<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM __________ TO __________
COMMISSION FILE NUMBER 1-13576
[COX LOGO]
COX COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 58-2112281
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
1400 LAKE HEARN DRIVE, ATLANTA, GEORGIA 30319
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
Registrant's telephone number, including area code: (404) 843-5000
---------------
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
---------------
Indicate the number of shares outstanding of each of the issuer's
classes of Common Stock, as of the latest practicable date.
There were 570,981,390 shares of Cox Class A Common Stock outstanding
as of November 1, 1999.
There were 27,597,792 shares of Cox Class C Common Stock outstanding as
of November 1, 1999.
<PAGE> 2
COX COMMUNICATIONS, INC.
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1999
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
PART I - FINANCIAL INFORMATION
<S> <C> <C>
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS.................................................................... 2
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS......................................................................... 14
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK........................................... 22
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.................................................................................... 22
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS............................................................ 23
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K..................................................................... 24
SIGNATURES...................................................................................................... 25
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
COX COMMUNICATIONS, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30 DECEMBER 31
1999 1998
-------------- -------------
(UNAUDITED)
(THOUSANDS OF DOLLARS)
<S> <C> <C>
ASSETS
Cash ........................................................................... $ 58,419 $ 30,604
Accounts and notes receivable, less allowance for doubtful
accounts of $10,558 and $7,872 ............................................... 319,062 166,052
Net plant and equipment ........................................................ 3,526,442 2,652,212
Investments .................................................................... 9,352,039 5,981,057
Intangible assets .............................................................. 8,936,043 3,959,906
Other assets ................................................................... 222,604 88,273
------------- -------------
Total assets .............................................................. $ 22,414,609 $ 12,878,104
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued expenses .......................................... $ 399,754 $ 296,950
Deferred income ................................................................ 48,498 39,147
Deferred income taxes .......................................................... 5,758,374 2,886,636
Other liabilities .............................................................. 153,432 188,050
Debt ........................................................................... 5,306,024 3,920,159
Amounts due to Cox Enterprises, Inc. (CEI) ..................................... 27,021 170,596
------------- -------------
Total liabilities ......................................................... 11,693,103 7,501,538
------------- -------------
Commitments and Contingencies (Note 9)
Minority interest in equity of consolidated subsidiaries ....................... 196,850 --
Cox-obligated capital securities of subsidiary trust ........................... 635,389 --
Shareholders' equity
Series A Preferred Stock - liquidation preference of $22.1375 per
share, $1 par value; 10,000,000 shares authorized; shares
issued and outstanding: 4,836,372 ......................................... 4,836 4,836
Class A Common Stock, $1 par value; 650,000,000 shares
authorized; shares issued and outstanding: 570,917,557
and 527,111,512 ........................................................... 570,918 527,112
Class C Common Stock, $1 par value; 60,000,000 shares
authorized; shares issued and outstanding: 27,597,792 ..................... 27,598 27,598
Additional paid-in capital ................................................... 3,838,089 1,872,477
Retained earnings ............................................................ 2,119,149 1,350,277
Accumulated other comprehensive income ....................................... 3,328,677 1,594,266
------------- -------------
Total shareholders' equity ................................................ 9,889,267 5,376,566
------------- -------------
Total liabilities and shareholders' equity ................................ $ 22,414,609 $ 12,878,104
============= =============
</TABLE>
See notes to consolidated financial statements.
2
<PAGE> 4
COX COMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED SEPTEMBER 30 ENDED SEPTEMBER 30
---------------------------- ----------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
(UNAUDITED)
(THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
REVENUES ................................................... $ 587,914 $ 415,965 $ 1,596,339 $ 1,230,052
COSTS AND EXPENSES
Programming costs ....................................... 141,016 99,923 392,107 290,587
Plant operations ........................................ 45,084 35,222 120,405 98,762
Marketing ............................................... 40,563 25,897 98,088 73,012
General and administrative .............................. 135,523 96,053 375,625 278,311
Satellite operating and administrative .................. -- -- -- 29,404
Depreciation ............................................ 148,395 88,731 378,374 256,176
Amortization ............................................ 45,440 19,849 98,078 56,200
------------ ------------ ------------ ------------
OPERATING INCOME ........................................... 31,893 50,290 133,662 147,600
Interest expense ........................................... (71,152) (48,673) (193,824) (152,801)
Equity in net losses of affiliated companies ............... (11,568) (143,346) (87,609) (414,031)
Gain on investments, net ................................... 59,498 1,719,295 1,387,454 1,818,763
Gain on issuance of stock by affiliated companies .......... -- 150,386 -- 165,342
Dividend income ............................................ 11,073 -- 33,219 --
Other, net ................................................. 796 (4,434) 829 350
------------ ------------ ------------ ------------
INCOME BEFORE INCOME TAXES
AND MINORITY INTEREST ................................. 20,540 1,723,518 1,273,731 1,565,223
Income tax expense ......................................... 1,740 656,544 497,919 612,414
------------ ------------ ------------ ------------
INCOME BEFORE MINORITY INTEREST ............................ 18,800 1,066,974 775,812 952,809
Minority interest .......................................... (6,940) -- (6,940) --
------------ ------------ ------------ ------------
NET INCOME ................................................. $ 11,860 $ 1,066,974 $ 768,872 $ 952,809
============ ============ ============ ============
PER SHARE DATA
Basic net income per share ............................... $ 0.02 $ 1.97 $ 1.37 $ 1.76
Diluted net income per share ............................. 0.02 1.95 1.35 1.74
Basic weighted-average shares outstanding ................ 576,103,113 542,778,738 562,111,772 542,618,004
Diluted weighted-average shares outstanding .............. 585,053,264 547,033,424 571,029,610 546,578,018
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 5
COX COMMUNICATIONS, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
ACCUMULATED
SERIES A COMMON STOCK ADDITIONAL OTHER
PREFERRED ----------------------- PAID-IN RETAINED COMPREHENSIVE COMPREHENSIVE
STOCK CLASS A CLASS C CAPITAL EARNINGS INCOME TOTAL INCOME
---------- ---------- ---------- ---------- ---------- ------------- ----------- -------------
(UNAUDITED) (UNAUDITED)
(THOUSANDS OF DOLLARS) (THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT
DECEMBER 31, 1998,
AS ADJUSTED FOR THE
TWO-FOR-ONE STOCK
SPLIT .............. $ 4,836 $ 527,112 $ 27,598 $1,872,477 $1,350,277 $1,594,266 $5,376,566
Net income.......... 768,872 768,872 $ 768,872
----------
Issuance of stock
related to stock
compensation
plans (including
tax benefit on
stock options
exercised) ....... 508 11,115 11,623
Issuance of stock
related to TCA
acquisition ...... 33,198 1,612,175 1,645,373
Issuance of common
stock related to
public offering .. 10,100 327,784 337,884
Fair value of
forward purchase
contracts, less
the present value
of contract
adjustment
payments issued
in connection
with manditorily
redeemable capital
securities ....... 14,538 14,538
Foreign currency
translation
adjustment ....... (4,593)
Change in net
unrealized gain
on securities,
net of
reclassification
adjustment ...... 1,739,004
----------
Other comprehensive
income .......... 1,734,411 1,734,411 1,734,411
----------
Comprehensive
income .......... $2,503,283
---------- ---------- ---------- ---------- ---------- ---------- ---------- ==========
BALANCE AT
SEPTEMBER 30,
1999 ............. $ 4,836 $ 570,918 $ 27,598 $3,838,089 $2,119,149 $3,328,677 $9,889,267
---------- ---------- ---------- ---------- ---------- ---------- ----------
</TABLE>
See notes to consolidated financial statements.
4
<PAGE> 6
COX COMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER 30
------------------------------------
1999 1998
------------- -------------
(UNAUDITED)
(THOUSANDS OF DOLLARS)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income ................................................................ $ 768,872 $ 952,809
Adjustments to reconcile net income to net cash provided by
operating activities, net of effects of acquisitions:
Depreciation ............................................................ 378,374 256,176
Amortization ............................................................ 98,078 56,200
Equity in net losses of affiliated companies ............................ 87,609 414,031
Deferred income taxes ................................................... 423,549 719,940
Gain on investments, net ................................................ (1,387,454) (1,818,763)
Gain on issuance of stock by affiliated companies ....................... -- (165,342)
Increase in accounts and notes receivable ................................. (21,152) (2,288)
Increase in prepaid expenses .............................................. (81,233) (552)
Increase in accounts payable and accrued expenses ......................... 58,011 7,309
Increase (decrease) in other liabilities .................................. (35,303) 3,932
Decrease in taxes payable ................................................. (76,071) (51,258)
Other, net ................................................................ (3,619) (2,004)
------------- -------------
Net cash provided by operating activities .......................... 209,661 370,190
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures ...................................................... (798,237) (549,157)
Investments in affiliated companies ....................................... (28,166) (160,806)
Proceeds from sale of investments ......................................... 742,611 137,140
Restricted cash invested .................................................. -- 204,210
Cash paid for purchases of cable television systems ....................... (2,079,483) (258,067)
Proceeds from exchange of cable television systems ........................ 9,750 --
Decrease in amounts due from CEI, net ..................................... -- 50,856
Other, net ................................................................ (8,494) (4,082)
------------- -------------
Net cash used in investing activities .............................. (2,162,019) (579,906)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Revolving credit repayments, net .......................................... (350,000) (800,000)
Commercial paper borrowings (repayments), net ............................. (308,578) 86,009
Proceeds from issuance of debt, net of discounts........................... 1,997,164 1,493,532
Repayment of debt ......................................................... (193,838) (663,565)
Proceeds from exercise of stock options ................................... 7,724 8,099
Increase (decrease) in amounts due to CEI, net ............................ (143,575) 42,267
Proceeds from the issuance of common stock, net of offering costs ......... 337,884 --
Proceeds from the issuance of Cox-obligated capital securities
of subsidiary trust................................................... 650,000 --
Increase (decrease) in book overdrafts .................................... (15,508) 25,392
Other ..................................................................... (1,100) --
------------- -------------
Net cash provided by financing activities .......................... 1,980,173 191,734
------------- -------------
Net increase (decrease) in cash ........................................... 27,815 (17,982)
Cash at beginning of period ............................................... 30,604 28,259
------------- -------------
Cash at end of period ..................................................... $ 58,419 $ 10,277
============= =============
</TABLE>
See notes to consolidated financial statements.
5
<PAGE> 7
COX COMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(CONTINUED)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER 30
-----------------------------------
1999 1998
------------- ------------
(UNAUDITED)
(THOUSANDS OF DOLLARS)
<S> <C> <C>
SIGNIFICANT NONCASH TRANSACTIONS
MediaOne cable television system exchange ............................ $ 93,050 $ --
TCA merger stock issuance ............................................ 1,645,373 --
Assumed TCA indebtedness ............................................. 540,000
Cox PCS stock exchange ............................................... 794,546 --
PrimeStar merger stock exchange ...................................... -- 94,696
Teleport stock issuance .............................................. -- 150,386
Teleport merger stock exchange ....................................... -- 2,076,861
Capital lease obligations ............................................ 32,512 33,144
ADDITIONAL CASH FLOW INFORMATION
Cash paid for interest ............................................... $ 159,510 $ 123,935
Cash paid (refunded) for income taxes ................................ 157,557 (56,268)
</TABLE>
See notes to consolidated financial statements.
6
<PAGE> 8
COX COMMUNICATIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 1999
1. BASIS OF PRESENTATION AND OTHER INFORMATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnote disclosures required by generally accepted accounting
principles for complete financial statements. In the opinion of management, the
financial statements reflect all adjustments considered necessary for a fair
statement of the results of operations and financial position for the interim
periods presented. All such adjustments are of a normal recurring nature. These
unaudited interim financial statements should be read in conjunction with the
audited consolidated financial statements and notes thereto contained in Cox's
Annual Report on Form 10-K for the year ended December 31, 1998.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. The results
of operations for the nine months ended September 30, 1999 are not necessarily
indicative of the results to be expected for the year ending December 31, 1999
or any interim period.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Investments
Investments in affiliates are accounted for under the equity method or
cost method depending upon the level of ownership in the investment and/or
Cox's ability to exercise significant influence over the operating and
financial policies of the investee. Equity method investments are recorded at
cost and adjusted periodically to recognize Cox's proportionate share of the
investees' undistributed income or losses.
Investments in unrestricted publicly traded entities are classified as
Available-for-Sale under Statement of Financial Accounting Standards No. 115,
Accounting for Certain Investments in Debt and Equity Securities, and are
recorded at their fair value, with unrealized gains and losses resulting from
changes in fair value between measurement dates recorded as a component of
other comprehensive income. Investments in privately held entities are stated
at cost, adjusted for any known diminution in value that is determined to be
other than temporary.
Recently Issued Accounting Pronouncements
In 1998, SFAS No. 133, Accounting for Derivative Financial Instruments
and Hedging Activities, was issued. This statement requires that all
derivatives be recognized in the statement of financial position as either
assets or liabilities and measured at fair value. In addition, all hedging
relationships must be designated, reassessed and documented pursuant to the
provisions of SFAS No. 133. SFAS No. 133, as amended by SFAS No. 137, is
effective for fiscal quarters of fiscal years beginning after June 15, 2000.
Management is in the process of assessing the impact of SFAS No. 133 on the
consolidated financial statements.
7
<PAGE> 9
Reclassifications
Certain amounts in the 1998 quarterly financial statements have been
reclassified for comparative purposes.
3. ACQUISITIONS AND EXCHANGES OF BUSINESSES
In August 1999, Cox completed its merger with TCA Cable TV, Inc. (the
"TCA acquisition"), a cable television operator serving approximately 883,000
customers in Texas, Arkansas, Louisiana and four other states for $1.6 billion
in cash and 38.3 million shares of Cox Class A common stock and assumed
indebtedness of $540.0 million. Contemporaneously, Cox paid off and retired
$340.0 million in TCA debt. In connection with the merger, Cox also acquired VPI
Communications, Inc., an affiliate of TCA, which is a leader in advertising
sales and provides turnkey advertising services to 82 cable television system
operators representing more than 3.5 million customers nationwide. In addition,
the TCA acquisition included TCA's interest in two majority-owned partnerships.
Also in August 1999, Cox completed the purchase of cable television
systems serving communities near Gloucester, New Kent, West Point and King and
Queen County, Virginia, from First Commonwealth Communications, Inc. The cable
television systems, serving more than 11,000 customers, are contiguous to Cox's
Hampton Roads, Virginia cable operation.
Also in August 1999, Cox and MediaOne exchanged selected cable
television systems serving communities in Massachusetts, Rhode Island and
Connecticut. In connection with the transaction, Cox traded its cable television
systems in Massachusetts, serving more than 54,000 customers, for MediaOne
properties in Enfield, Connecticut and Westerly, Rhode Island, serving 51,000
customers, and cash. Cox recognized a pre-tax gain of $77.4 million in
connection with this exchange.
In October 1999, Cox completed the purchase of cable television systems
serving more than 260,000 subscribers in Fairfax County and Fredericksburg,
Virginia, from Media General, Inc. for $1.4 billion in cash.
Also in October 1999, Cox completed the purchase of cable television
systems from Cable Plus Holding Company serving approximately 17,000 customers
in Arizona and Nevada.
Also in October 1999, Cox restructured its partnership with Time
Warner Entertainment Company, L.P. As part of this restructuring, Cox acquired
control of the cable television system serving Fort Walton Beach, Florida, and
Time Warner acquired control of cable television system serving Staten Island,
New York. In connection with the restructuring, the Cox subsidiary holding the
Fort Walton Beach system and Cox's cable television systems serving Pensacola,
Florida, received approximately $104.0 million in cash which will be used for
capital expenditures and a reduction of indebtedness. Cox expects to recognize
a gain on this transaction during the fourth quarter 1999.
The consummated acquisitions and exchange of businesses have been
accounted for by Cox under the purchase method of accounting in accordance with
APB Opinion No. 16, Business Combinations.
The following summarized unaudited pro forma financial information for
the nine months ended September 30, 1999 and 1998 assumes the TCA acquisition
and the acquisition of the Media General cable television systems had occurred
on January 1, 1998. In addition, the following summarized unaudited pro forma
financial information for the nine months ended September 30, 1998 assumes the
acquisition of the Las Vegas cable television system from Prime South
Diversified, Inc. had occurred on January 1, 1998. The summarized unaudited pro
forma financial information does not purport to be indicative of the results of
operations which may occur in the future.
8
<PAGE> 10
<TABLE>
<CAPTION>
PRO FORMA
NINE MONTHS ENDED
SEPTEMBER 30
-------------------------------
1999 1998
----------- -----------
(THOUSANDS OF DOLLARS,
EXCEPT PER SHARE DATA)
(UNAUDITED)
<S> <C> <C>
Revenues .............................................. $ 1,986,941 $ 1,765,193
Operating income ...................................... 87,686 121,605
Net income ............................................ 632,291 798,717
Earnings per share:
Basic net income per share ......................... $ 1.05 $ 1.33
Diluted net income per share ....................... 1.03 1.31
</TABLE>
In July 1999, Cox and AT&T Corp. entered into a definitive agreement
to exchange Cox's 50.3 million shares of AT&T common stock for the stock of
AT&T subsidiaries that own cable television systems that serve approximately
495,000 customers and other assets, including cash. In return for its shares of
AT&T common stock, Cox will receive the stock of AT&T subsidiaries that own:
cable systems serving Tulsa, Oklahoma (160,000 customers) and Baton Rouge,
Louisiana (156,000 customers); the remaining 20% ownership interest in a
partnership in which Cox acquired an 80% interest through its acquisition of
TCA Cable TV, Inc.; Peak Cablevision LLC, which has 117,000 customers in
Oklahoma, Arkansas, Utah and Nevada; and approximately $750.0 million in other
assets, including cash. Cox expects to complete this transaction, which is
subject to regulatory approval, in the first half of 2000.
Also in July 1999, Cox and Multimedia Cablevision, Inc., a subsidiary
of Gannett Co., Inc., entered into a definitive purchase agreement whereby Cox
will purchase for $2.7 billion in cash Multimedia's cable television operations
serving 522,000 customers in Kansas, Oklahoma and North Carolina. Cox expects
to complete this transaction, which is subject to legal and regulatory approval,
in the first quarter of 2000.
4. INVESTMENTS
<TABLE>
<CAPTION>
SEPTEMBER 30 DECEMBER 31
1999 1998
------------ ------------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Equity method investments ............................. $ 140,358 $ 90,700
Fair value method investments ......................... 9,197,802 5,886,502
Cost method investments ............................... 13,879 3,855
----------- -----------
Total investments ..................................... $ 9,352,039 $ 5,981,057
=========== ===========
</TABLE>
Cox's fair value method investments in unrestricted publicly traded
entities have an aggregate cost at September 30, 1999 and December 31, 1998 of
$3.8 billion and $3.3 billion, respectively.
In December 1998, Cox entered into four costless collar agreements to
hedge its investment in 15.0 million shares of AT&T common stock. The
agreements contained a notional amount of $52.00 per share and mature at
various dates through January 2003. Cox settled the costless collar agreements
in August 1999 at their fair market value resulting in a pre-tax loss
of $14.9 million.
In January 1999, Cox sold its 11.9% equity interest in Telewest
Communications plc for $727.9 million in cash and recorded a pre-tax gain of
$433.1 million.
9
<PAGE> 11
In May 1999, Cox exercised its right under the Cox Communications PCS,
L.P. partnership agreement to transfer its remaining 32.0% equity interest in
Cox PCS to Sprint Corporation in exchange for approximately 19.1 million shares
of Sprint's PCS Common Stock-Series 2. As a result of this transaction, Cox
recognized a pre-tax gain of $908.5 million.
5. DEBT
<TABLE>
<CAPTION>
SEPTEMBER 30 DECEMBER 31
1999 1998
------------ -----------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Revolving credit facilities ........................... $ -- $ 349,998
Commercial paper ...................................... 718,376 1,026,164
Medium-term notes ..................................... 444,988 463,363
Reset put securities .................................. 248,190 248,150
Floating rate reset notes ............................. -- 147,425
Notes and debentures .................................. 3,813,988 1,615,161
Capitalized lease obligations ......................... 80,482 69,898
----------- -----------
Total debt ............................................ $ 5,306,024 $ 3,920,159
=========== ===========
</TABLE>
In July 1999, Cox and certain wholly-owned Cox financing trusts filed
a registration statement on Form S-3 with the Securities and Exchange Commission
under which Cox may issue from time to time shares of its Class A common stock
and preferred stock, as well as debentures, bonds, notes and other evidences of
indebtedness, stock purchase contracts and stock purchase units, and the Cox
trusts may issue preferred securities and capital securities for an aggregate
offering amount of up to $8.0 billion. Upon filing of this shelf registration
statement, Cox transferred the $2.0 billion of securities registered on its
April 1999 shelf registration, which included all of the securities remaining
on its July 1998 shelf registration, to the July 1999 shelf registration.
In August 1999, Cox issued $2.0 billion aggregate principal amount in
debt securities under the July 1999 shelf registration, including $525.0
million aggregate principal amount floating rate notes, bearing interest at
LIBOR plus 60 basis points, due August 15, 2000; $300.0 million aggregate
principal amount of 7% notes due August 15, 2001; $375.0 million aggregate
principal amount of 7.50% notes due August 15, 2004; $400.0 million aggregate
principal amount of 7.75% notes due August 15, 2006 and; $400.0 million
aggregate principal amount of 7.875% notes due August 15, 2009, less a discount
of $2.9 million and offering costs of $9.2 million. The notes are unsecured and
rank equally with Cox's other unsecured senior indebtedness. Interest on the
notes is payable on a quarterly basis.
In September 1999, Cox amended and restated its 364-day credit
agreement and its 5-year credit agreement providing for borrowings of up to
$1.5 billion and $1.2 billion, respectively. As of September 30, 1999, Cox had
no borrowings outstanding under either credit agreement.
6. SHAREHOLDERS' EQUITY
The following table reconciles the numerator and the denominator of
the basic and diluted per-share computations for income from operations for the
three and nine months ended September 30, 1999 and 1998:
10
<PAGE> 12
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30, 1999
-------------------------------------------------------
INCOME SHARES PER-SHARE
(NUMERATOR) (DENOMINATOR) AMOUNT
------------- ------------- ---------
<S> <C> <C> <C>
Net income .............................. $ 11,860,000
-------------
Basic EPS................................ 11,860,000 576,103,113 $ 0.02
=======
Effect of Dilutive Securities:
Options............................... -- 2,921,194
ESPP.................................. -- 991,974
Preferred common stock equivalent..... -- 5,036,983
------------- ------------
Diluted EPS.............................. $ 11,860,000 585,053,264 $ 0.02
============= ============ =======
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30, 1998
-------------------------------------------------------
INCOME SHARES PER-SHARE
(NUMERATOR) (DENOMINATOR) AMOUNT
-------------- ------------- ---------
<S> <C> <C> <C>
Net income............................... $1,066,974,000
--------------
Basic EPS................................ 1,066,974,000 542,778,738 $ 1.97
=======
Effect of Dilutive Securities:
Options............................... -- 3,514,844
ESPP.................................. -- 739,842
-------------- -------------
Diluted EPS.............................. $1,066,974,000 547,033,424 $ 1.95
============== ============= =======
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 1999
-------------------------------------------------------
INCOME SHARES PER-SHARE
(NUMERATOR) (DENOMINATOR) AMOUNT
------------- ------------- ---------
<S> <C> <C> <C>
Net income............................... $ 768,872,000
-------------
Basic EPS................................ 768,872,000 562,111,772 $ 1.37
=======
Effect of Dilutive Securities:
Options............................... -- 2,889,684
ESPP.................................. -- 991,171
Preferred common stock equivalent..... -- 5,036,983
------------- ------------
Diluted EPS.............................. $ 768,872,000 571,029,610 $ 1.35
============= ============ =======
</TABLE>
11
<PAGE> 13
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 1998
-------------------------------------------------------
INCOME SHARES PER-SHARE
(NUMERATOR) (DENOMINATOR) AMOUNT
------------- ------------- ---------
<S> <C> <C> <C>
Net income............................... $ 952,809,000
-------------
Basic EPS................................ 952,809,000 542,618,004 $ 1.76
=======
Effect of Dilutive Securities:
Options............................... -- 3,262,512
ESPP.................................. -- 697,502
------------- ------------
Diluted EPS.............................. $ 952,809,000 546,578,018 $ 1.74
============= ============ =======
</TABLE>
On March 18, 1999, the Cox Board of Directors approved a
two-for-one stock split that was effected on May 21, 1999 with respect to
stockholders of record on May 14, 1999. Cox's certificate of incorporation was
amended to increase the authorized preferred stock from 5,000,000 to 10,000,000
shares, the authorized Class A common stock from 316,000,000 to 650,000,000
shares and the authorized Class C common stock from 14,000,000 to 60,000,000
shares. All references to number of shares and per share information in these
notes and the unaudited interim consolidated financial statements have been
restated to give effect to this stock split.
In July 1999, Cox filed a Form S-4 Registration Statement with the
Securities and Exchange Commission to register shares of Class A common stock
to be issued to TCA shareholders in connection with the acquisition of TCA (See
Note 3). According to the exchange agent, of the 38,326,272 shares authorized
for issuance to TCA shareholders, all except 55,117 have been issued as
of November 5, 1999.
In August 1999, Cox issued 10.1 million shares of Class A common stock
under the July 1999 shelf registration for an aggregate offering of $350.3
million, less offering costs of $12.4 million.
7. MANDATORILY REDEEMABLE CAPITAL SECURITIES AND TRUST PREFERRED
SECURITIES ISSUED BY SUBSIDIARIES
In August 1999, Cox issued 13.0 million FELINE PRIDES off of the July
1999 shelf registration for aggregate proceeds of $650.0 million, less offering
costs of $19.5 million. Each FELINE PRIDES consists of a unit comprised of:
(1) a three-year forward purchase contract under which the holder
is obligated to purchase from Cox an indeterminable number of
new shares of Cox Class A common stock based upon a
settlement rate, and
(2) either:
(A) beneficial ownership of a 7% capital security having
a stated liquidation amount equal to $50,
representing a preferred undivided beneficial
interest in the assets of Cox Trust II, a wholly
owned financing subsidiary of Cox Communications, or
(B) a 5% undivided beneficial ownership in a zero coupon
U.S. Treasury Security having a principal amount at
maturity equal to $1,000.
A forward purchase contract coupled with a 7% capital security is
called an "Income PRIDE," and a forward purchase contract coupled with a
treasury security is called a "Growth PRIDE." The forward purchase contract
forming a part of a Growth PRIDE entitles the holder to an unsecured contract
adjustment payments of .25% of $50 per year paid quarterly. Upon the issuance
of the FELINE PRIDES, Cox recorded an increase of approximately $15.0 million
to shareholders' equity equal to the fair value of the forward purchase
contracts and offset by a decrease of approximately $0.5 million to
shareholders' equity equal to the present value of the future contract
adjustment payments under the Growth PRIDES.
12
<PAGE> 14
The forward purchase contracts require the holder to purchase a minimum of
1.1962 shares and a maximum of 1.4414 shares of Cox Class A common stock per
purchase contract depending upon the average of the closing price per share of
Cox's Class A common stock for a 20 consecutive day period ending on the third
trading day immediately preceding August 16, 2002.
The 7% capital securities were issued by Cox Trust II, a Delaware
business trust wholly owned by Cox, and the proceeds received by the trust were
invested in Cox's 7% senior debentures due 2004, which represent the sole
assets of the trust. The obligations of the trust related to its 7% capital
securities are guaranteed by Cox to the extent that Cox makes payments pursuant
to the senior debentures. This guarantee, when taken together with Cox's
obligations under the senior debentures, the indenture governing the senior
debentures and the amended and restated declaration of trust governing Cox
Trust II, provides a full and unconditional guarantee of the trust's
obligations with respect to its 7% capital securities. The FELINE PRIDES have
been presented as mezzanine equity in Cox's consolidated balance sheet and the
distributions paid by the trust, as well as the contract adjustment payments
described above, are presented as minority interest in Cox's consolidated
statements of operations.
In October 1999, Cox RHINOS Trust, a wholly-owned financing subsidiary
of Cox and a statutory business trust formed under the laws of the State of
Delaware, sold 500,000 of Redeemable Hybrid Income Overnight Shares ("RHINOS")
to a special purpose entity organized by Bank of America, N.A. for an aggregate
offering of $500.0 million, less offering costs of $5.0 million. The RHINOS are
long-term auction rate reset preferred securities of Cox RHINOS Trust. Cox
RHINOS Trust used the proceeds from the sale of the RHINOS and from Cox's
purchase of the common securities of Cox RHINOS Trust to purchase Auction Rate
Reset Senior Notes Series A issued by Cox with economic terms substantially
identical to those of the RHINOS. Cox used the net proceeds received from the
sale of the senior notes to Cox RHINOS Trust for general corporate purposes.
Cox will pay interest with respect to the senior notes and Cox RHINOS Trust
will pay distributions with respect to the RHINOS at a floating rate based on
LIBOR plus 75 basis points. The RHINOS will be presented as mezzanine equity in
Cox's consolidated balance sheet and the distributions paid by the trust will
be presented as minority interest in Cox's consolidated statement of
operations.
Cox may redeem the RHINOS and the related senior notes with the
proceeds from one or more public offerings of its Class A common stock
underwritten by Banc of America Securities LLC. If the RHINOS remain
outstanding on October 6, 2002 or if the closing price of Cox's Class A common
stock falls below $28.00 per share (subject to adjustment upon the occurrence
of certain events), Cox may be required to remarket the RHINOS pursuant to
their terms in a private auction to Qualified Institutional Buyers. The
interest rate and maturity date of the RHINOS would be reset in connection with
a successful remarketing.
8. TRANSACTIONS WITH AFFILIATED COMPANIES
Cash requirements are funded by internally generated funds, by various
external financing transactions and, as needed, through intercompany loans from
Cox Enterprises. Cox Enterprises performs day-to-day cash management services
for Cox, with settlements of credit or debit balances between Cox and Cox
Enterprises occurring periodically with interest at market rates (6.1% at
September 30, 1999).
Included in the amounts due to Cox Enterprises are the following
transactions:
<TABLE>
<CAPTION>
(THOUSANDS OF DOLLARS)
---------------------
<S> <C>
Balance, December 31, 1998.................... $ 170,596
Cash transferred from Cox Enterprises......... 220,004
Net operating expense reimbursements.......... (363,579)
-------------
Balance, September 30, 1999................... $ 27,021
=============
</TABLE>
13
<PAGE> 15
9. COMMITMENTS AND CONTINGENCIES
Cox is a party to various legal proceedings that are ordinary and
incidental to its business. Management does not expect that any legal
proceedings currently pending, including the putative class actions, will have
a material adverse impact on Cox's consolidated financial position,
consolidated results of operations or consolidated cash flows. See "-- Part II
- - Other Information -- Item 1. Legal Proceedings."
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
accompanying consolidated financial statements for the three- and nine-month
periods ended September 30, 1999 and 1998.
The forward looking statements included in Management's Discussion and
Analysis of Financial Condition and Results of Operations and other parts of
this report, which reflect management's best judgement based on factors
currently known, involve risks, uncertainties and other factors which may cause
the actual performance of Cox to be materially different from the performance
indicated or implied by such statements. Such factors include, among others:
competitive pressures within the broadband communications industry; terms and
availability of capital; the level of success of Cox's operating initiatives;
changes in business strategy and development plans; the ability of Cox to
mitigate the impact of the Year 2000 issue; the impact from Cox's pending
acquisitions; and other factors included in the discussion below. Cox claims
the protection of the safe harbor for forward looking statements contained in
Section 21E of the Securities Exchange Act of 1934, as amended, for all forward
looking statements included in this report.
RECENT ACQUISITIONS AND EXCHANGES
See Note 3, for a description of recent acquisitions and exchanges of
businesses to the notes to consolidated financial statements in Item 1 of this
report.
RESULTS OF OPERATIONS
The results of operations discussed below include the effects of the
following:
- the August 1999 acquisition of TCA;
- the August 1999 acquisition of cable television systems from
First Commonwealth Communications, Inc.;
- the August 1999 exchange of selected cable television systems
with MediaOne;
- the April 1998 disposition of Cox's partnership interests and
net assets in and operations of PrimeStar Partners, L.P.;
- the June 1998 acquisition of the Tucson and Sierra Vista,
Arizona cable television system; and
- the October 1998 acquisition of the Las Vegas, Nevada cable
television system.
These transactions are collectively referred to in the discussion below as the
1999 and 1998 transactions.
THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED WITH THREE MONTHS ENDED
SEPTEMBER 30, 1998
Total revenues for the three months ended September 30, 1999 were $587.9
million, a 41% increase over revenues of $416.0 million for the three months
ended September 30, 1998. Of this increase, 28% relates to increased revenues
from the 1999 and 1998 transactions. The remaining 13% increase is attributable
to:
14
<PAGE> 16
- basic and digital customer growth at existing cable
television systems;
- rate increases, implemented primarily during the fourth
quarter of 1998, resulting from channel additions, increased
programming costs and the pass-through of inflation
adjustments;
- an increase in pay-per-view revenues due to the third quarter
1999 De La Hoya/Trinidad national boxing event and an
increase in digital pay-per-view revenues;
- growth in local and national advertising sales during 1999;
and
- growth in data, commercial telephony and residential
telephony product offerings.
Programming costs were $141.0 million for the third quarter of 1999,
an increase of 41% over the same period in 1998. Of this increase, 29% relates
to the 1999 and 1998 transactions. The remaining 12% increase is due to basic
and digital customer growth at existing cable television systems and January
1999 programming rate increases and channel additions. Plant operations
expenses increased 28% to $45.1 million. Of this increase, 20% relates to the
1999 and 1998 transactions. The remaining 8% increase relates to plant
maintenance and costs related to new services at existing cable television
systems.
Marketing costs increased 57% to $40.6 million. Of this increase, 32%
relates to the 1999 and 1998 transactions, including the acquisition of VPI
Communications, Inc. through the TCA acquisition. The remaining 25% increase
relates to costs associated with the rollout of digital video, high-speed data
and telephony services. General and administrative expenses for the third
quarter of 1999 increased 41% to $135.5 million due to the 1999 and 1998
transactions and costs associated with digital video, high-speed data and
telephony services in newly launched markets.
Operating cash flow (income before depreciation and amortization), a
non-GAAP measure of performance, is a commonly used financial analysis tool for
measuring and comparing cable television companies in several areas of
liquidity, operating performance and leverage. Operating cash flow increased
42% to $225.7 million for the third quarter of 1999. The operating cash flow
margin (operating cash flow as a percentage of revenues) for the current
quarter was 38.4%, an increase from 38.2% for the third quarter of 1998.
Depreciation increased to $148.4 million for the third quarter of 1999
compared to $88.7 million during the same period in 1998 due to the 1999 and
1998 transactions and the continued upgrade and rebuild of our broadband
network. Amortization increased to $45.4 million for the third quarter of 1999
compared to $19.8 million during 1998 due to the 1999 and 1998 transactions.
Operating income for the third quarter of 1999 was $31.9 million, a decrease of
37% compared to the same period in 1998.
Interest expense increased to $71.2 million for the third quarter 1999
compared to $48.7 million for the same period in 1998 primarily due to an
increase in the total debt outstanding. Net gain on investments of $59.5
million was due to the $77.4 million pre-tax gain on the August 1999 exchange
of cable television systems with MediaOne and offset by a $14.9 million pre-tax
loss on August 1999 settlement of the costless collar agreements.
Minority interest of $6.9 million primarily represents the accrued
distributions on the FELINE PRIDES. Net income for the current quarter was
$11.9 million as compared to $1,067.0 million for the third quarter of 1998.
NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED WITH NINE MONTHS ENDED SEPTEMBER
30, 1998
Total revenues for the nine months ended September 30, 1999 were
$1,596.3 million, a 30% increase over revenues of $1,230.1 million for the nine
months ended September 30, 1998. Of this increase, 19% relates to increased
revenues from the 1999 and 1998 transactions. The remaining 11% increase is
attributable to:
- basic and digital customer growth at existing cable
television systems;
15
<PAGE> 17
- rate increases, implemented primarily during the fourth
quarter 1998, resulting from channel additions, increased
programming costs and the pass-through of inflation
adjustments;
- an increase in pay-per-view revenues due to the national
boxing events during the first and third quarters 1999 and an
increase in digital pay-per-view revenues;
- growth in local and national advertising sales during 1999;
and
- growth in data, commercial telephony and residential
telephony product offerings.
Programming costs were $392.1 million for the nine months ended
September 30, 1999, an increase of 35% over the same period in 1998. Of this
increase, 21% relates to the 1999 and 1998 transactions. The remaining 14%
increase is due to basic and digital customer growth at existing cable
television systems, January 1999 programming rate increases, channel additions
and the 1999 pay-per-view events. Plant operations expenses increased 22% to
$120.4 million. Of this increase, 12% relates to the 1999 and 1998
transactions. The remaining 10% increase relates to plant maintenance and costs
related to new services at existing cable television systems.
Marketing costs increased 34% to $98.1 million. Of this increase, 18%
relates to the 1999 and 1998 transactions, including the acquisition of VPI
Communications, Inc. through the TCA acquisition. The remaining 16% increase
relates to costs associated with the rollout of digital video, high-speed data
and telephony services. General and administrative expenses for the first nine
months of 1999 increased 35% to $375.6 million due to the 1999 and 1998
transactions and costs associated with digital video, high-speed data and
telephony services in newly launched markets.
Operating cash flow, a non-GAAP measure of performance, is a commonly
used financial analysis tool for measuring and comparing cable television
companies in several areas of liquidity, operating performance and leverage.
Operating cash flow increased 33% to $610.1 million for the first nine months
of 1999. The operating cash flow margin for the nine months ended September 30,
1999 was 38.2%, an increase from 37.4% for the comparable period of 1998.
Depreciation increased to $378.4 million for the nine months ended
September 30, 1999 compared to $256.2 million during the same period in 1998
due to the 1999 and 1998 transactions and the continued upgrade and rebuild of
our broadband network. Amortization increased to $98.1 million for the nine
months ended September 30, 1999 compared to $56.2 million during 1998 due to
the 1999 and 1998 transactions. Operating income for the nine months ended
September 30, 1999 was $133.7 million, a decrease of 9% compared to the same
period in 1998.
Interest expense increased to $193.8 million for the nine months ended
September 30, 1999 compared to $152.8 million for the same period in 1998
primarily due to an increase in the total debt outstanding offset by more
favorable average interest rates during 1999. Equity in net losses of
affiliated companies was $87.6 million primarily due to losses associated with
Cox Communications PCS, L.P. Net gain on investments of $1,387.5 million
includes the $908.5 million pre-tax gain on the transfer of Cox's remaining
interest in Cox PCS to Sprint Corporation in May 1999, the $433.1 million
pre-tax gain on the sale of Cox's interest in Telewest Communications plc in
January 1999, the $77.4 million pre-tax gain on the August 1999 exchange of
cable television systems with MediaOne and offset by a $14.9 million pre-tax
loss on August 1999 settlement of the costless collar agreements.
Minority interest of $6.9 million primarily represents the accrued
distributions on the FELINE PRIDES. Net income for the nine months ended
September 30, 1999 was $768.9 million as compared to $952.8 million for the
comparable period in 1998.
16
<PAGE> 18
LIQUIDITY AND CAPITAL RESOURCES
USES OF CASH
As part of Cox's ongoing strategic plan, Cox has invested, and will
continue to invest, significant amounts of capital to enhance the reliability
and capacity of its broadband network in preparation for the offering of new
services and to make investments in affiliated companies primarily focused on
telephony, programming and communications-related activities.
During the nine months ended September 30, 1999, Cox made capital
expenditures of $798.2 million. These expenditures were primarily directed at
upgrading and rebuilding its broadband network for the delivery of high-speed
data and telephony. Capital expenditures for 1999 are expected to range between
$925.0 million and $975.0 million. This estimate does not include any
additional capital expenditures related to pending or consummated 1999
transactions.
Investments in affiliated companies during the nine months ended
September 30, 1999 consisted primarily of debt and equity funding to NextLink
Nevada. Funding requirements for the remainder of 1999 for investments in
affiliated companies are expected to be approximately $8.0 million. Payments
for purchases of cable television systems primarily represent cash payments to
TCA shareholders in connection with Cox's acquisition of TCA.
During the nine months ended September 30, 1999, net repayments of
$350.0 million were made for revolving credit borrowings and principal
repayment of $150.0 million was made on the Floating Rate Reset Notes. Net
repayments on commercial paper were $308.6 million.
SOURCES OF CASH
Cox generated $209.7 million from operating activities during the nine
months ended September 30, 1999. Proceeds from the sale of investments of
$742.6 million relate primarily to the sale of Telewest during first quarter
1999.
Cox Enterprises continues to perform day-to-day cash management
services for Cox with settlements of balances between Cox and Cox Enterprises
occurring periodically bearing interest at 50 basis points above Cox
Enterprises' current commercial paper borrowings.
In July 1999, Cox filed a registration statement on Form S-4 with the
Securities and Exchange Commission to register shares of Cox Class A common
stock expected to be issued to TCA shareholders as part of the TCA acquisition
consideration. Also in July 1999, Cox and certain wholly-owned Cox financing
trusts filed a shelf registration statement on Form S-3 with the Securities and
Exchange Commission under which Cox may issue from time to time shares of its
Class A common stock and preferred stock, as well as debentures, bonds, notes
and other evidences of indebtedness, stock purchase contracts and stock
purchase units, and the Cox trusts may issue preferred securities and capital
securities for an aggregate offering amount of up to $8.0 billion.
In August 1999 under the July 1999 shelf registration, Cox issued:
- $2.0 billion aggregate principal amount of senior debt securities
with maturity dates ranging from August 15, 2000 to August 15, 2009
and interest rates ranging from LIBOR plus 60 basis points to 7.875%,
less a discount of $2.9 million and offering costs of $9.2 million;
- 10.1 million shares of Class A common stock for an aggregate
offering of $350.3 million, less $12.4 million of offering costs; and
- 13 million FELINE PRIDES for an aggregate offering of $650.0
million, less $19.5 million of offering costs and $15.0 million
allocated to the fair value of the forward contracts embedded in these
securities. These securities have been classified as mezzanine equity
on Cox's balance sheet.
17
<PAGE> 19
Cox used these proceeds to partially finance certain acquisitions, for
capital expenditures, to retire commercial paper indebtedness and for other
general corporate purposes.
In October 1999, Cox RHINOS Trust, a wholly-owned financing subsidiary
of Cox and a statutory business trust formed under the laws of the State of
Delaware, sold 500,000 of Redeemable Hybrid Income Overnight Shares ("RHINOS")
to a special purpose entity organized by Bank of America, N.A. for an
aggregate offering of $500.0 million, less offering costs of $5.0 million. The
RHINOS are long-term auction rate reset preferred securities of Cox RHINOS
Trust. Cox RHINOS Trust used the proceeds from the sale of the RHINOS and from
Cox's purchase of the common securities of Cox RHINOS Trust to purchase Auction
Rate Reset Senior Notes Series A issued by Cox with economic terms
substantially identical to those of the RHINOS. Cox used the net proceeds
received from the sale of the senior notes to Cox RHINOS Trust for general
corporate purposes. Cox will pay interest with respect to the senior notes and
Cox RHINOS Trust will pay distributions with respect to the RHINOS at a
floating rate based on LIBOR plus 75 basis points. The RHINOS will be presented
as mezzanine equity in Cox's consolidated balance sheet and the distributions
paid by the trust will be presented as minority interest in Cox's consolidated
statement of operations.
Cox may redeem the RHINOS and the related senior notes with the
proceeds from one or more public offerings of its Class A common stock
underwritten by Banc of America Securities LLC. If the RHINOS remain
outstanding on October 6, 2002 or if the closing price of Cox's Class A common
stock falls below $28.00 per share (subject to adjustment upon the occurrence
of certain events), Cox may be required to remarket the RHINOS pursuant to
their terms in a private auction to Qualified Institutional Buyers. The
interest rate and maturity date of the RHINOS would be reset in connection with
a successful remarketing.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In 1998, SFAS No. 133, "Accounting for Derivative Financial
Instruments and Hedging Activities," was issued. This statement requires that
all derivatives be recognized in the statement of financial position as either
assets or liabilities and measured at fair value. In addition, all hedging
relationships must be designated, reassessed and documented pursuant to the
provisions of SFAS No. 133. SFAS No. 133, as amended by SFAS No. 137, is
effective for fiscal quarters of fiscal years beginning after June 15, 2000.
Management is in the process of assessing the impact of SFAS No. 133 on the
consolidated financial statements.
OTHER MATTERS
YEAR 2000 READINESS DISCLOSURE
General
The Year 2000 issue is the potential impact of computer programs and
embedded computer microprocessors being unable to properly process dates or
date-sensitive calculations beyond December 31, 1999. Computer systems that
process dates or date-sensitive calculations may recognize only the last two
digits to identify the year in a date, or identify digits as an instruction.
Accordingly, the year "00" may be recognized as the year 1900 rather than the
year 2000, which may result in miscalculations or system failures. A computer
system is deemed to be year 2000 compliant when it continues to produce
understandable, accurate and predictable results that conform to the original
functional specifications, regardless of the millennium change. Cox recognizes
the importance of this issue and is actively managing an appropriate transition
into the year 2000.
The initial discussions of Year 2000 readiness exclude information on
pending acquisitions, which are discussed separately, below.
18
<PAGE> 20
State of Readiness
In June 1997, Cox appointed a project team, using both internal and
external resources, to develop its Year 2000 initiative. Cox is, as necessary,
upgrading and replacing affected information technology systems (such as
computer systems and software applications) and non-information technology
systems (such as equipment with embedded microprocessors). Cox is also
designing a contingency and business continuation plan and will implement these
plans as necessary.
The project team has developed a plan to assess, remediate, and test
its information technology and non-information technology systems sufficiently
in advance of the year 2000 to reduce the risk of an interruption in critical
services as a result of the millennium date change. The Year 2000 initiative
addresses the following systems:
- Applications: custom and packaged software applications;
- Infrastructure: local- and wide-area networks, hardware,
processors and operating systems;
- Plant: the Cox plant, distribution network and programming
components; and
- Vendors: business-critical third party vendors.
The general phases of the Year 2000 initiative common to all systems
are as follows:
- Phase 1: inventory of all business processes to document the
Year 2000 status for each product and service;
- Phase 2: assign priorities to identified items;
- Phase 3: assess the Year 2000 compliance of items determined
to be material to Cox;
- Phase 4: repair or replace material items that are determined
not to be Year 2000 compliant;
- Phase 5: test material items;
- Phase 6: integration testing of multiple information
technology and non-information technology assets, both custom
and vendor-provided, to determine correct manipulation of
dates and date-related data; and
- Phase 7: design and implement contingency and business
continuation plans for each organization and Cox location,
where appropriate.
STATUS OF INITIATIVE AS OF NOVEMBER 1, 1999
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
APPLICATIONS INFRASTRUCTURE PLANT VENDORS
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Phase 1-4 Complete Complete Complete Complete
- -------------------------------------------------------------------------------
Phase 5 Complete Complete Complete Complete
- -------------------------------------------------------------------------------
Phase 6 Complete Complete Complete Complete
- -------------------------------------------------------------------------------
Phase 7 Complete Complete Substantially Complete
complete
- -------------------------------------------------------------------------------
</TABLE>
Applications. Applications consist of custom and packaged software. In
1995, Cox began a company-wide business systems replacement project to meet the
growth in the cable business and to meet emerging business needs. Accordingly,
Cox was in the process of replacing or upgrading substantially all applications
irrespective of the Year 2000 issue.
Cox's two most critical applications are its common financial system
and the cable operation support and billing system. The financial system is
based on packaged software from JDEdwards. This software was upgraded to
version 7.5 during fourth quarter 1998. Cox has made appropriate inquiries and
JDEdwards has provided certification that Version 7.5 is Year 2000 compliant.
Cox operates all of its cable properties using the ICOMS subscriber management
system licensed from Convergys, Inc. Cox has made appropriate inquiries and
Convergys, Inc. has provided opinions indicating that the release of ICOMS used
by Cox cable television systems, other than those recently acquired from TCA
Cable TV, Inc. (see below),
19
<PAGE> 21
is Year 2000 compliant. Additionally, Cox has conducted its own testing of its
billing and customer care platform. Such testing has included the testing of
interfaces with numerous external partners including @Home, bill printers and
lockboxes. Such testing resulted in no critical failures.
Cox has a very limited inventory of custom or in-house developed
software. Cox believes that all such software has been made Year 2000
compliant.
Infrastructure. Infrastructure consists of local- and wide-area
networks, hardware, processors and operating systems. Cox has received
recommendations from significant vendors as to the appropriate version of
software needed to be Year 2000 compliant. Cox has implemented such upgrades as
are required for Year 2000 compliance on all central processor resources as
well as all LAN and WAN elements. The project team has also conducted reviews
of non-information technology systems (i.e., elevator, automated lighting,
building security systems, fire suppression systems, etc.). Based upon the
project team's review, Cox has concluded that exposure from non-information
technology systems failing to be Year 2000 compliant is limited and does not
pose a material operational or financial risk to the company. Systems that were
found to be non-compliant have been upgraded.
Plant. The cable plant is comprised of an integrated distribution
network providing video, voice and data services to its customers. In 1995, Cox
began to deploy fiber optic cable and to upgrade the technical quality of its
hybrid fiber-coaxial broadband network facilitating the delivery of additional
programming and services. As a result, substantially all of Cox's cable plant
equipment and software is state-of-the-art, which has helped to reduce the
level of plant Year 2000 issues. As of November 1, 1999, Cox has received all
known necessary hardware and software upgrades to its plant. Cox plans to
perform its last upgrade to its digital controllers during the first half of
November. All other upgrades, known to be required, are complete and the plant
is deemed to be Year 2000 ready for all video, voice, and data services. Cox
has developed testing and integration testing procedures, and has completed
significant testing activity. Due to the nature of the cable plant network,
testing procedures are dependent on testing performed by vendors and Cox in a
non-production environment. Cox has evaluated all equipment used to provide
Emergency Alert Services. All such equipment has been certified by its supplier
to be Year 2000 compliant.
Vendors. Cox's assessment of its vendors includes a formal
communication program with Cox's significant vendors to determine the extent to
which Cox is vulnerable should those third parties fail to remediate their own
Year 2000 non-compliance. In addition, Cox has completed testing with certain
key vendors. With respect to customers, most of Cox's customer base consists of
individual subscribers; thus, vulnerability to a few key customers is not a
significant risk to Cox. Cox is not aware of any anticipated Year 2000
non-compliance by its vendors or customers that could materially affect Cox's
business operations; however, Cox does not control the systems of other
companies and cannot assure that such systems will be converted in a timely
fashion and, if not converted, would not have an adverse effect on Cox's
business operations.
Like most other companies, Cox is dependent upon a variety of external
suppliers including vendors providing electrical power, local and long distance
telephone services, data networking services, water, fuel for vehicles and
other necessary commodities. Cox also relies upon the interstate banking system
and related electronic communications for such functions as transmitting
financial data from field locations to the home office and sweeping cash into
lockboxes. Cox is currently not aware of any material non-compliance by these
vendors that will materially affect Cox's business operations; however, Cox
does not control these systems and cannot assure that they will be converted in
a timely fashion and, if not converted, would not have an adverse effect on
Cox's business operations.
Lockdown and Event Management
Cox has entered a lockdown of its susceptible systems beginning
November 1, 1999. After that date, all material changes must be approved by its
Chief Information Officer. This lockdown period is expected to terminate in
late January 2000.
20
<PAGE> 22
Cox has made arrangements to ensure that appropriate personnel,
including key engineering and information technology resources, are available
to respond to any situations that may be encountered. A coordinated group will
have the resources required to identify, track, prioritize, remediate, and
report on any events encountered.
Costs
Total costs associated with Year 2000 compliance are not expected to
be material to Cox's financial position. Most of the costs associated with
Cox's applications systems, including subscriber equipment, upgrades and
replacements are being incurred irrespective of the Year 2000 initiative. In
addition, the timing of these upgrades and replacements has not been
accelerated in order to become Year 2000 compliant. As of November 1, 1999, the
total incremental costs expended on the Year 2000 initiative is approximately
$2.4 million. Cox expects that the total incremental costs of the Year 2000
initiative upon completion will be less than $3.0 million.
Risks and Reasonably Likely Worst Case Scenarios
The failure to correct a material Year 2000 problem could result in
system failures leading to a disruption in, or failure of certain normal
business activities or operations. Such failures could materially and adversely
affect Cox's results of operations, liquidity and financial condition. Due to
the general uncertainty inherent in the Year 2000 problem, resulting in part
from the uncertainty of the Year 2000 readiness of third-party suppliers and
customers, Cox is unable to determine at this time whether the consequences of
Year 2000 failures will have a material impact on Cox's results of operations,
liquidity or financial condition. The Year 2000 initiative is expected to
significantly reduce Cox's level of uncertainty about the Year 2000 problem
and, in particular, about the Year 2000 compliance and readiness of its
material vendors. Cox believes that the new applications and cable plant
business systems implemented since 1995 and its Year 2000 initiative reduce the
possibility of significant disruptions to normal operations.
Closed and Pending Acquisitions
Cox has completed the TCA acquisition, as well as the acquisition of
certain cable television systems from Media General, MediaOne, First
Commonwealth Communications, Inc. and Cable Plus Holding Company. Prior to the
acquisition of each of these systems, their respective owners began implementing
its own Year 2000 readiness initiative. In connection with each acquisition, the
seller has either covenanted, warranted or represented to Cox that the acquired
systems are either already Year 2000 compliant, that such systems will be
compliant before the respective acquisitions' closing dates, or that it is on
track with its plan to address the Year 2000 problem. Cox is in the process of
verifying the compliance claims, and further, has negotiated certain contractual
rights in connection with the acquisitions providing recourse against the
sellers in the event that covenants, representations, and warranties relating to
Year 2000 readiness are not met. Following the closing of the recent
transactions, Cox has identified and in some cases remediated certain systems
and components. At present, Cox is unaware of any likely material failures.
However, the acquired systems operate on diverse platforms, some of which are
based on older and possibly outdated technologies and in some instances have not
been certified compliant by their vendors.
Cox is also in the process of acquiring certain cable televisions
systems from Gannett Co., Inc. and AT&T and anticipates closing these
acquisitions during the first half of 2000. Certain historical information on
Year 2000 readiness for systems acquired from Gannett and AT&T, both of whom are
required to make periodic filings with the SEC, may be available in those
companies' respective 10-Q filings.
21
<PAGE> 23
Contingency and Business Continuation Plan
The Year 2000 initiative calls for suitable contingency planning for
Cox's at-risk business functions. Cox normally makes contingency plans in order
to avoid interrupted service providing video, voice and data products to Cox's
customers. The normal contingency planning has been and is being revised where
appropriate, to specifically address Year 2000 exposure with respect to service
to customers.
All statements relating to the Year 2000 made in Forms 10-K, 10-Q or
registration statements filed by Cox with the SEC after January 1, 1996 are
hereby incorporated by reference and designated as Year 2000 Readiness
Disclosures.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Cox has estimated the fair values of financial instruments using
available market information and appropriate valuation methodologies.
Considerable judgment, however, is required in interpreting market data to
develop the estimates of fair value. Accordingly, the estimates presented
herein are not necessarily indicative of the amounts that Cox would realize in
a current market exchange.
The carrying amounts of cash, accounts receivable, other assets,
accounts payable, deferred income and amounts due to Cox Enterprises are
reasonable estimates of their fair value at September 30, 1999 and December 31,
1998.
The estimated fair value of debt instruments is based on discounted
cash flow analyses using Cox's incremental borrowing rate for similar types of
borrowing arrangements and dealer quotations. The commercial paper and the
floating rate notes at September 30, 1999 and the revolving credit agreements,
commercial paper and Floating Rate Reset Notes at December 31, 1998 bear
interest at current market rates and, thus, approximate fair value. Cox is
exposed to interest rate volatility with respect to the foregoing variable rate
debt instruments.
The estimated fair value of Cox's remaining debt instruments at
September 30, 1999 was $3,887.0 million compared to a carrying amount of
$4,062.6 million. The estimated fair value of the remaining debt instruments at
December 31, 1998 was $2,385.7 million compared to a carrying amount of
$2,393.6 million. In addition, the effect of a hypothetical one percentage
point decrease in interest rates would increase the estimated fair value of the
remaining debt instruments with a carrying amount of $4,062.6 million to
$4,102.9 million at September 30, 1999 and $2,393.6 million to $2,540.6 million
at December 31, 1998.
The fair values of some of Cox's investments are estimated based on
quoted market prices for those or similar investments. For cost method
investments for which there are no quoted market prices, a reasonable estimate
of fair value was not practicable as such estimate could not be made without
incurring excessive costs.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On October 9, 1997, three individual subscribers filed a putative
class action suit in Superior Court of the State of California, County of San
Diego against Cox and its cable television system subsidiaries in California
arising out of the manner in which such systems sell premium channel cable
services. The suit alleges that Cox's California Systems unlawfully require
limited basic cable customers to purchase the expanded basic services tier in
order to purchase premium channels, i.e., channels sold on an a-la-carte basis
such as Home Box Office and Showtime. The suit asserts causes of action under
California antitrust
22
<PAGE> 24
and consumer protection laws. The suit seeks injunctive relief as well as an
order awarding the class members compensatory damages, plus statutory damages,
punitive damages, interest and attorney's fees. On February 13, 1998, the Court
granted Cox's motion to stay the suit and referred it on grounds of Primary
Jurisdiction to the Federal Communications Commission for consideration of
issues best addressed by the FCC's expertise should the plaintiffs elect to
file a complaint with the FCC. The plaintiffs filed a Petition for Order to
Show Cause against Cox on October 1, 1998. In addition, they sought to have the
stay lifted by the court. On January 15, 1999, the court denied the plaintiff's
motion to lift the stay. On July 19, 1999, the FCC dismissed the Petition
without prejudice to any further FCC action at a later date. In doing so, the
FCC found that Cox has complied with the rules at issue with regard to its
southern San Diego operations where the three named petitioners are
subscribers. At a status conference on October 21, 1999, the Court gave the
plaintiffs 30 days to file an amended complaint and the defendants 30 days
thereafter to file a response. Cox will continue to defend the action
vigorously. The outcome of this matter cannot be predicted at this time.
Cox and certain subsidiaries are defendants in eight putative
subscriber class action suits in state courts in Arizona, Oklahoma, Louisiana,
Florida, Nebraska, Indiana, Texas and Nevada initiated between October 17, 1997
and December 17, 1998. The suits all challenge the propriety of late fees
charged by the subsidiaries to customers who fail to pay for services in a
timely manner. The suits seek injunctive relief and various formulations of
damages under various claimed causes of action under various bodies of state
law. These actions are in different stages of defense and, in four cases, the
parties have reached settlement agreements. Settlements in Oklahoma and Florida
have been approved by the court. Settlements in Arizona and Nevada are pending
court approval. The court approval of the settlement of the Florida case is on
appeal, pending oral argument. The remaining actions are being defended
vigorously. The outcome of these matters cannot be predicted at this time.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On October 6, 1999, Cox RHINOS Trust, a wholly owned financing
subsidiary of Cox, sold securities in a transaction exempt from registration
pursuant to Section 4(2) under the Securities Act of 1933. For more information
regarding this transaction, see Note 7 to Cox's consolidated financial
statements. Banc of America Securities, LLC acted as placement agent for this
transaction and is entitled to receive an aggregate placement fee of $12.5
million for such services, $5.0 million of which was paid at closing.
23
<PAGE> 25
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<S> <C>
4.1 -- Second Supplemental Indenture, dated as of October
6, 1999, by and between Cox Communications, Inc., as
Issuer and The Bank of New York, as Trustee.
4.2 -- Guarantee Agreement, dated as of October 6, 1999, by
and between Cox Communications, as Guarantor and The
Bank of New York as Guarantee Trustee.
10.1 -- Remarketing Agreement, dated as of October 6, 1999,
by and among Cox Communications, Inc., Cox RHINOS
Trust and Banc of America Securities LLC.
10.2 -- Amended and Restated 364-Day Credit Agreement, dated
as of September 28, 1999, by and among Cox
Communications, Inc., Bank of America National Trust
and Savings Association, as Syndication Agent, The
Bank of New York and Wachovia Bank, N.A., as
Co-Documentation Agents, Chase Bank of Texas,
National Association, as Administrative Agent for
the Banks, and Chase Securities Inc., as Sole Book
Manager and Lead Arranger.
10.3 -- Amended and Restated Five-Year Credit Agreement,
dated as of September 28, 1999, by and among Cox
Communications, Inc., The Chase Manhattan Bank, as
Documentation Agent, Chase Bank of Texas, National
Association, as Administrative Agent for the Banks,
and Chase Securities Inc., as Sole Book Manager and
Lead Arranger.
27 -- Financial Data Schedule (for SEC use only).
</TABLE>
(b) Reports on Form 8-K filed during the quarter ended September 30,
1999:
Form 8-K dated July 7, 1999 (filed July 7, 1999) reporting the
proposed acquisition of AT&T cable television systems under Item 5.
The 8-K was amended on July 28, 1999, August 10, 1999 and August 11,
1999 by filing the associated Agreement and Plan of reorganization as
Exhibit 2.1 and including certain pro forma financial statements under
Item 7.
Form 8-K dated July 27, 1999 (filed July 27, 1999) reporting the
proposed acquisition of cable television systems from Gannett Co.,
Inc. under Item 5 and filing the associated Asset Purchase Agreement
as Exhibit 2.1 under Item 7.
Form 8-K dated August 12, 1999 (filed August 23, 1999) reporting the
consummation of certain public offerings by Cox under Item 5 and
incorporating by reference certain documents into Cox's registration
statement on Form S-3 (File No. 333-82575) under Item 7.
Form 8-K dated August 12, 1999 (filed August 25, 1999) reporting the
completion of Cox's acquisition of TCA under Item 5 and filing certain
related documents under Item 7.
24
<PAGE> 26
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COX COMMUNICATIONS, INC.
/s/ Jimmy W. Hayes Date: November 8, 1999
- ----------------------------------------
Jimmy W. Hayes
Executive Vice President,
Finance and Administration
and Chief Financial Officer
(Principal Financial Officer)
25
<PAGE> 1
EXHIBIT 4.1
------------------------------------------------------------------------
SECOND SUPPLEMENTAL INDENTURE
between
COX COMMUNICATIONS, INC.,
as Issuer
and
THE BANK OF NEW YORK,
as Trustee
Dated as of October 6, 1999
------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
-----------------------
<TABLE>
<CAPTION>
PAGE
----
ARTICLE 1
DEFINITIONS
<S> <C> <C>
SECTION 1.01. Definitions of Terms...............................................................2
ARTICLE 2
GENERAL TERMS AND CONDITIONS OF THE SENIOR NOTES
SECTION 2.01. Designation and Principal Amount...................................................7
SECTION 2.02. Maturity...........................................................................7
SECTION 2.03. Form and Payment; Minimum Transfer Restriction.....................................7
SECTION 2.04. Exchange and Registration of Transfer of Securities;
Restrictions on Transfers; Depository....................................................8
SECTION 2.05. Interest..........................................................................12
SECTION 2.06. Right to Proceed..................................................................15
SECTION 2.07. No Issuance upon the Exercise of Warrants.........................................15
ARTICLE 3
REDEMPTION OF THE SENIOR NOTES
SECTION 3.01. Redemption........................................................................15
SECTION 3.02. Optional Redemption by Company....................................................16
SECTION 3.03. No Sinking Fund...................................................................16
SECTION 3.04. Mandatory Redemption upon a Qualifying Equity Offering............................16
ARTICLE 4
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.01. Extension of Interest Payment Period..............................................16
ARTICLE 5
EXPENSES
SECTION 5.01. Payment of Expenses...............................................................17
SECTION 5.02. Payment upon Resignation or Removal...............................................18
ARTICLE 6
CONVERSION OF SENIOR NOTES
SECTION 6.01. Conversion Rights.................................................................18
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
ARTICLE 7
FORM OF SENIOR NOTES
<S> <C> <C>
SECTION 7.01. Form of Senior Note...............................................................19
ARTICLE 8
ORIGINAL ISSUE OF SENIOR NOTES
SECTION 8.01. Original Issue of Senior Notes....................................................19
ARTICLE 9
REMARKETING; RESET RATE
SECTION 9.01. Effectiveness of this Article; Incorporation of Remarketing
Agreement...............................................................................19
SECTION 9.02. Determination of Reset Date; Remarketing..........................................19
SECTION 9.03. Reset of Interest Rate and Maturity Date..........................................22
SECTION 9.04. Failed Remarketing................................................................23
SECTION 9.05. Renewed Remarketing...............................................................23
ARTICLE 10
MISCELLANEOUS
SECTION 10.01. Ratification of Base Indenture; Second Supplemental
Indenture Controls......................................................................23
SECTION 10.02. Trustee Not Responsible for Recitals.............................................23
SECTION 10.03. Governing Law....................................................................23
SECTION 10.04. Severability.....................................................................23
SECTION 10.05. Counterparts.....................................................................24
</TABLE>
ii
<PAGE> 4
SECOND SUPPLEMENTAL INDENTURE, dated as of October 6, 1999 (the "SECOND
SUPPLEMENTAL INDENTURE") between Cox Communications, Inc., a Delaware
corporation (the "COMPANY"), and The Bank of New York, a New York banking
corporation, as trustee (the "TRUSTEE") under the Indenture dated as of June 27,
1995 between the Company and the Trustee (the "BASE INDENTURE" and together with
this Second Supplemental Indenture, the "INDENTURE").
WHEREAS, the Company executed and delivered the Base Indenture to the
Trustee to provide for the future issuance of the Company's Debt Securities to
be issued from time to time in one or more series as might be determined by the
Company under the Indenture, in an unlimited aggregate principal amount which
may be authenticated and delivered as provided in the Base Indenture;
WHEREAS, Section 2.03 of the Base Indenture permits the terms of any
series of Securities to be established in an indenture supplemental to the Base
Indenture;
WHEREAS, pursuant to the terms of the Base Indenture, the Company
desires to provide for the establishment of a new series of its Debt Securities
to be known as its Auction Rate Reset Senior Notes Series A (the "SENIOR
NOTES"), the form and substance of such Senior Notes and the terms, provisions
and conditions thereof to be set forth as provided in the Base Indenture and
this Second Supplemental Indenture;
WHEREAS, Cox RHINOS Trust, a Delaware statutory business trust (the
"TRUST"), has offered to Intrepid Funding Master Trust $500,000,000 aggregate
liquidation amount of its Auction Rate Reset Preferred Securities (the
"PREFERRED SECURITIES"), representing undivided beneficial interests in the
assets of the Trust, and proposes to invest the proceeds from such offering,
together with the proceeds of the issuance and sale by the Trust to the Company
of $15,500,000 aggregate liquidation amount of its Auction Rate Reset Common
Securities, in $515,500,000 aggregate principal amount of the Senior Notes;
WHEREAS, pursuant to the terms of the Remarketing Agreement dated as of
October 6, 1999 (the "REMARKETING AGREEMENT") among the Company, the Trust and
Banc of America Securities LLC, as remarketing agent (the "REMARKETING AGENT"),
the Preferred Securities or, following any distribution of Senior Notes to the
holders of Preferred Securities, such Senior Notes, as the case may be, shall,
on the occurrence of a Trigger Event, be remarketed in accordance with the terms
hereof by the Remarketing Agent on the Reset Date; and
WHEREAS, the Company requested that the Trustee execute and deliver
this Second Supplemental Indenture, and all requirements necessary to make this
Second Supplemental Indenture a valid instrument in accordance with its terms,
and to make the Senior Notes, when executed by the Company and authenticated
<PAGE> 5
and delivered by the Trustee, the legal, valid and binding obligations of the
Company, have been performed, and the execution and delivery of this Second
Supplemental Indenture has been duly authorized in all respects.
