____________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
SCHEDULE 14D-1
(Tender Offer Statement Pursuant to
Section 14(d)(1) of the Securities Exchange Act of 1934)
(Amendment No. 26)
PARAMOUNT COMMUNICATIONS INC.
(Name of Subject Company)
QVC NETWORK, INC.
COMCAST CORPORATION
BELLSOUTH CORPORATION
(Bidders)
Common Stock, Par Value $1.00 Per Share
(Including the Associated Common Stock Purchase Rights)
(Title of Class of Securities)
699216 10 7
(CUSIP Number of Class of Securities)
<TABLE>
<S> <C> <C>
Neal S. Grabell Stanley L. Wang Walter H. Alford
QVC Network, Inc. Comcast Corporation BellSouth Corporation
Goshen Corporate Park 1234 Market Street 1155 Peachtree Street, N.E.
West Chester, PA 19380 Philadelphia, PA 19107 Atlanta, GA 30367
(215) 430-1000 (215) 981-7510 (404) 249-2050
</TABLE>
(Names, Addresses and Telephone Numbers of Persons Authorized
to Receive Notices and Communications on Behalf of Bidders)
Copy to:
<TABLE>
<S> <C> <C>
Pamela S. Seymon Dennis S. Hersch Alan Stephenson
Wachtell, Lipton, Rosen & Katz Davis Polk & Wardwell Cravath, Swaine & Moore
51 West 52nd Street 450 Lexington Avenue One Worldwide Plaza
New York, NY 10019 New York, NY 10017 825 Eighth Avenue
(212) 403-1000 (212) 450-4000 New York, NY 10022
(212) 474-1000
</TABLE>
<PAGE>
<PAGE>
This Statement amends and supplements the Tender Of-
fer Statement on Schedule 14D-1 filed with the Securities and
Exchange Commission (the "Commission") on October 27, 1993, as
previously amended and supplemented (the "Schedule 14D-1"), by
QVC Network, Inc., a Delaware corporation ("QVC"), Comcast Cor-
poration, a Pennsylvania corporation, and BellSouth Corpora-
tion, a Georgia corporation, and relates to a tender offer to
purchase 61,607,894 of the outstanding shares of Common Stock,
par value $1.00 per share (the "Shares"), of Paramount Com-
munications Inc., a Delaware corporation ("Paramount"), or such
greater number of Shares as equals 50.1% of the Shares out-
standing plus the Shares issuable upon the exercise of the then
exercisable stock options, as of the expiration of the Offer,
and the associated Rights, at a price of $92.00 per Share (and
associated Right), net to the seller in cash, without interest
thereon, upon the terms and subject to the conditions set forth
in the Offer to Purchase, dated October 27, 1993 (the "Offer to
Purchase"), as amended and supplemented by the Supplement
thereto, dated November 12, 1993 (the "First Supplement"), the
Second Supplement thereto, dated December 23, 1993 (the "Second
Supplement"), and the related Letters of Transmittal, which
were annexed to and filed with the Schedule 14D-1 as Exhibits
(a)(1), (a)(17), (a)(46), (a)(2), (a)(18) and (a)(47), respec-
tively, and the amendments thereto (which together constitute
the "Offer"). Capitalized terms used and not defined herein
shall have the meanings assigned such terms in the Offer and
the Schedule 14D-1.
Item 4. Source and Amount of Funds or Other Consideration
The description under "Bank Financing" in Section 12
of the Offer to Purchase, as previously amended and supple-
mented, is hereby amended and supplemented by adding the fol-
lowing information:
Bank Credit Agreement. In connection with the
offer, QVC has entered into a credit agreement, dated
as of January 7, 1994, (the "Bank Credit Agreement")
with Chemical Bank, a Co-Arranger and the
Administrative Agent, and the other Co-Arrangers,
with respect to the provision of the Revised Bank
Financing. The terms and conditions of the Bank
Credit Agreement are, except as summarized below,
substantially similar to the terms and conditions of
the Revised Bank Commitments, previously described in
an amendment to the Schedule 14D-1 and filed as
Exhibit (b)(2) thereto.
<PAGE>
<PAGE>
The Permanent Facilities will consist of up to
$2.0 billion of the Term Loan Facility and $1.0 bil-
lion of the Revolving Credit Facility. In addition
to the Tender Offer Facilities and the Permanent
Facilities, Chemical Bank will make available at the
time of the QVC Second-Step Merger a facility (the
"Swingline Facility" (and amounts extended thereunder
the "Swingline Loans")) of up to $25 million, pro-
vided that at no time can the aggregate of Revolving
Loans and Swingline Loans exceed $1 billion. The
Swingline Loans will be made available the same day
as a borrowing notice is received and may be used for
general corporate and working capital requirements.
The Swingline Loans will mature on December 22, 2000,
and will bear interest at the Applicable Base Rate
Margin plus the highest of (a) the applicable prime
rate of Chemical Bank, (b) 0.5% plus the Federal
Reserve reported certificate of deposit rate or (c)
0.5% plus the federal funds rate. With certain ex-
ceptions specified in the Bank Credit Agreement, the
Swingline Facility is subject to the terms and
conditions of the Revised Facilities.
Pursuant to the Bank Credit Agreement, the Term
Loans will be subject to quarterly amortizations
commencing on March 31, 1995. Amortization payments
will start at $50 million and increase to $75 million
on March 31, 1996 and to $150 million on March 31,
2000.
Pursuant to the Bank Credit Agreement, all asset
sales proceeds will be applied towards mandatory pre-
payments of principal in the inverse order of matu-
rity (or permanent reductions of commitments under
the Revised Facilities if the Term Loans have been
repaid in full). All proceeds of permitted debt
issuances and, with certain exceptions, permitted
equity issuances will be applied towards mandatory
prepayments of principal in the inverse order of
maturity until such time as $500 million of the Term
Loans shall have been prepaid through the use of
proceeds from asset sales, and permitted issuances of
debt or equity and, thereafter, 75% of the additional
proceeds from permitted issuances of debt and equity
will be so applied (or will be applied to permanent
reductions of commitments under the Revised Facili-
ties if the Term Loans have been repaid in full).
-2-
<PAGE>
<PAGE>
The Bank Credit Agreement provides that the max-
imum consolidated leverage ratio will be 5.5:1, with
a stepdown to 4.5:1 on and after July 31, 1996.
The Bank Credit Agreement is attached hereto as
Exhibit (b)(3), and the foregoing summary description is
qualified in its entirety by reference to such exhibit.
Item 11. Material to be Filed as Exhibits.
(a)(1) -- Offer to Purchase, dated October 27, 1993.*
(a)(2) -- Letter of Transmittal.*
(a)(3) -- Notice of Guaranteed Delivery.*
(a)(4) -- Form of Letter to Brokers, Dealers, Commercial
Banks, Trust Companies and Nominees.*
(a)(5) -- Form of Letter to Clients for Use by Brokers,
Dealers, Commercial Banks, Trust Companies and
Nominees.*
(a)(6) -- Guidelines of the Internal Revenue Service for
Certification of Taxpayer Identification Number
on Substitute Form W-9.*
(a)(7) -- Press release issued by QVC on October 21,
1993.*
(a)(8) -- Form of Summary Advertisement, dated October 27,
1993.*
(a)(9) -- Text of Letter from QVC to Paramount, dated Oc-
tober 29, 1993.*
(a)(10) -- Press release issued by QVC on October 29,
1993.*
(a)(11) -- Form of Letter to Participants in the Dividend
Reinvestment Plan of Paramount Communications
Inc.*
(a)(12) -- Text of Letter from Paramount to QVC, dated Oc-
tober 29, 1993.*
_____________________
* Previously filed.
-3-
<PAGE>
<PAGE>
(a)(13) -- Text of Letter from Paramount to QVC advisor,
dated November 1, 1993.*
(a)(14) -- Text of Letter from QVC advisor to Paramount,
dated November 2, 1993.*
(a)(15) -- Press release issued by QVC on November 5,
1993.*
(a)(16) -- Press release issued by QVC on November 5,
1993.*
(a)(17) -- Supplement to the Offer to Purchase, dated No-
vember 12, 1993.*
(a)(18) -- Revised Letter of Transmittal.*
(a)(19) -- Revised Notice of Guaranteed Delivery.*
(a)(20) -- Revised Form of Letter to Brokers, Dealers, Com-
mercial Banks, Trust Companies and Nominees.*
(a)(21) -- Revised Form of Letter to Clients for use by
Brokers, Dealers, Commercial Banks, Trust Compa-
nies and Nominees.*
(a)(22) -- Press release issued by QVC on November 11,
1993.*
(a)(23) -- Press release issued by QVC on November 12,
1993.*
(a)(24) -- Revised Form of Letter to Participants in the
Dividend Reinvestment Plan of Paramount Com-
munications, Inc.*
(a)(25) -- Press release issued by QVC on November 16,
1993.*
(a)(26) -- Amended Complaint in Viacom International Inc.
v. Tele-Communications, Inc., et al., dated No-
vember 9, 1993, and filed in the United States
District Court for the Southern District of New
York.*
(a)(27) -- Text of letter from QVC to Paramount, dated
November 19, 1993.*
_____________________
* Previously filed.
-4-
<PAGE>
<PAGE>
(a)(28) -- Press release issued by QVC on November 20,
1993.*
(a)(29) -- Press release issued by QVC on November 22,
1993.*
(a)(30) -- Press release issued by QVC on November 23,
1993.*
(a)(31) -- Press release issued by QVC on November 23,
1993.*
(a)(32) -- Press release issued by QVC on November 24,
1993.*
(a)(33) -- Press release issued by QVC on December 1,
1993.*
(a)(34) -- Press release issued by QVC on December 9,
1993.*
(a)(35) -- Press release issued by QVC on December 10,
1993.*
(a)(36) -- Press release issued by QVC on December 14,
1993.*
(a)(37) -- Text of letter from Paramount advisor to QVC,
dated December 14, 1993.*
(a)(38) -- Text of letter from QVC advisor to Paramount
advisor, dated December 14, 1993.*
(a)(39) -- Press release issued by QVC on December 15,
1993.*
(a)(40) -- Press release issued by QVC on December 16,
1993.*
(a)(41) -- Text of letter from Paramount advisor to QVC
advisor, dated December 17, 1993.
(a)(42) -- Text of letter from QVC advisor to Viacom advi-
sor, dated December 17, 1993.*
_____________________
* Previously filed.
-5-
<PAGE>
<PAGE>
(a)(43) -- Text of letter from QVC to Paramount, dated De-
cember 20, 1993.*
(a)(44) -- Press release issued by QVC on December 20,
1993.*
(a)(45) -- Press release issued by QVC on December 20,
1993.*
(a)(46) -- Second Supplement to the Offer to Purchase,
dated December 23, 1993.*
(a)(47) -- Second Revised Letter of Transmittal.*
(a)(48) -- Second Revised Notice of Guaranteed Delivery.*
(a)(49) -- Second Revised Form of Letter to Brokers, Deal-
ers, Commercial Banks, Trust Companies and Nomi-
nees.*
(a)(50) -- Second Revised Form of Letter to Clients for use
by Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees.*
(a)(51) -- Second Revised Form of Letter to Participants in
the Dividend Reinvestment Plan of Paramount Com-
munications Inc.*
(a)(52) -- Press release issued by QVC on December 22,
1993.*
(a)(53) -- Press release issued by QVC on December 27,
1993.*
(a)(54) -- Press release issued by QVC on January 7, 1994.*
(a)(55) -- Press release issued by QVC on January 10,
1994.*
(b)(1) -- Commitment Letters, dated September 30, 1993, by
and between QVC and certain banks.*
(b)(2) -- Commitment Letters, dated November 19, 1993, by
and between QVC and certain banks.*
(b)(3) -- Bank Credit Agreement, dated as of January 7,
1994, by and between QVC and certain banks.
_____________________
* Previously filed.
-6-
<PAGE>
<PAGE>
(c)(1) -- Commitment Letter, dated October 15, 1993, by
and among QVC and certain investors named there-
in.*
(c)(2) -- Stockholders Agreement, dated July 16, 1993,
among Liberty Media Corporation, Comcast Cor-
poration, Arrow Investments, L.P. and certain
affiliates and subsidiaries of such parties.*
(c)(3) -- Agreement Among Stockholders, dated October 15,
1993.*
(c)(4) -- Proposed form of merger agreement delivered by
QVC to Paramount.*
(c)(5) -- First Amended and Supplemental Complaint in QVC
Network, Inc. v. Paramount Communications Inc.
filed October 28, 1993 in the Delaware Chancery
Court.*
(c)(6) -- Voting Trust Agreement, dated as of October 28,
1993, between QVC and G. William Miller.*
(c)(7) -- Informational request from QVC to Paramount,
dated November 1, 1993.*
(c)(8) -- Fair bidding procedures delivered by QVC to Par-
amount on November 1, 1993.*
(c)(9) -- Proposed form of merger agreement delivered by
QVC to Paramount on November 1, 1993.*
(c)(10) -- Commitment Letter, dated November 11, 1993, by
and among QVC and certain investors named there-
in.*
(c)(11) -- Memorandum of Understanding, dated November 11,
1993, by and between QVC and BellSouth.*
(c)(12) -- Liberty-QVC Agreement, dated November 11, 1993,
by and between QVC and Liberty.*
(c)(13) -- Agreement Among Stockholders, dated November 11,
1993, among QVC, Advance, Arrow, BellSouth, Com-
cast and Cox.*
_____________________
* Previously filed.
-7-
<PAGE>
<PAGE>
(c)(14) -- Understanding Among Stockholders, dated November
11, 1993, among Arrow, BellSouth, Comcast and
Liberty.*
(c)(15) -- Agreement Containing Consent Order and Interim
Agreement, dated November 12, 1993, among the
FTC, Liberty, and TCI.*
(c)(16) -- BellSouth Commitment Letter, dated November 19,
1993, by and between BellSouth and QVC.*
(c)(17) -- Memorandum Opinion and Preliminary Injunction
Order in QVC Network, Inc. v. Paramount Com-
munications, Inc., C.A. No. 13208, both dated
November 24, 1993, entered by Delaware Chancery
Court.*
(c)(18) -- Revised Memorandum Opinion, dated November 26,
1993, in QVC Network, Inc. v. Paramount Communi-
cations, Inc., C.A. No. 13208, entered by Dela-
ware Chancery Court.*
(c)(19) -- Order, dated December 9, 1993, in Paramount Com-
munications Inc. v. QVC Network, Inc., C.A. No.
13208, entered by Delaware Supreme Court.*
(c)(20) -- Proposed form of merger agreement delivered by
Paramount to QVC on December 14, 1993.*
(c)(21) -- Text of letter from QVC advisor to Paramount
advisor, dated December 10, 1993.*
(c)(22) -- Text of letter from Paramount advisor to QVC
advisor, dated December 14, 1993.*
(c)(23) -- Agreement and Plan of Merger, between Paramount
and QVC, dated as of December 22, 1993.*
(c)(24) -- Exemption Agreement, between Paramount and QVC,
dated December 22, 1993.*
(c)(25) -- Voting Agreement, dated December 22, 1993, among
BellSouth, Comcast, Cox, Advance and Arrow.*
_____________________
* Previously filed.
-8-
<PAGE>
<PAGE>
(c)(26) -- First Amendment, dated as of December 27, 1993,
to Agreement and Plan of Merger, between Para-
mount and QVC.*
(c)(27) -- Letter Agreement, dated as of December 20, 1993,
by and among QVC, Comcast, Cox, Advance and
BellSouth.*
_____________________
* Previously filed.
-9-
<PAGE>
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this state-
ment is true, complete and correct.
QVC NETWORK, INC.
By:/s/ Neal S. Grabell
Neal S. Grabell
Senior Vice President,
General Counsel and
Corporate Secretary
Dated: January 11, 1994
<PAGE>
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this state-
ment is true, complete and correct.
COMCAST CORPORATION
By:/s/ Julian A. Brodsky
Julian A. Brodsky
Vice Chairman
Dated: January 11, 1994
<PAGE>
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this state-
ment is true, complete and correct.
BELLSOUTH CORPORATION
By:/s/ Charles C. Miller, III
Charles C. Miller, III
Vice President-
Strategic Planning and Corporate
Development
Dated: January 11, 1994
<PAGE>
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
(a)(1) -- Offer to Purchase, dated October 27, 1993.*
(a)(2) -- Letter of Transmittal.*
(a)(3) -- Notice of Guaranteed Delivery.*
(a)(4) -- Form of Letter to Brokers, Dealers, Commercial
Banks, Trust Companies and Nominees.*
(a)(5) -- Form of Letter to Clients for Use by Brokers,
Dealers, Commercial Banks, Trust Companies and
Nominees.*
(a)(6) -- Guidelines of the Internal Revenue Service for
Certification of Taxpayer Identification Number
on Substitute Form W-9.*
(a)(7) -- Press release issued by QVC on October 21,
1993.*
(a)(8) -- Form of Summary Advertisement, dated October 27,
1993.*
(a)(9) -- Text of Letter from QVC to Paramount, dated Oc-
tober 29, 1993.*
(a)(10) -- Press release issued by QVC on October 29,
1993.*
(a)(11) -- Form of Letter to Participants in the Dividend
Reinvestment Plan of Paramount Communications
Inc.*
(a)(12) -- Text of Letter from Paramount to QVC, dated Oc-
tober 29, 1993.*
(a)(13) -- Text of Letter from Paramount to QVC advisor,
dated November 1, 1993.*
(a)(14) -- Text of Letter from QVC advisor to Paramount,
dated November 2, 1993.*
_____________________
* Previously filed.
<PAGE>
<PAGE>
(a)(15) -- Press release issued by QVC on November 5,
1993.*
(a)(16) -- Press release issued by QVC on November 5,
1993.*
(a)(17) -- Supplement to the Offer to Purchase, dated No-
vember 12, 1993.*
(a)(18) -- Revised Letter of Transmittal.*
(a)(19) -- Revised Notice of Guaranteed Delivery.*
(a)(20) -- Revised Form of Letter to Brokers, Dealers, Com-
mercial Banks, Trust Companies and Nominees.*
(a)(21) -- Revised Form of Letter to Clients for use by
Brokers, Dealers, Commercial Banks, Trust Compa-
nies and Nominees.*
(a)(22) -- Press release issued by QVC on November 11,
1993.*
(a)(23) -- Press release issued by QVC on November 12,
1993.*
(a)(24) -- Revised Form of Letter to Participants in the
Dividend Reinvestment Plan of Paramount Com-
munications, Inc.*
(a)(25) -- Press release issued by QVC on November 16,
1993.*
(a)(26) -- Amended Complaint in Viacom International Inc.
v. Tele-Communications, Inc., et al., dated No-
vember 9, 1993, and filed in the United States
District Court for the Southern District of New
York.*
(a)(27) -- Text of letter from QVC to Paramount, dated
November 19, 1993.*
(a)(28) -- Press release issued by QVC on November 20,
1993.*
(a)(29) -- Press release issued by QVC on November 22,
1993.*
(a)(30) -- Press release issued by QVC on November 23,
1993.*
_____________________
* Previously filed.
<PAGE>
<PAGE>
(a)(31) -- Press release issued by QVC on November 23,
1993.*
(a)(32) -- Press release issued by QVC on November 24,
1993.*
(a)(33) -- Press release issued by QVC on December 1,
1993.*
(a)(34) -- Press release issued by QVC on December 9,
1993.*
(a)(35) -- Press release issued by QVC on December 10,
1993.*
(a)(36) -- Press release issued by QVC on December 14,
1993.*
(a)(37) -- Text of letter from Paramount advisor to QVC,
dated December 14, 1993.*
(a)(38) -- Text of letter from QVC advisor to Paramount
advisor, dated December 14, 1993.*
(a)(39) -- Press release issued by QVC on December 15,
1993.*
(a)(40) -- Press release issued by QVC on December 16,
1993.*
(a)(41) -- Text of letter from Paramount advisor to QVC
advisor, dated December 17, 1993.*
(a)(42) -- Text of letter from QVC advisor to Viacom advi-
sor, dated December 17, 1993.*
(a)(43) -- Text of letter from QVC to Paramount, dated De-
cember 20, 1993.*
(a)(44) -- Press release issued by QVC on December 20,
1993.*
(a)(45) -- Press release issued by QVC on December 20,
1993.*
(a)(46) -- Second Supplement to the Offer to Purchase,
dated December 23, 1993.*
(a)(47) -- Second Revised Letter of Transmittal.*
(a)(48) -- Second Revised Notice of Guaranteed Delivery.*
_____________________
* Previously filed.
<PAGE>
<PAGE>
(a)(49) -- Second Revised Form of Letter to Brokers, Deal-
ers, Commercial Banks, Trust Companies and Nomi-
nees.*
(a)(50) -- Second Revised Form of Letter to Clients for use
by Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees.*
(a)(51) -- Second Revised Form of Letter to Participants in
the Dividend Reinvestment Plan of Paramount Com-
munications Inc.*
(a)(52) -- Press release issued by QVC on December 22,
1993.*
(a)(53) -- Press release issued by QVC on December 27,
1993.*
(a)(54) -- Press release issued by QVC on January 7, 1994.*
(a)(55) -- Press release issued by QVC on January 10,
1994.*
(b)(1) -- Commitment Letters, dated September 30, 1993, by
and between QVC and certain banks.*
(b)(2) -- Commitment Letters, dated November 19, 1993, by
and between QVC and certain banks.*
(b)(3) -- Bank Credit Agreement, dated as of January 7,
1994, by and between QVC and certain banks.
(c)(1) -- Commitment Letter, dated October 15, 1993, by
and among QVC and certain investors named there-
in.*
(c)(2) -- Stockholders Agreement, dated July 16, 1993,
among Liberty Media Corporation, Comcast Cor-
poration, Arrow Investments, L.P. and certain
affiliates and subsidiaries of such parties.*
(c)(3) -- Agreement Among Stockholders, dated October 15,
1993.
(c)(4) -- Proposed form of merger agreement delivered by
QVC to Paramount.*
(c)(5) -- First Amended and Supplemental Complaint in QVC
Network, Inc. v. Paramount Communications Inc.
filed October 28, 1993 in the Delaware Chancery
Court.*
_____________________
* Previously filed.
<PAGE>
<PAGE>
(c)(6) -- Voting Trust Agreement, dated as of October 28,
1993, between QVC and G. William Miller.*
(c)(7) -- Informational request from QVC to Paramount,
dated November 1, 1993.*
(c)(8) -- Fair bidding procedures delivered by QVC to Par-
amount on November 1, 1993.*
(c)(9) -- Proposed form of merger agreement delivered by
QVC to Paramount on November 1, 1993.*
(c)(10) -- Commitment Letter, dated November 11, 1993, by
and among QVC and certain investors named
therein.*
(c)(11) -- Memorandum of Understanding, dated November 11,
1993, by and between QVC and BellSouth.*
(c)(12) -- Liberty-QVC Agreement, dated November 11, 1993,
by and between QVC and Liberty.*
(c)(13) -- Agreement Among Stockholders, dated November 11,
1993, among QVC, Advance, Arrow, BellSouth, Com-
cast and Cox.*
(c)(14) -- Understanding Among Stockholders, dated November
11, 1993, among Arrow, BellSouth, Comcast and
Liberty.*
(c)(15) -- Agreement Containing Consent Order and Interim
Agreement, dated November 12, 1993, among the
FTC, Liberty, and TCI.*
(c)(16) -- BellSouth Commitment Letter, dated November 19,
1993, by and between BellSouth and QVC.*
(c)(17) -- Memorandum Opinion and Preliminary Injunction
Order in QVC Network, Inc. v. Paramount Com-
munications, Inc., C.A. No. 13208, both dated
November 24, 1993, entered by Delaware Chancery
Court.*
(c)(18) -- Revised Memorandum Opinion, dated November 26,
1993, in QVC Network, Inc. v. Paramount Communi-
cations, Inc., C.A. No. 13208, entered by Dela-
ware Chancery Court.*
(c)(19) -- Order, dated December 9, 1993, in Paramount Com-
munications Inc. v. QVC Network, Inc., C.A. No.