NOW THEREFORE, in consideration of the purchase and acceptance of the
Senior Notes by the Holder thereof, and for the purpose of setting forth, as
provided in the Indenture, the form and substance of the Senior Notes and the
terms, provisions and conditions thereof, the Company covenants and agrees with
the Trustee as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions of Terms. Unless the context otherwise
requires:
(a) a term defined in the Base Indenture and not otherwise defined
herein has the same meaning when used in this Second Supplemental Indenture;
(b) the singular includes the plural as well as vice versa;
(c) a reference to a Section or Article is to a Section or Article of
this Second Supplemental Indenture;
(d) headings are for convenience of reference only and do not affect
interpretation; and
(e) the following terms have the meanings given to them in the Trust
Agreement:
ADMINISTRATIVE TRUSTEE
AFFILIATE
ASSOCIATED PERSON
CLOSING DATE
CLOSING PRICE
COMMON SECURITIES
COMMON STOCK
DELAWARE TRUSTEE
DIRECT ACTION
LIKE AMOUNT
LIQUIDATION AMOUNT
MAJORITY IN LIQUIDATION AMOUNT
2
<PAGE> 6
MANDATORY REDEMPTION DATE
MANDATORY REDEMPTION PRICE
PAYING AGENT
PERSON
PORTAL MARKET
PREFERRED SECURITIES
PRO RATA
PROPERTY TRUSTEE
PURCHASE AGREEMENT
QUALIFYING EQUITY OFFERING
REFERENCE CORPORATE DEALER
REMARKETING AGENT
REMARKETING AGREEMENT
REMARKETING FEE
REPLACEMENT SECURITIES
RULE 144A
SECONDARY PURCHASE AGREEMENT
SECURITIES ACT
SPECIAL EVENT
TAX EVENT
TRADING DAY
TRIGGER PRICE
(f) the following terms have the meanings given to them in this Section
1.01(f):
"90 DAY PERIOD" has the meaning set forth in Section 3.01.
"ADDITIONAL INTEREST" means the interest, if any, that shall accrue on
any interest on the Senior Notes that is in arrears for more than one interest
payment period or not paid during any Extension Period, which in either case
shall accrue at the stated rate per annum specified or determined as specified
in such Senior Note and compounded quarterly.
"ADDITIONAL SUMS" has the meaning set forth in Section 2.05(f).
"ADDITIONAL TAXES" means the sum of any additional taxes, duties and
other governmental changes to which the Trust has become subject from time to
time as a result of a Tax Event.
"AFFILIATED BIDDER" has the meaning set forth in Section 9.02(b).
"BID" means an irrevocable offer to purchase the aggregate outstanding
principal amount of Senior Notes at the Remarketing Price with an Interest Rate
3
<PAGE> 7
equal to the Bid Rate specified in such Bid and with a Maturity Date on the
Remarketed Maturity Date.
"BID RATE" means the proposed Interest Rate on the Senior Notes
specified in a Bid.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day
on which banking institutions in The City of New York are authorized or required
by law, regulation or executive order to close and for purposes of LIBOR rate
determinations, until the Remarketing Settlement Date, that is also a London
Banking Day.
"CALCULATION AGENT" means Banc of America Securities LLC.
"DATE OF DETERMINATION" has the meaning set forth in Section 2.05(b).
"DISSOLUTION EVENT" means that pursuant to Section 8.01 of the Trust
Agreement, the Trust is to be dissolved in accordance with the Trust Agreement,
and the Senior Notes held by the Property Trustee are to be distributed to the
holders of the Trust Securities issued by the Trust Pro Rata in accordance with
the Trust Agreement.
"EXPECTED RESET DATE" has the meaning set forth in Section 9.02(a).
"EXTENSION PERIOD" has the meaning set forth in Section 4.01.
"FAILED REMARKETING" means any event specified as such, at the time so
specified in Article 9 hereof or in Article 6 of the Trust Agreement.
"FINAL RESET DATE" has the meaning set forth in Section 9.02(a)(iii).
"FORMER HOLDERS" has the meaning set forth in Section 9.02(i).
"GLOBAL SENIOR NOTE" has the meaning set forth in Section 2.04(a)(i).
"GUARANTEE TRUSTEE" means the Guarantee Trustee as defined in the
Preferred Securities Guarantee Agreement dated as of October 6, 1999 between Cox
Communications, Inc., as Guarantor, and The Bank of New York, as Guarantee
Trustee.
"INTEREST PAYMENT DATE" has the meaning set forth in Section 2.05(d).
"INTEREST RATE" has the meaning set forth in Section 2.05(a).
4
<PAGE> 8
"LIBOR" means the rate determined by the Calculation Agent as the
interest rate expressed in decimal figures for deposits in the London interbank
market for a period of three months in U.S. Dollars that appears on the Telerate
Page 3750 as of 11:00 a.m., London time, on the Date of Determination. If such
rate does not appear on the Telerate Page 3750, the rate on the Date of
Determination will be determined as if the parties had specified the LIBOR-
Reference Banks Rate as the applicable rate.
"LIBOR-REFERENCE BANKS RATE" means the rate determined on the basis of
the rates at which three-month deposits in U.S. Dollars in the Representative
Amount are offered at approximately 11:00 a.m., London time, on the Date of
Determination by the Reference Banks to prime banks in the London interbank
market for deposits commencing two London Banking Days following such Date of
Determination. The Calculation Agent will request the principal London office of
each of the Reference Banks to provide a quotation of its rate. If at least two
such quotations are provided, the rate will be the arithmetic mean of the
quotations. If fewer than two quotations are provided as requested, the rate
will be the arithmetic mean of the rates quoted at approximately 11:00 a.m., New
York City time, on the Date of Determination by major banks in New York City
(selected by the Calculation Agent) on the Date of Determination for three-month
loans in U.S. Dollars in the Representative Amount to leading banks for loans
extended two London Banking Days following such Date of Determination.
"LONDON BANKING DAY" means any day on which dealings in deposits in
U.S. Dollars are transacted in the London interbank market.
"MARGIN" has the meaning set forth in Section 2.05(a)(i).
"MATURITY DATE" means October 6, 2029; provided that in the event of a
successful Remarketing of the Senior Notes or the Preferred Securities, as the
case may be, the Maturity Date shall be the Remarketed Maturity Date.
"OPTIONAL REDEMPTION" has the meaning set forth in Section 3.01(b).
"PRE-REMARKETING INTEREST PAYMENT DATE" has the meaning set forth in
Section 2.05(b).
"PRE-REMARKETING REGULAR RECORD DATE" has the meaning set forth in
Section 2.05(c).
"REDEMPTION DATE" shall mean, when used with respect to any Senior
Notes to be redeemed, the date fixed for such redemption by or pursuant to this
Second Supplemental Indenture.
"REDEMPTION PRICE" has the meaning set forth in Section 3.01.
5
<PAGE> 9
"REFERENCE BANKS" means, for the purposes of any LIBOR rate, four major
banks in the London interbank market selected by the Calculation Agent.
"REGULAR RECORD DATE" has the meaning set forth in Section 2.05(e).
"REMARKETED MATURITY DATE" means the later of (i) the thirtieth
anniversary of the Remarketing Settlement Date on which Replacement Notes are
issued, and (ii) October 6, 2029.
"REMARKETING" means a remarketing of Senior Notes pursuant to Article 9
hereof or Article 6 of the Trust Agreement.
"REMARKETING PRICE" means 100.25% of the aggregate principal amount of
the Senior Notes plus accrued and unpaid interest (including Additional
Interest, if any).
"REMARKETING SETTLEMENT DATE" means the third Business Day immediately
following the Reset Date.
"RENEWED REMARKETING" has the meaning set forth in Section 9.05.
"REPLACEMENT NOTES" has the meaning set forth in Section 9.02(j).
"REPLACEMENT SECURITIES" has the meaning set forth in Section 5(j) of
the Remarketing Agreement.
"REPRESENTATIVE AMOUNT" means, for the purposes of any LIBOR rate for
which a Representative Amount is relevant, an amount that is equal to the
aggregate principal amount of all of the Senior Notes.
"RESET DATE" means any date established as a Reset Date pursuant to
Article 9 hereof or Article 6 of the Trust Agreement.
"RESET RATE" has the meaning set forth in Section 1 of the Remarketing
Agreement.
"RESTRICTED SECURITY" has the meaning set forth in Section 2.04(c).
"SECONDARY PURCHASER" has the meaning set forth in Section 9.02(c).
"TRANSFER RESTRICTION TERMINATION DATE" means the first date on which
the Senior Notes (other than Senior Notes acquired by the Company or any
Affiliate thereof) may be sold pursuant to Rule 144(k).
"TRIGGER EVENT" has the meaning set forth in Section 9.02(a).
6
<PAGE> 10
"TRUST AGREEMENT" means the Amended and Restated Trust Agreement of Cox
RHINOS Trust, a Delaware statutory business trust, dated as of October 6, 1999.
"TRUST SECURITIES" means the Preferred Securities and Common Securities
of the Trust.
"U.S. DOLLAR" means the lawful currency of the United States of
America.
"WINNING BID RATE" has the meaning set forth in Section 9.02(b) hereof
or in Section 6.02(b) of the Trust Agreement.
ARTICLE 2
GENERAL TERMS AND CONDITIONS OF THE SENIOR NOTES
SECTION 2.01. Designation and Principal Amount. There is hereby
authorized a series of Securities designated the "Auction Rate Reset Senior
Notes Series A", limited in aggregate principal amount to $515,500,000 (except
as contemplated in Section 2.03(2) of the Base Indenture).
SECTION 2.02. Maturity. The principal of the Senior Notes shall be due
and payable on the Maturity Date.
SECTION 2.03. Form and Payment; Minimum Transfer Restriction.
(a) Except as provided in Section 2.04, the Senior Notes shall be
issued as Registered Securities in fully certificated form without coupons in
denominations of $100,000 in principal amount and integral multiples of $1,000
thereof. Principal and interest on the Senior Notes issued in certificated form
will be payable by check or wire transfer, the transfer of such Senior Notes
will be registrable and such Senior Notes will be exchangeable for Senior Notes
bearing identical terms and provisions, in each case, at the office or agency of
the Trustee in the Borough of Manhattan, The City of New York; provided that
payment of interest may be made at the option of the Company by check mailed to
the holder of Senior Notes at such address as shall appear in the Securities
Register. Notwithstanding the foregoing, so long as the Property Trustee is a
holder of Senior Notes, the payment of the principal of and interest (including
any Additional Interest, if any) on such Senior Notes held by the Property
Trustee will be made at such place and to such account as may be designated by
the Property Trustee.
7
<PAGE> 11
(b) A holder of Senior Notes may transfer or exchange Senior Notes held
by it only in minimum denominations of $100,000 and integral multiples of $1,000
in excess thereof. Any attempted transfer, sale or other disposition of Senior
Notes in a denomination of less than $100,000 shall be deemed to be void and of
no legal effect whatsoever.
SECTION 2.04. Exchange and Registration of Transfer of Securities;
Restrictions on Transfers; Depository. (a) If distributed to holders of
Preferred Securities in connection with a Dissolution Event, the Senior Notes
will be issued in the same form as the Preferred Securities that such Senior
Notes replace in accordance with the following procedures.
(i) If the Preferred Securities are held in global form, the
Senior Notes shall be presented to the Trustee by the Property Trustee
in exchange for a Security in permanent global form in an aggregate
principal amount equal to the aggregate principal amount of all
outstanding Senior Notes (a "GLOBAL SENIOR NOTE"), to be registered in
the name of the Depository, or its nominee, and delivered by the
Property Trustee to the Depository for crediting to the accounts of its
participants pursuant to the instructions of the Administrative
Trustees. The Company upon any such presentation shall execute a Global
Senior Note in such aggregate principal amount and deliver the same to
the Trustee for authentication and delivery in accordance with the
Indenture. Payments on the Senior Notes issued as a Global Senior Note
will be made to the Depository. The Company initially appoints The
Depository Trust Company to act as Depository with respect to the
Global Senior Note.
(ii) If the Preferred Securities are held in certificated
form, the Senior Notes shall be presented to the Trustee by the
Property Trustee and each outstanding Preferred Security certificate
will be deemed to represent a beneficial interest in such Senior Note
in an aggregate principal amount equal to the aggregate Liquidation
Amount of the Preferred Securities represented by such Preferred
Security certificate. When the holder of a Preferred Security
certificate presents such certificate for transfer or reissuance, such
certificate will be canceled and a Senior Note, registered in the name
of such holder or such holder's transferee, as the case may be, in an
aggregate principal amount equal to the aggregate Liquidation Amount of
the canceled certificate, will be executed by the Company and delivered
to the Trustee for authentication and delivery in accordance with the
Indenture. On issue of such Senior Notes, Senior Notes with an
equivalent aggregate principal amount that were presented by the
Property Trustee to the Trustee will be deemed to have been canceled.
(b) Any Global Senior Note may be endorsed with or have incorporated
in the text thereof such legends or recitals or changes not inconsistent with
the
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provisions of this Indenture as may be required by the Depository, by a
national securities exchange or by the National Association of Securities
Dealers, Inc. in order for the Senior Notes to be tradeable on the PORTAL Market
or as may be required for the Senior Notes to be tradeable on any other market
developed for trading of securities pursuant to Rule 144A or required to comply
with any applicable law or any regulation thereunder or with the rules and
regulations of any securities exchange upon which the Senior Notes may be listed
or traded or to conform with any usage with respect thereto, or to indicate any
special limitations or restrictions to which any particular Senior Notes are
subject.
(c) Each Senior Note that bears or is required to bear the legend set
forth in this Section 2.04(c) (a "RESTRICTED SECURITY") shall be subject to the
restrictions on transfer provided in the legend set forth in this Section
2.04(c), unless such restrictions on transfer shall be waived by the written
consent of the Company, and the Holder of each Restricted Security, by such
Holder's acceptance thereof, agrees to be bound by such restrictions on
transfer. As used in this Section 2.04(c) and in Section 2.04(d), the term
"transfer" encompasses any sale, pledge, transfer or other disposition of any
Restricted Security.
Prior to the Remarketing Settlement Date and after the occurrence of a
Dissolution Event, any certificate evidencing a Senior Note shall bear a legend
in substantially the following form, unless otherwise agreed by the Company
(with written notice thereof to the Trustee):
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET
FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF,
THE HOLDER AGREES THAT IT WILL NOT RESELL OR OTHERWISE
TRANSFER THE SECURITIES EVIDENCED HEREBY EXCEPT TO (1) COX
COMMUNICATIONS, INC. OR ANY AFFILIATE THEREOF, (2) BANK OF
AMERICA, N.A. OR ANY OF ITS AFFILIATES, (3) ANY ENTITY
SPONSORED OR ORGANIZED BY, ON BEHALF OF, OR FOR THE PRIMARY
USE OF, BANK OF AMERICA, N.A. OR ANY OF ITS AFFILIATES OR (4)
A SECONDARY PURCHASER (AS DEFINED IN THE AMENDED AND RESTATED
TRUST AGREEMENT OF COX RHINOS TRUST DATED AS OF OCTOBER 6,
1999 (AS AMENDED FROM TIME TO TIME, THE "TRUST
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AGREEMENT")) THAT AS OF THE RESET DATE HAS ENTERED INTO A
SECONDARY PURCHASE AGREEMENT (AS DEFINED IN THE TRUST
AGREEMENT) WITH COX RHINOS TRUST.
On and after the Remarketing Settlement Date and after the occurrence
of a Dissolution Event and prior to the Transfer Restriction Termination Date,
any certificate evidencing a Replacement Note shall bear a legend in
substantially the following form, unless otherwise agreed by the Company (with
written notice thereof to the Trustee):
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET
FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF,
THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT HAS ACQUIRED THE SECURITIES IN AN
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR
904 UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT
PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO
SALES OF THE SECURITIES EVIDENCED HEREBY UNDER RULE 144(k)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION) RESELL
OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY EXCEPT TO
(A) COX COMMUNICATIONS, INC. OR ANY SUBSIDIARY THEREOF, (B) A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT OR (C) IN AN OFFSHORE TRANSACTION
MEETING THE REQUIREMENTS OF RULE 903 OR 904 UNDER THE
SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AT THE
REQUEST OF THE
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HOLDER, THIS LEGEND WILL BE REMOVED AFTER THE EXPIRATION OF
THE HOLDING PERIOD APPLICABLE TO THE SALE OF THE SECURITY
EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT.
Following the Transfer Restriction Termination Date, any Senior Note or
security issued in exchange or substitution therefor (other than Senior Notes
acquired by the Company or any Affiliate), may upon surrender of such Senior
Note or security for exchange to the Trustee in accordance with the provisions
of this Section 2.04, be exchanged for a new Senior Note or Senior Notes, of
like tenor and aggregate principal amount, which shall not bear the restrictive
legend required by this Section 2.04(c).
(d) Any Senior Note that, prior to the Transfer Restriction
Termination Date, is purchased or owned by the Company or any Affiliate thereof
may not be resold by the Company or such Affiliate unless registered under the
Securities Act or resold pursuant to an exemption from the registration
requirements thereof that results in such Senior Note no longer being a
"restricted security" as defined under Rule 144 under the Securities Act.
(e) Except as provided in (f) below, a Global Senior Note may be
transferred, in whole but not in part, only to another nominee of the
Depository, or a successor Depository selected or approved by the Company or to
a nominee of such successor Depository.
(f) If (i) the Depository notifies the Company that it is unwilling
or unable to continue as a depositary for such Global Senior Note and no
successor depositary shall have been appointed within 90 days by the Company or
(ii) the Depository, at any time, ceases to be a clearing agency registered
under the Exchange Act at which time the Depository is required to be so
registered to act as such depositary and no successor depositary shall have
been appointed within 90 days by the Company, in each case, the Company will
execute and the Trustee, upon written notice from the Company and receipt of a
Company Order, will authenticate and deliver in exchange for such Global Senior
Note, the Senior Notes in definitive registered form without coupons, in
authorized denominations, and in an aggregate principal amount equal to the
principal amount of the Global Senior Note. If (A) the Company, in its sole
discretion, determines that the Senior Notes shall no longer be represented by
a Global Senior Note or (B) there shall have occurred an Event of Default with
respect to such Senior Notes, in each case, the Company will execute and the
Trustee, upon receipt of an Officers' Certificate evidencing such determination
by the Company and a Company Order, will authenticate and make available for
delivery in exchange for such Global Senior Note, the Senior Notes in
definitive registered form without coupons, in authorized denominations, and in
an aggregate principal amount equal to the
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principal amount of the Global Senior Note. Any Senior Notes delivered pursuant
to this Section 2.04(f) shall be registered in such names and in such
authorized denominations as the Depository, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Trustee. The
Trustee shall (i) deliver any such Senior Notes to the Depository for delivery
to the Persons in whose names such Senior Notes are so registered and (ii)
cancel the Global Senior Note for which such Senior Notes are exchanged.
SECTION 2.05. Interest. (a) Interest on the principal amount of each
Senior Note will accrue and be payable at a rate (the "INTEREST RATE") per annum
equal to
(i) from and including the Closing Date to but excluding the
earlier of (A) the Remarketing Settlement Date on which Replacement
Notes are issued and (B) the date such principal amount is paid, LIBOR
plus 75 basis points increasing by 50 basis points upon the date of
occurrence of a Failed Remarketing and by an additional 50 basis points
on the corresponding day of each calendar month thereafter (the
"MARGIN");
(ii) from and including the Remarketing Settlement Date on
which Replacement Notes are issued to but excluding the date such
principal amount is paid, the Winning Bid Rate; and
(iii) notwithstanding clauses (i) and (ii) above, if the
Company fails to pay the principal amount on the date such amount
becomes due, then from and including such due date to but excluding
the date such principal amount is paid, the applicable periodic
Interest Rate, compounded quarterly, but only to the extent permitted
by applicable law.
Interest that is not paid when due will bear additional interest
thereon compounded quarterly at the applicable periodic Interest Rate specified
above (to the extent permitted by applicable law) in accordance with Section
4.01. The term "interest", as used herein, includes any such Additional Interest
unless otherwise stated.
(b) Until the Remarketing Settlement Date on which Replacement Notes
are issued, interest on the Senior Notes will be payable quarterly in arrears
(A) on October 15, January 15, April 15 and July 15 of each year, commencing
January 15, 2000 and (B) on such Remarketing Settlement Date (each, a
"PRE-REMARKETING INTEREST PAYMENT DATE"), and will accrue from and including the
most recent date to which interest has been paid or, if no interest has been
paid, from the Closing Date to but excluding the related Pre-Remarketing
Interest Payment Date, except as otherwise described below.
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The Interest Rate in effect for the period from and including the
Closing Date to but excluding January 15, 2000 shall be the rate determined by
the Calculation Agent two London Banking Days prior to Closing Date and shall
equal LIBOR plus 75 basis points. The Interest Rate in effect thereafter, for
each quarterly period from and including the immediately preceding
Pre-Remarketing Interest Payment Date to but excluding the applicable
Pre-Remarketing Interest Payment Date, shall be determined by the Calculation
Agent two London Banking Days prior to such immediately preceding
Pre-Remarketing Interest Payment Date (a "DATE OF DETERMINATION") and shall
equal LIBOR plus the Margin. Prior to the Remarketing Settlement Date, the
amount of interest payable for any period shall be computed on the basis of a
360-day year and the actual number of days elapsed in such period. If a
Pre-Remarketing Interest Payment Date is not a Business Day, then such
Pre-Remarketing Interest Payment Date will be the next succeeding Business Day,
except if such Business Day is in the next succeeding calendar month, such
Pre-Remarketing Distribution Date will be the immediately preceding Business
Day.
(c) Interest shall be paid to the Person in whose name such Senior
Note or any predecessor Senior Note is registered on the books and records of
the Company at the close of business on the Regular Record Date for such
interest installment, which shall be fifteen (15) days prior to a
Pre-Remarketing Interest Payment Date (the "PRE-REMARKETING REGULAR RECORD
DATE").
(d) From and including the Remarketing Settlement Date on which
Replacement Notes are issued, interest on the Replacement Notes will be payable
quarterly in arrears (A) on October 15, January 15, April 15 and July 15 of each
year, commencing on the Remarketing Settlement Date and (B) on the Maturity Date
(each, an "INTEREST PAYMENT DATE"), and will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from and
including the Remarketing Settlement Date, to but excluding the related Interest
Payment Date, except as otherwise described below. From and including the
Remarketing Settlement Date, the amount of interest payable for any quarterly
period shall be computed on the basis of a 360-day year of twelve 30-day months.
Except as provided in the last sentence of this paragraph, from and including
the Remarketing Settlement Date the amount of interest payable for any period
shorter than a full quarterly period for which interest is computed will be
computed on the basis of the actual number of days elapsed per 30-day month. If
an Interest Payment Date is not a Business Day, then such Interest Payment Date
will be postponed to the next succeeding Business Day (and without any interest
or other payment in respect of any such delay).
(e) Interest shall be paid to the Person in whose name the Senior Note
or any predecessor Senior Note is registered on the books and records of the
Company, at the close of business on the Regular Record Date for such interest
installment, which, in respect of Senior Notes of which the Property Trustee is
the
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Holder and the related Preferred Securities are in book-entry only form or a
Global Senior Note, shall be the close of business on the Business Day next
preceding that Interest Payment Date (the "REGULAR RECORD DATE"). If the Senior
Notes are not represented by a Global Senior Note, the Regular Record Date for
such interest installment shall be fifteen (15) days prior to that Interest
Payment Date.
(f) In the event that (i) the Property Trustee is the Holder of all of
the outstanding Senior Notes, (ii) a Tax Event in respect of the Trust shall
have occurred and be continuing and (iii) the Company shall not have (A)
redeemed the Senior Notes pursuant to Section 3.01 or (B) terminated the Trust
pursuant to Section 8.01(iii) of the Trust Agreement, the Company shall pay to
the Trust (or its permitted successors or assigns under the Trust Agreement) for
so long as the Trust (or its permitted successor or assignee) is the registered
holder of the Senior Notes, such additional amounts as may be necessary in order
that the amount of distributions (including any Additional Amounts as defined in
the Trust Agreement) then due and payable by the Trust on the Preferred
Securities and Common Securities that at any time remain outstanding in accord
with the terms thereof shall not be reduced as a result of any Additional Taxes
(the "ADDITIONAL SUMS"). Whenever in this Indenture or the Senior Notes there is
a reference in any context to the payment of principal of or interest on the
Senior Notes, such mention shall be deemed to include mention of the payments of
the Additional Sums provided for in this paragraph to the extent that, in such
context, Additional Sums are, were or would be payable in respect thereof
pursuant to the provisions of this paragraph and express mention of the payment
of Additional Sums (if applicable) in any provisions hereof shall not be
construed as excluding Additional Sums in those provisions hereof where such
express mention is not made; provided that the extension of an interest payment
period pursuant to Section 4.01 on the Senior Notes shall not extend the payment
of any Additional Sums that may be due and payable during such interest payment
period.
SECTION 2.06. Right to Proceed. The Company acknowledges the rights of
the Holders of Preferred Securities under the Trust Agreement to take Direct
Action referred to in Section 3.08(e) thereof and Annex I thereto.
SECTION 2.07. No Issuance upon the Exercise of Warrants. The Senior
Notes shall not be issuable upon the exercise of warrants.
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ARTICLE 3
REDEMPTION OF THE SENIOR NOTES
SECTION 3.01. Redemption. (a) If at any time a Special Event occurs,
the Company shall have the right (subject to the conditions set forth in the
Indenture) at any time, upon not less than 30 nor more than 60 days' notice, to
redeem the Senior Notes in whole, but not in part, within the 90 days following
the occurrence of such Special Event (the "90 DAY PERIOD") at a redemption price
equal to 100% of the principal amount of the Senior Notes plus any accrued and
unpaid interest thereon (including any Additional Interest) to the date of such
redemption (the "REDEMPTION PRICE"), and, simultaneous with such redemption, to
cause a Like Amount of the Trust Securities to be redeemed by the Trust at the
Mandatory Redemption Price on a Pro Rata basis. The Redemption Price shall be
paid prior to 12:00 noon, New York City time, on the date of such redemption or
such earlier time as the Company determines, provided that the Company shall
deposit with the Trustee an amount sufficient to pay the Redemption Price prior
to the Redemption Date.
(b) From and after the fifth anniversary of the Remarketing Settlement
Date, the Company shall have the right at any time, upon not less than 30 nor
more than 60 days' notice, to redeem the Senior Notes, in whole but not in part,
at the Redemption Price (an "OPTIONAL REDEMPTION") and, simultaneous with such
redemption, to cause a Like Amount of the Securities to be redeemed by the Trust
at the Mandatory Redemption Price on a Pro Rata basis. The Redemption Price
shall be paid prior to 12:00 noon, New York City time, on the date of such
redemption or such earlier time as the Company determines, provided that the
Company shall deposit with the Trustee an amount sufficient to pay the
Redemption Price prior to the Redemption Date.
SECTION 3.02. Optional Redemption by Company. Except as provided in
Section 3.01, the Senior Notes are not subject to any optional redemption by the
Company.
SECTION 3.03. No Sinking Fund. The Senior Notes are not entitled to
the benefit of any sinking fund.
SECTION 3.04. Mandatory Redemption upon a Qualifying Equity Offering.
If at any time prior to the successful Remarketing of the Preferred Securities
(or the Senior Notes), a Qualifying Equity Offering occurs, the Company shall,
upon not less than 30 nor more than 60 days' notice, redeem Senior Notes having
an aggregate principal amount equal to the lesser of (a) the gross proceeds of
such Qualifying Equity Offering (without deduction of any applicable
underwriting discounts and commissions) and (b) the aggregate principal amount
of all outstanding Senior Notes, on the 90th day following the closing of such
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Qualifying Equity Offering, and, simultaneous with such redemption, cause a Like
Amount of the Trust Securities to be redeemed by the Trust on a Pro Rata basis
at a redemption price equal to the Redemption Price.
ARTICLE 4
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.01. Extension of Interest Payment Period. Subject to the last
sentence of this paragraph, the Company shall have the right, at any time during
the term of the Senior Notes, so long as no Event of Default has occurred and is
continuing, from time to time to extend the interest payment period for the
Senior Notes (each such deferral period, an "EXTENSION PERIOD"), during which
period the Company shall have the right to not make payments of interest on any
Interest Payment Date; provided that no such Extension Period shall (i) exceed
20 consecutive quarterly periods or (ii) extend beyond the Mandatory Redemption
Date, if the Trust Securities are at the time outstanding, or the Maturity Date.
On the last day of any such Extension Period, which shall be an Interest Payment
Date, the Company shall pay all interest then accrued and unpaid thereon
(together with Additional Interest thereon, if any, to the extent permitted by
applicable law) to the Person in whose name the Senior Note or any predecessor
Senior Note is registered on the books and records of the Company at the close
of business on the Regular Record Date for the Interest Payment Date at the end
of such Extension Period. Upon termination of any Extension Period and upon the
payment of all accrued and unpaid interest and any Additional Interest then due,
the Company may select a new Extension Period, subject to the above
requirements. No interest including Additional Interest, if any, shall be due
and payable during an Extension Period, except at the end thereof. The Company
shall give the Trustee, the Property Trustee and the Administrative Trustees
notice of its selection of such Extension Period at least one Business Day prior
to the record date for the date the distributions on the Preferred Securities of
the Trust (or if no Preferred Securities are outstanding, for the date interest
on the Senior Notes) would have been payable except for the election to begin
such Extension Period. Such notice shall specify the period selected.
Notwithstanding the foregoing, in the event of a Failed Remarketing, any then
current Extension Period shall terminate on the date of such Failed Remarketing
and all deferred payments of interest shall be due and payable on such date, and
no Extension Period may thereafter commence unless and until there shall have
been a successful Remarketing of all of the Preferred Securities (or the Senior
Notes).
The Trustee shall promptly give notice of the Company's selection of
such Extension Period to the Holders of the outstanding Senior Notes.
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The limitations set forth in Section 6.02 of the Preferred Securities
Guarantee Agreement shall apply during any Extension Period.
ARTICLE 5
EXPENSES
SECTION 5.01. Payment of Expenses. In connection with the offering,
sale and issuance of the Senior Notes to the Trust and in connection with the
sale of the Trust Securities by the Trust, the Company, in its capacity as
borrower with respect to the Senior Notes, shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Senior Notes and the Trust Securities payable by the Trust
pursuant to the Purchase Agreement and reasonable compensation of the Trustee
under the Indenture in accordance with the provisions of Section 7.06 of the
Base Indenture;
(b) pay all costs and expenses of the Trust (other than payment in
respect of Trust Securities) (including, but not limited to, costs and expenses
relating to the organization of the Trust; the fees and expenses and indemnities
of the Property Trustee and the Delaware Trustee; the costs and expenses
relating to the operation of the Trust, including without limitation, costs and
expenses of accountants, attorneys, statistical or bookkeeping services,
expenses for printing, engraving, computing or accounting equipment, paying
agent(s), registrar(s), transfer agent(s), duplicating and travel; telephone and
other telecommunications expenses; and costs and expenses incurred in connection
with the acquisition, financing, and disposition of Trust assets);
(c) pay all costs and expenses of the Trust or Property Trustee
related to the enforcement by the Property Trustee of the rights of the holders
of the Preferred Securities;
(d) be primarily liable for any indemnification obligations arising
with respect to the Trust Agreement; and
(e) pay any and all taxes (other than United States withholding taxes
attributable to the Trust or its assets) and all liabilities, costs and expenses
with respect to such taxes of the Trust.
SECTION 5.02. Payment upon Resignation or Removal. Upon termination of
this Second Supplemental Indenture or the Base Indenture or the removal or
resignation of the Trustee pursuant to Section 7.08 of the Base Indenture, the
Company shall pay to the Trustee all amounts accrued to the date of such
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termination, removal or resignation. Upon termination of the Trust Agreement or
the removal or resignation of the Delaware Trustee, the Guarantee Trustee or the
Property Trustee, as the case may be, the Company shall pay to the Delaware
Trustee, the Guarantee Trustee or the Property Trustee and their respective
counsel, as the case may be, all amounts accrued to the date of such
termination, removal or resignation.
ARTICLE 6
CONVERSION OF SENIOR NOTES
SECTION 6.01. Conversion Rights. The Senior Notes are not convertible
into shares of Common Stock at any time.
ARTICLE 7
FORM OF SENIOR NOTES
SECTION 7.01. Form of Senior Note. The Senior Notes and the Trustee's
certificate of authentication shall be substantially in the form of Exhibit A-1.
Following the Remarketing, the Replacement Notes shall be substantially in the
form of Exhibit A-2. Each of Exhibit A-1 and Exhibit A-2 is hereby incorporated
in and expressly made a part of this Second Supplemental Indenture.
ARTICLE 8
ORIGINAL ISSUE OF SENIOR NOTES
SECTION 8.01. Original Issue of Senior Notes. Senior Notes in the
aggregate principal amount of $515,500,000 may, upon execution of this Second
Supplemental Indenture, be executed by the Company and delivered to the Trustee
for authentication, and the Trustee shall thereupon authenticate and deliver
such Senior Notes to or upon the written order of the Company, in accordance
with Section 2.05 of the Base Indenture.
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ARTICLE 9
REMARKETING; RESET RATE
SECTION 9.01. Effectiveness of this Article; Incorporation of
Remarketing Agreement. (a) Sections 9.02 and 9.05 shall become effective if and
only if the Senior Notes have been distributed to the Holders of the Trust
Securities prior to Remarketing. Notwithstanding the foregoing, on the
Remarketing Settlement Date (except in the case of a Failed Remarketing), the
certificates representing the Senior Notes held by the Property Trustee shall be
exchanged for certificates representing Replacement Notes.
(b) Every Person, by virtue of having become a Holder in accordance
with the terms of this Agreement, shall be deemed to have expressly assented and
agreed to the terms of, and shall be bound by, this Second Supplemental
Indenture, including the terms of Exhibit B. Exhibit B is hereby incorporated in
and expressly made a part of this Second Supplemental Indenture.
SECTION 9.02. Determination of Reset Date; Remarketing.
(a) (i) Subject to Section 9.05, (i) if the Closing Price of the
Common Stock on any Trading Day is less than the Trigger Price and the Senior
Notes have been distributed to the holders of the Trust Securities and (ii) in
any case, if the Preferred Securities (or the Senior Notes) remain outstanding
at 36 months from the date of issuance (each, a "TRIGGER EVENT"), the holders of
a majority in principal amount of the Senior Notes (the "REQUESTING HOLDERS")
will have the right to require remarketing of the Senior Notes. The Requesting
Holders may exercise this right by delivering a written notice to the
Remarketing Agent at any time on or prior to the sixth Business Day following
the date on which such Trigger Event occurs. Upon the receipt of such notice,
the Remarking Agent shall immediately deliver a written notice to the Company on
behalf of the Requesting Holders (the "REMARKETING NOTICE"). If the Requesting
Holders exercise their right to require the remarketing of the Senior Notes, the
Reset Date shall be the sixth Business Day after the date on which the
Remarketing Notice is delivered by the Remarketing Agent (the "EXPECTED RESET
DATE").
(ii) If the Requesting Holders do not exercise their right to require
the remarketing the Senior Notes pursuant to Section 9.02(a)(i) above
with respect to any Trigger Event, the Requesting Holders shall
continue to have the option to require the remarketing of the Senior
Notes in accordance with Section 9.02(a)(i) with respect to any
subsequent Trigger Event.
(iii) Notwithstanding Section 9.02(a)(i):
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(A) the Company may, by notice to the Remarketing Agent,
direct that the Reset Date be delayed if the Company believes
it will be unable to meet the conditions to Remarketing in the
absence of such a delay; and
(B) the Remarketing Agent may, by notice to the Company,
direct that the Reset Date be delayed if the Remarketing Agent
believes that a Remarketing will not be successful in the
absence of such a delay;
provided that the Company and the Remarketing Agent, in either such event, will
use their reasonable best efforts to establish a delayed Reset Date that is
within five Business Days after the Expected Reset Date, but in no event later
than the 30th Business Day following the date on which the related Remarketing
Notice was delivered (the "FINAL RESET DATE").
(iv) If the Company and the Remarketing Agent have not agreed,
on or prior to the sixth Business Day preceding the Final Reset Date,
to a Reset Date that is not later than the Final Reset Date, a Failed
Remarketing shall be deemed to have occurred.
(b) The Company shall, by notice to the Remarketing Agent no later
than five Business Days prior to the Reset Date, select and specify three
Reference Corporate Dealers. By 3:00 p.m., New York City time, on the Reset
Date, the Remarketing Agent shall request Bids from such Reference Corporate
Dealers. The Remarketing Agent or an Affiliate or Associated Person thereof (any
such person, an "AFFILIATED BIDDER") may, at its option, enter a Bid. The
Remarketing Agent shall disclose to the Company the Bids obtained and determine
the lowest Bid Rate (the "WINNING BID RATE") from among the Bids obtained on the
Reset Date. By approximately 4:30 p.m., New York City time, on the Reset Date,
the Remarketing Agent shall notify the Company and the Trustee of the Winning
Bid Rate. If on a Reset Date, Bids are not submitted by at least two Reference
Corporate Dealers, or if the lowest Bid submitted would result in a Winning Bid
Rate in excess of the rate permitted by applicable law, the Remarketing shall be
deemed to be a Failed Remarketing on the corresponding Remarketing Settlement
Date. The Winning Bid Rate determined by the Remarketing Agent, absent manifest
error, shall be binding and conclusive upon the holders of the Senior Notes, the
Company and the Trust.
(c) On the Reset Date, the Remarketing Agent shall designate as the
Secondary Purchaser (the "SECONDARY PURCHASER") the Reference Corporate Dealer
providing the Bid containing the Winning Bid Rate. If the Winning Bid Rate is
specified in the Bids submitted by two or more bidders, the Remarketing Agent
shall, in consultation with the Company, designate one of such bidders as
the Secondary Purchaser.
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(d) On the Reset Date, the Secondary Purchaser shall enter into a
Secondary Purchase Agreement for the purchase by such Secondary Purchaser at the
Remarketing Price of the aggregate principal amount of Senior Notes, with an
Interest Rate equal to the Winning Bid Rate and with a Maturity Date on the
Remarketed Maturity Date.
(e) If a Remarketing has occurred pursuant to this Section 9.02 but
settlement of the purchase and sale of the Senior Notes does not occur on the
corresponding Remarketing Settlement Date, then a Failed Remarketing shall be
deemed to have occurred on such Remarketing Settlement Date.
(f) At the time and in the manner specified in the Secondary Purchase
Agreement, the Secondary Purchaser shall pay on the Remarketing Settlement Date
to the Remarketing Agent on behalf of the holders of the Senior Notes an amount
of cash equal to the Remarketing Price.
(g) Unless otherwise agreed among the Remarketing Agent, the Paying
Agent and any Former Holder, the Remarketing Agent shall promptly pay the
Remarketing Price, less the Remarketing Fee, to the Paying Agent, acting solely
as agent for the Former Holders, and the Paying Agent shall pay such amount to
the Former Holders in the manner specified in Section 2.12 of the Base Indenture
for payments of interest and as is otherwise specified herein, except that the
record date therefor shall be the Business Day immediately preceding the
Remarketing Settlement Date.
(h) The obligation of the Remarketing Agent to make payment to the
Former Holders in connection with the Remarketing shall be limited to the extent
that the Secondary Purchaser has delivered the Remarketing Price therefor to the
Remarketing Agent.
(i) Any outstanding Senior Notes purchased on the Remarketing
Settlement Date shall be deemed to be transferred to the Secondary Purchaser and
shall be replaced in the manner provided in Section 9.02(j). On and after the
Remarketing Settlement Date (except in the event of a Failed Remarketing), (A)
the Company shall make no further payments to, and the Company shall have no
further obligations under this Second Supplemental Indenture (or the Indenture)
in respect of, the holders of such replaced Senior Notes (the "FORMER HOLDERS"),
(B) the Company shall only be obligated to make payments to the holders of
Replacement Notes and (C) the Senior Notes of the Former Holders shall no longer
represent an obligation of the Company, but shall only represent a right to
receive the proceeds of the Remarketing from the Paying Agent.
(j) The Company shall cause replacement certificates evidencing the
remarketed Senior Notes (or, if the Preferred Securities have been remarketed,
21
<PAGE> 25
reset Senior Notes) to be executed by the Company and authenticated by the
Trustee in accordance with the provisions of Section 2.05 of the Base Indenture
(the "REPLACEMENT NOTES"). If the Replacement Notes are to be purchased on the
Remarketing Settlement Date, the Replacement Notes shall be delivered to the
purchaser or purchasers of the remarketed Senior Notes in accordance with the
terms of the Secondary Purchase Agreement.
SECTION 9.03. Reset of Interest Rate and Maturity Date. From and
including the Remarketing Settlement Date on which Replacement Securities are
issued, if the Senior Notes are remarketed pursuant to Article 9 hereof or the
Preferred Securities are remarketed pursuant to Article 6 of the Trust
Agreement, the Interest Rate on the Senior Notes shall be the Winning Bid Rate
and the Maturity Date shall be the Remarketed Maturity Date.
SECTION 9.04. Failed Remarketing. The Remarketing Agent shall give
notice of any Failed Remarketing on the date such Failed Remarketing occurs, or
is deemed to occur, by 4:00 p.m., New York City time, on the date of such Failed
Remarketing, to the Company, the Trustee and the Paying Agent.
SECTION 9.05. Renewed Remarketing. If a Failed Remarketing has occurred
the Company may thereafter at its option at any time or from time to time
initiate a new Remarketing (a "RENEWED REMARKETING") by giving notice of such
election to the Remarketing Agent. Upon the receipt of such notice, the
Remarketing Agent shall immediately deliver written notice to the Holders of the
Senior Notes which are not Replacement Notes, and such notice shall constitute a
Remarketing Notice for purposes of Section 9.02(a)(i).
ARTICLE 10
MISCELLANEOUS
SECTION 10.01. Ratification of Base Indenture; Second Supplemental
Indenture Controls. The Base Indenture, as supplemented by this Second
Supplemental Indenture, is in all respects ratified and confirmed, and this
Second Supplemental Indenture shall be deemed part of the Base Indenture in the
manner and to the extent herein and therein provided. The provisions of this
Second Supplemental Indenture shall supersede the provisions of the Base
Indenture to the extent the Base Indenture is inconsistent herewith.
SECTION 10.02. Trustee Not Responsible for Recitals. The recitals
herein contained are made by the Company and not by the Trustee, and the Trustee
assumes no responsibility for the correctness thereof. The Trustee makes
22
<PAGE> 26
no representation as to the validity or sufficiency of this Second Supplemental
Indenture.
SECTION 10.03. Governing Law. This Second Supplemental Indenture and
each Senior Note shall be governed by and construed in accordance with the laws
of the State of New York, as applied to contracts made and performed within the
State of New York, without regard to its principles of conflicts of laws.
SECTION 10.04. Severability. If any provision in the Base Indenture,
this Second Supplemental Indenture or in the Senior Notes shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 10.05. Counterparts. The parties may sign any number of copies
of this Second Supplemental Indenture. Each signed copy shall be an original,
but all of them together represent the same agreement. Any signed copy shall be
sufficient proof of this Second Supplemental Indenture.
23
<PAGE> 27
IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed as of the day and year first above
written.
COX COMMUNICATIONS, INC.
By: /s/ Dallas S. Clement
--------------------------------
Name: Dallas S. Clement
Title: Vice President and Treasurer
THE BANK OF NEW YORK,
as Trustee
By: /s/ Marie E. Trimboli
--------------------------------
Name: Marie E. Trimboli
Title: Assistant Treasurer
<PAGE> 28
EXHIBIT A-1
[FORM OF SENIOR NOTE]
IF A DISSOLUTION EVENT HAS OCCURRED, INSERT THE FOLLOWING - THE SECURITY
EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE
HOLDER AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THE SECURITIES
EVIDENCED HEREBY EXCEPT TO (1) COX COMMUNICATIONS, INC. OR ANY AFFILIATE
THEREOF, (2) BANK OF AMERICA, N.A. OR ANY OF ITS AFFILIATES, (3) ANY ENTITY
SPONSORED OR ORGANIZED BY, ON BEHALF OF, OR FOR THE PRIMARY USE OF, BANK OF
AMERICA, N.A. OR ANY OF ITS AFFILIATES OR (4) A SECONDARY PURCHASER (AS DEFINED
IN THE AMENDED AND RESTATED TRUST AGREEMENT OF COX RHINOS TRUST DATED AS OF
OCTOBER 6, 1999 (AS AMENDED FROM TIME TO TIME, THE "TRUST AGREEMENT")) THAT AS
OF THE RESET DATE HAS ENTERED INTO A SECONDARY PURCHASE AGREEMENT (AS DEFINED IN
THE TRUST AGREEMENT) WITH COX RHINOS TRUST.
FROM AND AFTER THE REMARKETING SETTLEMENT DATE ON WHICH REPLACEMENT NOTES ARE
ISSUED TO ANY PERSON OTHER THAN THE PROPERTY TRUSTEE, THIS INSTRUMENT SHALL
REPRESENT ONLY THE RIGHT TO RECEIVE THE REMARKETING PRICE, AS PROVIDED IN THE
TRUST AGREEMENT, AND SHALL NO LONGER REPRESENT AN OBLIGATION OF THE COMPANY.
<PAGE> 29
No. ________ CUSIP NO.________
COX COMMUNICATIONS, INC.
AUCTION RATE RESET SENIOR NOTE SERIES A
Cox Communications, Inc., a Delaware corporation (the "COMPANY," which
term includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay the principal sum of five
hundred fifteen million five hundred thousand dollars ($515,500,000) on the
Maturity Date.
(a) Interest on the principal amount of this Senior Note will accrue
and be payable at a rate (the "INTEREST RATE") per annum equal to
(i) from and including the Closing Date to but excluding the
earlier of (A) the Remarketing Settlement Date on which Replacement
Notes are issued and (B) date on which the principal amount of this
Senior Note becomes due upon the maturity, acceleration or redemption
thereof, LIBOR plus 75 basis points increasing by 50 basis points upon
the date of occurrence of a Failed Remarketing and by an additional 50
basis points on the corresponding day of each calendar month thereafter
(the "MARGIN");
(ii) except as provided in clause (iii) below, from and
including the Remarketing Settlement Date on which Replacement Notes
are issued to but excluding the date on which the principal amount of
the Senior Notes becomes due upon the maturity, acceleration or
redemption thereof, the Winning Bid Rate; and
(iii) if the Company fails to pay the principal amount due
upon the maturity, acceleration or redemption of this Senior Note on
the date such amount becomes due, from and including such due date to
but excluding the date of actual payment by the Company, the applicable
periodic Interest Rate compounded quarterly.
Interest that is not paid when due will bear additional interest
thereon compounded quarterly at the applicable periodic Interest Rate (to the
extent permitted by applicable law).
The term "INTEREST", as used herein, includes any Additional Interest
unless otherwise stated.
(b) Until the Remarketing Settlement Date on which Replacement Notes
are issued, interest on this Senior Note will be payable quarterly (subject to
A1-2
<PAGE> 30
deferral as set forth herein) in arrears (i) on October 15, January 15, April 15
and July 15 of each year, commencing January 15, 2000 and (ii) on such
Remarketing Settlement Date (each, a "PRE-REMARKETING INTEREST PAYMENT DATE"),
and will accrue from and including the most recent date to which interest has
been paid or, if no interest has been paid, from the Closing Date to but
excluding the related Pre-Remarketing Interest Payment Date, except as otherwise
described below.
The Interest Rate in effect for the period from and including the
Closing Date to but excluding January 15, 2000 shall be the rate determined by
the Calculation Agent two London Banking Days prior to the Closing Date and
shall equal LIBOR plus 75 basis points. The Interest Rate in effect thereafter,
for each quarterly period from and including the immediately preceding
Pre-Remarketing Interest Payment Date to but excluding the applicable
Pre-Remarketing Interest Payment Date, shall be determined by the Calculation
Agent two London Banking Days prior to such immediately preceding
Pre-Remarketing Interest Payment Date (a "DATE OF DETERMINATION") and shall
equal LIBOR plus the Margin. Prior to the Remarketing Settlement Date, the
amount of interest payable for any period shall be computed on the basis of a
360-day year and the actual number of days elapsed in such period. If a
Pre-Remarketing Interest Payment Date is not a Business Day, then such
Pre-Remarketing Interest Payment Date will be the next succeeding Business Day,
except if such Business Day is in the next succeeding calendar month, such
Pre-Remarketing Distribution Date will be the immediately preceding Business
Day.
As used herein, "LONDON BANKING DAY" means any day on which dealings in
deposits in U.S. Dollars are transacted in the London interbank market.
All percentages resulting from any calculations on the Senior Notes
will be rounded, if necessary, to the nearest one hundred-thousandth of a
percentage point, with five one-millionths of a percentage point rounded upward
(e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)), and
all dollar amounts used in or resulting from such calculations will be rounded
to the nearest cent (with one-half cent being rounded upward).
(c) From and including the Remarketing Settlement Date on which
Replacement Notes are issued, interest on the Replacement Notes will be payable
quarterly in arrears (i) on the interest payment dates set forth in such
Replacement Notes, commencing on the Remarketing Settlement Date and (ii) on the
Maturity Date (each, an "INTEREST PAYMENT DATE"), and will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from and including the Remarketing Settlement Date, to but excluding the related
Interest Payment Date, except as otherwise described below. From and including
the Remarketing Settlement Date, the amount of interest payable for any period
shall be computed on the basis of a 360-day year of twelve 30-day months. Except
as
A1-3
<PAGE> 31
provided in the last sentence of this paragraph, from and including the
Remarketing Settlement Date the amount of interest payable for any period
shorter than a full quarterly period for which interest is computed will be
computed on the basis of the actual number of days elapsed per 30-day month. If
an Interest Payment Date is not a Business Day, then such Interest Payment Date
will be postponed to the next succeeding Business Day (and without interest or
other payment in respect of any such delay).
(d) Interest shall be paid to the Person in whose name this Senior Note
or any predecessor Senior Note is registered on the books and records of the
Company at the close of business on the Regular Record Date for such interest
installment, which shall be fifteen (15) days prior to a Pre-Remarketing
Interest Payment Date (the "PRE-REMARKETING REGULAR RECORD DATE").
Notwithstanding the foregoing, so long as the Holder of this Senior Note is the
Property Trustee, the payment of the principal of (and premium, if any) and
interest on this Senior Note will be made at such place and to such account as
may be designated by the Property Trustee.
This Senior Note shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been signed by or on
behalf of the Trustee.
The provisions of this Senior Note are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
A1-4
<PAGE> 32
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
COX COMMUNICATIONS, INC.
By:
--------------------------------
Name: Dallas S. Clement
Title: Vice President and Treasurer
Attest:
By:
-----------------------------------
Name:
Title:
A1-5
<PAGE> 33
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series described in the within-mentioned
Indenture.
Dated:
THE BANK OF NEW YORK,
as Trustee
By:
--------------------------------
Authorized Signatory
A1-6
<PAGE> 34
[FORM OF REVERSE OF NOTE]
This Senior Note is one of a duly authorized series of Debt Securities
of the Company (herein sometimes referred to as the "SENIOR NOTES"), specified
in the Base Indenture (as defined below), all issued or to be issued in one or
more series under and pursuant to an Indenture (the "BASE INDENTURE") dated as
of June 27, 1995, duly executed and delivered between the Company and The Bank
of New York, as Trustee (the "TRUSTEE"), as supplemented by the Second
Supplemental Indenture dated as of October 6, 1999 between the Company and the
Trustee (the Base Indenture as so supplemented, the "INDENTURE"), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the holders of the Senior
Notes. By the terms of the Indenture, the Senior Notes are issuable thereunder
in series that may vary as to amount, date of maturity, rate of interest and in
other respects as provided in the Indenture. This series of Senior Notes is
limited in aggregate principal amount as specified in such Second Supplemental
Indenture and herein sometimes referred to as the "SENIOR NOTES."
Because of the occurrence and continuation of a Special Event or a
Qualifying Equity Offering, in certain circumstances, this Senior Note may
become due and payable at the principal amount together with any interest
accrued thereon (including Additional Interest) (the "REDEMPTION PRICE"). The
Redemption Price shall be paid prior to 12:00 noon, New York City time, on the
date of such redemption or at such earlier time as the Company determines. If
the Maturity Date or any other date fixed for redemption of the Senior Notes is
not a Business Day, then payment of the Redemption Price or principal payable on
such date will be made on the next succeeding day that is a Business Day with
interest thereon to the date of payment.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Senior Notes may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Senior Notes and each other series of Debt
Securities Outstanding and affected, to execute supplemental indentures for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of the Indenture or of modifying in any manner the rights of
the holders of such Series of Securities; provided that the Company and the
Trustee may not, without the consent of the holder of each Senior Note then
Outstanding and affected thereby: (a) change the time of payment of the
principal (or any installment) of any Senior Note, or reduce the principal
amount thereof, or reduce
A1-7
<PAGE> 35
the rate or change the time of payment of interest thereon, or impair the
right to institute suit for the enforcement of any payment on any Senior Note
when due, (b) reduce the percentage in principal amount of the Senior Notes the
consent of whose holders is required to execute any such supplemental indenture,
or the consent of whose holders is required for any waiver provided for in the
Indenture or (c) subject to certain exceptions, modify provisions of the
Indenture relating to the waiver of past defaults with respect to the Senior
Notes and the execution of supplemental indentures. The Indenture also contains
provisions providing that prior to the acceleration of the maturity of any
Senior Note, the holders of a majority in aggregate principal amount of Senior
Notes may, on behalf of the holders of all Senior Notes, waive any past default
with respect to the Senior Notes and its consequences, except a default (i) in
respect of a covenant or provision of the Indenture or of any Senior Note that
cannot be modified or amended without the consent of the holder of each
outstanding Senior Note or (ii) in the payment of the principal of, any premium
or interest (including any Additional Interest) on, or any Additional Amounts
with respect to the Senior Notes. Any such consent or waiver by the registered
holder of this Senior Note (unless revoked as provided in the Indenture) shall
be conclusive and binding upon such holder and upon all future holders and
owners of this Senior Note and of any Senior Note issued in exchange herefor or
in place hereof (whether by registration or transfer or otherwise), irrespective
of whether or not any notation of such consent or waiver is made upon this
Senior Note.
No reference herein to the Indenture and no provision of this Senior
Note or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and premium, if
any, and interest on this Senior Note at the time and place and at the rate and
in the money herein prescribed.
Subject to the last sentence of this paragraph, the Company shall have
the right at any time during the term of this Senior Note, from time to time, to
extend the interest payment period of such Senior Note for a period not to
exceed 20 consecutive quarterly periods (each such deferral period an "EXTENSION
PERIOD"), during which periods the Company shall have the right not to make
payments of interest on any Interest Payment Date. On the last day of any such
Extension Period, which shall be an Interest Payment Date, the Company shall pay
all interest then accrued and unpaid (together with Additional Interest, if any,
thereon to the extent permitted by applicable law) to the Person in whose name
such Senior Note or any predecessor Senior Note is registered on the books and
records of the Company at the close of business on the Regular Record Date for
such Interest Payment Date. Prior to the termination of any such Extension
Period, the Company may further extend the interest payment period; provided
that no Extension Period together with all such previous and further extensions
thereof shall (i) exceed 20 consecutive quarterly periods or (ii) extend beyond
the Mandatory Redemption Date, if the Trust Securities are at the time
outstanding, or
A1-8
<PAGE> 36
the Maturity Date of this Senior Note. Upon the termination of any such
Extension Period and upon the payment of all accrued and unpaid interest and any
Additional Interest then due, the Company may elect to begin a new Extension
Period, subject to the above requirements. Notwithstanding the foregoing, in the
event of a Failed Remarketing, any then current Extension Period shall terminate
on the date of such Failed Remarketing and all deferred payments of interest
shall be due and payable on such date, and no Extension Period may thereafter
commence unless and until there shall have been a successful Remarketing of all
of the Preferred Securities (or the Senior Notes).
As provided in the Indenture and subject to certain limitations herein
and therein set forth, this Senior Note is transferable by the registered holder
hereof on the Securities Register of the Company, upon surrender of this Senior
Note for registration of transfer at the office or agency of the Trustee in The
City and State of New York accompanied by a written instrument or instruments of
transfer in form satisfactory to the Company or the Trustee duly executed by the
registered Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Senior Notes of authorized denominations and for the
same aggregate principal amount and series will be issued to the designated
transferee or transferees. No service charge will be made for any such transfer,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this Senior
Note, the Company, the Trustee, any paying agent and the Securities Registrar
may deem and treat the registered holder hereof as the absolute owner hereof
(whether or not this Senior Note shall be overdue and notwithstanding any notice
of ownership or writing hereon made by anyone other than the Securities
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any paying agent nor any
Securities Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Senior Note, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
The Senior Notes of this series are issuable only in registered form
without coupons in denominations of $100,000 and any integral multiple of $1,000
thereof. A holder of Senior Notes may transfer or exchange Senior Notes held by
A1-9
<PAGE> 37
it only in minimum denominations of $100,000 and integral multiples of $1,000 in
excess thereof. Any attempted transfer, sale or other disposition of Senior
Notes in a denomination of less than $100,000 shall be deemed to be void and of
no legal effect whatsoever.
All terms used in this Senior Note that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
THE INDENTURE AND THE SENIOR NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS
PRINCIPLES OF CONFLICTS OF LAWS.
A1-10
<PAGE> 38
EXHIBIT A-2
[FORM OF REPLACEMENT NOTE]
IF THE NOTE IS TO BE A GLOBAL SENIOR NOTE, INSERT THE FOLLOWING--THIS
NOTE IS IN GLOBAL FORM WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED
TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
CERTIFICATED FORM IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, THIS
SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE (1) BY THE DEPOSITORY TO A
NOMINEE OF THE DEPOSITORY, (2) BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY
OR ANOTHER NOMINEE OF THE DEPOSITORY OR (3) BY THE DEPOSITORY OR ANY SUCH
NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON
IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
IF A DISSOLUTION EVENT HAS OCCURRED, INSERT THE FOLLOWING -- THE
SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF,
THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT HAS ACQUIRED THE
SECURITIES IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR
904 UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT PRIOR TO THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED
HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION)
RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED
<PAGE> 39
HEREBY EXCEPT TO (A) COX COMMUNICATIONS, INC. OR ANY AFFILIATE THEREOF, (B) A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT OR (C) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR
904 UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON
TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. AT THE REQUEST OF THE HOLDER, THIS LEGEND WILL BE
REMOVED AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO THE SALE OF THE
SECURITY EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT.
A2-2
<PAGE> 40
No.__________ CUSIP NO.________
COX COMMUNICATIONS, INC.
AUCTION RATE RESET SENIOR NOTE SERIES A
REPLACEMENT NOTE
Cox Communications, Inc., a Delaware corporation (the "COMPANY", which
term includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay the principal sum of
____________ dollars ($__________) on the Maturity Date.
(a) Interest on the principal amount of this Senior Note will accrue
and be payable at a rate (the "INTEREST RATE") per annum equal to, from and
including the date of issuance to but excluding the date such principal amount
is paid, the Winning Bid Rate; and if the Company fails to pay the principal
amount on the date such amount becomes due, then from and including such due
date to but excluding the date such principal amount is paid, the applicable
periodic Interest Rate, compounded quarterly, but only to the extent permitted
by applicable law.
Interest that is not paid when due will bear additional interest
thereon compounded quarterly at the applicable periodic Interest Rate (to the
extent permitted by applicable law).
The term "INTEREST", as used herein, includes any Additional Interest
unless otherwise stated.
(b) From and including the date of issuance, interest on this
Replacement Note will be payable quarterly in arrears (i) on ______, ______,
______ and _______ of each year, commencing on the Remarketing Settlement Date
on which this Replacement Note is issued and (ii) on the Maturity Date (each, an
"INTEREST PAYMENT DATE"), and will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from and including the
date of issuance, to but excluding the related Interest Payment Date, except as
otherwise described below. The amount of interest payable for any period shall
be computed on the basis of a 360-day year of twelve 30-day months. Except as
provided in the last sentence of this paragraph, the amount of interest payable
for any period shorter than a full quarterly period for which interest is
computed will be computed on the basis of the actual number of days elapsed per
30-day month. If an Interest Payment Date is not a Business Day, then such
Interest Payment Date will be the next succeeding Business Day (and without any
interest or other payment in respect of any such delay).
A2-3
<PAGE> 41
(c) Interest shall be paid to the Person in whose name the Senior Note
or any predecessor Senior Note is registered on the books and records of the
Company at the close of business on the Regular Record Date for such interest
installment, which, in respect of Senior Notes of which the Property Trustee is
the Holder and the related Preferred Securities are in book-entry only form or a
Global Senior Note, shall be the close of business on the Business Day next
preceding that Interest Payment Date (the "REGULAR RECORD DATE"). If the Senior
Notes are not represented by a Global Senior Note, the Regular Record Date for
such interest installment shall be fifteen (15) days prior to an Interest
Payment Date. Notwithstanding the foregoing, so long as the Holder of this
Senior Note is the Property Trustee, the payment of the principal of (and
premium, if any) and interest on this Senior Note will be made at such place and
to such account as may be designated by the Property Trustee.
This Senior Note shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been signed by or on
behalf of the Trustee.
The provisions of this Senior Note are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
A2-4
<PAGE> 42
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
COX COMMUNICATIONS, INC.
By:
--------------------------
Name:
Title:
Attest:
By:
----------------------------
Name:
Title:
A2-5
<PAGE> 43
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein referred to in the
within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK,
as Trustee
By:
---------------------------
Authorized Signatory
A2-6
<PAGE> 44
[FORM OF REVERSE OF NOTE]
This Senior Note is one of a duly authorized series of Securities of
the Company (herein sometimes referred to as the "SENIOR NOTES"), specified in
the Base Indenture (as defined below), all issued or to be issued in one or more
series under and pursuant to an Indenture (the "BASE INDENTURE") dated as of
June 27, 1995, duly executed and delivered between the Company and The Bank of
New York, as Trustee (the "TRUSTEE"), as supplemented by the Second Supplemental
Indenture dated as of October 6, 1999 between the Company and the Trustee (the
Base Indenture as so supplemented, the "INDENTURE"), to which Indenture and all
indentures supplemental thereto reference is hereby made for a description of
the rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Company and the holders of the Senior Notes. By the terms of
the Indenture, the Senior Notes are issuable thereunder in series that may vary
as to amount, date of maturity, rate of interest and in other respects as
provided in the Indenture. This series of Senior Notes is limited in aggregate
principal amount as specified in such Second Supplemental Indenture and herein
sometimes referred to as the "SENIOR NOTES."
Because of the occurrence and continuation of a Special Event or an
Optional Redemption in certain circumstances, this Senior Note may become due
and payable at the principal amount together with any interest accrued thereon
(including Additional Interest) (the "REDEMPTION PRICE"). The Redemption Price
shall be paid prior to 12:00 noon, New York City time, on the date of such
redemption or at such earlier time as the Company determines. If the Maturity
Date or any other date fixed for redemption of the Senior Notes is not a
Business Day, then payment of the Redemption Price or principal payable on such
date will be made on the next succeeding day that is a Business Day with
interest thereon to the date of payment.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Senior Notes may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Senior Notes and each other series of
Securities Outstanding and affected, to execute supplemental indentures for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of the Indenture or of modifying in any manner the rights of
the holders of such Series of Securities; provided that the Company and the
Trustee may not, without the consent of the holder of each Senior Note then
outstanding and affected thereby: (a) change the time of payment of the
principal (or any installment) of any Senior Note, or reduce the principal
amount thereof, or reduce
A2-7
<PAGE> 45
the rate or change the time of payment of interest thereon, or impair the right
to institute suit for the enforcement of any payment on any Senior Note when
due, (b) reduce the percentage in principal amount of the Senior Notes the
consent of whose holders is required to execute any such supplemental indenture
or the consent of whose holders is required for any waiver provided for in the
indenture or (c) subject to certain exceptions, modify provisions of the
Indenture relating to the waiver of past defaults with respect to the Senior
Notes and the execution of supplemental indentures. The Indenture also contains
provisions providing that prior to the acceleration of the maturity of any
Senior Note, the holders of a majority in aggregate principal amount of Senior
Notes may, on behalf of the holders of all Senior Notes, waive any past default
with respect to the Senior Notes and its consequences, except a default (i) in
respect of a covenant or provision of the Indenture or of any Senior Note that
cannot be modified or amended without the consent of the holder of each
Outstanding Senior Note or (ii) in the payment of the principal of, any premium
or interest (including any Additional Interest) on, or any Additional Amounts
with respect to the Senior Notes. Any such consent or waiver by the registered
holder of this Senior Note (unless revoked as provided in the Indenture) shall
be conclusive and binding upon such holder and upon all future holders and
owners of this Senior Note and of any Senior Note issued in exchange herefor or
in place hereof (whether by registration or transfer or otherwise), irrespective
of whether or not any notation of such consent or waiver is made upon this
Senior Note.
No reference herein to the Indenture and no provision of this Senior
Note or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and premium, if
any, and interest on this Senior Note at the time and place and at the rate and
in the money herein prescribed.
The Company shall have the right at any time during the term of this
Senior Note, from time to time, to extend the interest payment period of such
Senior Note for a period not to exceed 20 consecutive quarterly periods (each
such deferral period an "EXTENSION PERIOD"), during which periods the Company
shall have the right not to make payments of interest on any Interest Payment
Date. On the last day of any such Extension Period, which shall be an Interest
Payment Date, the Company shall pay all interest then accrued and unpaid
(together with Additional Interest, if any, thereon to the extent permitted by
applicable law) to the Person in whose name such Senior Note or any predecessor
Senior Note is registered on the books and records of the Company at the close
of business on the Regular Record Date for such Interest Payment Date. Prior to
the termination of any such Extension Period, the Company may further extend the
interest payment period; provided that no Extension Period together with all
such previous and further extensions thereof shall (i) exceed 20 consecutive
quarterly periods or (ii) extend beyond the Mandatory Redemption Date, if the
Trust Securities are at the time outstanding, or the Maturity Date of this
Senior Note. Upon the
A2-8
<PAGE> 46
termination of any such Extension Period and upon the payment of all accrued and
unpaid interest and any Additional Interest then due, the Company may elect to
begin a new Extension Period.
As provided in the Indenture and subject to certain limitations herein
and therein set forth, this Senior Note is transferable by the registered holder
hereof on the Register of the Company, upon surrender of this Senior Note for
registration of transfer at the office or agency of the Trustee in The City and
State of New York accompanied by a written instrument or instruments of transfer
in form satisfactory to the Company or the Trustee duly executed by the
registered Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Senior Notes of authorized denominations and for the
same aggregate principal amount and series will be issued to the designated
transferee or transferees. No service charge will be made for any such transfer,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this Senior
Note, the Company, the Trustee, any paying agent and the Securities Registrar
may deem and treat the registered holder hereof as the absolute owner hereof
(whether or not this Senior Note shall be overdue and notwithstanding any notice
of ownership or writing hereon made by anyone other than the Securities
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any paying agent nor any
Securities Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Senior Note, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
The Senior Notes of this series are issuable only in registered form
without coupons in denominations of $100,000 and any integral multiple of $1,000
thereof. A holder of Senior Notes may transfer or exchange Senior Notes held by
it only in minimum denominations of $100,000 and integral multiples of $1,000 in
excess thereof. Any attempted transfer, sale or other disposition of Senior
Notes in a denomination of less than $100,000 shall be deemed to be void and of
no legal effect whatsoever.
A2-9
<PAGE> 47
All terms used in this Senior Note that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
THE INDENTURE AND THE SENIOR NOTES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS
PRINCIPLES OF CONFLICTS OF LAWS.
A2-10
<PAGE> 1
EXHIBIT 4.2
- --------------------------------------------------------------------------------
GUARANTEE AGREEMENT
COX COMMUNICATIONS, INC. and THE BANK OF NEW YORK
Relating to the Preferred Securities of Cox RHINOS Trust
Dated as of October 6, 1999
- --------------------------------------------------------------------------------
<PAGE> 2
CROSS REFERENCE TABLE(1)
<TABLE>
<CAPTION>
Section of Trust Section of
Indenture Act Of Guarantee
1939, as amended Agreement
<S> <C>
310(a)......................................................................................4.01(a)
310(b) ...............................................................................4.01(c), 2.08
310(c).................................................................................Inapplicable
311(a)......................................................................................2.02(b)
311(b)......................................................................................2.02(b)
311(c).................................................................................Inapplicable
312(a)......................................................................................2.02(a)
312(b)......................................................................................2.02(b)
313............................................................................................2.03
314 (a)........................................................................................2.04
314(b).................................................................................Inapplicable
314(c).........................................................................................2.05
314(d).................................................................................Inapplicable
314(e).............................................................................1.01, 2.03, 3.02
314(f).........................................................................................3.02
315(a)......................................................................................3.01(d)
315(b).........................................................................................2.07
315(c).........................................................................................3.01
315(d)......................................................................................3.01(d)
316(a).............................................................................1.01, 2.06, 5.04
316(b).........................................................................................5.03
317(a).................................................................................Inapplicable
317(b).................................................................................Inapplicable
318(a)......................................................................................2.01(b)
318(b).........................................................................................2.01
318(c)......................................................................................2.01(a)
</TABLE>
- --------
(1) This Cross-Reference Table does not constitute part of this
Guarantee Agreement and shall not affect the interpretation of any of its terms
or provisions.