13208, entered by Delaware Supreme Court.*
_____________________
* Previously filed.
<PAGE>
<PAGE>
(c)(20) -- Proposed form of merger agreement delivered by
Paramount to QVC on December 14, 1993.*
(c)(21) -- Text of letter from QVC advisor to Paramount
advisor, dated December 10, 1993.*
(c)(22) -- Text of letter from Paramount advisor to QVC
advisor, dated December 14, 1993.*
(c)(23) -- Agreement and Plan of Merger, between Paramount
and QVC, dated as of December 22, 1993.*
(c)(24) -- Exemption Agreement, between Paramount and QVC,
dated December 22, 1993.*
(c)(25) -- Voting Agreement, dated December 22, 1993, among
BellSouth, Comcast, Cox, Advance and Arrow.*
(c)(26) -- First Amendment, dated as of December 27, 1993,
to Agreement and Plan of Merger, between Para-
mount and QVC.*
(c)(27) -- Letter Agreement, dated as of December 20, 1993,
by and among QVC, Comcast, Cox, Advance and
BellSouth.*
_____________________
* Previously filed.
<PAGE>
Exhibit (b)(3)
CONFORMED COPY
$3,000,000,000
CREDIT AGREEMENT
among
QVC NETWORK, INC.,
VARIOUS LENDING INSTITUTIONS,
THE BANK OF NOVA SCOTIA,
BARCLAYS BANK PLC,
CHEMICAL BANK,
LTCB TRUST COMPANY,
NATIONSBANK OF TEXAS, N.A.
and
TORONTO DOMINION (TEXAS), INC.
AS CO-ARRANGERS
and
CHEMICAL BANK,
AS ADMINISTRATIVE AGENT
_____________________________
Dated as of January 7, 1994
_____________________________
<PAGE>
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. Amount and Terms of Credit.................... 1
1.01 Commitments................................... 1
1.02 Notice of Borrowing........................... 4
1.03 Disbursement of Funds......................... 5
1.04 Notes......................................... 6
1.05 Conversions................................... 8
1.06 Pro Rata Borrowings........................... 9
1.07 Interest...................................... 9
1.08 Interest Periods.............................. 10
1.09 Increased Costs, Illegality, etc.............. 12
1.10 Compensation.................................. 14
1.11 Change of Lending Office...................... 15
SECTION 2. Fees; Commitments............................. 16
2.01 Fees.......................................... 16
2.02 Voluntary Reduction of Commitments............ 16
2.03 Mandatory Adjustments of Commitments, etc..... 16
SECTION 3. Payments...................................... 18
3.01 Voluntary Prepayments......................... 18
3.02 Mandatory Prepayments......................... 18
(A) Requirements........................... 18
(B) Application............................ 22
3.03 Method and Place of Payment................... 22
3.04 Net Payments.................................. 22
SECTION 4. Conditions Precedent.......................... 23
4.01 Conditions Precedent to Initial Borrowing
Date........................................ 23
(a) Effectiveness; Notes................... 23
(b) Officer's Certificate.................. 24
(c) Opinions of Counsel.................... 24
(d) Subsidiary Guaranty.................... 24
(e) Pledge Documents....................... 24
(f) Form U-1............................... 25
(g) Tender Offer Documents................. 25
(h) Tender of Shares of PCI................ 25
(i) Issuance to Specified Equity
Investors............................ 26
(j) BellSouth.............................. 26
(k) Use of Other Funds..................... 26
(l) Consent Letter......................... 26
(m) Corporate Documents; Proceedings;
Officer's Certificates............... 27
<PAGE>
<PAGE>
Page
(n) Payment of Fees........................ 27
(o) Approvals.............................. 27
(p) Adverse Change......................... 28
(q) Litigation............................. 28
(r) Proxy Materials........................ 28
4.01A Certain Share Purchase Loans.................. 28
4.02 Conditions Precedent to Merger Borrowing
Date........................................ 29
(a) Notes.................................. 29
(b) Officer's Certificate.................. 29
(c) Opinions of Counsel.................... 30
(d) Bring-Downs............................ 30
(e) Subsidiary Guaranty.................... 30
(f) Merger................................. 30
(g) Organizational Documentation, etc...... 31
(h) Solvency Opinion....................... 31
(i) Insurance Policies..................... 31
(j) Consent Letter......................... 31
(k) Corporate Documents.................... 31
(l) Approvals.............................. 32
(m) Adverse Change......................... 32
(n) Litigation............................. 32
(o) Plans; etc............................. 33
(p) Due Diligence.......................... 33
4.03 Conditions Precedent to All Loans............. 34
(a) No Default; Representations and
Warranties........................... 34
(b) Notice of Borrowing.................... 34
SECTION 5. Representations, Warranties and Agreements.... 34
5.01 Corporate Status.............................. 35
5.02 Corporate Power and Authority................. 35
5.03 No Violation.................................. 35
5.04 Litigation.................................... 36
5.05 Use of Proceeds, etc.......................... 36
5.06 Governmental Approvals........................ 37
5.07 Investment Company Act........................ 37
5.08 Public Utility Holding Company Act............ 37
5.09 True and Complete Disclosure.................. 37
5.10 Offer to Purchase............................. 38
5.11 Financial Condition; Financial Statements..... 38
5.12 Tax Returns and Payments...................... 40
5.13 Compliance with ERISA......................... 40
5.14 Subsidiaries.................................. 41
5.15 Patents, etc.................................. 41
5.16 Compliance with Statutes, etc................. 42
5.17 Properties.................................... 43
5.18 Labor Relations; Collective Bargaining
Agreements.................................. 43
(ii)
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Page
5.19 Indebtedness.................................. 43
5.20 Restrictions on Subsidiaries.................. 44
5.21 Representations and Warranties in Other
Agreements.................................. 44
5.22 Investor Preferred, etc....................... 44
5.23 Merger........................................ 44
5.24 Security Interests............................ 45
SECTION 6. Affirmative Covenants......................... 45
6.01 Information Covenants......................... 45
(a) Annual Financial Statements............ 45
(b) Quarterly Financial Statements......... 46
(c) Officer's Certificates................. 46
(d) Notice of Default or Litigation........ 46
(e) Auditors' Reports...................... 47
(f) Environmental Matters.................. 47
(g) Other Information...................... 48
6.02 Books, Records, Inspections, etc.............. 48
6.03 Payment of Taxes.............................. 48
6.04 Corporate Franchises.......................... 49
6.05 Compliance with Statutes, etc................. 49
6.06 ERISA......................................... 49
6.07 Good Repair................................... 50
6.08 End of Fiscal Years; Fiscal Quarters.......... 50
6.09 Insurance..................................... 51
6.10 Merger; Control; BellSouth Conditions......... 51
SECTION 7. Negative Covenants............................ 51
7.01 Consolidation, Merger, Sale or Purchase
of Assets, etc.............................. 52
7.02 Liens......................................... 54
7.03 Indebtedness.................................. 56
7.04 Advances, Investments and Loans............... 58
7.05 Dividends, etc................................ 60
7.06 Transactions with Affiliates.................. 62
7.07 Changes in Business........................... 62
7.08 EBITDA to Total Cash Interest Expense......... 62
7.09 Consolidated Indebtedness to EBITDA........... 63
7.10 Consolidated Indebtedness to Capitalization... 63
7.11 Limitation on Voluntary Payments; etc......... 63
7.12 Issuance of Subsidiary Stock.................. 64
7.13 Limitation on Restrictions Affecting
Subsidiaries................................ 64
7.14 Finance Subs; Finance Co...................... 64
SECTION 8. Events of Default............................. 65
8.01 Payments...................................... 65
8.02 Representations, etc.......................... 65
8.03 Covenants..................................... 65
(iii)
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Page
8.04 Default Under Other Agreements................ 66
8.05 Bankruptcy, etc............................... 66
8.06 ERISA......................................... 67
8.07 Guaranties.................................... 67
8.08 Judgments..................................... 67
8.09 Pledge Documents.............................. 67
8.10 Ownership..................................... 68
8.11 Finance Co.................................... 68
SECTION 9. Definitions................................... 68
SECTION 10. The Administrative Agent...................... 99
10.01 Appointment................................... 99
10.02 Delegation of Duties.......................... 100
10.03 Exculpatory Provisions........................ 100
10.04 Reliance by Administrative Agent.............. 101
10.05 Notice of Default............................. 101
10.06 Non-Reliance on Administrative Agent
and Other Banks............................. 102
10.07 Indemnification............................... 102
10.08 Administrative Agent in Its Individual
Capacity.................................... 103
10.09 Resignation of Administrative Agent;
Successor Administrative Agent.............. 103
SECTION 11. Miscellaneous................................. 104
11.01 Payment of Expenses, etc...................... 104
11.02 Right of Setoff............................... 105
11.03 Notices....................................... 105
11.04 Benefit of Agreement.......................... 106
11.05 No Waiver; Remedies Cumulative................ 107
11.06 Payments Pro Rata............................. 107
11.07 Calculations; Computations.................... 108
11.08 Governing Law; Submission to Jurisdiction;
Venue....................................... 108
11.09 Counterparts.................................. 111
11.10 Effectiveness................................. 111
11.11 Headings Descriptive.......................... 111
11.12 Amendment or Waiver........................... 111
11.13 Survival...................................... 112
11.14 Domicile of Loans............................. 112
11.15 Confidentiality............................... 112
SCHEDULE I - Commitments
SCHEDULE II - Bank Addresses
SCHEDULE III - Subsidiaries
SCHEDULE IV - Conflicts
SCHEDULE V - Existing Indebtedness
SCHEDULE VI - Insurance
(iv)
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SCHEDULE VII - Liens
SCHEDULE VIII - Existing Investments
SCHEDULE IX - Litigation
EXHIBIT A-1 - Tender Offer-A Note
EXHIBIT A-2 - Tender Offer-B Note
EXHIBIT A-3 - Term Note
EXHIBIT A-4 - Revolving Note
EXHIBIT A-5 - Swingline Note
EXHIBIT B-1 - Opinion of Counsels to the Borrower
EXHIBIT B-2 - Opinion of White & Case
(Tender Offer)
EXHIBIT B-3 - Opinion of White & Case
(Merger)
EXHIBIT C - Subsidiary Guaranty
EXHIBIT D-1 - Voting Trust Agreement
EXHIBIT D-2 - Borrower Pledge Agreement
EXHIBIT D-3 - VT Pledge Agreement
EXHIBIT D-4 - Finance Co. Pledge Agreement
EXHIBIT E - Consent Letter
EXHIBIT F - Officer's Certificate
EXHIBIT G - Assignment Agreement
EXHIBIT H - Special Funding Procedures Letter
<PAGE>
<PAGE>
CREDIT AGREEMENT, dated as of January 7, 1994, among
QVC NETWORK, INC., a Delaware corporation (the "Borrower"), the
lending institutions listed from time to time on Schedule I
hereto (each a "Bank" and, collectively, the "Banks"), THE BANK
OF NOVA SCOTIA, BARCLAYS BANK PLC, CHEMICAL BANK, LTCB TRUST
COMPANY, NATIONSBANK OF TEXAS, N.A. and TORONTO DOMINION
(TEXAS), INC., as Co-Arrangers (the "Co-Arrangers") and CHEMI-
CAL BANK, as administrative agent (the "Administrative Agent").
Unless otherwise defined herein, all capitalized terms used
herein and defined in Section 9 are used herein as so defined.
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions
set forth herein, the Banks are willing to make available to
the Borrower the credit facilities provided for herein.
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
1.01 Commitments. (A) Subject to and upon the
terms and conditions herein set forth, each Bank severally
agrees to make a loan or loans (each a "Loan" and, collec-
tively, the "Loans") to the Borrower, which Loans shall be
drawn, to the extent such Bank has a commitment under such Fa-
cility, under the Tender Offer-A Facility, the Tender Offer-B
Facility, the Term Loan Facility, the Revolving Credit Facility
and the Swingline Facility, as set forth below:
(a) Each Loan under the Tender Offer-A Facility
(each a "Tender Offer-A Loan" and, collectively, the "Ten-
der Offer-A Loans") (i) shall be made from time to time
after the Effective Date and prior to the Tender Offer
Maturity Date, provided that Share Purchase Loans may not
be incurred on more than one date, (ii) except as herein-
after provided, shall, at the option of the Borrower, be
incurred and maintained as, and/or converted into, Base
Rate Loans or Eurodollar Loans, provided that all Tender
Offer-A Loans made by all Banks pursuant to the same Bor-
rowing shall, unless otherwise specifically provided
herein, consist entirely of Loans of the same Type, and
provided further that Share Purchase Loans will be ini-
tially incurred as, and be maintained for at least three
Business Days as, Base Rate Loans and (iii) shall not ex-
ceed for any Bank at any time outstanding that aggregate
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principal amount which equals the Tender Offer-A Commit-
ment of such Bank at such time.
(b) Each Loan under the Tender Offer-B Facility
(each a "Tender Offer-B Loan" and, collectively, the "Ten-
der Offer-B Loans") (i) shall be made at any time and from
time to time on and after the Initial Borrowing Date and
prior to the Merger Borrowing Date, (ii) except as herein-
after provided, shall, at the option of the Borrower, be
incurred and maintained as, and/or converted into, Base
Rate Loans or Eurodollar Loans, provided that all Tender
Offer-B Loans made by all Banks pursuant to the same Bor-
rowing shall, unless otherwise specifically provided
herein, consist entirely of Loans of the same Type, and
(iii) shall not exceed for any Bank at any time outstand-
ing that aggregate principal amount which equals the Ten-
der Offer-B Commitment of such Bank.
(c) Each Loan under the Term Loan Facility (each a
"Term Loan" and, collectively, the "Term Loans") (i) shall
be made pursuant to one drawing, which shall be on the
Merger Borrowing Date, (ii) except as hereinafter pro-
vided, may, at the option of the Borrower, be incurred and
maintained as, and/or converted into, Base Rate Loans or
Eurodollar Loans, provided that all Term Loans made by all
Banks pursuant to the same Borrowing shall, unless other-
wise specifically provided herein, consist entirely of
Loans of the same Type, and (iii) shall not exceed for any
Bank at the time of incurrence thereof on the Merger Bor-
rowing Date that amount which equals the Term Loan Commit-
ment, if any, of such Bank on such date. Once repaid,
Term Loans may not be reborrowed.
(d) Each Loan under the Revolving Credit Facility
(each a "Revolving Loan" and, collectively, the "Revolving
Loans") (i) shall be made at any time and from time to
time on and after the Merger Borrowing Date and prior to
the Final Maturity Date, (ii) except as hereinafter pro-
vided, may, at the option of the Borrower, be incurred and
maintained as, and/or converted into, Base Rate Loans or
Eurodollar Loans, provided that all Revolving Loans made
by all Banks pursuant to the same Borrowing shall, unless
otherwise specifically provided herein, consist entirely
of Loans of the same Type, (iii) may be repaid and rebor-
rowed in accordance with the provisions hereof, (iv) shall
not exceed in aggregate principal amount for any Bank at
any time outstanding that amount which equals the Revolv-
ing Commitment, if any, of such Bank at such time and (v)
shall not exceed in aggregate principal amount for all
Banks at any time outstanding that amount which, when
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added to the then aggregate outstanding principal amount
of Swingline Loans, would equal the Total Revolving Com-
mitment at such time.
(e) Subject to and upon the terms and conditions
herein set forth, Chemical Bank in its individual capacity
agrees, at any time and from time to time after the Merger
Borrowing Date and prior to the Swingline Expiry Date, to
make a loan or loans (each a "Swingline Loan" and, col-
lectively, the "Swingline Loans") to the Borrower, which
Swingline Loans (i) shall be made and maintained as Base
Rate Loans, (ii) shall not exceed at any time outstanding
Chemical Bank's Swingline Commitment, (iii) shall not ex-
ceed in aggregate principal amount at any one time out-
standing, when combined with the aggregate principal
amount of all Revolving Loans then outstanding, the Total
Revolving Commitment then in effect, (iv) shall be repaid
no later than 10 Business Days after the date incurred and
(v) may be repaid and reborrowed in accordance with the
provisions hereof. On the Swingline Expiry Date, all
Swingline Loans shall be repaid in full. Chemical Bank
shall not make any Swingline Loan after receiving a writ-
ten notice from the Borrower or any Bank stating that a
Default or an Event of Default exists and is continuing
until such time as Chemical Bank shall have received writ-
ten notice of (i) rescission of all such notices from the
party or parties originally delivering such notice or (ii)
the waiver of such Default or Event of Default by the Re-
quired Banks. On any Business Day, Chemical Bank may, in
its sole discretion, give notice to the Banks that all
then outstanding Swingline Loans shall be funded with a
Borrowing of Revolving Loans (provided that such notice
shall be deemed to have been automatically given upon the
occurrence of an Event of Default under Section 8.05), in
which case a Borrowing of Revolving Loans constituting
Base Rate Loans (each such Borrowing, a "Mandatory Borrow-
ing") shall be made on the immediately succeeding Business
Day by all RL Banks pro rata based on each RL Bank's Re-
volving Commitment and the proceeds thereof shall be ap-
plied directly to Chemical Bank to repay such outstanding
Swingline Loans. Each RL Bank hereby irrevocably agrees
to make such Revolving Loans upon one Business Day's no-
tice pursuant to each Mandatory Borrowing in the amount
and in the manner specified in the preceding sentence and
on the date specified to it in writing by Chemical Bank
notwithstanding (i) that the amount of the Mandatory Bor-
rowing may not comply with the minimum amount for a Bor-
rowing specified in Section 1.01(B), (ii) whether any con-
ditions specified in Section 4 are then satisfied, (iii)
whether a Default or an Event of Default has occurred and
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<PAGE>
is continuing, (iv) the date of such Mandatory Borrowing
and (v) any reduction in the Total Revolving Commitment
after any such Swingline Loans were made. In the event
that any Mandatory Borrowing cannot for any reason be made
on the date otherwise required above (including, without
limitation, as a result of the commencement of a proceed-
ing under the Bankruptcy Code in respect of the Borrower),
each RL Bank hereby agrees that it shall forthwith pur-
chase from Chemical Bank (without recourse or warranty)
such assignment of the outstanding Swingline Loans as
shall be necessary to cause the RL Banks to share in such
Swingline Loans ratably based upon their respective Re-
volving Commitments, provided that all interest payable on
such Swingline Loans shall be for the account of Chemical
Bank until the date the respective assignment is purchased
and, to the extent attributable to the purchased assign-
ment, shall be payable to the Bank purchasing same from
and after such date of purchase.
(B) The aggregate principal amount of each Borrowing
under a Facility shall not be less than the Minimum Borrowing
Amount for such Facility. More than one Borrowing may be in-
curred on any day, provided that (x) at no time prior to the
Syndication Date shall there be more than one Borrowing of Ten-
der Offer-A Loans constituting Eurodollar Loans, and (y) at no
time thereafter shall there be outstanding more than 15 Borrow-
ings of Eurodollar Loans.
1.02 Notice of Borrowing. (a) Whenever the Bor-
rower desires to incur Loans under any Facility (other than the
Swingline Facility), it shall give the Administrative Agent at
its Notice Office, prior to 12:00 Noon (New York time), at
least three Business Days' prior written notice (or telephonic
notice promptly confirmed in writing) of each Borrowing of Eu-
rodollar Loans and at least one Business Day's prior written
notice (or telephonic notice promptly confirmed in writing) of
each Borrowing of Base Rate Loans to be made hereunder. Each
such notice (each, together with a notice delivered pursuant to
Section 1.02(b), a "Notice of Borrowing") shall be irrevocable
and shall specify (i) the Facility pursuant to which such Bor-
rowing is to be made, (ii) the aggregate principal amount of
the Loans to be made pursuant to such Borrowing, (iii) the date
of Borrowing (which shall be a Business Day) and (iv) whether
the respective Borrowing shall consist of Base Rate Loans or
Eurodollar Loans and, if Eurodollar Loans, the Interest Period
to be initially applicable thereto. The Administrative Agent
shall promptly give each Bank written notice (or telephonic
notice promptly confirmed in writing) of each proposed Bor-
rowing, of such Bank's proportionate share thereof and of the
other matters covered by the Notice of Borrowing.
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(b) Whenever the Borrower desires to make a Borrow-
ing of Swingline Loans hereunder, it shall give the Administra-
tive Agent no later than 12:00 Noon (New York time) on the day
such Swingline Loan is to be made, written notice (or tele-
phonic notice promptly confirmed in writing) of the Swingline
Loan to be made hereunder. Each such notice shall be ir-
revocable and specify in each case (i) the date of Borrowing
(which shall be a Business Day) and (ii) the aggregate princi-
pal amount of the Swingline Loans to be made pursuant to such
Borrowing. The Administrative Agent shall promptly give Chemi-
cal Bank written notice (or telephonic notice promptly con-
firmed in writing) of each proposed Borrowing of Swingline
Loans and of the other matters covered by the Notice of Borrow-
ing.
(c) Mandatory Borrowings shall be made upon the no-
tice specified in Section 1.01(A)(e), with the Borrower irre-
vocably agreeing, by its incurrence of any Swingline Loan, to
the making of Mandatory Borrowings as set forth in such Sec-
tion.
(d) Without in any way limiting the obligation of
the Borrower to confirm in writing any notice it may give here-
under by telephone, the Administrative Agent may act prior to
receipt of written confirmation without liability upon the ba-
sis of any such telephonic notice (which is identified as
such), believed by the Administrative Agent in good faith to be
from an Authorized Officer of the Borrower as a person entitled
to give telephonic notices under this Agreement on behalf of
the Borrower. In each such case the Borrower hereby waives the
right to dispute the Administrative Agent's record of the terms
of any such telephonic notice.