2
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
ARTICLE 1
DEFINITIONS
<S> <C> <C>
SECTION 1.01. Definitions........................................................................2
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.01. Trust Indenture Act; Application...................................................4
SECTION 2.02. List of Holders....................................................................5
SECTION 2.03. Reports by the Guarantee Trustee...................................................5
SECTION 2.04. Periodic Reports to Guarantee Trustee..............................................5
SECTION 2.05. Evidence of Compliance with Conditions Precedent...................................5
SECTION 2.06. Events of Default; Waiver..........................................................6
SECTION 2.07. Events of Default; Notice..........................................................6
SECTION 2.08. Conflicting Interests..............................................................6
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.01. Powers and Duties of the Guarantee Trustee.........................................7
SECTION 3.02. Certain Rights of Guarantee Trustee................................................8
SECTION 3.03. Indemnity.........................................................................10
ARTICLE 4
GUARANTEE TRUSTEE
SECTION 4.01. Guarantee Trustee; Eligibility....................................................11
SECTION 4.02. Appointment, Removal and Resignation of the Guarantee
Trustee.................................................................................11
ARTICLE 5
GUARANTEE
SECTION 5.01. Guarantee.........................................................................12
SECTION 5.02. Waiver of Notice and Demand.......................................................12
SECTION 5.03. Obligations Not Affected..........................................................12
SECTION 5.04. Rights of Holders.................................................................13
SECTION 5.05. Guarantee of Payment..............................................................14
SECTION 5.06. Subrogation.......................................................................14
SECTION 5.07. Independent Obligations...........................................................14
ARTICLE 6
COVENANTS AND STATUS
SECTION 6.01. Status of this Guarantee Agreement................................................15
SECTION 6.02. Certain Covenants of the Guarantor................................................15
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
PAGE
----
ARTICLE 7
TERMINATION
<S> <C> <C>
SECTION 7.01. Termination.......................................................................16
ARTICLE 8
MISCELLANEOUS
SECTION 8.01. Successors and Assigns............................................................16
SECTION 8.02. Amendments........................................................................17
SECTION 8.03. Notices...........................................................................17
SECTION 8.04. Benefit...........................................................................18
SECTION 8.05. Interpretation....................................................................18
SECTION 8.06. Governing Law.....................................................................19
SECTION 8.07. Counterparts......................................................................19
</TABLE>
ii
<PAGE> 5
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT dated as of October 6, 1999 is executed and
delivered by COX COMMUNICATIONS, INC., a Delaware corporation (the "GUARANTOR"),
and THE BANK OF NEW YORK, a New York banking corporation, as trustee (the
"GUARANTEE TRUSTEE"), for the benefit of the holders from time to time of the
Preferred Securities (as defined herein) of COX RHINOS TRUST, a Delaware
statutory business trust (the "ISSUER").
WHEREAS, pursuant to the Amended and Restated Trust Agreement (the
"TRUST AGREEMENT"), dated as of October 6, 1999 among the Trustees named
therein, the Guarantor, as Sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing 500,000 of its Auction Rate Reset Preferred Securities (liquidation
preference $1,000 per preferred security) (the "PREFERRED SECURITIES")
representing preferred undivided beneficial interests in the assets of the
Issuer and having the terms set forth in the Trust Agreement;
WHEREAS, the Preferred Securities will be issued by the Issuer and the
proceeds thereof, together with the proceeds from the issuance by the Issuer of
the Common Securities (as defined herein), will be used to purchase the Senior
Notes (as defined in the Trust Agreement) of the Guarantor, which will be
deposited with The Bank of New York, as Property Trustee under the Trust
Agreement, as trust assets;
WHEREAS, as incentive for Holders (as defined herein) to purchase
Preferred Securities, the Guarantor desires irrevocably and unconditionally to
agree, to the extent set forth herein, to pay the Guarantee Payments (as defined
herein) to the Holders and to make certain other payments on the terms and condi
tions set forth herein; and
WHEREAS, the Guarantor is executing and delivering for the benefit of
the holders of the Common Securities a guarantee agreement (the "COMMON
SECURITIES GUARANTEE") with terms substantially identical to those of this
Guarantee Agreement, except that if an Event of Default (as defined in the
Indenture (as defined herein)) has occurred and is continuing, the rights of
holders of the Common Securities to receive payments under the Common Securities
Guarantee shall be subordinated to the rights of Holders to receive Guarantee
Payments (as defined herein) under this Guarantee Agreement;
NOW, THEREFORE, in consideration of the purchase by each Holder, which
purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor
executes and delivers this Guarantee Agreement for the benefit of the
Holders.
<PAGE> 6
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. As used in this Guarantee Agreement, the
terms set forth below shall, unless the context otherwise requires, have the
following meanings. Capitalized or otherwise defined terms used but not
otherwise defined herein shall have the meanings assigned to such terms in the
Trust Agreement as in effect on the date hereof.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct common control with such
specified Person, provided, however, that an Affiliate of the Guarantor shall
not be deemed to include the Issuer. For the purposes of this definition,
"CONTROL" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "CONTROLLING" and "CONTROLLED" have meanings correlative to the
foregoing.
"COMMON SECURITIES" means the securities representing common beneficial
interests in the assets of the Issuer.
"EVENT OF DEFAULT" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee Agreement; provided that,
except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received written notice of default and shall not have cured
such default within 60 days after receipt of such notice.
"GUARANTEE PAYMENTS" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by or on behalf of the Issuer: (i) any accrued and unpaid
Distributions (as defined in the Trust Agreement) required to be paid on the
Preferred Securities to the extent the Issuer shall have funds available
therefor, (ii) the redemption price, including all accrued and unpaid
Distributions to the date of redemption (the "REDEMPTION PRICE"), to the extent
the Issuer shall have funds available therefor, with respect to the Preferred
Securities called for redemption by the Issuer and (iii) upon a voluntary or
involuntary dissolution, winding-up or liquidation of the Issuer, unless the
Senior Notes are distributed to Holders, the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid Distributions on the Preferred
Securities to the date of payment, to the extent the Issuer shall have funds
available therefor and (b) the amount of assets of the Issuer remaining
available for distribution to Holders in liquidation of the Issuer (in either
case, the "LIQUIDATION DISTRIBUTION").
2
<PAGE> 7
"GUARANTEE TRUSTEE" means The Bank of New York, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.
"HOLDER" means any holder, as registered on the books and records of
the Issuer, of any Preferred Securities; provided that in determining whether
the holders of the requisite percentage of Preferred Securities have given any
request, notice, consent or waiver hereunder, "HOLDER" shall not include the
Guarantor or any Affiliate of the Guarantor.
"INDENTURE" means the Indenture dated as of June 27, 1995 between the
Guarantor and The Bank of New York, as trustee (the "INDENTURE TRUSTEE"), as
supplemented by the Second Supplemental Indenture dated as of October 6, 1999
between the Guarantor and the Indenture Trustee and as further amended,
supplemented, modified or superseded from time to time.
"LIST OF HOLDERS" has the meaning specified in Section 2.02(a).
"MAJORITY IN LIQUIDATION AMOUNT OF THE PREFERRED SECURITIES" means,
except as provided by the Trust Indenture Act, a vote by the Holder(s), voting
separately as a class, of more than 50% of the aggregate liquidation amount of
all the outstanding Preferred Securities issued by the Issuer.
"OFFICER'S CERTIFICATE" means, with respect to any Person, a
certificate signed by the Chairman, Chief Executive Officer, President or a Vice
President and delivered to the Guarantee Trustee. Any Officer's Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Guarantee Agreement shall include:
(a) a statement that the officer signing the Officer's Certificate has
read or has caused someone under the officer's supervision to read the covenant
or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by such officer in rendering the Officer's Certificate;
(c) a statement that such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of such officer, such
condition or covenant has been complied with.
3
<PAGE> 8
"PERSON" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"RESPONSIBLE OFFICER" means, with respect to the Guarantee Trustee, any
Executive Vice President, Senior Vice President, any First Vice President, any
Vice President, any Assistant Vice President, the Secretary, any Assistant
Secretary, the Treasurer, any Assistant Treasurer, any Trust Officer or
Assistant Trust Officer or any other officer of the Corporate Trust Services
Division of the Guarantee Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and familiarity with
the particular subject.
"SUCCESSOR GUARANTEE TRUSTEE" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.01.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as
amended.
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.01. Trust Indenture Act; Application. (a) This Guarantee
Agreement is subject to the provisions of the Trust Indenture Act that would be
required to be part of this Guarantee Agreement in order for this Guarantee
Agreement to be a qualified indenture under the Trust Indenture Act and shall,
to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.02. List of Holders. (a) The Guarantor shall shall provide,
or cause to be provided to the Guarantee Trustee (unless the Guarantee Trustee
is acting as the Registrar (as defined in the Trust Agreement), a list, in such
form as the Guarantee Trustee may reasonably require, of the names and addresses
of the Holders of the Securities (a "LIST OF HOLDERS") (i) within 14 days after
each record date for payment of Distributions, as of such record date; provided
that the Sponsor shall not be obligated to provide such List of Holders at any
time the List of Holders does not differ from the most recent List of Holders
given to the
4
<PAGE> 9
Guarantee Trustee by the Sponsor, and (ii) at any other time, within 30 days of
receipt by the Trust of a written request from the Guarantee Trustee for a List
of Holders as of a date no more than 14 days before such List of Holders is
given to the Guarantee Trustee. The Guarantee Trustee shall preserve, in as
current a form as is reasonably practicable, all information contained in Lists
of Holders given to it; provided that the Guarantee Trustee may destroy any List
of Holders previously given to it on receipt of a new List of Holders.
Notwithstanding the foregoing, the Guarantor shall not be obligated to provide
such List of Holders at any time the Preferred Securities are represented by one
or more Global Certificates (as defined in the Trust Agreement).
(b) The Guarantee Trustee shall comply with its obligations under
Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.03. Reports by the Guarantee Trustee. On or before July 15,
of each calendar year, the Guarantee Trustee shall provide to the Holders such
reports as are required by Section 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by Section 313 of the Trust Indenture Act.
The Guarantee Trustee shall also comply with the requirements of Section 313(d)
of the Trust Indenture Act.
SECTION 2.04. Periodic Reports to Guarantee Trustee. The Guarantor
shall provide to the Guarantee Trustee, the Securities and Exchange Commission
and the Holders such documents, reports and information, if any, as may be
required by Section 314 of the Trust Indenture Act or the rules and regulations
thereunder and the compliance certificate required by Section 314 of the Trust
Indenture Act in the form, in the manner and at the times required by Section
314 of the Trust Indenture Act.
SECTION 2.05. Evidence of Compliance with Conditions Precedent. The
Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with such conditions precedent, if any, provided for in this Guarantee Agreement
that relate to any of the matters set forth in Section 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given by an officer
pursuant to Section 314(c)(1) may be given in the form of an Officer's
Certificate.
SECTION 2.06. Events of Default; Waiver. The Holders of a Majority in
Liquidation Amount of the Preferred Securities may, by vote, on behalf of the
Holders, waive any past Event of Default and its consequences. Upon such waiver,
any such Event of Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
Guarantee Agreement, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent therefrom.
5
<PAGE> 10
SECTION 2.07. Events of Default; Notice. (a) The Guarantee Trustee
shall, within 10 days after a Responsible Officer of the Guarantee Trustee
obtains knowledge of the occurrence of an Event of Default with respect to this
Guarantee Agreement, deliver by overnight courier to the Guarantor notices of
all defaults known to a Responsible Officer of the Guarantee Trustee.
(b) The Guarantee Trustee shall, not sooner than 60 days and not more
than 90 days after the notice required by Section 2.07(a) is sent to the
Guarantor, transmit by mail, first class postage prepaid, to the Holders,
notices of all such Events of Default, unless such defaults have been cured
before the giving of such notice, provided, that, except in the case of a
default in the payment of a Guarantee Payment, the Guarantee Trustee shall be
protected in withholding such notice if and so long as the Board of Directors,
the executive committee or a trust committee of directors and/or Responsible
Officers of the Guarantee Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders.
(c) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible Officer charged with the administration of the Trust
Agreement shall have obtained written notice, of such Event of Default.
SECTION 2.08. Conflicting Interests. The (i) Trust Agreement and (ii)
the Indenture shall be deemed to be specifically described in this Guarantee
Agreement for the purposes of clause (i) of the first proviso contained in
Section 310(b) of the Trust Indenture Act.
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.01. Powers and Duties of the Guarantee Trustee. (a) This
Guarantee Agreement shall be held by the Guarantee Trustee for the benefit of
the Holders, and the Guarantee Trustee shall not transfer this Guarantee
Agreement to any Person except a Holder exercising his or her rights pursuant to
Section 5.04(d) or to a Successor Guarantee Trustee on acceptance by such
Successor Guarantee Trustee of its appointment to act as Successor Guarantee
Trustee. The right, title and interest of the Guarantee Trustee shall
automatically vest in any Successor Guarantee Trustee, upon acceptance by such
Successor Guarantee Trustee of its appointment hereunder, and such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered pursuant to the appointment of such Successor
Guarantee Trustee.
6
<PAGE> 11
(b) If an Event of Default actually known to the Responsible Officer
of the Guarantee Trustee has occurred and is continuing, the Guarantee Trustee
shall enforce this Guarantee Agreement for the benefit of the Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Guarantee Trustee. In case an Event of Default
has occurred (that has not been cured or waived pursuant to Section 2.06) and is
actually known to the Responsible Officer of the Guarantee Trustee, the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Guarantee Agreement, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act, its own bad faith or its own willful misconduct,
except that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred;
(A) the duties and obligations of the Guarantee Trustee
shall be determined solely by the express provisions of this
Guarantee Agreement, and the Guarantee Trustee shall not be
liable except for the performance of such duties and
obligations as are specifically set forth in this Guarantee
Agreement; and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and conforming to
the requirements of this Guarantee Agreement; but in the case
of any such certificates or opinions that by any provision
hereof or of the Trust Indenture Act are specifically required
to be furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this
Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Guarantee
7
<PAGE> 12
Trustee, unless it shall be proved that the Guarantee Trustee was
negligent in ascertaining the pertinent facts upon which such judgment
was made;
(iii) the Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
Majority in Liquidation Amount of the Preferred Securities relating to
the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee, or exercising any trust or power
conferred upon the Guarantee Trustee under this Guarantee Agreement;
and
(iv) no provision of this Guarantee Agreement shall require
the Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if the
Guarantee Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured to it
under the terms of this Guarantee Agreement or if reasonable indemnity
against such risk or liability is not reasonably assured to it.
SECTION 3.02. Certain Rights of Guarantee Trustee. (a) Subject to the
provisions of Section 3.01:
(i) The Guarantee Trustee may rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, proxy, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to
be genuine and to have been signed, sent or presented by the proper
party or parties.
(ii) Any direction or act of the Guarantor contemplated by
this Guarantee Agreement shall be sufficiently evidenced by an
Officer's Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a matter
be proved or established before taking, suffering or omitting to take
any action hereunder, the Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of negligence, bad
faith or willful misconduct on its part, request and rely upon an
Officer's Certificate which, upon receipt of such request from the
Guarantee Trustee, shall be promptly delivered by the Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel, and
the advice or written opinion of such legal counsel with respect to
legal
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<PAGE> 13
matters shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted to be taken by it
hereunder in good faith and in accordance with such advice or opinion.
Such legal counsel may be legal counsel to the Guarantor or any of its
Affiliates and may be one of its employees. The Guarantee Trustee shall
have the right at any time to seek instructions concerning the
administration of this Guarantee Agreement from any court of competent
jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holder, unless such Holder
shall have provided to the Guarantee Trustee such adequate security and
indemnity as would satisfy a reasonable person in the position of the
Guarantee Trustee, against the reasonable costs, expenses (including
reasonable attorneys' fees and expenses) and liabilities that might be
incurred by it in complying with such request or direction, including
such reasonable advances as may be requested by the Guarantee Trustee;
provided that nothing contained in this Section 3.02(a)(v) shall be
taken to relieve the Guarantee Trustee, upon the occurrence of an Event
of Default, of its obligation to exercise the rights and powers vested
in it by this Guarantee Agreement and use the same degree of care and
skill in the exercise thereof as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in
its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through its agents or attorneys or any Affiliate, and the Guarantee
Trustee shall not be responsible for any misconduct or negligence on
the part of any such agent or attorney appointed with due care by it
hereunder.
(viii) Whenever in the administration of this Guarantee
Agreement the Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking
any other action hereunder, the Guarantee Trustee (A) may request
instructions from the Holders of a Majority in Liquidation Amount of
the Preferred Securities, (B) may refrain from enforcing such remedy or
right or taking such other action until such instructions are received,
and (C) shall be protected in acting in accordance with such
instructions.
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<PAGE> 14
(b) No provision of this Guarantee Agreement shall be deemed to impose
any duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
SECTION 3.03. Indemnity. The Guarantor agrees to indemnify the
Guarantee Trustee for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on the part of the Guarantee
Trustee, arising out of or in connection with the acceptance or administration
of this Guarantee Agreement, including the reasonable costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder. The Guarantee Trustee
will not claim or exact any lien or charge on any Guarantee Payment as a result
of any amount due to it under this Guarantee Agreement.
ARTICLE 4
GUARANTEE TRUSTEE
SECTION 4.01. Guarantee Trustee; Eligibility. (a) There shall at all
times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of
at least $50,000,000, and shall be a corporation meeting the
requirements of Section 310(a) of the Trust Indenture Act. If such
corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the supervising or examining
authority, then, for the purposes of this Section and to the extent
permitted by the Trust Indenture Act, the combined capital and surplus
of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Guarantee Trustee shall cease to be eligible to
so act under Section 4.01(a), the Guarantee Trustee shall immediately resign in
the manner and with the effect set out in Section 4.02(c).
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<PAGE> 15
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
SECTION 4.02. Appointment, Removal and Resignation of the Guarantee
Trustee. (a) Subject to Section 4.01(b) the Guarantee Trustee may be appointed
or removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a Successor
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Guarantee Trustee and delivered to
the Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold office until
a Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by an instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.02 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.
ARTICLE 5
GUARANTEE
SECTION 5.01. Guarantee. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders the Guarantee Payments (without duplication
of amounts theretofore paid by or on behalf of the Issuer), as and when due,
regardless of any defense, right of set-off or counterclaim which the Issuer may
have or assert, other than the defense of payment. The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of
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<PAGE> 16
the required amounts by the Guarantor to the Holders or by causing the Issuer to
pay such amounts to the Holders.
SECTION 5.02. Waiver of Notice and Demand. The Guarantor hereby waives
notice of acceptance of the Guarantee Agreement and of any liability to which it
applies or may apply, presentment, demand for payment, any right to require a
proceeding first against the Guarantee Trustee, Issuer or any other Person
before proceeding against the Guarantor, protest, notice of nonpayment, notice
of dishonor, notice of redemption and all other notices and demands.
SECTION 5.03. Obligations Not Affected. The obligations, covenants,
agreements and duties of the Guarantor under this Guarantee Agreement shall in
no way be affected or impaired by reason of the happening from time to time of
any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities (other than an extension of time for
payment of Distributions that results from the extension of any interest payment
period on the Senior Notes or any extension of the maturity date of the Senior
Notes permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
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(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.03 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders or the Guarantee Trustee to
give notice to, or obtain the consent of, the Guarantor with respect to the
happening of any of the foregoing.
SECTION 5.04. Rights of Holders. The Guarantor expressly acknowledges
that: (a) this Guarantee Agreement will be deposited with the Guarantee Trustee
to be held for the benefit of the Holders; (b) the Guarantee Trustee has the
right to enforce this Guarantee Agreement on behalf of the Holders; (c) the
Holders of a Majority in Liquidation Amount of the Preferred Securities have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Guarantee Trustee in respect of this Guarantee Agreement
or to direct the exercise of any trust or power conferred upon the Guarantee
Trustee under this Guarantee Agreement; (d) any Holder may institute a legal
proceeding directly against the Guarantor to enforce its rights under this
Guarantee Agreement, without first instituting a legal proceeding against the
Guarantee Trustee, the Issuer or any other Person; and (e) if an Event of
Default with respect to the Senior Notes constituting the failure to pay
interest or principal on the Senior Notes on the date such interest or principal
is otherwise payable has occurred and is continuing, then any Holder shall have
the right, which is absolute and unconditional, to proceed directly against the
Guarantor to obtain Guarantee Payments without first waiting to determine if the
Guarantee Trustee has enforced this Guarantee Agreement or instituting a legal
proceeding against the Issuer, the Guarantee Trustee or any other Person.
SECTION 5.05. Guarantee of Payment. This Guarantee Agreement creates
a guarantee of payment and not of collection.
SECTION 5.06. Subrogation. The Guarantor shall be subrogated to all (if
any) rights of the Holders against the Issuer in respect of any amounts paid to
the Holders by the Guarantor under this Guarantee Agreement and shall have the
right to waive payment by the Issuer pursuant to Section 5.01; provided that the
Guarantor shall not (except to the extent required by applicable law) be
entitled to enforce or exercise any rights which it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Guarantee Agreement, if, at the time of any such
payment, any amounts are due and unpaid under this Guarantee Agreement. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
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SECTION 5.07. Independent Obligations. The Guarantor acknowledges that
its obligations hereunder are independent of the obligations of the Issuer with
respect to the Preferred Securities and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Guarantee Agreement notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.03.
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ARTICLE 6
COVENANTS AND STATUS
SECTION 6.01. Status of this Guarantee Agreement. This Guarantee
Agreement shall constitute a senior unsecured obligation of the Guarantor and
shall rank equally with all of the Guarantor's other senior unsecured
obligations. If an Event of Default (as defined in the Indenture) has occurred
and is continuing, the rights of holders of the Common Securities to receive
payments under the Common Securities Guarantee shall be subordinated to the
rights of Holders to receive Guarantee Payments.
SECTION 6.02. Certain Covenants of the Guarantor.
(a) The Guarantor covenants and agrees that it will not, and will not
permit any subsidiary of the Guarantor to (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Guarantor's capital stock or (ii) make any payment
of principal of, interest or premium, if any, on or repay, repurchase or redeem
any debt securities (including guarantees of indebtedness for money borrowed) of
the Guarantor that by their terms permit deferral at the option of the Guarantor
of scheduled payments of interest or principal (other than (A) any dividend,
redemption, liquidation, interest, principal or guarantee payment by Guarantor
where the payment is made by way of securities (including capital stock) that
rank pari passu with or junior to the securities on which such dividend,
redemption, interest, principal or guarantee payment is being made, (B)
purchases of the Guarantor's capital stock related to the issuance of the
Guarantor's capital stock under any of the Guarantor's benefit plans for its
directors, officers or employees, (C) as a result of a reclassification of the
Guarantor's capital stock or the ex change or conversion of one series or class
of the Guarantor's capital stock for another series or class of the Guarantor's
capital stock, including, without limitation, the conversion of the Guarantor's
Class C common stock and its Series A convertible preferred stock into shares of
the Guarantor's Class A common stock, and (D) the purchase of fractional
interests in shares of the Guarantor's capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted or
exchanged) if at such time (1) there shall have occurred any event of which the
Guarantor has actual knowledge that (x) with the giving of notice or the lapse
of time, or both, would constitute an Event of Default (as defined in the
Indenture) with respect to the Senior Notes and (y) the Guarantor shall not have
taken reasonable steps to cure, (2) the Guarantor shall be in default with
respect to its payment of any obligations under the Guarantee or (3) the
Guarantor shall have given notice of its selection of an Extension Period (as
defined in the Indenture) with respect to the Senior Notes
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<PAGE> 20
and shall not have rescinded such notice, or such Extension Period, or any
extension thereof, shall be continuing.
(b) The Guarantor covenants and agrees (i) to maintain directly or
indirectly 100% ownership of the Common Securities, provided that certain
successors which are permitted by the Indenture may succeed to the Guarantor's
ownership of the Common Securities, (ii) not to voluntarily terminate, wind-up
or liquidate the Issuer, except (A) in connection with a distribution of the
Senior Notes to Holders in the event of the liquidation of the Issuer, (B) in
connection with the redemption of all of the Preferred Securities or (C) in
connection with certain mergers, consolidations or amalgamations permitted by
the Trust Agreement and (iii) to use its reasonable efforts, consistent with the
terms and provisions of the Trust Agreement, to cause the Issuer to remain
classified as a grantor trust and not as an association or publicly traded
partnership taxable as a corporation for United States Federal income tax
purposes.
ARTICLE 7
TERMINATION
SECTION 7.01. Termination. This Guarantee Agreement shall terminate and
be of no further force and effect upon (a) full payment of the Redemption Price
of all Preferred Securities, (b) the distribution of Senior Notes to the Holders
in exchange for all outstanding Preferred Securities and Common Securities or
(c) full payment of the amounts payable in accordance with the Trust Agreement
upon liquidation of the Issuer. Notwithstanding the foregoing, this Guarantee
Agreement will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder must restore payment of any sums paid with respect
to Preferred Securities or this Guarantee Agreement.
ARTICLE 8
MISCELLANEOUS
SECTION 8.01. Successors and Assigns. All guarantees and agreements
contained in this Guarantee Agreement shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders of the Preferred Securities then outstanding. Except in
connection with a consolidation, merger or sale involving the Guarantor with or
into another entity that is permitted under the Indenture and pursuant to which
the assignee agrees in writing to perform the Guarantor's obligations hereunder,
the Guarantor shall not assign its obligations hereunder.
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<PAGE> 21
SECTION 8.02. Amendments. Except with respect to any changes which do
not materially and adversely affect the rights of the Holders (in which case no
consent of the Holders will be required), this Guarantee Agreement may only be
amended with the prior approval of the Holders of not less than a Majority in
Liquidation Amount of the Preferred Securities. The provisions of Section 12.02
of the Trust Agreement concerning meetings of the Holders shall apply to the
giving of such approval. The Guarantor shall furnish the Guarantee Trustee with
an Officer's Certificate and an Opinion of Counsel to the effect that any
amendment of this Agreement is authorized and permitted.
SECTION 8.03. Notices. Any notice, request or other communication
required or permitted to be given hereunder shall be in writing, duly signed by
the party giving such notice, and delivered, telecopied or mailed by first class
mail as follows: (a) if given to the Guarantor, to the address set forth below
or such other address as the Guarantor may give notice of to the Holders:
Cox Communications, Inc.
1400 Lake Hearn Drive
Atlanta, Georgia 30319
Telephone: (404) 843-5000
Telecopier: (404) 847-6336
Attention: Dallas S. Clement
with a copy to:
Dow, Lohnes & Albertson, PLLC
1200 New Hampshire Ave., N.W.
Suite 800
Washington, D.C. 20036
Telecopier: 202-776-2222
Attention: Stuart A. Sheldon
(b) if given to the Issuer, in care of the Guarantee Trustee, at the
Issuer's (and the Guarantee Trustee's) address set forth below or such other
address as the Guarantee Trustee on behalf of the Issuer may give notice of to
the Holders:
Cox RHINOS Trust
c/o Cox Communications, Inc.
1400 Lake Hearn Drive
Atlanta, Georgia 30319
Telephone: (404) 843-5000
Telecopier: (404) 847-6336
Attention: Dallas S. Clement
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<PAGE> 22
with a copy to:
Dow, Lohnes & Albertson, PLLC
1200 New Hampshire Ave., N.W.
Suite 800
Washington, D.C. 20036
Telecopier: 202-776-2222
Attention: Stuart A. Sheldon
and with a copy to:
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Phone No.: 212-815-5092
Facsimile No.: 212-815-5915
Attention: Corporate Trust Administration
(c) if given to any Holder, at the address set forth on the books and
records of the Issuer.
All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 8.04. Benefit. This Guarantee Agreement is solely for the
benefit of the Holders and is not separately transferable from the Preferred
Securities.
SECTION 8.05. Interpretation. In this Guarantee Agreement, unless the
context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not defined
in the preambles hereto have the respective meanings assigned to them in Section
1.01;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;
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<PAGE> 23
(d) all references in this Guarantee Agreement to Articles and Sections
are to Articles and Sections of this Guarantee Agreement unless otherwise
specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa; and
(g) the masculine, feminine or neuter genders used herein shall include
the masculine, feminine and neuter genders.
SECTION 8.06. Governing Law. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
SECTION 8.07. Counterparts. This instrument may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
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<PAGE> 24
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
COX COMMUNICATIONS, INC.
By: /s/ Dallas S. Clement
--------------------------------
Name: Dallas S. Clement
Title: Vice President and
Treasurer
THE BANK OF NEW YORK, as
Guarantee Trustee
By: /s/ Marie E. Trimboli
--------------------------------
Name: Marie E. Trimboli
Title: Assistant Treasurer
<PAGE> 1
EXHIBIT 10.1
REMARKETING AGREEMENT
among
COX COMMUNICATIONS, INC.,
COX RHINOS TRUST
and
BANC OF AMERICA SECURITIES LLC
Dated as of October 6, 1999
<PAGE> 2
REMARKETING AGREEMENT
REMARKETING AGREEMENT (the "AGREEMENT") dated as of October 6, 1999 by
and among Cox Communications, Inc., a Delaware corporation (the "COMPANY"), Cox
RHINOS Trust, a Delaware statutory business trust (the "TRUST"), and Banc of
America Securities LLC, as remarketing agent (the "REMARKETING AGENT").
WITNESSETH:
WHEREAS, the Trust shall issue 500,000 Auction Rate Reset Preferred
Securities (the "PREFERRED SECURITIES") in an aggregate stated liquidation
amount of $500,000,000 and 15,500 Auction Rate Reset Common Securities (the
"COMMON SECURITIES", and together with the Preferred Securities, the "TRUST
SECURITIES") in an aggregate stated liquidation amount of $15,500,000 under the
Amended and Restated Trust Agreement dated as of October 6, 1999 among the
Company, the Administrative Trustees, the Delaware Trustee and the Property
Trustee (as the same may be amended from time to time, the "TRUST AGREEMENT");
WHEREAS, the sole assets of the Trust, consisting of $515,500,000
aggregate principal amount of Auction Rate Reset Senior Notes Series A (the
"SENIOR NOTES") of the Company shall be purchased by the Trust from the Company
with the proceeds of the sale of the Trust Securities;
WHEREAS, upon the occurrence of a Trigger Event (as defined herein),
the Preferred Securities (or, following the distribution of Senior Notes to
Holders of Preferred Securities upon the termination of the Trust, the Senior
Notes) may be remarketed in accordance with the terms hereof;
WHEREAS, the Company and the Trust have requested that Banc of America
Securities LLC ("BAS") act as the Remarketing Agent and, as such, perform the
duties described herein; and
WHEREAS, BAS is willing to act as Remarketing Agent and, as such, to
perform such duties on the terms and conditions expressly set forth herein;
NOW, THEREFORE, in consideration of the covenants herein made, and
subject to the conditions herein set forth, the parties hereto agree as follows:
SECTION 1. Definitions. Capitalized terms used and not defined in this
Agreement shall have the meanings assigned to them in the Trust Agreement. In
addition, as used in this Agreement, the following terms shall have the
following definitions:
<PAGE> 3
"1934 ACT REPORTS" has the meaning set forth in Section 2(b)(iv).
"AFFILIATED BIDDER" has the meaning set forth in Section 5(b).
"ASSOCIATED PERSON" has the meaning set forth in Article 1(ee) of the
ByLaws of the National Association of Securities Dealers, Inc.
"BAS" has the meaning set forth in the fourth recital hereto.
"BID" means an irrevocable offer to purchase the aggregate outstanding
Liquidation Amount of Preferred Securities at the Remarketing Price or,
following any distribution of Senior Notes to Holders, the aggregate outstanding
principal amount of such Senior Notes, as the case may be, with a Distribution
Rate or interest rate, as applicable, equal to the Bid Rate specified in such
Bid and with a redemption date or maturity date, as the case may be, on the
Remarketed Maturity Date.
"BID RATE" means the proposed Distribution Rate on the Preferred
Securities or interest rate on Senior Notes specified in a Bid.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day
on which banking institutions in The City of New York are authorized or required
by law, regulation or executive order to close.
"COMMISSION" means the Securities and Exchange Commission.
"COMPANY" has the meaning set forth in the initial paragraph hereto.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE ACT REGULATIONS" means the rules and regulations promulgated
under the Exchange Act.
"EXPECTED RESET DATE" has the meaning set forth in Section 5(a)(i).
"FAILED REMARKETING" means an event deemed to have occurred if,
following the giving of notice by the Requesting Holders to the Remarketing
Agent as contemplated by Section 5(a)(i), the settlement of a purchase and sale
of the Trust Securities (or, if applicable, the Senior Notes) shall not have
occurred within the applicable time limit specified in this Agreement and in any
event if such a settlement shall not have occurred by the third Business Day
following the related Final Reset Date.
"FINAL RESET DATE" has the meaning set forth in Section 5(a)(iii).
2
<PAGE> 4
"FORMER HOLDERS" has the meaning set forth in Section 5(i).
"FORWARD UNDERWRITING AGREEMENT" means the Forward Underwriting
Agreement dated as of October 6, 1999 between the Company and BAS.
"GUARANTEE AGREEMENT" means the Preferred Securities Guarantee
Agreement dated as of October 6, 1999, executed by the Company for the benefit
of Holders of the Preferred Securities, as amended, supplemented, modified or
superseded from time to time.
"INDENTURE" means the Indenture dated as of June 27, 1995 between the
Company and The Bank of New York, as Indenture Trustee, as supplemented by the
Second Supplemental Indenture dated as of October 6, 1999 and as further
amended, supplemented, modified or superceded from time to time.
"INDENTURE TRUSTEE" means the Trustee pursuant to the Indenture.
"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940, as
amended.
"MATERIAL ADVERSE CHANGE" means any development that would be
reasonably expected to result in a material adverse change in the business,
operations, properties or financial condition of the Company and its
subsidiaries, taken as a whole, or a material adverse effect on the legality,
validity or enforceability of this Agreement.
"OFFERING MEMORANDUM" has the meaning set forth in Section 13.
"PREFERRED SECURITIES" has the meaning set forth in the first recital
hereto.
"REFERENCE CORPORATE DEALER" means a leading dealer of publicly traded
debt securities selected by the Company, which dealer shall be a Qualified
Institutional Buyer (as defined in Rule 144A under the Securities Act) and which
shall not include BAS, its Affiliates (as such term is defined in Rule 405 under
the Securities Act) or its Associated Persons.
"REMARKETED MATURITY DATE" means the later of (i) the thirtieth
anniversary of the Remarketing Settlement Date on which Replacement Securities
are issued and (ii) October 6, 2029.
"REMARKETING" means a remarketing of Preferred Securities or Senior
Notes pursuant to Section 5.
"REMARKETING FEE" has the meaning set forth in Section 9.
3
<PAGE> 5
"REMARKETING NOTICE" has the meaning set forth in Section 5(a)(i).
"REMARKETING PRICE" means (i) with respect to the Preferred Securities,
a price equal to the sum of (A) 100.25% of the aggregate outstanding Liquidation
Amount of the Preferred Securities plus (B) accrued and unpaid Distributions
thereon (including any Additional Distributions) (if any) to and including the
Remarketing Settlement Date on which Replacement Securities are issued and (ii)
with respect to the Senior Notes, a price equal to the sum of (A) 100.25% of the
aggregate outstanding principal amount of such Senior Notes, plus (B) accrued
and unpaid interest thereon (including any Additional Interest) (if any), to and
including the Remarketing Settlement Date on which Replacement Securities are
issued.
"REMARKETING SETTLEMENT DATE" means the third Business Day immediately
following the Reset Date.
"RENEWED REMARKETING" has the meaning set forth in Section 8.
"REPLACEMENT PREFERRED SECURITIES" has the meaning set forth in Section
5(j).
"REPLACEMENT SECURITIES" has the meaning set forth in Section 5(j).
"REPLACEMENT SENIOR NOTES" has the meaning set forth in Section 5(j).
"REPRESENTATION DATE" has the meaning set forth in Section 2(a).
"REQUESTING HOLDERS" has the meaning set forth in Section 5(a)(i).
"RESET DATE" means any date established as a Reset Date pursuant to
Section 5.
"RESET RATE" means the Winning Bid Rate.
"SECONDARY PURCHASE AGREEMENT" means an agreement to be dated as of the
Reset Date (or such other date permitted by applicable law) among the Company,
the Trust, the Remarketing Agent and the Secondary Purchaser (selected in the
manner provided in Section 5(c)) providing for the purchase of the Preferred
Securities, or the Senior Notes, as the case may be, by the Secondary Purchaser,
substantially in the form of Exhibit A hereto, or as otherwise agreed among the
Company, the Trust, the Remarketing Agent and the Secondary Purchaser.
"SECONDARY PURCHASER" has the meaning set forth in Section 5(c).
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"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR NOTES" has the meaning set forth in the second recital hereto.
"TRANSACTION DOCUMENTS" means this Agreement, the Purchase Agreement,
the Placement Fee Letter, the Trust Agreement, the Guarantee Agreement, the
Indenture, the Common Securities, the Forward Underwriting Agreement, the
Secondary Purchase Agreement, the Preferred Securities and the Senior Notes;
provided that for any representation made as of the date hereof pursuant to
Section 2(b), Transaction Documents means this Agreement, the Purchase
Agreement, the Placement Fee Letter, the Trust Agreement, the Guarantee
Agreement, the Indenture, the Common Securities, the Forward Underwriting
Agreement, the Preferred Securities and the Senior Notes.
"TRIGGER EVENT" has the meaning set forth in Section 5(a)(i).
"TRIGGER PRICE" has the meaning set forth in Section 10.
"TRUST" has the meaning set forth in the initial paragraph hereto.
"TRUST AGREEMENT" has the meaning set forth in the initial paragraph
hereto.
"TRUST SECURITIES" has the meaning set forth in the first recital
hereto.
"WINNING BID RATE" has the meaning set forth in Section 5(b).
SECTION 2. Representations and Warranties. (a) Basic Warranties. Each
of the Company and the Trust, on the one hand, and the Remarketing Agent, on the
other hand, represents and warrants to the other as of the date hereof, the
Reset Date and the Remarketing Settlement Date (each of the foregoing dates
being hereinafter referred to as a "REPRESENTATION DATE") that:
(i) Status. It is a duly and validly existing entity
under the laws of the jurisdiction of its creation, formation or
incorporation and, if relevant under such laws, in good standing.
(ii) Powers. It has the corporate or trust power and
authority to execute, enter into and perform its obligations under, or
contemplated under, this Agreement and consummate the transactions
contemplated hereby.
(iii) No Violation or Conflict. The execution, delivery and
performance by such party of this Agreement, the consummation of the
transactions herein contemplated and compliance by such party with its
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obligations hereunder (A) do not violate or conflict with (1) any
provision of its organizational documents, (2) any law applicable to
it, any order or judgment of any court or other agency of government
applicable to it or any of its assets that affects the legality,
validity or enforceability of this Agreement and (B) do not and will
not conflict with or constitute a breach of any contractual restriction
binding on or affecting it or any of its assets.
(iv) Consents. All governmental and other consents that
are required to have been obtained by it with respect to the
performance by such party of its obligations under this Agreement have
been obtained and are in full force and effect and all conditions of
any such consents have been complied with, except for such consents
required under state securities laws or the laws of a foreign
jurisdiction, if applicable, in connection with a Remarketing or a
Renewed Remarketing.
(v) Obligations Binding. Its obligations under this
Agreement constitute its legal, valid and binding obligations,
enforceable against it in accordance with the terms of this Agreement,
except as the enforcement hereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws of general
application relating to or affecting the enforcement of creditors'
rights or by general equitable principles.
(vi) Absence of Litigation. There is not pending or, to
its knowledge, threatened against or affecting it or any of its
Affiliates any action, suit or proceeding at law or in equity or before
any court, tribunal, governmental body, agency or official or any
arbitrator that would reasonably be expected to materially and
adversely affect the legality, validity or enforceability against it of
this Agreement or its ability to perform its obligations under this
Agreement.
(vii) Non-Reliance. It is acting for its own account, and
it has made its own independent decision to enter into this Agreement
and as to whether this Agreement is appropriate or proper for it based
upon its own judgment and upon advice from such advisers as it has
deemed necessary. It is not relying on any communication (written or
oral) of any other party as investment advice or as a recommendation to
enter into this Agreement, it being understood that information and
explanations related to the terms and conditions of this Agreement
shall not be considered investment advice or a recommendation to enter
into this Agreement. No communication (written or oral) received from
any other party shall be deemed to be an assurance or guarantee as to
the expected results of this Agreement. No other party is acting as a
fiduciary for or an adviser to it with respect to this Agreement.
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<PAGE> 8
(viii) Assessment and Understanding. It is capable of
assessing the merits of and understanding (on its own behalf or through
independent professional advice), and understands and accepts, the
terms, conditions and risks of this Agreement. It is also capable of
assuming, and assumes, the risks of this Agreement.
(b) Representations and Warranties of the Company and the Trust.
Each of the Company and the Trust further represents and warrants to the
Remarketing Agent as of each Representation Date, as applicable to each such
entity, that:
(i) Securities Validly Issued. The Preferred Securities
and Senior Notes have been, and the Replacement Preferred Securities
and the Replacement Senior Notes will, following a Trigger Event, be
validly authorized and executed by the Trust and the Company, as the
case may be, and, when authenticated, issued and delivered in the
manner provided for in the Trust Agreement and the Indenture, as the
case may be, and delivered against payment of the purchase price
therefor as provided in the Purchase Agreement, and constitute, or will
constitute, legally binding obligations of the Trust or the Company, as
the case may be, entitled to the benefits of the Trust Agreement and
Indenture.
(ii) No Event of Default. No Event of Default under the
Trust Agreement and no Event of Default under the Indenture has
occurred and is continuing and no such event or circumstance would
occur as a result of its entering into or performing its obligations
under this Agreement.
(iii) Compliance with Exchange Act Requirements. The
Company has made all the filings with the Commission that it is
required to make under the Exchange Act and the Exchange Act
Regulations, and each such filing complies in all material respects
with the requirements of the Exchange Act and Exchange Act Regulations.
(iv) No Material Misstatements. The Company's most recent
Annual Report on Form 10-K, and its Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K filed after the end of the fiscal year to
which such Annual Report relates (collectively, the "1934 ACT
REPORTS"), as amended and supplemented by material press releases, at
the time they were filed did not, and do not, contain any untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
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(v) No Material Adverse Change. Since the respective
dates as of which information is given in the 1934 Act Reports, except
as otherwise stated therein, there has been no Material Adverse Change.
(vi) Not an Investment Company. Neither the Company nor
the Trust is an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the Investment
Company Act.
SECTION 3. Covenants. (a) The Company hereby covenants with the
Remarketing Agent as follows:
(i) Maintain Authorizations. The Company shall use its
commercially reasonable efforts to maintain in full force and effect
all consents of any governmental or other authority that are required
to be obtained by it with respect to this Agreement and shall use its
commercially reasonable efforts to obtain any such consents that may
become necessary in the future.
(ii) Comply with Laws. The Company shall comply in all
material respects with all applicable laws and orders to which it may
be subject if failure so to comply would materially impair its ability
to perform its obligations under this Agreement.
(iii) Furnish Documentation. The Company will furnish to
the Remarketing Agent: (i) unless available to the Remarketing Agent on
EDGAR or the Company's website at http: //www.cox.com, each document
filed after the date hereof by the Company pursuant to the periodic
reporting requirements of the Exchange Act and (ii) in connection with
the remarketing of the Preferred Securities or Senior Notes, as the
case may be, such other information as the Remarketing Agent may
reasonably request in writing from time to time. Notwithstanding the
foregoing sentence, the Company agrees to provide the Remarketing Agent
with as many copies of the foregoing written materials and other
Company-approved information as the Remarketing Agent may reasonably
request for use in connection with the remarketing of the Preferred
Securities or Senior Notes, as the case may be, and consents to the use
thereof for such purpose; provided, however, that materials designated
confidential or proprietary by the Company shall not be used for such
purpose without the prior written consent of the Company.
(iv) Notification. If, at any time prior to the
Remarketing Settlement Date, any event or condition known to the
Company relating to or affecting the Company, the Preferred Securities
or the Senior Notes shall occur that would reasonably be expected to
cause any of the reports,
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documents, materials or information referred to in Section 3(a)(iii) or
any document incorporated therein by reference to contain an untrue
statement of a material fact or omit to state a material fact, the
Company shall promptly notify the Remarketing Agent in writing of the
then-known circumstances and details of such event or condition.
(v) Comply with Securities Laws. The Company will comply
with the Securities Act and the rules and regulations of the Commission
thereunder, the Exchange Act and the Exchange Act Regulations so as to
permit the completion of the remarketing of the Preferred Securities or
Senior Notes, as the case may be, as contemplated in this Agreement.
(vi) No Purchase of Securities. The Company agrees that
neither it nor any of its subsidiaries or Affiliates shall purchase or
otherwise acquire, or enter into any agreement to purchase or otherwise
acquire, any of the Preferred Securities or Senior Notes prior to the
remarketing thereof by the Remarketing Agent, other than pursuant to
this Agreement or pursuant to the terms of the Preferred Securities or
the Senior Notes.
(vii) Notification of Rating Agency Action. The Company
will provide prompt notice by telephone, confirmed in writing (which
may include facsimile or other electronic transmission), to the
Remarketing Agent of any notification or announcement by a "nationally
recognized statistical rating organization" (as defined by the
Commission for purposes of Rule 436(g)(2) under the Securities Act)
with regard to a downgrade or withdrawal of the rating of any security
of the Company or the placement on what is currently called a "watch
list"or a "credit watch" with negative implications of any security of
the Company.
(viii) Restriction on Debt Issuance. During the period
commencing on the date on which the Remarketing Agent delivers a
Remarketing Notice in accordance with Section 5(a)(i) and ending on the
earlier of (A) the date of the related Remarketing Settlement Date or
(B) the date of the related Failed Remarketing, the Company will not,
without the consent of the Remarketing Agent, offer, sell or contract
to sell, or otherwise dispose of, directly or indirectly, or announce
the offering of, any senior debt securities with a maturity of more
than ten years.
(ix) Reasonable Efforts. The Company shall use its
commercially reasonable efforts to assist the Remarketing Agent in
remarketing the Preferred Securities or the Senior Notes, as the case
may be, in the manner contemplated by this Agreement.
(b) The Remarketing Agent hereby covenants with the Company as
follows:
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(i) Maintain Authorizations. The Remarketing Agent will
use all of its reasonable efforts to maintain in full force and effect
all consents of any governmental or other authority that are required
to be obtained by it with respect to this Agreement and shall use all
reasonable efforts to obtain any that may become necessary in the
future.
(ii) Comply with Laws. The Remarketing Agent shall comply
in all material respects with all applicable laws and orders which it
may be subject if failure so to comply would materially impair its
ability to perform its obligations under this Agreement.
SECTION 4. Appointment and Obligations of Remarketing Agent and
Calculation Agent; Secondary Purchaser. (a) The Company and the Trust hereby
appoint BAS as Remarketing Agent and as Calculation Agent under the Trust
Agreement and the Indenture (i) to determine, in accordance with the terms
described in Section 5(b), the Reset Rate that, when applied to the Preferred
Securities (or, following the distribution of the Senior Notes to Holders of the
Preferred Securities upon termination of the Trust, the Senior Notes), shall
result in the resale of all outstanding Preferred Securities (or, if applicable,
all outstanding Senior Notes), at a sales price equal to the Remarketing Price;
provided that the Reset Rate shall in no event exceed the rate permitted by
applicable law, (ii) to conduct a private auction of all outstanding Preferred
Securities or Senior Notes, as the case may be, and (iii) to enter into a
Secondary Purchase Agreement with respect to the Preferred Securities or the
Senior Notes, as the case may be.
(b) Pursuant to the Secondary Purchase Agreement, the Secondary
Purchaser, either as the sole purchaser or as the representative of a syndicate
of purchasers designated by the Secondary Purchaser, shall agree, subject to the
terms and conditions set forth therein, that the Secondary Purchaser and any
such other purchasers shall purchase severally such Preferred Securities or
Senior Notes, as the case may be, from the holders thereof at a price equal to
the Remarketing Price.
SECTION 5. Determination of Reset Date; Remarketing Procedures.
(a) (i) Subject to Section 8, (i) if the Closing Price of the
Common Stock on any Trading Day is less than the Trigger Price and (ii) in any
case, if the Preferred Securities (or the Senior Notes) remain outstanding at 36
months from the date of issuance (each, a "TRIGGER EVENT"), the Holders of a
Majority in Liquidation Amount of the Trust Securities (or, if applicable, the
holders of a majority in principal amount of the Senior Notes), acting together
as a single class (the "REQUESTING HOLDERS"), will have the right to require
remarketing of the Preferred Securities (or, if applicable, the Senior Notes).
The Requesting Holders
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may exercise this right by delivering a written notice to the Remarketing Agent
at any time on or prior to the sixth Business Day following the date on which
such Trigger Event occurs. Upon the receipt of such notice, the Remarketing
Agent shall immediately deliver a written notice to the Company on behalf of the
Requesting Holders (the "REMARKETING NOTICE"). If the Requesting Holders
exercise their right to require the remarketing of the Preferred Securities (or,
if applicable, the Senior Notes), the Reset Date shall be the sixth Business Day
after the date on which the Remarketing Notice is delivered by the Remarketing
Agent (the "EXPECTED RESET DATE").
(ii) If the Requesting Holders do not exercise their right
to require the remarketing of the Preferred Securities (or, if
applicable, the Senior Notes) pursuant to Section 5(a)(i) above with
respect to any Trigger Event, the Requesting Holders shall continue to
have the right to require the remarketing of the Preferred Securities
(or, if applicable, the Senior Notes) in accordance with Section
5(a)(i) with respect to any subsequent Trigger Event.
(iii) Notwithstanding Section 5(a)(i):
(A) the Company may, by notice to the
Remarketing Agent, direct that the Reset Date be delayed if
the Company believes it will be unable to meet the conditions
to Remarketing in the absence of such a delay; and
(B) the Remarketing Agent may, by notice to the
Company, direct that the Reset Date be delayed if the
Remarketing Agent believes that a Remarketing will not be
successful in the absence of such a delay;
provided that the Company and the Remarketing Agent, in either such
event, will use their reasonable best efforts to establish a delayed
Reset Date that is within five Business Days after the Expected Reset
Date, but in no event later than the 30th Business Day following the
date on which the related Remarketing Notice was delivered (the "FINAL
RESET DATE").
(iv) If the Company and the Remarketing Agent have not
agreed, on or prior to the sixth Business Day preceding the Final Reset
Date, to a Reset Date that is not later than the Final Reset Date, a
Failed Remarketing, subject to the provisions of Section 7, shall be
deemed to have occurred.
(b) The Company shall, by notice to the Remarketing Agent no later
than five Business Days prior to the Reset Date, select and specify three
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Reference Corporate Dealers. By 3:00 p.m., New York City time, on the Reset
Date, the Remarketing Agent shall request Bids from such Reference Corporate
Dealers. The Remarketing Agent or an Affiliate or Associated Person thereof (any
such person, an "AFFILIATED BIDDER") may, at its option, enter a Bid. The
Remarketing Agent shall disclose to the Company the Bids obtained and determine
the lowest Bid Rate (the "WINNING BID RATE") from among the Bids obtained on the
Reset Date. By approximately 4:30 p.m., New York City time, on the Reset Date,
the Remarketing Agent shall notify the Company, the Indenture Trustee and the
Property Trustee of the Winning Bid Rate. If on a Reset Date, Bids are not
submitted by at least two Reference Corporate Dealers, or if the lowest Bid
submitted would result in a Winning Bid Rate in excess of the rate permitted by
applicable law, the Remarketing shall be deemed to be a Failed Remarketing on
the corresponding Remarketing Settlement Date. The Winning Bid Rate determined
by the Remarketing Agent, absent manifest error, shall be binding and conclusive
upon the Holders of the Trust Securities, the holders of the Senior Notes, the
Company and the Trust.
(c) On the Reset Date, the Remarketing Agent shall designate as
the Secondary Purchaser (the "SECONDARY PURCHASER") the Reference Corporate
Dealer providing the Bid containing the Winning Bid Rate. If the Winning Bid
Rate is specified in the Bids submitted by two or more bidders, the Remarketing
Agent shall, in consultation with the Company, designate one of such bidders as
the Secondary Purchaser.
(d) On the Reset Date, the Secondary Purchaser shall enter into a
Secondary Purchase Agreement for the purchase by such Secondary Purchaser at the
Remarketing Price of the aggregate Liquidation Amount of Preferred Securities,
with (i) a Distribution Rate equal to the Winning Bid Rate (or, if Senior Notes
shall have been distributed to Holders of the Trust Securities, the aggregate
principal amount of Senior Notes with an interest rate equal to the Winning Bid
Rate) and (ii) a Mandatory Redemption Date (or, in the case of Senior Notes, a
maturity date) on the Remarketed Maturity Date.
(e) If a Remarketing shall have occurred pursuant to this Section
5 but settlement of the purchase and sale of the Preferred Securities or Senior
Notes, as the case may be, does not occur on the corresponding Remarketing
Settlement Date, then a Failed Remarketing shall be deemed to have occurred on
such Remarketing Settlement Date.
(f) At the time and in the manner specified in the Secondary
Purchase Agreement, the Secondary Purchaser shall pay on the Remarketing
Settlement Date to the Remarketing Agent on behalf of the holders of the
Preferred Securities or Senior Notes, as the case may be, an amount of cash
equal to the Remarketing Price.
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(g) Unless otherwise agreed among the Remarketing Agent, the
paying agent (under the Trust Agreement or Indenture, as applicable) and any
Former Holder, the Remarketing Agent shall promptly pay the Remarketing Price,
less the Remarketing Fee, to the paying agent, acting solely as agent for the
Former Holders, and the paying agent shall pay such amount to the Former Holders
on the Remarketing Settlement Date in the manner specified in the Trust
Agreement or the Indenture, as the case may be. Any amounts held by the paying
agent for payment to the Former Holders shall not be property of the Trust or
the Company, as the case may be.
(h) The obligation of the Remarketing Agent to make payment to the
Former Holders in connection with the Remarketing shall be limited to the extent
that the Secondary Purchaser has delivered the Remarketing Price therefor to the
Remarketing Agent.
(i) Any outstanding Preferred Securities (or, if applicable, the
Senior Notes) purchased on the Remarketing Settlement Date shall be deemed to be
transferred to the Secondary Purchaser and shall be replaced in the manner
provided in Section 5(j). On and after the Remarketing Settlement Date (except
in the event of a Failed Remarketing), (i) the Trust (or the Company, in the
case of the Senior Notes) shall make no further payments to, and the Trust (or
the Company, in the case of the Senior Notes) shall have no further obligations
under the Trust Agreement (or the Indenture, in the case of the Senior Notes) in
respect of, the holders of such replaced securities (the "FORMER HOLDERS"), (ii)
the Trust (or the Company, in the case of the Senior Notes) shall only be
obligated to make payments to the holders of Replacement Securities and (iii)
the Preferred Securities (or, if applicable, the Senior Notes) of the Former
Holders shall no longer represent an obligation of, or interest in, the Trust
(or the Company, in the case of the Senior Notes) but shall only represent a
right to receive the proceeds of the Remarketing from the paying agent under the
Trust Agreement or the Indenture, as the case may be.
(j) (i) The Company shall cause replacement certificates
evidencing the remarketed Preferred Securities (the "REPLACEMENT PREFERRED
SECURITIES") to be executed by an Administrative Trustee on behalf of the Trust
and authenticated by the Property Trustee and (ii) the Senior Note Issuer shall
cause replacement certificates evidencing the Senior Notes (the "REPLACEMENT
SENIOR NOTES", and together with the Replacement Preferred Securities, the
"REPLACEMENT SECURITIES") to be executed by an authorized signatory and
authenticated by the Indenture Trustee, in each case, in accordance with the
provisions of Section 5. If the Preferred Securities are to be purchased on the
Remarketing Settlement Date, (A) the Replacement Preferred Securities shall be
delivered to the purchaser of the remarketed Preferred Securities in accordance
with the terms of the Secondary Purchase Agreement and (B) the Replacement
Senior Notes shall be delivered to the Trust. If the Senior Notes are to be
purchased on the Remarketing Settlement
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Date, the Replacement Senior Notes shall be delivered to the purchaser of the
remarketed Senior Notes in accordance with the terms of the Secondary Purchase
Agreement.
SECTION 6. Reset of Distribution Rate, Mandatory Redemption Date,
Interest Rate and Maturity Date. From and including the Remarketing Settlement
Date on which Replacement Securities are issued, (a) the Distribution Rate on
the Trust Securities and the interest rate on the Senior Notes shall be the
Winning Bid Rate and (b) the Mandatory Redemption Date and the maturity date of
the Senior Notes shall be the Remarketed Maturity Date.
SECTION 7. Failed Remarketing. The Remarketing Agent shall give notice
of any Failed Remarketing on the date such Failed Remarketing occurs, or is
deemed to have occurred, by 4:00 p.m., New York City time, to the Company, the
Senior Note Issuer, the Property Trustee, the Indenture Trustee and the paying
agent under the Indenture.
SECTION 8. Renewed Remarketing. If a Failed Remarketing has occurred,
the Sponsor may thereafter at its option at any time or from time to time
initiate a new Remarketing (a "RENEWED REMARKETING") by giving notice of such
election to the Remarketing Agent. Upon the receipt of such notice, the
Remarketing Agent shall immediately deliver written notice to the Holders of the
Preferred Securities which are not Replacement Securities, and such notice shall
constitute a Remarketing Notice for purposes of Section 5(a)(i).
SECTION 9. Remarketing Fee. With respect to the Remarketing, the
Remarketing Agent and the Calculation Agent shall retain as an aggregate fee
(the "REMARKETING FEE") an amount equal to 25 basis points (.25%) of the
aggregate Liquidation Amount of the remarketed Preferred Securities or 25 basis
points (.25%) of the aggregate principal amount of the Senior Notes, as the case
may be, from the purchase price received in connection with such Remarketing.
SECTION 10. Adjustments to Trigger Price. The "TRIGGER PRICE" shall
initially be equal to $28.00. Following the determination by the Remarketing
Agent in its reasonable discretion that a Potential Adjustment Event has
occurred, the Remarketing Agent shall determine (after consultation with the
Company) whether such Potential Adjustment Event has a diluting or concentrative
effect on the theoretical value of the Common Stock and, if so, shall make the
corresponding adjustment(s), if any, to the Trigger Price. The Company shall
promptly notify the Remarketing Agent of any Potential Adjustment Event. The
Remarketing Agent may, but need not, determine the appropriate adjustment(s) by
reference to the adjustment(s) in respect of such Potential Adjustment Event
made by an options exchange to options on the Common Stock traded on that
options exchange. In the event of any merger, consolidation or reorganization of
the
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Company, the Remarketing Agent shall determine (after consultation with the
Company) the appropriate Trigger Price as a result of such event.
SECTION 11. Replacement and Resignation of Remarketing Agent. (a) The
Company shall not have the right to replace BAS as the Remarketing Agent, except
in the case of bad faith, gross negligence or willful misconduct by BAS.
(b) BAS may resign at any time for good reason (after consultation
with the Company) and, subject to the following sentence, shall be discharged
from its duties and obligations hereunder or as Calculation Agent under the
Trust Agreement and the Indenture by giving no less than 10 Business Days'
notice. Any such resignation shall become effective upon the Company's
appointment of a successor to perform the services that would otherwise be
performed hereunder by the Remarketing Agent or the Calculation Agent under the
Trust Agreement and the Indenture, as the case may be, and the agreement of any
such successor so to serve. Upon receiving notice from the Remarketing Agent
that it wishes to resign hereunder or as Calculation Agent under the Trust
Agreement and the Indenture stating the reasons for such resignation, the
Company shall appoint such a successor and enter into a new remarketing
agreement with it as soon as reasonably practicable.
(c) This Agreement shall terminate as to any Remarketing Agent
that is replaced on the effective date of its replacement pursuant to Section
11(b). Notwithstanding any such termination, the obligations of the Company set
forth in Section 15 shall survive and remain in full force and effect until all
amounts payable under said Section 15 shall have been paid in full.
SECTION 12. Dealing in the Securities. BAS, when acting as Remarketing
Agent hereunder or under the Secondary Purchase Agreement or when acting in its
individual or any other capacity, may, to the extent permitted by law, buy,
sell, hold or deal in any of the Preferred Securities or Senior Notes. The
Remarketing Agent may exercise any vote or join in any action with respect to
any Preferred Securities or Senior Notes owned by it with like effect as if it
did not act in any capacity hereunder. BAS, in its individual capacity, either
as principal or agent, may also engage in or have an interest in any financial
or other transaction with the Company as freely as if it did not act in any
capacity hereunder.
SECTION 13. Offering Memorandum. Promptly following a Trigger Event,
the Company shall furnish an offering memorandum (the "OFFERING MEMORANDUM") to
the Remarketing Agent, in form and substance reasonably satisfactory to the
Remarketing Agent, to be used in the remarketing by the Secondary Purchaser or
purchasers under the Secondary Purchase Agreement, and shall pay all expenses
relating to the preparation and furnishing of such Offering Memorandum.
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SECTION 14. Conditions to the Remarketing Agent's Obligations. (a) The
obligations of the Remarketing Agent, the Secondary Purchaser and any other
purchasers to perform their respective obligations hereunder and under the
Secondary Purchase Agreement shall be subject to the terms and conditions of the
Secondary Purchase Agreement.
(b) If at any time during the term of this Agreement, any Event of
Default under the Indenture or any Event of Default under the Trust Agreement,
or event that with the passage of time or the giving of notice or both would
become an Event of Default under the Indenture or an Event of Default under the
Trust Agreement, has occurred and is continuing under the Indenture or the Trust
Agreement, then the obligations and duties of the Remarketing Agent under this
Agreement shall be suspended until such default or event has been cured. The
Trust shall cause the Property Trustee to provide to the Remarketing Agent
notice of all such defaults and events of which the Property Trustee is aware,
and the Company shall cause the Indenture Trustee to provide to the Remarketing
Agent notice of all such defaults and events of which the Indenture Trustee is
aware.
SECTION 15. Indemnification. The Company shall indemnify and hold
harmless the Remarketing Agent and its officers and employees from and against
all actions, claims, damages, liabilities and losses, and costs and expenses
related thereto (including reasonable legal fees and costs) relating to or
arising out of actions or omissions in any capacity hereunder and in any
capacity as Calculation Agent under the Trust Agreement and the Indenture,
except actions, claims, damages, liabilities, losses, costs and expenses to the
extent caused by (a) the bad faith, gross negligence or wilful misconduct of
such indemnified party or (b) the breach by the Remarketing Agent of its
representations, warranties and covenants hereunder. This Section 15 shall
survive the termination of the Agreement, the Trust Agreement, the Indenture and
the payment in full of all obligations under the Preferred Securities or the
Senior Notes, as the case may be, and this Agreement, whether by purchase,
repurchase, redemption or otherwise.
SECTION 16. Remarketing Agent's Performance: Duty of Care; Power of
Attorney. The duties and obligations of the Remarketing Agent hereunder shall be
determined solely by the express provisions of this Agreement and the Secondary
Purchase Agreement.
The Remarketing Agent hereby accepts the obligation set forth in the
Trust Agreement and the Indenture to act as attorney-in-fact for the holders of
the Preferred Securities or Senior Notes, as the case may be.
SECTION 17. Expenses. The Company shall pay the reasonable expenses and
disbursements of the Remarketing Agent (including the reasonable fees of its
counsel) incurred in connection with any remarketing, including any Renewed
Remarketing and any Failed Remarketing, and the Company shall pay the
16
<PAGE> 18
reasonable expenses and disbursements of the Remarketing Agent (including the
reasonable fees of its counsel) in connection with the execution and delivery of
the Secondary Purchase Agreement.
SECTION 18. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without reference
to the choice of law rules thereof.
SECTION 19. Term of Agreement. Unless otherwise terminated in
accordance with the provisions hereof and except as otherwise provided herein,
this Agreement shall remain in full force and effect from the date hereof until
30 days after the earlier of (i) the date all Preferred Securities (or, if
applicable, Senior Notes) shall have been redeemed and (ii) the Reset Date in
connection with a Remarketing that is not a Failed Remarketing.
SECTION 20. Successors and Assigns. The rights and obligations of the
Company hereunder may not be assigned or delegated to any other person without
the prior written consent of the Remarketing Agent. Subject to the provisions of
Section 11, the rights and obligations of the Remarketing Agent hereunder may
not be assigned or delegated to any other person without the prior written
consent of the Company. This Agreement shall inure to the benefit of and be
binding upon the Trust, the Company and the Remarketing Agent and their
respective successors and assigns. The terms "successors" and "assigns" shall
not include any purchaser of Preferred Securities or Senior Notes merely as a
result of such purchase. This Agreement shall inure to the benefit of the
Holders of the Preferred Securities (or, if applicable, holders of the Senior
Notes).
SECTION 21. Headings. Section headings have been inserted in this
Agreement as a matter of convenience of reference only, and it is agreed that
such section headings are not a part of this Agreement and shall not be used in
the interpretation of any provision of this Agreement.
SECTION 22. Severability. If any provision of this Agreement shall be
held or deemed to be or shall, in fact, be invalid, inoperative or unenforceable
as applied in any particular case in any or all jurisdictions because it
conflicts with any provisions of any constitution, statute, rule or public
policy or for any other reason, such circumstances shall not have the effect of
rendering the provision in question invalid, inoperative or unenforceable in any
other case, circumstances or jurisdiction, or of rendering any other provision
or provisions of this Agreement invalid, inoperative or unenforceable to any
extent whatsoever.
SECTION 23. Counterparts. This Agreement may be executed in
counterparts, each of which shall be regarded as an original and all of which
shall constitute one and the same document.
17
<PAGE> 19
SECTION 24. Amendments. This Agreement may be amended by any instrument
in writing signed by the parties hereto; provided that any amendment to Section
5 shall require the consent of all Holders of the Preferred Securities (or,
following the distribution of Senior Notes to Holders of the Preferred
Securities upon termination of the Trust, the Senior Notes).
SECTION 25. Notices. Unless otherwise specified, any notices, requests,
consents or other communications given or made hereunder or pursuant hereto
shall be made in writing or transmitted by any standard form of
telecommunication, including telephone, telegraph or telecopy, and confirmed in
writing. All written notices and confirmations of notices by telecommunication
shall be deemed to have been validly given or made when delivered or mailed,
registered or certified mail, return receipt requested and postage prepaid. All
such notices, requests, consents or other communications shall be addressed as
follows:
if to the Company, to:
Cox Communications, Inc.
1400 Lake Hearn Drive
Atlanta, Georgia 30319
Facsimile: (404) 847-6336
Attention: Dallas S. Clement
if to the Trust, to:
Cox RHINOS Trust
c/o Cox Communications, Inc.
1400 Lake Hearn Drive
Atlanta, Georgia 30319
Facsimile: (404) 847-6336
Attention: Dallas S. Clement
in each case, with a copy to:
Dow, Lohnes & Albertson, PLLC
1200 New Hampshire Ave., N.W.
Washington, D.C. 20036
Facsimile: 202-776-2222
Attention: Stuart A. Sheldon
and if to the Remarketing Agent, to:
Banc of America Securities LLC
9 West 57th Street
New York, NY 10019
Facsimile: (212) 847-5124
Attention: William Caccamise
or to such other address as any of the above shall specify to the other in
writing.
18
<PAGE> 20
IN WITNESS WHEREOF, each of the Company, the Trust and the
Remarketing Agent has caused this Remarketing Agreement to be executed in its
name and on its behalf by one of its duly authorized officers as of the date
first above written.
COX COMMUNICATIONS, INC.
By: /S/ Dallas S. Clement
-----------------------------------
Name: Dallas S. Clement
Title: Vice President and Treasurer
COX RHINOS TRUST
By: Cox Communications, Inc.
as Sponsor
By: /S/ Dallas S. Clement
-----------------------------------
Name: Dallas S. Clement
Title: Administrative Trustee
Confirmed and Accepted
as of the date hereof:
BANC OF AMERICA
SECURITIES LLC, not individually,
but solely as Remarketing Agent
By: /s/ Trevor Ganshaw
----------------------------------
Name: Trevor Ganshaw
Title: Managing Director
<PAGE> 1
EXHIBIT 10.2
================================================================================
AMENDED AND RESTATED
364-DAY CREDIT AGREEMENT
dated as of September 28, 1999
by and among
COX COMMUNICATIONS, INC.