1.03 Disbursement of Funds. (a) No later than 1:00
P.M. (3:00 P.M. in the case of Swingline Loans) (New York time)
on the date specified in each Notice of Borrowing, each Bank
will make available its pro rata share, if any, of each Borrow-
ing requested to be made on such date in the manner provided
below, provided that the principal amount of Loans to be so
made available on the Merger Borrowing Date shall be net of the
aggregate principal amount of Tender Offer Loans of such Bank
required to be repaid on such date, with the amount not so made
available to be applied by such Bank to the repayment of such
Tender Offer Loans. All amounts shall be made available to the
Administrative Agent in U.S. dollars and immediately available
funds at the Payment Office and the Administrative Agent
promptly will make available to the Borrower by depositing to
its account at the Payment Office the aggregate of the amounts
so made available in the type of funds received. Unless the
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Administrative Agent shall have been notified by any Bank prior
to the date of Borrowing that such Bank does not intend to make
available to the Administrative Agent its portion, if any, of
the Borrowing or Borrowings to be made on such date, the Admin-
istrative Agent may assume that such Bank has made such amount
available to the Administrative Agent on such date of Borrow-
ing, and the Administrative Agent, in reliance upon such as-
sumption, may (in its sole discretion and without any obliga-
tion to do so) make available to the Borrower a corresponding
amount. If such corresponding amount is not in fact made
available to the Administrative Agent by such Bank and the Ad-
ministrative Agent has made available same to the Borrower, the
Administrative Agent shall be entitled to recover such corre-
sponding amount from such Bank. If such Bank does not pay such
corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent shall promptly notify
the Borrower, and the Borrower shall within 2 Business Days of
notice thereof pay such corresponding amount to the Administra-
tive Agent. The Administrative Agent shall also be entitled to
recover from such Bank or the Borrower, as the case may be,
interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by
the Administrative Agent to the Borrower to the date such cor-
responding amount is recovered by the Administrative Agent, at
a rate per annum equal to (x) if to be paid by such Bank, the
overnight Federal Funds Rate or (y) if to be paid by the Bor-
rower, the then applicable rate of interest, calculated in ac-
cordance with Section 1.07, for the respective Loans.
(b) Notwithstanding the foregoing, the Special Fund-
ing Procedures Letter shall be executed by the Borrower and
each Bank on or prior to the Effective Date to provide for mu-
tually satisfactory arrangements whereby a pre-funding of the
initial Tender Offer Loans by the Banks with a Tender Offer
Commitment shall be made in advance of the Initial Borrowing
Date.
(c) Nothing herein shall be deemed to relieve any
Bank from its obligation to fulfill its commitments hereunder
or to prejudice any rights which the Borrower may have against
any Bank as a result of any default by such Bank hereunder.
1.04 Notes. (a) The Borrower's obligation to pay
the principal of, and interest on, the Loans made by each Bank
shall be evidenced (i) if Tender Offer-A Loans, by a promissory
note duly executed and delivered by the Borrower substantially
in the form of Exhibit A-1 with blanks appropriately completed
in conformity herewith (each a "Tender Offer-A Note" and, col-
lectively, the "Tender Offer-A Notes"), (ii) if Tender Offer-B
Loans, by a promissory note duly executed and delivered by the
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Borrower substantially in the form of Exhibit A-2 with blanks
appropriately completed in conformity herewith (each a "Tender
Offer-B Note" and, collectively, the "Tender Offer-B Notes"),
(iii) if Term Loans, by a promissory note duly executed and
delivered by the Borrower substantially in the form of Exhibit
A-3 with blanks appropriately completed in conformity herewith
(each a "Term Note" and, collectively, the "Term Notes"),
(iv) if Revolving Loans, by a promissory note duly executed and
delivered by the Borrower substantially in the form of Exhibit
A-4, with blanks appropriately completed in conformity herewith
(each a "Revolving Note" and collectively the "Revolving
Notes") and (v) if Swingline Loans, by a promissory note duly
executed and delivered by the Borrower substantially in the
form of Exhibit A-5, with blanks appropriately completed in
conformity herewith (the "Swingline Note").
(b) The Tender Offer-A Note, if any, issued to each
Bank shall (i) be payable to the order of such Bank and be
dated the Tender Offer Closing Date, (ii) be in a stated prin-
cipal amount equal to the Tender Offer-A Commitment of such
Bank and be payable in the principal amount of the Tender
Offer-A Loans evidenced thereby, (iii) mature on the Tender
Offer Maturity Date, (iv) bear interest as provided in the ap-
propriate clause of Section 1.07 in respect of the Base Rate
Loans and Eurodollar Loans, as the case may be, evidenced
thereby, (v) be subject to mandatory repayment as provided in
Section 3.02 and (vi) be entitled to the benefits of this
Agreement and the other Credit Documents.
(c) The Tender Offer-B Note, if any, issued to each
Bank shall (i) be payable to the order of such Bank and be
dated the Tender Offer Closing Date, (ii) be in a stated prin-
cipal amount equal to the Tender Offer-B Commitment of such
Bank and be payable in the principal amount of the Tender
Offer-B Loans evidenced thereby, (iii) mature on the Tender
Offer Maturity Date, (iv) bear interest as provided in the ap-
propriate clause of Section 1.07 in respect of the Base Rate
Loans and Eurodollar Loans, as the case may be, evidenced
thereby, (v) be subject to mandatory repayment as provided in
Section 3.02 and (vi) be entitled to the benefits of this
Agreement and the other Credit Documents.
(d) The Term Note, if any, issued to each Bank shall
(i) be payable to the order of such Bank and be dated the
Merger Borrowing Date, (ii) be in a stated principal amount
equal to the Term Loan made or acquired by such Bank and be
payable in the principal amount of the Term Loans evidenced
thereby, (iii) mature on the Final Maturity Date, (iv) bear
interest as provided in the appropriate clause of Section 1.07
in respect of the Base Rate Loans and Eurodollar Loans, as the
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case may be, evidenced thereby, (v) be subject to mandatory
repayment as provided in Section 3.02 and (vi) be entitled to
the benefits of this Agreement and the other Credit Documents.
(e) The Revolving Note, if any, issued to each Bank
shall (i) be payable to the order of such Bank and be dated the
Merger Borrowing Date, (ii) be in a stated principal amount
equal to the Revolving Commitment of such Bank and be payable
in the principal amount of the Revolving Loans evidenced
thereby, (iii) mature on the Final Maturity Date, (iv) bear
interest as provided in the appropriate clause of Section 1.07
in respect of the Base Rate Loans and Eurodollar Loans, as the
case may be, evidenced thereby, (v) be subject to mandatory
repayment as provided in Section 3.02 and (vi) be entitled to
the benefits of this Agreement and the other Credit Documents.
(f) The Swingline Note issued to Chemical Bank shall
(i) be payable to the order of Chemical Bank and be dated the
Merger Borrowing Date, (ii) be in a stated principal amount
equal to the Swingline Commitment and be payable in the out-
standing principal amount of the Swingline Loans evidenced
thereby, (iii) mature on the Swingline Expiry Date, (iv) be
subject to mandatory prepayment as provided in Section 3.02,
(v) bear interest as provided in the appropriate clause of Sec-
tion 1.07 in respect of the Base Rate Loans evidenced thereby
and (vi) be entitled to the benefits of this Agreement and the
other Credit Documents.
(g) Each Bank will note on its internal records the
amount of each Loan made by it and each payment in respect
thereof and will prior to any transfer of any of its Notes en-
dorse on the reverse side thereof the outstanding principal
amount of Loans evidenced thereby and the last date or dates on
which interest has been paid in respect of the Loans evidenced
thereby. Failure to make any such notation shall not affect
the Borrower's obligations in respect of such Loans, or affect
the validity of such transfer by any Bank of such Note.
1.05 Conversions. (a) The Borrower shall have the
option to convert on any Business Day all or a portion at least
equal to the applicable Minimum Borrowing Amount of the out-
standing principal amount of the Loans owing by the Borrower
pursuant to a single Facility (other than under the Swingline
Facility, with all Swingline Loans to at all times be main-
tained as Base Rate Loans) into a Borrowing or Borrowings pur-
suant to such Facility of another Type of Loan, provided that
(i) no partial conversion of a Borrowing of Eurodollar Loans
shall reduce the outstanding principal amount of the Eurodollar
Loans pursuant to such Borrowing to less than the Minimum Bor-
rowing Amount applicable thereto, (ii) Base Rate Loans may only
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be converted into Eurodollar Loans if no Default or Event of
Default is in existence on the date of the conversion and (iii)
Borrowings of Eurodollar Loans resulting from this Section 1.05
shall be limited in number as provided in Section 1.01(B).
Each such conversion shall be effected by the Borrower by giv-
ing the Administrative Agent at its Notice Office, prior to
12:00 Noon (New York time), at least three Business Days (or
one Business Day in the case of a conversion into Base Rate
Loans) prior written notice (or telephonic notice promptly con-
firmed in writing) (each a "Notice of Conversion") specifying
the Loans to be so converted, the Type of Loans to be converted
into and, if to be converted into a Borrowing of Eurodollar
Loans, the Interest Period to be initially applicable thereto.
The Administrative Agent shall give each Bank prompt notice of
any such proposed conversion affecting any of its Loans.
(b) The Administrative Agent shall have the one time
right (exercisable after consultation with each Co- Arranger),
in connection with reaching the Syndication Date and upon at
least two Business Days prior written notice to the Borrower,
to require that all Tender Offer Loans then outstanding as Eu-
rodollar Loans be converted into Base Rate Loans, with the Bor-
rower not having the right to thereafter convert Base Rate
Loans into Eurodollar Loans for three Business Days following
such forced conversion.
1.06 Pro Rata Borrowings. All Borrowings of Loans
under this Agreement (other than under the Swingline Facility)
shall be loaned by the Banks pro rata on the basis of their
Tender Offer-A Commitments, Tender Offer-B Commitments, Term
Loan Commitments or Revolving Commitments, as the case may be.
It is understood that no Bank shall be responsible for any de-
fault by any other Bank in its obligation to make Loans hereun-
der and that each Bank shall be obligated to make the Loans
provided to be made by it hereunder, regardless of the failure
of any other Bank to fulfill its commitments hereunder.
1.07 Interest. (a) The unpaid principal amount of
each Base Rate Loan shall bear interest from the date of the
Borrowing thereof until maturity (whether by acceleration or
otherwise) at a rate per annum which shall at all times be the
Applicable Base Rate Margin plus the Base Rate in effect from
time to time.
(b) The unpaid principal amount of each Eurodollar
Loan shall bear interest from the date of the Borrowing thereof
until maturity (whether by acceleration or otherwise) at a rate
per annum which shall at all times be the Applicable Eurodollar
Margin plus the relevant Eurodollar Rate.
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(c) Overdue principal and, to the extent permitted
by law, overdue interest in respect of each Loan shall bear
interest at a rate per annum equal to the Base Rate in effect
from time to time plus the sum of (i) 2% and (ii) the Applic-
able Base Rate Margin, provided that no Loan shall bear in-
terest after maturity (whether by acceleration or otherwise) at
a rate per annum less than 2% plus the rate of interest ap-
plicable thereto at maturity.
(d) Interest shall accrue from and including the
date of any Borrowing to but excluding the date of any repay-
ment thereof and shall be payable (i) in respect of each Base
Rate Loan that is a Tender Offer Loan, monthly in arrears on
the last Business Day of each month, (ii) in respect of each
Term Loan or Revolving Loan, quarterly in arrears on the last
day of each calendar quarter and, in respect of each Eurodollar
Loan, on the last day of each Interest Period applicable
thereto and (iii) in respect of each Loan, on any prepayment or
conversion (on the amount prepaid or converted), at maturity
(whether by acceleration or otherwise) and, after such matu-
rity, on demand.
(e) All computations of interest hereunder shall be
made in accordance with Section 11.07(b).
(f) The Administrative Agent, upon determining the
interest rate for any Borrowing of Eurodollar Loans for any
Interest Period, shall promptly notify the Borrower and the
Banks thereof in writing.
1.08 Interest Periods. At the time the Borrower
gives a Notice of Borrowing or Notice of Conversion in respect
of the making of, or conversion into, a Borrowing of Eurodollar
Loans (in the case of the initial Interest Period applicable
thereto) or prior to 12:00 Noon (New York time) on the third
Business Day prior to the expiration of an Interest Period ap-
plicable to a Borrowing of Eurodollar Loans, it shall have the
right to elect by giving the Administrative Agent written no-
tice (or telephonic notice promptly confirmed in writing) of
the Interest Period applicable to such Borrowing, which Inter-
est Period shall, at the option of the Borrower, be a one, two,
three or six or, if available to each Bank required to make or
maintain the respective Loans (as determined by each such Bank
for itself in good faith), nine or twelve month period, pro-
vided that only a one month period may be elected for Tender
Offer Loans. Notwithstanding anything to the contrary con-
tained above:
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(i) the initial Interest Period for any Borrowing of
Eurodollar Loans shall commence on the date of such Bor-
rowing (including the date of any conversion from a Bor-
rowing of Base Rate Loans) and each Interest Period occur-
ring thereafter in respect of such Borrowing shall com-
mence on the day on which the next preceding Interest Pe-
riod expires;
(ii) if any Interest Period begins on a day for which
there is no numerically corresponding day in the calendar
month at the end of such Interest Period, such Interest
Period shall end on the last Business Day of such calendar
month;
(iii) if any Interest Period would otherwise expire on
a day which is not a Business Day, such Interest Period
shall expire on the next succeeding Business Day, provided
that if any Interest Period would otherwise expire on a
day which is not a Business Day but is a day of the month
after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding
Business Day;
(iv) no Interest Period may be elected if it would
extend beyond (x) in the case of Tender Offer Loans, the
Tender Offer Maturity Date or (y) in the case of Term
Loans and Revolving Loans, the Final Maturity Date;
(v) no Interest Period may be elected at any time
when a Default or Event of Default is then in existence;
and
(vi) no Interest Period with respect to any Borrowing
of Term Loans may be elected that would extend beyond any
date upon which a Scheduled Repayment is required to be
made if, after giving effect to the selection of such In-
terest Period, the aggregate principal amount of Term
Loans maintained as Eurodollar Loans with Interest Periods
ending after such date would exceed the aggregate princi-
pal amount of Term Loans permitted to be outstanding after
such Scheduled Repayment.
If upon the expiration of any Interest Period, the Borrower has
failed to elect a new Interest Period to be applicable to the
respective Borrowing of Eurodollar Loans as provided above, the
Borrower shall be deemed to have elected to convert such Bor-
rowing into a Borrowing of Base Rate Loans effective as of the
expiration date of such current Interest Period.
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1.09 Increased Costs, Illegality, etc. (a) In the
event that (x) in the case of clause (i) below, the Administra-
tive Agent or (y) in the case of clauses (ii) and (iii) below,
any Bank shall have reasonably determined (which determination
shall, absent manifest error, be final and conclusive and bind-
ing upon all parties hereto):
(i) on any date for determining the Eurodollar Rate
for any Interest Period that, by reason of any changes
arising after the date of this Agreement affecting the
interbank Eurodollar market, adequate and fair means do
not exist for ascertaining the applicable interest rate on
the basis provided for in the definition of Eurodollar
Rate; or
(ii) at any time, that such Bank shall incur in-
creased costs or reductions in the amounts received or
receivable hereunder with respect to any Eurodollar Loans
(other than any increased cost or reduction in the amount
received or receivable resulting from the imposition of or
a change in the rate of taxes or similar charges) because
of (x) any change since the date of this Agreement in any
applicable law, governmental rule, regulation, guideline,
order or request (whether or not having the force of law)
or in the interpretation or administration thereof and
including the introduction of any new law or governmental
rule, regulation, guideline, order or request (such as,
for example, but not limited to, a change in official re-
serve requirements, but, in all events, excluding reserves
payable pursuant to Section 1.09(c)) and/or (y) other cir-
cumstances adversely affecting the interbank Eurodollar
market or the position of such Bank in such market; or
(iii) at any time, that the making or continuance of
any Eurodollar Loan has become unlawful by compliance by
such Bank in good faith with any law, governmental rule,
regulation, guideline or order (or would conflict with any
such governmental rule, regulation, guideline or order not
having the force of law but with which such Bank customar-
ily complies even though the failure to comply therewith
would not be unlawful), or has become impracticable as a
result of a contingency occurring after the date of this
Agreement which adversely affects the interbank Eurodollar
market;
then, and in any such event, such Bank (or the Administrative
Agent in the case of clause (i) above) shall (x) on such date
and (y) within three Business Days of the date on which such
event no longer exists give notice (by telephone confirmed in
writing) to the Borrower and (except in the case of clause (i))
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to the Administrative Agent of such determination (which notice
the Administrative Agent shall promptly transmit to each of the
other Banks). Thereafter (x) in the case of clause (i) above,
Eurodollar Loans shall no longer be available until such time
as the Administrative Agent notifies the Borrower and the Banks
that the circumstances giving rise to such notice by the Admin-
istrative Agent no longer exist, and any Notice of Borrowing or
Notice of Conversion given by the Borrower with respect to Eu-
rodollar Loans which have not yet been incurred shall be deemed
rescinded by the Borrower, (y) in the case of clause (ii)
above, the Borrower shall pay to such Bank, upon written demand
therefor, such additional amounts (in the form of an increased
rate of, or a different method of calculating, interest or oth-
erwise as such Bank in its sole discretion shall determine) as
shall be required to compensate such Bank for such increased
costs or reductions in amounts receivable hereunder (a written
notice as to the additional amounts owed to such Bank, showing
the basis for the calculation thereof, submitted to the Bor-
rower by such Bank shall, absent manifest error, be final and
conclusive and binding upon all parties hereto) and (z) in the
case of clause (iii) above, the Borrower shall take one of the
actions specified in Section 1.09(b) as promptly as possible
and, in any event, within the time period required by law.
(b) At any time that any Eurodollar Loan is affected
by the circumstances described in Section 1.09(a)(ii), (iii) or
1.09(c), the Borrower may (and in the case of a Eurodollar Loan
affected pursuant to Section 1.09(a)(iii) shall) either (i) if
the affected Eurodollar Loan is then being made pursuant to a
Borrowing, (x) cancel said Borrowing or (y) require the af-
fected Bank to make its requested Loan as a Base Rate Loan, in
each case by giving the Administrative Agent telephonic notice
(confirmed promptly in writing) thereof on the same date that
the Borrower was notified by a Bank pursuant to Section
1.09(a)(ii) or (iii), or (ii) if the affected Eurodollar Loan
is then outstanding, upon at least three Business Days' notice
to the Administrative Agent, require the affected Bank to con-
vert each such Eurodollar Loan into a Base Rate Loan, provided
that if more than one Bank is affected by the same matter at
any time, then all affected Banks must be treated the same pur-
suant to this Section 1.09(b). Unless a Bank that has made
demand for additional costs pursuant to Section 1.09(a) or
1.09(c) subsequently informs the Borrower that such additional
costs are no longer applicable, the Borrower may, at the time
it subsequently requests a Borrowing of Eurodollar Loans, as-
sume that such additional costs will be applicable and require
such Bank to make all its requested Loans as Base Rate Loans.
(c) In the event that any Bank shall reasonably de-
termine (which determination shall, absent manifest error, be
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final and conclusive and binding on all parties hereto) at any
time that by reason of Regulation D such Bank is required to
maintain reserves in respect of Eurodollar loans or liabilities
during any period it has a Eurodollar Loan outstanding, then
such Bank shall promptly notify the Borrower by telephone con-
firmed in writing specifying the additional amounts required to
indemnify such Bank against the cost of maintaining such re-
serves (such written notice to provide in sufficient detail a
computation of such additional amounts) and the Borrower shall
directly pay to such Bank such specified amounts as additional
interest at the time that it is otherwise required to pay in-
terest in respect of such Eurodollar Loan or, if later, on de-
mand.
(d) If any Bank determines in good faith at any time
that the adoption or effectiveness of any applicable law, rule
or regulation regarding capital adequacy, or any change there-
in, or any change in the interpretation or administration
thereof by any governmental authority, central bank or com-
parable agency charged with the interpretation or administra-
tion thereof, or actual compliance by such Bank or its parent
corporation with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have
the effect of increasing the costs to such Bank or its parent
corporation to a level above that, or reducing the rate of re-
turn on such Bank's or parent corporation's capital or assets
as a consequence of its commitments or obligations hereunder to
a level below that, which such Bank or its parent corporation
could have achieved but for such adoption, effectiveness,
change or compliance (taking into consideration such Bank's or
parent corporation's policies with respect to capital ad-
equacy), then from time to time, upon written demand by such
Bank (with a copy to the Administrative Agent), the Borrower
shall pay to such Bank such additional amount or amounts as
will compensate such Bank or its parent corporation for such
increase or reduction. Each Bank, upon determining in good
faith that any additional amounts will be payable pursuant to
this Section 1.09(d), will give prompt written notice thereof
to the Borrower, which notice shall set forth the basis of the
calculation of such additional amounts, provided that the Bor-
rower will not be responsible for additional costs owing to
such Bank pursuant to this Section 1.09(d) accruing more than
180 days prior to such Bank giving such notice.
1.10 Compensation. The Borrower shall compensate
each Bank, upon its written request (which request shall set
forth the basis for requesting such compensation), for all rea-
sonable losses, expenses and liabilities (including, without
limitation, any loss, expense or liability incurred by reason
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of the liquidation or reemployment of deposits or other funds
required by such Bank to fund its Eurodollar Loans) which such
Bank may sustain: (i) if for any reason (other than a failure
by such Bank to fund its Loans when required by the terms of
this Agreement) a Borrowing of Eurodollar Loans does not occur
on a date specified therefor in a Notice of Borrowing or Notice
of Conversion (whether or not withdrawn by the Borrower or
deemed withdrawn pursuant to Section 1.09(a)); (ii) if any re-
payment or conversion of any of its Eurodollar Loans occurs on
a date which is not the last day of an Interest Period ap-
plicable thereto; (iii) if any prepayment of any of its Euro-
dollar Loans is not made on any date specified in a notice of
prepayment given by the Borrower; or (iv) as a consequence of
(x) any other default by the Borrower to repay its Eurodollar
Loans when required by the terms of this Agreement or (y) an
election made pursuant to Section 1.09(b). Calculation of all
amounts payable to a Bank under this Section 1.10 shall be made
as though that Bank had actually funded its relevant Eurodollar
Loan through the purchase of a Eurodollar deposit bearing in-
terest at the Eurodollar Rate in an amount equal to the amount
of that Loan, having a maturity comparable to the relevant In-
terest Period and through the transfer of such Eurodollar de-
posit from an offshore office or affiliate of that Bank to a
domestic office of that Bank in the United States of America
(or if such Bank has no offshore office or affiliate, from an
offshore office of the Administrative Agent to the domestic
office of the Administrative Agent); provided, however, that
each Bank may fund each of its Eurodollar Loans in any manner
it sees fit and the foregoing assumption shall be utilized only
for the calculation of amounts payable under this Section 1.10.
1.11 Change of Lending Office. Each Bank agrees
that, upon the occurrence of any event giving rise to the op-
eration of Section 1.09(a)(ii) or (iii), 1.09(c), 1.09(d) or
3.04 with respect to such Bank, it will, if requested by the
Borrower, use reasonable efforts (subject to overall policy
considerations of such Bank) to designate another lending of-
fice of such Bank for any Loans affected by such event, pro-
vided that such designation is made on such terms that such
Bank and its lending office suffer no economic, legal or regu-
latory disadvantage, with the object of avoiding or reducing to
the full extent possible the consequence of the event giving
rise to the operation of any such Section. Nothing in this
Section 1.11 shall affect or postpone any of the obligations of
the Borrower or the right of any Bank provided in Section 1.09
or 3.04.
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SECTION 2. Fees; Commitments.