The Banks Party Hereto,
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
as Syndication Agent
THE BANK OF NEW YORK and WACHOVIA BANK, N.A.
as Co-Documentation Agents
----------------------------
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Administrative Agent for the Banks
----------------------------
Chase Securities Inc.,
as Sole Book Manager and Lead Arranger
================================================================================
<PAGE> 2
COX COMMUNICATIONS, INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE I
<S> <C>
Definitions...................................................................1
ARTICLE II
The Loans
SECTION 2.01. Revolving Credit Loans........................................13
SECTION 2.02. Setoff, Counterclaims and Taxes...............................22
SECTION 2.03. Withholding Tax Exemption.....................................23
SECTION 2.04. Discretionary Loans...........................................23
SECTION 2.05. Obligations Several, Not Joint................................24
ARTICLE III
Optional and Required Prepayments; Interest
Payment Date; Other Payments
SECTION 3.01. Optional Prepayments..........................................24
SECTION 3.02. Required Prepayments..........................................25
SECTION 3.03. Interest Payment Date.........................................27
SECTION 3.04. Place, etc. of Payments and Prepayments.......................27
ARTICLE IV
Fees; Reduction of Commitments
SECTION 4.01. Commitment Fees; Utilization Fee..............................27
SECTION 4.02. Reduction or Termination of Commitments.......................28
ARTICLE V
Application of Proceeds..........................29
</TABLE>
<PAGE> 3
ARTICLE VI
Representations and Warranties
<TABLE>
<S> <C> <C>
SECTION 6.01. Organization; Qualification; Subsidiaries.....................29
SECTION 6.02. Financial Statements..........................................29
SECTION 6.03. Actions Pending...............................................30
SECTION 6.04. Default.......................................................30
SECTION 6.05. Title to Assets...............................................30
SECTION 6.06. Payment of Taxes..............................................30
SECTION 6.07. Conflicting or Adverse Agreements or Restrictions.............30
SECTION 6.08. Purpose of Loans..............................................31
SECTION 6.09. Authority; Validity...........................................31
SECTION 6.10. Consents or Approvals.........................................31
SECTION 6.11. Compliance with Law...........................................31
SECTION 6.12. ERISA.........................................................32
SECTION 6.13. Investment Company Act........................................32
SECTION 6.14. Disclosure....................................................32
SECTION 6.15. Material Franchise Agreements.................................32
SECTION 6.16. Insurance.....................................................33
SECTION 6.17. Quality of CATV Systems.......................................33
SECTION 6.18. Environmental and Safety Matters..............................33
SECTION 6.19. Year 2000 Compliance..........................................34
ARTICLE VII
Conditions
SECTION 7.01. Conditions Precedent to Closing and to Initial Borrowing......34
SECTION 7.02. Conditions Precedent to Each Borrowing........................35
SECTION 7.03. Conditions Precedent to Borrowings that
Increase Principal Outstanding.............................35
SECTION 7.04. Conditions Precedent to the Initial Borrowing after the
Amendment Closing Date.....................................36
ARTICLE VIII
Affirmative Covenants
SECTION 8.01. Certain Financial Covenants...................................37
SECTION 8.02. Financial Statements and Information..........................37
SECTION 8.03. Existence, Laws, Obligations..................................39
SECTION 8.04. Notice of Litigation and Other Matters........................39
SECTION 8.05. Books and Records.............................................40
SECTION 8.06. Inspection of Property and Records............................40
</TABLE>
2
<PAGE> 4
<TABLE>
<S> <C> <C>
SECTION 8.07. Maintenance of Property, Insurance............................40
SECTION 8.08. ERISA.........................................................40
SECTION 8.09. Maintenance of Business Lines.................................41
SECTION 8.10. Compliance with Material Franchise Agreements.................41
SECTION 8.11. Restricted/Unrestricted Designation of Subsidiaries...........41
SECTION 8.12. Capital Expenditure Budget....................................41
ARTICLE IX
Negative Covenants
SECTION 9.01. Mortgages, etc................................................42
SECTION 9.02. Debt..........................................................43
SECTION 9.03. Merger; Consolidation; Disposition of Assets..................43
SECTION 9.04. Restricted Payments...........................................44
SECTION 9.05. Limitation on Margin Stock....................................44
SECTION 9.06. Loans and Advances to and Investments in
Unrestricted Subsidiaries..................................44
SECTION 9.07. Transactions with Affiliates..................................45
ARTICLE X
Events of Default
SECTION 10.01. Failure To Pay Principal or Interest.........................45
SECTION 10.02. Failure To Pay Other Sums....................................46
SECTION 10.03. Failure To Pay Other Debt....................................46
SECTION 10.04. Misrepresentation or Breach of Warranty......................46
SECTION 10.05. Violation of Certain Covenants...............................46
SECTION 10.06. Violation of Other Covenants, etc............................46
SECTION 10.07. Undischarged Judgment........................................46
SECTION 10.08. ERISA........................................................47
SECTION 10.09. Change of Control............................................47
SECTION 10.10. Assignment for Benefit of Creditors or Nonpayment of Debts...47
SECTION 10.11. Voluntary Bankruptcy.........................................47
SECTION 10.12. Involuntary Bankruptcy.......................................47
SECTION 10.13. Dissolution..................................................47
</TABLE>
3
<PAGE> 5
ARTICLE XI
<TABLE>
<S> <C>
Modifications, Amendments or Waivers......................48
ARTICLE XII
The Administrative Agent
SECTION 12.01. Appointment of Administrative Agent..........................49
SECTION 12.02. Indemnification of Administrative Agent......................49
SECTION 12.03. Limitation of Liability......................................49
SECTION 12.04. Independent Credit Decision..................................50
SECTION 12.05. Rights of TCB................................................50
SECTION 12.06. Successor to the Administrative Agent........................50
ARTICLE XIII
Miscellaneous
SECTION 13.01. Payment of Expenses..........................................51
SECTION 13.02. Notices......................................................51
SECTION 13.03. Setoff.......................................................52
SECTION 13.04. Indemnity and Judgments......................................53
SECTION 13.05. Interest.....................................................53
SECTION 13.06. Governing Law; Submission to Jurisdiction; Venue.............54
SECTION 13.07. Survival of Representations and Warranties; Binding
Effect; Assignment.........................................55
SECTION 13.08. Counterparts.................................................58
SECTION 13.09. Severability.................................................58
SECTION 13.10. Descriptive Headings.........................................59
SECTION 13.11. Representation of the Banks..................................59
SECTION 13.12. Final Agreement of the Parties...............................59
SECTION 13.13. Waiver of Jury Trial.........................................59
SECTION 13.14. Effect of Amendment and Restatement..........................59
</TABLE>
4
<PAGE> 6
LIST OF EXHIBITS
Exhibit 2.01(a) - Banks and Commitments
Exhibit 2.01(g)(iv) - Eurocurrency Liabilities (Regulation D)
Exhibit 6.01 - List of Subsidiaries
Exhibit 6.03 - List of Actions Pending
Exhibit 6.15 - Franchise Agreements
Exhibit 7.01(b)(i) - Opinions of the Company's Counsel and the
Company's Special FCC Counsel addressed
to the Banks
Exhibit 7.01(b)(ii) - Opinion of Counsel for the Banks
Addressed to the Banks
Exhibit 7.01(c) - Officer's Certificate
Exhibit A - Incumbency Certificate
Exhibit 9.01(d) - List of Liens and Security Interests
Exhibit 13.02 - Addresses for Notices
Exhibit 13.07(c) - Assignment and Acceptance
5
<PAGE> 7
THIS AMENDED AND RESTATED 364-DAY CREDIT
AGREEMENT (the "Agreement") made as of the 28th day
of September 1999, is among COX COMMUNICATIONS, INC.,
the BANKS party hereto, BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION, as Syndication Agent,
THE BANK OF NEW YORK AND WACHOVIA BANK, N.A., AS
CO-DOCUMENTATION AGENTS, AND CHASE BANK OF TEXAS
NATIONAL ASSOCIATION, as Administrative Agent for the
Banks (hereinafter in such capacity called the
"Administrative Agent").
WHEREAS Cox Communications, Inc., a Delaware corporation
(hereinafter called the "Company"), has previously entered into the Amended and
Restated 364-Day Credit Agreement dated as of October 9, 1997, among the
Company, the banks party thereto, Texas Commerce Bank National Association, as
Administrative Agent, and The Chase Manhattan Bank, as Documentation Agent (the
"1997 Agreement").
WHEREAS the 1997 Agreement was amended and restated by the
Amended and Restated 364-Day Credit Agreement dated as of September 30, 1998,
among the Company, the banks party thereto and Chase Bank of Texas, National
Association, as Administrative Agent, Citibank, N.A., as Documentation Agent,
and NationsBank, N.A., as Syndication Agent (the "Existing Agreement").
WHEREAS the Company desires, and the Banks and the
Administrative Agent agree, to amend and restate the Existing Agreement in the
form of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements herein contained, the parties hereto agree as
follows:
ARTICLE I
Definitions
As used in this Agreement, the following words and terms
shall have the respective meanings indicated opposite each of them and all
accounting terms shall be construed in accordance with GAAP consistent with
those followed in the preparation of the financial statements referred to in
Section 6.02, unless otherwise indicated:
"Affiliate" shall mean, when used with respect to a specified
person, another person that directly, or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with the
person specified.
"Agreement" shall mean this Amended and Restated Credit
Agreement, as the same may be amended from time to time.
<PAGE> 8
"Alternate Base Rate" shall mean, for any day, a rate per
annum (rounded upwards, if necessary, to the nearest 1/16 of 1%) equal to the
greater of (a) the Floating Rate in effect on such day; or (b) the Federal Funds
Borrowing Rate in effect for such day plus 1/2 of 1%. For purposes of this
Agreement, any change in the Alternate Base Rate due to a change in the Federal
Funds Borrowing Rate shall be effective on the effective date of such change in
the Federal Funds Borrowing Rate. If for any reason the Administrative Agent
shall have determined (which determination shall be conclusive, absent manifest
error) that it is unable to ascertain, after reasonable efforts, the Federal
Funds Borrowing Rate, the Alternate Base Rate shall be the Floating Rate until
the circumstances giving rise to such inability no longer exist.
"Alternate Base Rate Loans" shall mean those Loans which may
be made under this Agreement and which are described in Section 2.01(d)(ii) on
which the Company shall pay interest at a rate based on the Alternate Base Rate.
"Assignment and Acceptance" has the meaning specified in
Section 13.07(c) hereof.
"Attributable Amount" shall mean, in respect of any assets
disposed of by the Company or a Restricted Subsidiary, or any designation of a
Restricted Subsidiary as an Unrestricted Subsidiary or of an Unrestricted
Subsidiary as a Restricted Subsidiary pursuant to Section 8.11, the amount of
Consolidated Annualized Operating Cash Flow, determined at the time of such
disposition or designation, which was attributable to such assets or such
Subsidiary.
"Banks" shall mean the Persons listed on Exhibit 2.01(a) and
any other Person that shall have become a party hereto pursuant to an Assignment
and Acceptance, other than any such Person that ceases to be a party hereto
pursuant to an Assignment and Acceptance.
"Basic Subscribers" shall mean all of the following which are
receiving basic cable television service provided by the CATV Systems: (a) the
number of single family dwellings, plus the number of individual households in
multiple dwelling units, paying at the stated basic service rate, (b) the number
of equivalent bulk and commercial rate customers calculated by dividing the
aggregate bulk and commercial basic service revenues by the stated basic service
rate and (c) the number of courtesy and free service customers.
"Borrowings" and individually, "Borrowing", shall mean
Conventional Borrowings.
2
<PAGE> 9
"Borrowing Date" shall mean a date upon which a Borrowing is
to be made under Section 2.
"Business Day" shall mean a day when the Reference Banks and
the Administrative Agent are open for business; provided that if the applicable
Business Day relates to Eurodollar Loans, it shall mean a day when the Reference
Banks and the Administrative Agent are open for business and banks are
authorized to be open for business in London, Dallas and New York.
"Cash Flow Producing Assets" shall mean (a) assets other than
(i) cash equivalents and other investments purchased in the ordinary course of
the Company's cash management activities, (ii) office buildings and office
equipment and supplies and (iii) other assets not comprising cable television
systems or portions thereof and not directly employed in the cash flow-producing
activities of the Company and its Restricted Subsidiaries and (b) any capital
stock of a Restricted Subsidiary owning a Cash Flow Producing Asset.
"CATV Systems" shall mean the cable television distribution
systems owned and operated, directly or indirectly, by the Company or any of its
Subsidiaries that receive television and video signals by antenna, microwave
transmission or satellite transmission and which amplify such signals and
distribute them via coaxial or fiber optic cable.
"CD Rate" for any Interest Period shall mean, for each CD
Rate Loan comprising all or part of the relevant Conventional Borrowing, an
interest rate per annum determined by the Administrative Agent to be equal to
the sum of:
(a) the rate per annum obtained by dividing (i) the per
annum rate of interest determined by the Administrative Agent to be the
average (rounded upward to the nearest whole multiple of 0.01%, if such
average is not such a multiple) of the bid rate determined
independently by each Reference Bank at 9:00 a.m. (Dallas, Texas time),
or as soon thereafter as is practicable, on the first day of such
Interest Period, of a certificate of deposit dealer of recognized
standing selected by each Reference Bank for the purchase at face value
of its certificates of deposit in an amount approximately equal or
comparable to the aggregate principal amount of such CD Rate Loans,
with a maturity equal to such Interest Period, by (ii) the result
obtained by subtracting from 100% all reserve (including, without
limitation, any imposed by the Board of Governors of the Federal
Reserve System), special deposit or similar requirements (expressed as
a rate per annum) applicable (or scheduled at the time of determination
to become applicable during such Interest Period) to such certificates
of deposit, plus
3
<PAGE> 10
(b) the weighted average of annual assessment rates,
determined by the Administrative Agent to be in effect on the first day
of such Interest Period, used to determine the then current annual
assessment payable by the Reference Banks to the Federal Deposit
Insurance Corporation for such Corporation's insuring Dollar deposits
of such Reference Banks in the United States.
"CD Rate Loans" shall mean those Loans which may be made under
this Agreement and which are described in Section 2.01(d)(i) on which the
Company shall pay interest at a rate based on the CD Rate.
A "Change of Control" shall be deemed to have occurred if (a)
the Cox Family and Cox Enterprises shall cease at any time to own directly or
indirectly at least 50.1% of the outstanding voting stock of the Company, (b)
any Person or group of Persons other than the Cox Family, Cox Enterprises and
Persons controlled by them shall have the right or ability, directly or
indirectly, to cause the election of a majority of the directors of the Company,
(c) the Cox Family shall cease at any time to own directly or indirectly at
least 50.1% of the outstanding voting stock of Cox Enterprises, or (d) any
Person or group of Persons other than the Cox Family shall have the right or
ability, directly or indirectly, to cause the election of a majority of the
directors of Cox Enterprises.
"Chase Texas" shall mean Chase Bank of Texas, National
Association, a national banking association having its principal offices located
at 2200 Ross Avenue, Dallas, Texas 75201.
"Commitment" shall mean as to any Bank the amount of such
Bank's commitment to make Loans hereunder, as set forth beside such Bank's name
on Exhibit 2.01(a) attached hereto or in any Assignment and Acceptance executed
pursuant to Section 13.07(c), as such amount (a) may be reduced from time to
time pursuant to the terms of this Agreement or pursuant to an Assignment and
Acceptance or (b) may be increased from time to time pursuant to an Assignment
and Acceptance, and "Commitments" shall mean the Commitments of all of the
Banks.
"Commitment Fees" shall have the meaning set forth in Section
4.01(a).
"Consolidated Annualized Interest Expense" shall mean, four
times the sum of (i) interest expense, after giving effect to any net payments
made or received by the Company and its Restricted Subsidiaries with respect to
interest rate swaps, caps and floors or other similar agreements, and (ii)
capitalized interest expense, in each case of the Company and its Restricted
Subsidiaries for the
4
<PAGE> 11
most recently completed fiscal quarter, all on a consolidated basis determined
in accordance with GAAP.
"Consolidated Annualized Operating Cash Flow" shall mean the
sum of (i) four times operating income of the Company and its Restricted
Subsidiaries for the most recently completed fiscal quarter (less cash dividends
and other cash distributions to the holders of minority interests in the
Company's Restricted Subsidiaries), before giving effect to depreciation,
amortization, equity in earnings (losses) of unconsolidated investees and
nonrecurring one-time charges and (ii) cash dividends and cash distributions
paid (other than extraordinary distributions) to the Company and its Restricted
Subsidiaries during the most recently completed fiscal quarter and the three
immediately preceding fiscal quarters by unconsolidated investees of the Company
and its Restricted Subsidiaries, all on a consolidated basis determined in
accordance with GAAP.
"Consolidated Debt" shall mean, as of any date and without
duplication, all Debt of the Company and its Restricted Subsidiaries on a
consolidated basis determined in accordance with GAAP, including guaranties of
indebtedness for borrowed money or for the deferred purchase price of Property
and obligations under or with respect to standby letters of credit of the
Company and its Restricted Subsidiaries, but only to the extent that the amount
of such liabilities for guaranties or standby letters of credit in the aggregate
exceed $50,000,000; provided further that (a) for purposes of this definition,
Debt shall not include guaranties by the Company of overdrafts of any Restricted
Subsidiary which occur in the ordinary course of business and remain outstanding
for a period not to exceed seven Business Days, and (b) for purposes of
computing the Leverage Ratio at any time, the Consolidated Debt of the Company
and its Restricted Subsidiaries shall be reduced by the aggregate amount of cash
and cash equivalents of the Company and its Restricted Subsidiaries representing
the unused proceeds of debt and equity securities issued or assets sold after
the date hereof to finance acquisitions that have not yet been consummated and
to refinance any Debt scheduled to mature in 90 days.
"Conventional Borrowings" and individually, "Conventional
Borrowing", shall mean Borrowings by the Company under Section 2.01(a)
consisting of simultaneous Loans from the Banks.
"Conventional Loans" and individually, "Conventional Loan",
shall mean CD Rate Loans, Alternate Base Rate Loans or Eurodollar Loans made in
Dollars, pursuant to Section 2.01(a).
"Counsel for the Administrative Agent" shall mean Cravath,
Swaine & Moore.
5
<PAGE> 12
"Counsel for the Company" shall mean Dow, Lohnes & Albertson
PLLC.
"Cox Enterprises" shall mean Cox Enterprises, Inc., a Delaware
corporation.
"Cox Family" shall include those certain trusts commonly
referred to as the Dayton-Cox Trust A, the Barbara Cox Anthony Atlanta Trust,
the Anne Cox Chambers Atlanta Trust, the Estate of James M. Cox, Jr., Barbara
Cox Anthony, Garner Anthony, Anne Cox Chambers, and the estates, executors and
administrators, and children of the above-named individuals, and any
corporation, partnership, limited liability company, trust or other entity in
which the above-named trusts or individuals in the aggregate have a beneficial
interest of greater than 50%.
"Debt" shall mean with respect to any Person and without
duplication (i) indebtedness for borrowed money or for the deferred purchase
price of Property in respect of which such Person is liable, contingently or
otherwise, as obligor, guarantor or otherwise, or in respect of which such
Person directly or indirectly assures a creditor against loss, and (ii) the
capitalized portions of obligations under leases which shall have been or should
have been, in accordance with GAAP, recorded as capital leases.
"Default Rate" shall mean a rate per annum (for the actual
number of days elapsed, based on a year of 365 or 366 days, as the case may be)
which shall be equal to the lesser of the Alternate Base Rate plus 1%, or the
Highest Lawful Rate.
"Depositary" shall have the meaning set forth in Section
13.03.
"Discretionary Borrowings" and individually, "Discretionary
Borrowing", shall mean borrowings by the Company under Section 2.04 consisting
of Discretionary Loans.
"Discretionary Loans" and individually, "Discretionary Loan",
shall mean loans made by a Bank pursuant to Section 2.04.
"Dollars" and "$" shall mean lawful currency of the United
States of America.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"Eurodollar Event" shall have the meaning set forth in Section
2.01(e)(i).
6
<PAGE> 13
"Eurodollar Loans" shall mean those Loans which may be made
under this Agreement and which are described in Section 2.01(d)(iii) on which
the Company shall pay interest at a rate based on the Eurodollar Rate.
"Eurodollar Rate" for any Interest Period shall mean, for each
Eurodollar Loan comprising part of the relevant Conventional Borrowing, an
interest rate per annum equal to the per annum rate of interest determined by
the Administrative Agent to be the arithmetical average (rounded upward to the
nearest whole multiple of 0.01%, if such average is not such a multiple) of the
rate per annum at which deposits in Dollars are offered by the Lending Office of
each Reference Bank to a prime bank in the interbank domestic eurodollar market
at 10:00 a.m. (Dallas, Texas time) two Business Days before the first day of
such Interest Period for a period equal to such Interest Period and in an amount
substantially equal to the amount of the relevant Eurodollar Loan of such
Reference Bank during such Interest Period.
"Event of Default" shall mean any of the events specified in
Section 10; provided that there has been satisfied any requirement in connection
with such event for the giving of notice, or the lapse of time, or the happening
of any further condition, event or act, and "Default" shall mean any of such
events, whether or not any such requirement has been satisfied.
"Excess Margin Stock" shall mean that portion of the Margin
Stock owned by the Company and its Restricted Subsidiaries that must be excluded
from the assets subject to the restrictions of Sections 9.01 and 9.03 in order
for the Margin Stock subject to such Sections to represent less than 25% of the
value of the assets of the Company and its Restricted Subsidiaries on a
consolidated basis that are subject to such Sections.
"FCC" shall mean the Federal Communications Commission or any
successor governmental agency thereto.
"Facility B Agreement" shall mean the Amended and Restated
Five-Year Credit Agreement dated September 28, 1999, among the Company, certain
lenders party thereto and Chase Texas, as Administrative Agent for the lenders.
"Federal Funds Borrowing Rate" shall mean, for any day, a
fluctuating interest rate per annum equal to the weighted average (rounded
upwards, if necessary, to the nearest whole multiple of 1/100 of 1%) of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System for such day quoted by the Reference Banks to the Administrative
Agent at 12:00 noon (Dallas, Texas time) on such day.
"Fitch" shall mean Fitch Investors Service Inc.
7
<PAGE> 14
"Floating Rate" shall mean, as of a particular date, the prime
rate most recently determined by Chase Texas. Without notice to the Company or
any other Person, the Floating Rate shall change automatically from time to time
as and in the amount by which said prime rate shall fluctuate, with each such
change to be effective as of the date of each change in such prime rate. The
Floating Rate is a reference rate and does not necessarily represent the lowest
or best rate actually charged to any customer. Chase Texas may make commercial
loans or other loans at rates of interest at, above or below the Floating Rate.
"Franchise Agreements" shall mean all franchise agreements or
other substantially similar agreements to which the Company or any of its
Subsidiaries is a party.
"GAAP" shall mean generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and 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, which are applicable to the circumstances as of
the date of determination.
"Granting Bank" has the meaning specified in Section 13.07(d).
"Highest Lawful Rate" shall mean the maximum nonusurious
interest rate, if any, that at any applicable time may be contracted for, taken,
reserved, charged or received on any Loan or on the other amounts which may be
owing to any Bank pursuant to this Agreement under the laws applicable to such
Bank and this transaction.
"Homes Passed" shall mean the total of (a) the number of
single family residences capable of being serviced without further line
construction; (b) the number of units in multi-family residential buildings
capable of being serviced without further line construction; and (c) the number
of then current commercial service accounts regardless of the number of units
serviced or the equivalent billing units.
"Index Debt" shall mean senior, unsecured noncredit-enhanced,
long-term Debt of the Company.
"Initial Leverage Ratio Date" shall mean the earlier of (a)
the date on which the Borrower has completed both (i) a monetization of certain
capital stock of Sprint PCS owned by the Borrower yielding approximately
$1,500,000,000 in cash proceeds and
8
<PAGE> 15
(ii) a split-off exchange with AT&T valued at approximately $2,800,000,000, and
(b) March 31, 2000.
"Interest Payment Date" shall mean the last day of each
Interest Period.
"Interest Period" shall mean, with respect to each Loan made
hereunder, the period commencing on the Borrowing Date of such Loan and
(a) in the case of CD Rate Loans, ending 30, 60, 90 or 180
days thereafter;
(b) in the case of Alternate Base Rate Loans, ending not less
than one nor more than 90 days thereafter; and
(c) in the case of Eurodollar Loans, ending 7 days (subject to
availability from each Bank) or one, two, three or six months
thereafter;
in each case as the Company may select in the Notice of Conventional Borrowing;
provided, however, that (i) no Interest Period for a Conventional Loan may be
chosen that would extend beyond the Maturity Date, (ii) whenever the last day of
any Interest Period would otherwise occur on a day other than a Business Day,
the last day of such Interest Period shall be extended to occur on the next
succeeding Business Day; provided that with respect to Eurodollar Loans, any
Interest Period that would otherwise end on a day that is not a Business Day
shall be extended to the next succeeding Business Day only if such Business Day
does not fall in another month, and in the event the next succeeding Business
Day falls in another month, the Interest Period for such Eurodollar Loan shall
be accelerated so that such Interest Period shall end on the next preceding
Business Day and (iii) any Interest Period that begins on a day for which there
is no numerically corresponding day in the last month of such Interest Period
shall end on the last Business Day of the last month of such Interest Period. In
no event shall there be more than ten (10) Interest Periods in effect at any one
time.
"Lending Office" shall mean, with respect to any Bank, its
principal office in the city identified with such Bank in Exhibit 13.02 hereto,
or such other office or branch of such Bank, or Affiliate of such Bank located
in the United States (acting on behalf of such Bank as its "Lending Office"
hereunder), as it shall designate in writing from time to time to the Company,
as the case may be.
"Leverage Ratio" shall mean, at any time, the ratio of (a)
Consolidated Debt as of the last day of the fiscal quarter most
9
<PAGE> 16
recently ended to (b) Pro-forma Consolidated Annualized Operating Cash Flow.
"Loans" and individually, "Loan", shall mean Conventional
Loans and Discretionary Loans.
"Majority Banks" shall mean (a) except as provided in clause
(b) below, Banks having at least 66-2/3% of the aggregate Commitments, and (b)
for the period after the Termination Date until such time as the obligations
under this Agreement are paid in full, and for purposes of making determinations
under Article X, Banks having at least 66-2/3% of the aggregate principal amount
of Loans outstanding.
"Margin Percentage" shall mean at any date that percentage to
be added to the CD Rate or the Eurodollar Rate, as appropriate, pursuant to
Section 2.01(d)(i) or Section 2.01(d)(iii), for purposes of determining the per
annum rate of interest applicable from time to time to CD Rate Loans or
Eurodollar Loans, set forth under the appropriate column below opposite the
Category in which the Company's Leverage Ratio, which in each case shall be
determined as of the end of the most recent fiscal quarter ended at least 60
days (or during the first fiscal quarter of any year, at least 90 days) prior to
such date, shall fall:
<TABLE>
<CAPTION>
Eurodollar
Leverage Ratio Spread CD Spread
-------------- ------ ---------
<S> <C> <C> <C>
Category 1 < 4.00 to 1.0 0.400% 0.525%
-
Category 2 > 4.00 to 1.0 and < 4.50 to 0.500% 0.625%
-
1.0
Category 3 > 4.50 to 1.0 and < 5.00 to 0.625% 0.750%
-
1.0
Category 4 > 5.00 to 1.0 and < 5.50 to 0.750% 0.875%
-
1.0
Category 5 > 5.50 to 1.0 0.875% 1.000%
</TABLE>
provided that for any period during which financial statements have not been
delivered as required under Section 8.02, the Margin Percentage shall be
determined by reference to the Category which is one Category higher (based upon
the number assigned to the Categories in the table above) than the Category in
effect immediately prior to such period. The applicable Margin Percentages
determined by reference to the Company's Leverage Ratio as of any such date of
determination shall apply to each Loan requested by the Company on and after
such date of determination and shall remain the applicable Margin Percentages
until the next succeeding date of determination; provided that, with respect to
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<PAGE> 17
any Loans outstanding as of a date of determination, the old applicable Margin
Percentages shall continue to apply to such Loans until the earlier of the
Interest Payment Dates for such Loans or the twenty-ninth day after such date of
determination, and the new applicable Margin Percentages that became effective
as of such date of determination shall apply to such Loans on and after the
thirtieth day after such date of determination, if applicable.
"Margin Stock" shall mean "margin stock" as that term is
defined in Regulation U of the Board of Governors of the Federal Reserve System.
"Material FCC Licenses" shall have the meaning set forth in
Section 8.04.
"Material Franchise Agreements" shall mean Franchise
Agreements in connection with CATV Systems constituting 80% or more at any time
of aggregate Basic Subscribers of the Company and its Subsidiaries.
"Materially Adverse Effect" shall mean (a) a materially
adverse effect on the business, operations, condition (financial or otherwise)
or assets of the Company and its Restricted Subsidiaries taken as a whole or (b)
material impairment of the rights or interests of the Banks in connection with
this Agreement.
"Maturity Date" shall mean the Termination Date, unless the
Company shall give the Notice of Extension contemplated by Section 2.01(i), in
which case the Maturity Date shall mean September 27, 2003.
"Maximum Permissible Rate" shall have the meaning set forth in
Section 13.05.
"Moody's" shall mean Moody's Investors Service, Inc.
"Net Cash Proceeds" shall mean (a) with respect to a sale,
assignment, transfer or other disposition by the Company or any of its
Restricted Subsidiaries to any Person other than the Company or any of its
Restricted Subsidiaries of any capital stock or assets owned by such party, the
gross cash proceeds to such party (including cash proceeds, whenever received,
of any non-cash consideration) of such sale, assignment, transfer or other
disposition, less the sum of (i) the reasonable costs associated with such sale,
assignment, transfer or other disposition, including income taxes (as estimated
by the Company or any of its Restricted Subsidiaries, as the case may be, in
good faith), (ii) payments of the outstanding principal amount of, premium or
penalty, if any, and interest on any Debt required to be, and which in fact is,
prepaid under the terms thereof as a result of such disposition and (iii)
appropriate amounts as a reserve, in
11
<PAGE> 18
accordance with GAAP, against any liabilities directly associated with the
capital stock or assets sold and which liabilities are retained by the Company
or any of its Subsidiaries after such sale, assignment, transfer or other
disposition, including, without limitation, pension and other post-employment
benefit liabilities and liabilities related to environmental matters or against
any indemnification obligations associated with such sale, assignment, transfer
or disposition and (b) with respect to any incurrence of Debt, cash proceeds net
of underwriting commissions or placement fees and expenses directly incurred in
connection therewith.
"Notice of Conventional Borrowing" shall have the meaning set
forth in Section 2.01(b).
"Officer's Certificate" shall mean a certificate signed in the
name of the Company by either its Chief Executive Officer, its President, its
Chief Financial Officer, one of its Vice Presidents or its Treasurer.
"Pay Units" shall mean the aggregate number of premium
services received by Basic Subscribers on a primary outlet.
"PBGC" shall have the meaning set forth in Section 6.12.
"Person" shall mean an individual, partnership, joint venture,
corporation, limited liability company, bank, trust, unincorporated organization
and/or a government or any department or agency thereof.
"Plan" shall mean any employee pension benefit plan within the
meaning of Article IV of ERISA which is either (i) maintained for employees of
the Company, of any Subsidiary, or of any member of a "controlled group of
corporations" or "combined group of trades or businesses under common control"
as such terms are defined, respectively, in Sections 414(b) and (c) of the
Internal Revenue Code of 1986, as amended, and the regulations thereunder, of
which the Company or any Subsidiary is a party, or (ii) maintained pursuant to a
collective bargaining agreement or any other arrangement under which more than
one employer makes contributions and to which the Company, any Subsidiary or any
member of a "controlled group of corporations" or "combined group of trades or
businesses under common control" defined as aforesaid, is at the time in
question making or accruing an obligation to make contributions or has within
the preceding five plan years made contributions.
"Prepayment Period" shall mean any period during which the
ratio of (x) the sum of the average daily principal amount of the Loans
outstanding under this Agreement and the Facility B Agreement and any
outstanding commercial paper in respect of which Commitments under this
Agreement or the Facility B Agreement are
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<PAGE> 19
used to provide backup liquidity, each during the most recently ended fiscal
quarter to (y) Pro-forma Consolidated Annualized Operating Cash Flow exceeds 4.5
to 1.0
"Pro-forma Consolidated Annualized Operating Cash Flow" shall
mean Consolidated Annualized Operating Cash Flow, excluding therefrom all
Consolidated Annualized Operating Cash Flow attributable to any Property sold or
otherwise disposed of other than in the ordinary course of business during any
applicable fiscal quarter as if such Property were not owned at any time during
such quarter, and including therein all Consolidated Annualized Operating Cash
Flow attributable to any Property acquired other than in the ordinary course of
business during any applicable fiscal quarter as if such Property were at all
times owned during such quarter.
"Property" shall mean all types of real and personal property,
whether tangible, or intangible or mixed.
"Pro Rata Share" shall mean, with respect to any Bank, a
fraction (expressed as a percentage rounded upward to the nearest whole multiple
of 0.000000001%) (a) the numerator of which shall be a principal amount equal to
such Bank's Commitment, and (b) the denominator of which shall be the aggregate
principal amount equal to all Banks' Commitments; provided that following the
Termination Date, Pro Rata Share shall mean, with respect to any Bank, a
fraction (expressed as a percentage rounded upward to the nearest whole multiple
of 0.000000001%) (x) the numerator of which shall be the aggregate principal
amount of such Bank's outstanding Conventional Loans and (y) the denominator of
which shall be the aggregate principal amount of all outstanding Conventional
Loans.
"Quarterly Date" shall mean the last day of each March, June,
September and December, beginning with December 31, 1999, or if any such date is
not a Business Day, the next succeeding Business Day.
"Reference Banks" and individually "Reference Bank", shall
mean Chase Texas, Wachovia Bank, N.A. and Morgan Guaranty Trust Company of New
York.
"Register" shall have the meaning set forth in Section
13.07(e) hereof.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System.
"Required Prepayment Date" shall have the meaning set forth in
Section 2.01(e)(i) hereof.
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<PAGE> 20
"Restricted Payment" shall have the meaning set forth in
Section 9.04.
"Restricted Subsidiary" shall mean each Subsidiary other than
those Subsidiaries identified as Unrestricted Subsidiaries in Exhibit 6.01;
provided, however, that subject to Section 8.11, a Restricted Subsidiary may be
designated by the Company as an Unrestricted Subsidiary or an Unrestricted
Subsidiary may be redesignated by the Company as a Restricted Subsidiary and the
Company shall promptly notify the Administrative Agent of any such designation
or redesignation; provided further that after the initial designation of an
Unrestricted Subsidiary by the Company, only three further redesignations of
such Subsidiary shall be permitted.
"S&P" shall mean Standard and Poor's Ratings Group.
"SPC" has the meaning specified in Section 13.07(d).
"Special FCC Counsel" shall mean Dow, Lohnes & Albertson,
PLLC.
"Subsidiary" shall mean any Person of which 50% or more of the
outstanding shares having voting power under ordinary circumstances to elect a
majority of the Board of Directors of such Person shall at the time be owned,
directly or indirectly, by the Company, by any one or more Subsidiaries or by
the Company and one or more Subsidiaries.
"Termination Date" shall mean September 26, 2000.
"Unrestricted Subsidiary" means any Subsidiary so designated
in accordance with the terms of this Agreement.
"Utilization Fee" shall have the meaning set forth in Section
4.01(b).
"Wholly Owned", when used with respect to a Subsidiary, shall
mean the beneficial ownership by the Company of 100% of the equity securities of
such Subsidiary.
ARTICLE II
The Loans
SECTION 2.01. Revolving Credit Loans.
(a) Conventional Loan Commitment. Subject to and upon the terms and conditions
set forth in this Agreement, each Bank severally agrees to make Conventional
Loans to the Company on any one or more Business Days on or after the date
hereof and prior to the Maturity
14
<PAGE> 21
Date, up to an aggregate principal amount of Conventional Loans not exceeding at
any one time outstanding an amount equal to (i) such Bank's Commitment made to
the Company by such Bank, if any, if such Loan is to be made on or prior to the
Termination Date, or (ii) the aggregate principal amount of such Bank's
outstanding Conventional Loans being repaid on such day pursuant to Section
3.01, if any, if such Loan is to be made after the Termination Date; provided,
however, in no event shall the aggregate outstanding principal amount at any
time of Conventional Loans and Discretionary Loans exceed $1,500,000,000, as
such amount may be reduced pursuant to the terms of this Agreement. Each
Conventional Borrowing shall be in an aggregate amount of not less than
$3,000,000 and an integral multiple of $250,000. Subject to the foregoing, each
Conventional Borrowing shall be made simultaneously from the Banks according to
their Pro Rata Shares of the principal amount requested for each Conventional
Borrowing, and shall consist of Conventional Loans of the same type (e.g.,
Alternate Base Rate Loans, CD Rate Loans or Eurodollar Loans) with the same
Interest Period from each Bank. Within such limits and during such period, the
Company may borrow, repay and reborrow under this Section 2.01(a) (including,
without limitation, reborrowings for the sole purpose of refinancing any Loan).
The Company hereby unconditionally promises to pay to the Administrative Agent
for the account of each Bank the then unpaid principal amount of each
Conventional Loan on the Interest Payment Date for such Conventional Loan.
(b) Conventional Borrowing Procedures; Delivery of
Proceeds; Recordation of Loans. (i) Each Conventional Borrowing under this
Section 2.01 shall be made on at least, (A) in the case of a Conventional
Borrowing consisting of Alternate Base Rate Loans, prior oral or written notice
from the Company to the Administrative Agent by 9:00 a.m., Dallas, Texas time on
the same day as the requested borrowing (and the Administrative Agent shall
prior to 12:00 noon (Dallas, Texas time) on the date such notice is received by
the Administrative Agent) provide oral or written notice of the requested
borrowing to the Banks, and each Reference Bank shall then provide to the
Administrative Agent not later than 12:15 p.m. (Dallas, Texas time) oral or
written notice of the rate on overnight Federal funds for such day offered at
12:00 noon (Dallas, Texas time) by such Reference Bank to the Company, and the
Alternate Base Rate determined by the Administrative Agent shall be conveyed by
the Administrative Agent by oral or written communication to all of the Banks by
1:00 p.m. (Dallas, Texas time) on the Borrowing Date, (B) in the case of a
Conventional Borrowing consisting of CD Rate Loans, one Business Day's prior
written or oral notice from the Company to the Administrative Agent by 9:00
a.m., Dallas, Texas time and (C) in the case of a Conventional Borrowing
consisting of Eurodollar Loans, three Business Days' prior written or oral
notice from the Company to the Administrative Agent by 9:00 a.m., Dallas, Texas
time (and the Administrative Agent shall, in the case of (B) and (C) above,
provide to each Bank
15
<PAGE> 22
prior oral or written notice of the requested borrowing by 11:30 a.m. (Dallas,
Texas time) on the date such notice is received by the Administrative Agent)
("Notice of Conventional Borrowing"); provided, however, with respect to each
oral Notice of Conventional Borrowing, the Company shall deliver promptly (and
in any event, no later than two Business Days after the giving of such oral
notice) to the Administrative Agent a confirmatory written Notice of
Conventional Borrowing. Each Notice of Conventional Borrowing shall be
irrevocable and shall specify: (w) the total principal amount of the proposed
Conventional Borrowing, (x) whether the Conventional Borrowing will be comprised
of CD Rate Loans, Alternate Base Rate Loans or Eurodollar Loans, (y) the
applicable Interest Period for such Loans (which may not extend beyond the
Maturity Date), and (z) the Borrowing Date. The Administrative Agent shall
promptly give like notice to the other Banks, and on the Borrowing Date each
Bank shall make its Pro Rata Share of the Conventional Borrowing available at
the principal banking office of the Administrative Agent, 2200 Ross Avenue,
Dallas, Texas 75201, no later than 3:30 p.m. (Dallas, Texas time) in the case of
a Conventional Borrowing consisting of Alternate Base Rate Loans, and no later
than 2:00 p.m. (Dallas, Texas time) in the case of all other Conventional
Borrowings, in each case, in immediately available funds.
(ii) The Administrative Agent shall pay or deliver the
proceeds of each Borrowing to or upon the order of the Company. Each Bank shall
maintain in accordance with its usual practice an account or accounts evidencing
the indebtedness to such Bank resulting from each Loan, from time to time,
including the amounts of principal and interest payable and paid such Bank from
time to time under this Agreement. The Administrative Agent shall maintain
accounts in which it will record (A) the principal amount of each Loan made
hereunder, the type of each Loan and the Interest Period applicable thereto, (B)
the amount of any principal or interest due and payable or to become due and
payable from the Company to each Bank hereunder and (C) the amount of any sum
received by the Administrative Agent hereunder from the Company and each Bank's
Pro Rata Share thereof. The entries made in the accounts maintained pursuant to
this paragraph shall be prima facie evidence of the existence and amounts of the
obligations therein recorded; provided, however, that the failure of any Bank or
the Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the obligation of the Company to repay the Loans in
accordance with their terms.
16
<PAGE> 23
(c) Substitute Rate. Anything in this Agreement to the
contrary notwithstanding, if at any time prior to the determination of the rate
with respect to any proposed Loan (i) the Majority Banks in their discretion
shall determine with respect to Eurodollar Loans to be made by them on the
applicable Borrowing Date of such Loan that there is a reasonable probability
that Dollar deposits will not be offered to such Banks in the interbank
eurodollar market for a period of time equal to the applicable Interest Period
in amounts equal to the amount of each such Bank's Eurodollar Loan in Dollars or
(ii) the Administrative Agent in its discretion shall determine with respect to
CD Rate Loans to be made by the Banks on the applicable Borrowing Date of such
proposed Loan that bid rates will not be provided by certificate of deposit
dealers of recognized standing for the purchase at face value of certificates of
deposit of the Reference Banks for a period of time equal to the applicable
Interest Period in amounts approximately equal or comparable to the aggregate
principal amount of such Loans with a maturity equal to the applicable Interest
Period, then:
(A) the Majority Banks (acting through the Administrative
Agent) or the Administrative Agent, as the case may be, shall give the
Company notice thereof and in the case of subsection (ii) above, the
Administrative Agent shall also give the Banks notice thereof, and
(B) Alternate Base Rate Loans shall be made having an
Interest Period of 10 days in lieu of any Eurodollar Loans or CD Rate
Loans, as the case may be, that were to have been made at such time.
(d) Interest. The Loans shall bear interest as follows:
(i) Each CD Rate Loan shall be made in Dollars and shall
bear interest on the unpaid principal amount thereof from time to time
outstanding at a rate per annum (for the actual number of days elapsed,
based on a year of 360 days) which shall be equal to the lesser of (A)
the CD Rate plus the applicable Margin Percentage, or (B) the Highest
Lawful Rate.
(ii) Each Alternate Base Rate Loan shall be made in
Dollars and shall bear interest on the unpaid principal amount thereof
from time to time outstanding at a rate per annum (for the actual
number of days elapsed, based on a year of 365 or 366 days, as the case
may be) which shall be equal to the lesser of (A) the Alternate Base
Rate, or (B) the Highest Lawful Rate.
(iii) Each Eurodollar Loan shall be made in Dollars and
shall bear interest on the unpaid principal amount thereof from time to
time outstanding at a rate per annum (for the
17
<PAGE> 24
actual number of days elapsed, based on a year of 360 days) which shall
be equal to the lesser of (A) the Eurodollar Rate plus the applicable
Margin Percentage, or (B) the Highest Lawful Rate.
(iv) Interest on the outstanding principal of each Loan
shall accrue from and including the Borrowing Date for such Loan to but
excluding the date such Loan is paid in full and shall be due and
payable (A) on the Interest Payment Date for each such Loan, (B) as to
any Eurodollar Loan having an Interest Period greater than three
months, at the end of the third month of the Interest Period for such
Loan, (C) as to any CD Rate Loan having an Interest Period greater than
90 days, on the 90th day of the Interest Period for such Loan, and (D)
as to all Loans, at maturity, whether by acceleration or otherwise, or
after notice of prepayment in accordance with Section 2.01(e)(i) or
Section 3.01(c) hereof, on and after the Required Prepayment Date or
the applicable prepayment date, as the case may be, as specified in
such notice.
(v) Past due principal, whether pursuant to acceleration
or the Company's failure to make a prepayment on the date specified in
the applicable prepayment notice or otherwise, and, to the extent
permitted by applicable law, past due interest and (after the
occurrence of an Event of Default) past due fees, pursuant to
acceleration or otherwise, shall bear interest from their respective
due dates, until paid, at the Default Rate and shall be due and payable
upon demand.
(e) Change of Law. (i) Anything in this Agreement to the
contrary notwithstanding, if at any time any Bank in good faith determines
(which determination shall be conclusive) that any change after the date hereof
in any applicable law, rule or regulation or in the interpretation or
administration thereof makes it unlawful, or any central bank or other
governmental authority asserts that it is unlawful (any of the above being
described as a "Eurodollar Event") for such Bank or its foreign branch or
branches to maintain or fund any Loan in Dollars by means of Dollar deposits
obtained in the interbank eurodollar market then, at the option of such Bank,
the aggregate principal amount of each of such Bank's Eurodollar Loans then
outstanding, which Loans are directly affected by such Eurodollar Events shall
be prepaid in Dollars and any remaining obligation of such Bank hereunder to
make Eurodollar Loans (but not CD Rate Loans or Alternate Base Rate Loans) shall
be suspended for so long as such Eurodollar Events shall continue. Upon the
occurrence of any Eurodollar Event and at any time thereafter so long as such
Eurodollar Event shall continue, such Bank may exercise its aforesaid option by
giving written notice thereof to the Administrative Agent and the Company. Any
prepayment of any Eurodollar Loan which is required under this
18
<PAGE> 25
Section 2.01(e) shall be made, together with accrued and unpaid interest and all
other amounts payable to such Bank under this Agreement with respect to such
prepaid Loan (including, without limitation, amounts payable pursuant to Section
2.01(f)), on the date stated in the notice to the Company referred to above,
which date ("Required Prepayment Date") shall be not less than 15 days (or such
earlier date as shall be necessary to comply with the relevant law, rule or
regulation) from the date of such notice. If any Eurodollar Loan is required to
be prepaid under this Section 2.01(e), the Banks agree that at the written
request of the Company, the Bank that has made such Eurodollar Loan shall make
an Alternate Base Rate Loan or a CD Rate Loan on the Required Prepayment Date to
the Company in the same principal amount, in Dollars as the Eurodollar Loan of
such Bank being so prepaid. Any such written request by the Company for
Alternate Base Rate Loans or CD Rate Loans under this Section 2.01(e) shall be
irrevocable and, in order to be effective, must be delivered to the
Administrative Agent not less than one Business Day prior to the Required
Prepayment Date.
(ii) Notwithstanding the foregoing, in the event the
Company is required to pay to any Bank amounts with respect to any Borrowing
pursuant to Section 2.01(e)(i), the Company may give notice to such Bank (with
copies to the Administrative Agent) that it wishes to seek one or more assignees
(which may be one or more of the Banks) to assume the Commitment of such Bank
and to purchase its outstanding Loans and the Administrative Agent will use its
best efforts to assist the Company in obtaining an assignee; provided that if
more than one Bank requests that the Company pay substantially and
proportionately equal additional amounts under Section 2.01(e)(i) and the
Company elects to seek an assignee to assume the Commitments of any of such
affected Banks, the Company must seek an assignee or assignees to assume the
Commitments of all of such affected Banks. Each Bank requesting compensation
pursuant to Section 2.01(e)(i) agrees to sell its Commitment, Loans and interest
in this Agreement in accordance with Section 13.07 to any such assignee for an
amount equal to the sum of the outstanding unpaid principal of and accrued
interest on such Loans in Dollars plus all other fees and amounts (including,
without limitation, any compensation claimed by such Bank under Section
2.01(e)(i) and Section 2.01(f)) due such Bank hereunder calculated, in each
case, to the date such Commitment, Loans and interest are purchased. Upon such
sale or prepayment, each such Bank shall have no further Commitment or other
obligation to the Company hereunder.
(f) Funding Losses. In the event of (i) any payment or
prepayment (whether authorized or required hereunder pursuant to acceleration or
otherwise) of all or a portion of any CD Rate Loan or Eurodollar Loan on a day
other than an Interest Payment Date, (ii) any payment or prepayment (whether
authorized or required hereunder pursuant to acceleration or otherwise), of any
CD Rate
19
<PAGE> 26
Loan or Eurodollar Loan made after the delivery of the Notice of Conventional
Borrowing for such CD Rate Loan or Eurodollar Loan, but before the Borrowing
Date therefor, if such payment or prepayment prevents such CD Rate Loan or
Eurodollar Loan from being made in full or (iii) the failure of any Loan to be
made by any Bank due to any condition precedent to a Loan not being satisfied or
as a result of this Section 2.01 or due to any other action or inaction of the
Company, the Company shall pay, in Dollars, to each affected Bank upon its
request made on or before 45 days after the occurrence of any such event, acting
through the Administrative Agent, such amount or amounts (to the extent such
amount or amounts would not be usurious under applicable law) as may be
necessary to compensate such Bank for any direct or indirect costs and losses
incurred by such Bank (including, without limitation, such amount or amounts as
will compensate it for the amount by which the rate of interest on such Loan
immediately prior to such repayment exceeds the Eurodollar Rate or the CD Rate,
as the case may be, for the period from the date of such prepayment to the
Interest Payment Date with respect to such prepaid Loan, but otherwise without
penalty. Any such claim by a Bank for compensation shall be made through the
Administrative Agent and shall be accompanied by a certificate signed by an
officer of such Bank authorized to so act on behalf of such Bank, setting forth
the computation upon which such claim is based. The obligations of the Company
under this Section 2.01(f) shall survive the termination of this Agreement
and/or the payment of the obligations hereunder.
(g) Increased Costs--Taxes, Reserve Requirements, Etc.
(i) The Company for and on behalf of each Bank shall pay or cause to be paid
directly to the appropriate governmental authority or shall reimburse or
compensate each Bank upon demand by such Bank, acting through the Administrative
Agent, for all costs incurred, losses suffered or payments made, as determined
by such Bank, by reason of any and all present or future taxes (including,
without limitation, any interest equalization tax or any similar tax on the
acquisition of debt obligations), levies, imposts or any other charge of any
nature whatsoever imposed by any taxing authority, whether or not such taxes
were correctly or legally asserted, on or with regard to any aspect of the
transactions with respect to this Agreement and the Loans, except such taxes as
may be measured by the overall net income of a Bank or its Lending Office and
any increase in franchise taxes imposed by the jurisdiction, or any political
subdivision or taxing authority thereof, in which such Bank's principal
executive office or its Lending Office is located.
(ii) The Company shall pay immediately upon demand by any
Bank, acting through the Administrative Agent, any applicable stamp and
registration taxes, duties, official and sealed paper taxes, or similar charges
due, or which under currently applicable law could in the future become due, or
which may in the future become due as a result of any change in applicable law,
the
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interpretation thereof, or otherwise, in connection with any Loans or this
Agreement or in connection with the enforcement hereof.
(iii) If any Bank or the Administrative Agent receives a
refund in respect of taxes for which such Bank or the Administrative Agent has
received payment from the Company hereunder, it shall promptly notify the
Company of such refund and shall, within 30 days after receipt of such refund,
repay such refund to the Company with interest if any interest is received
thereon by such Bank or the Administrative Agent; provided that the Company,
upon the request of such Bank or the Administrative Agent, agrees to return such
refund (plus penalties, interest or other charges) to such Bank or the
Administrative Agent in the event such Bank or the Administrative Agent is
required to repay such refund.
(iv) (A) The Company shall reimburse or compensate each
Bank upon demand by such Bank, acting through the Administrative Agent, for all
costs incurred, losses suffered or payments made in connection with any CD Rate
Loans, Eurodollar Loans or any part thereof which costs, losses or payments are
a result of any present or future reserve, special deposit or similar
requirement against assets of, liabilities of, deposits with or for the account
of, or Loans by such Bank imposed on such Bank, its foreign lending branch or
the interbank eurodollar market by any regulatory authority, central bank or
other governmental authority, whether or not having the force of law, including,
without limitation, Regulation D.
(B) If as a result of (y) the introduction of or any
change in or in the interpretation or administration of any law or regulation or
(z) the compliance with any 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 to any Bank of agreeing to make or making, funding or maintaining
Loans for which such Bank shall not have been reimbursed pursuant to the
provisions of clause (A) above, then the Company shall from time to time, upon
demand by such Bank, acting through the Administrative Agent, pay to such Bank
additional amounts sufficient to indemnify such Bank against the full amount of
such increased cost.
(C) Any Bank claiming reimbursement or compensation under
this Section 2.01(g)(iv) shall make its demand on or before 45 days after the
end of each Interest Period during which any such cost is incurred, loss is
suffered or payment is made and shall provide the Administrative Agent, who in
turn shall provide the Company, with a written statement of the amount and basis
of its request, which statement, subject to Section 2.01(h), shall be conclusive
absent manifest error; provided that in the event any reimbursement or
compensation demanded by a Bank under this Section 2.01(g) is a result of
reserves actually maintained pursuant to the requirements imposed by Regulation
D with respect
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to "Eurocurrency liabilities" (as defined or within the meaning of such
Regulation), such demand shall be accompanied by a statement of such Bank in the
form of Exhibit 2.01(g)(iv) attached hereto. No Bank may request reimbursement
or compensation under this Section 2.01(g)(iv) for any period prior to the
period for which demand has been made in accordance with the foregoing sentence.
Such statement shall be conclusive and binding on the Company, subject to
Section 2.01(h), except in the case of manifest error. In preparing any
statement delivered under this Section 2.01(g)(iv), such Bank may employ such
assumptions and allocations of costs and expenses as it shall in good faith deem
reasonable and may be determined by any reasonable averaging and attribution
method. So long as any notice requirement provided for herein has been
satisfied, any decision by the Administrative Agent or any Bank not to require
payment of any interest, cost or other amount payable under this Section
2.01(g)(iv), or to calculate any amount payable by a particular method, on any
occasion, shall in no way limit or be deemed a waiver of the Administrative
Agent's or such Bank's right to require full payment of any interest, cost or
other amount payable hereunder, or to calculate any amount payable by another
method, on any other or subsequent occasion for a subsequent Interest Period.
(v) If any Bank shall have determined in good faith that
any applicable law, rule, regulation or guideline regarding capital adequacy now
or hereafter in effect, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or any Lending Office of such Bank) with any
request or directive regarding capital adequacy (whether or not having the force
of law) of any such governmental authority, central bank or comparable agency
has the effect of reducing the rate of return on such Bank's capital or the
capital of any corporation controlling such Bank as a consequence of its
obligations hereunder to a level below that which such Bank would have achieved
as a consequence of its obligations hereunder but for such adoption, change or
compliance (taking into consideration such Bank's policies with respect to
capital adequacy) by an amount deemed in good faith by such Bank to be material,
then from time to time, upon notice by the Bank requesting (through the
Administrative Agent) compensation, under this Section 2.01(g)(v) within a
reasonable period of time after such Bank has obtained knowledge of such event,
the Company shall pay to the Administrative Agent for the account of such Bank
such additional amount or amounts as will compensate such Bank for such
reduction. Any such claim by a Bank for compensation shall be made through the
Administrative Agent and shall be accompanied by a certificate signed by an
officer of such Bank authorized to so act on behalf of such Bank setting forth
the calculation upon which such claim is based. It is acknowledged that this
Agreement is being entered
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into by the Banks on the understanding that the Banks will not be required to
maintain capital against their Commitments under currently applicable laws,
regulations and regulatory guidelines. In the event Banks shall be advised by
any governmental authority or shall otherwise determine on the basis of
pronouncements of any governmental authority that such understanding is
incorrect, it is agreed that the Banks will be entitled to make claims under
this Section 2.01(g)(v) (each such claim to be made within a reasonable period
of time after the period to which it relates) based upon market requirements
prevailing on the date hereof for commitments under comparable credit facilities
against which capital is required to be maintained.
(vi) Notwithstanding the foregoing, in the event the
Company is required to pay to any Bank amounts pursuant to Section
2.01(g)(iv)(A), Section 2.01(g)(iv)(B) or Section 2.01(g)(v), the Company may
give notice to such Bank (with copies to the Administrative Agent) (A) that it
wishes to seek one or more assignees (which may be one or more of the Banks) to
assume the Commitment of such Bank and to purchase its outstanding Loans, in
which case the Administrative Agent will use its best efforts to assist the
Company in obtaining an assignee, or (B) in the case of any Bank that became a
Bank pursuant to an assignment under Section 13.07, that it wishes to terminate
the Commitment of such Bank; provided that if more than one Bank requests that
the Company pay substantially and proportionately equal additional amounts under
Section 2.01(g)(iv)(A), Section 2.01(g)(iv)(B) or Section 2.01(g)(v) and the
Company elects to seek an assignee to assume, or to terminate, the Commitments
of any of such affected Banks, the Company must seek an assignee or assignees to
assume, or must terminate, as the case may be, the Commitments of all of such
affected Banks. Each Bank requesting compensation pursuant to Section
2.01(g)(iv)(A), Section 2.01(g)(iv)(B) or Section 2.01(g)(v) agrees to sell its
Commitment, its outstanding Loans and interest in this Agreement in accordance
with Section 13.07 to any such assignee for an amount equal to the sum of, and
agrees that its Commitment shall be terminated as provided above upon payment to
it by the Company of, the outstanding unpaid principal of and accrued interest
on its outstanding Loans in Dollars plus all other fees and amounts (including,
without limitation, any compensation claimed by such Bank under Section 2.01(f),
Section 2.01(g)(iv)(A), Section 2.01(g)(iv)(B) or Section 2.01(g)(v)) due such
Bank hereunder calculated, in each case, to the date such Commitment, Loans and
interest are purchased or such amounts are paid, as the case may be. Upon such
sale or prepayment, each such Bank shall have no further Commitment or other
obligation to the Company hereunder.
(vii) Any Bank claiming any amounts pursuant to this
Section 2.01(g) shall use its reasonable good faith efforts (consistent with its
internal policies and legal and regulatory
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restrictions) to avoid or minimize the payment by the Company of any amounts
under this Section 2.01(g), including changing the jurisdiction of its Lending
Office; provided that no such change or action shall be required to be made or
taken if, in the reasonable judgment of such Bank, such change would be
materially disadvantageous to such Bank.
(viii) The aggregate amount payable, reimbursable or
compensable by the Company to or for the account of a Bank under this Section
2.01(g) shall not include any cost covered by the amount received by such Bank
from the Company through the Administrative Agent in connection with the
calculation of the CD Rate. The Company agrees to indemnify and hold the
Administrative Agent and each Bank harmless from and against any and all
liabilities with respect to or resulting from any delay in the payment or
omission to pay such amounts. The obligations of the Company under this Section
2.01(g) created in accordance with this Section 2.01(g) shall survive the
termination of the Commitments and/or this Agreement and/or the payment of the
obligations hereunder.
(h) Calculation Errors. Each calculation by the
Administrative Agent or any Bank with respect to amounts owing or to be owing by
the Company pursuant to this Agreement or any Loan shall be conclusive except in
the case of error. In the event the Administrative Agent determines within a
reasonable time that any such error shall have occurred in connection with the
determination of the applicable interest rate for any Loan which results in the
Company paying either more or less than the amount which would have been due and
payable but for such error, then (i) any Bank that received an overpayment or
underpayment or (ii) the Company, as the case may be, shall promptly refund or
pay, as the case may be, to the other any such overpayment or underpayment. In
the event it is determined within a reasonable time that any Bank, acting
through the Administrative Agent, has miscalculated any amount for which it has
demanded reimbursement or compensation from the Company in respect of amounts
owing by the Company other than interest which results in the Company paying
more or less than the amount which would have been due and payable but for such
error, such Bank or the Company, as the case may be, shall promptly refund or
pay, as the case may be, to the other the full amount of such overpayment or
underpayment. In the event it is determined within a reasonable time that the
Company has miscalculated the Commitment Fees or the Utilization Fee due under
Section 4.01 which results in the Company paying more or less than the amount
which would have been due and payable but for such error, (y) any Bank that
received an overpayment or underpayment or (z) the Company, as the case may be,
shall promptly refund or pay, as the case may be, the full amount of the
overpayment or underpayment.
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(i) Extension of Maturity Date; Required Prepayments. The
Borrower may, at its sole option, at any time not sooner than the 30th Business
Day prior to the Termination Date and not later than the 15th Business Day prior
to the Termination Date, deliver to the Administrative Agent written notice
extending the Maturity Date, in which event the Commitments shall terminate on
the Termination Date but the Maturity Date for Conventional Loans outstanding on
the Termination Date shall be extended to September 27, 2003. Following the
Termination Date, the first proviso to Section 3.02(b)(ii) shall have no effect.
After the Termination Date, references in Sections 2.01(e)(ii), 2.01(g)(vi),
13.03 and 13.07(c) to "Commitments" shall be deemed to be references to "Loans",
as the sense of the applicable provisions may require. Loans repaid or prepaid
after the Termination Date may not be reborrowed (except in the case of a
refinancing of a Loan with another Loan at the time of such prepayment).
SECTION 2.02. Setoff, Counterclaims and Taxes. All payments
(whether of principal, interest, fees, reimbursements or otherwise) under this
Agreement shall be made by the Company without setoff or counterclaim and shall
be made free and clear of and without deduction (except as specifically
contemplated in Section 2.03 below) for any present or future tax, levy, impost,
or any other charge, if any, of any nature whatsoever now or hereafter imposed
by any governmental authority (including, without limitation, withholdings of
United States taxes, except as otherwise provided in Section 2.03). Except as
specifically provided in Section 2.03 below, if the making of such payments is
prohibited by law unless such tax, levy, impost, or other charge is deducted or
withheld therefrom, the Company shall pay to the Administrative Agent for the
account of each Bank, on the date of each such payment, such additional amounts
as may be necessary in order that the net amounts received by such Bank after
such deduction or withholding shall equal the amounts in Dollars which would
have been received if such deduction or withholding were not required. The
Company shall confirm that all applicable taxes, if any, imposed on this
Agreement or transactions hereunder shall have been properly and legally paid by
it to the appropriate taxing authorities by sending official tax receipts or
notarized copies of such receipts to the Administrative Agent within 30 calendar
days after payment of any applicable tax. Upon request of any Bank, the
Administrative Agent shall forward to such Bank a copy of such official receipt
or a copy of such notarized copy of such receipt.
SECTION 2.03. Withholding Tax Exemption. To the extent not
previously delivered, at least five Business Days prior to the first date on
which interest or fees are payable hereunder to the Banks, if any Bank is not
incorporated or organized under the laws of the United States of America, or a
state thereof, such Bank agrees that it will deliver to the Company (with a copy
to the Administrative Agent) a duly completed copy of United States
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Internal Revenue Service Form 1001 or 4224, certifying in either case that such
Bank is entitled to receive payments under this Agreement without deduction or
withholding of any United States Federal income taxes. If such Bank delivers a
Form 1001 or 4224, such Bank further undertakes to deliver to the Company (with
a copy to the Administrative Agent) an additional copy of such form (or a
successor form) on or before the date that such form expires (currently, three
successive calendar years for Form 1001 and one calendar year for Form 4224) or
becomes obsolete or after the occurrence of any event requiring a change in the
most recent forms so delivered by it, and such amendments thereto or extensions
or renewals thereof as may be reasonably requested by the Company, in each case
certifying that such Bank is entitled to receive payments under this Agreement
without deduction or withholding of any United States Federal income taxes,
unless an event (including, without limitation, any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Bank from duly completing and delivering any such form with respect
to it and such Bank advises the Company (and the Administrative Agent) that it
is not capable of receiving payments without any deduction or withholding of
United States Federal income tax. In no event will any withholding by the
Company of interest payable by any Bank as contemplated by this Section 2.03
give rise to a Default under Section 10.01 with respect to payments of interest.
SECTION 2.04. Discretionary Loans. (a) Each Bank may, in its
sole discretion and on terms and conditions in writing satisfactory to it and
the Company that are not inconsistent with the provisions of this Agreement,
make additional Loans to the Company under its Commitment in Dollars on any one
or more Business Days on or after the date hereof and prior to the Termination
Date, which Discretionary Loans will be payable to the appropriate Bank upon
such terms and conditions; provided, however, that the Company will not permit
to remain outstanding any Discretionary Loans from any Bank, and no Bank will
make any Discretionary Loans to the Company, if the aggregate principal amount
of the Discretionary Loans and the Conventional Loans payable to such Bank
exceeds such Bank's Commitment. Should any Discretionary Loan be outstanding
from any Bank on a date on which a Conventional Borrowing is to be made, such
Conventional Borrowing shall be made available only if the Company has paid or
shall, simultaneously with the making of such Conventional Borrowing, pay such
portions of Discretionary Loans (including, without limitation, the payment of
the amount of any losses payable pursuant to Section 2.01(f) actually incurred
by such Bank as a result of such prepayment) as shall be necessary to make
available a portion of each Bank's Commitment at least equal to such Bank's Pro
Rata Share of such Conventional Borrowing. No Discretionary Loan shall have a
maturity date or interest period that extends beyond the Termination Date. Each
Bank shall maintain
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in accordance with its usual practice an account or accounts evidencing the
indebtedness to such Bank resulting from each Discretionary Loan made by such
Bank. The entries made in the accounts maintained pursuant to this Section 2.04
(a) shall be prima facie evidence of the existence and amounts of the
obligations therein recorded; provided, however, that the failure of any Bank to
maintain such accounts or any error therein shall not in any manner affect the
obligation of the Company to repay the Discretionary Loans in accordance with
their terms. The Company hereby unconditionally promises to pay to each Bank the
then unpaid principal amount of each Discretionary Loan made by such Bank on the
earlier of the Maturity Date and the date on which such principal amount is due
pursuant to the terms of such Discretionary Loan.
(b) Promptly upon written request of the Administrative
Agent, each Bank will certify in writing the borrowing date, the principal
amount in Dollars and the maturity date of any Discretionary Loans made during
any period for which the Commitment Fees and the Utilization Fee under Section
4.01 are to be calculated. The Company agrees to certify to the Administrative
Agent on or before each Quarterly Date the Borrowing Date, the principal amount
in Dollars, the maturity date and the lending Bank for all Discretionary Loans
made during any period for which the Commitment Fees and the Utilization Fee
under Section 4.01 are to be calculated.
SECTION 2.05. Obligations Several, Not Joint. The obligations
of the Banks hereunder are several and not joint. The failure of any Bank to
make the Loan to be made by it as part of any borrowing shall not relieve any
other Bank of its obligation to make its Loan on the date of such borrowing, and
no Bank shall be responsible for the failure of any other Bank to make the Loan
to be made by such other Bank on the date of any borrowing.
ARTICLE III
Optional and Required Prepayments; Interest
Payment Date; Other Payments
SECTION 3.01. Optional Prepayments. Loans may be prepaid in
whole or from time to time in part at the option of the Company on any Business
Day, without premium or penalty, notwithstanding that such Business Day is not
an Interest Payment Date, provided that:
(a) losses, if any, incurred by any Bank under Section 2.01(f)
shall be payable with respect to each such prepayment of any such CD
Rate Loan or Eurodollar Loan; and
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(b) all partial prepayments shall be in an aggregate
principal amount of at least $2,000,000 and an integral multiple of
$100,000; and
(c) the Company shall give the Administrative Agent not
less than one full Business Day's prior oral or written notice of each
prepayment of any Eurodollar Loans or CD Rate Loans, or any portion
thereof, and notice to the Administrative Agent not less than 9:00
a.m., Dallas, Texas time on the same day of the prepayment of Alternate
Base Rate Loans, or any portion thereof, proposed to be made pursuant
to this Section 3.01, specifying the aggregate principal amount of the
Loans to be prepaid and the prepayment date; provided, however, with
respect to each oral notice of a prepayment, the Company shall deliver
promptly (and in any event, no later than two Business Days after the
giving of such oral notice) to the Administrative Agent a confirmatory
written notice of such proposed prepayment. The Administrative Agent
shall promptly notify the Banks of the principal amount to be prepaid
and the prepayment date. Notice of such prepayment shall be irrevocable
and having been given as aforesaid, the principal amount specified in
such notice, together with accrued and unpaid interest thereon to the
date of prepayment, shall become due and payable on such prepayment
date, and the provisions of Section 2.01(f) shall be applicable. The
Company shall have no optional right to prepay the principal amount of
any Loan other than as provided in this Section 3.01.