2.01 Fees. (a) The Borrower agrees to pay to the
Administrative Agent a commitment commission ("Commitment Com-
mission") for the account of (x) each Bank with a Tender Offer
Commitment for the period from and including the Tender Offer
Closing Date to but not including the Tender Offer Maturity
Date (or, if earlier, the date on which the Total Tender Offer
Commitment has been terminated) and (y) each RL Bank for the
period from and including the Merger Borrowing Date to but not
including the Final Maturity Date (or, if earlier, the date on
which the Total Revolving Commitment has been terminated), in
each case computed at a rate for each day equal to the Ap-
plicable CC Percentage for such day on such Bank's unutilized
Tender Offer Commitment or Revolving Commitment, as the case
may be. Such Commitment Commission shall be due and payable in
arrears on the last Business Day of each month (in the case of
Tender Offer Commitments) or calendar quarter (in the case of
Revolving Commitments) and on the date upon which the Total
Revolving Commitment is terminated.
(b) The Borrower shall pay to each of the Co-Ar-
rangers (x) on the Initial Borrowing Date for its own account
and/or for distribution to the Banks such fees as heretofore
agreed by the Borrower and the Co-Arrangers and (y) for its own
account, such other fees as may be agreed to from time to time
between the Borrower and any such Co-Arranger, when and as due.
(c) All computations of Fees shall be made in ac-
cordance with Section 11.07(b).
2.02 Voluntary Reduction of Commitments. Upon at
least three Business Days' prior written notice (or telephonic
notice confirmed in writing) to the Administrative Agent at its
Notice Office (which notice the Administrative Agent shall
promptly transmit to each of the Banks), the Borrower shall
have the right at any time after the Merger Borrowing Date,
without premium or penalty, to terminate the unutilized Total
Revolving Commitment, in part or in whole, provided that (x)
any such termination shall apply to proportionately and perma-
nently reduce the Revolving Commitment of each of the RL Banks
and (y) any partial reduction pursuant to this Section 2.02
shall be in the amount of at least $10,000,000.
2.03 Mandatory Adjustments of Commitments, etc. (a)
The Total Commitment (and the Tender Offer Commitment, Term
Loan Commitment and Revolving Loan Commitment of each Bank)
shall be terminated on the Expiration Date unless the Initial
Borrowing Date has occurred on or before such date.
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(b) The Total Tender Offer Commitment shall (x) ter-
minate on the earlier of (i) the Tender Offer Maturity Date and
(ii) the date on which a Change of Control Event occurs and (y)
be reduced on each date on which Tender Offer Loans are re-
quired to be repaid pursuant to Section 3.02(A)(c), (d) or (e)
in the amount of such repayment.
(c) The Total Term Loan Commitment and Total Revolv-
ing Commitment shall terminate on the date, if any, prior to
the Merger Borrowing Date on which the Total Tender Offer Com-
mitment is terminated.
(d) The Total Term Loan Commitment shall be reduced
on each date on which the Total Tender Offer Commitment is re-
duced pursuant to Section 2.03(b) in the amount of such reduc-
tion.
(e) The Total Revolving Commitment shall also termi-
nate on the earlier of (x) the Final Maturity Date and (y) the
date on which a Change of Control Event occurs.
(f) The Total Term Loan Commitment shall also termi-
nate on the Merger Borrowing Date, after giving effect to the
incurrence of Term Loans on such date.
(g) The Total Revolving Commitment shall be reduced
on each date set forth below by the amount set forth opposite
such date (each a "Scheduled Reduction"):
Reduction Date Amount
December 31, 1997 $100,000,000
December 31, 1998 $100,000,000
December 31, 1999 $300,000,000
(h) The Total Revolving Commitment shall be reduced
at the time any mandatory repayment of the Term Loans would be
required pursuant to Section 3.02(A)(c), (d), (e) or (g) if
Term Loans were then outstanding in an amount, if any, by which
the amount of such required repayment (determined as if an un-
limited amount of Term Loans were then outstanding) exceeds the
aggregate amount of Term Loans then outstanding, with such re-
ductions (in the case of Section 3.02(A) (c), (d) or (e)) to be
applied to the remaining Scheduled Reductions (x) when result-
ing from a Section 3.02(A)(c) event, in inverse order and (y)
in all other cases, pro rata among same.
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(i) Each reduction of the Total Tender Offer Com-
mitment, Total Term Loan Commitment or Total Revolving Com-
mitment pursuant to this Section 2.03 shall apply proportion-
ately to the Tender Offer Commitment, Term Loan Commitment or
Revolving Commitment, as the case may be, of each Bank.
SECTION 3. Payments.
3.01 Voluntary Prepayments. The Borrower shall have
the right to prepay Revolving Loans and/or Term Loans in whole
or in part, without penalty or fee except as otherwise provided
in this Agreement, from time to time on the following terms and
conditions: (i) the Borrower shall give the Administrative
Agent at the Payment Office written notice (or telephonic no-
tice promptly confirmed in writing) of its intent to prepay the
Loans, whether such Loans are Term Loans or Revolving Loans,
the amount of such prepayment and (in the case of Eurodollar
Loans) the specific Borrowing(s) pursuant to which made, which
notice shall be given by the Borrower at least two Business
Days prior to the date of such prepayment, which notice shall
promptly be transmitted by the Administrative Agent to each of
the Banks; (ii) each partial prepayment of any Borrowing shall
be in an aggregate principal amount of at least $10,000,000 (or
$5,000,000 in the case of Revolving Loans or $1,000,000 in the
case of Swingline Loans), provided that no partial prepayment
of Eurodollar Loans made pursuant to a Borrowing shall reduce
the aggregate principal amount of the Loans outstanding pursu-
ant to such Borrowing to an amount less than the Minimum Bor-
rowing Amount applicable thereto; and (iii) each prepayment in
respect of any Loans made pursuant to a Borrowing shall be ap-
plied pro rata among such Loans. Each prepayment of Term Loans
pursuant to this Section 3.01 shall (x) until such time as the
Term Loan Reduction has been achieved, reduce the remaining
Scheduled Repayments in inverse order of maturity and (y) after
the Term Loan Reduction has been achieved, reduce pro rata the
remaining Scheduled Repayments.
3.02 Mandatory Prepayments.
(A) Requirements:
(a) If on any date the sum of the aggregate out-
standing principal amount of Revolving Loans plus the aggregate
outstanding principal amount of Swingline Loans exceeds the
Total Revolving Commitment as then in effect, the Borrower
shall repay on such date the principal first of Swingline Loans
and then of Revolving Loans in an aggregate amount equal to
such excess.
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(b) On each date set forth below the Borrower shall
be required to repay the principal amount of Term Loans as is
set forth opposite such date (each such repayment, a "Scheduled
Repayment", and each such date a "Scheduled Repayment Date"):
Scheduled Repayment Date Amount
March 31, 1995 $ 50,000,000
June 30, 1995 $ 50,000,000
September 30, 1995 $ 50,000,000
December 31, 1995 $ 50,000,000
March 31, 1996 $ 75,000,000
June 30, 1996 $ 75,000,000
September 30, 1996 $ 75,000,000
December 31, 1996 $ 75,000,000
March 31, 1997 $ 75,000,000
June 30, 1997 $ 75,000,000
September 30, 1997 $ 75,000,000
December 31, 1997 $ 75,000,000
March 31, 1998 $ 75,000,000
June 30, 1998 $ 75,000,000
September 30, 1998 $ 75,000,000
December 31, 1998 $ 75,000,000
March 31, 1999 $ 75,000,000
June 30, 1999 $ 75,000,000
September 30, 1999 $ 75,000,000
December 31, 1999 $ 75,000,000
March 31, 2000 $150,000,000
June 30, 2000 $150,000,000
September 30, 2000 $150,000,000
December 31, 2000 $150,000,000
(c) On (x) the Business Day after the date of re-
ceipt by the Borrower or any of its Subsidiaries of the Cash
Proceeds of any Asset Sale, an amount equal to the Estimated
Net Cash Proceeds of such Asset Sale shall be applied to the
prepayment of the outstanding principal amount of (i) if prior
to the Merger Borrowing Date, the Tender Offer Loans (first to
outstanding Tender Offer-B Loans and when paid in full, to Ten-
der Offer-A Loans) and (ii) if thereafter, the Term Loans and
(y) the Business Day on which the Final Net Cash Proceeds of
any such Asset Sale is determined (the Borrower hereby agreeing
to make such determination within 60 days after consummation of
such Asset Sale), an amount equal to the excess of such Final
Net Cash Proceeds over the Estimated Net Cash Proceeds of such
Asset Sale shall be applied in the same manner as provided in
(x) above.
(d) On each date of the receipt thereof by the Bor-
rower or any of its Subsidiaries of an amount equal to the Net
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Debt Issuance Proceeds of the incurrence after the Initial Bor-
rowing Date of Indebtedness (other than Indebtedness permitted
by Section 7.03 (other than Section 7.03(l)) as such Section is
in effect on the Effective Date), (x) all of such amount until
such time as the Term Loan Reduction has been achieved and (y)
after the Term Loan Reduction has been achieved, 75% of ad-
ditional Net Debt Issuance Proceeds shall, in each case, be
applied to the prepayment of the outstanding principal amount
of (i) if prior to the Merger Borrowing Date, the Tender Offer
Loans (first to outstanding Tender Offer-B Loans and when paid
in full, to Tender Offer-A Loans) and (ii) if thereafter, the
Term Loans.
(e) On each date of the receipt thereof by the Bor-
rower or any of its Subsidiaries of an amount equal to the Net
Equity Issuance Proceeds of the sale of equity consummated af-
ter the Initial Borrowing Date (other than (i) the issuance to
BellSouth of Investor Voting Preferred and Borrower Common
Stock upon satisfaction of the BellSouth Conditions as contem-
plated by Section 2.01(a) of the Investment Agreement, (ii)
exchanges by the Specified Equity Investors of Investor
Non-Voting Preferred for Investor Voting Preferred and/or Bor-
rower Common Stock (as applicable), (iii) issuances of Borrower
Common Stock, Merger Preferred and Merger Warrants pursuant to
the Merger as provided in the Offer to Purchase, (iv) issuances
of Borrower Common Stock in payment of dividends and/or inter-
est on the Borrower Preferred Stock or Permitted Subordinated
Debt (or to the limited extent provided in the Finance Co. Loan
Agreement, on the Subordinated Finance Co. Note), (v) issuances
by the Borrower of Borrower Common Stock and/or Borrower Pre-
ferred Stock (weighted no more heavily in favor of Borrower
Preferred Stock than the allocation among common and preferred
applicable to the proposed BellSouth equity investment) follow-
ing the BellSouth Notice to the extent the proceeds thereof are
used to repay the principal of, and accrued and unpaid interest
on, the Subordinated Finance Co. Note; (vi) the issuance to
employees of and consultants to the Borrower and its Subsidiar-
ies of Borrower Common Stock and the exercise of stock options
issued to such persons, (vii) issuances of Borrower Common
Stock and/or Borrower Preferred Stock to a seller, or to some
or all the Principal Stockholders, to finance the purchase of,
or investment in, stock or assets to the extent such purchase
or investment is permitted by Section 7.01 or 7.04 or, in the
case of issuances to the Principal Stockholders, to finance
working capital needs of the Borrower and its Subsidiaries,
(viii) issuances of equity of the Borrower to one or more Per-
sons (other than pursuant to a public offering or a widely dis-
bursed Rule 144A or similar placement) to the extent that the
proceeds of such issuance are used, concurrently with the re-
ceipt thereof, to repurchase from existing holders any shares
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of equity of the Borrower but only if the equity so issued does
not have a higher priority (i.e., as between common stock and
preferred stock and not between classes of preferred stock),
and does not have a right to greater annual cash payments,
than, in each case, the shares of equity of the Borrower so
repurchased, (ix) issuances of Borrower Common Stock and/or
Investor Preferred pursuant to the Investment Agreement or oth-
erwise, to the extent utilized to purchase Shares pursuant to
the Tender Offer, (x) issuances in the normal course of busi-
ness for nominal consideration of Borrower Preferred Stock or
Borrower Common Stock to cable operators for carriage, (xi)
issuances of Borrower Common Stock upon exercise of Merger War-
rants to the extent that (m) the aggregate net cash proceeds
received from all such issuances on any Business Day are less
than $1,000,000 (provided that this subclause (m) shall cease
to be applicable to excluded net cash proceeds once they ag-
gregate $5,000,000) and (n) the exercise price is paid with
Merger Preferred (and/or Permitted Subordinated Debt exchanged
therefor), and (xii) issuances of equity by Subsidiaries of the
Borrower to the extent permitted by Section 7.12), (I) all of
such amount until such time as the Term Loan Reduction has been
reached and (II) after the Term Loan Reduction has been
achieved, 75% of Additional Net Equity Issuance Proceeds, shall
be applied to the prepayment of the outstanding principal
amount of (A) if prior to the Merger Borrowing Date, the Tender
Offer Loans (first to outstanding Tender Offer-B Loans and when
paid in full, to Tender Offer-A Loans) and (B) if thereafter,
the Term Loans.
(f) On the date a Change of Control Event occurs,
the outstanding principal amount of the Term Loans shall be due
and payable in full.
(g) On each Scheduled Repayment Date following the
date of an issuance of Permitted Subordinated Debt pursuant to
Section 7.05(f)(y), the Borrower shall, if on such Scheduled
Repayment Date the condition specified in Section 7.05(f)(x)
for issuing Permitted Subordinated Debt is not then satisfied,
repay Term Loans in an amount equal to the result of multiply-
ing (x) an amount equal to the Alternate Reduction Amount for
such issuance by (y) a fraction (i) the numerator of which is
the remaining Scheduled Repayment due on such Scheduled Repay-
ment Date as of the date of such issuance and (ii) the denomi-
nator of which is an amount equal to the aggregate outstanding
principal amount of all Term Loans as of the date of such issu-
ance, such repayment not to be applied against satisfaction of
the Scheduled Repayment due on such date (except to the extent
there are no subsequent remaining Scheduled Repayments) but
shall be applied as provided in Section 3.02(B)(a).
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(B) Application:
(a) All prepayments of Loans made pursuant to Sec-
tion 3.02(A)(c), (d)(x), (e)(I) or (g) shall be applied to re-
duce the remaining Scheduled Repayments in inverse order of
maturity and all prepayments of Loans made pursuant to Section
3.02(A)(d)(y) or (e)(II) shall be applied pro rata among the
remaining Scheduled Repayments.
(b) With respect to each prepayment of Loans re-
quired by this Section 3.02, the Borrower may designate the
Types of Loans which are to be prepaid and the specific
Borrowing(s) under the affected Facility pursuant to which
made, provided that (i) each prepayment of any Loans made pur-
suant to a Borrowing shall be applied pro rata among such
Loans; and (ii) if any prepayment of Eurodollar Loans made pur-
suant to a single Borrowing shall reduce the outstanding Loans
made pursuant to such Borrowing to an amount less than the
Minimum Borrowing Amount for such Eurodollar Loans, such Bor-
rowing shall be immediately converted into Base Rate Loans. In
the absence of a designation by the Borrower as described in
the preceding sentence, the Administrative Agent shall, subject
to the above, make such designation in its sole discretion with
a view, but no obligation, to minimize breakage costs owing
under Section 1.10.
3.03 Method and Place of Payment. Except as other-
wise specifically provided herein, all payments under this
Agreement shall be made to the Administrative Agent for the
ratable account of the Banks entitled thereto, not later than
1:00 P.M. (New York time) on the date when due and shall be
made in immediately available funds and in lawful money of the
United States of America at the Payment Office. Any payments
under this Agreement which are made later than 1:00 P.M. (New
York time) shall be deemed to have been made on the next suc-
ceeding Business Day. Whenever any payment to be made here-
under shall be stated to be due on a day which is not a Busi-
ness Day, the due date thereof shall be extended to the next
succeeding Business Day and, with respect to payments of prin-
cipal, interest shall be payable during such extension at the
applicable rate in effect immediately prior to such extension.
3.04 Net Payments. All payments made by the Bor-
rower hereunder, under any Note or under any other Credit Docu-
ment will be made without setoff, counterclaim or other de-
fense. All such payments will be made free and clear of, and
without deduction or withholding for, any taxes, levies, im-
posts, duties, fees, assessments or other charges of whatever
nature hereafter (as a result of a change after the date hereof
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in any applicable law, rule or regulation) imposed by any ju-
risdiction or by any political subdivision or taxing authority
thereof or therein (but excluding, except as provided below,
any tax imposed on or measured by the net income of a Bank pur-
suant to the laws of the jurisdiction in which the principal
office or applicable lending office of such Bank is located or
under the laws of any political subdivision or taxing authority
of any such jurisdiction in which the principal office or ap-
plicable lending office of such Bank is located) and all inter-
est, penalties or similar liabilities with respect thereto
(collectively, "Taxes"). The Borrower shall also reimburse
each Bank, upon the written request of such Bank, for taxes
imposed on or measured by the net income of such Bank pursuant
to the laws of the United States of America, any State or po-
litical subdivision thereof, or the jurisdiction in which the
principal office or applicable lending office of such Bank is
located or of any political subdivision or taxing authority of
any such jurisdiction as such Bank shall determine are payable
by such Bank in respect of Taxes paid to or on behalf of such
Bank pursuant to this or the preceding sentence. If any Taxes
are so levied or imposed, the Borrower agrees to pay the full
amount of such Taxes, and such additional amounts as may be
necessary so that every payment of all amounts due hereunder,
under any Note or under any other Credit Document, after with-
holding or deduction for or on account of any Taxes, will not
be less than the amount provided for herein or in such Note.
The Borrower will furnish to the Administrative Agent within
five days after the date the payment of any Taxes, or any with-
holding or deduction on account thereof, is due pursuant to
applicable law certified copies of tax receipts evidencing such
payment by the Borrower. The Borrower will indemnify and hold
harmless the Administrative Agent and each Bank, and reimburse
the Administrative Agent or such Bank upon its written request,
for the amount of any Taxes so levied or imposed and paid or
withheld by such Bank.
SECTION 4. Conditions Precedent.
4.01 Conditions Precedent to Initial Borrowing Date.
The obligation of each Bank to make any Tender Loans on the
Initial Borrowing Date is subject to the satisfaction of the
following conditions at such time:
(a) Effectiveness; Notes. On or prior to the Tender
Offer Closing Date (i) the Effective Date shall have oc-
curred and (ii) there shall have been delivered to the
Administrative Agent for the account of each Bank the ap-
propriate Tender Offer Notes executed by the Borrower, in
each case, in the amount, maturity and as otherwise pro-
vided herein.
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(b) Officer's Certificate. On the Tender Offer
Closing Date, the Administrative Agent shall have received
a certificate dated the Tender Offer Closing Date signed
on behalf of the Borrower by the President, any Executive
Vice President or the Chief Financial Officer of the Bor-
rower stating that all the conditions in Sections 4.01(f),
(g), (h), (i), (j), (k), (o), (p), (q) and (r) and 4.03
(in each case to the extent not dependent on the satisfac-
tion or judgement of the Administrative Agent, any Co-
Arranger and/or the Required Banks and assuming, if no
Tender Offer Loans are made on the Tender Offer Closing
Date, Share Purchase Loans in an aggregate amount equal to
the Differential were borrowed) have been satisfied on
such date.
(c) Opinions of Counsel. On the Tender Offer Clos-
ing Date, the Administrative Agent shall have received an
opinion, or opinions, addressed to each of the Banks and
dated the Tender Offer Closing Date, from (i) Wachtell,
Lipton, Rosen & Katz, special counsel to the Borrower,
Young, Conaway, Stargatt & Taylor, special Delaware coun-
sel to the Borrower, Neal Grabell, Esq., General Counsel
of the Borrower, Hogan & Hartson, special FCC counsel to
the Borrower and Foley & Lardner, counsel to the VTA
Trustee, covering in form and substance satisfactory to
the Administrative Agent, the matters set forth in Exhibit
B-1 hereto, which opinions shall cover such other matters
incident to the transactions contemplated herein as the
Administrative Agent may reasonably request, and (ii)
White & Case, special counsel to the Banks, in the form of
Exhibit B-2 hereto.
(d) Subsidiary Guaranty. On or prior to the Tender
Offer Closing Date, each Initial Subsidiary Guarantor
shall have duly authorized, executed and delivered a sub-
sidiary guaranty in the form of Exhibit C hereto (as modi-
fied, supplemented or amended from time to time, the "Sub-
sidiary Guaranty"), and the Subsidiary Guaranty shall be
in full force and effect.
(e) Pledge Documents. On or prior to the Tender
Offer Closing Date, the Borrower shall have duly autho-
rized, executed and delivered (x) a Voting Trust Agreement
in substantially the form of Exhibit D-1 hereto and shall
have delivered to (or issued irrevocable instructions that
will result in the delivery to) the Trustee thereunder
(the "VTA Trustee") all of the Stock referred to therein
then owned by, or required to be delivered to, the Bor-
rower, and (y) a Pledge Agreement substantially in the
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form of Exhibit D-2 hereto and shall have delivered to the
Administrative Agent as Pledgee thereunder, inter alia,
executed and undated stock powers and the VTA Trustee
shall have executed and delivered a Pledge Agreement sub-
stantially in the form of Exhibit D-3 hereto and shall
have delivered to (or issued irrevocable instructions that
will result in the delivery to) the Administrative Agent
as Pledgee thereunder all of the Stock referred to therein
to be delivered to the VTA Trustee pursuant to the VTA.
(f) Form U-1. On the Tender Offer Closing Date, the
Borrower shall have delivered to each Bank a duly com-
pleted Form U-1 referred to in Regulation U. On each date
upon which Tender Offer Loans are being incurred which are
"purpose loans" as defined in Regulation U, each Bank
shall be able in good faith to complete an addendum to
said Form U-1 showing that the Tender Offer Loans then
being made satisfy the collateral requirements of Regula-
tion U.
(g) Tender Offer Documents. On or prior to the Ten-
der Offer Closing Date, there shall have been delivered to
the Banks true and correct copies of the Tender Offer
Documents and the Additional Tender Offer Documents (which
Additional Tender Offer Documents, other than any Ad-
ditional Tender Offer Document consisting solely of an
amendment extending the expiration date of the Tender Of-
fer, shall be reasonably satisfactory to the Administra-
tive Agent, provided that any Additional Tender Offer
Document amending the terms or conditions of the Tender
Offer in any material respect, other than any amendment
consisting solely of an extension of the expiration date
of the Tender Offer, shall be reasonably satisfactory to
each of the Co-Arrangers) and each of the conditions to
purchase contained in the Offer to Purchase shall have
been satisfied to the satisfaction of, or, if applicable,
waived with the consent of, each Co-Arranger (as if it
were the Borrower).
(h) Tender of Shares of PCI. On the Initial Bor-
rowing Date, (i) there shall have been validly tendered to
the Borrower and not withdrawn at least 61,607,894 Shares
(or, if greater, the number of Shares equal to 50.1% of
the Shares outstanding plus the Shares issuable upon the
exercise of then exercisable stock options, as of the Ten-
der Offer Closing Date), and the price per Share paid pur-
suant to the Offer to Purchase shall not exceed the Maxi-
mum Price Per Share and (ii) the Shares to be purchased on
such date shall have been validly tendered to the Bor-
rower, free and clear of all Liens and restrictions to
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purchase imposed by applicable law or otherwise and such
Shares shall not have been validly withdrawn and shall be
available for purchase in accordance with the terms and
conditions set forth in the Offer to Purchase.