SECTION 3.02. Required Prepayments. (a) If the Company shall
reduce or terminate the respective Commitments of the Banks pursuant to Section
4.02, it will prepay to each Bank on the effective date of any such reduction or
termination:
(i) in the case of a reduction of the Commitments, that
part of such unpaid principal amount outstanding of the Conventional
Loans and the Discretionary Loans held by such Bank that exceeds the
amount of the Commitment of such Bank immediately after such reduction;
and
(ii) in the case of termination of the Commitments, the
entire unpaid principal amount of the Conventional Loans and the
Discretionary Loans;
together, in each case, with accrued and unpaid interest on the amount being so
prepaid and all other amounts accrued and owing under this Agreement on such
date.
(b) (i) If on any Borrowing Date the principal amount
outstanding of the Conventional Loans and Discretionary Loans, as the case may
be, made to the Company by any Bank shall exceed the
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Commitment of such Bank, the Company shall promptly pay to such Bank an amount
equal to such excess, together with accrued and unpaid interest on the amount so
prepaid and all other amounts accrued and owing under this Agreement on such
date; and
(ii) if during any Prepayment Period the Company or any of
its Restricted Subsidiaries shall (A) sell, assign, transfer or otherwise
dispose of any Cash Flow Producing Asset (other than (i) dispositions of
inventory in the ordinary course of business or (ii) sales or transfers of
capital stock or assets to the Company or a Restricted Subsidiary) or (B) incur
Debt for borrowed money (other than (i) Debt incurred under this Agreement, the
Facility B Agreement or outstanding commercial paper in respect of which
Commitments under this Agreement or the Facility B Agreement are used to provide
backup liquidity and (ii) Debt incurred to finance the purchase by the Company
or its Restricted Subsidiaries of assets or capital stock (other than capital
stock of the Company or its Restricted Subsidiaries) not otherwise provided for
in the Company's annual capital expenditure budget or Debt incurred to refinance
such Debt), then the Company or such Restricted Subsidiary shall promptly apply
an amount equal to 50% of the Net Cash Proceeds of such sale, assignment,
transfer, disposition or incurrence to the prepayment of Loans under this
Agreement and the Facility B Agreement and the Commitments under this Agreement
and the Facility B Agreement shall be reduced by the respective amounts so
prepaid thereunder; provided, that if in connection with the disposition of any
such capital stock or Cash Flow Producing Asset, the Company shall advise the
Administrative Agent that it intends to use the Net Cash Proceeds of such
disposition to acquire Cash Flow Producing Assets to be owned by the Company or
a Restricted Subsidiary, then (i) the Commitments will not be reduced as
required by this Section 3.02(b)(ii) to the extent the amount prepaid or a
portion thereof shall have been reborrowed within 12 months after the date of
such disposition and used to acquire such Cash Flow Producing Assets, and (ii)
during such 12 month period an amount of the Commitments equal to the amount so
prepaid will be restricted and the Company will be entitled to reborrow such
amount as provided herein only upon a certification to the Administrative Agent
that the proceeds of such borrowing will be promptly applied to acquire such
Cash Flow Producing Assets; and provided further that prepayments and reductions
required under clause (B) shall be made only at each time that the aggregate
amount of payments and reductions required but not made shall equal an amount
not less than $50,000,000, at which time Loans shall be prepaid and Commitments
reduced in such aggregate amount.
(c) Notwithstanding the foregoing, (i) no prepayment
shall be required under Section 3.02(b)(ii) with respect to an aggregate of
$10,000,000 of Net Cash Proceeds and (ii) in the event any prepayment required
by Section 3.02(b)(ii) to be made under this Agreement and the Facility B
Agreement shall be in an amount
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less than $2,000,000, such prepayment may be deferred until the aggregate amount
of the prepayments deferred in reliance on this provision and the corresponding
provision of the Facility B Agreement shall exceed $2,000,000, at which time all
such prepayments shall be promptly made and the Commitments correspondingly
reduced (except as otherwise provided in Section 3.02(b)(ii)). In the event any
prepayment required by Section 3.02(a) or Section 3.02(b) with respect to any
Loan would become due on a date that is not an Interest Payment Date and as a
result thereof the Company would incur liabilities under Section 2.01(f), the
Company shall make such prepayment to the Administrative Agent on the due date;
provided, however, that interest shall continue to accrue on any Loan so prepaid
and shall be paid by the Company to the Administrative Agent on the applicable
Interest Payment Date. So long as no Default or Event of Default shall occur or
shall have occurred and be continuing, the Administrative Agent shall hold the
proceeds of such prepayment for the benefit of the Banks, in an interest bearing
account, until such time as such proceeds can be applied towards payment of the
Loans in accordance with the provisions of this Agreement without resulting in
any liability to the Company under Section 2.01(f). All interest which may
accrue on such amounts so held in escrow shall be held by the Administrative
Agent for the benefit of the Company.
(d) All prepayments made pursuant to the provisions of
this Section 3.02 shall be applied, in the case of Conventional Loans, first,
towards payment of all Alternate Base Rate Loans, as the Company directs, and
secondly, and subject to the provisions of Section 2.01(f), towards payment of
the appropriate amount of CD Rate Loans and Eurodollar Loans, as the Company
directs. The Company shall have no right to reborrow any amount prepaid under
Section 3.02(a) or, except as expressly provided therein, Section 3.02(b)(ii).
SECTION 3.03. Interest Payment Date. The Company promises to
repay the principal amount of each Loan on the Interest Payment Date, or if
earlier, the Maturity Date, for such Loan; provided that, the Company may
reborrow in accordance with Section 2.01(a), Section 2.01(b) or Section 2.04 for
the purpose of refinancing any Loan. All principal payments of Loans shall be
accompanied by accrued and unpaid interest on the principal amount being repaid
to the date of payment.
SECTION 3.04. Place, etc. of Payments and Prepayments. All
payments and prepayments made in accordance with the provisions of this
Agreement in respect of the Commitment Fees or the Utilization Fee and the
Administrative Agent's fee and of principal of and interest on the Loans (other
than with respect to Discretionary Loans) shall be made to the Administrative
Agent in Dollars at its office at 2200 Ross Avenue, Dallas, Texas 75201, in
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<PAGE> 37
immediately available funds for the accounts of the Banks. The Administrative
Agent will promptly distribute to the Banks, in accordance with each Bank's Pro
Rata Share as to all Loans (other than Discretionary Loans), in immediately
available funds, the amount of principal, interest, Commitment Fees and
Utilization Fees received by the Administrative Agent for the account of the
Banks; provided that if interest shall accrue on any Loan at a rate different
from the rate applicable to any other Loan, payment and distribution of interest
shall be based on the respective accrual rates applicable to such Loan. Any
payment to the Administrative Agent for the account of a Bank under this
Agreement shall constitute payment by the Company to such Bank of the amounts so
paid to the Administrative Agent, and any Loan or portions thereof so paid shall
not be considered outstanding for any purpose after the date of such payment to
the Administrative Agent.
ARTICLE IV
Fees; Reduction of Commitments
SECTION 4.01. Commitment Fees; Utilization Fee.
(a) The Company agrees to pay to the Administrative Agent
for the account of each Bank in Dollars, Commitment Fees, computed on a daily
basis of a year of 365 or 366 days, as the case may be, from the date of this
Agreement to and including the Termination Date at the rate of .10% per annum on
the daily average unused amount of the Commitment of such Bank (taking into
account all Conventional Loans and Discretionary Loans of such Bank outstanding
on the dates covered by such calculation). Each such Commitment Fee shall be
payable on or before the fifteenth day following each Quarterly Date and on the
Termination Date or on such earlier date as the Commitment of such Bank shall
terminate pursuant to the terms of this Agreement.
(b) The Company agrees to pay to the Administrative Agent
for the account of each Bank in Dollars a Utilization Fee ("Utilization Fee"),
computed on a daily basis of a year of 365 or 366 days, as the case may be, from
the date of this Agreement to and including the Maturity Date at the rate of (i)
.0625% per annum on the daily average aggregate amount of the outstanding Loans
(excluding Discretionary Loans) of such Bank hereunder during any calendar
quarter (or shorter period) in which the average daily aggregate amount of such
Loans outstanding under this Agreement (including all outstanding Discretionary
Loans) exceeds 33-1/3% of the aggregate Commitments hereunder but is less than
or equal to 66-2/3% of such Commitments or (ii) .1250% per annum on the daily
average aggregate amount of the outstanding Loans (excluding Discretionary
Loans) of such Bank hereunder during any calendar quarter (or shorter period) in
which the average daily aggregate amount of such Loans (including all
outstanding Discretionary
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<PAGE> 38
Loans) exceeds 66-2/3% of such Commitments; provided, that no Utilization Fee
shall be payable for any calendar quarter if the Leverage Ratio at the end of
the most recent fiscal quarter ended at least 60 days (or during the first
fiscal quarter of any year, at least 90 days) earlier shall have been less than
3.5 to 1.0. Each such Utilization Fee shall be payable on or before the
fifteenth day following each Quarterly Date and on the Maturity Date or on such
earlier date as the Commitments shall terminate pursuant to the terms of this
Agreement. For purposes of determining the applicable Utilization Fee during the
period following the Termination Date and prior to the Maturity Date, the
applicable calculation shall be made based on the amount of the Loans
outstanding hereunder from time to time and the amount of Commitments
outstanding hereunder immediately prior to their termination on the Termination
Date.
SECTION 4.02. Reduction or Termination of Commitments. The
Company may at any time or from time to time reduce ratably in proportion to
their respective Commitments or terminate in whole, the respective Commitments
of the Banks hereunder by giving not less than five full Business Days' prior
written notice to such effect to the Administrative Agent; provided that any
partial reduction shall be in an aggregate amount of not less than $3,000,000
and an integral multiple of $250,000; provided, further, that, the Commitments
may not be reduced to an amount less than the aggregate principal amount of
Discretionary Loans and Conventional Loans outstanding at such time, unless
simultaneously therewith the Company shall make a prepayment in accordance with
Section 3.02(a) hereof. In the event of any prepayment of the Loans outstanding
hereunder pursuant to Section 3.02(b)(ii), the Commitments shall be ratably
reduced by the amount of such prepayment to the extent provided in Section
3.02(b)(ii). The Administrative Agent shall promptly notify each Bank of its Pro
Rata Share of and of the date of each reduction of the Commitments. After each
such reduction, the Commitment Fees owing to each Bank shall be calculated upon
the Commitment of such Bank as so reduced. In the event of acceleration of the
maturity date of any Loan, the Commitments hereunder of the Banks shall
thereupon automatically terminate without notice. Each reduction or any
termination of the Commitments hereunder shall be irrevocable.
Application of Proceeds
The Company agrees that the proceeds of the Loans hereunder
shall be used by the Company for general corporate purposes, including the
repayment of maturing commercial paper.
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ARTICLE VI
Representations and Warranties
The Company represents and warrants that:
SECTION 6.01. Organization; Qualification; Subsidiaries. The
Company and each Subsidiary (i) is duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation or organization,
(ii) has corporate or other power to own its properties and to carry on its
business as now conducted, and (iii) is duly qualified as a foreign corporation
or partnership to do business and is in good standing in every jurisdiction
where failure to be duly qualified would materially and adversely affect the
business, properties or financial condition of the Company and its Subsidiaries
on a consolidated basis or the ability of the Company to perform its obligations
under this Agreement. Attached hereto as Exhibit 6.01 is a correct and complete
list setting forth, as of the date of this Agreement: (A) the name of each
Subsidiary, (B) the title and number of such outstanding shares, if any, owned
by Persons other than the Company or any Subsidiary, (C) the name and address of
each such other Person, and (D) whether such Subsidiary is a Restricted or
Unrestricted Subsidiary. All shares of capital stock of Restricted Subsidiaries
owned by the Company or any Restricted Subsidiary are owned thereby free and
clear of all liens, claims and encumbrances.
SECTION 6.02. Financial Statements. The Company has furnished
each Bank with the consolidated financial statements for the Company and its
Subsidiaries as at and for its fiscal year ended December 31, 1998, accompanied
by the opinion of Deloitte & Touche, and quarterly consolidated financial
statements as at and for the period ended June 30, 1999. Such statements have
been prepared in conformity with GAAP consistently applied throughout the period
involved, except as may be explained in such opinion. Such statements fairly
present the financial condition of the Company and its Subsidiaries on a
consolidated basis and the results of its and their operations as at the dates
and for the periods indicated. There has been no material adverse change in the
financial condition or the business or properties of the Company and its
Subsidiaries on a consolidated basis since June 30, 1999; provided, however,
that for purposes of this sentence, the provisions of the Cable Television
Consumer Protection and Competition Act of 1992 and the Telecommunications Act
of 1996 and the regulations adopted by the FCC pursuant to such statutes that
are in effect as of the date hereof shall not be considered.
SECTION 6.03. Actions Pending. Except as disclosed in Exhibit
6.03 attached hereto, there is no action, suit or proceeding pending or, to the
knowledge of the Company, threatened
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<PAGE> 40
against the Company or any Subsidiary before any court or administrative agency
or other governmental authority which might (although in the opinion of the
Company such actions, suits and proceedings would not reasonably be expected to)
result in any material adverse change in the business, properties or financial
condition of the Company and its Subsidiaries on a consolidated basis or impair
the ability of the Company to perform its obligations under this Agreement.
SECTION 6.04. Default. Neither the Company nor any Subsidiary
is (i) in default under the provisions of any instrument evidencing any Debt or
any other liability, contingent or otherwise, or of any agreement relating
thereto or (ii) in default under or in violation of any order, writ, injunction
or decree of any court, or in default under or in violation of any order,
regulation or demand of any governmental instrumentality, other than for such
defaults or violations under clauses (i) and (ii) above which taken in the
aggregate do not materially and adversely affect the business, properties or
financial condition of the Company and its Subsidiaries on a consolidated basis
or impair the ability of the Company to perform its obligations under this
Agreement.
SECTION 6.05. Title to Assets. The Company and each Restricted
Subsidiary (i) have good and marketable title to their respective real property
assets and (ii) good title to their respective personal property assets, in each
case, subject to no liens, security interests or other encumbrances except those
permitted by Section 9.01.
SECTION 6.06. Payment of Taxes. The Company and each
Subsidiary have filed all Federal and state income and franchise tax returns, or
extensions therefor, which, to the knowledge of the officers thereof, are
required to be filed and have paid all taxes shown on said returns and all
assessments which are due. The Company and its officers know of no claims by any
governmental authority for any unpaid taxes which claims in the aggregate could
reasonably be expected to result in a material and adverse effect on the
business, properties or financial condition of the Company and its Subsidiaries
on a consolidated basis.
SECTION 6.07. Conflicting or Adverse Agreements or
Restrictions. Neither the Company nor any Subsidiary is a party to any contract
or agreement or subject to any restriction which materially and adversely
affects the business, properties or financial condition of the Company and its
Subsidiaries on a consolidated basis. Neither the execution nor delivery of this
Agreement nor compliance with the terms and provisions hereof or of any
instruments required hereby will be contrary to the provisions of, or constitute
a default under, (i) the charter or by-laws of the Company or any Subsidiary or
(ii) any law or any regulation,
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<PAGE> 41
order, writ, injunction or decree of any court or governmental authority or any
material agreement to which the Company or any Subsidiary is a party or by which
it is bound or to which it is subject if such noncompliance or defaults referred
to in this clause (ii) could in the aggregate have a material adverse effect on
the business, properties or financial condition of the Company and its
Subsidiaries on a consolidated basis or impair the ability of the Company to
perform its obligations under this Agreement.
SECTION 6.08. Purpose of Loans. Neither the Company nor any
Subsidiary is engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or carrying Margin
Stock. This Agreement and the transactions contemplated hereby comply in all
respects with Regulations U, T and X and all other regulations of the Board of
Governors of the Federal Reserve System. Neither the Company nor any agent
acting on its behalf has taken or will take any action which would cause this
Agreement to violate Regulation U, T or X or any other regulation of the Board
of Governors of the Federal Reserve System or to violate the Securities Exchange
Act of 1934, in each case as in effect now or as the same may hereafter be in
effect on the date of any Loan.
SECTION 6.09. Authority; Validity. The Company has the
corporate power and authority to make and carry out this Agreement and the
transactions contemplated herein, to make the borrowings provided for herein and
to perform its obligations hereunder; and all such action has been duly
authorized by all necessary corporate proceedings on its part. This Agreement
has been duly and validly executed and delivered by the Company and constitutes
a valid and legally binding agreement of the Company, enforceable in accordance
with its terms, except as enforcement may be limited by bankruptcy, insolvency
or other laws of general application relating to or affecting the enforcement of
creditors' rights and general principles of equity.
SECTION 6.10. Consents or Approvals. No order, consent,
approval, license, authorization or validation of any governmental authority and
no registration or filing with or notice to any governmental authority is
necessary to authorize or permit, or is required in connection with, the
execution and delivery of this Agreement, the making of borrowings pursuant
hereto or the performance of the obligations of the Company hereunder.
SECTION 6.11. Compliance with Law. Neither the Company nor any
of its Subsidiaries are in violation of any Federal, state or local laws or
orders affecting the Company or any Subsidiary or any of their businesses and
operations which taken alone, or in the aggregate, could reasonably be expected
to have a material and adverse effect on the business, properties or financial
condition of the Company and its Subsidiaries, on a consolidated basis, or
35
<PAGE> 42
could reasonably be expected to impair the ability of the Company to perform its
obligations under this Agreement. Neither the Company nor any Subsidiary has
failed to obtain any license, permit, franchise, consent or authorization of any
governmental authority necessary to the ownership of its properties or the
operation of its business, which failure could reasonably be expected to have a
material and adverse effect on the business, properties or financial condition
of the Company and its Subsidiaries on a consolidated basis or could reasonably
be expected to impair the ability of the Company to perform its obligations
under this Agreement.
SECTION 6.12. ERISA. The Company and its Subsidiaries are in
compliance in all material respects with the applicable provisions of ERISA.
Neither the Company nor any Subsidiary, taken individually or in the aggregate,
has incurred any material accumulated funding deficiency within the meaning of
ERISA or Section 4971 of the Internal Revenue Code of 1986, as amended, or has
incurred any material liability to the Pension Benefit Guaranty Corporation
established under ERISA, or any successor thereto under ERISA (the "PBGC"), in
connection with any Plan. None of the Company, any Subsidiary or any member of a
"controlled group of corporations" or "combined group of trades or businesses
under common control" as such terms are defined, respectively, in Sections
414(b) and (c) of the Internal Revenue Code of 1986, as amended, is required to
contribute to any "multiemployer plan" (as such term is defined in Section
4001(a)(3) of ERISA) or has withdrawn from any multiemployer plan where such
contribution obligation or withdrawal has resulted or could result in any
"withdrawal liability" (as such term is defined in Section 4201 of ERISA) which
could reasonably be expected to have a Materially Adverse Effect.
SECTION 6.13. Investment Company Act. Neither the Company nor
any Subsidiary (i) is an investment company as that term is defined in the
Investment Company Act of 1940, as amended, (ii) directly or indirectly controls
or is controlled by a company which is an investment company as that term is
defined in the Investment Company Act of 1940, as amended, or (iii) is otherwise
subject to regulation under the Investment Company Act of 1940, as amended.
SECTION 6.14. Disclosure. All material information furnished
by or on behalf of the Company in writing to the Administrative Agent or any
Bank pursuant to the terms of this Agreement (a) in the Confidential Information
Memorandum dated September 1999 or (b) after the date hereof and, in either
case, concerning the historical operations of the Company, did not or will not,
as the case may be, when made, include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements therein, in
light of the
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<PAGE> 43
circumstances under which they were or are made, not materially misleading.
SECTION 6.15. Material Franchise Agreements. The Franchise
Agreements are described on Exhibit 6.15 attached hereto. With respect to the
Material Franchise Agreements, except as set forth on Exhibit 6.15 hereto:
(a) the Material Franchise Agreements are legal, valid
and binding agreements of the Company or a Subsidiary of the Company
and to the Company's knowledge, each other party thereto and are in
full force and effect, except to the extent that certain Material
Franchise Agreements may have expired in accordance with their terms as
of the date this representation and warranty is made or deemed made;
(b) neither the Company nor any Subsidiary of the Company
is materially in default or breach of (with or without the giving of
notice or passage of time, and no franchiser has asserted in writing
that the Company or a Subsidiary of the Company is materially in
default or breach of (with or without the giving of notice or passage
of time)), the Material Franchise Agreements;
(c) to the Company's knowledge, the other parties to the
Material Franchise Agreements are not materially in violation thereof,
and
(d) neither the Company nor any Subsidiary of the Company
has waived any rights under the Material Franchise Agreements where
such waiver would have a material adverse effect on the business,
properties or financial condition of the Company and its Subsidiaries
on a consolidated basis.
SECTION 6.16. Insurance. The Company and each Subsidiary
maintains insurance of such types as is usually carried by corporations of
established reputation engaged in the same or similar businesses and similarly
situated with financially sound and reputable insurance companies or
associations (or, as to workers' compensation or similar insurance, with an
insurance fund or by self-insurance authorized by the jurisdiction in which its
operations are carried on) and in such amounts (and with co-insurance and
deductibles) as such insurance is usually carried by corporations of established
reputation engaged in the same or similar businesses and similarly situated.
SECTION 6.17. Quality of CATV Systems. The materials and
workmanship used in the construction and operation of the CATV Systems are of
sufficient quality to conform in all material respects with applicable standards
and regulations of the FCC or any other appropriate governmental or regulatory
authority.
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SECTION 6.18. Environmental and Safety Matters. The Company
and each Subsidiary has complied in all material respects with all Federal,
state, local and other statutes, ordinances, orders, judgments, rulings and
regulations relating to environmental pollution or to environmental regulation
or control or to employee health or safety. To the best knowledge of the
Company's executive officers, neither the Company nor any Subsidiary has
received notice of any material failure so to comply. The Company's and the
Subsidiaries' plants do not manage any hazardous wastes, hazardous substances,
hazardous materials, toxic substances, toxic pollutants or substances similarly
denominated, as those terms or similar terms are used in the Resource
Conservation and Recovery Act, the Comprehensive Environmental Response
Compensation and Liability Act, the Hazardous Materials Transportation Act, the
Toxic Substance Control Act, the Clean Air Act, the Clean Water Act or any other
applicable law relating to environmental pollution or employee health and safety
generally, in violation in any material respect of any law or any regulations
promulgated pursuant thereto. The Company is aware of no events, conditions or
circumstances involving environmental pollution or contamination or employee
health or safety that could reasonably be expected to result in a material
adverse effect on the business, properties or financial condition of the Company
and its Subsidiaries on a consolidated basis.
SECTION 6.19. Year 2000 Compliance. The Company is taking such
actions and devoting such resources that, in the good faith exercise of its
business judgment, it believes to be reasonably necessary to permit the proper
functioning, in and following the year 2000, of (i) material computer systems of
the Company and its Subsidiaries and (ii) material equipment containing embedded
microchips (including systems and equipment supplied by others or with which the
systems of the Company or its Subsidiaries interface). The cost to the Company
and its Subsidiaries of such actions and of the reasonably foreseeable
consequences of year 2000 to the Company and its Subsidiaries (including,
without limitation, reprogramming errors and the failure of others' systems or
equipment) will not result in a Default or a Materially Adverse Effect. The
Company believes that, subject to testing and completion of the actions referred
to above, the computer and management information systems of the Company and its
Subsidiaries are and, with ordinary course upgrading and maintenance, will
continue to be, sufficient to permit the Company and its Subsidiaries to conduct
their business without a Materially Adverse Effect.
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ARTICLE VII
Conditions
SECTION 7.01. Conditions Precedent to Closing. The obligations
of the Banks to extend credit hereunder is subject to the satisfaction of the
following conditions:
(a) the Administrative Agent shall have received executed
counterparts of this Agreement which, when taken together, bear the
signatures of each of the parties hereto;
(b) the Administrative Agent shall have received on behalf of
the Banks all such evidence as it shall reasonably have requested as to
the corporate power and authority of the Company to enter into and
borrow under this Agreement and to perform its obligations hereunder;
(c) the Administrative Agent shall have received on behalf of
the Banks (i) from Counsel and Special FCC Counsel for the Company,
their opinions, dated the date hereof, substantially in the forms
attached hereto as Exhibit 7.01(b)(i) and (ii) from Counsel for the
Administrative Agent, its opinion, dated the date hereof, substantially
in the form attached hereto as Exhibit 7.01(b)(ii);
(d) the Administrative Agent shall have received on behalf of
the Banks an Officer's Certificate, dated the date hereof,
substantially in the form attached hereto as Exhibit 7.01(c);
(e) no Default shall have occurred and be continuing or shall
occur after giving effect to the Company's execution of this Agreement;
(f) after giving effect to the Company's execution of this
Agreement, the representations and warranties made by the Company in
Article VI (except those that expressly relate to a prior date) shall
be true in all material respects on and as of the date hereof;
(g) the Administrative Agent shall have received all interest,
fees and other amounts accrued under the Existing Credit Agreement on
or prior to the date hereof (whether or not at the time due and
payable), including to the extent invoiced, reimbursement or payment of
all out-of-pocket expenses required to be reimbursed or paid by the
Company hereunder; and
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<PAGE> 46
(h) No Loans shall be outstanding under the Existing Agreement
as of the date hereof.
SECTION 7.02. Conditions Precedent to Each Borrowing. The
obligation of the Banks to fund each Borrowing (including, without limitation,
the initial Borrowing after the date of this Agreement) is subject to the
following:
(a) No Event of Default shall have occurred and be continuing
or shall occur after giving effect to such Borrowing and the application of the
proceeds thereof, and each Borrowing shall be deemed to constitute a
representation and warranty by the Company on the applicable Borrowing Date to
such effect.
(b) The Administrative Agent shall have received by telecopy,
or otherwise, the Notice of Conventional Borrowing required by Section 2.01(b).
(c) The Company shall have delivered to the Administrative
Agent and each Bank such certificates and other documents as are otherwise
required under this Agreement.
SECTION 7.03. Conditions Precedent to Borrowings that Increase
Principal Outstanding. The obligation of the Banks to fund each Loan (including,
without limitation, the initial Loans to be made by the Banks to the Company
hereunder after the date of this Agreement), which has the effect of increasing
the aggregate outstanding principal amount of Loans of any Bank on the
applicable Borrowing Date is subject, in addition to the conditions set forth in
Section 7.0, to the following conditions:
(a) After giving effect to such Borrowing and the application
of the proceeds thereof, the representations and warranties contained
in Article VI, other than the representations and warranties made by
the Company in the last sentence of Section 6.02 and in Sections 6.03
and 6.04 and those that expressly relate to a prior date, shall be true
in all material respects on and as of the particular Borrowing Date as
though made on and as of such date and each such Borrowing shall be
deemed to constitute a representation and warranty by the Company on
the applicable Borrowing Date as to the matters set forth in Article VI
(other than the representations and warranties made by the Company in
the last sentence of Section 6.02 and in Sections 6.03 and 6.04 and
those that expressly relate to a prior date).
(b) Except as otherwise set forth therein, or in certificates
accompanying such financial statements, the most recent financial
statements delivered to the Banks pursuant to Section 8.02 shall fairly
present the financial condition of the Company and its Subsidiaries on
a consolidated basis and
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<PAGE> 47
the results of its and their operations as at the dates and for the
periods indicated. Each such Borrowing shall be deemed to constitute a
representation and warranty by the Company on the applicable Borrowing
Date to such effect.
(c) No Default shall have occurred and be continuing or shall
occur after giving effect to such Borrowing and the application of the
proceeds thereof, and each Borrowing shall be deemed to constitute a
representation and warranty by the Company on the applicable Borrowing
Date to such effect.
(d) The Company shall have delivered to the Administrative
Agent and each Bank such certificates and other documents as are
otherwise required under this Agreement.
SECTION 7.04. Conditions Precedent to the Initial Borrowing
After Effectiveness of this Agreement. The obligation of the Banks to fund the
initial Conventional Loan and, unless otherwise agreed, the initial
Discretionary Loan on or after the date of this Agreement is subject, in
addition to the conditions set forth above, to the following condition:
No material adverse change shall have occurred in the
financial condition or the business, operations or properties of the Company and
its Subsidiaries on a consolidated basis since June 30, 1999.
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ARTICLE VIII
Affirmative Covenants
The Company covenants and agrees that, until payment in full
of the obligations and termination of the Commitments hereunder, the Company
will:
SECTION 8.01. Certain Financial Covenants. Maintain at all
times during each period set forth below:
(a) a Leverage Ratio of not more than the ratio set forth
opposite such period:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
Initial Leverage Ratio Date 6.0 to 1.0
through and including
December 31, 2000
January 1, 2001 through and 5.5 to 1.0
including December 31, 2001
January 1, 2002 and thereafter 5.0 to 1.0; and
</TABLE>
(b) a ratio of Pro-forma Consolidated Annualized Operating
Cash Flow to Consolidated Annualized Interest Expense of not less than
2.0 to 1.0 at any time.
SECTION 8.02. Financial Statements and Information. Deliver to
each of the Banks in duplicate:
(a) as soon as available, and in any event within 90 days,
after the end of each fiscal year (i) a copy of the consolidated annual
audited financial statements of the Company and its Subsidiaries for
such fiscal year containing a balance sheet, an income statement, a
statement of shareholders' equity and a consolidated statement of cash
flows, all in reasonable detail, together with the unqualified opinion
of Deloitte & Touche or another independent certified public accountant
of recognized standing satisfactory to the Banks, that such statements
have been prepared in accordance with generally accepted accounting
principles, consistently applied, except as may be explained in such
opinion, and fairly present the financial condition of the Company and
its Subsidiaries on a consolidated basis and the results of its and
their operations as at the dates and for the periods indicated and (ii)
a copy of the reconciliation sheet, certified by the chief financial
officer of the Company,
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<PAGE> 49
setting forth the adjustments required to the consolidated audited
financial statements of the Company and its Subsidiaries referred to
above in this paragraph (a) in order to arrive at the consolidated
financial statements of the Company and its Restricted Subsidiaries;
(b) as soon as available, and in any event within 60 days,
after the end of each of the first three quarterly accounting periods
in each fiscal year (i) a copy of the consolidated unaudited financial
statements of the Company and its Subsidiaries as at the end of such
quarter and for the period then ended, containing a balance sheet, an
income statement, a statement of shareholders' equity and a
consolidated statement of cash flows, all in reasonable detail and
certified by a financial officer of the Company to have been prepared
in accordance with GAAP, consistently applied (subject to year end
audit adjustments and except for the absence of footnotes), except as
may be explained in such certificate, and as fairly presenting the
financial condition of the Company and its Subsidiaries on a
consolidated basis and the results of its and their operations as at
the dates and for the periods indicated and (ii) a copy of the
reconciliation sheet, certified by the chief financial officer of the
Company, setting forth the adjustments required to the consolidated
quarterly financial statements of the Company and its Subsidiaries
referred to above in this paragraph (b) in order to arrive at the
consolidated financial statements of the Company and its Restricted
Subsidiaries;
(c) promptly after the filing thereof, copies of all
statements and reports filed with the Securities and Exchange
Commission other than Form S-8 registration statements and other
reports relating to employee benefit plans, supplements to registration
statements relating solely to the pricing of securities offerings for
which registration statements were previously filed and delivered and
Forms D;
(d) promptly after any officer of the Company obtains
knowledge of an Event of Default or Default, an Officer's Certificate
specifying the nature of such Event of Default or Default, the period
of existence thereof, and what action the Company has taken and
proposes to take with respect thereto;
(e) promptly upon the Company's or any Subsidiary's receipt
thereof, copies of all notices received from the FCC regarding the
termination, cancellation, revocation or taking of any other adverse
action with respect to any Material FCC Licenses;
(f) promptly upon the Company's or any Subsidiary's receipt
thereof, copies of any notice received from any
43
<PAGE> 50
franchisors regarding the termination, cancellation or revocation of
Franchise Agreements in connection with CATV Systems constituting 20%
or more at any time of aggregate Basic Subscribers of the Company and
its Subsidiaries;
(g) together with the delivery of the financial statements
required under clauses (a) and (b) of this Section 8.02, the Company
shall deliver to the Administrative Agent a report setting forth with
respect to the Company and its Subsidiaries (i) the number of Homes
Passed by cable, (ii) the number of Basic Subscribers, and (iii) the
number of Pay Units, in each case as of the end of the preceding fiscal
quarter or fiscal year, as the case may be; and
(h) promptly after request, such additional financial or other
information as the Administrative Agent or any Bank acting through the
Administrative Agent may reasonably request from time to time.
All financial statements specified in clauses (a) and (b)
above shall be furnished with comparative consolidated figures for the
corresponding period in the preceding year. Together with each delivery of
financial statements required by clauses (a) and (b) above, the Company will
deliver to each Bank (i) such schedules, computations and other information as
may be required to demonstrate that the Company is in compliance with its
covenants in Sections 8.01, 9.01(g), 9.02, 9.03 and 9.06 or reflecting any
non-compliance therewith as at the applicable date, and (ii) an Officer's
Certificate stating that there exists no Event of Default or, to the knowledge
of such officer, any Default, or, if any such Event of Default or, to the
knowledge of such officer, any Default exists, stating the nature thereof, the
period of existence thereof, and what action the Company has taken and proposes
to take with respect thereto. Together with each delivery of financial
statements required by clause (a) above, the Company will deliver to each Bank a
written statement of said accountants that, in making the audit necessary to the
certification of such financial statements, they have obtained no knowledge of
any Event of Default or Default, or, if such accountants shall have obtained
knowledge of any Event of Default or Default, they shall specify the nature and
period of existence thereof in such statement; provided, that such accountants
shall not be liable directly or indirectly to any Bank for failure to obtain
knowledge of any Event of Default or Default. Each Bank is authorized to deliver
a copy of any financial statement delivered to it to any regulatory body having
jurisdiction over it and to any other Person as may be required by applicable
law, rules and regulations.
SECTION 8.03. Existence, Laws, Obligations. Maintain its
corporate existence, comply and cause its Subsidiaries to comply, in all
respects material to the financial condition,
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<PAGE> 51
business and properties of the Company and its Subsidiaries on a consolidated
basis, with all applicable laws and regulations and pay and cause its
Subsidiaries to pay all taxes, assessments, governmental charges and other
obligations which if unpaid might become a lien against the Property of the
Company or a Subsidiary, except liabilities being contested in good faith by
appropriate proceedings.
SECTION 8.04. Notice of Litigation and Other Matters. Promptly
notify the Administrative Agent in writing of (i) any action, suit or proceeding
pending or to the knowledge of the Company threatened, before any governmental
authority (including, without limitation, any bankruptcy or similar proceeding
by or against the Company or any Subsidiary) which, in the reasonable view of
the Company, if adversely determined or during the pendency thereof, would
materially impair the ability of the Company and its Subsidiaries on a
consolidated basis to carry on their businesses substantially as now being
conducted or would materially and adversely affect the financial condition,
business, operations or properties of the Company and its Restricted
Subsidiaries on a consolidated basis or would impair the ability of the Company
to perform its obligations under this Agreement, (ii) any action or development
which, in the view of the Company, might reasonably be expected to materially
impair the ability of the Company and its Subsidiaries on a consolidated basis
to carry on their businesses substantially as now being conducted or would
materially and adversely affect the financial condition, business, operations or
properties of the Company and its Subsidiaries on a consolidated basis or would
impair the ability of the Company to perform its obligations under this
Agreement, (iii) the failure of any Unrestricted Subsidiary to pay when due
(after giving effect to any grace period permitted from time to time) any Debt
of such Unrestricted Subsidiary, the outstanding amount of which exceeds,
singularly or in the aggregate, $25,000,000, or the holder of which Debt
declares, or may declare, such Debt due prior to its stated maturity because of
the occurrence of a default or other event thereunder or with respect thereto
and (iv) any revocation, suspension or expiration of FCC licenses which,
individually or in the aggregate, are material to the operations of the Company
and the Restricted Subsidiaries on a consolidated basis (the "Material FCC
Licenses").
SECTION 8.05. Books and Records. Maintain, and cause its
Subsidiaries to maintain, proper books of record and account in accordance with
GAAP, consistently applied.
SECTION 8.06. Inspection of Property and Records. Permit any
Person designated in writing by the Administrative Agent or any Bank (i) to
visit and inspect any of the properties of the Company and any Restricted
Subsidiary and discuss its and their respective affairs and finances with its
and their respective
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principal officers and to inspect any of the corporate books and financial
records of the Company and any Restricted Subsidiary and (ii) from and after the
occurrence of an Event of Default, to make copies of and abstracts from the
books and records of account of the Company and its Restricted Subsidiaries, in
each case all upon reasonable prior notice and at such times as the
Administrative Agent or any Bank may reasonably request.
SECTION 8.07. Maintenance of Property, Insurance. Cause its
Property and the Property of its Subsidiaries to be maintained, preserved and
protected and kept in good repair, working order and condition so as not to
materially and adversely affect the business carried on in connection therewith
and maintain, and cause its Subsidiaries to maintain, insurance with responsible
companies in such amounts and against such risks as is reasonably deemed
appropriate by the Company.
SECTION 8.08. ERISA. Comply, and cause each Subsidiary to
comply, in all material respects with the applicable provisions of ERISA and
furnish to the Administrative Agent (i) as soon as possible, and in any event
within 30 days after the Company or a duly appointed administrator of a Plan
files or is required to file, with respect to any Plan, any notice of a
"reportable event" (as such term is defined in Section 4043 of ERISA) for which
the notice requirement has not been waived by the PBGC (provided that notice
shall be required for reportable events arising from the disqualification of a
Plan or the distress termination of a Plan (in accordance with ERISA Section
4041(c)) without regard to the waiver of notice provided by the PBGC by
regulation or otherwise), a statement of the chief financial officer of the
Company setting forth details as to such reportable event and the action which
the Company, or such Subsidiary, as the case may be, proposes to take with
respect thereto, together with a copy of the notice of such reportable event
given to the PBGC and (ii) promptly after receipt thereof, a copy of any notice
the Company, any Subsidiary or any member of the controlled group of
corporations may receive from the PBGC relating to the intention of the PBGC to
terminate any Plan pursuant to Section 4042 of ERISA.
SECTION 8.09. Maintenance of Business Lines. Maintain and
cause its Restricted Subsidiaries to maintain lines of business in cable
television and related lines of business that are similar in scope to the
existing business lines and operations of the Company and its Restricted
Subsidiaries.
SECTION 8.10. Compliance with Material Franchise Agreements.
The Company will maintain, and will cause each Subsidiary to maintain, in full
force and effect at all times during the term of this Agreement, and will
materially comply with, and will cause each Subsidiary to materially comply
with, the terms
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and provisions of, the Material Franchise Agreements and the Material FCC
Licenses.
SECTION 8.11. Restricted/Unrestricted Designation of
Subsidiaries. The Company will be permitted to designate a Restricted Subsidiary
as an Unrestricted Subsidiary or an Unrestricted Subsidiary as a Restricted
Subsidiary by the delivery to the Administrative Agent of a written notice
certifying that all conditions set forth in this Section 8.11 are satisfied as
of the effective date of such designation, which certification shall state the
effective date of such designation and shall set forth the computations and
information as may be required to demonstrate that the Company is in compliance
with this Section 8.11 and shall be signed by a financial officer of the
Company, provided, that, (a) no Default or Event of Default shall exist
immediately before or after the effective date of any such designation; and (b)
the Company shall not designate as Unrestricted Subsidiaries during any period
of 12 consecutive months Restricted Subsidiaries as to which the Attributable
Amount shall exceed 15% of Pro-forma Consolidated Annualized Operating Cash Flow
excluding therefrom the Attributable Amount of the Unrestricted Subsidiaries
which have been designated as Restricted Subsidiaries during such period.
SECTION 8.12. Capital Expenditure Budget. The Company will
prepare its annual capital expenditure budget in a manner consistent in all
material respects with past practice.
ARTICLE IX
Negative Covenants
Until payment in full of the obligations and termination of
the Commitments hereunder:
SECTION 9.01. Mortgages, etc. The Company will not and will
not permit any Restricted Subsidiary to create or permit to exist any lien,
encumbrance, or security interest (including the charge upon assets purchased
under a conditional sales agreement, purchase money mortgage, security
agreement, or other title retention agreement) upon any of its assets, whether
now owned or hereafter acquired, or assign or otherwise convey any right to
receive income, except
(a) liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings;
(b) other liens, encumbrances and security interests
incidental to the conduct of its business or the ownership of its
assets which were not incurred in connection with the borrowing of
money, and which do not in the aggregate
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materially detract from the value of its assets or materially impair
the use thereof in the operation of its business;
(c) liens and security interests on assets of a Restricted
Subsidiary to secure obligations of such Restricted Subsidiary to the
Company or a Wholly Owned Restricted Subsidiary;
(d) liens and security interests existing on the date hereof
which are (i) both (y) described in Exhibit 9.01(d) attached hereto and
(z) reflected in the consolidated financial statements of the Company
referred to in Section 6.02 and (ii) liens and security interests on
Property that were existing at the time of the acquisition thereof by
the Company or any Restricted Subsidiary or placed thereon to secure a
portion of the purchase price thereof described in Exhibit 9.01(d);
(e) liens and security interests on Property acquired after
the date hereof existing at the time of acquisition thereof by the
Company or any Restricted Subsidiary or placed thereon within one year
of such acquisition to secure a portion of the purchase price thereof,
provided that no such lien or security interest may encumber or cover
any other Property of such Restricted Subsidiary, of the Company or of
any other Restricted Subsidiary;
(f) liens, encumbrances and security interests on the stock of
Unrestricted Subsidiaries;
(g) liens on Excess Margin Stock owned by the Company and its
Restricted Subsidiaries; and
(h) other liens and security interests (in addition to those
permitted pursuant to Section 9.01(e)) on Property of the Company and
its Restricted Subsidiaries that secure Debt of the Company and its
Restricted Subsidiaries in an amount which, when taken together with
all other outstanding secured Debt incurred in reliance on this clause
(h) and, without duplication, all outstanding Debt of Restricted
Subsidiaries incurred in reliance on clause (b) of Section 9.02, does
not at the time it is incurred exceed 20% of Pro-forma Consolidated
Annualized Operating Cash Flow.
SECTION 9.02. Debt. The Company will not permit any Restricted
Subsidiary to create, incur or suffer to exist any Debt except:
(a) Debt outstanding on the date hereof which is reflected in
the consolidated financial statements of the Company referred to in
Section 6.02; and
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(b) additional Debt in an amount which, when taken together
with all other outstanding Debt incurred in reliance on this clause (b)
and, without duplication, all outstanding Debt of the Company and its
Restricted Subsidiaries secured by liens incurred in reliance on clause
(h) of Section 9.01, does not at the time it is incurred exceed 20% of
Pro-forma Consolidated Annualized Operating Cash Flow.
SECTION 9.03. Merger; Consolidation; Disposition of Assets.
The Company will not merge or consolidate with any Person unless the Company
shall be the continuing or surviving corporation and both before and after
giving effect to such merger or consolidation no Default or Event of Default
shall exist. The Company will not and will not permit any Restricted Subsidiary
to sell, lease or transfer or otherwise dispose of (whether in one transaction
or a series of transactions) any Cash Flow Producing Assets, other than sales of
inventory in the ordinary course of business and sales of stock of Unrestricted
Subsidiaries or Margin Stock to any Person and other than dispositions to the
Company and its Restricted Subsidiaries, unless both before and after giving
effect to such disposition no Default or Event of Default shall exist.
Notwithstanding the foregoing, the Company and its Restricted Subsidiaries may
at any time sell, lease, transfer or otherwise dispose of Cash Flow Producing
Assets with an Attributable Amount (a) which, when taken together with the
Attributable Amount of all other Cash Flow Producing Assets disposed of in
reliance on this sentence and the Attributable Amount of those Restricted
Subsidiaries which have been designated as Unrestricted Subsidiaries (reduced by
the Attributable Amount of those Unrestricted Subsidiaries which have been
redesignated as Restricted Subsidiaries) pursuant to Section 8.11, in each case
during the current fiscal quarter and the three immediately preceding fiscal
quarters, does not exceed 30% of Pro-forma Consolidated Annualized Operating
Cash Flow, and (b) which, when taken together with the Attributable Amount of
all other Cash Flow Producing Assets disposed of in reliance on this sentence
and the Attributable Amount of those Restricted Subsidiaries which have been
designated as Unrestricted Subsidiaries (reduced by the Attributable Amount of
those Unrestricted Subsidiaries which have been redesignated as Restricted
Subsidiaries) pursuant to Section 8.11, in each case since the January 24, 1995,
does not exceed 50% of Pro-forma Consolidated Annualized Operating Cash Flow, in
each case excluding therefrom the Attributable Amount relating to the
disposition of those Cash Flow Producing Assets for which the Company shall have
used the Net Cash Proceeds thereof to acquire Cash Flow Producing Assets. For
purposes of the foregoing, Pro-forma Consolidated Annualized Operating Cash Flow
shall in each case be determined without giving effect to the disposition in
respect of which the tests set forth in clauses (a) and (b) of the preceding
sentence are being applied. The Company and the
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Restricted Subsidiaries shall, in connection with any disposition permitted by
this Section, comply with their obligations under Section 3.02(b)(ii).
SECTION 9.04. Restricted Payments. The Company will not, and
will not permit any Subsidiary to, pay or declare dividends (exclusive of stock
dividends and cash dividends paid by the Subsidiaries to the Company or to
Restricted Subsidiaries) or redeem or acquire, directly or indirectly, any of
the stock of the Company or such Subsidiary or any warrant or option to purchase
any of such stock (any of the foregoing, a "Restricted Payment") during any
fiscal year in an aggregate amount equal to the greater of (a) $25,000,000 or
(b) 5% of Pro-forma Consolidated Annualized Operating Cash Flow determined as of
the Company's most recent fiscal year end if at the time of each such Restricted
Payment, and after giving effect thereto on a pro-forma basis as if each
Restricted Payment had occurred on the first day of the fiscal quarter most
recently ended, the Leverage Ratio would exceed 5.0 to 1.0.
SECTION 9.05. Limitation on Margin Stock. The Company will not
and will not permit any Restricted Subsidiary to own or acquire Margin Stock
such that at any time Margin Stock of the Company and its Restricted
Subsidiaries other than stock of Unrestricted Subsidiaries represents more than
40% of the value of the assets of the Company and its Subsidiaries on a
consolidated basis that would be subject to Section 9.01 or Section 9.03 but for
the exclusion of Excess Margin Stock from the restrictions of such Sections.
SECTION 9.06. Loans and Advances to and Investments in
Unrestricted Subsidiaries. At any time when (a) the Company shall not have
outstanding Index Debt that is investment grade rated by two of Moody's, S&P and
Fitch and (b) the Leverage Ratio exceeds (or would exceed on a pro forma basis
after giving effect to a transaction of the sort referred to in this Section
9.06 as if it had occurred at the beginning of any relevant quarter) 5.5 to 1.0,
the Company will not and will not permit any Restricted Subsidiary to make any
loan or advance to, or make any capital contribution to or other investment in,
any Unrestricted Subsidiary unless (i) in the case of a loan, advance or other
investment, such loan, advance or other investment is on terms which are no less
favorable to the Company or such Restricted Subsidiary, as the case may be, than
would obtain in a comparable arm's length transaction with an unaffiliated
Person, and (ii) in each case at the time of the making of any such loan,
advance, capital contribution or investment no Default or Event of Default has
occurred and is continuing and after giving effect to such loan, advance,
capital contribution or investment no Default or Event of Default would occur.
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SECTION 9.07. Transactions with Affiliates. The Company will
not, and will not permit any Restricted Subsidiary to, directly or indirectly
enter into any transaction or series of transactions, whether or not in the
ordinary course of business, with any Affiliate other than (a) transactions with
the Company or one or more Subsidiaries that are otherwise permitted by this
Agreement, (b) transactions on terms and conditions substantially as favorable
to the Company or such Restricted Subsidiary as would be obtainable by the
Company or such Restricted Subsidiary at the time in comparable arm's length
transactions with persons other than Affiliates, (c) transactions involving the
Company and its Restricted Subsidiaries exclusively and (d) any executive or
employee incentive or compensation plan, contract or other arrangement
(including any loans or extensions of credit in connection therewith) if such
plan, contract or arrangement is approved either by the stockholders of the
Company (in accordance with such voting requirements as may be applicable) or by
the Board of Directors of the Company at a meeting at which a quorum of
disinterested directors is present.
ARTICLE X
Events of Default
Upon (i) the occurrence of any Event of Default specified in
Sections 10.10, 10.11, 10.12 or 10.13, (x) the unpaid principal amount of, and
all accrued but unpaid interest on, all Loans outstanding (including all
Discretionary Loans) and any other amounts payable hereunder shall automatically
become immediately due and payable without presentment, demand, protest, notice
of intent to accelerate or other notice of any kind to the Company, all of which
are hereby expressly waived and (y) the obligation of the Banks to make Loans
hereunder shall immediately terminate and (ii) the occurrence and during the
continuance of any other Event of Default and upon the written request of the
Majority Banks, the Administrative Agent shall, by notice to the Company, (x)
declare the obligation of the Banks to make Loans hereunder to be immediately
terminated, and the same shall forthwith be terminated, and/or (y) declare all
Loans then outstanding (including all Discretionary Loans) and any other amount
payable hereunder to be, and the same shall forthwith become, immediately due
and payable without presentment, demand, protest, notice of intent to accelerate
or other notice of any kind to the Company, all of which are hereby expressly
waived.
SECTION 10.01. Failure To Pay Principal or Interest. The
Company does not pay or prepay any principal of any Loan on the date due
(whether at stated maturity, by acceleration, by notice of prepayment, under
Section 2.01, 3.01 or 3.02 or otherwise) or the Company does not pay or prepay
any interest on any Loan (i) on or
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before five days after actual receipt of oral or written notice from the
Administrative Agent, or the applicable Bank with respect to any Discretionary
Loan, as to the amount of interest due, but in no event shall the Company be
required to pay or prepay any such interest prior to the date due, or (ii)
within 10 days after the due date thereof if no notice is actually received by
the Company from the Administrative Agent with respect to the amount of interest
due; or
SECTION 10.02. Failure To Pay Other Sums. The Company does not
pay any sums (other than payments of principal and interest on any Loan covered
by Section 10.01) payable to the Administrative Agent or any Bank under the
terms of this Agreement within 10 days after the date due (or, in the case of
the Commitment Fees or the Utilization Fee payable to the Administrative Agent
for the account of each Bank pursuant to Section 4.01, 10 days after written
notice of nonpayment has been received by the Company from the Administrative
Agent or any Bank); or
SECTION 10.03. Failure To Pay Other Debt.
(i) The Company or any Restricted Subsidiary does not pay when due any other
Debt of the Company or any Restricted Subsidiary, the outstanding amount of
which exceeds, singularly or in the aggregate, $25,000,000 in respect of which
any applicable grace period has expired; (ii) the Company or any Restricted
Subsidiary shall otherwise default under any other Debt of the Company or any
Restricted Subsidiary, the outstanding amount of which exceeds, singularly or in
the aggregate, $25,000,000, in respect of which any applicable notice has been
given and such Debt has been declared due prior to any maturity thereof,
provided that, during the continuance of any applicable grace period with
respect thereto, such event shall constitute a Default (but not an Event of
Default) hereunder; or (iii) an Event of Default shall occur and be continuing
under the Facility B Agreement; or
SECTION 10.04. Misrepresentation or Breach of Warranty. (i)
Any representation or warranty made by the Company herein when made or deemed
made by the Company pursuant hereto shall be incorrect in any material respect
or (ii) any other information (other than projections and similar
forward-looking information) provided by the Company pursuant to this Agreement
after the date hereof, shall, when made, include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they are made, not
materially misleading; or
SECTION 10.05. Violation of Certain Covenants. The Company
violates any covenant, agreement or condition contained in Article V or Section
8.01 or Section 8.02(d) or Article IX; or
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SECTION 10.06. Violation of Other Covenants, etc. The Company
violates any other covenant, agreement or condition contained herein and such
violation shall not have been remedied within 30 days after written notice has
been received by the Company from the Administrative Agent or any Bank; or
SECTION 10.07. Undischarged Judgment. Final judgment for the
payment of money in excess of $15,000,000 shall be rendered against the Company
or any Restricted Subsidiary and the same shall remain undischarged for a period
of 30 days during which period execution shall not be effectively stayed; or
SECTION 10.08. ERISA. (a) A "reportable event" (as such term
is defined in Section 4043 of ERISA) shall have occurred with respect to any
Plan and within 30 days after the reporting of any such reportable event to the
Administrative Agent, the Administrative Agent shall have notified the Company
in writing that the Majority Banks have made a determination that, on the basis
of such reportable event, there is a substantial likelihood that such Plan will
be terminated by the PBGC or (b) the PBGC has instituted proceedings to
terminate any Plan and the effect of either of the foregoing would reasonably be
expected to have a Materially Adverse Effect.
SECTION 10.09. Change of Control. A Change of Control shall
have occurred.
SECTION 10.10. Assignment for Benefit of Creditors or
Nonpayment of Debts. The Company or any Restricted Subsidiary makes an
assignment for the benefit of creditors or is generally not paying its debts as
such debts become due; or
SECTION 10.11. Voluntary Bankruptcy. The Company or any
Restricted Subsidiary petitions or applies to any tribunal for or consents to
the appointment of, or taking possession by, a trustee, receiver, custodian,
liquidator or similar official, of the Company or any Restricted Subsidiary, or
of any substantial part of the assets of the Company or any Restricted
Subsidiary, or commences any case or proceedings relating to the Company or any
Restricted Subsidiary under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or other liquidation law of any
jurisdiction; or
SECTION 10.12. Involuntary Bankruptcy. An involuntary
proceeding is commenced or an involuntary petition is filed in a court of
competent jurisdiction seeking (i) relief in respect of the Company or any
Restricted Subsidiary, or of a substantial part of the property or assets of the
Company or a Restricted Subsidiary, under Title 11 of the United States Code, as
now constituted or hereafter amended, or any other Federal or state bankruptcy,
insolvency, receivership or similar law or (ii) the
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appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Company or any Restricted Subsidiary or for a
substantial part of the property or assets of the Company or Restricted
Subsidiary; and such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing shall be
entered; or
SECTION 10.13. Dissolution. Any order is entered in any
proceeding against the Company or any Restricted Subsidiary decreeing the
dissolution or split-up of the Company or such Restricted Subsidiary, and such
order remains unstayed and in effect for 60 days.
ARTICLE XI
Modifications, Amendments or Waivers
Any of the provisions of this Agreement may from time to time
be modified or amended by, or waived with the written consent of, the Majority
Banks; provided that no such waiver, modification or amendment may be made which
will:
(a) Reduce or increase the amount or alter the term of the
Commitment of any Bank hereunder, other than as permitted by Section
4.02, without the prior written consent of such Bank; or
(b) Extend the stated maturity of or the time for payment of
interest on any Loan or the time for payment of any fee, or waive an
Event of Default with respect to payment of any principal, interest, or
fee, or reduce the principal amount of or the rate of interest on any
Loan, or reduce the amount of any fee, or otherwise affect the terms of
payment of any such fee, without the prior written consent of each
affected Bank; or
(c) Change the definition of Majority Banks without the prior
written consent of all the Banks; or (d) Waive, modify or amend the
provisions of this Article XI, Section 13.07(a) or any other provision
of this Agreement requiring the ratable distribution of payments among
the Banks without the prior written consent of all the Banks; or
(e) Waive, modify or amend the provisions of Article XII
without the prior written consent of the Administrative Agent and the
Majority Banks.
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No failure or delay on the part of the Administrative Agent or
any Bank in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or remedy or any abandonment or discontinuance of steps to enforce such a
power, right or remedy preclude any other or further exercise thereof or the
exercise of any other power, right or remedy hereunder. The remedies provided
for in this Agreement are cumulative and not exclusive of any remedies provided
by law or in equity. No modification or waiver of any provision of this
Agreement or consent to any departure by the Company therefrom shall in any
event be effective unless the same shall be in writing, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given. No notice to or demand on the Company in any case shall entitle the
Company to any other or further notice or demand in similar or other
circumstances.
ARTICLE XII
The Administrative Agent
SECTION 12.01. Appointment of Administrative Agent. Each of
the Banks irrevocably appoints and authorizes the Administrative Agent to act on
its behalf under this Agreement, and to exercise such powers hereunder as are
specifically delegated to or required of the Administrative Agent by the terms
hereof, together with such powers as may be reasonably incidental thereto. As to
any matters not expressly provided for by this Agreement, the Administrative
Agent shall not be required to exercise any discretion or take any action, but
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, and such instructions shall be binding upon all Banks; provided, however,
that the Administrative Agent shall not be required to take any action which
exposes the Administrative Agent to personal liability or which is contrary to
this Agreement or applicable law.
SECTION 12.02. Indemnification of Administrative Agent. The
Administrative Agent shall not be required to take any action hereunder or to
prosecute or defend any suit in respect of this Agreement, unless indemnified to
its reasonable satisfaction by the Banks against loss, cost, liability and
expense. If any indemnity furnished to the Administrative Agent shall become
impaired, it may call for additional indemnity and cease to do the acts
indemnified against until such additional indemnity is given. In addition, the
Banks agree to indemnify the Administrative Agent (to the extent not reimbursed
by the Company), ratably according to the respective principal amounts of the
Loans then held by each of them (or if no
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Loans are at the time outstanding, ratably according to the respective amounts
of their Commitments), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by, or asserted against the Administrative Agent in any way relating to or
arising out of this Agreement or any action taken or omitted by the
Administrative Agent under this Agreement, provided 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 the
Administrative Agent's gross negligence or wilful misconduct.
SECTION 12.03. Limitation of Liability. Neither the
Administrative Agent nor any of its directors, officers, employees, attorneys or
agents shall be liable for any action taken or omitted by it or them hereunder,
or in connection herewith, (i) with the consent or at the request of the
Majority Banks, or (ii) in the absence of its or their own gross negligence or
wilful misconduct. Without limitation of the generality of the foregoing (but
subject to the immediately preceding clause (ii)), the Administrative Agent: (v)
may consult with legal counsel (including Counsel for the Company), 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; (w) makes no warranty or
representation to any Bank and shall not be responsible to any Bank for any
statements, warranties or representations made in or in connection with this
Agreement; (x) shall not 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, or to inspect the Property (including the books and records) of the
Company; (y) shall not be responsible to any Bank for the due execution,
legality, validity, enforceability and genuineness of this Agreement, or any
other instrument or document furnished pursuant hereto; and (z) shall incur no
liability under or in respect of the Agreement by acting upon any notice or
consent (whether oral or written and whether by telephone, telegram, cable or
facsimile), certificate or other instrument or writing (which may be by
telegram, cable or facsimile) believed by it to be genuine and communicated,
signed or sent by the proper Person or Persons.
SECTION 12.04. Independent Credit Decision. Each Bank agrees
that it has relied solely upon its independent review of the financial
statements of the Company and all other representations and warranties made by
the Company herein or otherwise in making the credit decisions preliminary to
entering into this Agreement and agrees that it will continue to rely solely
upon its independent review of the facts and circumstances of the Company in
making future decisions with respect to this Agreement and the
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Loans. Each Bank agrees that it has not relied and will not rely upon the
Administrative Agent or any other Bank respecting the ability of the Company to
perform its obligations pursuant to this Agreement.
SECTION 12.05. Rights of Chase Texas. With respect to its
Commitment and the Loans made by it, Chase Texas shall have the same rights and
powers under this Agreement as any other Bank and may exercise the same as
though it were not the Administrative Agent; and the term "Bank" or "Banks"
shall, unless otherwise expressly indicated, include Chase Texas in its
individual capacity. Chase Texas and its Affiliates may accept deposits from,
lend money to, act as trustee under indentures of, and generally engage in any
kind of business with, the Company, any of the Subsidiaries and any Person or
entity who may do business with or own securities of any of them or of their
subsidiaries, all as if Chase Texas were not the Administrative Agent and
without any duty to account therefor to the Banks.
SECTION 12.06. Successor to the Administrative Agent. The
Administrative Agent may resign at any time as Administrative Agent under this
Agreement, by giving 30 days' prior written notice thereof to the Banks and the
Company and may be removed as Administrative Agent under this Agreement, at any
time with or without cause by the Company and the Majority Banks. Upon any such
resignation or removal, the Company (with the consent of the Majority Banks)
shall have the right to appoint a successor Administrative Agent thereunder. If
no successor Administrative Agent shall have been so appointed by the Company
(with the consent of the Majority Banks), and shall have accepted such
appointment, within 30 days after the retiring Administrative Agent's giving of
notice of resignation or the Majority Banks' removal of the retiring
Administrative Agent, then the retiring Administrative Agent may, on behalf of
the Banks, appoint a successor Administrative Agent, which shall be a 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 $100,000,000. Upon
the acceptance of any appointment as Administrative Agent under this Agreement
by a successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations under this Agreement.
After any retiring Administrative Agent's resignation or removal as
Administrative Agent under this Agreement, 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 Administrative Agent under this Agreement.
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ARTICLE XIII
Miscellaneous
SECTION 13.01. Payment of Expenses. Any provision hereof to
the contrary notwithstanding, and whether or not the transactions contemplated
by this Agreement shall be consummated, the Company agrees to pay on demand (i)
all reasonable costs and expenses of the Administrative Agent and the Banks or
any Bank in connection with the preparation, execution and delivery of this
Agreement and all amendments hereto (including, without limitation, waivers
hereunder and workouts with respect to Loans hereunder) and the other
instruments and documents to be delivered hereunder or with respect to any
amendment hereto, including, without limitation, the reasonable fees and
out-of-pocket expenses of any counsel for the Administrative Agent and the Banks
or any Bank with respect thereto; provided, however, that so long as no Default
or Event of Default has occurred and is continuing, such reasonable counsel
expenses shall be limited to the reasonable expenses of one counsel for the
Administrative Agent, (ii) all reasonable increases in costs and expenses of the
Administrative Agent and the Banks or any Bank (including reasonable counsel
fees and expenses, including reasonable allocated costs of in-house legal
counsel to the Administrative Agent or any Bank), if any, in connection with the
administration of this Agreement after the occurrence of a Default or Event of
Default and so long as the same is continuing and (iii) all reasonable costs and
expenses of the Administrative Agent and the Banks or any Bank (including
reasonable counsel fees and expenses, including reasonable allocated costs of
in-house legal counsel to the Administrative Agent or any Bank), if any, in
connection with the enforcement of this Agreement and the other instruments and
documents to be delivered hereunder. The obligations of the Company under this
Section 13.01 shall survive the termination of this Agreement and the payment of
the obligations hereunder.
SECTION 13.02. Notices. The Administrative Agent or any Bank
giving consent or notice to the Company provided for hereunder (other than in
connection with any Discretionary Loans), shall notify each Bank and the
Administrative Agent thereof. In the event that any Bank shall transfer any Loan
in accordance with Section 13.07(c), it shall immediately so advise the
Administrative Agent which shall be entitled to assume conclusively that no
transfer of any Loan has been made by any Bank unless and until the
Administrative Agent receives written notice to the contrary. Except as
otherwise specifically permitted by this Agreement with respect to oral Notices
of Conventional Borrowings or oral notices regarding the payment of interest
under Section 10.01, notices and other communications provided for herein shall
be in writing (including telegraphic, facsimile or cable communication) and
shall
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be delivered, mailed, telegraphed, transmitted or cabled addressed to the
addresses set forth on Exhibit 13.02 attached hereto (or, as to the Company or
the Administrative Agent, at such other address as shall be designated by such
party to the other parties in a 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 Company and the Administrative Agent). All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given upon receipt or if sent by
registered or certified mail four Business Days after being duly posted, in each
case addressed to such party as provided in this Section 13.02 or in accordance
with the latest unrevoked direction from such party, except for Notices of
Conventional Borrowings and notices of prepayments of Loans hereunder, which
shall be deemed to have been given when received by the Administrative Agent,
and except for notices from the Administrative Agent to the Company under
Section 10.01 with respect to the amount of accrued and unpaid interest due on
the Loans, which shall be deemed to have been given when received by the
Company. The Administrative Agent and the Banks may at any time waive any
requirement for notice hereunder.
SECTION 13.03. Setoff. If one or more Events of Default as
defined herein shall occur, any Bank or commercial bank which is owed any
obligation hereunder (a "Depositary") shall have the right, in addition to all
other rights and remedies available to it, and is hereby authorized, to the
extent permitted by applicable law, at any time and from time to time, without
notice to the Company (any such notice being hereby expressly waived by the
Company), to setoff and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness (whether
or not then due and payable) at any time owing by the Depositary to or for the
credit or the account of the Company, against any and all of the obligations of
the Company now or hereafter existing under this Agreement irrespective of
whether or not the Depositary shall have made any demand for satisfaction of
such obligations and although such obligations may be unmatured. Each Depositary
agrees to notify the Company and the Administrative Agent promptly after any
such setoff and application, provided that the failure to give such notice shall
not affect the validity of such setoff and application. The rights of each
Depositary under this Section are in addition to other rights and remedies
(including, without limitation, other rights of setoff which such Depositary may
have hereunder or under any applicable law). Each Depositary agrees that (i) if
it shall exercise any such right of banker's lien, setoff, counterclaim or
similar right pursuant hereto, it will apply the proceeds thereof to the payment
of Loans outstanding hereunder and (ii) if it shall through the exercise of a
right of banker's lien, setoff, counterclaim or otherwise obtain payment of a
proportion of the Loans held by it in excess of the proportion of the Loans of
each
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of the other Depositaries being paid simultaneously, it shall be deemed to have
simultaneously purchased from each other Depositary a participation in the Loans
owed to such other Depositaries so that the amount of unpaid Loans and
participations therein held by all Depositaries shall be proportionate to the
original principal amount of the Loans owed to them and in each case it shall
promptly remit to each such Depositary the amount of the participation thus
deemed to have been purchased. The Company expressly consents to the foregoing
arrangements, and in furtherance thereof, agrees that at such time as an Event
of Default hereunder has occurred, the Administrative Agent shall provide to
each Bank a schedule setting forth the Commitment of each Bank hereunder to
permit each Bank to correctly determine the portion which its Commitment
hereunder bears to the aggregate of all Commitments hereunder. If all or any
portion of any such excess payment is thereafter recovered from the Depositary
which received the same, the purchase provided for herein shall be deemed to
have been rescinded to the extent of such recovery, without interest.
SECTION 13.04. INDEMNITY AND JUDGMENTS. THE COMPANY AGREES TO
INDEMNIFY THE ADMINISTRATIVE AGENT AND EACH OF THE BANKS, THEIR CONTROLLING
PERSONS AND AFFILIATES AND EACH OF THEIR RESPECTIVE DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS, ATTORNEYS AND ADVISORS, FROM AND HOLD EACH HARMLESS AGAINST
ANY AND ALL LOSSES, COSTS, LIABILITIES, CLAIMS, DAMAGES AND EXPENSES INCURRED BY
ANY OF THE FOREGOING PERSONS (COLLECTIVELY, THE "INDEMNIFIED LIABILITIES"),
INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES, SETTLEMENT COSTS,
COURT COSTS AND OTHER LEGAL EXPENSES, ARISING OUT OF OR BY REASON OF ANY
PARTICIPATION IN, OR ANY ACTION OR OMISSION IN CONNECTION WITH THIS AGREEMENT OR
ANY LOAN BY A BANK HEREUNDER OR ANY INVESTIGATION, LITIGATION OR OTHER
PROCEEDINGS BROUGHT OR THREATENED RELATING THERETO, OR TO ANY USE OR PROPOSED
USE TO BE MADE BY THE COMPANY OR ANY SUBSIDIARY OF THE LOANS AND TO THE EXTENT
THAT THE INDEMNIFIED LIABILITIES ARISE OUT OF OR BY REASON OF CLAIMS MADE BY
PERSONS OTHER THAN THE ADMINISTRATIVE AGENT OR ANY BANK; PROVIDED THAT NO SUCH
PERSON SHALL BE ENTITLED TO BE INDEMNIFIED AND HELD HARMLESS AGAINST ANY PORTION
OF INDEMNIFIED LIABILITIES RESULTING FROM OR BY REASON OF THE GROSS NEGLIGENCE
OR WILFUL MISCONDUCT OF SUCH PERSON.