(i) Issuance to Specified Equity Investors. On or
prior to the Tender Offer Closing Date, (i) the Borrower
shall have received gross cash proceeds in the aggregate
amount of at least $1,500,000,000 from the issuance by the
Borrower to the Specified Equity Investors of its Investor
Preferred and Borrower Common Stock and (ii) the Adminis-
trative Agent and the Banks shall have received copies of
the Investor Documents certified as true and correct by an
Authorized Officer of the Borrower, and the terms and con-
ditions of the Investor Documents shall be in form and
substance satisfactory to each Co-Arranger and the Re-
quired Banks.
(j) BellSouth. On or prior to the Tender Offer
Closing Date, (i) QVC Finance Sub and BellSouth Finance
shall have formed a Delaware limited purpose general part-
nership ("Finance Co."), which shall have received a cash
contribution of at least $1,500,000,000 from BellSouth
Finance as provided for in Section 2.04 of the Investment
Agreement, which contribution shall have been loaned by
Finance Co. to the Borrower pursuant to a subordinated
loan evidenced by the Subordinated Finance Co. Note and
(ii) the Administrative Agent and the Banks shall have
received copies of the BellSouth Documents certified as
true and correct by an Authorized Officer of the Borrower,
and the terms and conditions of the BellSouth Documents
(including, without limitation, the terms and conditions
of the Subordinated Finance Co. Note (including subordina-
tion provisions, interest rates, prepayments, maturities,
automatic extensions, covenants, redemption provisions,
defaults and remedies with respect thereto)) shall be in
form and substance satisfactory to each Co-Arranger and
the Required Banks.
(k) Use of Other Funds. Prior to or concurrently
with the initial incurrence of Tender Offer Loans, the
Borrower shall have utilized all proceeds received by it
as described in preceding clauses (i) and (j) to purchase
Shares in connection with the Offer to Purchase and to pay
certain fees and expenses in connection therewith.
(l) Consent Letter. On the Tender Offer Closing
Date, the Administrative Agent shall have received a let-
ter from Corporation Service Company, presently located at
4 Central Avenue, Albany, NY 12210, in the form of Exhibit
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E indicating its consent to its appointment by each cur-
rent Credit Party as their agent to receive service of
process.
(m) Corporate Documents; Proceedings; Officer's Cer-
tificates. (i) On the Tender Offer Closing Date, the
Administrative Agent shall have received from each Credit
Party a certificate, dated the Tender Offer Closing Date,
signed and attested to by an Authorized Officer of such
Person, in the form of Exhibit F with appropriate inser-
tions, together with copies of the Certificate of Incorpo-
ration and By-Laws of such Credit Party and the resolu-
tions of such Credit Party referred to in such certificate
and the foregoing shall be reasonably satisfactory to the
Administrative Agent.
(ii) On the Tender Offer Closing Date, all corporate
and legal proceedings and all instruments and agreements
in connection with the transactions contemplated by this
Agreement and the other Credit Documents shall be reason-
ably satisfactory in form and substance to the Adminis-
trative Agent, and the Administrative Agent shall have
received all information and copies of all certificates,
documents and papers, including good standing certificates
and any other records of corporate proceedings and govern-
mental approvals, if any, which the Administrative Agent
may have requested in connection therewith, such documents
and papers where appropriate to be certified by proper
corporate or governmental authorities.
(n) Payment of Fees. On or prior to the Initial
Borrowing Date, all costs, fees and expenses, and all
other compensation contemplated by this Agreement, due
from the Borrower to the Administrative Agent or the Banks
(including, without limitation, legal fees and expenses)
shall have been paid by the Borrower to the extent due.
(o) Approvals. On the Tender Offer Closing Date,
all necessary governmental and third party approvals in
connection with the transactions contemplated by the
Credit Documents and the Transaction Documents and other-
wise referred to herein or therein shall have been ob-
tained and remain in effect, and all applicable waiting
periods shall have expired without any action being taken
by any competent authority which restrains or prevents
such transactions or imposes, in the reasonable judgment
of the Required Banks or the Administrative Agent, materi-
ally adverse conditions upon the consummation of such
transactions, it being understood that the FCC Long-Form
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Approval and the Company Stockholder Approval need not be
obtained to satisfy this clause (o).
(p) Adverse Change. From October 31, 1993 to the
Tender Offer Closing Date, nothing shall have occurred
(nor shall any of the Co-Arrangers or the Banks become
aware of any facts not previously known) which the Re-
quired Banks or any of the Co-Arrangers shall reasonably
determine (i) has, or is reasonably likely to have, a ma-
terial adverse effect on the rights or remedies of the
Banks, or the Administrative Agent, or on the ability of
the Borrower to perform its obligations to the Banks or
the Administrative Agent or (ii) has, or is reasonably
likely to have, a Material Adverse Effect.
(q) Litigation. Except as set forth on Schedule IX,
no litigation by any entity (private or governmental)
shall be pending or threatened on the Initial Borrowing
Date (a) with respect to this Agreement or any other
Credit Document, (b) which could reasonably be expected to
have a material adverse effect with respect to the Acqui-
sition or any Transaction Document, or (c) which any of
the Co-Arrangers or the Required Banks shall reasonably
determine could reasonably be expected to have a Material
Adverse Effect.
(r) Proxy Materials. All Proxy Materials, if any,
shall have been delivered to the Banks, and such Proxy
Materials shall be reasonably satisfactory in form and
substance to the Administrative Agent and each Co-Ar-
ranger.
4.01A Certain Share Purchase Loans. Notwithstanding
the provisions of Section 4.01, if Tender Offer Loans are not
incurred on the Tender Offer Closing Date, the obligation of
the Banks to make Share Purchase Loans during the period com-
mencing on the date following the Tender Offer Closing Date and
ending on the date which is 10 Business Days after the Tender
Offer Closing Date shall only be subject to the following con-
ditions:
(i) each of the conditions specified in Section 4.01
(except that the Section 4.01(b) certificate will not re-
fer to Section 4.01(h) or (k)) required to be satisfied on
the Tender Offer Closing Date was satisfied (such satis-
faction to be evidenced by delivery on the Tender Offer
Closing Date of a certificate of the Administrative Agent,
on behalf of the Banks, to such effect);
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(ii) the conditions specified in Section 4.03(a) and
Section 4.01(o) and (p) would have been satisfied on the
Tender Offer Closing Date if Share Purchase Loans in an
aggregate principal amount at least equal to the Dif-
ferential were borrowed on such date (such satisfaction to
be evidenced by the delivery of the officer's certificate
referred to in Section 4.01(b) and delivery on the Tender
Offer Closing Date of a certificate from the Administra-
tive Agent, on behalf of the Required Banks, that the con-
dition specified in Section 4.01(p) was satisfied);
(iii) the conditions specified in Section 4.01(f), (h)
and (k) are satisfied at the time of the making of such
Loans;
(iv) there shall exist on the date of the making of
such Loans no judgment, order, injunction or other re-
straint issued or filed with respect to the purchase of
Shares pursuant to the Offer to Purchase, the making of
such Loans or the consummation of the Merger; and
(v) no Default or Event of Default exists on the
date of the making of such Loans under Section 8.05 in
respect of the Borrower or PCI or any of their "signifi-
cant subsidiaries" (as such term is defined in the Securi-
ties Act of 1933, as amended).
4.02 Conditions Precedent to Merger Borrowing Date.
The obligation of each Bank to make any Loans on the Merger
Borrowing Date is subject to the satisfaction of the following
conditions at such time:
(a) Notes. On or prior to the Merger Borrowing Date
there shall have been delivered to the Administrative
Agent for the account of each Bank the appropriate Term
Loan Note and/or Revolving Note executed by the Borrower,
in each case, in the amount, maturity and as otherwise
provided herein.
(b) Officer's Certificate. On the Merger Borrowing
Date, the Administrative Agent shall have received a cer-
tificate dated the Merger Borrowing Date signed on behalf
of the Borrower by the President, any Executive Vice
President or the Chief Financial Officer of the Borrower
stating that all the conditions in Sections 4.02(f), (l),
(m), (n) and (o) and 4.03 have been satisfied on such date
(to the extent not dependent on the satisfaction or judg-
ment of the Administrative Agent, any Co-Arranger and/or
the Required Banks).
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(c) Opinions of Counsel. On the Merger Borrowing
Date, the Administrative Agent shall have received an
opinion, or opinions, addressed to each of the Banks and
dated the Merger Borrowing Date, from (i) Wachtell,
Lipton, Rosen & Katz, special counsel to the Borrower,
Young, Conaway, Stargatt & Taylor, special Delaware coun-
sel to the Borrower, Neal Grabell, Esq., General Counsel
of the Borrower and Hogan & Hartson, special FCC counsel
to the Borrower, covering, in form and substance satisfac-
tory to the Administrative Agent, the matters set forth in
Exhibit B-1 hereto (modified to take into account that the
relevant opinions are being delivered on the Merger Bor-
rowing Date), which opinions shall cover such other mat-
ters incident to the transactions contemplated herein and
to be then effected, as the Administrative Agent may rea-
sonably request, and (ii) White & Case, special counsel to
the Banks, in the form of Exhibit B-3 hereto.
(d) Bring-Downs. On the Merger Borrowing Date, the
Administrative Agent shall have received confirmatory
bring-downs, each dated the Merger Borrowing Date, of all
opinions and certificates delivered pursuant to Section
4.01 which the Administrative Agent shall request.
(e) Subsidiary Guaranty. On or prior to the Merger
Borrowing Date, each Additional Subsidiary Guarantor shall
have duly authorized, executed and delivered a counterpart
of the Subsidiary Guaranty, and the Subsidiary Guaranty
shall be in full force and effect.
(f) Merger. Prior to the Merger Borrowing Date,
there shall have been delivered to the Administrative
Agent and the Banks all Merger Documents certified as true
and correct by an Authorized Officer of the Borrower, all
of which Merger Documents shall be (x) in the form deliv-
ered to the Banks pursuant to Section 4.01(g) or (y) oth-
erwise in form and substance reasonably satisfactory to
each of the Co-Arrangers and each of the conditions prece-
dent to the consummation of the Merger as set forth in the
Merger Documents shall have been satisfied to the reason-
able satisfaction of each Co-Arranger. Additionally,
there shall not exist any judgment, order or injunction
prohibiting or imposing material adverse conditions upon
the consummation of the Merger. The Merger shall have
been consummated in accordance with the terms and condi-
tions of the Merger Documents and all applicable laws and
material contracts.
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(g) Organizational Documentation, etc. To the ex-
tent not theretofore delivered in connection on the Ini-
tial Borrowing Date, on the Merger Borrowing Date, the
Administrative Agent shall have received copies of, or
amendments to, the Certificate of Incorporation and
By-Laws of Paramount and each other Credit Party and any
agreements entered into by any such entity governing the
terms and relative rights of its capital stock, in each
case certified as true and complete by an appropriate gov-
ernmental or corporate official, and the provisions of the
foregoing shall be reasonably satisfactory to the Adminis-
trative Agent.
(h) Solvency Opinion. On the Merger Borrowing Date,
the Banks shall have received opinions of value and other
appropriate factual information and expert advice (includ-
ing, to the extent reasonably requested by the
Co-Arrangers, appraisals of specified properties) support-
ing the conclusions that, after giving effect to the
Merger and the contemplated borrowings of the full amount
which will be available under the Total Commitment, with
respect to each of (i) the Borrower and its Subsidiaries
taken as a whole and (ii) Paramount and its Subsidiaries
taken as whole (x) the sum of their/its assets, at a fair
valuation, will exceed their/its debts, (y) they/it will
not have incurred debts beyond their/its ability to pay
such debts as such debts mature, and (z) they/it will have
sufficient capital with which to conduct their/its busi-
ness. For purposes of this Section 4.01(h), "debt" shall
have the meaning assigned thereto in Section 5.11.
(i) Insurance Policies. On the Merger Borrowing
Date, the Administrative Agent shall have received evi-
dence of insurance complying with the requirements of Sec-
tion 6.09 for the business and properties of the Borrower
and its Subsidiaries, in form and substance reasonably
satisfactory to the Administrative Agent.
(j) Consent Letter. On the Merger Borrowing Date,
the Administrative Agent shall have received a letter from
Corporation Service Company, presently located at 4 Cen-
tral Avenue, Albany, NY 12210, in the form of Exhibit E
indicating its consent to its appointment by each current
Credit Party as their agent to receive service of process.
(k) Corporate Documents. On the Merger Borrowing
Date, all corporate and legal proceedings and all instru-
ments and agreements in connection with the transactions
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contemplated by this Agreement and the other Credit Docu-
ments shall be reasonably satisfactory in form and sub-
stance to the Administrative Agent, and the Administrative
Agent shall have received all information and copies of
all certificates, documents and papers, including good
standing certificates and any other records of corporate
proceedings and governmental approvals, if any, which the
Administrative Agent or any Co-Arranger may have requested
in connection therewith, such documents and papers where
appropriate to be certified by proper corporate or
governmental authorities.
(l) Approvals. On the Merger Borrowing Date, all
necessary governmental and third party approvals in con-
nection with the transactions contemplated by the Credit
Documents and the Transaction Documents and otherwise re-
ferred to herein or therein shall have been obtained and
remain in effect, and all applicable waiting periods shall
have expired without any action being taken by any compe-
tent authority which restrains or prevents such transac-
tions or imposes, in the reasonable judgment of the Re-
quired Banks or the Administrative Agent, materially ad-
verse conditions upon the consummation of such transac-
tions.
(m) Adverse Change. From October 31, 1993 to the
Merger Borrowing Date, nothing shall have occurred (nor
shall any of the Co-Arrangers or the Banks become aware of
any facts not previously known) which the Required Banks
or any of the Co-Arrangers shall reasonably determine (i)
has, or is reasonably likely to have, a material adverse
effect on the rights or remedies of the Banks, or the Ad-
ministrative Agent, or on the ability of the Borrower to
perform its obligations to the Banks or the Administrative
Agent or (ii) has, or is reasonably likely to have, a Ma-
terial Adverse Effect.
(n) Litigation. Except as set forth on Schedule IX,
no litigation by any entity (private or governmental)
shall be pending or threatened on the Merger Borrowing
Date (a) with respect to this Agreement or any other
Credit Document, (b) which could reasonably be expected to
have a material adverse effect with respect to the Merger
or any Transaction Document, or (c) which any of the
Co-Arrangers or the Required Banks shall reasonably deter-
mine could reasonably be expected to have a Material Ad-
verse Effect.
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(o) Plans; etc. On or prior to the Merger Borrowing
Date, there shall have been made available to the Adminis-
trative Agent and its counsel (which copies, to the extent
not designated as confidential, may be made available to
the Banks) copies, certified as true and correct by an
Authorized Officer of the Borrower, of (a) any Plans,
other than any Plans which have terminated prior to the
Merger Borrowing Date and any Plans in which none of the
Borrower, any Subsidiary or any ERISA Affiliate parti-
cipates as of the Merger Borrowing Date, and for each such
Plan (x) that is a "single-employer plan" (as defined in
Section 4001(a)(15) of ERISA) the most recently completed
actuarial valuation prepared therefor by such Plan's regu-
lar enrolled actuary and the Schedule B, "Actuarial Infor-
mation" to the IRS Form 5500 (Annual Report) most recently
filed with the Internal Revenue Service and (y) that is a
"multiemployer plan" (as defined in Section 4001(a)(3) of
ERISA), each of the documents referred to in clause (x)
either in the possession of the Borrower or reasonably
available thereto from the sponsor or trustees of such
Plan, (b) any collective bargaining agreements or any
other similar agreement or arrangements covering the em-
ployees of the Borrower or any of its Subsidiaries (col-
lectively, the "Collective Bargaining Agreements"), (c)
any material agreements (or the forms thereof) with
members of, or with respect to, the management of the
Borrower or any of its Subsidiaries (collectively, the
"Management Agreements"), (d) any material employment
agreements entered into by the Borrower or any of its
Subsidiaries (collectively, the "Employment Agreements"),
(e) all agreements entered into by the Borrower or any of
its Subsidiaries governing the terms and relative rights
of its capital stock and any agreements of which the Bor-
rower has knowledge entered into by shareholders relating
to any such entity with respect to their capital stock
(collectively, the "Shareholders' Agreements"), (f) all
agreements governing the Existing Indebtedness (the "Ex-
isting Indebtedness Agreements") and (g) all tax sharing,
tax allocation and other similar agreements entered into
by the Borrower, and/or any of its Subsidiaries (collec-
tively, the "Tax Sharing Agreements"), all of which Plans,
Collective Bargaining Agreements, Management Agreements,
Employment Agreements, Shareholders' Agreements, Existing
Indebtedness Agreements and Tax Sharing Agreements shall
be in form and substance reasonably satisfactory to the
Administrative Agent.
(p) Due Diligence. The Co-Arrangers shall have com-
pleted, to the reasonable satisfaction of each Co-Arranger
and the Required Banks, the Co-Arrangers' business and
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legal due diligence analysis and review with respect to
the assets, liabilities, businesses, operations, condi-
tions and (financial or otherwise) of the Borrower, PCI
and their respective Subsidiaries.
4.03 Conditions Precedent to All Loans. The obliga-
tion of each Bank to make any Loans is subject, at the time of
each such Loans (including on the Initial Borrowing Date) to
the satisfaction of the following conditions at such time:
(a) No Default; Representations and Warranties. At
the time of each Loan and also after giving effect thereto
(i) there shall exist no Default or Event of Default and
(ii) all representations and warranties contained herein
or in the other Credit Documents in effect at such time
shall be true and correct in all material respects with
the same effect as though such representations and warran-
ties had been made on and as of the date of the making of
such Loan (except to the extent any representation or war-
ranty is expressly made as of a specific date, in which
case such representation and warranty shall be true and
correct in all material respects as of such date).
(b) Notice of Borrowing. The Administrative Agent
shall have received a Notice of Borrowing with respect to
such Borrowing of Loans meeting the requirements of Sec-
tion 1.02.
The acceptance of the benefits of each Loan shall
constitute a representation and warranty by the Borrower to
each of the Banks that all of the applicable conditions speci-
fied in this Section 4 are then satisfied. All of the cert-
ificates, legal opinions and other documents and papers re-
ferred to in this Section 4, unless otherwise specified, shall
be delivered to the Administrative Agent at its Notice Office
for the account of each of the Banks and, except for the Notes,
in sufficient counterparts or copies for each of the Banks and
shall be satisfactory in form and substance to the Administra-
tive Agent.
SECTION 5. Representations, Warranties and Agree-
ments. In order to induce the Banks to enter into this Agree-
ment and to make the Loans as provided for herein, the Borrower
makes the following representations and warranties to, and
agreements with, the Banks, all of which shall survive the ex-
ecution and delivery of this Agreement and the making of the
Loans (with the incurrence of each Loan being deemed to consti-
tute a representation and warranty that the matters specified
in this Section 5 are true and correct in all material respects
on and as of the date of making each such Loan (and, in the
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case of the Merger Borrowing Date, after giving effect to the
Merger), except to the extent that any representation or war-
ranty is expressly made as of a specific date, in which case
such representation or warranty shall be true and correct in
all material respects as of such specific date), it being un-
derstood that, without modifying the stated provisions of Sec-
tion 4.03(a)(ii) or 8.02, the representations in this Section 5
relating to PCI and its Subsidiaries, to the extent made prior
to completion of the Borrower's due diligence with respect
thereto, are made to the best knowledge of the Borrower:
5.01 Corporate Status. Each of the Borrower and its
Subsidiaries (i) is a duly organized and validly existing cor-
poration in good standing under the laws of the jurisdiction of
its organization and has the corporate power and authority to
own its property and assets and to transact the business in
which it is engaged and presently proposes to engage and (ii)
has duly qualified and is authorized to do business and is in
good standing in all jurisdictions where it is required to be
so qualified and where the failure to be so qualified is rea-
sonably likely to have a Material Adverse Effect.
5.02 Corporate Power and Authority. Each of the
Borrower and its Subsidiaries has the corporate power and au-
thority to execute, deliver and carry out the terms and provi-
sions of the Documents, if any, to which it is a party and has
taken all necessary corporate action to authorize the execu-
tion, delivery and performance of the Documents to which it is
a party. Each Credit Party has duly executed and delivered
each Document to which it is a party and each such Document
constitutes the legal, valid and binding obligation of such
Credit Party enforceable in accordance with its terms.
5.03 No Violation. Neither the execution, delivery
and performance by any of the Borrower or any of its Subsidiar-
ies of the Credit Documents to which it is a party nor compli-
ance with the terms and provisions thereof, nor the consumma-
tion of the transactions contemplated therein (i) will contra-
vene any applicable provision of any law, statute, rule, regu-
lation, order, writ, injunction or decree of any court or gov-
ernmental instrumentality, (ii) will conflict or be inconsis-
tent with or result in any breach of, any of the terms, cov-
enants, conditions or provisions of, or constitute a default
under, or (other than pursuant to the Pledge Documents) result
in the creation or imposition of (or the obligation to create
or impose) any Lien upon any of the property or assets of the
Borrower or any of its Subsidiaries pursuant to the terms of
any indenture, mortgage, deed of trust, agreement or other in-
strument to which the Borrower or any of its Subsidiaries is a
party or by which it or any of its property or assets are bound
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or to which it may be subject, including without limitation the
Existing Indebtedness Agreements or (iii) will violate any pro-
vision of the charter or By-Laws of the Borrower or any of its
Subsidiaries. Except as set forth on Schedule IV hereto, nei-
ther the execution, delivery or performance of the Merger
Agreement (once executed by the parties thereto) nor consumma-
tion of the Merger will conflict with or be inconsistent with
or result in any breach of, any of the material terms, cov-
enants, conditions or provisions of, or constitute a material
default under, or result in the creation or imposition of (or
the obligation to create or impose) any Lien upon any of the
material property of the Borrower or any of its Subsidiaries
pursuant to the terms of any indenture, mortgage, deed of
trust, instrument, agreement relating to Indebtedness or other
material agreement to which the Borrower or any of its Subsid-
iaries is a party or by which any of its property may be bound
or to which it may be subject.
5.04 Litigation. Except as set forth in Schedule
IX, there are no actions, suits or proceedings pending or
threatened with respect to the Borrower or any of its Subsidi-
aries that are reasonably likely to have a Material Adverse
Effect or that could reasonably have a material adverse effect
on (a) the rights or remedies of the Banks or on the ability of
any Credit Party to perform its obligations to them hereunder
and under the other Credit Documents to which it is, or will
be, a party or (b) the ability to consummate in a timely manner
the Acquisition in accordance with Section 6.10.
5.05 Use of Proceeds, etc. (a) The proceeds of all
Tender Offer Loans shall be utilized (i) to pay for Shares pur-
chased pursuant to the Offer to Purchase, and (ii) to pay cer-
tain fees and expenses arising in connection with the Acquisi-
tion, including, without limitation, interest and fees payable
in respect of the Tender Offer Loans.
(b) The proceeds of all Term Loans and Revolving
Loans incurred on the Merger Borrowing Date shall be utilized
(i) first to repay all outstanding Tender Offer Loans, together
with accrued and unpaid interest thereon, in full and (ii) sec-
ond, to pay additional costs and expenses of, or arising from,
the Acquisition. The proceeds of Revolving Loans borrowed af-
ter the Merger Borrowing Date may be utilized for general cor-
porate purposes of the Borrower and its Subsidiaries, including
to fund the Liberty Put Obligations.