SECTION 13.05. Interest. Anything in this Agreement to the
contrary notwithstanding, the Company shall never be required to pay unearned
interest on any Loan and shall never be required to pay interest on any Loan at
a rate in excess of the Highest Lawful Rate, and if the effective rate of
interest which would otherwise be payable under this Agreement would exceed the
Highest Lawful Rate, or if any Bank shall receive any unearned interest or shall
receive monies that are deemed to constitute interest which would increase the
effective rate of interest payable under this Agreement to a rate in excess of
the Highest Lawful Rate, then (i) in lieu of the amount of interest which would
otherwise be
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payable under this Agreement, the Company shall pay the Highest Lawful Rate, and
(ii) any unearned interest paid by the Company or any interest paid by the
Company in excess of the Highest Lawful Rate shall be credited on the principal
of such Loan, and, thereafter, refunded to the Company. It is further agreed
that, without limitation of the foregoing, all calculations of the rate of
interest contracted for, charged or received by any Bank under this Agreement
that are made for the purpose of determining whether such rate exceeds the
Highest Lawful Rate applicable to such Bank (such Highest Lawful Rate being such
Bank's "Maximum Permissible Rate"), shall be made, to the extent permitted by
usury laws applicable to such Bank (now or hereafter enacted), by amortizing,
prorating and spreading in equal parts during the period of the full stated term
of the Loans all interest at any time contracted for, charged or received by
such Bank in connection therewith. If at any time and from time to time (y) the
amount of interest payable to any Bank on any date shall be computed at such
Bank's Maximum Permissible Rate pursuant to this Section 13.05 and (z) in
respect of any subsequent interest computation period the amount of interest
otherwise payable to such Bank would be less than the amount of interest payable
to such Bank computed at such Bank's Maximum Permissible Rate, then the amount
of interest payable to such Bank in respect of such subsequent interest
computation period shall continue to be computed at such Bank's Maximum
Permissible Rate until the total amount of interest payable to such Bank shall
equal the total amount of interest which would have been payable to such Bank if
the total amount of interest had been computed without giving effect to this
Section.
SECTION 13.06. GOVERNING LAW; SUBMISSION TO JURISDICTION;
VENUE. (A) THIS AGREEMENT AND OTHER DOCUMENTS EXECUTED IN CONNECTION HEREWITH
SHALL BE DEEMED TO BE CONTRACTS AND AGREEMENTS EXECUTED BY THE COMPANY, THE
ADMINISTRATIVE AGENT AND THE BANKS UNDER THE LAWS OF THE STATE OF NEW YORK AND
OF THE UNITED STATES AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH,
AND GOVERNED BY, THE LAWS OF SAID STATE AND OF THE UNITED STATES. WITHOUT
LIMITATION OF THE FOREGOING, NOTHING IN THIS AGREEMENT SHALL BE DEEMED TO
CONSTITUTE A WAIVER OF ANY RIGHTS WHICH ANY BANK MAY HAVE UNDER APPLICABLE
FEDERAL LAW RELATING TO THE AMOUNT OF INTEREST WHICH SUCH BANK MAY CONTRACT FOR,
TAKE, RECEIVE OR CHARGE IN RESPECT OF ANY LOANS, INCLUDING ANY RIGHT TO TAKE,
RECEIVE, RESERVE AND CHARGE INTEREST AT THE RATE ALLOWED BY THE LAWS OF THE
STATE WHERE SUCH BANK IS LOCATED. TO THE EXTENT THAT TEXAS LAW IS APPLICABLE TO
THE DETERMINATION OF THE HIGHEST LAWFUL RATE OR A MAXIMUM PERMISSIBLE RATE, THE
PROVISIONS OF CHAPTER 15 OF SUBTITLE 3, TITLE 79, OF THE REVISED CIVIL STATUTES
OF TEXAS, 1925, AS AMENDED, SHALL NOT APPLY TO THIS AGREEMENT. ANY LEGAL ACTION
OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK SITTING IN NEW YORK CITY OR OF THE UNITED STATES FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
THE COMPANY HEREBY
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IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. THE
COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT 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 COMPANY AT ITS
ADDRESS FOR NOTICES PURSUANT TO SECTION 13.02, SUCH SERVICE TO BECOME EFFECTIVE
15 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE
ADMINISTRATIVE AGENT OR ANY BANK TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY
IN ANY OTHER JURISDICTION.
(B) THE COMPANY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT BROUGHT IN THE
COURTS REFERRED TO IN CLAUSE (A) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND
AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
SECTION 13.07. Survival of Representations and Warranties;
Binding Effect; Assignment. (a) All representations, warranties and covenants
contained herein or made in writing by the Company in connection herewith shall
survive the execution and delivery of this Agreement, and will bind and inure to
the benefit of the respective successors and assigns of the parties hereto,
whether so expressed or not. This Agreement shall become effective when it shall
have been executed by the Company, the Administrative Agent and each of the
Banks, and thereafter shall be binding upon and inure to the benefit of the
Company, the Administrative Agent and the Banks and their respective successors
and assigns, except that the Company shall not have the right to assign its
rights or obligations hereunder or any interest herein without the prior written
consent of each Bank.
(b) Each Bank may grant participations to one or more other
banks or other Persons in or to all or any part of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Commitment) pursuant to such participation agreements and certificates as are
customary in the banking industry; provided, however, that (i) such Bank's
obligations under this Agreement (including, without limitation its Commitment
to the Company hereunder) shall remain unchanged, (ii) such Bank shall remain
solely responsible to the other parties hereto for the performance of such
obligations and (iii) the Company, the Administrative Agent 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, including without
limitation, such Bank's rights under Article XI
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hereof. In connection with any such participation, each Bank may deliver such
financial information concerning the Company and its Subsidiaries to permit such
participant to make an informed and independent credit decision concerning such
participation; provided, however, each such Bank shall obtain from each such
participant an agreement to the effect that all such information delivered to it
in connection with such participation shall be considered confidential and shall
not be further distributed or delivered to any other Person except any
regulatory body having jurisdiction over such participant or to any director,
officer, employee, Affiliate or representative (including accountants and
attorneys acting for such participants) or as may otherwise be required by legal
process or applicable law, rules and regulations. Upon request of the Company,
each Bank shall give prompt notice to the Company of each such participation to
banks or other Persons that are not Affiliates of such Bank identifying each
such participant and the interest acquired by each such participant. This
Agreement shall not be construed so as to confer any right or benefit upon any
Person, including, without limitation, any Person acquiring a participation in
any Loan, other than the parties to this Agreement, except that any Person
acquiring a participation shall be entitled to the benefits conferred upon the
Banks by Section 2.01(f)-(g) (provided that the cost to the Company is not in
excess of what such cost would have been had such participation not been
granted).
(c) Subject (except in the case of assignments to Banks, or
Affiliates of the Banks) to the prior written consent of the Company (which
consent shall not be unreasonably withheld) and written acknowledgment of the
Administrative Agent, each Bank may assign to a bank or other Person a portion
of its rights and obligations under this Agreement (including, without
limitation, a portion of its Commitment); provided, however, that (i) each such
assignment shall be of a constant, and not a varying, percentage of all of the
assigning Bank's rights and obligations under this Agreement and shall be in an
amount equal to or greater than $15,000,000 of the assigning Bank's Commitment
(except in the case of assignments to Banks or Affiliates of any Bank or unless
otherwise agreed by the Company), and (ii) the parties to each such assignment
shall execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance in substantially the
form of Exhibit 13.07(c) attached hereto (the "Assignment and Acceptance"),
together with a processing and recordation fee of $2,000 (except in the case of
assignments to Banks or Affiliates of any Bank); provided, however, that such
recordation fee shall not be payable if such transfer is made pursuant to
Sections 2.01(e) or (g)(vi). Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment and
Acceptance, which effective date shall be the date on which such Assignment and
Acceptance is accepted by the Administrative Agent, (x) the assignee thereunder
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shall be a party hereto and, to the extent that rights and obligations hereunder
have been assigned to it pursuant to such Assignment and Acceptance, have the
rights and obligations of a Bank under this Agreement and (y) the Bank assignor
thereunder shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
and be released from its obligations under this Agreement (and, in the case of
an Assignment and Acceptance covering all or the remaining portion of an
assigning Bank's rights and obligations under this Agreement, such Bank shall
cease to be a party hereto).
(d) Notwithstanding anything to the contrary contained herein,
any Bank (a "Granting Bank") may grant to a special purpose funding vehicle (an
"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 Loan 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 Loan and (ii) if an
SPC elects not to exercise such option or otherwise fails to provide all or any
part of such Loan, the Granting Bank shall be obligated to make such Loan
pursuant to the terms hereof. The making of a Loan by an SPC hereunder shall
utilize the Commitment of the Granting Bank to the same extent, and as if, such
Loan 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). 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 of any State thereof. In addition, notwithstanding
anything to the contrary contained in this Section 13.07(d) any SPC may (i) with
notice to, but without the prior written consent of, the Borrower and the
Administrative Agent and without paying any processing fee therefor, assign all
or a portion of its interests in any Loan 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 maintenance of Loans and (ii) disclose on a confidential
basis any non-public information relating to its Loans to any rating agency,
commercial paper dealer or provider of any suretS, guarantee or credit or
liquidity enhancement to such SPC. This Section may not be amended without the
written consent of the SPC.
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(e) By executing and delivering an Assignment and Acceptance,
the Bank assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Bank makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of any other instrument or document furnished pursuant
thereto, (ii) such assigning Bank makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the Company
or the performance or observance by the Company of any of its respective
obligations under this Agreement, (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the financial
statements referred to in Sections 6.02 and 8.02 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance, (iv) such assignee will,
independently and without reliance upon the Administrative Agent, such assigning
Bank 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, (v) such assignee appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto, and (vi) such assignee agrees that it will
perform in accordance with its terms all of the obligations which by the terms
of this Agreement are required to be performed by it as a Bank.
(f) The Administrative Agent shall maintain at its address
referred to in Section 13.02 a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the names and
addresses of the Banks 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 Company, the Administrative Agent and the Banks 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 Company or any Bank at any reasonable time and from time to time upon
reasonable prior notice.
(g) Upon its receipt of an Assignment and Acceptance executed
by an assigning Bank, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit
13.07(c) attached hereto,
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(i) accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the Company.
(h) Notwithstanding any other provision in this Agreement, any
Bank may at any time, without the consent of the Company, assign all or any
portion of its rights under this Agreement (including, without limitation, the
Loans) in favor of any Federal Reserve Bank in accordance with Regulation A of
the Board of Governors of the Federal Reserve System; provided that no such
assignment shall release a Bank from any of its obligations hereunder or
substitute any such Federal Reserve Bank for such Bank as a party hereto. In
order to facilitate such an assignment to a Federal Reserve Bank, the Company
shall, at the request of the assigning Bank, duly execute and deliver to the
assigning Bank a promissory note or notes evidencing the Loans made to the
Company by the assigning Bank hereunder.
SECTION 13.08. Counterparts. This Agreement may be executed in
several counterparts, and by the parties hereto on separate counterparts. When
counterparts executed by all the parties shall have been delivered to the
Administrative Agent, this Agreement shall become effective, and at such time
the Administrative Agent shall notify the Company and each Bank. Each
counterpart, when so executed and delivered, shall constitute an original
instrument, and all such separate counterparts shall constitute but one and the
same instrument.
SECTION 13.09. Severability. Should any clause, sentence,
paragraph or section of this Agreement be judicially declared to be invalid,
unenforceable or void, such decision will not have the effect of invalidating or
voiding the remainder of this Agreement, and the parties hereto agree that the
part or parts of this Agreement so held to be invalid, unenforceable or void
will be deemed to have been stricken herefrom and the remainder will have the
same force and effectiveness as if such part or parts had never been included
herein.
SECTION 13.10. Descriptive Headings. The section headings in
this Agreement have been inserted for convenience only and shall be given no
substantive meaning or significance whatever in construing the terms and
provisions of this Agreement.
SECTION 13.11. Representation of the Banks. Each Bank hereby
represents and warrants that it is not relying upon any Margin Stock as
collateral in extending or maintaining the credit to the Company represented by
this Agreement.
SECTION 13.12. FINAL AGREEMENT OF THE PARTIES. THIS AGREEMENT
(INCLUDING THE EXHIBITS HERETO) REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY
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EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.
SECTION 13.13. WAIVER OF JURY TRIAL. THE COMPANY, THE BANKS
AND THE ADMINISTRATIVE AGENT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LEGAL ACTION OR PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT AND FOR ANY
COUNTERCLAIM THEREIN.
SECTION 13.14. Effect of Amendment and Restatement. Accrued
interest and fees under the Existing Agreement prior to the date of this
Agreement shall not be affected by this Agreement; provided that interest rates
and fees accruing on and after the date of this Agreement shall be calculated in
accordance with, and after giving effect to, this Agreement. All references in
this Agreement to "the date of this Agreement" shall mean the date appearing in
the heading of this Agreement.
IN WITNESS WHEREOF this Agreement has been executed by the
duty authorized signatories of the parties hereto in several counterparts all as
of the day and year first above written.
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EXHIBIT 2.01(g)(iv)
[BANK LETTERHEAD]
Chase Bank of Texas, National Association
2200 Ross Avenue
Dallas, Texas 75201
Attention: National Communications Division
Pursuant to Section 2.01(g)(iv) of the Cox Communications, Inc. Amended and
Restated 364-Day Credit Agreement dated as of September 28, 1999, this letter is
submitted as a request for reimbursement for the reserves actually maintained by
the undersigned pursuant to Regulation D of the Board of Governors of the
Federal Reserve System against "Eurocurrency Liabilities" during the [Interest
Period] for the $ Eurodollar Loan advanced by the Bank on for an Interest Period
of days. This letter will also serve to certify that such reserves were in fact
maintained by the undersigned with respect to such Eurodollar Loan during such
Interest Period. The reimbursement for the required reserves maintained has been
calculated according to Section 2.01(g) of the Credit Agreement as set forth
below:
1. $________
Eurodollar Loan outstanding for ___ days from _________ to __________.
2. Reserve Adjusted Base Rate =
Actual Quoted Base Rate/(1 - Actual Reserve
Requirement Rate Incurred)
__________/(1 - .__) = _______
3. Additional Spread due to Reserves =
Reserve Adjusted Base Rate - Actual Quoted Base Rate
_________ - _________ = _________
4. Annualization Fraction =
# of Days Outstanding/# of Eurodollar Days Per Year __________/360 =
__________
Reimbursement = (1)x((3)/100)x(4)
= ________ x ________ x ________
= $_______
[NAME OF BANK]
-------------------------
By:_______________________
Title:____________________
cc: Cox Communications, Inc.
1400 Lake Hearn Drive, N.E.
Atlanta, Georgia 30319
Attention of Dallas Clement
Treasurer
<PAGE> 75
EXHIBIT 7.01(c)
COX COMMUNICATIONS, INC.
Officers' Certificate
We, the undersigned officers of Cox Communications, Inc., a
Delaware corporation (the "Company"), hereby certify pursuant to Section 7.01(c)
of the Amended and Restated 364-Day Credit Agreement dated as of September 28,
1999 (the "Agreement"), among the Company, the banks party thereto (the
"Banks"), Chase Bank of Texas, National Association, as Administrative Agent,
for the Banks and Bank of America NT&SA as Syndication Agent and The Bank of New
York and Wachovia Bank, N.A. as Co-Documentation Agents, for the Banks, as
follows:
(1) The Certificate of Incorporation of the Company has not
been amended since November 21, 1994. The By-laws of the Company have not been
amended since May 19, 1994. No liquidation or dissolution proceedings with
respect to the Company have been commenced.
(2) The persons named on the Incumbency Certificate attached
hereto as Exhibit A are duly elected officers of the Company, now hold the
offices set forth opposite their respective names, and the signature thereon
opposite the name and title of each such person and officer is his correct
signature.
(3) Attached hereto as Exhibit B is a true and complete copy
of resolutions respecting the Agreement duly adopted by the Board of Directors
of the Company by a unanimous written consent dated [ ], and such resolutions
have not been revoked, rescinded or modified and are now in full force and
effect.
(4) The representations and warranties contained in Article VI
of the Agreement are true on and as of the date hereof with the same effect as
though such representations and warranties had been made on and as of this date;
and there exists on the date hereof no Event of Default or Default as defined in
Article I of the Agreement.
(5) No material and adverse change has occurred with respect
to the business, properties or financial condition of the Company and its
Subsidiaries on a consolidated basis since June 30, 1999; provided, however,
that for purposes of this clause (5), the provisions of the Cable Television
Consumer Protection and Competition Act of 1992 and the Telecommunications Act
of 1996 and the regulations adopted by the Federal Communications Commission
pursuant to such statutes that are in effect as of the date hereof shall not be
considered.
(6) There are no outstanding inquiry letters issued by the
Copyright Office to the Company or its Subsidiaries concerning any statements of
account or related royalty payments made by the Company or its Subsidiaries with
respect to the Subsidiaries, nor is there any pending claim, action, demand, or
litigation by any other person with respect to the statements of account or
related royalty payments made by any of the Subsidiaries which would have a
material adverse effect on the business, properties or financial condition of
the Company and its Subsidiaries on a consolidated basis.
<PAGE> 76
IN WITNESS WHEREOF, the undersigned Treasurer of the Company
has executed this certificate in his capacity as such with respect to Sections 4
and 5 hereof, and the undersigned Secretary of the Company has executed this
certificate in his capacity as such with respect to Sections 1, 2, 3 and 6
hereof, on this __ day of September, 1999.
----------------------------------
Dallas Clement, Treasurer
----------------------------------
Andrew A. Merdek, Secretary
<PAGE> 77
EXHIBIT 13.02
ADDRESSES FOR NOTICES
If to the Company, to it at:
Cox Communications, Inc.
1400 Lake Hearn Drive, N.E.
Atlanta, Georgia 30319
Attention: Dallas Clement, Treasurer
Telefax No.: 404-843-5142
with an identical copy transmitted
at the same time and in the same manner to:
J. Eric Dahlgren
Dow, Lohnes & Albertson
One Ravinia Drive, Suite 1600
Atlanta, Georgia 30346
Telefax No.: 770-901-8874
If to the Agent, to it at:
Chase Bank of Texas
2200 Ross Avenue, 3rd Floor
Dallas, Texas 75201
Attention: J. Kevin Kelty
Telefax No.: 214-922-2044
<PAGE> 78
EXHIBIT 13.07(c)
ASSIGNMENT AND ACCEPTANCE
Dated [ ]
Reference is made to that certain Amended and Restated 364-Day
Credit Agreement dated as of September 28, 1999 (as amended and modified from
time to time, the "Credit Agreement") among Cox Communications, Inc., a Delaware
corporation (the "Company"), the Banks (as defined in the Credit Agreement),
Chase Bank of Texas, National Association ("Chase Texas"), as Administrative
Agent for the Banks (the "Administrative Agent"), and Bank of America NT&SA as
Syndication Agent an The Bank of New York and Wachovia Bank, N.A. as
Co-Documentation Agents for the Banks. Terms defined in the Credit Agreement and
not defined herein are used herein with the same meaning.
W I T N E S S E T H
WHEREAS, pursuant to Section 13.07 of the Credit Agreement,
____________ (the "Assignor") desires to assign a certain percentage of its
rights and obligations under the Credit Agreement (including, without
limitation, the Assignor's Commitment) to ____________________ (the "Assignee")
subject to the terms hereof and the conditions set forth in Section 13.07(c) of
the Credit Agreement; and
WHEREAS the Assignee desires to accept said rights and assume
said obligations of the Assignor under the Credit Agreement and become a party
to and bound by the Credit Agreement;
NOW, THEREFORE, for and in consideration of ten dollars ($10)
in hand paid and for other good and valuable consideration, the receipt,
sufficiency and adequacy of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, a ___%(1) interest
in and to all of the Assignor's rights and obligations under the Credit
Agreement as of the Effective Date (as defined below), including, without
limitation, such percentage interest in the Assignor's Commitment as in effect
on the Effective Date, and the Assignor is hereby released from said obligations
from and after the Effective Date.
2. The Assignor (i) represents and warrants that as of the
date hereof its Commitment (without giving effect to assignments thereof which
have not yet become effective) is $_____; and the aggregate outstanding
principal amount of Loans owing to it (without giving effect to assignments
thereof which have not yet become effective) is $______; (ii) represents and
warranties that it is duly authorized to execute this Assignment and Acceptance;
(iii) represents and warrants that it is the legal and beneficial owner of the
interest being assigned by it hereunder
- --------
(1) Specify percentage in no more than 4 decimal points.
<PAGE> 79
and that such interest is free and clear of any adverse claim; (iv) 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 any other instrument or document furnished
pursuant thereto; and (v) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Company or the
performance or observance by the Company of any of its obligations under the
Credit Agreement or any other instrument or document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of
the Credit Agreement, together with copies of the financial statements referred
to in Sections 6.02 and 8.02 of the Credit Agreement 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; (ii) represents and
warrants that it is duly authorized to execute this Assignment and Acceptance;
(iii) 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 action under the Credit Agreement;
(iv) appoints and authorizes the Administrative Agent to take such action as
agent on its behalf and to exercise such powers under the Credit Agreement as
are delegated to the Administrative Agent by the terms thereof, together with
such powers as are reasonably incidental thereto; (v) agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of the Credit Agreement are required to be performed by it as a Bank; (vi) (if
such Assignee is a bank or financial institution organized outside the United
States) agrees that it will deliver to the Company (with a copy to the
Administrative Agent) such certificates, documents or other evidence as may be
required from time to time, including any certificate or statement of exemption
required under Treasury Regulation Section 1.1441-4(a) or Section 1.1441-6(c) or
any subsequent version thereof, to establish that it is not subject to
withholding under Section 1441 or 1442 of the Code, or comparable provisions,
because payments to it are effectively connected with the conduct of a trade or
business conducted in the United States or because it is fully exempt from
United States tax under a provision of an applicable tax treaty; and (vii)
specifies as its Lending Office (and address for notices) the offices set forth
beneath its name on the signature pages hereof.
4. Following the execution of this Assignment and Acceptance
by the Assignor and the Assignee, it will be delivered to the Administrative
Agent for acceptance and recording by the Administrative Agent. The effective
date for this Assignment and Acceptance shall be the date on which this
Assignment and Acceptance is accepted by the Administrative Agent (the
"Effective Date").
2
<PAGE> 80
5. As of the Effective Date (i) the Assignee shall be a party
to the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Bank thereunder and (ii) the
Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement and in the event that the Assignor has assigned to the Assignee
hereunder all of its rights and obligations under the Credit Agreement, the
Assignor shall cease to be a party to the Credit Agreement.
6. From and after the Effective Date, the Administrative Agent
shall make all payments under the Credit Agreement in respect of the interest
assigned hereby (including, without limitation, all payments of principal,
interest and the Commitment Fees and Utilization Fee with respect thereto) to
the Assignee. The Assignor and Assignee shall make all appropriate adjustments
in payments for periods prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.
[NAME OF ASSIGNOR],
by
-----------------------
Name:
Title:
[NAME OF ASSIGNOR],
by
-----------------------
Name:
Title:
[Address]
Accepted this __ day
of ___________, 19__
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as Administrative Agent,*
by
-----------------------
Name:
Title:
Agreed and consented to on
this __ day of _________ 19__
COX COMMUNICATIONS, INC.*,
by
-----------------------
Name:
Title:
- -------------------------
* if required.
<PAGE> 1
EXHIBIT 10.3
================================================================================
AMENDED AND RESTATED
FIVE-YEAR
CREDIT AGREEMENT
dated as of September 28, 1999
by and among
COX COMMUNICATIONS, INC.,
The Banks Party Hereto,
THE CHASE MANHATTAN BANK
as Documentation Agent
and
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Administrative Agent for the Banks
-------------------------
Chase Securities Inc.,
as Sole Book Manager and Lead Arranger
-------------------------
================================================================================
<PAGE> 2
COX COMMUNICATIONS, INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE I
<S> <C> <C>
SECTION 1.01. Defined Terms............................................. 1
SECTION 1.02. Redenomination of Certain
Foreign Currencies...................................... 13
ARTICLE II
The Loans
SECTION 2.01. Revolving Credit Loans.................................... 13
SECTION 2.02. Setoff, Counterclaims and Taxes........................... 21
SECTION 2.03. Withholding Tax Exemption................................. 22
SECTION 2.04. Alternate Currency Loans.................................. 22
SECTION 2.05. Currency Equivalents...................................... 24
SECTION 2.06. Discretionary Loans....................................... 24
SECTION 2.07. Obligations Several, Not Joint............................ 25
ARTICLE III
Optional and Required Prepayments; Interest
Payment Date; Other Payments
SECTION 3.01. Optional Prepayments...................................... 25
SECTION 3.02. Required Prepayments...................................... 26
SECTION 3.03. Interest Payment Date..................................... 28
SECTION 3.04. Place, etc. of Payments and Prepayments................... 28
SECTION 3.05. Basis of Accrual.......................................... 28
SECTION 3.06. Rounding and Other
Consequential Changes................................... 29
ARTICLE IV
Fees; Reduction of Commitments
SECTION 4.01. Commitment Fees; Utilization Fee.......................... 29
SECTION 4.02. Reduction or Termination of Commitments................... 30
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
ARTICLE V
<S> <C>
Application of Proceeds.................................................................. 30
ARTICLE VI
Representations and Warranties
SECTION 6.01. Organization; Qualification; Subsidiaries................. 31
SECTION 6.02. Financial Statements...................................... 31
SECTION 6.03. Actions Pending........................................... 31
SECTION 6.04. Default................................................... 31
SECTION 6.05. Title to Assets........................................... 32
SECTION 6.06. Payment of Taxes.......................................... 32
SECTION 6.07. Conflicting or Adverse Agreements or Restrictions......... 32
SECTION 6.08. Purpose of Loans.......................................... 32
SECTION 6.09. Authority; Validity....................................... 32
SECTION 6.10. Consents or Approvals..................................... 33
SECTION 6.11. Compliance with Law....................................... 33
SECTION 6.12. ERISA..................................................... 33
SECTION 6.13. Investment Company Act.................................... 33
SECTION 6.14. Disclosure................................................ 33
SECTION 6.15. Material Franchise Agreements............................. 34
SECTION 6.16. Insurance................................................. 34
SECTION 6.17. Quality of CATV Systems................................... 34
SECTION 6.18. Environmental and Safety Matters.......................... 34
SECTION 6.19 Year 2000 Compliance...................................... 35
ARTICLE VII
Conditions
SECTION 7.01. Conditions Precedent to Effectiveness and to Initial
Borrowing............................................ 35
SECTION 7.02. Conditions Precedent to Each Borrowing.................... 36
SECTION 7.03. Conditions Precedent to Borrowings that Increase
Principal Outstanding................................ 36
SECTION 7.04 Conditions Precedent to the Initial Borrowing After the
Amendment Closing Date............................... 37
ARTICLE VIII
Affirmative Covenants
SECTION 8.01. Certain Financial Covenants............................... 37
SECTION 8.02. Financial Statements and Information...................... 38
SECTION 8.03. Existence, Laws, Obligations.............................. 39
SECTION 8.04. Notice of Litigation and Other Matters.................... 39
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 8.05. Books and Records......................................... 40
SECTION 8.06. Inspection of Property and Records........................ 40
SECTION 8.07. Maintenance of Property, Insurance........................ 40
SECTION 8.08. ERISA..................................................... 40
SECTION 8.09. Maintenance of Business Lines............................. 41
SECTION 8.10. Compliance with Material Franchise Agreements............. 41
SECTION 8.11. Restricted/Unrestricted Designation of Subsidiaries....... 41
SECTION 8.12. Capital Expenditure Budget................................ 41
ARTICLE IX
Negative Covenants
SECTION 9.01. Mortgages, etc............................................ 42
SECTION 9.02. Debt...................................................... 43
SECTION 9.03. Merger; Consolidation; Disposition of Assets.............. 43
SECTION 9.04. Restricted Payments....................................... 43
SECTION 9.05. Limitation on Margin Stock................................ 44
SECTION 9.06. Loans and Advances to and Investments in Unrestricted
Subsidiaries......................................... 44
SECTION 9.07. Transactions with Affiliates.............................. 44
ARTICLE X
Events of Default
SECTION 10.01. Failure To Pay Principal or Interest...................... 45
SECTION 10.02. Failure To Pay Other Sums................................. 45
SECTION 10.03. Failure To Pay Other Debt................................. 45
SECTION 10.04. Misrepresentation or Breach of Warranty................... 46
SECTION 10.05. Violation of Certain Covenants............................ 46
SECTION 10.06. Violation of Other Covenants, etc......................... 46
SECTION 10.07. Undischarged Judgment..................................... 46
SECTION 10.08. ERISA..................................................... 46
SECTION 10.09. Change of Control......................................... 46
SECTION 10.10. Assignment for Benefit of Creditors or Nonpayment of Debts 46
SECTION 10.11. Voluntary Bankruptcy...................................... 46
SECTION 10.12. Involuntary Bankruptcy.................................... 46
SECTION 10.13. Dissolution............................................... 47
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
ARTICLE XI
<S> <C>
Modifications, Amendments or Waivers................................................... 47
ARTICLE XII
The Administrative Agent
SECTION 12.01. Appointment of Administrative Agent...................... 48
SECTION 12.02. Indemnification of Administrative Agent................... 48
SECTION 12.03. Limitation of Liability................................... 48
SECTION 12.04. Independent Credit Decision............................... 49
SECTION 12.05. Rights of TCB............................................. 49
SECTION 12.06. Successor to the Administrative Agent..................... 49
ARTICLE XIII
Miscellaneous
SECTION 13.01. Payment of Expenses....................................... 50
SECTION 13.02. Notices................................................... 50
SECTION 13.03. Setoff.................................................... 51
SECTION 13.04. Indemnity and Judgments................................... 51
SECTION 13.05. Interest.................................................. 52
SECTION 13.06. Governing Law; Submission to Jurisdiction; Venue.......... 53
SECTION 13.07. Survival of Representations and Warranties; Binding
Effect; Assignment................................... 54
SECTION 13.08. Counterparts.............................................. 56
SECTION 13.09. Severability.............................................. 57
SECTION 13.10. Descriptive Headings...................................... 57
SECTION 13.11. Representation of the Banks............................... 57
SECTION 13.12. Final Agreement of the Parties............................ 57
SECTION 13.13. Waiver of Jury Trial...................................... 57
SECTION 13.14. Effect of Amendment and
Restatement.......................................... 57
LIST OF EXHIBITS
Exhibit 2.01(a) - Banks and Commitments
Exhibit 2.01(g)(iv) - Eurocurrency Liabilities (Regulation D)
Exhibit 6.01 - List of Subsidiaries
Exhibit 6.03 - List of Actions Pending
Exhibit 6.15 - Franchise Agreements
Exhibit 7.01(b)(i) - Opinions of the Company's Counsel and the Company's
Special FCC Counsel addressed to the Banks
</TABLE>
<PAGE> 6
<TABLE>
<CAPTION>
<S> <C> <C>
Exhibit 7.01(b)(ii) - Opinion of Counsel for the Banks Addressed to the Banks
Exhibit 7.01(c) - Officers' Certificate
Exhibit A - Incumbency Certificate
Exhibit 9.01(d) - List of Liens and Security Interests
Exhibit 13.02 - Addresses for Notices
</TABLE>
<PAGE> 7
Exhibit 13.07(c) - Assignment and Acceptance
THIS AMENDED AND RESTATED FIVE-YEAR CREDIT
AGREEMENT (the "Agreement") made as of the 28th day of
September 1999, is among COX COMMUNICATIONS, INC. and the
BANKS party hereto, THE CHASE MANHATTAN BANK, as Documentation
Agent, and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, as
Administrative Agent for the Banks (hereinafter in such
capacity called the "Administrative Agent").
WHEREAS Cox Communications, Inc., a Delaware corporation
(hereinafter called the "Company"), has previously entered into the Amended and
Restated Five-Year Credit Agreement dated as of October 9, 1997, among the
Company, the banks party thereto, Texas Commerce Bank National Association, as
Administrative Agent, and The Chase Manhattan Bank, as Documentation Agent (the
"1997 Agreement").
WHEREAS the 1997 Agreement was amended by the First Amendment
dated as of September 30, 1998 (the "First Amendment"; the First Amendment as
amended by the First Amendment, the "Existing Agreement").
WHEREAS the Company desires, and the Banks and the
Administrative Agent agree, to amend and restate the Existing Agreement in the
form of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements herein contained, the parties hereto agree as
follows:
ARTICLE I
SECTION 1.01. Defined Terms. As used in this Agreement, the
following words and terms shall have the respective meanings indicated opposite
each of them and all accounting terms shall be construed in accordance with GAAP
consistent with those followed in the preparation of the financial statements
referred to in Section 6.02, unless otherwise indicated:
"Affiliate" shall mean, when used with respect to a specified
person, another person that directly, or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with the
person specified.
"Agreement" shall mean this Amended and Restated Credit
Agreement, as the same may be amended from time to time.
"Alternate Base Rate" shall mean, for any day, a rate per
annum (rounded upwards, if necessary, to the nearest 1/16 of 1%) equal to the
greater of (a) the Floating Rate in effect on such day; or (b) the Federal Funds
Borrowing Rate in effect for such day plus 1/2 of 1%. For purposes of this
Agreement, any change in the Alternate Base Rate due to a change in the Federal
Funds Borrowing Rate shall be effective on the effective date of such
1
<PAGE> 8
change in the Federal Funds Borrowing Rate. If for any reason the Administrative
Agent shall have determined (which determination shall be conclusive, absent
manifest error) that it is unable to ascertain, after reasonable efforts, the
Federal Funds Borrowing Rate, the Alternate Base Rate shall be the Floating Rate
until the circumstances giving rise to such inability no longer exist.
"Alternate Base Rate Loans" shall mean those Loans which may
be made under this Agreement and which are described in Section 2.01(d)(ii) on
which the Company shall pay interest at a rate based on the Alternate Base Rate.
"Alternate Currency" shall mean British pounds sterling,
Japanese yen, Canadian dollars or the Euro.
"Alternate Currency Borrowings" and individually "Alternate
Currency Borrowing", shall mean borrowings by the Company under Section 2.04
consisting of simultaneous Loans from the Banks under each such Bank's Alternate
Currency Commitment.
"Alternate Currency Commitment" shall mean, subject to Section
4.02, as to each Bank, the Dollar equivalent of 44.014084507% of each Bank's
initial Commitment (as set forth on Exhibit 2.01(a), attached hereto) or as set
forth in an Assignment and Acceptance, as such Commitment (a) may be reduced
from time to time pursuant to this Agreement or (b) may be increased from time
to time pursuant to an Assignment and Acceptance.
"Alternate Currency Loans" and individually, "Alternate
Currency Loan", shall mean those Loans which may be made under this Agreement
and which are described in Section 2.04(a).
"Alternate Currency Reference Banks" shall mean Chase Texas
and its Affiliates, Citicorp U.S.A., Inc. and Morgan Guaranty Trust Company of
New York.
"Assignment and Acceptance" has the meaning specified in
Section 13.07(c) hereof.
"Attributable Amount" shall mean, in respect of any assets
disposed of by the Company or a Restricted Subsidiary, or any designation of a
Restricted Subsidiary as an Unrestricted Subsidiary or of an Unrestricted
Subsidiary as a Restricted Subsidiary pursuant to Section 8.11, the amount of
Consolidated Annualized Operating Cash Flow, determined at the time of such
disposition or designation, which was attributable to such assets or such
Subsidiary.
"Banks" shall mean the Persons listed on Exhibit 2.01(a) and
any other Person that shall have become a party hereto pursuant to an Assignment
and Acceptance, other than any such Person that ceases to be a party hereto
pursuant to an Assignment and Acceptance.
"Basic Subscribers" shall mean all of the following which are
receiving basic cable television service provided by the CATV Systems: (a) the
number of single family dwellings, plus the number of individual households in
multiple dwelling units, paying at the stated basic service rate, (b) the number
of equivalent bulk and commercial rate customers calculated by dividing the
aggregate bulk and commercial basic service revenues by the stated basic service
rate and (c) the number of courtesy and free service customers.
2
<PAGE> 9
"Borrowings" and individually, "Borrowing", shall mean
Conventional Borrowings or Alternate Currency Borrowings.
"Borrowing Date" shall mean a date upon which a Borrowing is
to be made under Section 2.
"Business Day" shall mean a day when the Reference Banks or
Alternate Currency Reference Banks, as the case may be, and the Administrative
Agent are open for business; provided that if the applicable Business Day
relates to Eurodollar Loans or Eurocurrency Loans, it shall mean a day when the
Reference Banks or the Alternate Currency Reference Banks, as the case may be,
and the Administrative Agent are open for business and banks are authorized to
be open for business in London, Dallas and New York; further provided that if
the applicable Business Day relates to an Alternate Currency Loan, it shall
additionally mean a day when banks are open for business in (i) the country of
issue of the currency of such Alternate Currency Loan and (ii) Frankfurt am
Main, Germany (or such principal financial center or centers in such
Participating Member State or States as the Administrative Agent may from time
to time nominate for this purpose).
"Cash Flow Producing Assets" shall mean (a) assets other than
(i) cash equivalents and other investments purchased in the ordinary course of
the Company's cash management activities, (ii) office buildings and office
equipment and supplies and (iii) other assets not comprising cable television
systems or portions thereof and not directly employed in the cash flow-producing
activities of the Company and its Restricted Subsidiaries and (b) any capital
stock of a Restricted Subsidiary owning a Cash Flow Producing Asset.
"CATV Systems" shall mean the cable television distribution
systems owned and operated, directly or indirectly, by the Company or any of its
Subsidiaries that receive television and video signals by antenna, microwave
transmission or satellite transmission and which amplify such signals and
distribute them via coaxial or fiber optic cable.
"CD Rate" for any Interest Period shall mean, for each CD Rate
Loan comprising all or part of the relevant Conventional Borrowing, an interest
rate per annum determined by the Administrative Agent to be equal to the sum of:
(a) the rate per annum obtained by dividing (i) the per annum
rate of interest determined by the Administrative Agent to be the
average (rounded upward to the nearest whole multiple of 0.01%, if such
average is not such a multiple) of the bid rate determined
independently by each Reference Bank at 9:00 a.m. (Dallas, Texas time),
or as soon thereafter as is practicable, on the first day of such
Interest Period, of a certificate of deposit dealer of recognized
standing selected by each Reference Bank for the purchase at face value
of its certificates of deposit in an amount approximately equal or
comparable to the aggregate principal amount of such CD Rate Loans,
with a maturity equal to such Interest Period, by (ii) the result
obtained by subtracting from 100% all reserve (including, without
limitation, any imposed by the Board of Governors of the Federal
Reserve System), special deposit or similar requirements (expressed as
a rate per annum) applicable (or scheduled at the time of determination
to become applicable during such Interest Period) to such certificates
of deposit, plus
3
<PAGE> 10
(b) the weighted average of annual assessment rates,
determined by the Administrative Agent to be in effect on the first day
of such Interest Period, used to determine the then current annual
assessment payable by the Reference Banks to the Federal Deposit
Insurance Corporation for such Corporation's insuring Dollar deposits
of such Reference Banks in the United States.
"CD Rate Loans" shall mean those Loans which may be made under
this Agreement and which are described in Section 2.01(d)(i) on which the
Company shall pay interest at a rate based on the CD Rate.
A "Change of Control" shall be deemed to have occurred if (a)
the Cox Family and Cox Enterprises shall cease at any time to own directly or
indirectly at least 50.1% of the outstanding voting stock of the Company, (b)
any Person or group of Persons other than the Cox Family, Cox Enterprises and
Persons controlled by them shall have the right or ability, directly or
indirectly, to cause the election of a majority of the directors of the Company,
(c) the Cox Family shall cease at any time to own directly or indirectly at
least 50.1% of the outstanding voting stock of Cox Enterprises, or (d) any
Person or group of Persons other than the Cox Family shall have the right or
ability, directly or indirectly, to cause the election of a majority of the
directors of Cox Enterprises.
"Chase Texas" shall mean Chase Bank of Texas, National
Association, a national banking association having its principal offices located
at 2200 Ross Avenue, Dallas, Texas 75201.
"Commitment" shall mean as to any Bank the amount of such
Bank's commitment to make Loans hereunder, as set forth beside such Bank's name
on Exhibit 2.01(a) attached hereto or in any Assignment and Acceptance executed
pursuant to Section 13.07(c), as such amount (a) may be reduced from time to
time pursuant to the terms of this Agreement or pursuant to an Assignment and
Acceptance or (b) may be increased from time to time pursuant to an Assignment
and Acceptance, and "Commitments" shall mean the Commitments of all of the
Banks.
"Commitment Fees" shall have the meaning set forth in Section
4.01(a).
"Consolidated Annualized Interest Expense" shall mean four
times the sum of (i) interest expense, after giving effect to any net payments
made or received by the Company and its Restricted Subsidiaries with respect to
interest rate swaps, caps and floors or other similar agreements, and (ii)
capitalized interest expense, in each case of the Company and its Restricted
Subsidiaries for the most recently completed fiscal quarter, all on a
consolidated basis determined in accordance with GAAP.
"Consolidated Annualized Operating Cash Flow" shall mean the
sum of (i) four times operating income of the Company and its Restricted
Subsidiaries for the most recently completed fiscal quarter (less cash dividends
and other cash distributions to the holders of minority interests in the
Company's Restricted Subsidiaries), before giving effect to depreciation,
amortization, equity in earnings (losses) of unconsolidated investees and
nonrecurring one-time charges and (ii) cash dividends and cash distributions
paid (other than extraordinary distributions) to the Company and its Restricted
Subsidiaries during the most recently completed fiscal quarter and the three
immediately preceding fiscal quarters by unconsolidated investees of the Company
and its Restricted Subsidiaries, all on a consolidated basis determined in
accordance with GAAP.
4
<PAGE> 11
"Consolidated Debt" shall mean, as of any date and without
duplication, all Debt of the Company and its Restricted Subsidiaries on a
consolidated basis determined in accordance with GAAP, including guaranties of
indebtedness for borrowed money or for the deferred purchase price of Property
and obligations under or with respect to standby letters of credit of the
Company and its Restricted Subsidiaries, but only to the extent that the amount
of such liabilities for guaranties or standby letters of credit in the aggregate
exceed $50,000,000; provided further that (a) for purposes of this definition,
Debt shall not include guaranties by the Company of overdrafts of any Restricted
Subsidiary which occur in the ordinary course of business and remain outstanding
for a period not to exceed seven Business Days, and (b) for purposes of
computing the Leverage Ratio at any time, the Consolidated Debt of the Company
and its Restricted Subsidiaries shall be reduced by the aggregate amount of cash
and cash equivalents of the Company and its Restricted Subsidiaries representing
the unused proceeds of debt and equity securities issued or assets sold after
the date hereof to finance acquisitions that have not yet been consummated and
to refinance Debt obligations scheduled to mature in 90 days.
"Conventional Borrowings" and individually, "Conventional
Borrowing", shall mean Borrowings by the Company under Section 2.01(a)
consisting of simultaneous Loans (other than Alternate Currency Loans) from the
Banks.
"Conventional Loans" and individually, "Conventional Loan",
shall mean CD Rate Loans, Alternate Base Rate Loans or Eurodollar Loans made in
Dollars, pursuant to Section 2.01(a).
"Counsel for the Administrative Agent" shall mean Cravath,
Swaine & Moore.
"Counsel for the Company" shall mean Dow, Lohnes & Albertson,
PLLC.
"Cox Enterprises" shall mean Cox Enterprises, Inc., a Delaware
corporation.
"Cox Family" shall include those certain trusts commonly
referred to as the Dayton-Cox Trust A, the Barbara Cox Anthony Atlanta Trust,
the Anne Cox Chambers Atlanta Trust, the Estate of James M. Cox, Jr., Barbara
Cox Anthony, Garner Anthony, Anne Cox Chambers, and the estates, executors and
administrators, and children of the above-named individuals, and any
corporation, partnership, limited liability company, trust or other entity in
which the above-named trusts or individuals in the aggregate have a beneficial
interest of greater than 50%.
"Debt" shall mean with respect to any Person and without
duplication (i) indebtedness for borrowed money or for the deferred purchase
price of Property in respect of which such Person is liable, contingently or
otherwise, as obligor, guarantor or otherwise, or in respect of which such
Person directly or indirectly assures a creditor against loss, and (ii) the
capitalized portions of obligations under leases which shall have been or should
have been, in accordance with GAAP, recorded as capital leases.
"Default Rate" shall mean a rate per annum (for the actual
number of days elapsed, based on a year of 365 or 366 days, as the case may be)
which shall be equal to the lesser of (i) in the case of a Conventional Loan,
the Alternate Base Rate plus 1%, or the Highest Lawful Rate and (ii) in the
5
<PAGE> 12
case of an Alternate Currency Loan, the Eurocurrency Rate plus the applicable
Margin Percentage plus 1%, or the Highest Lawful Rate; provided that after the
end of any applicable Interest Period, if the rate provided for in clause (ii)
is not available, then the Default Rate shall be the rate provided for in clause
(i).
"Depositary" shall have the meaning set forth in Section
13.03.
"Discretionary Alternate Currency" shall mean any lawful
currency other than Dollars which is freely transferable and convertible into
Dollars.
"Discretionary Borrowings" and individually, "Discretionary
Borrowing", shall mean borrowings by the Company under Section 2.06 consisting
of Discretionary Loans.
"Discretionary Loans" and individually, "Discretionary Loan",
shall mean loans made by a Bank pursuant to Section 2.06, including, without
limitation, Discretionary Loans made in a Discretionary Alternate Currency.
"Dollars" and "$" shall mean lawful currency of the United
States of America.
"EMU" means economic and monetary union as contemplated in the
Treaty on European Union.
"EMU Legislation" means legislative measures of the European
Council for the introduction of, changeover to or operation of a single or
unified European currency (whether known as the Euro or otherwise), being in
part the implementation of the third stage of EMU.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"Euro" means the single currency of Participating Member
States of the European Union.
"Eurocurrency Loans" shall mean those Loans which may be made
under this Agreement and which are described in Section 2.01(d)(iv) on which the
Company shall pay interest at a rate based on the Eurocurrency Rate.
"Eurocurrency Rate" for any Interest Period shall mean, for
each Eurocurrency Loan comprising part of the relevant Alternate Currency
Borrowing, the rate per annum determined by the Administrative Agent at
approximately 10:00 am (Dallas, Texas time) on the Quotation Day for such
Interest Period by reference to the British Bankers' Association Interest
Settlement Rates for deposits in the currency of such Alternate Currency
Borrowing (as reflected on the applicable Telerate screen), for a period equal
to such Interest Period; provided that, to the extent that an interest rate is
not ascertainable pursuant to the foregoing provisions of this definition,
"Eurocurrency Rate" shall be the interest rate determined by the Administrative
Agent to be the arithmetical average (rounded upward to the nearest whole
multiple of 0.01%, if such average is not such a multiple) of the rate per annum
at which deposits in the relevant Alternate Currency are offered for such
Interest Period by the lending office of each Alternate Currency Reference Bank
to a prime bank in the London interbank market at 10:00 am (Dallas, Texas time)
on the date two Business Days prior to the beginning of such Interest Period and
in an amount substantially equal to the
6
<PAGE> 13
amount of the relevant Eurocurrency Loan of such Alternate Currency Reference
Bank to be outstanding during such Interest Period.
"Eurodollar Event" or "Eurocurrency Event" shall have the
meaning set forth in Section 2.01(e)(i).
"Eurodollar Loans" shall mean those Loans which may be made
under this Agreement and which are described in Section 2.01(d)(iii) on which
the Company shall pay interest at a rate based on the Eurodollar Rate.
"Eurodollar Rate" for any Interest Period shall mean, for each
Eurodollar Loan comprising part of the relevant Conventional Borrowing, an
interest rate per annum equal to the per annum rate of interest determined by
the Administrative Agent to be the arithmetical average (rounded upward to the
nearest whole multiple of 0.01%, if such average is not such a multiple) of the
rate per annum at which deposits in Dollars are offered by the Lending Office of
each Reference Bank to a prime bank in the interbank domestic eurodollar market
at 10:00 a.m. (Dallas, Texas time) two Business Days before the first day of
such Interest Period for a period equal to such Interest Period and in an amount
substantially equal to the amount of the relevant Eurodollar Loan of such
Reference Bank during such Interest Period.
"Euro Unit" means the currency unit of the Euro.
"Event of Default" shall mean any of the events specified in
Section 10; provided that there has been satisfied any requirement in connection
with such event for the giving of notice, or the lapse of time, or the happening
of any further condition, event or act, and "Default" shall mean any of such
events, whether or not any such requirement has been satisfied.
"Excess Margin Stock" shall mean that portion of the Margin
Stock owned by the Company and its Restricted Subsidiaries that must be excluded
from the assets subject to the restrictions of Sections 9.01 and 9.03 in order
for the Margin Stock subject to such Sections to represent less than 25% of the
value of the assets of the Company and its Restricted Subsidiaries on a
consolidated basis that are subject to such Sections.
"FCC" shall mean the Federal Communications Commission or any
successor governmental agency thereto.
"Facility A Agreement" shall mean the Amended and Restated
364-Day Credit Agreement dated September 28, 1999, among the Company, certain
lenders thereto and Chase Texas as Administrative Agent for the lenders.
"Federal Funds Borrowing Rate" shall mean, for any day, a
fluctuating interest rate per annum equal to the weighted average (rounded
upwards, if necessary, to the nearest whole multiple of 1/100 of 1%) of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System for such day quoted by the Reference Banks to the Administrative
Agent at 12:00 noon (Dallas, Texas time) on such day.
"Fitch" shall mean Fitch Investors Service Inc.
"Floating Rate" shall mean, as of a particular date, the prime
rate most recently determined by Chase Texas. Without notice to the Company or
any other Person, the Floating Rate shall change automatically from time to time
as and in the amount by which said prime rate shall fluctuate, with
7
<PAGE> 14
each such change to be effective as of the date of each change in such prime
rate. The Floating Rate is a reference rate and does not necessarily represent
the lowest or best rate actually charged to any customer. Chase Texas may make
commercial loans or other loans at rates of interest at, above or below the
Floating Rate.
"Franchise Agreements" shall mean all franchise agreements or
other substantially similar agreements to which the Company or any of its
Subsidiaries is a party.
"GAAP" shall mean generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and 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, which are applicable to the circumstances as of
the date of determination.
"Granting Bank" has the meaning specified in Section 13.07(d).
"Highest Lawful Rate" shall mean the maximum nonusurious
interest rate, if any, that at any applicable time may be contracted for, taken,
reserved, charged or received on any Loan or on the other amounts which may be
owing to any Bank pursuant to this Agreement under the laws applicable to such
Bank and this transaction.
"Homes Passed" shall mean the total of (a) the number of
single family residences capable of being serviced without further line
construction; (b) the number of units in multi-family residential buildings
capable of being serviced without further line construction; and (c) the number
of then current commercial service accounts regardless of the number of units
serviced or the equivalent billing units.
"Index Debt" shall mean senior, unsecured noncredit-enhanced,
long-term Debt of the Company.
"Initial Leverage Ratio Date" shall mean the earlier of (a)
the date on which the Borrower has completed both (i) a monetization of certain
capital stock of Sprint PCS owned by the Borrower yielding approximately
$1,500,000,000 in cash proceeds and (ii) a split-off exchange with AT&T valued
at approximately $2,800,000,000, and (b) March 31, 2000.
"Interest Payment Date" shall mean the last day of each
Interest Period.
"Interest Period" shall mean, with respect to each Loan made
hereunder, the period commencing on the Borrowing Date of such Loan and
(a) in the case of CD Rate Loans, ending 30, 60, 90 or 180
days thereafter;
(b) in the case of Alternate Base Rate Loans, ending not less
than one nor more than 90 days thereafter; and
(c) in the case of Eurodollar Loans or Eurocurrency Loans,
ending 7 days (subject to availability from each Bank) or one, two,
three or six months thereafter;
8
<PAGE> 15
in each case as the Company may select in the Notice of Conventional Borrowing
or the Notice of Alternate Currency Borrowing; provided, however, that (i) no
Interest Period for a Conventional Loan or an Alternate Currency Loan may be
chosen that would extend beyond the Maturity Date, (ii) whenever the last day of
any Interest Period would otherwise occur on a day other than a Business Day,
the last day of such Interest Period shall be extended to occur on the next
succeeding Business Day; provided that with respect to Eurodollar Loans or
Eurocurrency Loans, any Interest Period that would otherwise end on a day that
is not a Business Day shall be extended to the next succeeding Business Day only
if such Business Day does not fall in another month, and in the event the next
succeeding Business Day falls in another month, the Interest Period for such
Eurodollar Loan or Eurocurrency Loan shall be accelerated so that such Interest
Period shall end on the next preceding Business Day and (iii) any Interest
Period that begins on a day for which there is no numerically corresponding day
in the last month of such Interest Period shall end on the last Business Day of
the last month of such Interest Period. In no event shall there be more than ten
(10) Interest Periods in effect at any one time.
"Lending Office" shall mean, with respect to any Bank, its
principal office in the city identified with such Bank in Exhibit 13.02 hereto,
or such other office or branch of such Bank, or Affiliate of such Bank located
in the United States (acting on behalf of such Bank as its "Lending Office"
hereunder), as it shall designate in writing from time to time to the Company,
as the case may be.
"Leverage Ratio" shall mean, at any time, the ratio of (a)
Consolidated Debt as of the last day of the fiscal quarter most recently ended
to (b) Pro-forma Consolidated Annualized Operating Cash Flow.
"Loans" and individually, "Loan", shall mean Conventional
Loans, Alternate Currency Loans and Discretionary Loans.
"Majority Banks" shall mean (a) except as provided in clause
(b) below, Banks having at least 66-2/3% of the aggregate Commitments, and (b)
for the period after the Maturity Date until such time as the obligations under
this Agreement are paid in full, and for purposes of making determinations under
Article X, Banks having at least 66-2/3% of the aggregate principal amount of
Loans outstanding (calculated in its Dollar equivalent).
"Margin Percentage" shall mean at any date that percentage (a)
to be added to the CD Rate or the Eurodollar Rate or the Eurocurrency Rate, as
appropriate, pursuant to Section 2.01(d)(i), Section 2.01(d)(iii) or Section
2.01(d)(iv), for purposes of determining the per annum rate of interest
applicable from time to time to CD Rate Loans or Eurodollar Loans or
Eurocurrency Loans and (b) to be used in computing the Commitment Fee pursuant
to Section 4.01(a), set forth under the appropriate column below opposite the
Category in which the Company's Leverage Ratio, which in each case shall be
determined as of the end of the most recent fiscal quarter ended at least 60
days (or during the first fiscal quarter of any year, at least 90 days) prior to
such date, shall fall:
<TABLE>
<CAPTION>
Eurodollar/
Eurocurrency
Leverage Ratio Commitment Fee Spread CD Spread
-------------- -------------- ------ ---------
<S> <C> <C> <C> <C>
Category 1 < 4.00 to 1.0 0.1000% 0.400% 0.525%
-
Category 2 > 4.00 to 1.0 and < 4.50 0.1100% 0.500% 0.625%
- -
to 1.0
</TABLE>
9
<PAGE> 16
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Category 3 > 4.50 to 1.0 and < 5.00 0.1250% 0.625% 0.750%
- -
to 1.0
Category 4 > 5.00 to 1.0 and < 5.50 0.1500% 0.750% 0.875%
-
to 1.0
Category 5 > 5.50 to 1.0 0.2000% 0.875% 1.000%;
</TABLE>
provided that for any period during which financial statements have not been
delivered as required under Section 8.02, the Margin Percentage shall be
determined by reference to the Category which is one Category higher (based
upon the number assigned to the Categories in the table above) than the
Category in effect immediately prior to such period. The applicable Margin
Percentages determined by reference to the Company's Leverage Ratio as of any
such date of determination shall apply to each Loan requested by the Company on
and after such date of determination and shall remain the applicable Margin
Percentages until the next succeeding date of determination; provided that,
with respect to any Loans outstanding as of a date of determination, the old
applicable Margin Percentages shall continue to apply to such Loans until the
earlier of the Interest Payment Dates for such Loans or the twenty-ninth day
after such date of determination, and the new applicable Margin Percentages
that became effective as of such date of determination shall apply to such
Loans on and after the thirtieth day after such date of determination, if
applicable.
"Margin Stock" shall mean "margin stock" as that term is
defined in Regulation U of the Board of Governors of the Federal Reserve System.
"Material FCC Licenses" shall have the meaning set forth in
Section 8.04.
"Material Franchise Agreements" shall mean Franchise
Agreements in connection with CATV Systems constituting 80% or more at any time
of aggregate Basic Subscribers of the Company and its Subsidiaries.
"Materially Adverse Effect" shall mean (a) a materially
adverse effect on the business, operations, condition (financial or otherwise)
or assets of the Company and its Restricted Subsidiaries taken as a whole or (b)
material impairment of the rights or interests of the Banks in connection with
this Agreement.
"Maturity Date" shall mean October 9, 2002.
"Maximum Permissible Rate" shall have the meaning set forth in
Section 13.05.
"Moody's" shall mean Moody's Investors Service, Inc.
"National Currency Unit" means the Unit of currency (other
than a Euro Unit) of a participating member state.
"Net Cash Proceeds" shall mean (a) with respect to a sale,
assignment, transfer or other disposition by the Company or any of its
Restricted Subsidiaries to any Person other than the Company or any of its
Restricted Subsidiaries of any capital stock or assets owned by such party, the
gross cash proceeds to such party (including cash proceeds, whenever received,
of any non-cash consideration) of such sale, assignment, transfer or other
disposition, less the sum of (i) the reasonable costs associated with such sale,
assignment, transfer or other disposition, including income
10
<PAGE> 17
taxes (as estimated by the Company or any of its Restricted Subsidiaries, as the
case may be, in good faith), (ii) payments of the outstanding principal amount
of, premium or penalty, if any, and interest on any Debt required to be, and
which in fact is, prepaid under the terms thereof as a result of such
disposition and (iii) appropriate amounts as a reserve, in accordance with GAAP,
against any liabilities directly associated with the capital stock or assets
sold and which liabilities are retained by the Company or any of its
Subsidiaries after such sale, assignment, transfer or other disposition,
including, without limitation, pension and other post-employment benefit
liabilities and liabilities related to environmental matters or against any
indemnification obligations associated with such sale, assignment, transfer or
disposition and (b) with respect to any incurrence of Debt, cash proceeds net of
underwriting commissions or placement fees and expenses directly incurred in
connection therewith.
"Notice of Alternate Currency Borrowing" shall have the
meaning set forth in Section 2.04(b).
"Notice of Conventional Borrowing" shall have the meaning set
forth in Section 2.01(b).
"Officer's Certificate" shall mean a certificate signed in the
name of the Company by either its Chief Executive Officer, its President, its
Chief Financial Officer, one of its Vice Presidents or its Treasurer.
"Participating Member State" means each state so described in
any EMU legislation.
"Pay Units" shall mean the aggregate number of premium
services received by Basic Subscribers on a primary outlet.
"PBGC" shall have the meaning set forth in Section 6.12.
"Person" shall mean an individual, partnership, joint venture,
corporation, limited liability company, bank, trust, unincorporated organization
and/or a government or any department or agency thereof.
"Plan" shall mean any employee pension benefit plan within the
meaning of Article IV of ERISA which is either (i) maintained for employees of
the Company, of any Subsidiary, or of any member of a "controlled group of
corporations" or "combined group of trades or businesses under common control"
as such terms are defined, respectively, in Sections 414(b) and (c) of the
Internal Revenue Code of 1986, as amended, and the regulations thereunder, of
which the Company or any Subsidiary is a party, or (ii) maintained pursuant to a
collective bargaining agreement or any other arrangement under which more than
one employer makes contributions and to which the Company, any Subsidiary or any
member of a "controlled group of corporations" or "combined group of trades or
businesses under common control" defined as aforesaid, is at the time in
question making or accruing an obligation to make contributions or has within
the preceding five plan years made contributions.
"Prepayment Period" shall mean any period during which the
ratio of (x) the sum of the average daily principal amount of the Loans
outstanding under this Agreement and the Facility A Agreement and any
outstanding commercial paper in respect of which Commitments under this
Agreement or the Facility A Agreement are used to provide backup liquidity, each
during the
11
<PAGE> 18
most recently ended fiscal quarter to (y) Pro-forma Consolidated Annualized
Operating Cash Flow exceeds 4.5 to 1.0
"Pro-forma Consolidated Annualized Operating Cash Flow" shall
mean Consolidated Annualized Operating Cash Flow, excluding therefrom all
Consolidated Annualized Operating Cash Flow attributable to any Property sold or
otherwise disposed of other than in the ordinary course of business during any
applicable fiscal quarter as if such Property were not owned at any time during
such quarter, and including therein all Consolidated Annualized Operating Cash
Flow attributable to any Property acquired other than in the ordinary course of
business during any applicable fiscal quarter as if such Property were at all
times owned during such quarter.
"Property" shall mean all types of real and personal property,
whether tangible, or intangible or mixed.
"Pro Rata Share" shall mean, with respect to any Bank, a
fraction (expressed as a percentage rounded upward to the nearest whole multiple
of 0.000000001%) (a) the numerator of which shall be a principal amount equal to
such Bank's Commitment, and (b) the denominator of which shall be the aggregate
principal amount equal to all Banks' Commitments.
"Quarterly Date" shall mean the last day of each March, June,
September and December, beginning with December 31, 1999, or if any such date is
not a Business Day, the next succeeding Business Day.
"Quotation Day" means, with respect to any Alternate Currency
Borrowing and any Interest Period, the day on which it is market practice on the
relevant interbank market for prime banks to give quotations for deposits in the
currency of such Alternate Currency Borrowing for delivery on the first day of
such Interest Period. If such quotations would normally be given by prime banks
on more than one day, the Quotation Day will be the last of such days.
"Reference Banks" and individually "Reference Bank", shall
mean Chase Texas, Wachovia Bank, N.A. and Morgan Guaranty Trust Company of New
York.
"Register" shall have the meaning set forth in Section
13.07(e) hereof.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System.
"Required Prepayment Date" shall have the meaning set forth in
Section 2.01(e)(i) hereof.
"Restricted Payment" shall have the meaning set forth in
Section 9.04.
"Restricted Subsidiary" shall mean each Subsidiary other than
those Subsidiaries identified as Unrestricted Subsidiaries in Exhibit 6.01;
provided, however, that subject to Section 8.11, a Restricted Subsidiary may be
designated by the Company as an Unrestricted Subsidiary or an Unrestricted
Subsidiary may be redesignated by the Company as a Restricted Subsidiary and the
Company shall promptly notify the Administrative Agent of any such designation
or redesignation; provided further that after the initial designation of an
Unrestricted Subsidiary by the Company, only three further redesignations of
such Subsidiary shall be permitted.
12
<PAGE> 19
"S&P" shall mean Standard and Poor's Ratings Group.
"SPC" has the meaning specified in Section 13.07(d).
"Special FCC Counsel" shall mean Dow, Lohnes & Albertson,
PLLC.
"Subsidiary" shall mean any Person of which 50% or more of the
outstanding shares, having voting power under ordinary circumstances to elect a
majority of the Board of Directors of such Person, shall at the time be owned,
directly or indirectly, by the Company, by any one or more Subsidiaries or by
the Company and one or more Subsidiaries.
"Treaty on European Union" means the Treaty of Rome of March
25, 1957, as amended by the Single European Act 1986 and the Maastricht Treaty
(which was signed at Maastricht on February 7, 1992, and came into force on
November 1, 1993), as amended from time to time.
"Unrestricted Subsidiary" means any Subsidiary so designated
in accordance with the terms of this Agreement.
"Utilization Fee" shall have the meaning set forth in Section
4.01(b).
"Wholly Owned", when used with respect to a Subsidiary, shall
mean the beneficial ownership by the Company of 100% of the equity securities of
such Subsidiary.
SECTION 1.02. Redenomination of Certain Foreign Currencies.
Each obligation of any party to this Agreement to make a payment denominated in
the National Currency Unit of any member state of the European Union that adopts
the Euro as its lawful currency after the date hereof shall be redenominated
into the Euro at the time of such adoption (in accordance with the EMU
Legislation).
ARTICLE II
The Loans
SECTION 2.01. Revolving Credit Loans.
(a) Conventional Loan Commitment. Subject to and upon the terms and conditions
set forth in this Agreement, each Bank severally agrees to make Conventional
Loans to the Company on any one or more Business Days on or after the date
hereof and prior to the Maturity Date, up to an aggregate principal amount of
Conventional Loans not exceeding at any one time outstanding an amount equal to
such Bank's Commitment, less the principal amount outstanding at such time of
all Alternate Currency Loans (calculated in its Dollar equivalent on the
Borrowing Date of such Conventional Loan) made to the Company by such Bank, if
any; provided, however, in no event shall the aggregate outstanding principal
amount at any time of Conventional Loans, Alternate Currency Loans and
Discretionary Loans, each calculated in its Dollar equivalent, as applicable,
exceed $1,200,000,000, as such amount may be reduced pursuant to the terms of
this Agreement. Each Conventional Borrowing shall be in an aggregate amount of
not less than $3,000,000 and an integral multiple of $250,000. Subject to the
foregoing, each Conventional Borrowing shall be made simultaneously from the
Banks according to their Pro Rata Shares of the principal amount requested for
each Conventional
13
<PAGE> 20
Borrowing, and shall consist of Conventional Loans of the same type (e.g.,
Alternate Base Rate Loans, CD Rate Loans or Eurodollar Loans) with the same
Interest Period from each Bank. Within such limits and during such period, the
Company may borrow, repay and reborrow under this Section 2.01(a) (including,
without limitation, reborrowings for the sole purpose of refinancing any Loan).
The Company hereby unconditionally promises to pay to the Administrative Agent
for the account of each Bank the then unpaid principal amount of each
Conventional Loan on the Interest Payment Date for such Conventional Loan.
(b) Conventional Borrowing Procedures; Delivery of Proceeds;
Recordation of Loans. (i) Each Conventional Borrowing under this Section 2.01
shall be made on at least, (A) in the case of a Conventional Borrowing
consisting of Alternate Base Rate Loans, prior oral or written notice from the
Company to the Administrative Agent by 9:00 a.m., Dallas, Texas time on the same
day as the requested borrowing (and the Administrative Agent shall prior to
12:00 noon (Dallas, Texas time) on the date such notice is received by the
Administrative Agent) provide oral or written notice of the requested borrowing
to the Banks, and each Reference Bank shall then provide to the Administrative
Agent not later than 12:15 p.m. (Dallas, Texas time) oral or written notice of
the rate on overnight Federal funds for such day offered at 12:00 noon (Dallas,
Texas time) by such Reference Bank to the Company, and the Alternate Base Rate
determined by the Administrative Agent shall be conveyed by the Administrative
Agent by oral or written communication to all of the Banks by 1:00 p.m. (Dallas,
Texas time) on the Borrowing Date, (B) in the case of a Conventional Borrowing
consisting of CD Rate Loans, one Business Day's prior written or oral notice
from the Company to the Administrative Agent by 9:00 a.m., Dallas, Texas time
and (C) in the case of a Conventional Borrowing consisting of Eurodollar Loans,
three Business Days' prior written or oral notice from the Company to the
Administrative Agent by 9:00 a.m., Dallas, Texas time (and the Administrative
Agent shall, in the case of (B) and (C) above, provide to each Bank prior oral
or written notice of the requested borrowing by 11:30 a.m. (Dallas, Texas time)
on the date such notice is received by the Administrative Agent) ("Notice of
Conventional Borrowing"); provided, however, with respect to each oral Notice of
Conventional Borrowing, the Company shall deliver promptly (and in any event, no
later than two Business Days after the giving of such oral notice) to the
Administrative Agent a confirmatory written Notice of Conventional Borrowing.
Each Notice of Conventional Borrowing shall be irrevocable and shall specify:
(w) the total principal amount of the proposed Conventional Borrowing, (x)
whether the Conventional Borrowing will be comprised of CD Rate Loans, Alternate
Base Rate Loans or Eurodollar Loans, (y) the applicable Interest Period for such
Loans (which may not extend beyond the Maturity Date), and (z) the Borrowing
Date. The Administrative Agent shall promptly give like notice to the other
Banks, and on the Borrowing Date each Bank shall make its Pro Rata Share of the
Conventional Borrowing available at the principal banking office of the
Administrative Agent, 2200 Ross Avenue, Dallas, Texas 75201, no later than 3:30
p.m. (Dallas, Texas time) in the case of a Conventional Borrowing consisting of
Alternate Base Rate Loans, and no later than 2:00 p.m. (Dallas, Texas time) in
the case of all other Conventional Borrowings, in each case, in immediately
available funds.
(ii) The Administrative Agent shall pay or deliver the
proceeds of each Borrowing to or upon the order of the Company. Each Bank shall
maintain in accordance with its usual practice an account or accounts evidencing
the indebtedness to such Bank resulting from each Loan, from time to time,
including the amounts of principal and interest payable and paid such Bank from
time to time under this Agreement. The Administrative Agent
14
<PAGE> 21
shall maintain accounts in which it will record (A) the principal amount of each
Loan made hereunder, the type of each Loan and the Interest Period applicable
thereto, (B) the amount of any principal or interest due and payable or to
become due and payable from the Company to each Bank hereunder and (C) the
amount of any sum received by the Administrative Agent hereunder from the
Company and each Bank's Pro Rata Share thereof. The entries made in the accounts
maintained pursuant to this paragraph shall be prima facie evidence of the
existence and amounts of the obligations therein recorded; provided, however,
that the failure of any Bank or the Administrative Agent to maintain such
accounts or any error therein shall not in any manner affect the obligation of
the Company to repay the Loans in accordance with their terms.