(c) On and after the Merger Borrowing Date, no more
than 25% of the value of the assets of the Borrower, or of the
Borrower and its Subsidiaries on a consolidated basis, subject
to the restrictive arrangements contained in Sections 7.01 and
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7.02 hereof, shall constitute Margin Stock. Neither the making
of any Loan hereunder, nor the use of the proceeds thereof,
will violate or be inconsistent with the provisions of Regula-
tion G, T, U or X of the Board of Governors of the Federal Re-
serve System and no part of the proceeds of any Loan will be
used to purchase or carry any Margin Stock in violation of
Regulation U or to extend credit for the purpose of purchasing
or carrying any Margin Stock in violation of Regulation U.
5.06 Governmental Approvals. No order, consent,
approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, any foreign or
domestic governmental or public body or authority, or any sub-
division thereof, is required to authorize or is required in
connection with (i) the execution, delivery and performance of
any Document or (ii) the legality, validity, binding effect or
enforceability of any Document, it being understood that the
FCC Long-Form Approval need not be obtained until the Merger
Borrowing Date.
5.07 Investment Company Act. Neither the Borrower
nor any of its Subsidiaries is an "investment company" or a
company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended.
5.08 Public Utility Holding Company Act. Neither
the Borrower nor any of its Subsidiaries is a "holding com-
pany," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," within the meaning of the Public Util-
ity Holding Company Act of 1935, as amended.
5.09 True and Complete Disclosure. All factual in-
formation (taken as a whole) heretofore or contemporaneously
furnished by or on behalf of the Borrower or its Subsidiaries
in writing to the Administrative Agent or any Bank (including,
without limitation, all information contained in the Documents)
for purposes of or in connection with this Agreement or any
transaction contemplated herein is, and all other such factual
information (taken as a whole) hereafter furnished by or on
behalf of the Borrower or its Subsidiaries in writing to any
Bank will be, true and accurate in all material respects on the
date as of which such information is dated or certified and not
incomplete by omitting to state any material fact necessary to
make such information (taken as a whole) not misleading at such
time in light of the circumstances under which such information
was provided. The projections and pro forma financial informa-
tion contained in such materials are based on good faith esti-
mates and assumptions believed by the Borrower to be reasonable
at the time made, it being recognized by the Banks that such
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projections as to future events are not to be viewed as facts
and that actual results during the period or periods covered by
any such projections may differ from the projected results in
any material respect. There is no fact known to the Borrower
which has, or is reasonably likely to have, a Material Adverse
Effect which has not been disclosed herein or in such other
documents, certificates and statements furnished to the Banks
for use in connection with the transactions contemplated
hereby.
5.10 Offer to Purchase. All necessary material gov-
ernmental and third party approvals in connection with the pur-
chase of Shares pursuant to the Offer to Purchase and the
Merger, the transactions contemplated thereby and otherwise
referred to therein have been or, prior to the time when re-
quired, will have been, obtained and remain in effect, and all
applicable waiting periods have or, prior to the time when re-
quired, will have, expired without, in all such cases, any ac-
tion being taken by any competent authority which restrains,
prevents, imposes materially adverse conditions upon or unduly
hinders, the consummation of the purchase of Shares pursuant to
the Offer to Purchase or the Merger. Additionally, except to
the extent consented to by the Required Banks there does not
exist any judgment, order, injunction or other restraint issued
or filed with respect to the purchase of Shares pursuant to the
Offer to Purchase, the consummation of the Merger or the making
of Loans, or the performance by the Credit Parties of their
obligations under the Documents. At the time of their dis-
semination to the public, the Offer to Purchase and any amend-
ments or supplements thereto and all documents required to be
filed by the Borrower, or (after the Merger Agreement Date) PCI
pursuant to the Securities Exchange Act of 1934, as amended,
copies of which documents have been or will be delivered to
each Bank (other than exhibits to such filings, which have been
made available to each Bank upon request therefor), do not and
will not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which
made, not misleading.
5.11 Financial Condition; Financial Statements. (a)
On and as of each of the Tender Offer Closing Date and the
Merger Borrowing Date on a pro forma basis after giving effect
to the Merger and all Indebtedness incurred and to be incurred,
by the Borrower and its Subsidiaries in connection therewith,
with respect to each of the Borrower and Paramount, each deter-
mined on a consolidated basis (x) the sum of its assets, at a
fair valuation, will exceed its debts, (y) it will not have
incurred nor intended to, or believes that it will not, incur
debts beyond its ability to pay such debts as such debts mature
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and (z) it will have sufficient capital with which to conduct
its business. For purposes of this Section 5.11(a), "debt"
means any liability on a claim, and "claim" means (i) right to
payment whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unma-
tured, disputed, undisputed, legal, equitable, secured or unse-
cured; or (ii) right to an equitable remedy for breach of per-
formance if such breach gives rise to a payment, whether or not
such right to an equitable remedy is reduced to judgment,
fixed, contingent, matured, unmatured, disputed, undisputed,
secured or unsecured.
(b) The consolidated balance sheet of the Borrower
and its Subsidiaries at January 31, 1993 and the related con-
solidated statements of income and cash flows of the Borrower
and its Subsidiaries for the fiscal year ended as of said date,
the consolidated balance sheet of PCI and its Subsidiaries at
April 30, 1993 and the related consolidated statements of in-
come and cash flows of PCI and its Subsidiaries for the period
ended on such date, and the pro forma (after giving effect to
the Merger and the related financing thereof) consolidated bal-
ance sheet of the Borrower and its Subsidiaries as at July 31,
1993, copies of which have heretofore been furnished to each
Bank, present fairly the financial position of the Borrower and
its Subsidiaries or PCI and its Subsidiaries, as the case may
be, at the dates of said statements and the results for the
periods covered thereby (or, in the case of the pro forma bal-
ance sheet, present a good faith estimate of the consolidated
pro forma financial condition of the Borrower and its Subsid-
iaries at the date thereof). All such financial statements
(other than the aforesaid pro forma balance sheet) have been
prepared in accordance with GAAP and practices consistently
applied except to the extent provided in the notes to said fi-
nancial statements.
(c) From January 31, 1993 and April 30, 1993, re-
spectively, to the Initial Borrowing Date, there was no mate-
rial adverse change in the business, property, assets, li-
abilities or condition (financial or otherwise) of the Borrower
and its Subsidiaries taken as a whole or PCI and its Subsidiar-
ies taken as a whole, as the case may be, except to the extent
of fees paid or owing by the Borrower or PCI in connection with
the Acquisition or the proposed Viacom Inc. acquisition of PCI.
(d) Since the Initial Borrowing Date, there has been
no material adverse change in the business, property, assets,
liabilities or condition (financial or otherwise) of the Bor-
rower and its Subsidiaries taken as a whole.
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(e) Except as fully reflected in the financial
statements described in Section 5.11(b), there were as of the
Initial Borrowing Date (and after giving effect to any Loans
made on such date), no liabilities or obligations (excluding
current obligations incurred in the ordinary course of busi-
ness) with respect to the Borrower or any of its Subsidiaries
of any nature whatsoever (whether absolute, accrued, contingent
or otherwise and whether or not due), and the Borrower does not
know of any assertion against the Borrower or any of its Sub-
sidiaries of any such liability or obligation which, either
individually or in aggregate, are or would be reasonably likely
to be material to the Borrower and its Subsidiaries taken as a
whole.
(f) The "Pro Forma Analysis" prepared by the Bor-
rower and delivered to the Banks prior to the Merger Borrowing
Date (the "Projections") shall be based on good faith estimates
and assumptions made by the management of the Borrower, and on
the Merger Borrowing Date such management shall believe that
the Projections are then reasonable and attainable, it being
recognized by the Banks, however, that projections as to future
events are not to be viewed as facts and that the actual re-
sults during the period or periods covered by the Projections
probably will differ from the projected results and that the
differences may be material.
5.12 Tax Returns and Payments. Each of the Borrower
and each of its Subsidiaries has filed all federal income tax
returns and all other material tax returns, domestic and for-
eign, required to be filed by it and has paid all material
taxes and assessments payable by it which have become due,
other than those not yet delinquent and except for those con-
tested in good faith. Each of the Borrower and its Subsidiar-
ies has paid, or has provided adequate reserves (in the good
faith judgment of the management of such Person) for the pay-
ment of, all federal, state and foreign income taxes applicable
for all prior fiscal years and for the current fiscal year to
the date hereof.
5.13 Compliance with ERISA. Except to the extent
that all events and obligations described in the following
clauses of this Section 5.13 and then in existence would not,
in the aggregate, be likely to have a Material Adverse Effect,
each Plan is in substantial compliance with ERISA and the Code;
no Reportable Event has occurred with respect to a Plan; no
Plan is insolvent or in reorganization; no Plan has an Unfunded
Current Liability; no Plan has an accumulated or waived funding
deficiency, has permitted decreases in its funding standard
account or has applied for an extension of any amortization
period within the meaning of Section 412 of the Code; neither
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the Borrower nor any Subsidiary nor any ERISA Affiliate has
incurred any liability to or on account of a Plan pursuant to
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201
or 4204 of ERISA or Section 4971 or 4975 of the Code or has
been notified that it will incur any liability under any of the
foregoing Sections with respect to any Plan; no proceedings
have been instituted to terminate any Plan; no condition exists
which presents a material risk to the Borrower or any Subsid-
iary or any ERISA Affiliate of incurring a liability to or on
account of a Plan pursuant to the foregoing provisions of ERISA
and the Code; no lien imposed under the Code or ERISA on the
assets of the Borrower or any Subsidiary or any ERISA Affiliate
exists nor has the Borrower, any Subsidiary or any ERISA Af-
filiate been notified that such a lien will be imposed on the
assets of the Borrower, any Subsidiary or any ERISA Affiliate
on account of any Plan; and the Borrower and its Subsidiaries
do not maintain or contribute to any employee welfare benefit
plan (as defined in Section 3(1) of ERISA) (other than such an
employee welfare benefit plan which is a "multiemployer plan"
within the meaning of Section 414(f) of the Code) which pro-
vides benefits to retired employees (other than as required by
Section 601 of ERISA) or any employee pension benefit plan (as
defined in Section 3(2) of ERISA) (other than any such employee
pension benefit plan which is intended to be qualified under
Section 401(a) of the Code). With respect to Plans that are
multiemployer plans (as defined in Section 3(37) of ERISA) the
representations and warranties in this Section 5.13, other than
any made with respect to liability under Section 4201 or 4204
of ERISA, are made to the best knowledge of the Borrower.
5.14 Subsidiaries. Schedule III hereto (as it shall
be amended (without the need of the consent by any Bank) with
respect to PCI and its Subsidiaries by the Borrower, within 30
days after the Merger Agreement Date, delivering to the Admin-
istrative Agent a revised Schedule III) lists each Subsidiary
of the Borrower, and the direct and indirect ownership interest
of the Borrower therein, in each case as of the Effective Date
(or the Merger Agreement Date in the case of such amendment).
5.15 Patents, etc. The Borrower and each of its
Subsidiaries owns or holds a valid license to use all material
patents, trademarks, servicemarks, trade names, copyrights,
licenses and other rights, that are necessary for, and no re-
striction applicable to any such patent, trademark, service-
mark, trade name, copyright, license or other right would
interfere with, the operation of their businesses taken as a
whole as presently conducted and as proposed to be conducted,
except such restrictions as are not likely to, in the aggre-
gate, have a Material Adverse Effect.
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5.16 Compliance with Statutes, etc. (a) Each of
the Borrower and its Subsidiaries is in compliance with all
applicable statutes, regulations and orders of, and all applic-
able restrictions imposed by, all governmental bodies, domestic
or foreign, in respect of the conduct of its business and the
ownership of its property (including applicable statutes, regu-
lations, orders and restrictions relating to environmental
standards and controls), except such noncompliance as is not
likely to, in the aggregate, have a Material Adverse Effect.
(b) Each of the Borrower and its Subsidiaries is in
compliance with all applicable Environmental Laws governing its
business for which failure to comply is likely to have a Mate-
rial Adverse Effect, and neither the Borrower nor any of its
Subsidiaries is liable for any material penalties, fines or
forfeitures for failure to comply with any of the foregoing in
the manner set forth above. All licenses, permits, registra-
tions or approvals required for the business of the Borrower
and each of its Subsidiaries, as conducted as of the Initial
Borrowing Date, under any Environmental Law have been secured
and the Borrower and each of its Subsidiaries is in substantial
compliance therewith, except such licenses, permits, registra-
tions or approvals the failure to secure or to comply therewith
is not likely to have a Material Adverse Effect. Neither the
Borrower nor any of its Subsidiaries is in any respect in non-
compliance with, breach of or default under any applicable
writ, order, judgment, injunction, or decree to which the Bor-
rower or such Subsidiary is a party or which would affect the
ability of the Borrower or such Subsidiary to operate any real
property and no event has occurred and is continuing which,
with the passage of time or the giving of notice or both, would
constitute noncompliance, breach of or default thereunder, ex-
cept in each such case, such noncompliance, breaches or de-
faults as are not likely to, in the aggregate, have a Material
Adverse Effect. There are as of the Initial Borrowing Date no
Environmental Claims pending or, to the best knowledge of the
Borrower, threatened, which (a) question the validity, term or
entitlement of the Borrower or any of its Subsidiaries for any
permit, license, order or registration required for the opera-
tion of any facility which the Borrower or any of its Subsid-
iaries currently operates and (b) wherein an unfavorable deci-
sion, ruling or finding would be reasonably likely to have a
material adverse effect on the financial viability of any fa-
cility thereof. There are no facts, circumstances, conditions
or occurrences on any Real Property or, to the knowledge of the
Borrower, on any property adjacent to any such Real Property
that could reasonably be expected (i) to form the basis of an
Environmental Claim against the Borrower, any of its Subsidiar-
ies or any Real Property of the Borrower or any of its Subsid-
iaries, or (ii) to cause such Real Property to be subject to
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any restrictions on the ownership, occupancy, use or transfer-
ability of such Real Property under any Environmental Law, ex-
cept in each such case, such Environmental Claims or restric-
tions that individually or in the aggregate are not reasonably
likely to have a Material Adverse Effect.
(c) Hazardous Materials have not at any time been
(i) generated, used, treated or stored on, or transported to or
from, any Real Property of the Borrower or any of its Subsidi-
aries or (ii) released on any Real Property, in each case where
such occurrence or event is reasonably likely to have a Mate-
rial Adverse Effect.
5.17 Properties. The Borrower and each of its Sub-
sidiaries has good and marketable title to all properties owned
by it, including all property reflected in the financial state-
ments referred to in Section 5.11(b) (except as sold or other-
wise disposed of since the dates of the financial statements
specified therein in the ordinary course of business) free and
clear of all Liens, other than Liens permitted by Section 7.02.
5.18 Labor Relations; Collective Bargaining Agree-
ments. Neither the Borrower nor any of its Subsidiaries is
engaged in any unfair labor practice that is reasonably likely
to have a Material Adverse Effect. There is (i) no significant
unfair labor practice complaint pending against the Borrower or
any of its Subsidiaries or, to the best knowledge of the Bor-
rower, threatened against any of them, before the National La-
bor Relations Board, and no significant grievance or signi-
ficant arbitration proceeding arising out of or under any col-
lective bargaining agreement is now pending against the Bor-
rower or any of its Subsidiaries or, to the best knowledge of
the Borrower, threatened against any of them, (ii) no signi-
ficant strike, labor dispute, slowdown or stoppage is pending
against the Borrower or any of its Subsidiaries or, to the best
knowledge of the Borrower, threatened against the Borrower or
any of its Subsidiaries and (iii) to the best knowledge of the
Borrower, no union representation question exists with respect
to the employees of the Borrower or any of its Subsidiaries,
except (with respect to any matter specified in clause (i),
(ii) or (iii) above, either individually or in the aggregate)
such as is not reasonably likely to have a Material Adverse
Effect.
5.19 Indebtedness. Schedule V, Part A sets forth a
true and complete list of (x) all Indebtedness (other than in-
tercompany indebtedness) of the Borrower and each of its Sub-
sidiaries (other than PCI and its Subsidiaries) which is to
remain outstanding after the Initial Borrowing Date and (y) all
agreements which are to remain outstanding after the Initial
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Borrowing Date pursuant to which the Borrower or any of its
Subsidiaries (other than PCI and its Subsidiaries) is entitled
to incur Indebtedness (other than intercompany indebtedness)
(whether or not any condition to such incurrence could be met)
(collectively, together with all Indebtedness and agreements
listed in Part B and, to the extent acceptable to the Required
Banks, Part C, the "Existing Indebtedness"), in each case show-
ing the aggregate principal amount thereof (and available com-
mitments, if any, thereunder) and the name of the respective
borrower and any other entity which directly or indirectly
guaranteed such debt. Part B of Schedule V shall list all of
the aforesaid information, as of such dates, for PCI and its
Subsidiaries, to the knowledge of the Borrower on the Tender
Offer Closing Date. Part C of Schedule V shall list all of the
aforesaid information, as of the Merger Agreement Date for PCI
and its Subsidiaries not included on Part B, with the Borrower
hereby agreeing to deliver to the Administrative Agent such
Part C within 30 days after the Merger Agreement Date.
5.20 Restrictions on Subsidiaries. Except for re-
strictions contained in the Credit Documents, as of the Tender
Offer Closing Date there are no contractual or consensual re-
strictions on the Borrower or any of its Subsidiaries which
prohibit or otherwise restrict (i) the transfer of cash or
other assets (x) between the Borrower and any of its Subsidi-
aries or (y) between any Subsidiaries of the Borrower or
(ii) the ability of the Borrower or any of its Subsidiaries to
grant the security interests contemplated by the Pledge Docu-
ments.
5.21 Representations and Warranties in Other Agree-
ments. All representations and warranties made by the Borrower
or any of its Subsidiaries set forth in any of the Transaction
Documents will be true and correct on the Initial Borrowing
Date in all material respects as though such representations
and warranties were being made on and as of such date.
5.22 Investor Preferred, etc. As of the Initial
Borrowing Date, the Investor Preferred has been duly author-
ized, issued and delivered in accordance with applicable law.
The subordination provisions contained in the Subordinated Fi-
nance Co. Note are enforceable by the Banks against the Bor-
rower and the holder of the Subordinated Finance Co. Note, and
all Obligations of the Borrower hereunder or under the other
Credit Documents are or will be within the definition of "Se-
nior Debt" included in such provisions.
5.23 Merger. On and as of the Merger Borrowing
Date, all material consents and approvals of, and filings and
registrations with, and all other actions in respect of, all
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governmental agencies, authorities or instrumentalities re-
quired in order to make or consummate the Merger, or otherwise
required in connection with the Merger, will have been ob-
tained, given, filed or taken and are or will be in full force
and effect (or effective judicial relief with respect thereto
has been obtained). All actions pursuant to or in furtherance
of the Merger have been and will be taken in compliance with
all applicable laws.
5.24 Security Interests. Once executed and deliv-
ered, and until terminated in accordance with the terms
thereof, the Pledge Documents create, as security for the obli-
gations purported to be secured thereby, a valid and enforce-
able perfected security interest in and Lien on all of the Col-
lateral referred to in each of the Pledge Agreements in favor
of the Collateral Agent for the benefit of the Banks, superior
to and prior to the rights of all third persons and subject to
no other Liens. The Borrower and the VTA Trustee (and if the
Finance Co. Pledge Agreement has been executed and delivered,
Finance Co.) together own all Collateral under the respective
Pledge Agreements free and clear of all Liens. No filings or
recordings are required in order to perfect the security inter-
ests created under either Pledge Agreement.
SECTION 6. Affirmative Covenants. The Borrower cov-
enants and agrees that on the Tender Offer Closing Date and
thereafter for so long as this Agreement is in effect and until
the Commitments have terminated, and the Loans together with
interest, Fees and all other Obligations (other than any indem-
nities described in Section 11.01 hereof which are not then due
and payable) incurred hereunder are paid in full:
6.01 Information Covenants. The Borrower will fur-
nish to each Bank:
(a) Annual Financial Statements. Within 90 days
after the close of each fiscal year of the Borrower, the
consolidated and (if, and to the extent, requested by any
of the Co-Arrangers) consolidating balance sheets of the
Borrower and its Subsidiaries, as at the end of such fis-
cal year and the related statements of income and cash
flows for such fiscal year, setting forth comparative fig-
ures for the preceding fiscal year, and in the case of
such consolidated statements examined by independent cert-
ified public accountants of recognized national standing
not unacceptable to the Required Banks whose opinion shall
not be qualified as to the scope of audit and as to the
status of the Borrower or any of its Subsidiaries as a go-
ing concern, together, in each case, with a certificate of
the accounting firm referred to above stating that in the
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course of its regular audit of the business of the Bor-
rower and its Subsidiaries, which audit was conducted in
accordance with generally accepted auditing standards,
such accounting firm has obtained no knowledge of any De-
fault or Event of Default which has occurred and is con-
tinuing or, if in the opinion of such accounting firm such
a Default or Event of Default has occurred and is continu-
ing, a statement as to the nature thereof.
(b) Quarterly Financial Statements. As soon as
available and in any event within 45 days after the close
of each of the first three quarterly accounting periods in
each fiscal year of the Borrower, the consolidated and
(if, and to the extent, requested by any of the
Co-Arrangers) consolidating balance sheets of the Borrower
and its Subsidiaries, as at the end of such quarterly per-
iod and the related statements of income and cash flows
for such quarterly period and for the elapsed portion of
the fiscal year ended with the last day of such quarterly
period, and setting forth comparative figures for the re-
lated periods in the prior fiscal year, in each case, cer-
tified by an Authorized Officer of the Borrower, subject
to changes resulting from audit and normal year-end audit
adjustments.
(c) Officer's Certificates. At the time of the de-
livery of the financial statements provided for in Section
6.01(a) and (b) a certificate of an Authorized Officer of
the Borrower to the effect that no Default or Event of
Default exists or, if any Default or Event of Default does
exist, specifying the nature and extent thereof, which
certificate shall set forth the Consolidated Interest Cov-
erage Ratio and the Leverage Ratio, together with the cal-
culations required to establish such ratios and whether
the Borrower and its Subsidiaries were in compliance with
the provisions of Sections 7.08, 7.09 and 7.10, in each
case as at the end of such fiscal quarter or year, as the
case may be.
(d) Notice of Default or Litigation. Promptly, and
in any event within three Business Days after an executive
officer of the Borrower obtains knowledge thereof, notice
of (x) the occurrence of any event which constitutes a
Default or Event of Default, which notice shall specify
the nature thereof, the period of existence thereof and
what action the Borrower proposes to take with respect
thereto and (y) the commencement of or any significant
development in any litigation or governmental proceeding
pending against the Borrower or any of its Subsidiaries
which is reasonably expected to have a Material Adverse
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Effect or a material adverse effect on the ability of any
Credit Party to perform its obligations hereunder or under
any other Credit Document.
(e) Auditors' Reports. Promptly upon receipt there-
of, a copy of each other report or "management letter"
submitted to the Borrower or its Subsidiaries by its inde-
pendent accountants in connection with any annual, interim
or special audit made by it of the books of the Borrower
or its Subsidiaries.
(f) Environmental Matters. Promptly upon obtaining
knowledge thereof, notice of (i) any pending or threatened
Environmental Claim against the Borrower or any of its
Subsidiaries or any Real Property of the Borrower or any
of its Subsidiaries unless such Environmental Claim could
not, individually or when aggregated with all other such
Environmental Claims, reasonably be expected to have a
Material Adverse Effect; (ii) any condition or occurrence
on any Real Property of the Borrower or any of its Subsid-
iaries that (a) results in material noncompliance by the
Borrower or such Subsidiary with any applicable Environ-
mental Law, or (b) could reasonably be anticipated to form
the basis of an Environmental Claim against the Borrower,
such Subsidiary or any Real Property of the Borrower or
such Subsidiary, unless in each case such noncompliance or
such Environmental Claim could not, individually or when
aggregated with all other such noncompliance claims, rea-
sonably be expected to have a Material Adverse Effect;
(iii) any condition or occurrence on any Real Property of
the Borrower that could reasonably be anticipated to cause
such Real Property to be subject to any restrictions on
the ownership, occupancy, use or transferability of such
Real Property under any Environmental Law unless such re-
strictions could not, individually or when aggregated with
all other such restrictions, reasonably be expected to
have a Material Adverse Effect; and (iv) the taking of any
removal or remedial action in response to the actual or
alleged presence of any Hazardous Material on any Real
Property of the Borrower or any of its Subsidiaries, un-
less the presence of such Hazardous Materials and the re-
moval or remedial action in response thereto could not,
individually or when aggregated with all such other occur-
rences or events, reasonably be expected to have a Mate-
rial Adverse Effect. All such notices shall describe in
reasonable detail the nature of the claim, investigation,
condition, occurrence or removal or remedial action and
the response thereto of the Borrower or of its applicable
Subsidiary. In addition, the Borrower will provide the
Banks with copies of all material written communications
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with any government or governmental agency relating to
Environmental Laws, all communications with any government
or governmental agency relating to Environmental Claims,
and such detailed reports of any Environmental Claim, in
each case as may reasonably be requested in writing from
time to time by the Administrative Agent or the Required
Banks.
(g) Other Information. Promptly upon transmission
thereof, copies of any filings and registrations with, and
reports to, the SEC by the Borrower or any of its Sub-
sidiaries, copies of all press releases and copies of all
financial statements, notices and reports that the Bor-
rower or any of its Subsidiaries shall send to analysts,
or any publicly issued debt of the Borrower or its Sub-
sidiaries (in each case, to the extent not theretofore
delivered to the Banks pursuant to this Agreement) and,
with reasonable promptness, such other information or
documents (financial or otherwise) as the Administrative
Agent on its own behalf or on behalf of the Required Banks
may reasonably request from time to time.
6.02 Books, Records, Inspections, etc. The Borrower
will, and will cause each of its Subsidiaries to, permit, upon
notice to the Chief Financial Officer or any other Authorized
Officer of the Borrower, officers and designated representa-
tives of the Administrative Agent or the Banks to visit and
inspect any of the properties or assets of the Borrower and any
of its Subsidiaries in whomsoever's possession, and to examine
the books of account of the Borrower and any of its Subsidiar-
ies and discuss the affairs, finances and accounts of the Bor-
rower and any of its Subsidiaries (other than in all events
confidential information subject to attorney-client privilege)
with, and be advised as to the same by, the officers and inde-
pendent accountants of the Borrower or such Subsidiary, all at
such reasonable times and intervals, upon reasonable notice,
and to such reasonable extent as the Administrative Agent or
any Bank may request.
6.03 Payment of Taxes. The Borrower will, and will
cause each of its Subsidiaries to, pay and discharge all taxes,
assessments and governmental charges or levies imposed upon it
or upon its income or profits, or upon any properties belonging
to it, prior to the date on which penalties attach thereto, and
all lawful claims which, if unpaid, might become a Lien or
charge upon any properties of the Borrower or of any of its
Subsidiaries, provided that neither the Borrower nor any of its
Subsidiaries shall be required to pay any such tax, assessment,
charge, levy or claim which is being contested in good faith
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and by proper proceedings if it has maintained adequate re-
serves (in the good faith judgment of the management of such
Person) with respect thereto in accordance with GAAP.
6.04 Corporate Franchises. The Borrower will, and
will cause each of its Material Subsidiaries to, do or cause to
be done, all things necessary to preserve and keep in full
force and effect its existence, material rights and material
authorities to do business, provided that any transaction per-
mitted by Section 7.01 will not constitute a breach of this
Section 6.04.
6.05 Compliance with Statutes, etc. The Borrower
will, and will cause each Subsidiary to, comply with all ap-
plicable statutes, regulations and orders of, and all applic-
able restrictions imposed by, all governmental bodies, domestic
or foreign, in respect of the conduct of its business and the
ownership of its property (including applicable statutes, regu-
lations, orders and restrictions relating to environmental
standards and controls) other than those the non-compliance with
which would not have a Material Adverse Effect.
6.06 ERISA. As soon as possible and, in any event,
within 20 Business Days after the Borrower or any of its Sub-
sidiaries or any ERISA Affiliate knows or has reason to know of
the occurrence of any of the following events relating to a
Plan, the Borrower will deliver to each of the Banks a certifi-
cate of an Authorized Officer of the Borrower setting forth
details as to such occurrence and the action, if any, which the
Borrower, such Subsidiary or such ERISA Affiliate is required
or proposes to take, together with any notices required or pro-
posed to be given to or filed with or by the Borrower, such
Subsidiary, the ERISA Affiliate, the PBGC, a Plan participant
or the Plan administrator with respect thereto: that a Report-
able Event has occurred which could reasonably be expected to
result in material liability of the Borrower, any of its Sub-
sidiaries or any ERISA Affiliate, that, with respect to a Plan
which is not a "multiemployer plan" (as defined in Section
4001(a)(3) of ERISA), an accumulated funding deficiency has
been incurred or an application is intended to be or has been
made to the Secretary of the Treasury for a waiver or modifica-
tion of the minimum funding standard (including any required
installment payments) or an extension of any amortization per-
iod under Section 412 of the Code with respect to such a Plan,
that a Plan has been or may be terminated (other than pursuant
to Section 4041(b) of ERISA), reorganized, partitioned or de-
clared insolvent under Title IV of ERISA, that a Plan has an
Unfunded Current Liability giving rise to a lien under ERISA or
the Code, that proceedings may be or have been instituted to
terminate a Plan (other than pursuant to Section 4041(b) of
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ERISA), that a proceeding has been instituted pursuant to Sec-
tion 515 of ERISA to collect a delinquent contribution to a
Plan, or that the Borrower, any of its Subsidiaries or any
ERISA Affiliate will or may incur any material liability (in-
cluding any contingent or secondary liability) to or on account
of the termination of or withdrawal from a Plan under Section
4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or with respect
to a Plan under Section 4971 or 4975 of the Code or Section 409
or 502(i) or 502(l) of ERISA. The Borrower will deliver to
each of the Banks a complete copy of the Schedule B, "Actuarial
Information" to the Internal Revenue Service Annual Report
(Form 5500) of each Plan (other than each Plan which is a
"multiemployer plan" (as defined in Section 4001(a)(3) of
ERISA)) required to be filed with the Internal Revenue Service.
In addition to any certificates or notices delivered to the
Banks pursuant to the first sentence hereof, copies of (i) an-
nual reports filed by the Borrower or any of its Subsidiaries
or any ERISA Affiliate with respect to any Plan and (ii) any
material, nonroutine notice received by the Borrower or any of
its Subsidiaries or any ERISA Affiliate from any governmental
agency or court with respect to any Plan, shall in either case
be delivered to the Banks no later than 20 Business Days after
the date such report or notice has been filed with the Internal
Revenue Service or received by the Borrower or such Subsidiary
or the ERISA Affiliate, as applicable.
6.07 Good Repair. The Borrower will, and will cause
each of its Subsidiaries to, use its best efforts to ensure
that its properties and equipment used or useful in its busi-
ness in whomsoever's possession they may be, are kept in good
repair, working order and condition, normal wear and tear ex-
cepted and, that from time to time there are made in such prop-
erties and equipment all needful and proper repairs, renewals,
replacements, extensions, additions, betterments and improve-
ments thereto, all to the extent and in the manner customary
for companies of similar size and in similar businesses.
6.08 End of Fiscal Years; Fiscal Quarters. The Bor-
rower will, for financial reporting purposes, cause (i) each of
its, and of each of its domestic Subsidiaries' fiscal years to
end on April 30 (provided that the Borrower's fiscal year
scheduled to end on January 31, 1994 may end on such date),
(ii) each of its, and each of its domestic Subsidiaries' fiscal
quarters to end on July 31, October 31, January 31 and April 30
and (iii) each of its non-U.S. based Subsidiaries to (x) retain
the same quarterly and annual financial periods as in effect on
the Initial Borrowing Date, (y) utilize fiscal periods required
or customary under local law or (z) cause each of its fiscal
quarters and fiscal years to end as provided in clauses (i) and
(ii) above.
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6.09 Insurance. The Company will, and will cause
each of its Subsidiaries to, at all times maintain in full
force and effect insurance with carriers rated A- or better by
A.M. Best (at the time of policy inception and any renewals) in
such amounts, covering such risks and liabilities (it being
understood that Directors and Officers insurance shall not be
required) and with such deductibles or self-insured retentions
as are in accordance with normal industry practice, provided
that in no event will any such deductible or self-insured re-
tention in respect of liability claims or in respect of casu-
alty damage exceed, in each such case, $2,000,000 per occur-
rence. At any time that insurance at the levels described in
Schedule VI is not being maintained by the Borrower and its
Subsidiaries, the Borrower will notify the Banks in writing
thereof and, if thereafter notified by the Administrative Agent
to do so, the Borrower will obtain insurance at such levels at
least equal to those set forth in Schedule VI to the extent
then generally available (but in any event within the deduct-
ible or self-insured retention limitations set forth in the
preceding sentence) or otherwise as are acceptable to the Ad-
ministrative Agent. The Borrower will furnish on the Initial
Borrowing Date and annually thereafter to the Administrative
Agent a summary of the insurance carried in respect of it and
its assets.
6.10 Merger; Control; BellSouth Conditions. The
Borrower shall (i) cause the Merger to be consummated as
promptly as practical and in no event later than the date which
is 270 days after the Tender Offer Closing Date, (ii) subject
to obtaining the FCC Long-Form Approval and compliance with
Rule 14f-1 promulgated under the Securities Exchange Act of
1934, take all actions available to it to cause designees of
the Borrower to constitute a majority of the Board of Directors
of PCI as promptly as reasonably practical after the Merger
Agreement Date, (iii) take all actions as are appropriate and
reasonably necessary to satisfy the BellSouth Conditions as
promptly as practical, (iv) comply with all of its covenants
and agreements contained in the Merger Agreement, (v) exercise
all of its rights and powers to cause PCI to comply with all of
PCI's covenants and conditions contained in the Merger Agree-
ment and (vi) not waive or agree to amend any covenant binding
upon PCI and its Subsidiaries that is set forth in Section 5.1
of the Merger Agreement (except to the extent the requested
action would not result in a breach of any of the covenants
contained in this Agreement (assuming same were then binding
upon PCI and its Subsidiaries)).
SECTION 7. Negative Covenants. The Borrower hereby
covenants and agrees that on the Tender Offer Closing Date and
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thereafter for so long as this Agreement is in effect and until
the Commitments have terminated, and the Loans, together with
interest, Fees and all other Obligations (other than any indem-
nities described in Section 11.01 hereof which are not then due
and payable) incurred hereunder, are paid in full:
7.01 Consolidation, Merger, Sale or Purchase of As-
sets, etc. The Borrower will not, and will not permit any of
its Subsidiaries to, wind up, liquidate or dissolve its af-
fairs, or enter into any merger or consolidation, sell or oth-
erwise dispose of (x) all or substantially all of the assets of
the Borrower or of the Borrower and its Subsidiaries taken as a
whole or (y) prior to the Conversion Date all, substantially
all or any part of its property or assets (other than inven-
tory, rights to unproduced or unpublished product, contract
rights and licenses, obsolete equipment, excess equipment, land
and/or buildings no longer needed in the conduct of business or
equipment being replaced with other equipment, in each case in
the ordinary course of business) or prior to the Conversion
Date purchase, lease or otherwise acquire all or any part of
the property or assets of any Person (other than purchases,
leases or other acquisitions of inventory, equipment, contract
rights and licenses, and product prior to the Conversion Date
in the ordinary course of business) or agree to do any of the
foregoing at any future time, except that the following shall
be permitted (with the following clauses (a), (e), (f), (g),
(h), (i), (j) and (k) only being relevant prior to the Conver-
sion Date):
(a) the investments, acquisitions and transfers or
dispositions of stock and other properties permitted pur-
suant to Sections 7.04 and 7.05;
(b) the Merger;
(c) (x) after the BellSouth Equity Investment Date,
the Borrower Merger (to the extent no Default or Event of
Default would otherwise result therefrom) and (y) after
the Conversion Date, any merger involving the Borrower
and/or any Subsidiary, on the one hand, and any other do-
mestic U.S. corporation, on the other hand, so long as at
the time thereof and after giving effect thereto no De-
fault or Event of Default exists or would exist and the
Borrower (or, if the Borrower is not involved, such Sub-
sidiary) is the surviving corporation of such merger;
(d) any Subsidiary of the Borrower (other than,
prior to the BellSouth Exchange, a Finance Sub) may be
merged or consolidated with or into, or be liquidated
into, the Borrower or a Subsidiary Guarantor (so long as
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the Borrower or such Subsidiary Guarantor is the surviving
corporation) or, in the case of any two such Subsidiaries
that are not Subsidiary Guarantors, any Subsidiary or all
or any part of its business, properties, stock and assets
may be conveyed, leased, sold or transferred to the Bor-
rower or a Subsidiary Guarantor or, in the case of any two
such Subsidiaries that are not Subsidiary Guarantors, any
Subsidiary;
(e) sales of assets for cash to the extent such
sales constitute MFJ Transactions and are required to sat-
isfy the MFJ Condition;
(f) sales of assets for cash in an amount equal to
at least the fair market value thereof (as determined by
the Board of Directors of the entity owning such assets)
to satisfy the HSR Condition in respect of any of the
Specified Equity Investors, provided that the Net Cash
Proceeds of all such sales shall not exceed $10,000,000;
(g) sales of assets owned by PCI and/or its Subsid-
iaries on the Initial Borrowing Date which are not (x)
used in or related to the production and/or distribution
of film or television product, (y) used in or related to
the publishing and/or information service business or (z)
used in or related to sports franchises and arenas for
cash in an amount equal to at least the fair market value
thereof (as determined by the Board of Directors of the
Borrower);
(h) capital expenditures for land, buildings and
equipment expended in the ordinary course of business;
(i) additional sales for cash in an amount equal to
at least the fair market value thereof (as determined by
the Board of Directors of the Borrower) generating not in
excess of $75,000,000 in Net Cash Proceeds in any fiscal
year (provided that for the purposes of this clause (i)
and Section 7.03(b), the period from the Tender Offer
Closing Date through April 30, 1994 shall be deemed a fis-
cal year);
(j) acquisitions by the Borrower or any Subsidiary
Guarantor of assets or stock of other Persons not other-
wise permitted by this Section 7.01 for cash, assets, Bor-
rower Common Stock or Borrower Preferred Stock provided
that the aggregate purchase price paid in cash (other than
cash generated by the sale of Borrower Common Stock to
some or all of the Principal Stockholders as contemplated
by Section 3.02(A)(e)(vii) (a "Section 3.02(A)(e)(vii)
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Issuance")), assets or Borrower Preferred Stock (and not
Borrower Common Stock) (with assets valued at fair market
value) expended pursuant to this clause (j) and Section
7.04(i) and/or (l) shall not exceed $200,000,000
($500,000,000 if after the Term Loan Reduction has been
achieved);
(k) acquisitions by the Borrower or any Subsidiary
Guarantor of assets or stock of any Person not otherwise
permitted by this Section 7.01 for cash not in excess of,
at the time of any such acquisition, the Unused Basket at
such time; and
(l) sales of credit card receivables pursuant to the
existing facility with General Electric Credit Corporation
(as in effect on the Tender Offer Closing Date and as it
may be expanded on terms no more burdensome in any mate-
rial respect to the Borrower and its Subsidiaries to in-
clude credit card receivables of PCI and its Subsidiaries,
the "GECC Facility") and/or replacement facilities no more
burdensome in any material respect to the Borrower and its
Subsidiaries ("Replacement Facilities").
7.02 Liens. The Borrower will not, and will not
permit any of its Subsidiaries to, create, incur, assume or
suffer to exist any Lien upon or with respect to any property
or assets of any kind (real or personal, tangible or intan-
gible) of the Borrower or any of its Subsidiaries, whether now
owned or hereafter acquired, or sell any such property or as-
sets subject to an understanding or agreement (but not an op-
tion), contingent or otherwise, to repurchase such property or
assets (including sales of accounts receivable or notes with
recourse to the Borrower or any of its Subsidiaries) or assign
any right to receive income, or file or permit the filing of
any financing statement under the UCC or any other similar no-
tice of Lien under any similar recording or notice statute,
except:
(a) Liens for taxes not yet due and payable or Liens
for taxes being contested in good faith and by appropriate
proceedings for which adequate reserves (in the good faith
judgment of the management of the Borrower) have been es-
tablished;
(b) Liens in respect of property or assets of the
Borrower or any of its Subsidiaries imposed by law which
were incurred in the ordinary course of business, such as
carriers', warehousemen's and mechanics' Liens, statutory
landlord's Liens, Liens in favor of customs and revenue
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authorities to secure payment of customs duties in connec-
tion with the importation of goods, and other similar
Liens arising in the ordinary course of business, and
(x) which, if any such property or asset is material, do
not in the aggregate materially detract from the value of
such property or assets or materially impair the use
thereof in the operation of the business of the Borrower
or such Subsidiary or (y) which are being contested in
good faith by appropriate proceedings, which proceedings
have the effect of preventing the forfeiture or sale of
the property or asset subject to such Lien;
(c) Liens of the Borrower and its Subsidiaries (in-
cluding PCI and its Subsidiaries) existing on the Initial
Borrowing Date and listed on Schedule VII hereto (as
amended within 30 days after the Merger Agreement Date to
include any such Liens as of the Merger Agreement Date of
PCI and its Subsidiaries as are satisfactory to the Re-
quired Banks) that are to remain outstanding after the
Initial Borrowing Date, without giving effect to any sub-
sequent extensions or renewals thereof other than renewals
or extensions of the Liens in respect of the GECC Facility
("Permitted Liens");
(d) Liens (other than any Lien imposed by ERISA)
incurred or deposits made in the ordinary course of busi-
ness in connection with (x) liability insurance, workers'
compensation, unemployment insurance and other types of
social security, or (y) to secure the performance of ten-
ders, statutory obligations, surety and appeal bonds,
bids, leases, government contracts, performance and
return-of-money bonds and other similar obligations in-
curred in the ordinary course of business;
(e) leases or subleases granted to third Persons not
interfering with the ordinary course of business of Bor-
rower or any of its Subsidiaries (other than QVC Finance
Sub);
(f) Capital Leases to the extent permitted under
Section 7.03 hereof;
(g) Permitted Encumbrances;
(h) Liens (x) arising pursuant to purchase money
mortgages securing Indebtedness representing the purchase
price (or financing of the purchase price within 180 days
after the respective purchase) of property or other assets
acquired by the Borrower or any of its Subsidiaries (other
than QVC Finance Sub), provided that (i) any such Liens
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attach only to the assets so purchased, (ii) the Indebted-
ness secured by any such Lien does not exceed 100%, nor is
less than 70%, of the purchase price of the assets being
purchased and (iii) the Indebtedness secured thereby is
permitted by Section 7.03(b); or (y) existing on specific
tangible assets at the time acquired by the Borrower or
such Subsidiary or on assets of a Person at the time such
Person first becomes a Subsidiary, provided that (i) any
such Liens were not created at the time of or in contem-
plation of the acquisition of such assets or Person,
(ii) in the case of any such acquisition of a Person, any
such Lien attaches only to specific tangible assets of
such Person and not assets of such Person generally,
(iii) the Indebtedness secured by any such Lien does not
exceed 100% of the fair market value of the asset to which
such Lien attaches, determined at the time of the acquisi-
tion of such asset or the time at which such Person be-
comes a Subsidiary, as the case may be and (iv) the In-
debtedness secured thereby is permitted by Section
7.03(b);
(i) notice filings of UCC statements with respect to
consigned goods and/or equipment leases;
(j) Liens on any Indebtedness permitted by Section
7.03(k), provided that (x) the Indebtedness being refi-
nanced was secured by a Lien and (y) such Lien attached
only to the property securing the Indebtedness so refi-
nanced;
(k) Liens in respect of the Replacement Facilities;
and
(l) Liens created pursuant to the Pledge Documents.
7.03 Indebtedness. Prior to the Conversion Date,
the Borrower will not, and will not permit any of its Subsid-
iaries to, contract, create, incur, assume or suffer to exist
any Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement
and the other Credit Documents;
(b) Capitalized Lease Obligations of the Borrower or
any of its Subsidiaries (other than a Finance Sub) and
Indebtedness secured by Liens permitted by Section 7.02(h)
in an aggregate amount incurred in any fiscal year not to
exceed $50,000,000;
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(c) Existing Indebtedness (including (i) extensions
of the GECC Facility and/or replacements thereof with Re-
placement Facilities and (ii) extensions and/or replace-
ments of Existing Indebtedness of PCI and its Subsidiar-
ies);
(d) Indebtedness of the Borrower under Interest Rate
Protection Agreements entered into in respect of the Term
Loans;
(e) Indebtedness under Currency Agreements entered
into in the ordinary course of business for hedging and
not speculative purposes;
(f) Indebtedness of the Borrower evidenced by the
Subordinated Finance Co. Note in principal amount not to
exceed $1,500,000,000;
(g) Indebtedness of (x) the Borrower owing to any
Subsidiary Guarantor and of any Subsidiary Guarantor owing
to the Borrower or another Subsidiary Guarantor and (y)
Indebtedness among the Borrower and Subsidiaries which are
not Subsidiary Guarantors, to the extent permitted under
Sections 7.04(i), (j), (k), (l) or (m);
(h) Indebtedness resulting from unsecured reimburse-
ment obligations of the Borrower and its Subsidiaries
(other than a Finance Sub) under commercial and perfor-
mance letters of credit with an aggregate stated amount
not exceeding $100,000,000 at any time;
(i) Indebtedness of the Borrower under the Liberty
Put Obligation;
(j) Permitted Subordinated Debt (x) issued as pro-
vided for in Section 7.05 or (y) issued to finance the
Borrower's monetary obligations under the Liberty Put Ob-
ligation;
(k) Indebtedness incurred to refinance Indebtedness
of PCI and/or its Subsidiaries outstanding on the Merger
Agreement Date and that would come due as a result of the
Acquisition (or any component thereof) or which is ex-
cluded from Existing Indebtedness because not acceptable
to the Required Banks (x) in an amount not in excess of
$50,000,000 or (y) if not permitted by clause (x), con-
taining provisions that are no more burdensome to the Bor-
rower and/or its Subsidiaries in any material respect than
the Indebtedness being refinanced;
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(l) long term Indebtedness for borrowed money of the
Borrower not otherwise permitted by this Section 7.03 on
terms and conditions and in amounts satisfactory to the
Required Banks; and
(m) Indebtedness of the Borrower constituting guar-
anties of (x) Indebtedness or lease obligations of any
Subsidiary to the extent such Subsidiary is otherwise per-
mitted to incur such Indebtedness pursuant to this Section
7.03 or not otherwise prohibited from incurring such lease
obligations by this Agreement, and in the case of entities
not Subsidiary Guarantors, only to the extent such guaran-
ties are permitted by Section 7.04(i), (l) or (m) and (y)
Indebtedness or lease obligations of Persons not consti-
tuting Subsidiaries to the extent such guaranties are per-
mitted by Section 7.04(l) or (m).