(c) Substitute Rate. Anything in this Agreement to the
contrary notwithstanding, if at any time prior to the determination of the rate
with respect to any proposed Loan (i) the Majority Banks in their discretion
shall determine (A) with respect to Eurodollar Loans to be made by them on the
applicable Borrowing Date of such Loan that there is a reasonable probability
that Dollar deposits will not be offered to such Banks in the interbank
eurodollar market for a period of time equal to the applicable Interest Period
in amounts equal to the amount of each such Bank's Eurodollar Loan in Dollars,
or (B) with respect to Eurocurrency Loans to be made by them on the applicable
Borrowing Date of such Eurocurrency Loan that there is a reasonable probability
that deposits in such Alternate Currency will not be offered to such Banks in
the interbank domestic eurocurrency market for a period of time equal to the
applicable Interest Period in amounts equal to each such Bank's Eurocurrency
Loan in such Alternate Currency, or (ii) the Administrative Agent in its
discretion shall determine with respect to CD Rate Loans to be made by the Banks
on the applicable Borrowing Date of such proposed Loan that bid rates will not
be provided by certificate of deposit dealers of recognized standing for the
purchase at face value of certificates of deposit of the Reference Banks for a
period of time equal to the applicable Interest Period in amounts approximately
equal or comparable to the aggregate principal amount of such Loans with a
maturity equal to the applicable Interest Period, then:
(A) the Majority Banks (acting through the Administrative
Agent) or the Administrative Agent, as the case may be, shall give the
Company notice thereof and in the case of subsection (ii) above, the
Administrative Agent shall also give the Banks notice thereof, and
(B) Alternate Base Rate Loans shall be made having an Interest
Period of 10 days in lieu of any Eurodollar Loans, Eurocurrency Loans
or CD Rate Loans, as the case may be, that were to have been made at
such time.
(d) Interest. The Loans shall bear interest as follows:
(i) Each CD Rate Loan shall be made in Dollars and shall bear
interest on the unpaid principal amount thereof from time to time
outstanding at a rate per annum (for the actual number of days elapsed,
based on a year of 360 days) which shall be equal to the lesser of (A)
the CD Rate plus the applicable Margin Percentage, or (B) the Highest
Lawful Rate.
(ii) Each Alternate Base Rate Loan shall be made in Dollars
and shall bear interest on the unpaid principal amount thereof from
time to time outstanding at a rate per annum (for the actual number of
days elapsed, based on a year of 365 or 366 days, as the case may be)
which
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shall be equal to the lesser of (A) the Alternate Base Rate, or (B)
the Highest Lawful Rate.
(iii) Each Eurodollar Loan shall be made in Dollars and shall
bear interest on the unpaid principal amount thereof from time to time
outstanding at a rate per annum (for the actual number of days elapsed,
based on a year of 360 days) which shall be equal to the lesser of (A)
the Eurodollar Rate plus the applicable Margin Percentage, or (B) the
Highest Lawful Rate.
(iv) Each Eurocurrency Loan shall be made in the Alternate
Currency specified in the applicable Notice of Alternate Currency
Borrowing and shall bear interest on the unpaid principal amount
thereof from time to time outstanding, payable in such Alternate
Currency, at a rate per annum (for the actual number of days elapsed,
based on a year of 360 days; provided that, for British pounds
sterling, and for any other Alternate Currency as to which the
Administrative Agent has delivered to the Company and to each Bank
certification in writing that as to such other Alternate Currency a 365
or 366 day year, as the case may be, is customarily used as a basis for
such calculation, on a year of 365 or 366 days, as the case may be),
which shall be equal to the lesser of (A) the Eurocurrency Rate plus
the applicable Margin Percentage, or (B) the Highest Lawful Rate;
provided, however, that the failure of the Administrative Agent to
deliver such certification to the Company and each Bank shall not
affect the basis for such calculation used by the Administrative Agent.
(v) Interest on the outstanding principal of each Loan shall
accrue from and including the Borrowing Date for such Loan to but
excluding the date such Loan is paid in full and shall be due and
payable (A) on the Interest Payment Date for each such Loan, (B) as to
any Eurodollar Loan or Eurocurrency Loan having an Interest Period
greater than three months, at the end of the third month of the
Interest Period for such Loan, (C) as to any CD Rate Loan having an
Interest Period greater than 90 days, on the 90th day of the Interest
Period for such Loan, and (D) as to all Loans, at maturity, whether by
acceleration or otherwise, or after notice of prepayment in accordance
with Section 2.01(e)(i) or Section 3.01(c) hereof, on and after the
Required Prepayment Date or the applicable prepayment date, as the case
may be, as specified in such notice.
(vi) Past due principal, whether pursuant to acceleration or
the Company's failure to make a prepayment on the date specified in the
applicable prepayment notice or otherwise, and, to the extent permitted
by applicable law, past due interest and (after the occurrence of an
Event of Default) past due fees, pursuant to acceleration or otherwise,
shall bear interest from their respective due dates, until paid, at the
Default Rate and shall be due and payable upon demand.
(e) Change of Law. (i) Anything in this Agreement to the
contrary notwithstanding, if at any time any Bank in good faith determines
(which determination shall be conclusive) that any change after the date hereof
in any applicable law, rule or regulation or in the interpretation or
administration thereof makes it unlawful, or any central bank or other
governmental authority asserts that it is unlawful (any of the above being
described as a "Eurodollar Event" or "Eurocurrency Event"), for such Bank or its
foreign branch or branches to maintain or fund any Loan in Dollars or in any
Alternate Currency by means of Dollar or Alternate Currency deposits, as the
case may be, obtained in the interbank eurodollar market, or interbank
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<PAGE> 23
domestic eurocurrency market, in the case of Eurocurrency Loans, then, at the
option of such Bank, the aggregate principal amount of each of such Bank's
Eurodollar Loans or Eurocurrency Loans, as the case may be, then outstanding,
which Loans are directly affected by such Eurodollar Events or Eurocurrency
Events, shall be prepaid in Dollars or in such Alternate Currency, as the case
may be, and any remaining obligation of such Bank hereunder to make Eurodollar
Loans (but not CD Rate Loans, Alternate Base Rate Loans or Eurocurrency Loans)
or Eurocurrency Loans in such Alternate Currency (but not Eurodollar Loans, CD
Rate Loans, Alternate Base Rate Loans or Eurocurrency Loans in another Alternate
Currency), as the case may be, shall be suspended for so long as such Eurodollar
Events or Eurocurrency Events shall continue. Upon the occurrence of any
Eurodollar Event or Eurocurrency Event, and at any time thereafter so long as
such Eurodollar Event or Eurocurrency Event shall continue, such Bank may
exercise its aforesaid option by giving written notice thereof to the
Administrative Agent and the Company. Any prepayment of any Eurodollar Loan or
Eurocurrency Loan, as the case may be, which is required under this Section
2.01(e) shall be made, together with accrued and unpaid interest and all other
amounts payable to such Bank under this Agreement with respect to such prepaid
Loan (including, without limitation, amounts payable pursuant to Section
2.01(f)), on the date stated in the notice to the Company referred to above,
which date ("Required Prepayment Date") shall be not less than 15 days (or such
earlier date as shall be necessary to comply with the relevant law, rule or
regulation) from the date of such notice. If any Eurodollar Loan or Eurocurrency
Loan, as the case may be, is required to be prepaid under this Section 2.01(e),
the Banks agree that at the written request of the Company, the Bank that has
made such Eurodollar Loan or Eurocurrency Loan, as the case may be, shall make
an Alternate Base Rate Loan or a CD Rate Loan on the Required Prepayment Date to
the Company in the same principal amount, in Dollars, or its Dollar equivalent
in Alternate Currency, as the case may be, as the Eurodollar Loan or
Eurocurrency Loan of such Bank being so prepaid. Any such written request by the
Company for Alternate Base Rate Loans or CD Rate Loans under this Section
2.01(e) shall be irrevocable and, in order to be effective, must be delivered to
the Administrative Agent not less than one Business Day prior to the Required
Prepayment Date.
(ii) Notwithstanding the foregoing, in the event the Company
is required to pay to any Bank amounts with respect to any Borrowing pursuant to
Section 2.01(e)(i), the Company may give notice to such Bank (with copies to the
Administrative Agent) that it wishes to seek one or more assignees (which may be
one or more of the Banks) to assume the Commitment of such Bank and to purchase
its outstanding Loans and the Administrative Agent will use its best efforts to
assist the Company in obtaining an assignee; provided that if more than one Bank
requests that the Company pay substantially and proportionately equal additional
amounts under Section 2.01(e)(i) and the Company elects to seek an assignee to
assume the Commitments of any of such affected Banks, the Company must seek an
assignee or assignees to assume the Commitments of all of such affected Banks.
Each Bank requesting compensation pursuant to Section 2.01(e)(i) agrees to sell
its Commitment, Loans and interest in this Agreement in accordance with Section
13.07 to any such assignee for an amount equal to the sum of the outstanding
unpaid principal of and accrued interest on such Loans in Dollars, or its Dollar
equivalent in Alternate Currency, if such Loan is an Alternate Currency Loan,
plus all other fees and amounts (including, without limitation, any compensation
claimed by such Bank under Section 2.01(e)(i) and Section 2.01(f)) due such Bank
hereunder calculated, in each case, to the date such Commitment, Loans and
interest are purchased. Upon such sale or prepayment, each such Bank shall have
no further Commitment or other obligation to the Company hereunder.
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<PAGE> 24
(f) Funding and Exchange Losses. In the event of (i) any
payment or prepayment (whether authorized or required hereunder pursuant to
acceleration or otherwise) of all or a portion of any CD Rate Loan, Eurodollar
Loan or Eurocurrency Loan on a day other than an Interest Payment Date, (ii) any
payment or prepayment (whether authorized or required hereunder pursuant to
acceleration or otherwise), of any CD Rate Loan, Eurodollar Loan or Eurocurrency
Loan made after the delivery of the Notice of Conventional Borrowing or Notice
of Alternate Currency Borrowing, as the case may be, for such CD Rate Loan,
Eurodollar Loan or Eurocurrency Loan, but before the Borrowing Date therefor, if
such payment or prepayment prevents such CD Rate Loan, Eurodollar Loan or
Eurocurrency Loan from being made in full, (iii) the failure of any Loan to be
made by any Bank due to any condition precedent to a Loan not being satisfied or
as a result of this Section 2.01 or Section 2.05(b) or due to any other action
or inaction of the Company, or (iv) the failure to pay any Alternate Currency
Loan or interest thereon in the Alternate Currency in which it was made, the
Company shall pay, in Dollars, or its Dollar equivalent in Alternate Currency,
as the case may be, if such Loan is an Alternate Currency Loan, to each affected
Bank upon its request made on or before 45 days after the occurrence of any such
event, acting through the Administrative Agent, such amount or amounts (to the
extent such amount or amounts would not be usurious under applicable law) as may
be necessary to compensate such Bank for any direct or indirect costs and losses
(including, without limitation, direct losses due to currency exchange rates and
exchange controls) incurred by such Bank (including, without limitation, such
amount or amounts as will compensate it for (A) the amount by which the rate of
interest on such Loan immediately prior to such repayment exceeds the Eurodollar
Rate, Eurocurrency Rate or the CD Rate, as the case may be, for the period from
the date of such prepayment to the Interest Payment Date with respect to such
prepaid Loan, (B) any loss incurred in liquidating or closing out any foreign
currency contract undertaken by such Bank in funding or maintaining such
Alternate Currency Loan, and (C) any loss arising from any change in the value
of Dollars in relation to any such Alternate Currency Loan which was not paid on
the date due between the date such payment was due and the date of payment, or
which was not paid in the Alternate Currency in which it was made, all as
determined by such Bank in its good faith discretion), but otherwise without
penalty. Any such claim by a Bank for compensation shall be made through the
Administrative Agent and shall be accompanied by a certificate signed by an
officer of such Bank authorized to so act on behalf of such Bank, setting forth
the computation upon which such claim is based. The obligations of the Company
under this Section 2.01(f) shall survive the termination of this Agreement
and/or the payment of the obligations hereunder.
(g) Increased Costs--Taxes, Reserve Requirements, etc. (i) The
Company for and on behalf of each Bank shall pay or cause to be paid directly to
the appropriate governmental authority or shall reimburse or compensate each
Bank upon demand by such Bank, acting through the Administrative Agent, for all
costs incurred, losses suffered or payments made, as determined by such Bank, by
reason of any and all present or future taxes (including, without limitation,
any interest equalization tax or any similar tax on the acquisition of debt
obligations), levies, imposts or any other charge of any nature whatsoever
imposed by any taxing authority, whether or not such taxes were correctly or
legally asserted, on or with regard to any aspect of the transactions with
respect to this Agreement and the Loans, except such taxes as may be measured by
the overall net income of a Bank or its Lending Office and any increase in
franchise taxes imposed by the jurisdiction, or any political subdivision or
taxing authority thereof, in which such Bank's principal executive office or its
Lending Office is located.
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(ii) The Company shall pay immediately upon demand by any
Bank, acting through the Administrative Agent, any applicable stamp and
registration taxes, duties, official and sealed paper taxes, or similar charges
due, or which under currently applicable law could in the future become due, or
which may in the future become due as a result of any change in applicable law,
the interpretation thereof, or otherwise, in connection with any Loans or this
Agreement or in connection with the enforcement hereof.
(iii) If any Bank or the Administrative Agent receives a
refund in respect of taxes for which such Bank or the Administrative Agent has
received payment from the Company hereunder, it shall promptly notify the
Company of such refund and shall, within 30 days after receipt of such refund,
repay such refund to the Company with interest if any interest is received
thereon by such Bank or the Administrative Agent; provided that the Company,
upon the request of such Bank or the Administrative Agent, agrees to return such
refund (plus penalties, interest or other charges) to such Bank or the
Administrative Agent in the event such Bank or the Administrative Agent is
required to repay such refund.
(iv) (A) The Company shall reimburse or compensate each Bank
upon demand by such Bank, acting through the Administrative Agent, for all costs
incurred, losses suffered or payments made in connection with any CD Rate Loans,
Eurodollar Loans, Eurocurrency Loans or any part thereof which costs, losses or
payments are a result of any present or future reserve, special deposit or
similar requirement against assets of, liabilities of, deposits with or for the
account of, or Loans by such Bank imposed on such Bank, its foreign lending
branch, the interbank eurodollar market or the interbank eurocurrency market by
any regulatory authority, central bank or other governmental authority, whether
or not having the force of law, including, without limitation, Regulation D.
(B) If as a result of (y) the introduction of or any change
in or in the interpretation or administration of any law or regulation or (z)
the compliance with any 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 to any Bank of agreeing to make or making, funding or maintaining
Loans for which such Bank shall not have been reimbursed pursuant to the
provisions of clause (A) above, then the Company shall from time to time, upon
demand by such Bank, acting through the Administrative Agent, pay to such Bank
additional amounts sufficient to indemnify such Bank against the full amount of
such increased cost.
(C) Any Bank claiming reimbursement or compensation under
this Section 2.01(g)(iv) shall make its demand on or before 45 days after the
end of each Interest Period during which any such cost is incurred, loss is
suffered or payment is made and shall provide the Administrative Agent, who in
turn shall provide the Company, with a written statement of the amount and basis
of its request, which statement, subject to Section 2.01(h), shall be conclusive
absent manifest error; provided that in the event any reimbursement or
compensation demanded by a Bank under this Section 2.01(g) is a result of
reserves actually maintained pursuant to the requirements imposed by Regulation
D with respect to "Eurocurrency liabilities" (as defined or within the meaning
of such Regulation), such demand shall be accompanied by a statement of such
Bank in the form of Exhibit 2.01(g)(iv) attached hereto. No Bank may request
reimbursement or compensation under this Section 2.01(g)(iv) for any period
prior to the period for which demand has been made in accordance with the
foregoing sentence. Such statement shall be conclusive and binding on the
Company, subject to Section 2.01(h),
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<PAGE> 26
except in the case of manifest error. In preparing any statement delivered under
this Section 2.01(g)(iv), such Bank may employ such assumptions and allocations
of costs and expenses as it shall in good faith deem reasonable and may be
determined by any reasonable averaging and attribution method. So long as any
notice requirement provided for herein has been satisfied, any decision by the
Administrative Agent or any Bank not to require payment of any interest, cost or
other amount payable under this Section 2.01(g)(iv), or to calculate any amount
payable by a particular method, on any occasion, shall in no way limit or be
deemed a waiver of the Administrative Agent's or such Bank's right to require
full payment of any interest, cost or other amount payable hereunder, or to
calculate any amount payable by another method, on any other or subsequent
occasion for a subsequent Interest Period.
(v) If any Bank shall have determined in good faith that any
applicable law, rule, regulation or guideline regarding capital adequacy now or
hereafter in effect, or any change therein, or any change in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Bank (or any Lending Office of such Bank) with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such governmental authority, central bank or comparable agency has the
effect of reducing the rate of return on such Bank's capital or the capital of
any corporation controlling such Bank as a consequence of its obligations
hereunder to a level below that which such Bank would have achieved as a
consequence of its obligations hereunder but for such adoption, change or
compliance (taking into consideration such Bank's policies with respect to
capital adequacy) by an amount deemed in good faith by such Bank to be material,
then from time to time, upon notice by the Bank requesting (through the
Administrative Agent) compensation, under this Section 2.01(g)(v) within a
reasonable period of time after such Bank has obtained knowledge of such event,
the Company shall pay to the Administrative Agent for the account of such Bank
such additional amount or amounts as will compensate such Bank for such
reduction. Any such claim by a Bank for compensation shall be made through the
Administrative Agent and shall be accompanied by a certificate signed by an
officer of such Bank authorized to so act on behalf of such Bank setting forth
the calculation upon which such claim is based.
(vi) Notwithstanding the foregoing, in the event the Company
is required to pay to any Bank amounts pursuant to Section 2.01(g)(iv)(A),
Section 2.01(g)(iv)(B) or Section 2.01(g)(v), the Company may give notice to
such Bank (with copies to the Administrative Agent) (A) that it wishes to seek
one or more assignees (which may be one or more of the Banks) to assume the
Commitment of such Bank and to purchase its outstanding Loans, in which case the
Administrative Agent will use its best efforts to assist the Company in
obtaining an assignee, or (B) in the case of any Bank that became a Bank
pursuant to an assignment under Section 13.07, that it wishes to terminate the
Commitment of such Bank; provided that if more than one Bank requests that the
Company pay substantially and proportionately equal additional amounts under
Section 2.01(g)(iv)(A), Section 2.01(g)(iv)(B) or Section 2.01(g)(v) and the
Company elects to seek an assignee to assume, or to terminate, the Commitments
of any of such affected Banks, the Company must seek an assignee or assignees to
assume, or must terminate, as the case may be, the Commitments of all of such
affected Banks. Each Bank requesting compensation pursuant to Section
2.01(g)(iv)(A), Section 2.01(g)(iv)(B) or Section 2.01(g)(v) agrees to sell its
Commitment, its outstanding Loans and interest in this Agreement in accordance
with Section 13.07 to any such assignee for an amount equal to the sum of, and
agrees that its Commitment shall be terminated as provided above upon payment to
it by the Company of,
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the outstanding unpaid principal of and accrued interest on its outstanding
Loans in Dollars or the Dollar equivalent in Alternate Currency, if any such
Loan is an Alternate Currency Loan, plus all other fees and amounts (including,
without limitation, any compensation claimed by such Bank under Section 2.01(f),
Section 2.01(g)(iv)(A), Section 2.01(g)(iv)(B) or Section 2.01(g)(v)) due such
Bank hereunder calculated, in each case, to the date such Commitment, Loans and
interest are purchased or such amounts are paid, as the case may be. Upon such
sale or prepayment, each such Bank shall have no further Commitment or other
obligation to the Company hereunder.
(vii) Any Bank claiming any amounts pursuant to this Section
2.01(g) shall use its reasonable good faith efforts (consistent with its
internal policies and legal and regulatory restrictions) to avoid or minimize
the payment by the Company of any amounts under this Section 2.01(g), including
changing the jurisdiction of its Lending Office; provided that no such change or
action shall be required to be made or taken if, in the reasonable judgment of
such Bank, such change would be materially disadvantageous to such Bank.
(viii) The aggregate amount payable, reimbursable or
compensable by the Company to or for the account of a Bank under this Section
2.01(g) shall not include any cost covered by the amount received by such Bank
from the Company through the Administrative Agent in connection with the
calculation of the CD Rate. The Company agrees to indemnify and hold the
Administrative Agent and each Bank harmless from and against any and all
liabilities with respect to or resulting from any delay in the payment or
omission to pay such amounts. The obligations of the Company under this Section
2.01(g) created in accordance with this Section 2.01(g) shall survive the
termination of the Commitments and/or this Agreement and/or the payment of the
obligations hereunder.
(h) Calculation Errors. Each calculation by the Administrative
Agent or any Bank with respect to amounts owing or to be owing by the Company
pursuant to this Agreement or any Loan shall be conclusive except in the case of
error. In the event the Administrative Agent determines within a reasonable time
that any such error shall have occurred in connection with the determination of
the applicable interest rate for any Loan which results in the Company paying
either more or less than the amount which would have been due and payable but
for such error, then (i) any Bank that received an overpayment or underpayment
or (ii) the Company, as the case may be, shall promptly refund or pay, as the
case may be, to the other any such overpayment or underpayment. In the event it
is determined within a reasonable time that any Bank, acting through the
Administrative Agent, has miscalculated any amount for which it has demanded
reimbursement or compensation from the Company in respect of amounts owing by
the Company other than interest which results in the Company paying more or less
than the amount which would have been due and payable but for such error, such
Bank or the Company, as the case may be, shall promptly refund or pay, as the
case may be, to the other the full amount of such overpayment or underpayment.
In the event it is determined within a reasonable time that the Company has
miscalculated the Commitment Fees or the Utilization Fee due under Section 4.01
which results in the Company paying more or less than the amount which would
have been due and payable but for such error, (y) any Bank that received an
overpayment or underpayment or (z) the Company, as the case may be, shall
promptly refund or pay, as the case may be, the full amount of the overpayment
or underpayment.
SECTION 2.02. Setoff, Counterclaims and Taxes. All payments
(whether of principal, interest, fees, reimbursements or otherwise) under this
Agreement shall be made by the Company without setoff or counterclaim
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and shall be made free and clear of and without deduction (except as
specifically contemplated in Section 2.03 below) for any present or future tax,
levy, impost, or any other charge, if any, of any nature whatsoever now or
hereafter imposed by any governmental authority (including, without limitation,
withholdings of United States taxes, except as otherwise provided in Section
2.03). Except as specifically provided in Section 2.03 below, if the making of
such payments is prohibited by law unless such tax, levy, impost, or other
charge is deducted or withheld therefrom, the Company shall pay to the
Administrative Agent for the account of each Bank, on the date of each such
payment, such additional amounts as may be necessary in order that the net
amounts received by such Bank after such deduction or withholding shall equal
the amounts in Dollars, or its Dollar equivalent in Alternate Currency, as the
case may be, which would have been received if such deduction or withholding
were not required. The Company shall confirm that all applicable taxes, if any,
imposed on this Agreement or transactions hereunder shall have been properly and
legally paid by it to the appropriate taxing authorities by sending official tax
receipts or notarized copies of such receipts to the Administrative Agent within
30 calendar days after payment of any applicable tax. Upon request of any Bank,
the Administrative Agent shall forward to such Bank a copy of such official
receipt or a copy of such notarized copy of such receipt.
SECTION 2.03. Withholding Tax Exemption. To the extent not
previously delivered, at least five Business Days prior to the first date on
which interest or fees are payable hereunder to the Banks, if any Bank is not
incorporated or organized under the laws of the United States of America, or a
state thereof, such Bank agrees that it will deliver to the Company (with a copy
to the Administrative Agent) a duly completed copy of United States Internal
Revenue Service Form 1001 or 4224, certifying in either case that such Bank is
entitled to receive payments under this Agreement without deduction or
withholding of any United States Federal income taxes. If such Bank delivers a
Form 1001 or 4224, such Bank further undertakes to deliver to the Company (with
a copy to the Administrative Agent) an additional copy of such form (or a
successor form) on or before the date that such form expires (currently, three
successive calendar years for Form 1001 and one calendar year for Form 4224) or
becomes obsolete or after the occurrence of any event requiring a change in the
most recent forms so delivered by it, and such amendments thereto or extensions
or renewals thereof as may be reasonably requested by the Company, in each case
certifying that such Bank is entitled to receive payments under this Agreement
without deduction or withholding of any United States Federal income taxes,
unless an event (including, without limitation, any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Bank from duly completing and delivering any such form with respect
to it and such Bank advises the Company (and the Administrative Agent) that it
is not capable of receiving payments without any deduction or withholding of
United States Federal income tax. In no event will any withholding by the
Company of interest payable by any Bank as contemplated by this Section 2.03
give rise to a Default under Section 10.01 with respect to payments of interest.
SECTION 2.04. Alternate Currency Loans. (a) Alternate Currency
Commitment. Subject to and upon the terms and conditions set forth in this
Agreement, each Bank severally agrees to make Alternate Currency Loans to the
Company on any one or more Business Days on or after the date hereof and prior
to the Maturity Date, up to an aggregate principal amount of Alternate Currency
Loans (calculated in its Dollar equivalent) not exceeding at any one time
outstanding an amount equal to such Bank's Alternate Currency Commitment;
provided, however, in no event shall the aggregate outstanding
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<PAGE> 29
principal amount of Conventional Loans, Discretionary Loans and Alternate
Currency Loans (each calculated in its Dollar equivalent) made by any Bank
exceed such Bank's Commitment; provided, further, that in no event shall the
aggregate outstanding principal amount of all Alternate Currency Loans and
Discretionary Loans made in a Discretionary Alternate Currency (each calculated
in its Dollar equivalent) made by all Banks exceed $500,000,000. Each Alternate
Currency Borrowing shall be in an aggregate amount of not less than $3,000,000
(or the equivalent thereof in any Alternate Currency), and an integral multiple
of $250,000 (or the equivalent thereof in any Alternate Currency). Each
Alternate Currency Borrowing shall be made simultaneously from the Banks ratably
according to their Pro Rata Shares of their respective Alternate Currency
Commitments and shall consist of Eurocurrency Loans with the same Interest
Period made in the same currency from each Bank. Within such limits and during
such period, the Company may borrow, repay and reborrow under this Section
2.04(a) (including, without limitation, reborrowings for the sole purpose of
refinancing any Loan). The Company hereby unconditionally promises to pay to the
Administrative Agent for the account of each Bank the then unpaid principal
amount of each Alternate Currency Loan on the Interest Payment Date for such
Alternate Currency Loan. For purposes of this Section 2.04(a) and all other
provisions of this Article II, the equivalent in Dollars of any Alternate
Currency or the equivalent in any Alternate Currency of Dollars shall be
determined in accordance with Section 2.05(a). Each Alternate Currency Loan
shall be a Loan evidenced in accordance with Section 2.01(b)(ii), shall
constitute a Eurocurrency Loan which bears interest pursuant to Section
2.01(d)(iv) hereof and shall be repaid in the same currency in which it was
made.
(b) Alternate Currency Borrowing Procedure. Each Alternate
Currency Loan under this Section 2.04 shall be made on at least three Business
Days' prior written or oral notice from the Company to the Administrative Agent
by 10:00 a.m. Dallas, Texas time (and the Administrative Agent shall, upon
receipt of such notice provide to each Bank prior oral or written notice by 3:00
p.m. (Dallas, Texas time) on the date such notice is received by the
Administrative Agent) ("Notice of Alternate Currency Borrowing"); provided,
however, with respect to each oral Notice of Alternate Currency Borrowing, the
Company shall deliver promptly to the Administrative Agent a confirmatory
written Notice of Alternate Currency Borrowing, and upon receipt of such notice
the Administrative Agent shall promptly notify each Bank of such notice. Each
Notice of Alternate Currency Borrowing shall be irrevocable and shall specify:
(i) the total principal amount of the proposed Alternate Currency Loan, (ii) the
applicable Interest Period for such Alternate Currency Loan (which may not
extend beyond the Maturity Date), (iii) the Borrowing Date, (iv) the currency of
such Borrowing and (v) the demand deposit account of the Company into which the
funds with respect to such Alternate Currency Borrowing shall be deposited.
(c) Each Bank shall, before 11:00 a.m., Dallas, Texas time, on
the date of each such Alternate Currency Borrowing, make available to the
Administrative Agent in the case of a Borrowing in an Alternate Currency, at the
office of Chase Texas, its Affiliates or its correspondent banks, for such
Alternate Currency (as such office shall have been notified by the
Administrative Agent to the Banks reasonably prior thereto) in same day funds,
such Bank's Pro Rata Share of such Alternate Currency Borrowing in such
Alternate Currency. After the Administrative Agent's receipt of such funds and
upon fulfillment of the applicable conditions set forth in Article VII, the
Administrative Agent will make such funds available to the Company at the demand
deposit account of the Company designated by the Company in its Notice of
Alternate Currency Borrowing.
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SECTION 2.05. Currency Equivalents. (a) For purposes of the
provisions of this Agreement, (i) the equivalent in Dollars of any Alternate
Currency and (ii) the equivalent in any Alternate Currency of Dollars shall be
determined by using the quoted spot rate at which Chase Texas or any Affiliate
of Chase Texas offers to exchange Dollars for such Alternate Currency in New
York City, at 10:00 a.m. (Dallas, Texas time) two Business Days prior to the
date on which such equivalent is to be determined pursuant to the provisions of
this Agreement (subject to Section 4.01(c) with respect to calculation of the
Commitment Fees and the Utilization Fee) and the Administrative Agent shall
notify each affected Bank of such determination on such date. The equivalent in
Dollars of each Loan made in an Alternate Currency shall be recalculated
hereunder on each date that it shall be necessary to determine the unused
portion of each Bank's Commitment or Alternate Currency Commitment, or the
amount of any or all Loans outstanding on such date.
(b) In the event that there shall occur on or prior to the
date of an Alternate Currency Borrowing any material adverse change in national
or international financial, political or economic conditions or currency
exchange rates or exchange controls which would in the opinion of the Majority
Banks make it impracticable for the Eurocurrency Loans comprising such Alternate
Currency Borrowing to be denominated in the Alternate Currency specified by the
Company, then the Administrative Agent shall forthwith give notice thereof to
the Company and the Banks, and such Loans shall not be denominated in such
Alternate Currency but shall be made on the date of such Borrowing in Dollars as
Alternate Base Rate Loans, unless the Company shall have notified the
Administrative Agent at least two Business Days before such date that it elects
not to borrow on such date.
SECTION 2.06. Discretionary Loans. (a) Each Bank may, in its
sole discretion and on terms and conditions in writing satisfactory to it and
the Company that are not inconsistent with the provisions of this Agreement,
make additional Loans to the Company under its Commitment in Dollars, or in a
Discretionary Alternate Currency, as the case may be, on any one or more
Business Days on or after the date hereof and prior to the Maturity Date, which
Discretionary Loans will be payable to the appropriate Bank upon such terms and
conditions; provided, however, that the Company will not permit to remain
outstanding any Discretionary Loans from any Bank, and no Bank will make any
Discretionary Loans to the Company, if the aggregate principal amount of the
Discretionary Loans and the Alternate Currency Loans (each calculated in its
Dollar equivalent, as applicable) and the Conventional Loans payable to such
Bank exceeds such Bank's Commitment. Should any Discretionary Loan be
outstanding from any Bank on a date on which a Conventional Borrowing or an
Alternate Currency Borrowing is to be made, such Conventional Borrowing or
Alternate Currency Borrowing shall be made available only if the Company has
paid or shall simultaneously with the making of such Conventional Borrowing or
Alternate Currency Borrowing, pay such portions of Discretionary Loans
(including, without limitation, the payment of the amount of any losses payable
pursuant to Section 2.01(f) actually incurred by such Bank as a result of such
prepayment) as shall be necessary to make available a portion of each Bank's
Commitment at least equal to such Bank's Pro Rata Share of such Conventional
Borrowing or Alternate Currency Borrowing. No Discretionary Loan shall have a
maturity date or interest period that extends beyond the Maturity Date. Each
Bank shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness to such Bank resulting from each Discretionary Loan
made by such Bank. The entries made in the accounts maintained pursuant to this
Section 2.06 (a) shall be prima facie evidence of the existence and amounts of
the obligations therein recorded; provided, however, that the
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failure of any Bank to maintain such accounts or any error therein shall not in
any manner affect the obligation of the Company to repay the Discretionary Loans
in accordance with their terms. The Company hereby unconditionally promises to
pay to each Bank the then unpaid principal amount of each Discretionary Loan
made by such Bank on the earlier of the Maturity Date and the date on which such
principal amount is due pursuant to the terms of such Discretionary Loan.
(b) Promptly upon written request of the Administrative Agent,
each Bank will certify in writing the borrowing date, the principal amount in
Dollars, or its Dollar equivalent if such Loan is in a Discretionary Alternate
Currency, and the maturity date of any Discretionary Loans made during any
period for which the Commitment Fees and the Utilization Fee under Section 4.01
are to be calculated. The Company agrees to certify to the Administrative Agent
on or before each Quarterly Date the Borrowing Date, the principal amount in
Dollars, or its Dollar equivalent if such Loan is in a Discretionary Alternate
Currency, the maturity date and the lending Bank for all Discretionary Loans
made during any period for which the Commitment Fees and the Utilization Fee
under Section 4.01 are to be calculated.
SECTION 2.07. Obligations Several, Not Joint. The obligations
of the Banks hereunder are several and not joint. The failure of any Bank to
make the Loan to be made by it as part of any borrowing shall not relieve any
other Bank of its obligation to make its Loan on the date of such borrowing, and
no Bank shall be responsible for the failure of any other Bank to make the Loan
to be made by such other Bank on the date of any borrowing.
ARTICLE III
Optional and Required Prepayments; Interest
Payment Date; Other Payments
SECTION 3.01. Optional Prepayments. Loans may be prepaid in
whole or from time to time in part at the option of the Company on any Business
Day, without premium or penalty, notwithstanding that such Business Day is not
an Interest Payment Date, provided that:
(a) losses, if any, incurred by any Bank under Section 2.01(f)
shall be payable with respect to each such prepayment of any such CD
Rate Loan, Eurodollar Loan or Eurocurrency Loan; and
(b) all partial prepayments shall be in an aggregate principal
amount of at least $2,000,000 and an integral multiple of $100,000, or
the Dollar equivalent in an Alternate Currency, as the case may be; and
(c) the Company shall give the Administrative Agent not less
than one full Business Day's prior oral or written notice of each
prepayment of any Eurodollar Loans, Eurocurrency Loans or CD Rate
Loans, or any portion thereof, and notice to the Administrative Agent
not less than 9:00 a.m., Dallas, Texas time on the same day of the
prepayment of Alternate Base Rate Loans, or any portion thereof,
proposed to be made pursuant to this Section 3.01, specifying the
aggregate principal amount of the Loans to be prepaid and the
prepayment date; provided, however, with respect to each oral notice of
a prepayment, the Company shall deliver promptly (and in any event, no
later than two Business Days after the giving of such oral notice) to
the Administrative Agent a confirmatory written notice of such proposed
prepayment. The Administrative Agent shall promptly notify the Banks of
the principal
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amount to be prepaid and the prepayment date. Notice of such prepayment
shall be irrevocable and having been given as aforesaid, the principal
amount specified in such notice, together with accrued and unpaid
interest thereon to the date of prepayment, shall become due and
payable on such prepayment date, and the provisions of Section 2.01(f)
shall be applicable. The Company shall have no optional right to prepay
the principal amount of any Loan other than as provided in this Section
3.01.
SECTION 3.02. Required Prepayments. (a) If the Company shall
reduce or terminate the respective Commitments of the Banks pursuant to Section
4.02, it will prepay to each Bank on the effective date of any such reduction or
termination:
(i) in the case of a reduction of the Commitments, that part
of such unpaid principal amount outstanding of the Conventional Loans,
the Alternate Currency Loans and the Discretionary Loans, each
calculated in its Dollar equivalent, as applicable, held by such Bank
that exceeds the amount of the Commitment of such Bank immediately
after such reduction and that part of such unpaid principal amount
outstanding of the Alternate Currency Loans calculated in its Dollar
equivalent held by such Bank that exceeds the amount of the Alternate
Currency Commitment of such Bank immediately after giving effect to
such reduction; and
(ii) in the case of termination of the Commitments, the entire
unpaid principal amount of the Conventional Loans, the Alternate
Currency Loans and the Discretionary Loans, each calculated in its
Dollar equivalent, as applicable;
together, in each case, with accrued and unpaid interest on the amount being so
prepaid and all other amounts accrued and owing under this Agreement on such
date.
(b) (i) If on any Borrowing Date the principal amount
outstanding of the Conventional Loans, Discretionary Loans and Alternate
Currency Loans (calculated in its Dollar equivalent), as the case may be, made
to the Company by any Bank shall exceed the Commitment of such Bank, or the
Alternate Currency Loans (calculated in its Dollar equivalent) shall exceed the
Alternate Currency Commitment of such Bank, the Company shall promptly pay to
such Bank an amount equal to such excess, together with accrued and unpaid
interest on the amount so prepaid and all other amounts accrued and owing under
this Agreement on such date; and
(ii) if during any Prepayment Period the Company or any of its
Restricted Subsidiaries shall (A) sell, assign, transfer or otherwise dispose of
any Cash Flow Producing Asset (other than (i) dispositions of inventory in the
ordinary course of business or (ii) sales or transfers of capital stock or
assets to the Company or a Restricted Subsidiary) or (B) incur Debt for borrowed
money (other than (i) Debt incurred under this Agreement, the Facility A
Agreement or outstanding commercial paper in respect of which Commitments under
this Agreement or the Facility A Agreement are used to provide backup liquidity
and (ii) Debt incurred to finance the purchase by the Company or its Restricted
Subsidiaries of assets or capital stock (other than capital stock of the Company
or its Restricted Subsidiaries) not otherwise provided for in the Company's
annual capital expenditure budget or Debt incurred to refinance such Debt), then
the Company or such Restricted Subsidiary shall promptly apply an amount equal
to 50% of the Net Cash Proceeds of such sale, assignment, transfer, disposition
or incurrence to the
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prepayment of Loans under this Agreement and the Facility A Agreement and the
Commitments under this Agreement and the Facility A Agreement shall be reduced
by the respective amounts so prepaid thereunder; provided, that if in connection
with the disposition of any such capital stock or Cash Flow Producing Asset, the
Company shall advise the Administrative Agent that it intends to use the Net
Cash Proceeds of such disposition to acquire Cash Flow Producing Assets to be
owned by the Company or a Restricted Subsidiary, then (i) the Commitments will
not be reduced as required by this Section 3.02(b)(ii) to the extent the amount
prepaid or a portion thereof shall have been reborrowed within 12 months after
the date of such disposition and used to acquire such Cash Flow Producing
Assets, and (ii) during such 12 month period an amount of the Commitments equal
to the amount so prepaid will be restricted and the Company will be entitled to
reborrow such amount as provided herein only upon a certification to the
Administrative Agent that the proceeds of such borrowing will be promptly
applied to acquire such Cash Flow Producing Assets; and provided further that
prepayments and reductions required under clause (B) shall be made only at each
time that the aggregate amount of payments and reductions required but not made
shall equal an amount not less than $50,000,000, at which time Loans shall be
prepaid and Commitments reduced in such aggregate amount.
(c) Notwithstanding the foregoing, (i) no prepayment shall be
required under Section 3.02(b)(ii) with respect to an aggregate of $10,000,000
of Net Cash Proceeds and (ii) in the event any prepayment required by Section
3.02(b)(ii) to be made under this Agreement and the Facility A Agreement shall
be in an amount less than $2,000,000, such prepayment may be deferred until the
aggregate amount of the prepayments deferred in reliance on this provision and
the corresponding provision of the Facility A Agreement shall exceed $2,000,000,
at which time all such prepayments shall be promptly made and the Commitments
correspondingly reduced (except as otherwise provided in Section 3.02(b)(ii)).
In the event any prepayment required by Section 3.02(a) or Section 3.02(b) with
respect to any Loan would become due on a date that is not an Interest Payment
Date and as a result thereof the Company would incur liabilities under Section
2.01(f), the Company shall make such prepayment to the Administrative Agent on
the due date; provided, however, that interest shall continue to accrue on any
Loan so prepaid and shall be paid by the Company to the Administrative Agent on
the applicable Interest Payment Date. So long as no Default or Event of Default
shall occur or shall have occurred and be continuing, the Administrative Agent
shall hold the proceeds of such prepayment for the benefit of the Banks, in an
interest bearing account, until such time as such proceeds can be applied
towards payment of the Loans in accordance with the provisions of this Agreement
without resulting in any liability to the Company under Section 2.01(f). All
interest which may accrue on such amounts so held in escrow shall be held by the
Administrative Agent for the benefit of the Company.
(d) All prepayments made pursuant to the provisions of this
Section 3.02 shall be applied, (i) in the case of Conventional Loans, first,
towards payment of all Alternate Base Rate Loans, as the Company directs, and
secondly, and subject to the provisions of Section 2.01(f), towards payment of
the appropriate amount of CD Rate Loans and Eurodollar Loans, as the Company
directs and (ii) in the case of Alternate Currency Loans, and subject to the
provisions of Section 2.01(f), towards payment of all Eurocurrency Loans. The
Company shall have no right to reborrow any amount prepaid under Section 3.02(a)
or, except as expressly provided therein, Section 3.02(b)(ii).
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SECTION 3.03. Interest Payment Date. The Company shall repay
the principal amount of each Loan on the Interest Payment Date, or if earlier,
the Maturity Date, for such Loan; provided that, the Company may reborrow in
accordance with Section 2.01(a), Section 2.01(b), Section 2.04 or Section 2.06
for the purpose of refinancing any Loan. All principal payments of Loans shall
be accompanied by accrued and unpaid interest on the principal amount being
repaid to the date of payment.
SECTION 3.04. Place, etc. of Payments and Prepayments. (a) All
payments and prepayments made in accordance with the provisions of this
Agreement (other than with respect to Alternate Currency Loans and Discretionary
Loans made in a Discretionary Alternate Currency) in respect of the Commitment
Fees or the Utilization Fee and the Administrative Agent's fee and of principal
of and interest on the Loans (other than with respect to Discretionary Loans)
shall be made to the Administrative Agent in Dollars at its office at 2200 Ross
Avenue, Dallas, Texas 75201, in immediately available funds for the accounts of
the Banks. All payments and prepayments made in accordance with the provisions
of this Agreement in respect of the Alternate Currency Loans shall be made in
the applicable Alternate Currency to the Administrative Agent at such office of
TCB, its Affiliates or its correspondents, as shall be from time to time
selected by the Administrative Agent and notified by the Administrative Agent to
the Company and the Banks. The Administrative Agent will promptly distribute to
the Banks, in accordance with each Bank's Pro Rata Share as to all Loans (other
than Discretionary Loans), in immediately available funds, the amount of
principal, interest, Commitment Fees and Utilization Fees received by the
Administrative Agent for the account of the Banks; provided that if interest
shall accrue on any Loan at a rate different from the rate applicable to any
other Loan, payment and distribution of interest shall be based on the
respective accrual rates applicable to such Loan. Any payment to the
Administrative Agent for the account of a Bank under this Agreement shall
constitute payment by the Company to such Bank of the amounts so paid to the
Administrative Agent, and any Loan or portions thereof so paid shall not be
considered outstanding for any purpose after the date of such payment to the
Administrative Agent. Any amount payable by the Administrative Agent to the
Banks under this Agreement in the currency of a Participating Member State shall
be paid in the Euro Unit.
(b) Payments by the Administrative Agent Generally. With
respect to the payment of any amount denominated in the Euro or in a National
Currency Unit, the Administrative Agent shall not be liable to the Borrower or
any of the Banks in any way whatsoever for any delay, or the consequences of any
delay, in the crediting to any account of any amount required by this Agreement
to be paid by the Administrative Agent if the Administrative Agent shall have
taken all relevant steps to achieve, on the date required by this Agreement, the
payment of such amount in immediately available, freely transferable, cleared
funds (in the Euro Unit or, as the case may be, in a National Currency Unit) to
the account with the bank in the principal financial center in the Participating
Member State which the Borrower or, as the case may be, any Bank shall have
specified for such purpose. In this paragraph (b), "all relevant steps" means
all such steps as may be prescribed from time to time by the regulations or
operating procedures of such clearing or settlement system as the Administrative
Agent may from time to time determine for the purpose of clearing or settling
payments of the Euro.
SECTION 3.05. Basis of Accrual. If the basis of accrual of
interest or fees expressed in this Agreement with respect to the currency of any
state that becomes a Participating Member State shall be inconsistent with any
convention or practice in the London Interbank Market for the basis of accrual
of interest or fees in respect of the Euro, such convention or
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practice shall replace such expressed basis effective as of and from the date on
which such state becomes a participating member state; provided, that if any
Loan in the currency of such state is outstanding immediately prior to such
date, such replacement shall take effect, with respect to such Loan, at the end
of the then current Interest Period for such Loan.
SECTION 3.06. Rounding and Other Consequential Changes.
Without prejudice and in addition to any method of conversion or rounding
prescribed by any EMU legislation and without prejudice to the respective
liabilities of the Borrower to the Banks and the Banks to the Borrower under or
pursuant to this Agreement:
(i) each reference in this Agreement to a minimum amount (or
an integral multiple thereof) in a National Currency Unit to be paid to
or by the Administrative Agent shall be replaced by a reference to such
reasonably comparable and convenient amount (or an integral multiple
thereof) in the Euro Unit as the Administrative Agent may from time to
time specify; and
(ii) except as expressly provided in this Section 3.06, each
provision of this Agreement shall be subject to such reasonable changes
of construction as the Administrative Agent may from time to time
specify to be necessary or appropriate to reflect the introduction of
or changeover to the Euro in Participating Member States.
ARTICLE IV
Fees; Reduction of Commitments
SECTION 4.01. Commitment Fees; Utilization Fee. (a) The
Company agrees to pay to the Administrative Agent for the account of each Bank
in Dollars, Commitment Fees, computed on a daily basis of a year of 365 or 366
days, as the case may be, from the date hereof to and including the Maturity
Date at a rate per annum equal to the applicable Margin Percentage from time to
time in effect on the daily average unused amount of the Commitment of such Bank
(taking into account all Conventional Loans, Alternate Currency Loans and
Discretionary Loans, of such Bank outstanding on the dates covered by such
calculation). Each such Commitment Fee shall be payable on or before the
fifteenth day following each Quarterly Date and on the Maturity Date or on such
earlier date as the Commitment of such Bank shall terminate pursuant to the
terms of this Agreement.
(b) The Company agrees to pay to the Administrative Agent for
the account of each Bank in Dollars a Utilization Fee ("Utilization Fee"),
computed on a daily basis of a year of 365 or 366 days, as the case may be, from
the date hereof to and including the Maturity Date at the rate of (i) .0625% per
annum on the daily average aggregate amount of the outstanding Loans (excluding
Discretionary Loans) of such Bank hereunder during any calendar quarter (or
shorter period) in which the average daily aggregate amount of such Loans
outstanding under this Agreement (including all outstanding Discretionary Loans)
exceeds 33-1/3% of the aggregate Commitments hereunder but is less than or equal
to 66-2/3% of such Commitments or (ii) .1250% per annum on the daily average
aggregate amount of the outstanding Loans (excluding Discretionary Loans) of
such Bank hereunder during any calendar quarter (or shorter period) in which the
average daily aggregate amount of such Loans (including all outstanding
Discretionary Loans) exceeds 66-2/3% of such Commitments; provided, that no
Utilization Fee shall be payable for any calendar quarter if the Leverage Ratio
at the end of
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the most recent fiscal quarter ended at least 60 days (or during the first
fiscal quarter of any year, at least 90 days) earlier shall have been less than
3.5 to 1.0. Each such Utilization Fee shall be payable on or before the
fifteenth day following each Quarterly Date and on the Maturity Date or on such
earlier date as the Commitments shall terminate pursuant to the terms of this
Agreement.
(c) For purposes of determining the unused portion of each
Bank's Commitment solely in order to calculate the Commitment Fees under Section
4.01(a) and the Utilization Fee under Section 4.01(b), the equivalent in Dollars
of each Eurocurrency Loan made by such Bank in an Alternate Currency, as
determined in accordance with Section 2.05 (provided that the calculation shall
be made two Business Days prior to the Borrowing Date with respect to such Loan,
rather than at the date specified in Section 2.05) shall be the amount of such
Bank's Commitment used in connection with such Loan, and no further adjustments
shall be made with respect to the unused portion of such Bank's Commitment based
upon fluctuations thereafter in the value of the Alternate Currency of such
Loan.
SECTION 4.02. Reduction or Termination of Commitments. The
Company may at any time or from time to time reduce ratably in proportion to
their respective Commitments or terminate in whole, the respective Commitments
of the Banks hereunder by giving not less than five full Business Days' prior
written notice to such effect to the Administrative Agent; provided that any
partial reduction shall be in an aggregate amount of not less than $3,000,000
and an integral multiple of $250,000; provided, further, that the Commitments
may not be reduced to an amount less than the aggregate principal amount of
Discretionary Loans and Conventional Loans (and the Alternate Currency
Commitments may not be reduced as provided below to an amount less than the
aggregate principal amount of the outstanding Alternate Currency Loans and the
Discretionary Loans made in a Discretionary Alternate Currency, each calculated
in its Dollar equivalent) outstanding at such time, unless simultaneously
therewith the Company shall make a prepayment in accordance with Section 3.02(a)
hereof. In the event of any prepayment of the Loans outstanding hereunder
pursuant to Section 3.02(b)(ii), the Commitments shall be ratably reduced by the
amount of such prepayment to the extent provided in Section 3.02(b)(ii). Any
reduction of the Commitments pursuant to this Section 4.02 shall reduce the
Alternate Currency Commitments proportionately; provided, that in no event shall
the Alternate Currency Commitments be reduced to an amount less than the lesser
of (a) $300,000,000 and (b) the aggregate amount of the Commitments. The
Administrative Agent shall promptly notify each Bank of its Pro Rata Share of
and of the date of each reduction of the Commitments. After each such reduction,
the Commitment Fees owing to each Bank shall be calculated upon the Commitment
of such Bank as so reduced. In the event of acceleration of the maturity date of
any Loan, the Commitments hereunder of the Banks shall thereupon automatically
terminate without notice. Each reduction or any termination of the Commitments
hereunder shall be irrevocable.
ARTICLE V
Application of Proceeds
The Company agrees that the proceeds of the Loans hereunder
shall be used by the Company for general corporate purposes, including the
repayment of maturing commercial paper.
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ARTICLE VI
Representations and Warranties
The Company represents and warrants that:
SECTION 6.01. Organization; Qualification; Subsidiaries. The
Company and each Subsidiary (i) is duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation or organization,
(ii) has corporate or other power to own its properties and to carry on its
business as now conducted, and (iii) is duly qualified as a foreign corporation
or partnership to do business and is in good standing in every jurisdiction
where failure to be duly qualified would materially and adversely affect the
business, properties or financial condition of the Company and its Subsidiaries
on a consolidated basis or the ability of the Company to perform its obligations
under this Agreement. Attached hereto as Exhibit 6.01 is a correct and complete
list setting forth, as of the date of this Agreement: (A) the name of each
Subsidiary, (B) the title and number of such outstanding shares, if any, owned
by Persons other than the Company or any Subsidiary, (C) the name and address of
each such other Person, and (D) whether such Subsidiary is a Restricted or
Unrestricted Subsidiary. All shares of capital stock of Restricted Subsidiaries
owned by the Company or any Restricted Subsidiary are owned thereby free and
clear of all liens, claims and encumbrances.
SECTION 6.02. Financial Statements. The Company has furnished
each Bank with the consolidated financial statements for the Company and its
Subsidiaries as at and for its fiscal year ended December 31, 1998 accompanied
by the opinion of Deloitte & Touche, and quarterly consolidated financial
statements as at and for the period ended June 30, 1999. Such statements have
been prepared in conformity with GAAP consistently applied throughout the period
involved, except as may be explained in such opinion. Such statements fairly
present the financial condition of the Company and its Subsidiaries on a
consolidated basis and the results of its and their operations as at the dates
and for the periods indicated. There has been no material adverse change in the
financial condition or the business or properties of the Company and its
Subsidiaries on a consolidated basis since June 30, 1999; provided, however,
that for purposes of this sentence, the provisions of the Cable Television
Consumer Protection and Competition Act of 1992 and the Telecommunications Act
of 1996 and the regulations adopted by the FCC pursuant to such statutes that
are in effect as of the date hereof shall not be considered.
SECTION 6.03. Actions Pending. Except as disclosed in Exhibit
6.03 attached hereto, there is no action, suit or proceeding pending or, to the
knowledge of the Company, threatened against the Company or any Subsidiary
before any court or administrative agency or other governmental authority which
might (although in the opinion of the Company such actions, suits and
proceedings would not reasonably be expected to) result in any material adverse
change in the business, properties or financial condition of the Company and its
Subsidiaries on a consolidated basis or impair the ability of the Company to
perform its obligations under this Agreement.
SECTION 6.04. Default. Neither the Company nor any Subsidiary
is (i) in default under the provisions of any instrument evidencing any Debt or
any other liability, contingent or otherwise, or of any agreement relating
thereto or (ii) in default under or in violation of any order, writ, injunction
or decree of any court, or in default under or in violation of any order,
regulation or demand of any governmental instrumentality, other than
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for such defaults or violations under clauses (i) and (ii) above which taken in
the aggregate do not materially and adversely affect the business, properties or
financial condition of the Company and its Subsidiaries on a consolidated basis
or impair the ability of the Company to perform its obligations under this
Agreement.
SECTION 6.05. Title to Assets. The Company and each Restricted
Subsidiary (i) have good and marketable title to their respective real property
assets and (ii) good title to their respective personal property assets, in each
case, subject to no liens, security interests or other encumbrances except those
permitted by Section 9.01.
SECTION 6.06. Payment of Taxes. The Company and each
Subsidiary have filed all Federal and state income and franchise tax returns, or
extensions therefor, which, to the knowledge of the officers thereof, are
required to be filed and have paid all taxes shown on said returns and all
assessments which are due. The Company and its officers know of no claims by any
governmental authority for any unpaid taxes which claims in the aggregate could
reasonably be expected to result in a material and adverse effect on the
business, properties or financial condition of the Company and its Subsidiaries
on a consolidated basis.
SECTION 6.07. Conflicting or Adverse Agreements or
Restrictions. Neither the Company nor any Subsidiary is a party to any contract
or agreement or subject to any restriction which materially and adversely
affects the business, properties or financial condition of the Company and its
Subsidiaries on a consolidated basis. Neither the execution nor delivery of this
Agreement nor compliance with the terms and provisions hereof or of any
instruments required hereby will be contrary to the provisions of, or constitute
a default under, (i) the charter or by-laws of the Company or any Subsidiary or
(ii) any law or any regulation, order, writ, injunction or decree of any court
or governmental authority or any material agreement to which the Company or any
Subsidiary is a party or by which it is bound or to which it is subject if such
noncompliance or defaults referred to in this clause (ii) could in the aggregate
have a material adverse effect on the business, properties or financial
condition of the Company and its Subsidiaries on a consolidated basis or impair
the ability of the Company to perform its obligations under this Agreement.
SECTION 6.08. Purpose of Loans. Neither the Company nor any
Subsidiary is engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or carrying Margin
Stock. This Agreement and the transactions contemplated hereby comply in all
respects with Regulations U, T and X and all other regulations of the Board of
Governors of the Federal Reserve System. Neither the Company nor any agent
acting on its behalf has taken or will take any action which would cause this
Agreement to violate Regulation U, T or X or any other regulation of the Board
of Governors of the Federal Reserve System or to violate the Securities Exchange
Act of 1934, in each case as in effect now or as the same may hereafter be in
effect on the date of any Loan.
SECTION 6.09. Authority; Validity. The Company has the
corporate power and authority to make and carry out this Agreement and the
transactions contemplated herein, to make the borrowings provided for herein and
to perform its obligations hereunder; and all such action has been duly
authorized by all necessary corporate proceedings on its part. This Agreement
has been duly and validly executed and delivered by the Company and constitutes
a valid and legally binding agreement of the Company, enforceable in accordance
with its terms, except as enforcement may be limited by
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bankruptcy, insolvency or other laws of general application relating to or
affecting the enforcement of creditors' rights and general principles of equity.
SECTION 6.10. Consents or Approvals. No order, consent,
approval, license, authorization or validation of any governmental authority and
no registration or filing with or notice to any governmental authority is
necessary to authorize or permit, or is required in connection with, the
execution and delivery of this Agreement, the making of borrowings pursuant
hereto or the performance of the obligations of the Company hereunder.
SECTION 6.11. Compliance with Law. Neither the Company nor any
of its Subsidiaries are in violation of any Federal, state or local laws or
orders affecting the Company or any Subsidiary or any of their businesses and
operations which taken alone, or in the aggregate, could reasonably be expected
to have a material and adverse effect on the business, properties or financial
condition of the Company and its Subsidiaries, on a consolidated basis, or could
reasonably be expected to impair the ability of the Company to perform its
obligations under this Agreement. Neither the Company nor any Subsidiary has
failed to obtain any license, permit, franchise, consent or authorization of any
governmental authority necessary to the ownership of its properties or the
operation of its business, which failure could reasonably be expected to have a
material and adverse effect on the business, properties or financial condition
of the Company and its Subsidiaries on a consolidated basis or could reasonably
be expected to impair the ability of the Company to perform its obligations
under this Agreement.
SECTION 6.12. ERISA. The Company and its Subsidiaries are in
compliance in all material respects with the applicable provisions of ERISA.
Neither the Company nor any Subsidiary, taken individually or in the aggregate,
has incurred any material accumulated funding deficiency within the meaning of
ERISA or Section 4971 of the Internal Revenue Code of 1986, as amended, or has
incurred any material liability to the Pension Benefit Guaranty Corporation
established under ERISA, or any successor thereto under ERISA (the "PBGC"), in
connection with any Plan. None of the Company, any Subsidiary or any member of a
"controlled group of corporations" or "combined group of trades or businesses
under common control" as such terms are defined, respectively, in Sections
414(b) and (c) of the Internal Revenue Code of 1986, as amended, is required to
contribute to any "multiemployer plan" (as such term is defined in Section
4001(a)(3) of ERISA) or has withdrawn from any multiemployer plan where such
contribution obligation or withdrawal has resulted or could result in any
"withdrawal liability" (as such term is defined in Section 4201 of ERISA) which
could reasonably be expected to have a Materially Adverse Effect.
SECTION 6.13. Investment Company Act. Neither the Company nor
any Subsidiary (i) is an investment company as that term is defined in the
Investment Company Act of 1940, as amended, (ii) directly or indirectly controls
or is controlled by a company which is an investment company as that term is
defined in the Investment Company Act of 1940, as amended, or (iii) is otherwise
subject to regulation under the Investment Company Act of 1940, as amended.
SECTION 6.14. Disclosure. All material information furnished
by or on behalf of the Company in writing to the Administrative Agent or any
Bank pursuant to the terms of this Agreement (a) in the Confidential Information
Memorandum dated September 1999 or (b) after the date hereof and, in either
case, concerning the historical operations of the Company, did not or will not,
as the case may be, when made, include any untrue statement of a material fact
or omit to state any material fact necessary to make the
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statements therein, in light of the circumstances under which they were or are
made, not materially misleading.
SECTION 6.15. Material Franchise Agreements. The Franchise
Agreements are described on Exhibit 6.15 attached hereto. With respect to the
Material Franchise Agreements, except as set forth on Exhibit 6.15 hereto:
(a) the Material Franchise Agreements are legal, valid and
binding agreements of the Company or a Subsidiary of the Company and to
the Company's knowledge, each other party thereto and are in full force
and effect, except to the extent that certain Material Franchise
Agreements may have expired in accordance with their terms as of the
date this representation and warranty is made or deemed made;
(b) neither the Company nor any Subsidiary of the Company is
materially in default or breach of (with or without the giving of
notice or passage of time, and no franchiser has asserted in writing
that the Company or a Subsidiary of the Company is materially in
default or breach of (with or without the giving of notice or passage
of time)), the Material Franchise Agreements;
(c) to the Company's knowledge, the other parties to the
Material Franchise Agreements are not materially in violation thereof,
and
(d) neither the Company nor any Subsidiary of the Company has
waived any rights under the Material Franchise Agreements where such
waiver would have a material adverse effect on the business, properties
or financial condition of the Company and its Subsidiaries on a
consolidated basis.
SECTION 6.16. Insurance. The Company and each Subsidiary
maintains insurance of such types as is usually carried by corporations of
established reputation engaged in the same or similar businesses and similarly
situated with financially sound and reputable insurance companies or
associations (or, as to workers' compensation or similar insurance, with an
insurance fund or by self-insurance authorized by the jurisdiction in which its
operations are carried on) and in such amounts (and with co-insurance and
deductibles) as such insurance is usually carried by corporations of established
reputation engaged in the same or similar businesses and similarly situated.
SECTION 6.17. Quality of CATV Systems. The materials and
workmanship used in the construction and operation of the CATV Systems are of
sufficient quality to conform in all material respects with applicable standards
and regulations of the FCC or any other appropriate governmental or regulatory
authority.
SECTION 6.18. Environmental and Safety Matters. The Company
and each Subsidiary has complied in all material respects with all Federal,
state, local and other statutes, ordinances, orders, judgments, rulings and
regulations relating to environmental pollution or to environmental regulation
or control or to employee health or safety. To the best knowledge of the
Company's executive officers, neither the Company nor any Subsidiary has
received notice of any material failure so to comply. The Company's and the
Subsidiaries' plants do not manage any hazardous wastes, hazardous substances,
hazardous materials, toxic substances, toxic pollutants or substances similarly
denominated, as those terms or similar terms are used in the Resource
Conservation and Recovery Act, the Comprehensive Environmental
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<PAGE> 41
Response Compensation and Liability Act, the Hazardous Materials Transportation
Act, the Toxic Substance Control Act, the Clean Air Act, the Clean Water Act or
any other applicable law relating to environmental pollution or employee health
and safety generally, in violation in any material respect of any law or any
regulations promulgated pursuant thereto. The Company is aware of no events,
conditions or circumstances involving environmental pollution or contamination
or employee health or safety that could reasonably be expected to result in a
material adverse effect on the business, properties or financial condition of
the Company and its Subsidiaries on a consolidated basis.
SECTION 6.19. Year 2000 Compliance. The Company is taking such
actions and devoting such resources that, in the good faith exercise of its
business judgment, it believes to be reasonably necessary to permit the proper
functioning, in and following the year 2000, of (i) material computer systems
of the Company and its Subsidiaries and (ii) material equipment containing
embedded microchips (including systems and equipment supplied by others or with
which the systems of the Company or its Subsidiaries interface). The cost to
the Company and its Subsidiaries of such actions and of the reasonably
foreseeable consequences of year 2000 to the Company and its Subsidiaries
(including, without limitation, reprogramming errors and the failure of others'
systems or equipment) will not result in a Default or a Materially Adverse
Effect. The Company believes that, subject to testing and completion of the
actions referred to above, the computer and management information systems of
the Company and its Subsidiaries are and, with ordinary course upgrading and
maintenance, will continue to be, sufficient to permit the Company and its
Subsidiaries to conduct their business without a Materially Adverse Effect.
ARTICLE VII
Conditions
SECTION 7.01. Conditions Precedent to Effectiveness and to
Initial Borrowing. (1) The obligations of the Banks to extend credit hereunder
is subject to the satisfaction of the following conditions:
(a) the Administrative Agent shall have received executed
counterparts of this Agreement which, when taken together, bear the
signatures of each of the parties hereto.
(b) the Administrative Agent shall have received on behalf of
the Banks all such evidence as it shall reasonably have requested as to
the corporate power and authority of the Company to enter into and
borrow under this Agreement and to perform its obligations hereunder;
(c) the Administrative Agent shall have received on behalf of
the Banks (i) from Counsel and Special FCC Counsel for the Company,
their opinions, dated the date hereof, substantially in the forms
attached hereto as Exhibit 7.01(c)(i) and (ii) from Counsel for the
Administrative Agent, its opinion, dated the date hereof, substantially
in the form attached hereto as Exhibit 7.01(c)(ii);
(d) the Administrative Agent shall have received on behalf of
the Banks an Officer's Certificate, dated the date hereof,
substantially in the form attached hereto as Exhibit 7.01(d);
(e) no Default shall have occurred and be continuing or shall
occur after giving effect to the Company's execution of this Agreement;
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<PAGE> 42
(f) after giving effect to the Company's execution of this
Agreement, the representations and warranties made by the Company in
Article VI (except those that expressly relate to a prior date) shall
be true on in all material respects and as of the date hereof;
(g) the Administrative Agent shall have received all interest,
fees and other amounts accrued under the Existing Credit Agreement on
or prior to the date hereof (whether or not at the time due and
payable), including to the extent invoiced, reimbursement or payment of
all out-of-pocket expenses required to be reimbursed or paid by the
Company hereunder; and
(h) No loans under the Existing Agreement shall be outstanding
as of the date hereof.
SECTION 7.02. Conditions Precedent to Each Borrowing. The
obligation of the Banks to fund each Borrowing (including, without limitation,
the initial Borrowing after the date of this Agreement) is subject to the
following:
(a) No Event of Default shall have occurred and be continuing
or shall occur after giving effect to such Borrowing and the application of the
proceeds thereof, and each Borrowing shall be deemed to constitute a
representation and warranty by the Company on the applicable Borrowing Date to
such effect.
(b) The Administrative Agent shall have received by telecopy,
or otherwise, the Notice of Conventional Borrowing required by Section 2.01(b)
or Notice of Alternate Currency Borrowing required by Section 2.04(b).
(c) The Company shall have delivered to the Administrative
Agent and each Bank such certificates and other documents as are otherwise
required under this Agreement.
SECTION 7.03. Conditions Precedent to Borrowings that Increase
Principal Outstanding. The obligation of the Banks to fund each Loan (including,
without limitation, the initial Loans to be made by the Banks to the Company
hereunder after the date of this Agreement), which has the effect of increasing
the aggregate outstanding principal amount of Loans of any Bank on the
applicable Borrowing Date is subject, in addition to the conditions set forth in
Section 7.02, to the following conditions:
(a) After giving effect to such Borrowing and the application
of the proceeds thereof, the representations and warranties contained
in Article VI, other than the representations and warranties made by
the Company in the last sentence of Section 6.02 and in Sections 6.03
and 6.04 and those that expressly relate to a prior date, shall be true
in all material respects on and as of the particular Borrowing Date as
though made on and as of such date and each such Borrowing shall be
deemed to constitute a representation and warranty by the Company on
the applicable Borrowing Date as to the matters set forth in Article VI
(other than the representations and warranties made by the Company in
the last sentence of Section 6.02 and in Sections 6.03 and 6.04 and
those that expressly relate to a prior date).
(b) Except as otherwise set forth therein, or in certificates
accompanying such financial statements, the most recent financial
statements delivered to the Banks pursuant to Section 8.02 shall fairly
present the financial condition of the Company and its Subsidiaries on
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<PAGE> 43
a consolidated basis and the results of its and their operations as at
the dates and for the periods indicated. Each such Borrowing shall be
deemed to constitute a representation and warranty by the Company on
the applicable Borrowing Date to such effect.
(c) No Default shall have occurred and be continuing or shall
occur after giving effect to such Borrowing and the application of the
proceeds thereof, and each Borrowing shall be deemed to constitute a
representation and warranty by the Company on the applicable Borrowing
Date to such effect.
(d) The Company shall have delivered to the Administrative
Agent and each Bank such certificates and other documents as are
otherwise required under this Agreement.
SECTION 7.04. Conditions Precedent to the Initial Borrowing
After the Effectiveness of this Agreement. The obligation of the Banks to fund
the initial Conventional Loan and, unless otherwise agreed, the initial
Discretionary Loan on or after the date of this Agreement is subject, in
addition to the conditions set forth above, to the following condition:
No material adverse change shall have occurred in the
financial condition or the business, operations or properties of the
Company and its Subsidiaries on a consolidated basis since June 30,
1999.
ARTICLE VIII
Affirmative Covenants
The Company covenants and agrees that, until payment in full
of the obligations and termination of the Commitments hereunder, the Company
will:
SECTION 8.01. Certain Financial Covenants. Maintain at all
times during each period set forth below:
(a) a Leverage Ratio of not more than the ratio set forth
opposite such period:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
Initial Leverage Ratio Date through and including 6.0 to 1.0
December 31, 2000
January 1, 2001 through and including December 31, 2001 5.5 to 1.0
January 1, 2002 and thereafter 5.0 to 1.0; and
</TABLE>
(b) a ratio of Pro-forma Consolidated Annualized Operating
Cash Flow to Consolidated Annualized Interest Expense of not less than
2.0 to 1.0 at any time.
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SECTION 8.02. Financial Statements and Information. Deliver to
each of the Banks in duplicate:
(a) as soon as available, and in any event within 90 days,
after the end of each fiscal year (i) a copy of the consolidated annual
audited financial statements of the Company and its Subsidiaries for
such fiscal year containing a balance sheet, an income statement, a
statement of shareholders' equity and a consolidated statement of cash
flows, all in reasonable detail, together with the unqualified opinion
of Deloitte & Touche or another independent certified public accountant
of recognized standing satisfactory to the Banks, that such statements
have been prepared in accordance with generally accepted accounting
principles, consistently applied, except as may be explained in such
opinion, and fairly present the financial condition of the Company and
its Subsidiaries on a consolidated basis and the results of its and
their operations as at the dates and for the periods indicated and (ii)
a copy of the reconciliation sheet, certified by the chief financial
officer of the Company, setting forth the adjustments required to the
consolidated audited financial statements of the Company and its
Subsidiaries referred to above in this paragraph (a) in order to arrive
at the consolidated financial statements of the Company and its
Restricted Subsidiaries;
(b) as soon as available, and in any event within 60 days,
after the end of each of the first three quarterly accounting periods
in each fiscal year (i) a copy of the consolidated unaudited financial
statements of the Company and its Subsidiaries as at the end of such
quarter and for the period then ended, containing a balance sheet, an
income statement, a statement of shareholders' equity and a
consolidated statement of cash flows, all in reasonable detail and
certified by a financial officer of the Company to have been prepared
in accordance with GAAP, consistently applied (subject to year end
audit adjustments and except for the absence of footnotes), except as
may be explained in such certificate, and as fairly presenting the
financial condition of the Company and its Subsidiaries on a
consolidated basis and the results of its and their operations as at
the dates and for the periods indicated and (ii) a copy of the
reconciliation sheet, certified by the chief financial officer of the
Company, setting forth the adjustments required to the consolidated
quarterly financial statements of the Company and its Subsidiaries
referred to above in this paragraph (b) in order to arrive at the
consolidated financial statements of the Company and its Restricted
Subsidiaries;
(c) promptly after the filing thereof, copies of all
statements and reports filed with the Securities and Exchange
Commission other than Form S-8 registration statements and other
reports relating to employee benefit plans, supplements to registration
statements relating solely to the pricing of securities offerings for
which registration statements were previously filed and delivered and
Forms D;
(d) promptly after any officer of the Company obtains
knowledge of an Event of Default or Default, an Officer's Certificate
specifying the nature of such Event of Default or Default, the period
of existence thereof, and what action the Company has taken and
proposes to take with respect thereto;
(e) promptly upon the Company's or any Subsidiary's receipt
thereof, copies of all notices received from the FCC regarding the
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<PAGE> 45
termination, cancelation, revocation or taking of any other adverse
action with respect to any Material FCC Licenses;
(f) promptly upon the Company's or any Subsidiary's receipt
thereof, copies of any notice received from any franchisors regarding
the termination, cancelation or revocation of Franchise Agreements in
connection with CATV Systems constituting 20% or more at any time of
aggregate Basic Subscribers of the Company and its Subsidiaries;
(g) together with the delivery of the financial statements
required under clauses (a) and (b) of this Section 8.02, the Company
shall deliver to the Administrative Agent a report setting forth with
respect to the Company and its Subsidiaries (i) the number of Homes
Passed by cable, (ii) the number of Basic Subscribers, and (iii) the
number of Pay Units, in each case as of the end of the preceding fiscal
quarter or fiscal year, as the case may be; and
(h) promptly after request, such additional financial or other
information as the Administrative Agent or any Bank acting through the
Administrative Agent may reasonably request from time to time.
All financial statements specified in clauses (a) and (b)
above shall be furnished with comparative consolidated figures for the
corresponding period in the preceding year. Together with each delivery of
financial statements required by clauses (a) and (b) above, the Company will
deliver to each Bank (i) such schedules, computations and other information as
may be required to demonstrate that the Company is in compliance with its
covenants in Sections 8.01, 9.01(g), 9.02, 9.03 and 9.06 or reflecting any
non-compliance therewith as at the applicable date, and (ii) an Officer's
Certificate stating that there exists no Event of Default or, to the knowledge
of such officer, any Default, or, if any such Event of Default or, to the
knowledge of such officer, any Default exists, stating the nature thereof, the
period of existence thereof, and what action the Company has taken and proposes
to take with respect thereto. Together with each delivery of financial
statements required by clause (a) above, the Company will deliver to each Bank a
written statement of said accountants that, in making the audit necessary to the
certification of such financial statements, they have obtained no knowledge of
any Event of Default or Default, or, if such accountants shall have obtained
knowledge of any Event of Default or Default, they shall specify the nature and
period of existence thereof in such statement; provided, that such accountants
shall not be liable directly or indirectly to any Bank for failure to obtain
knowledge of any Event of Default or Default. Each Bank is authorized to deliver
a copy of any financial statement delivered to it to any regulatory body having
jurisdiction over it and to any other Person as may be required by applicable
law, rules and regulations.
SECTION 8.03. Existence, Laws, Obligations. Maintain its
corporate existence, comply and cause its Subsidiaries to comply, in all
respects material to the financial condition, business and properties of the
Company and its Subsidiaries on a consolidated basis, with all applicable laws
and regulations and pay and cause its Subsidiaries to pay all taxes,
assessments, governmental charges and other obligations which if unpaid might
become a lien against the Property of the Company or a Subsidiary, except
liabilities being contested in good faith by appropriate proceedings.
SECTION 8.04. Notice of Litigation and Other Matters. Promptly
notify the Administrative Agent in writing of (i) any action, suit or proceeding
pending or to the knowledge of the Company threatened, before any
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<PAGE> 46
governmental authority (including, without limitation, any bankruptcy or similar
proceeding by or against the Company or any Subsidiary) which, in the reasonable
view of the Company, if adversely determined or during the pendency thereof,
would materially impair the ability of the Company and its Subsidiaries on a
consolidated basis to carry on their businesses substantially as now being
conducted or would materially and adversely affect the financial condition,
business, operations or properties of the Company and its Restricted
Subsidiaries on a consolidated basis or would impair the ability of the Company
to perform its obligations under this Agreement, (ii) any action or development
which, in the view of the Company, might reasonably be expected to materially
impair the ability of the Company and its Subsidiaries on a consolidated basis
to carry on their businesses substantially as now being conducted or would
materially and adversely affect the financial condition, business, operations or
properties of the Company and its Subsidiaries on a consolidated basis or would
impair the ability of the Company to perform its obligations under this
Agreement, (iii) the failure of any Unrestricted Subsidiary to pay when due
(after giving effect to any grace period permitted from time to time) any Debt
of such Unrestricted Subsidiary, the outstanding amount of which exceeds,
singularly or in the aggregate, $25,000,000, or the holder of which Debt
declares, or may declare, such Debt due prior to its stated maturity because of
the occurrence of a default or other event thereunder or with respect thereto
and (iv) any revocation, suspension or expiration of FCC licenses which,
individually or in the aggregate, are material to the operations of the Company
and the Restricted Subsidiaries on a consolidated basis (the "Material FCC
Licenses").
SECTION 8.05. Books and Records. Maintain, and cause its
Subsidiaries to maintain, proper books of record and account in accordance with
GAAP, consistently applied.
SECTION 8.06. Inspection of Property and Records. Permit any
Person designated in writing by the Administrative Agent or any Bank (i) to
visit and inspect any of the properties of the Company and any Restricted
Subsidiary and discuss its and their respective affairs and finances with its
and their respective principal officers and to inspect any of the corporate
books and financial records of the Company and any Restricted Subsidiary and
(ii) from and after the occurrence of an Event of Default, to make copies of and
abstracts from the books and records of account of the Company and its
Restricted Subsidiaries, in each case all upon reasonable prior notice and at
such times as the Administrative Agent or any Bank may reasonably request.
SECTION 8.07. Maintenance of Property, Insurance. Cause its
Property and the Property of its Subsidiaries to be maintained, preserved and
protected and kept in good repair, working order and condition so as not to
materially and adversely affect the business carried on in connection therewith
and maintain, and cause its Subsidiaries to maintain, insurance with responsible
companies in such amounts and against such risks as is reasonably deemed
appropriate by the Company.
SECTION 8.08. ERISA. Comply, and cause each Subsidiary to
comply, in all material respects with the applicable provisions of ERISA and
furnish to the Administrative Agent (i) as soon as possible, and in any event
within 30 days after the Company or a duly appointed administrator of a Plan
files or is required to file, with respect to any Plan, any notice of a
"reportable event" (as such term is defined in Section 4043 of ERISA) for which
the notice requirement has not been waived by the PBGC (provided that notice
shall be required for reportable events arising from the disqualification of a
Plan or the distress termination of a Plan (in accordance with ERISA Section
4041(c)) without regard to the waiver of notice
40
<PAGE> 47
provided by the PBGC by regulation or otherwise), a statement of the chief
financial officer of the Company setting forth details as to such reportable
event and the action which the Company, or such Subsidiary, as the case may be,
proposes to take with respect thereto, together with a copy of the notice of
such reportable event given to the PBGC and (ii) promptly after receipt thereof,
a copy of any notice the Company, any Subsidiary or any member of the controlled
group of corporations may receive from the PBGC relating to the intention of the
PBGC to terminate any Plan pursuant to Section 4042 of ERISA.
SECTION 8.09. Maintenance of Business Lines. Maintain and
cause its Restricted Subsidiaries to maintain lines of business in cable
television and related lines of business that are similar in scope to the
existing business lines and operations of the Company and its Restricted
Subsidiaries.
SECTION 8.10. Compliance with Material Franchise Agreements.
The Company will maintain, and will cause each Subsidiary to maintain, in full
force and effect at all times during the term of this Agreement, and will
materially comply with, and will cause each Subsidiary to materially comply
with, the terms and provisions of, the Material Franchise Agreements and the
Material FCC Licenses.
SECTION 8.11. Restricted/Unrestricted Designation of
Subsidiaries. The Company will be permitted to designate a Restricted Subsidiary
as an Unrestricted Subsidiary or an Unrestricted Subsidiary as a Restricted
Subsidiary by the delivery to the Administrative Agent of a written notice
certifying that all conditions set forth in this Section 8.11 are satisfied as
of the effective date of such designation, which certification shall state the
effective date of such designation and shall set forth the computations and
information as may be required to demonstrate that the Company is in compliance
with this Section 8.11 and shall be signed by a financial officer of the
Company, provided, that, (a) no Default or Event of Default shall exist
immediately before or after the effective date of any such designation; and (b)
the Company shall not designate as Unrestricted Subsidiaries during any period
of 12 consecutive months Restricted Subsidiaries as to which the Attributable
Amount shall exceed 15% of Pro-forma Consolidated Annualized Operating Cash Flow
excluding therefrom the Attributable Amount of the Unrestricted Subsidiaries
which have been designated as Restricted Subsidiaries during such period.
SECTION 8.12. Capital Expenditure Budget. The Company will
prepare its annual capital expenditure budget in a manner consistent in all
material respects with past practice.
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ARTICLE IX
Negative Covenants
Until payment in full of the obligations and termination of
the Commitments hereunder:
SECTION 9.01. Mortgages, etc. The Company will not and will
not permit any Restricted Subsidiary to create or permit to exist any lien,
encumbrance, or security interest (including the charge upon assets purchased
under a conditional sales agreement, purchase money mortgage, security
agreement, or other title retention agreement) upon any of its assets, whether
now owned or hereafter acquired, or assign or otherwise convey any right to
receive income, except
(a) liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings;
(b) other liens, encumbrances and security interests
incidental to the conduct of its business or the ownership of its
assets which were not incurred in connection with the borrowing of
money, and which do not in the aggregate materially detract from the
value of its assets or materially impair the use thereof in the
operation of its business;
(c) liens and security interests on assets of a Restricted
Subsidiary to secure obligations of such Restricted Subsidiary to the
Company or a Wholly Owned Restricted Subsidiary;
(d) liens and security interests existing on the date hereof
which are (i) both (y) described in Exhibit 9.01(d) attached hereto and
(z) reflected in the consolidated financial statements of the Company
referred to in Section 6.02 and (ii) liens and security interests on
Property that were existing at the time of the acquisition thereof by
the Company or any Restricted Subsidiary or placed thereon to secure a
portion of the purchase price thereof described in Exhibit 9.01(d);
(e) liens and security interests on Property acquired after
the date hereof existing at the time of acquisition thereof by the
Company or any Restricted Subsidiary or placed thereon within one year
of such acquisition to secure a portion of the purchase price thereof,
provided that no such lien or security interest may encumber or cover
any other Property of such Restricted Subsidiary, of the Company or of
any other Restricted Subsidiary;
(f) liens, encumbrances and security interests on the stock of
Unrestricted Subsidiaries;
(g) liens on Excess Margin Stock owned by the Company and its
Restricted Subsidiaries; and
(h) other liens and security interests (in addition to those
permitted pursuant to Section 9.01(e)) on Property of the Company and
its Restricted Subsidiaries that secure Debt of the Company and its
Restricted Subsidiaries in an amount which, when taken together with
all other outstanding secured Debt incurred in reliance on this clause
(h) and, without duplication, all outstanding Debt of Restricted
Subsidiaries incurred in reliance on clause (b) of Section 9.02, does
not at the time it is incurred exceed 20% of Pro-forma Consolidated
Annualized Operating Cash Flow.
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SECTION 9.02. Debt. The Company will not permit any Restricted
Subsidiary to create, incur or suffer to exist any Debt except:
(a) Debt outstanding on the date hereof which is reflected in
the consolidated financial statements of the Company referred to in
Section 6.02; and
(b) additional Debt in an amount which, when taken together
with all other outstanding Debt incurred in reliance on this clause (b)
and, without duplication, all outstanding Debt of the Company and its
Restricted Subsidiaries secured by liens incurred in reliance on clause
(h) of Section 9.01, does not at the time it is incurred exceed 20% of
Pro-forma Consolidated Annualized Operating Cash Flow.
SECTION 9.03. Merger; Consolidation; Disposition of Assets.
The Company will not merge or consolidate with any Person unless the Company
shall be the continuing or surviving corporation and both before and after
giving effect to such merger or consolidation no Default or Event of Default
shall exist. The Company will not and will not permit any Restricted Subsidiary
to sell, lease or transfer or otherwise dispose of (whether in one transaction
or a series of transactions) any Cash Flow Producing Assets, other than sales of
inventory in the ordinary course of business and sales of stock of Unrestricted
Subsidiaries or Margin Stock to any Person and other than dispositions to the
Company and its Restricted Subsidiaries, unless both before and after giving
effect to such disposition no Default or Event of Default shall exist.
Notwithstanding the foregoing, the Company and its Restricted Subsidiaries may
at any time sell, lease, transfer or otherwise dispose of Cash Flow Producing
Assets with an Attributable Amount (a) which, when taken together with the
Attributable Amount of all other Cash Flow Producing Assets disposed of in
reliance on this sentence and the Attributable Amount of those Restricted
Subsidiaries which have been designated as Unrestricted Subsidiaries (reduced by
the Attributable Amount of those Unrestricted Subsidiaries which have been
redesignated as Restricted Subsidiaries) pursuant to Section 8.11, in each case
during the current fiscal quarter and the three immediately preceding fiscal
quarters, does not exceed 30% of Pro-forma Consolidated Annualized Operating
Cash Flow, and (b) which, when taken together with the Attributable Amount of
all other Cash Flow Producing Assets disposed of in reliance on this sentence
and the Attributable Amount of those Restricted Subsidiaries which have been
designated as Unrestricted Subsidiaries (reduced by the Attributable Amount of
those Unrestricted Subsidiaries which have been redesignated as Restricted
Subsidiaries) pursuant to Section 8.11, in each case since January 24, 1995,
does not exceed 50% of Pro-forma Consolidated Annualized Operating Cash Flow, in
each case excluding therefrom the Attributable Amount relating to the
disposition of those Cash Flow Producing Assets for which the Company shall have
used the Net Cash Proceeds thereof to acquire Cash Flow Producing Assets. For
purposes of the foregoing, Pro-forma Consolidated Annualized Operating Cash Flow
shall in each case be determined without giving effect to the disposition in
respect of which the tests set forth in clauses (a) and (b) of the preceding
sentence are being applied. The Company and the Restricted Subsidiaries shall,
in connection with any disposition permitted by this Section, comply with their
obligations under Section 3.02(b)(ii).
SECTION 9.04. Restricted Payments. The Company will not, and
will not permit any Subsidiary to, pay or declare dividends (exclusive of stock
dividends and cash dividends paid by the Subsidiaries to the Company or to
Restricted Subsidiaries) or redeem or acquire, directly or indirectly, any of
the stock of the Company or such Subsidiary or any warrant or option to
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purchase any of such stock (any of the foregoing, a "Restricted Payment") during
any fiscal year in an aggregate amount equal to the greater of (a) $25,000,000
or (b) 5% of Pro-forma Consolidated Annualized Operating Cash Flow determined as
of the Company's most recent fiscal year end if at the time of each such
Restricted Payment, and after giving effect thereto on a pro-forma basis as if
each Restricted Payment had occurred on the first day of the fiscal quarter most
recently ended, the Leverage Ratio would exceed 5.0 to 1.0.
SECTION 9.05. Limitation on Margin Stock. The Company will not
and will not permit any Restricted Subsidiary to own or acquire Margin Stock
such that at any time (i) Margin Stock of the Company and its Restricted
Subsidiaries other than stock of Unrestricted Subsidiaries represents more than
40% of the value of the assets of the Company and its Subsidiaries on a
consolidated basis that would be subject to Section 9.01 or Section 9.03 but for
the exclusion of Excess Margin Stock from the restrictions of such Sections.
SECTION 9.06. Loans and Advances to and Investments in
Unrestricted Subsidiaries. At any time when (a) the Company shall not have
outstanding Index Debt that is investment grade rated by two of Moody's, S&P and
Fitch and (b) the Leverage Ratio exceeds (or would exceed on a pro forma basis
after giving effect to a transaction of the sort referred to in this Section
9.06 as if it had occurred at the beginning of any relevant quarter) 5.5 to 1.0,
the Company will not and will not permit any Restricted Subsidiary to make any
loan or advance to, or make any capital contribution to or other investment in,
any Unrestricted Subsidiary unless (i) in the case of a loan, advance or other
investment, such loan, advance or other investment is on terms which are no less
favorable to the Company or such Restricted Subsidiary, as the case may be, than
would obtain in a comparable arm's length transaction with an unaffiliated
Person, and (ii) in each case at the time of the making of any such loan,
advance, capital contribution or investment no Default or Event of Default has
occurred and is continuing and after giving effect to such loan, advance,
capital contribution or investment no Default or Event of Default would occur.
SECTION 9.07. Transactions with Affiliates. The Company will
not, and will not permit any Restricted Subsidiary to, directly or indirectly
enter into any transaction or series of transactions, whether or not in the
ordinary course of business, with any Affiliate other than (a) transactions with
the Company or one or more Subsidiaries that are otherwise permitted by this
Agreement, (b) transactions on terms and conditions substantially as favorable
to the Company or such Restricted Subsidiary as would be obtainable by the
Company or such Restricted Subsidiary at the time in comparable arm's length
transactions with persons other than Affiliates, (c) transactions involving the
Company and its Restricted Subsidiaries exclusively and (d) any executive or
employee incentive or compensation plan, contract or other arrangement
(including any loans or extensions of credit in connection therewith) if such
plan, contract or arrangement is approved either by the stockholders of the
Company (in accordance with such voting requirements as may be applicable) or by
the Board of Directors of the Company at a meeting at which a quorum of
disinterested directors is present.
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ARTICLE X
Events of Default
Upon (i) the occurrence of any Event of Default specified in
Sections 10.10, 10.11, 10.12 or 10.13, (x) the unpaid principal amount of, and
all accrued but unpaid interest on, all Loans outstanding (including all
Discretionary Loans) and any other amounts payable hereunder shall automatically
become immediately due and payable without presentment, demand, protest, notice
of intent to accelerate or other notice of any kind to the Company, all of which
are hereby expressly waived and (y) the obligation of the Banks to make Loans
hereunder shall immediately terminate and (ii) the occurrence and during the
continuance of any other Event of Default and upon the written request of the
Majority Banks, the Administrative Agent shall, by notice to the Company, (x)
declare the obligation of the Banks to make Loans hereunder to be immediately
terminated, and the same shall forthwith be terminated, and/or (y) declare all
Loans then outstanding (including all Discretionary Loans) and any other amount
payable hereunder to be, and the same shall forthwith become, immediately due
and payable without presentment, demand, protest, notice of intent to accelerate
or other notice of any kind to the Company, all of which are hereby expressly
waived.
SECTION 10.01. Failure To Pay Principal or Interest. The
Company does not pay or prepay any principal of any Loan on the date due
(whether at stated maturity, by acceleration, by notice of prepayment, under
Section 2.01, 3.01 or 3.02 or otherwise) or the Company does not pay or prepay
any interest on any Loan (i) on or before five days after actual receipt of oral
or written notice from the Administrative Agent, or the applicable Bank with
respect to any Discretionary Loan, as to the amount of interest due, but in no
event shall the Company be required to pay or prepay any such interest prior to
the date due, or (ii) within 10 days after the due date thereof if no notice is
actually received by the Company from the Administrative Agent with respect to
the amount of interest due; or
SECTION 10.02. Failure To Pay Other Sums. The Company does not
pay any sums (other than payments of principal and interest on any Loan covered
by Section 10.01) payable to the Administrative Agent or any Bank under the
terms of this Agreement within 10 days after the date due (or, in the case of
the Commitment Fees or the Utilization Fee payable to the Administrative Agent,
the Commitment Fees or the Utilization Fee for the account of each Bank pursuant
to Section 4.01, 10 days after written notice of nonpayment has been received by
the Company from the Administrative Agent or any Bank); or
SECTION 10.03. Failure To Pay Other Debt.
(i) The Company or any Restricted Subsidiary does not pay when due any other
Debt of the Company or any Restricted Subsidiary, the outstanding amount of
which exceeds, singularly or in the aggregate, $25,000,000 in respect of which
any applicable grace period has expired; (ii) the Company or any Restricted
Subsidiary shall otherwise default under any other Debt of the Company or any
Restricted Subsidiary, the outstanding amount of which exceeds, singularly or
in the aggregate, $25,000,000, in respect of which any applicable notice has
been given and such Debt has been declared due prior to any maturity thereof,
provided that, during the continuance of any applicable grace period with
respect thereto, such event shall constitute a Default (but not an Event of
Default) hereunder; or (iii) an Event of Default shall occur and be continuing
under the Facility A Agreement; or
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SECTION 10.04. Misrepresentation or Breach of Warranty. (i)
Any representation or warranty made by the Company herein when made or deemed
made by the Company pursuant hereto shall be incorrect in any material respect
or (ii) any other information (other than projections and similar
forward-looking information) provided by the Company pursuant to this Agreement
after the date hereof, shall, when made, include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they are made, not
materially misleading; or
SECTION 10.05. Violation of Certain Covenants. The Company
violates any covenant, agreement or condition contained in Article V or Section
8.01 or Section 8.02(d) or Article IX; or
SECTION 10.06. Violation of Other Covenants, etc. The Company
violates any other covenant, agreement or condition contained herein and such
violation shall not have been remedied within 30 days after written notice has
been received by the Company from the Administrative Agent or any Bank; or
SECTION 10.07. Undischarged Judgment. Final judgment for the
payment of money in excess of $15,000,000 shall be rendered against the Company
or any Restricted Subsidiary and the same shall remain undischarged for a period
of 30 days during which period execution shall not be effectively stayed; or
SECTION 10.08. ERISA. (a) A "reportable event" (as such term
is defined in Section 4043 of ERISA) shall have occurred with respect to any
Plan and within 30 days after the reporting of any such reportable event to the
Administrative Agent, the Administrative Agent shall have notified the Company
in writing that the Majority Banks have made a determination that, on the basis
of such reportable event, there is a substantial likelihood that such Plan will
be terminated by the PBGC or (b) the PBGC has instituted proceedings to
terminate any Plan and the effect of either of the foregoing would reasonably be
expected to have a Materially Adverse Effect.
SECTION 10.09. Change of Control. A Change of Control shall
have occurred.
SECTION 10.10. Assignment for Benefit of Creditors or
Nonpayment of Debts. The Company or any Restricted Subsidiary makes an
assignment for the benefit of creditors or is generally not paying its debts as
such debts become due; or
SECTION 10.11. Voluntary Bankruptcy. The Company or any
Restricted Subsidiary petitions or applies to any tribunal for or consents to
the appointment of, or taking possession by, a trustee, receiver, custodian,
liquidator or similar official, of the Company or any Restricted Subsidiary, or
of any substantial part of the assets of the Company or any Restricted
Subsidiary, or commences any case or proceedings relating to the Company or any
Restricted Subsidiary under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or other liquidation law of any
jurisdiction; or
SECTION 10.12. Involuntary Bankruptcy. An involuntary
proceeding is commenced or an involuntary petition is filed in a court of
competent jurisdiction seeking (i) relief in respect of the Company or any
Restricted Subsidiary, or of a substantial part of the property or assets of the
Company or a Restricted Subsidiary, under Title 11 of the United States
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Code, as now constituted or hereafter amended, or any other Federal or state
bankruptcy, insolvency, receivership or similar law or (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official for
the Company or any Restricted Subsidiary or for a substantial part of the
property or assets of the Company or Restricted Subsidiary; and such proceeding
or petition shall continue undismissed for 60 days or an order or decree
approving or ordering any of the foregoing shall be entered; or
SECTION 10.13. Dissolution. Any order is entered in any
proceeding against the Company or any Restricted Subsidiary decreeing the
dissolution or split-up of the Company or such Restricted Subsidiary, and such
order remains unstayed and in effect for 60 days.
ARTICLE XI
Modifications, Amendments or Waivers
Any of the provisions of this Agreement may from time to time
be modified or amended by, or waived with the written consent of, the Majority
Banks; provided that no such waiver, modification or amendment may be made which
will:
(a) Reduce or increase the amount or alter the term of the
Commitment of any Bank hereunder, other than as permitted by Section
4.02, without the prior written consent of such Bank; or
(b) Extend the stated maturity of or the time for payment of
interest on any Loan or the time for payment of any fee, or waive an
Event of Default with respect to payment of any principal, interest, or
fee, or reduce the principal amount of or the rate of interest on any
Loan, or reduce the amount of any fee, or otherwise affect the terms of
payment of any such fee, without the prior written consent of each
affected Bank; or
(c) Change the definition of Majority Banks without the prior
written consent of all the Banks; or
(d) Waive, modify or amend the provisions of this Article XI,
Section 13.07(a) or any other provision of this Agreement requiring the
ratable distribution of payments among the Banks without the prior
written consent of all the Banks; or
(e) Waive, modify or amend the provisions of Article XII
without the prior written consent of the Administrative Agent and the
Majority Banks.
No failure or delay on the part of the Administrative Agent or
any Bank in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or remedy or any abandonment or discontinuance of steps to enforce such a
power, right or remedy preclude any other or further exercise thereof or the
exercise of any other power, right or remedy hereunder. The remedies provided
for in this Agreement are cumulative and not exclusive of any remedies provided
by law or in equity. No modification or waiver of any provision of this
Agreement or consent to any departure by the Company therefrom shall in any
event be effective unless the same shall be in writing, and then such waiver or
consent shall be effective only in the
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specific instance and for the purpose for which given. No notice to or demand on
the Company in any case shall entitle the Company to any other or further notice
or demand in similar or other circumstances.
ARTICLE XII
The Administrative Agent
SECTION 12.01. Appointment of Administrative Agent. Each of
the Banks irrevocably appoints and authorizes the Administrative Agent to act on
its behalf under this Agreement, and to exercise such powers hereunder as are
specifically delegated to or required of the Administrative Agent by the terms
hereof, together with such powers as may be reasonably incidental thereto. As to
any matters not expressly provided for by this Agreement, the Administrative
Agent shall not be required to exercise any discretion or take any action, but
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, and such instructions shall be binding upon all Banks; provided, however,
that the Administrative Agent shall not be required to take any action which
exposes the Administrative Agent to personal liability or which is contrary to
this Agreement or applicable law.
SECTION 12.02. Indemnification of Administrative Agent. The
Administrative Agent shall not be required to take any action hereunder or to
prosecute or defend any suit in respect of this Agreement, unless indemnified to
its reasonable satisfaction by the Banks against loss, cost, liability and
expense. If any indemnity furnished to the Administrative Agent shall become
impaired, it may call for additional indemnity and cease to do the acts
indemnified against until such additional indemnity is given. In addition, the
Banks agree to indemnify the Administrative Agent (to the extent not reimbursed
by the Company), ratably according to the respective principal amounts
(determined in its Dollar equivalent with respect to any such amounts that
represent Alternate Currency Loans outstanding) of the Loans then held by each
of them (or if no Loans are at the time outstanding, ratably according to the
respective amounts of their Commitments), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against the Administrative Agent in any way
relating to or arising out of this Agreement or any action taken or omitted by
the Administrative Agent under this Agreement, provided 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 the Administrative Agent's gross negligence or wilful misconduct.
SECTION 12.03. Limitation of Liability. Neither the
Administrative Agent nor any of its directors, officers, employees, attorneys or
agents shall be liable for any action taken or omitted by it or them hereunder,
or in connection herewith, (i) with the consent or at the request of the
Majority Banks, or (ii) in the absence of its or their own gross negligence or
wilful misconduct. Without limitation of the generality of the foregoing (but
subject to the immediately preceding clause (ii)), the Administrative Agent: (v)
may consult with legal counsel (including Counsel for the Company), 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; (w) makes no warranty or
representation to any Bank and shall not be responsible to any Bank for any
statements, warranties or representations
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made in or in connection with this Agreement; (x) shall not 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, or to inspect the Property (including
the books and records) of the Company; (y) shall not be responsible to any Bank
for the due execution, legality, validity, enforceability and genuineness of
this Agreement, or any other instrument or document furnished pursuant hereto;
and (z) shall incur no liability under or in respect of the Agreement by acting
upon any notice or consent (whether oral or written and whether by telephone,
telegram, cable or facsimile), certificate or other instrument or writing (which
may be by telegram, cable or facsimile) believed by it to be genuine and
communicated, signed or sent by the proper Person or Persons.
SECTION 12.04. Independent Credit Decision. Each Bank agrees
that it has relied solely upon its independent review of the financial
statements of the Company and all other representations and warranties made by
the Company herein or otherwise in making the credit decisions preliminary to
entering into this Agreement and agrees that it will continue to rely solely
upon its independent review of the facts and circumstances of the Company in
making future decisions with respect to this Agreement and the Loans. Each Bank
agrees that it has not relied and will not rely upon the Administrative Agent or
any other Bank respecting the ability of the Company to perform its obligations
pursuant to this Agreement.
SECTION 12.05. Rights of Chase Texas. With respect to its
Commitment (including, without limitation, its Alternate Currency Commitment)
and the Loans made by it, Chase Texas shall have the same rights and powers
under this Agreement as any other Bank and may exercise the same as though it
were not the Administrative Agent; and the term "Bank" or "Banks" shall, unless
otherwise expressly indicated, include Chase Texas in its individual capacity.
Chase Texas and its Affiliates may accept deposits from, lend money to, act as
trustee under indentures of, and generally engage in any kind of business with,
the Company, any of the Subsidiaries and any Person or entity who may do
business with or own securities of any of them or of their subsidiaries, all as
if Chase Texas were not the Administrative Agent and without any duty to account
therefor to the Banks.
SECTION 12.06. Successor to the Administrative Agent. The
Administrative Agent may resign at any time as Administrative Agent under this
Agreement, by giving 30 days' prior written notice thereof to the Banks and the
Company and may be removed as Administrative Agent under this Agreement, at any
time with or without cause by the Company and the Majority Banks. Upon any such
resignation or removal, the Company (with the consent of the Majority Banks)
shall have the right to appoint a successor Administrative Agent thereunder. If
no successor Administrative Agent shall have been so appointed by the Company
(with the consent of the Majority Banks), and shall have accepted such
appointment, within 30 days after the retiring Administrative Agent's giving of
notice of resignation or the Majority Banks' removal of the retiring
Administrative Agent, then the retiring Administrative Agent may, on behalf of
the Banks, appoint a successor Administrative Agent, which shall be a 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 $100,000,000. Upon
the acceptance of any appointment as Administrative Agent under this Agreement
by a successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations under this Agreement.
After any retiring Administrative Agent's resignation
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or removal as Administrative Agent under this Agreement, 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 Administrative Agent under this Agreement.
ARTICLE XIII
Miscellaneous
SECTION 13.01. Payment of Expenses. Any provision hereof to
the contrary notwithstanding, and whether or not the transactions contemplated
by this Agreement shall be consummated, the Company agrees to pay on demand (i)
all reasonable costs and expenses of the Administrative Agent and the Banks or
any Bank in connection with the preparation, execution and delivery of this
Agreement and all amendments hereto (including, without limitation, waivers
hereunder and workouts with respect to Loans hereunder) and the other
instruments and documents to be delivered hereunder or with respect to any
amendment hereto, including, without limitation, the reasonable fees and
out-of-pocket expenses of any counsel for the Administrative Agent and the Banks
or any Bank with respect thereto; provided, however, that so long as no Default
or Event of Default has occurred and is continuing, such reasonable counsel
expenses shall be limited to the reasonable expenses of one counsel for the
Administrative Agent, (ii) all reasonable increases in costs and expenses of the
Administrative Agent and the Banks or any Bank (including reasonable counsel
fees and expenses, including reasonable allocated costs of in-house legal
counsel to the Administrative Agent or any Bank), if any, in connection with the
administration of this Agreement after the occurrence of a Default or Event of
Default and so long as the same is continuing and (iii) all reasonable costs and
expenses of the Administrative Agent and the Banks or any Bank (including
reasonable counsel fees and expenses, including reasonable allocated costs of
in-house legal counsel to the Administrative Agent or any Bank), if any, in
connection with the enforcement of this Agreement and the other instruments and
documents to be delivered hereunder. The obligations of the Company under this
Section 13.01 shall survive the termination of this Agreement and the payment of
the obligations hereunder.
SECTION 13.02. Notices. The Administrative Agent or any Bank
giving consent or notice to the Company provided for hereunder (other than in
connection with any Discretionary Loans), shall notify each Bank and the
Administrative Agent thereof. In the event that any Bank shall transfer any Loan
in accordance with Section 13.07(c), it shall immediately so advise the
Administrative Agent which shall be entitled to assume conclusively that no
transfer of any Loan has been made by any Bank unless and until the
Administrative Agent receives written notice to the contrary. Except as
otherwise specifically permitted by this Agreement with respect to oral Notices
of Conventional Borrowings, oral Notices of Alternate Currency Borrowings or
oral notices regarding the payment of interest under Section 10.01, notices and
other communications provided for herein shall be in writing (including
telegraphic, facsimile or cable communication) and shall be delivered, mailed,
telegraphed, transmitted or cabled addressed to the addresses set forth on
Exhibit 13.02 attached hereto (or, as to the Company or the Administrative
Agent, at such other address as shall be designated by such party to the other
parties in a 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 Company and the Administrative Agent). All notices and other communications
given to any party hereto in accordance with the provisions of this Agreement
shall be deemed to have been given upon receipt or if sent by registered or
certified
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mail four Business Days after being duly posted, in each case addressed to such
party as provided in this Section 13.02 or in accordance with the latest
unrevoked direction from such party, except for Notices of Conventional
Borrowings, Notices of Alternate Currency Borrowings and notices of prepayments
of Loans hereunder, which shall be deemed to have been given when received by
the Administrative Agent, and except for notices from the Administrative Agent
to the Company under Section 10.01 with respect to the amount of accrued and
unpaid interest due on the Loans, which shall be deemed to have been given when
received by the Company. The Administrative Agent and the Banks may at any time
waive any requirement for notice hereunder.
SECTION 13.03. Setoff. If one or more Events of Default as
defined herein shall occur, any Bank or commercial bank which is owed any
obligation hereunder (a "Depositary") shall have the right, in addition to all
other rights and remedies available to it, and is hereby authorized, to the
extent permitted by applicable law, at any time and from time to time, without
notice to the Company (any such notice being hereby expressly waived by the
Company), to setoff and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness (whether
or not then due and payable) at any time owing by the Depositary to or for the
credit or the account of the Company, against any and all of the obligations of
the Company now or hereafter existing under this Agreement irrespective of
whether or not the Depositary shall have made any demand for satisfaction of
such obligations and although such obligations may be unmatured. Each Depositary
agrees to notify the Company and the Administrative Agent promptly after any
such setoff and application, provided that the failure to give such notice shall
not affect the validity of such setoff and application. The rights of each
Depositary under this Section are in addition to other rights and remedies
(including, without limitation, other rights of setoff which such Depositary may
have hereunder or under any applicable law). Each Depositary agrees that (i) if
it shall exercise any such right of banker's lien, setoff, counterclaim or
similar right pursuant hereto, it will apply the proceeds thereof to the payment
of Loans outstanding hereunder and (ii) if it shall through the exercise of a
right of banker's lien, setoff, counterclaim or otherwise obtain payment of a
proportion of the Loans held by it in excess of the proportion of the Loans of
each of the other Depositaries being paid simultaneously, it shall be deemed to
have simultaneously purchased from each other Depositary a participation in the
Loans owed to such other Depositaries so that the amount of unpaid Loans and
participations therein held by all Depositaries shall be proportionate to the
original principal amount of the Loans owed to them; provided that, for purposes
of this Section 13.03, the equivalent in Dollars of any Alternate Currency or
the equivalent in any Alternate Currency of Dollars received hereunder, shall be
determined in accordance with Section 2.05(a); and in each case it shall
promptly remit to each such Depositary the amount of the participation thus
deemed to have been purchased. The Company expressly consents to the foregoing
arrangements, and in furtherance thereof, agrees that at such time as an Event
of Default hereunder has occurred, the Administrative Agent shall provide to
each Bank a schedule setting forth the Commitment (including and describing as a
separate item the Alternate Currency Commitment) of each Bank hereunder to
permit each Bank to correctly determine the portion which its Commitment
hereunder bears to the aggregate of all Commitments hereunder. If all or any
portion of any such excess payment is thereafter recovered from the Depositary
which received the same, the purchase provided for herein shall be deemed to
have been rescinded to the extent of such recovery, without interest.
SECTION 13.04. INDEMNITY AND JUDGMENTS. (A) THE COMPANY AGREES
TO INDEMNIFY THE ADMINISTRATIVE AGENT AND EACH OF THE BANKS AND EACH OF THEIR
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CONTROLLING PERSONS AND AFFILIATES AND EACH OF THEIR RESPECTIVE DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS AND ADVISORS FROM AND HOLD EACH HARMLESS
AGAINST ANY AND ALL LOSSES, COSTS, LIABILITIES, CLAIMS, DAMAGES AND EXPENSES
INCURRED BY ANY OF THE FOREGOING PERSONS (COLLECTIVELY, THE "INDEMNIFIED
LIABILITIES"), INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES,
SETTLEMENT COSTS, COURT COSTS AND OTHER LEGAL EXPENSES, ARISING OUT OF OR BY
REASON OF ANY PARTICIPATION IN, OR ANY ACTION OR OMISSION IN CONNECTION WITH
THIS AGREEMENT OR ANY LOAN BY A BANK HEREUNDER OR ANY INVESTIGATION, LITIGATION
OR OTHER PROCEEDINGS BROUGHT OR THREATENED RELATING THERETO, OR TO ANY USE OR
PROPOSED USE TO BE MADE BY THE COMPANY OR ANY SUBSIDIARY OF THE LOANS AND TO THE
EXTENT THAT THE INDEMNIFIED LIABILITIES ARISE OUT OF OR BY REASON OF CLAIMS MADE
BY PERSONS OTHER THAN THE ADMINISTRATIVE AGENT OR ANY BANK; PROVIDED THAT NO
SUCH PERSON SHALL BE ENTITLED TO BE INDEMNIFIED AND HELD HARMLESS AGAINST ANY
PORTION OF INDEMNIFIED LIABILITIES RESULTING FROM OR BY REASON OF THE GROSS
NEGLIGENCE OR WILFUL MISCONDUCT OF SUCH PERSON.
(B) IF FOR THE PURPOSES OF OBTAINING JUDGMENT IN ANY COURT IT
IS NECESSARY TO CONVERT A SUM DUE HEREUNDER IN AN ALTERNATE CURRENCY INTO
DOLLARS, THE PARTIES HERETO AGREE, TO THE FULLEST EXTENT THAT THEY MAY
EFFECTIVELY DO SO, THAT THE RATE OF EXCHANGE USED SHALL BE THE RATE OF EXCHANGE
DETERMINED IN ACCORDANCE WITH SECTION 2.05(A) TWO BUSINESS DAYS PRIOR TO THE
DATE ON WHICH FINAL JUDGMENT IS GIVEN.
(C) THE OBLIGATION OF THE COMPANY IN RESPECT OF ANY SUM DUE IN
ANY ALTERNATE CURRENCY FROM IT TO ANY BANK OR THE ADMINISTRATIVE AGENT HEREUNDER
SHALL, NOTWITHSTANDING ANY JUDGMENT IN A CURRENCY (THE "JUDGMENT CURRENCY")
OTHER THAN THE CURRENCY IN WHICH SUCH SUM IS STATED TO BE DUE HEREUNDER (THE
"AGREEMENT CURRENCY"), BE DISCHARGED ONLY TO THE EXTENT THAT ON THE BUSINESS DAY
FOLLOWING RECEIPT BY SUCH BANK OR THE ADMINISTRATIVE AGENT (AS THE CASE MAY BE)
OF ANY SUM ADJUDGED TO BE SO DUE IN THE JUDGMENT CURRENCY, SUCH BANK OR THE
ADMINISTRATIVE AGENT (AS THE CASE MAY BE) MAY, IN ACCORDANCE WITH NORMAL BANKING
PROCEDURES IN THE RELEVANT JURISDICTION PURCHASE THE AGREEMENT CURRENCY WITH THE
JUDGMENT CURRENCY; IF THE AMOUNT OF THE AGREEMENT CURRENCY SO PURCHASED IS LESS
THAN THE SUM ORIGINALLY DUE TO SUCH BANK OR THE ADMINISTRATIVE AGENT (AS THE
CASE MAY BE) IN THE AGREEMENT CURRENCY, THE COMPANY AGREES, AS A SEPARATE
OBLIGATION AND NOTWITHSTANDING ANY SUCH JUDGMENT, TO INDEMNIFY SUCH BANK OR THE
ADMINISTRATIVE AGENT (AS THE CASE MAY BE) AGAINST SUCH LOSS, AND IF THE AMOUNT
OF THE AGREEMENT CURRENCY SO PURCHASED EXCEEDS THE SUM ORIGINALLY DUE TO ANY
BANK OR THE ADMINISTRATIVE AGENT (AS THE CASE MAY BE) IN THE AGREEMENT CURRENCY,
SUCH BANK OR THE ADMINISTRATIVE AGENT (AS THE CASE MAY BE) AGREES TO REMIT TO
THE COMPANY SUCH EXCESS. THE OBLIGATIONS OF THE COMPANY CONTAINED IN THIS
SECTION 13.04 SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT AND THE PAYMENT OF
ALL OTHER AMOUNTS OWING HEREUNDER.
SECTION 13.05. Interest. Anything in this Agreement to the
contrary notwithstanding, the Company shall never be required to pay unearned
interest on any Loan and shall never be required to pay interest on any Loan at
a rate in excess of the Highest Lawful Rate, and if the effective rate of
interest which would otherwise be payable under this Agreement would exceed the
Highest Lawful Rate, or if any Bank shall receive any unearned interest or shall
receive monies that are deemed to constitute interest which would increase the
effective rate of interest payable under this Agreement to a rate in excess of
the Highest Lawful Rate, then (i) in lieu of the amount of interest which would
otherwise be payable under this Agreement, the Company shall pay the Highest
Lawful Rate, and (ii) any unearned interest paid by the Company or any interest
paid by the Company in excess of the Highest Lawful Rate shall be credited on
the principal of such Loan, and, thereafter,
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<PAGE> 59
refunded to the Company. It is further agreed that, without limitation of the
foregoing, all calculations of the rate of interest contracted for, charged or
received by any Bank under this Agreement that are made for the purpose of
determining whether such rate exceeds the Highest Lawful Rate applicable to such
Bank (such Highest Lawful Rate being such Bank's "Maximum Permissible Rate"),
shall be made, to the extent permitted by usury laws applicable to such Bank
(now or hereafter enacted), by amortizing, prorating and spreading in equal
parts during the period of the full stated term of the Loans all interest at any
time contracted for, charged or received by such Bank in connection therewith.
If at any time and from time to time (y) the amount of interest payable to any
Bank on any date shall be computed at such Bank's Maximum Permissible Rate
pursuant to this Section 13.05 and (z) in respect of any subsequent interest
computation period the amount of interest otherwise payable to such Bank would
be less than the amount of interest payable to such Bank computed at such Bank's
Maximum Permissible Rate, then the amount of interest payable to such Bank in
respect of such subsequent interest computation period shall continue to be
computed at such Bank's Maximum Permissible Rate until the total amount of
interest payable to such Bank shall equal the total amount of interest which
would have been payable to such Bank if the total amount of interest had been
computed without giving effect to this Section.
SECTION 13.06. GOVERNING LAW; SUBMISSION TO JURISDICTION;
VENUE. (A) THIS AGREEMENT AND OTHER DOCUMENTS EXECUTED IN CONNECTION HEREWITH
SHALL BE DEEMED TO BE CONTRACTS AND AGREEMENTS EXECUTED BY THE COMPANY, THE
ADMINISTRATIVE AGENT AND THE BANKS UNDER THE LAWS OF THE STATE OF NEW YORK AND
OF THE UNITED STATES AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH,
AND GOVERNED BY, THE LAWS OF SAID STATE AND OF THE UNITED STATES. WITHOUT
LIMITATION OF THE FOREGOING, NOTHING IN THIS AGREEMENT SHALL BE DEEMED TO
CONSTITUTE A WAIVER OF ANY RIGHTS WHICH ANY BANK MAY HAVE UNDER APPLICABLE
FEDERAL LAW RELATING TO THE AMOUNT OF INTEREST WHICH SUCH BANK MAY CONTRACT FOR,
TAKE, RECEIVE OR CHARGE IN RESPECT OF ANY LOANS, INCLUDING ANY RIGHT TO TAKE,
RECEIVE, RESERVE AND CHARGE INTEREST AT THE RATE ALLOWED BY THE LAWS OF THE
STATE WHERE SUCH BANK IS LOCATED. TO THE EXTENT THAT TEXAS LAW IS APPLICABLE TO
THE DETERMINATION OF THE HIGHEST LAWFUL RATE OR A MAXIMUM PERMISSIBLE RATE, THE
PROVISIONS OF CHAPTER 15 OF SUBTITLE 3, TITLE 79, OF THE REVISED CIVIL STATUTES
OF TEXAS, 1925, AS AMENDED, SHALL NOT APPLY TO THIS AGREEMENT. ANY LEGAL ACTION
OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK SITTING IN NEW YORK CITY OR OF THE UNITED STATES FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
THE COMPANY HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OUT 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 COMPANY AT ITS ADDRESS FOR NOTICES PURSUANT TO SECTION 13.02,
SUCH SERVICE TO BECOME EFFECTIVE 15 DAYS AFTER SUCH MAILING. NOTHING HEREIN
SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY BANK TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST THE COMPANY IN ANY OTHER JURISDICTION.
(B) THE COMPANY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT BROUGHT IN THE
COURTS REFERRED TO IN CLAUSE (A) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND
AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
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<PAGE> 60
SECTION 13.07. Survival of Representations and Warranties;
Binding Effect; Assignment. (a) All representations, warranties and covenants
contained herein or made in writing by the Company in connection herewith shall
survive the execution and delivery of this Agreement, and will bind and inure to
the benefit of the respective successors and assigns of the parties hereto,
whether so expressed or not. This Agreement shall become effective when it shall
have been executed by the Company, the Administrative Agent and each of the
Banks, and thereafter shall be binding upon and inure to the benefit of the
Company, the Administrative Agent and the Banks and their respective successors
and assigns, except that the Company shall not have the right to assign its
rights or obligations hereunder or any interest herein without the prior written
consent of each Bank.
(b) Each Bank may grant participations to one or more other
banks or other Persons in or to all or any part of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Commitment) pursuant to such participation agreements and certificates as are
customary in the banking industry; provided, however, that (i) such Bank's
obligations under this Agreement (including, without limitation its Commitment
to the Company hereunder) shall remain unchanged, (ii) such Bank shall remain
solely responsible to the other parties hereto for the performance of such
obligations and (iii) the Company, the Administrative Agent 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, including without
limitation, such Bank's rights under Article XI hereof. In connection with any
such participation, each Bank may deliver such financial information concerning
the Company and its Subsidiaries to permit such participant to make an informed
and independent credit decision concerning such participation; provided,
however, each such Bank shall obtain from each such participant an agreement to
the effect that all such information delivered to it in connection with such
participation shall be considered confidential and shall not be further
distributed or delivered to any other Person except any regulatory body having
jurisdiction over such participant or to any director, officer, employee,
Affiliate or representative (including accountants and attorneys acting for such
participants) or as may otherwise be required by legal process or applicable
law, rules and regulations. Upon request of the Company, each Bank shall give
prompt notice to the Company of each such participation to banks or other
Persons that are not Affiliates of such Bank identifying each such participant
and the interest acquired by each such participant. This Agreement shall not be
construed so as to confer any right or benefit upon any Person, including,
without limitation, any Person acquiring a participation in any Loan, other than
the parties to this Agreement, except that any Person acquiring a participation
shall be entitled to the benefits conferred upon the Banks by Section
2.01(f)-(g) (provided that the cost to the Company is not in excess of what such
cost would have been had such participation not been granted).
(c) Subject (except in the case of assignments to Banks or
Affiliates of the Banks) to the prior written consent of the Company (which
consent shall not be unreasonably withheld) and written acknowledgment of the
Administrative Agent, each Bank may assign to a bank or other Person a portion
of its rights and obligations under this Agreement (including, without
limitation, a portion of its Commitment); provided, however, that (i) each such
assignment shall be of a constant, and not a varying, percentage of all of the
assigning Bank's rights and obligations under this Agreement and shall be in an
amount equal to or greater than $15,000,000 of the assigning Bank's Commitment
(except in the case of assignments to Banks or Affiliates of any Bank or unless
otherwise agreed by the Company), and
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<PAGE> 61
(ii) the parties to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance in substantially the form of Exhibit 13.07(c) attached
hereto (the "Assignment and Acceptance"), together with a processing and
recordation fee of $2,000 (except in the case of assignments to Banks or
Affiliates of any Bank); provided, however, that such recordation fee shall not
be payable if such transfer is made pursuant to Sections 2.01(e) or (g)(vi).
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be the date on which such Assignment and Acceptance is accepted by the
Administrative Agent, (x) the assignee thereunder shall be a party hereto and,
to the extent that rights and obligations hereunder have been assigned to it
pursuant to such Assignment and Acceptance, have the rights and obligations of a
Bank under this Agreement and (y) the Bank assignor thereunder shall, to the
extent that rights and obligations hereunder have been assigned by it pursuant
to such Assignment and Acceptance, relinquish its rights and be released from
its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Bank's rights
and obligations under this Agreement, such Bank shall cease to be a party
hereto).
(d) Notwithstanding anything to the contrary contained herein,
any Bank (a "Granting Bank") may grant to a special purpose funding vehicle (an
"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 Loan 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 Loan and (ii) if an
SPC elects not to exercise such option or otherwise fails to provide all or any
part of such Loan, the Granting Bank shall be obligated to make such Loan
pursuant to the terms hereof. The making of a Loan by an SPC hereunder shall
utilize the Commitment of the Granting Bank to the same extent, and as if, such
Loan 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). 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 of any State thereof. In addition, notwithstanding
anything to the contrary contained in this Section 13.07(d), any SPC may (i)
with notice to, but without the prior written consent of, the Borrower and the
Administrative Agent and without paying any processing fee therefor, assign all
or a portion of its interests in any Loan 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 maintenance of Loans and (ii) disclose on a confidential
basis any non-public information relating to its Loans to any rating agency,
commercial paper dealer or provider of any surety, guarantee or credit or
liquidity enhancement to such SPC. This Section may not be amended without the
written consent of the SPC.
(e) By executing and delivering an Assignment and Acceptance,
the Bank assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Bank makes no
representation or warranty and assumes no responsibility with respect to any
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<PAGE> 62
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of any other instrument or document furnished pursuant
thereto, (ii) such assigning Bank makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the Company
or the performance or observance by the Company of any of its respective
obligations under this Agreement, (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the financial
statements referred to in Sections 6.02 and 8.02 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance, (iv) such assignee will,
independently and without reliance upon the Administrative Agent, such assigning
Bank 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, (v) such assignee appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto, and (vi) such assignee agrees that it will
perform in accordance with its terms all of the obligations which by the terms
of this Agreement are required to be performed by it as a Bank.
(f) The Administrative Agent shall maintain at its address
referred to in Section 13.02 a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the names and
addresses of the Banks 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 Company, the Administrative Agent and the Banks 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 Company or any Bank at any reasonable time and from time to time upon
reasonable prior notice.
(g) Upon its receipt of an Assignment and Acceptance executed
by an assigning Bank, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit
13.07(c) attached hereto, (i) accept such Assignment and Acceptance, (ii) record
the information contained therein in the Register and (iii) give prompt notice
thereof to the Company.
(h) Notwithstanding any other provision in this Agreement, any
Bank may at any time, without the consent of the Company, assign all or any
portion of its rights under this Agreement (including, without limitation, the
Loans) in favor of any Federal Reserve Bank in accordance with Regulation A of
the Board of Governors of the Federal Reserve System; provided that no such
assignment shall release a Bank from any of its obligations hereunder or
substitute any such Federal Reserve Bank for such Bank as a party hereto. In
order to facilitate such an assignment to a Federal Reserve Bank, the Company
shall, at the request of the assigning Bank, duly execute and deliver to the
assigning Bank a promissory note or notes evidencing the Loans made to the
Company by the assigning Bank hereunder.
SECTION 13.08. Counterparts. This Agreement may be executed in
several counterparts, and by the parties hereto on separate counterparts. When
counterparts executed by all the parties shall have been delivered to the
Administrative Agent, this Agreement shall become effective, and at such time
the Administrative Agent shall notify the Company and each Bank. Each
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<PAGE> 63
counterpart, when so executed and delivered, shall constitute an original
instrument, and all such separate counterparts shall constitute but one and the
same instrument.
SECTION 13.09. Severability. Should any clause, sentence,
paragraph or section of this Agreement be judicially declared to be invalid,
unenforceable or void, such decision will not have the effect of invalidating or
voiding the remainder of this Agreement, and the parties hereto agree that the
part or parts of this Agreement so held to be invalid, unenforceable or void
will be deemed to have been stricken herefrom and the remainder will have the
same force and effectiveness as if such part or parts had never been included
herein.
SECTION 13.10. Descriptive Headings. The section headings in
this Agreement have been inserted for convenience only and shall be given no
substantive meaning or significance whatever in construing the terms and
provisions of this Agreement.
SECTION 13.11. Representation of the Banks. Each Bank hereby
represents and warrants that it is not relying upon any Margin Stock as
collateral in extending or maintaining the credit to the Company represented by
this Agreement.
SECTION 13.12. FINAL AGREEMENT OF THE PARTIES. THIS AGREEMENT
(INCLUDING THE EXHIBITS HERETO) REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS BETWEEN
THE PARTIES.
SECTION 13.13. WAIVER OF JURY TRIAL. THE COMPANY, THE BANKS
AND THE ADMINISTRATIVE AGENT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT THEY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION OR PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT AND FOR
ANY COUNTERCLAIM THEREIN.
SECTION 13.14. Effect of Amendment and Restatement. Accrued
interest and fees under the Existing Agreement prior to the date hereof shall
not be affected by this Agreement; provided that interest rates and fees under
the Existing Agreement prior to the date of this Agreement shall not be affected
by this Agreement; provided that interest rates and fees accruing on and after
the date of this Agreement shall be calculated in accordance with, and after
giving effect to, this Agreement. All references in this Agreement to "the date
of this Agreement" or "the date hereof" shall mean the date appearing in the
heading of this Agreement.
IN WITNESS WHEREOF this Agreement has been executed by the
duty authorized signatories of the parties hereto in several counterparts all as
of the day and year first above written.
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EXHIBIT 2.01(g)(iv)
[BANK LETTERHEAD]
Chase Bank of Texas, National Association
2200 Ross Avenue
Dallas, Texas 75201
Attention: National Communications Division
Pursuant to Section 2.01(g)(iv) of the Cox Communications, Inc. Amended and
Restated Five-Year Credit Agreement dated as of September 28, 1999, this letter
is submitted as a request for reimbursement for the reserves actually maintained
by the undersigned pursuant to Regulation D of the Board of Governors of the
Federal Reserve System against "Eurocurrency Liabilities" during the [Interest
Period] for the $ ________ Eurodollar Loan advanced by the Bank on ________ for
an Interest Period of ________ days. This letter will also serve to certify that
such reserves were in fact maintained by the undersigned with respect to such
Eurodollar Loan during such Interest Period. The reimbursement for the required
reserves maintained has been calculated according to Section 2.01(g) of the
Credit Agreement as set forth below:
1. $________
Eurodollar Loan outstanding for ___ days
from _________ to __________.
2. Reserve Adjusted Base Rate =
Actual Quoted Base Rate/(1 - Actual Reserve
Requirement Rate Incurred)
__________/(1 - .__) = _______
3. Additional Spread due to Reserves =
Reserve Adjusted Base Rate - Actual Quoted Base Rate
_________ - _________ = _________
4. Annualization Fraction =
# of Days Outstanding/# of Eurodollar Days Per
Year __________/360 = __________
Reimbursement = (1)x((3)/100)x(4)
= ________ x ________ x ________
= $________
[NAME OF BANK]
---------------------
By:
---------------------------
Title:
------------------------
cc: Cox Communications, Inc.
1400 Lake Hearn Drive, N.E.
Atlanta, Georgia 30319
Attention of Dallas Clement
Treasurer
<PAGE> 65
EXHIBIT 7.01(d)
COX COMMUNICATIONS, INC.
Officers' Certificate
We, the undersigned officers of Cox Communications, Inc., a
Delaware corporation (the "Company"), hereby certify pursuant to Section 7.01(c)
of the Amended and Restated Five-Year Credit Agreement dated as of September 28,
1999 (the "Agreement"), among the Company, the banks party thereto (the
"Banks"), Chase Bank of Texas, National Association, as Administrative Agent and
The Chase Manhattan Bank, as Documentation Agent, as follows:
(1) The Certificate of Incorporation of the Company has not
been amended since November 21, 1994. The By-laws of the Company have not been
amended since May 19, 1994. No liquidation or dissolution proceedings with
respect to the Company have been commenced.
(2) The persons named on the Incumbency Certificate attached
hereto as Exhibit A are duly elected officers of the Company, now hold the
offices set forth opposite their respective names, and the signature thereon
opposite the name and title of each such person and officer is his correct
signature.
(3) Attached hereto as Exhibit B is a true and complete copy
of resolutions respecting the Agreement duly adopted by the Board of Directors
of the Company by a unanimous written consent dated [ ], and such
<PAGE> 66
resolutions have not been revoked, rescinded or modified and are now in full
force and effect.
(4) The representations and warranties contained in Article VI
of the Agreement are true on and as of the date hereof with the same effect as
though such representations and warranties had been made on and as of this date;
and there exists on the date hereof no Event of Default or Default as defined in
Article I of the Agreement.
(5) No material and adverse change has occurred with respect
to the business, properties or financial condition of the Company and its
Subsidiaries on a consolidated basis since June 30, 1999; provided, however,
that for purposes of this clause (5), the provisions of the Cable Television
Consumer Protection and Competition Act of 1992 and the Telecommunications Act
of 1996 and the regulations adopted by the Federal Communications Commission
pursuant to such statutes that are in effect as of the date hereof shall not be
considered.
(6) There are no outstanding inquiry letters issued by the
Copyright Office to the Company or its Subsidiaries concerning any statements of
account or related royalty payments made by the Company or its Subsidiaries with
respect to the Subsidiaries, nor is there any pending claim, action, demand, or
litigation by any other person with respect to the statements of account or
related royalty payments made by any of the Subsidiaries which would have a
material adverse effect on the business, properties or financial condition of
the Company and its Subsidiaries on a consolidated basis.
IN WITNESS WHEREOF, the undersigned Treasurer of the Company
has executed this certificate in his capacity as such with respect to Sections 4
and 5 hereof, and the undersigned Secretary of the Company has executed this
certificate in his capacity as such with respect to Sections 1, 2, 3 and 6
hereof, on this ___ day of September, 1999.
-----------------------------------------
Dallas Clement, Treasurer
-----------------------------------------
Andrew A. Merdek, Secretary
<PAGE> 67
EXHIBIT 13.02
ADDRESSES FOR NOTICES
If to the Company, to it at:
Cox Communications, Inc.
1400 Lake Hearn Drive, N.E.
Atlanta, Georgia 30319
Attention: Dallas Clement, Treasurer
Telefax No.: 404-843-5142
with an identical copy transmitted
at the same time and in the same manner to:
J. Eric Dahlgren
Dow, Lohnes & Albertson
One Ravinia Drive, Suite 1600
Atlanta, Georgia 30346
Telefax No.: 770-901-8874
If to the Agent or Texas Commerce Bank National Association, to it at:
Chase Bank of Texas
2200 Ross Avenue, 3rd Floor
Dallas, Texas 75201
Attention: J. Kevin Kelty
Telefax No.: 214-922-2044
EXHIBIT 13.07(c)
ASSIGNMENT AND ACCEPTANCE
Dated [ ]
Reference is made to that certain Amended and Restated
Five-Year Credit Agreement dated as of September 28, 1999 (as amended and
modified from time to time, the "Credit Agreement") among Cox Communications,
Inc., a Delaware corporation (the "Company"), the Banks (as defined in the
Credit Agreement), Texas Commerce Bank National Association, a national banking
association ("TCB"), as Administrative Agent for the Banks (the "Administrative
Agent"), and The Chase Manhattan Bank, as Documentation Agent for the Banks.
Terms defined in the Credit Agreement and not defined herein are used herein
with the same meaning.
W I T N E S S E T H
WHEREAS, pursuant to Section 13.07 of the Credit Agreement,
____________ (the "Assignor") desires to assign a certain percentage of its
rights and obligations under the Credit Agreement (including, without
limitation, the Assignor's Commitment) to ____________________ (the "Assignee")
subject to the terms hereof and the conditions set forth in Section 13.07(c) of
the Credit Agreement; and
<PAGE> 68
WHEREAS the Assignee desires to accept said rights and assume
said obligations of the Assignor under the Credit Agreement and become a party
to and bound by the Credit Agreement;
NOW, THEREFORE, for and in consideration of ten dollars ($10)
in hand paid and for other good and valuable consideration, the receipt,
sufficiency and adequacy of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, a ___% 1/ interest
in and to all of the Assignor's rights and obligations under the Credit
Agreement as of the Effective Date (as defined below), including, without
limitation, such percentage interest in the Assignor's Commitment as in effect
on the Effective Date, and the Assignor is hereby released from said obligations
from and after the Effective Date.
2. The Assignor (i) represents and warrants that as of the
date hereof its Commitment (without giving effect to assignments thereof which
have not yet become effective) is $_____; and the aggregate outstanding
principal amount of Loans owing to it (without giving effect to assignments
thereof which have not yet become effective) is $______; (ii) represents and
warrants that it is duly authorized to execute this Assignment and Acceptance
(iii) represents and warrants that it is the legal and beneficial owner of the
interest being assigned by it hereunder and that such interest is free and clear
of any adverse claim; (iv) 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 any other
instrument or document furnished pursuant thereto; and (v) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Company or the performance or observance by the
Company of any of its obligations under the Credit Agreement or any other
instrument or document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of
the Credit Agreement, together with copies of the financial statements referred
to in Sections 6.02 and 8.02 of the Credit Agreement 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; (ii) represents and
warrants that it is duly authorized to execute this Assignment and Acceptance;
(iii) 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 action under the Credit Agreement;
(iv) appoints and authorizes the Administrative Agent to take such action as
agent on its behalf and to exercise such powers under the Credit Agreement as
are delegated to the Administrative Agent by the terms thereof, together with
such powers as are reasonably incidental thereto; (v) agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of the Credit Agreement are required to be performed by it as a Bank; (vi) (if
such Assignee is a bank or financial institution organized outside the United
States) agrees that it will deliver to the Company (with a copy to the
Administrative Agent) such certificates, documents or other evidence as may be
required from time to time, including any certificate or
- --------------------------
(1) Specify percentage in no more than 4 decimal points.
<PAGE> 69
statement of exemption required under Treasury Regulation Section 1.1441-4(a) or
Section 1.1441-6(c) or any subsequent version thereof, to establish that it is
not subject to withholding under Section 1441 or 1442 of the Code, or comparable
provisions, because payments to it are effectively connected with the conduct of
a trade or business conducted in the United States or because it is fully exempt
from United States tax under a provision of an applicable tax treaty; and (vi)
specifies as its Lending Office (and address for notices) the offices set forth
beneath its name on the signature pages hereof.
4. Following the execution of this Assignment and Acceptance
by the Assignor and the Assignee, it will be delivered to the Administrative
Agent for acceptance and recording by the Administrative Agent. The effective
date for this Assignment and Acceptance shall be the date on which this
Assignment and Acceptance is accepted by the Administrative Agent (the
"Effective Date").
5. As of the Effective Date (i) the Assignee shall be a party
to the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Bank thereunder and (ii) the
Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement and in the event that the Assignor has assigned to the Assignee
hereunder all of its rights and obligations under the Credit Agreement, the
Assignor shall cease to be a party to the Credit Agreement.
6. From and after the Effective Date, the Administrative Agent
shall make all payments under the Credit Agreement in respect of the interest
assigned hereby (including, without limitation, all payments of principal,
interest and the Commitment Fees and Utilization Fee with respect thereto) to
the Assignee. The Assignor and Assignee shall make all appropriate adjustments
in payments for periods prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.
[NAME OF ASSIGNOR],
by
-----------------------
Name:
Title:
[NAME OF ASSIGNOR],
by
-----------------------
Name:
Title:
[Address]
Accepted this __ day
of ___________, 19__
<PAGE> 70
*TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Administrative Agent,
by
-----------------------
Name:
Title:
Agreed and consented to on
this __ day of _________ 19__
*COX COMMUNICATIONS, INC.,
by
-----------------------
Name:
Title:
------------------------------------------------------
* if required
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 58,419
<SECURITIES> 0
<RECEIVABLES> 329,620
<ALLOWANCES> (10,558)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 4,891,817
<DEPRECIATION> (1,365,375)
<TOTAL-ASSETS> 22,414,609
<CURRENT-LIABILITIES> 0
<BONDS> 0
635,389
4,836
<COMMON> 598,516
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 22,414,609
<SALES> 0
<TOTAL-REVENUES> 1,596,339
<CGS> 0
<TOTAL-COSTS> 512,512
<OTHER-EXPENSES> 476,452
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 193,824
<INCOME-PRETAX> 1,273,731
<INCOME-TAX> 497,919
<INCOME-CONTINUING> 775,812
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 768,872
<EPS-BASIC> 1.37<F1>
<EPS-DILUTED> 1.35<F1>
<FN>
<F1>EPS BASIC AND EPS DILUTED HAVE BEEN RESTATED TO REFLECT A TWO-FOR-ONE STOCK
SPLIT ON MAY 21, 1999. INTERIM FILINGS SUBSEQUENT TO THE STOCK SPLIT HAVE BEEN
ADJUSTED TO REFLECT THE STOCK SPLIT.
</FN>
</TABLE>