7.04 Advances, Investments and Loans. Prior to the
Conversion Date, the Borrower will not, and will not permit any
of its Subsidiaries to, lend money or credit or make advances
(which term shall not include advance payments made in the or-
dinary course of business for goods, services and products) to
any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital
contribution to any Person, except:
(a) the Borrower and its Subsidiaries may invest in
cash and Cash Equivalents;
(b) the Borrower or any of its Subsidiaries (other
than a Finance Sub) may acquire and hold receivables owing
to it, if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with
the customary trade terms of the Borrower or its ap-
plicable Subsidiary, as the case may be;
(c) loans and advances may be made (A) to employees
(other than athletes and coaches) in the ordinary course
of business (x) for relocation costs and expenses result-
ing from the Merger or (y) otherwise in an aggregate prin-
cipal amount not to exceed $2,000,000 at any time out-
standing and/or (B) to athletes and coaches in the normal
course of business within the context of the industry;
(d) Interest Rate Protection Agreements and Currency
Agreements entered into in compliance with Section 7.03(d)
or (e) shall be permitted;
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(e) advances, investments and loans (and agreements
relating to the foregoing) of the Borrower and its Subsid-
iaries (including PCI and its Subsidiaries) existing on
the Effective Date and listed on Schedule VIII hereto (as
amended within 30 days after the Merger Agreement Date to
include such advances, investments and loans of PCI and
its Subsidiaries as of the Merger Agreement Date) without
giving effect to any additions thereto or replacements
thereof shall be permitted;
(f) Indebtedness evidenced by the Subordinated Fi-
nance Co. Note, and distributions permitted by Section
7.05, shall be permitted;
(g) the Borrower and its Subsidiaries (other than a
Finance Sub) may acquire and own investments (including
debt obligations) received in connection with the bank-
ruptcy or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other dis-
putes with, customers and suppliers in the ordinary course
of business;
(h) the Borrower and/or any Subsidiary Guarantor may
make (x) advances or loans to the Borrower and/or (y) ad-
vances, loans or contributions to, or guarantee Indebted-
ness or lease obligations of, any Subsidiary Guarantor;
(i) the Borrower or any Subsidiary Guarantor may
make advances, loans and contributions to, or, in the case
of the Borrower, guarantee Indebtedness or lease obliga-
tions of, Subsidiaries (other than a Finance Sub) which
are not Subsidiary Guarantors so long as the net advances,
loans, contributions and guaranties (valued in the amounts
so guaranteed) made pursuant to this clause (i) (other
than with cash generated by Section 3.02(A)(e)(vii) Issu-
ances), together with all amounts expended pursuant to
Section 7.01(j) and/or clause (l) below, shall not exceed
$200,000,000 ($500,000,000 if after the Term Loan Reduc-
tion has been achieved);
(j) any Subsidiary (other than a Finance Sub) not a
Subsidiary Guarantor may make advances, loans or contribu-
tions to any other Subsidiary (other than a Finance Sub)
which is not a Subsidiary Guarantor;
(k) the Borrower may make loans or advances to, or
on behalf of, QVC Finance Sub in respect of Finance Co. as
expressly contemplated by the BellSouth Documents;
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(l) the Borrower and its Subsidiary Guarantors may
make additional loans, advances and investments (including
investments in the form of cash, assets, Borrower Pre-
ferred Stock or Borrower Common Stock in joint ventures)
in, or, in the case of the Borrower, make additional guar-
anties of Indebtedness or lease obligations of, any Person
other than QVC Finance Sub, Finance Co. or BellSouth Fi-
nance of a nature not contemplated by the foregoing
clauses (a) through (k), provided that all loans, advances
and investments (other than those made with Borrower Com-
mon Stock or cash generated by Section 3.02(A)(e)(vii)
Issuances) and guaranties (valued in the amount so guaran-
teed) made pursuant to this clause (l), together with all
amounts expended pursuant to Section 7.01(j) and clause
(i) above, shall not exceed $200,000,000 ($500,000,000 if
after the Term Loan Reduction has been achieved);
(m) the Borrower and its Subsidiary Guarantors may
make advances, loans, contributions, investments and/or
guaranties in excess of that permitted by the foregoing
clauses (i) and (l) in an amount not in excess of, at the
time of any such loan, advance, contribution, investment
or guaranty, the Unused Basket at such time;
(n) the Borrower and its Subsidiaries (other than a
Finance Sub) may make advances and loans on inventory to
manufacturers in the ordinary course of business; and
(o) the Borrower or a Subsidiary Guarantor may ac-
quire all of the capital stock of BellSouth Finance upon
and pursuant to the BellSouth Exchange.
7.05 Dividends, etc. The Borrower will not, and
will not permit any Subsidiary to, declare or pay any dividends
(other than dividends payable solely in capital stock of the
Borrower) or return any capital to, its stockholders or author-
ize or make any other distribution, payment or delivery of
property or cash to its stockholders as such, or redeem, re-
tire, purchase or otherwise acquire, directly or indirectly,
for a consideration, any shares of any class of its capital
stock now or hereafter outstanding (or any warrants for (in-
cluding the Merger Warrants) or options or stock appreciation
rights in respect of any of such shares), or set aside any
funds for any of the foregoing purposes and the Borrower will
not permit any of its Subsidiaries to purchase or otherwise
acquire for consideration any shares of any class of the capi-
tal stock of the Borrower now or hereafter outstanding (or any
warrants for or options or stock appreciation rights issued by
such Person in respect of any such shares) (all of the fore-
going "Dividends"), except that:
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(a) any Subsidiary of the Borrower may pay dividends
to the Borrower or to another Subsidiary, except that a
Subsidiary Guarantor may pay dividends only to the Bor-
rower or another Subsidiary Guarantor;
(b) dividends may be paid in cash on the Merger Pre-
ferred and Investor Preferred on and after the Merger Bor-
rowing Date when and as specified therein for the payment
of dividends thereon if, and only if (x) no Default or
Event of Default exists (or would result therefrom, in-
cluding to the extent the payment thereof would result in
a default under Section 7.08 for the period during which
paid) and (y) in the case of the Investor Preferred only,
the ratio as of the end of the last fiscal quarter prior
to such payment of Consolidated Indebtedness to EBITDA for
the four fiscal quarters then ended shall be less than
4.5:1, provided however that cash dividends may be paid on
the Investor Preferred at a time when the requirements of
this clause (b) (y) are not satisfied to the extent such
payment does not exceed the Unused Basket at such time;
(c) the Series F Non-Voting Preferred may be ex-
changed (in accordance with the terms thereof) for shares
of Investor Voting Preferred and the Series G Non-Voting
Preferred may be exchanged (in accordance with the terms
thereof) for shares of Borrower Common Stock;
(d) the Investor Preferred may be converted into
Borrower Common Stock in accordance with its terms;
(e) shares of Merger Preferred (and/or Permitted
Subordinated Debt previously issued in exchange therefor)
may be surrendered to the Borrower in satisfaction of all
or a portion of the exercise price of Merger Warrants;
(f) the shares of Borrower Common Stock and pre-
ferred stock of the Borrower owned by Liberty on the Ini-
tial Borrowing Date may be purchased by the Borrower (or
the Borrower may make the alternate payments to Liberty)
as contemplated by, and in accordance with, the Liberty
Put Obligation;
(g) after the BellSouth Equity Investment Date, the
Merger Preferred and/or the Investor Preferred, if no De-
fault or Event of Default exists (or would result there-
from), may be exchanged for, or redeemed with the proceeds
of the issuance of, Permitted Subordinated Debt if (x)
after giving effect thereto the ratio of, as of the end of
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each of the last two fiscal quarters prior to such conver-
sion, (i) the sum of (A) Consolidated Indebtedness plus
(B) the principal amount of Permitted Subordinated Debt so
issued to (ii) EBITDA for the four fiscal quarters then
ended shall be less than 4.5:1 or (y) at a time when the
requirements of clause (x) are not satisfied, upon written
notice by the Borrower to the Administrative Agent certi-
fying that as a result of the issuance of such Permitted
Subordinated Debt the Borrower shall prepay the Loans as
provided in Section 3.02(A)(g) in an aggregate amount
equal to the Alternate Reduction Amount for such issuance;
(h) repurchases of equity may be made from existing
holders with proceeds of any equity issuance referred to
in Section 3.02(A)(e)(viii); and
(i) repurchases may be made of Borrower Preferred
Stock or Borrower Common Stock issuances referred to in
Section 3.02(A)(e)(x) upon deficient performance of the
cable operator which received same for the same nominal
price paid for same by such operator.
7.06 Transactions with Affiliates. Except for
transactions expressly contemplated by the Investment Agree-
ment, the Borrower will not, and will not permit any of its
Subsidiaries to, enter into any transaction or series of trans-
actions, whether or not in the ordinary course of business,
with any Affiliate other than on terms and conditions substan-
tially as favorable (or more favorable) to the Borrower or such
Subsidiary as would be obtainable by the Borrower or such Sub-
sidiary at the time in a comparable arm's-length transaction
with a Person other than an Affiliate.
7.07 Changes in Business. Except as otherwise per-
mitted by Section 7.01 and 7.04, the Borrower will not materi-
ally alter the character of the business of the Borrower and
its Subsidiaries from that conducted by the Borrower and its
Subsidiaries, together with PCI and its Subsidiaries, on the
Initial Borrowing Date.
7.08 EBITDA to Total Cash Interest Expense. The
Borrower will not permit the ratio of (i) EBITDA to (ii) Total
Cash Interest Expense (x) for the first two full consecutive
fiscal quarters (taken as one accounting period) commencing
after the Merger Borrowing Date to be less than 2.0:1, (y) the
period of the first three full consecutive fiscal quarters
(taken as one accounting period) commencing after the Merger
Borrowing Date to be less than 2.0:1 and (z) for any period of
four full consecutive fiscal quarters (taken as one accounting
period) ending thereafter to be less than 2.0:1.
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7.09 Consolidated Indebtedness to EBITDA. The Bor-
rower will not permit (A) the ratio of (i) Consolidated Indebt-
edness on the last day of each of the first full three fiscal
quarters commencing after the Merger Borrowing Date, respec-
tively to (ii) the Annualized EBITDA ending on such respective
dates to be greater than 5.5:1; (B) the ratio of (i) Consoli-
dated Indebtedness on the last day of any fiscal quarter ending
thereafter and prior to July 31, 1996 to (ii) EBITDA for the
period of four consecutive fiscal quarters (taken as one ac-
counting period) ending at the end of such fiscal quarter to be
greater than 5.5:1 and (C) the ratio of (i) Consolidated In-
debtedness on the last day of any fiscal quarter ending on and
after July 31, 1996, to (ii) EBITDA for the period of four
consecutive fiscal quarters (taken as one accounting period)
ending at the end of such fiscal quarter to be greater than
4.5:1.
7.10 Consolidated Indebtedness to Capitalization.
The Borrower will not permit the ratio of (i) Consolidated In-
debtedness to (ii) Capitalization to exceed 40:100 at any time.
7.11 Limitation on Voluntary Payments; etc. The
Borrower will not, and will not permit any of its Subsidiaries
to: (i) make (or give any notice in respect of) any voluntary
or optional payment or prepayment of principal on or voluntary
or optional redemption of or acquisition for value of (includ-
ing, without limitation, by way of depositing with the trustee
with respect thereto money or securities before due for the
purpose of paying when due), the Indebtedness described in Sec-
tion 7.03(f), (i), (j) or (k), provided that the Subordinated
Finance Co. Note may be (x) repaid and/or redeemed with the
proceeds from the issuance to BellSouth of Investor Preferred
and Borrower Common Stock, or the issuance of other equity fol-
lowing the BellSouth Notice as contemplated by Section
3.02(A)(e)(v), or (y) as provided in Section 7.14, may be can-
celled after the BellSouth Exchange, (ii) amend or modify, or
permit the amendment or modification of, any provision of any
such Indebtedness or, to the extent in a manner adverse to the
Banks, any provision of its Certificate of Incorporation or By
Laws or of the Merger Documents, the Investor Documents and/or
BellSouth Documents, (iii) issue any preferred or preference
stock other than Investor Preferred, Merger Preferred, Series H
Preferred Stock (as defined in the Investment Agreement) and
other Borrower Preferred Stock that is permitted and/or contem-
plated by Sections 3.02(A)(e), 7.01 and/or 7.04, or (iv) pay
any cash interest on the Subordinated Finance Co. Note (other
than (x) an amount of cash equal to the amount of cash divi-
dends that would then be paid on the Borrower Common Stock and
Borrower Preferred Stock that BellSouth would own if the
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BellSouth Equity Investment Date had occurred and/or (y) inter-
est payments made with proceeds of issuances of equity referred
to in Section 3.02(A)(e)(v)).
7.12 Issuance of Subsidiary Stock. The Borrower
will not permit any of its Subsidiaries directly or indirectly
to issue, sell, assign, pledge or otherwise encumber or dispose
of any shares of its capital stock or other securities (or war-
rants, rights or options to acquire shares or other equity se-
curities) of such Subsidiary, except to the extent permitted by
Sections 7.01(d), 7.04 and/or 7.05(a), to the Borrower or an-
other Subsidiary.
7.13 Limitation on Restrictions Affecting Subsidiar-
ies. The Borrower will not, and will not permit any Subsidiary
to, directly, or indirectly, create or otherwise cause any en-
cumbrance or restriction which prohibits or limits the ability
of any Material Subsidiary of the Borrower (other than a Fi-
nance Sub as provided for in the BellSouth Documents) to (a)
pay dividends or make other distributions or pay any Indebted-
ness owed to the Borrower or any Subsidiary of the Borrower,
(b) make loans or advances to the Borrower or any Subsidiary of
the Borrower, (c) transfer any of its properties or assets to
the Borrower or any Subsidiary of the Borrower or (d) create,
incur, assume or suffer to exist any lien upon any of its prop-
erty, assets or revenues, whether now owned or hereafter ac-
quired, other than encumbrances and restrictions arising under
(i) applicable law, (ii) this Agreement and the other Credit
Documents, (iii) Indebtedness permitted pursuant to Sections
7.03(b) or (c), (iv) customary provisions restricting sublet-
ting or assignment of any lease governing a leasehold interest
of the Borrower or any of its Subsidiaries, (v) customary re-
strictions on dispositions of real property interests found in
reciprocal easement agreements of the Borrower or any of its
Subsidiaries and (vi) in the case of a Finance Sub, the Bell-
South Documents.
7.14 Finance Subs; Finance Co. The Borrower (i)
will not permit a Finance Sub to incur any Indebtedness, create
or grant any Lien, make any investment, advance or loan or en-
gage in any business or activity other than holding the general
partnership interest it owns on the Initial Borrowing Date in
Finance Co., (ii) will cause each Finance Sub to comply in all
respects with its certificate of incorporation and its agree-
ments and covenants under the other BellSouth Documents, (iii)
will not direct (including by directing the Borrower's desig-
nees on a Finance Sub's Board of Directors to vote to direct)
such Finance Sub to initiate, or to agree to initiate, volun-
tary (and/or, with respect to Finance Co., involuntary) pro-
ceedings with respect to such Finance Sub or Finance Co. under
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the Bankruptcy Code or any similar bankruptcy or insolvency
law, (iv) will cause QVC Finance Sub as the Managing General
Partner of Finance Co. to cause Finance Co. to comply in all
respects with its partnership agreement (including the limita-
tions therein and notwithstanding that any action may otherwise
be permitted under this Agreement) and its agreements and cov-
enants under the other BellSouth Documents and (v) upon any
exchange by BellSouth of all the capital stock of BellSouth
Finance for Investor Preferred and Borrower Common Stock, will
cause the Subordinated Finance Co. Note to be cancelled, pro-
vided that instead of such cancellation upon such exchange,
Finance Co. may retain such Subordinated Finance Co. Note pro-
vided that it shall provide a guaranty of the Obligations by
executing, and delivering to the Administrative Agent, a coun-
terpart of the Subsidiary Guaranty and it shall have executed,
and delivered to the Administrative Agent, the Finance Co.
Pledge Agreement and shall have delivered the Subordinated Fi-
nance Co. Note, endorsed in blank, to the Collateral Agent.
SECTION 8. Events of Default. Upon the occurrence
of any of the following specified events (each an "Event of
Default"):
8.01 Payments. The Borrower shall (i) default in
the payment when due of any principal of the Loans or (ii) de-
fault, and such default shall continue for two or more days, in
the payment when due (after notification of the amount due) of
any interest on the Loans or any Fees or any other amounts ow-
ing hereunder or under any other Credit Document; or
8.02 Representations, etc. Any representation, war-
ranty or statement made by any Credit Party herein or in any
other Credit Document or in any statement or certificate deliv-
ered or required to be delivered pursuant hereto or thereto
shall prove to be untrue in any material respect on the date as
of which made or deemed made; or
8.03 Covenants. The Borrower or any of its Subsidi-
aries shall (a) default in the due performance or observance by
it of any term, covenant or agreement contained in Section
6.09, 6.10 or 7, or (b) default in the due performance or ob-
servance by it of any term, covenant or agreement (other than
those referred to in Section 8.01, 8.02 or clause (a) of this
Section 8.03) contained in this Agreement and such default
shall continue unremedied for a period of at least 30 days af-
ter notice to the Borrower by the Administrative Agent or the
Required Banks; or
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8.04 Default Under Other Agreements. (a) The Bor-
rower or any of its Subsidiaries shall (i) default in any pay-
ment in respect of any Indebtedness (other than the Obliga-
tions) in excess of $10,000,000 individually or $50,000,000 in
the aggregate of the Borrower and its Subsidiaries or (ii) de-
fault in the observance or performance of any agreement or con-
dition relating to any such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the
effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to
cause, any such Indebtedness to become due prior to its stated
maturity; or (b) any such Indebtedness of the Borrower or any
such Subsidiary shall be declared to be due and payable, or
required to be prepaid other than by a regularly scheduled re-
quired prepayment, prior to the stated maturity thereof; or
8.05 Bankruptcy, etc. The Borrower or any of its
Material Subsidiaries shall commence a voluntary case concern-
ing itself under Title 11 of the United States Code entitled
"Bankruptcy", as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"); or an involuntary case is com-
menced against the Borrower or any of its Material Subsidiaries
and the petition is not controverted within 10 Business Days,
or is not dismissed within 60 days, after commencement of the
case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of
the property of the Borrower or any of its Material Subsidiar-
ies; or the Borrower or any of its Material Subsidiaries com-
mences any other proceeding under any reorganization, arrange-
ment, adjustment of debt, relief of debtors, dissolution, in-
solvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to the Borrower or
such Material Subsidiary; or there is commenced against the
Borrower or any of its Material Subsidiaries any such proceed-
ing which remains undismissed for a period of 60 days; or the
Borrower or any of its Material Subsidiaries is adjudicated
insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or the Bor-
rower or any of its Material Subsidiaries suffers any appoint-
ment of any custodian or the like for it or any substantial
part of its property to continue undischarged or unstayed for a
period of 60 days; or the Borrower or any of its Material Sub-
sidiaries makes a general assignment for the benefit of credi-
tors; or any corporate action is taken by the Borrower or any
of its Material Subsidiaries for the purpose of effecting any
of the foregoing; or
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8.06 ERISA. (a) Any Plan shall fail to satisfy the
minimum funding standard required for any plan year or part
thereof or a waiver of such standard or extension of any amor-
tization period is sought or granted under Section 412 of the
Code, any Plan is, shall have been or is likely to be termi-
nated or the subject of termination proceedings under ERISA,
any Plan shall have an Unfunded Current Liability, the Borrower
or any of its Subsidiaries or any ERISA Affiliate has incurred
or is likely to incur a liability to or on account of a Plan
under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069,
4201 or 4204 of ERISA or Section 4971 or 4975 of the Code, or
the Borrower or any of its Subsidiaries has incurred or is
likely to incur liabilities pursuant to one or more employee
welfare benefit plans (as defined in Section 3(1) of ERISA)
which provide benefits to retired employees (other than as re-
quired by applicable law or under the terms of an applicable
collective bargaining agreement) or employee pension benefit
plans (as defined in Section 3(2) of ERISA) other than any such
employee pension benefit plan intended to be qualified (within
the meaning of Section 401(a) of the Code); (b) there shall
result from any event or events described in clause (a) of this
Section 8.06, the imposition of a lien, the granting of a secu-
rity interest, or a liability or a material risk of incurring a
liability; (c) which lien, security interest or liability re-
ferred to in clause (b) of this Section 8.06, in the reasonable
opinion of the Required Banks, will have a Material Adverse
Effect; or
8.07 Guaranties. The Subsidiary Guaranty or any
provision thereof shall cease to be in full force and effect,
or any Subsidiary Guarantor thereunder or any Person acting by
or on behalf of such Subsidiary Guarantor shall deny or dis-
affirm such Subsidiary Guarantor's obligations under the Sub-
sidiary Guaranty or any Subsidiary Guarantor shall default in
the due performance or observance of any material term, cov-
enant or agreement on its part to be performed or observed pur-
suant to the Subsidiary Guaranty; or
8.08 Judgments. One or more judgments or decrees
shall be entered against the Borrower and/or any of its Sub-
sidiaries involving a liability (not paid or fully covered by
insurance) of $10,000,000 or more in the case of any one such
judgment or decree and $50,000,000 or more in the aggregate for
all such judgments and decrees for the Borrower and all its
Subsidiaries and all such judgments or decrees shall not have
been vacated, discharged or stayed or bonded pending appeal
within 30 days from the entry thereof; or
8.09 Pledge Documents. Except to the extent the
Pledge Agreements have been terminated pursuant to the terms
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thereof, the Pledge Documents shall cease to be in full force
and effect or shall fail to give the Collateral Agent the
Liens, rights, powers and privileges purported to be created
thereunder (as provided therein or herein) or the Borrower, VTA
Trustee and/or Finance Co., as applicable, shall default in the
due performance or observance of any material term, covenant or
agreement therein; or
8.10 Ownership. At any time on or after the Merger
Borrowing Date and prior to the consummation of the Borrower
Merger, the Borrower shall cease to own 100% of the capital
stock of Paramount; or
8.11 Finance Co. There shall have occurred and be
continuing any Finance Co. Control Event; or
then, and in any such event, and at any time thereafter, if any
Event of Default shall then be continuing, the Administrative
Agent shall, upon the written request of the Required Banks, by
written notice to the Borrower, take any or all of the fol-
lowing actions, without prejudice to the rights of the Adminis-
trative Agent or any Bank to enforce its claims against the
Borrower, except as otherwise specifically provided for in this
Agreement (provided that, if an Event of Default specified in
Section 8.05 shall occur with respect to the Borrower, the re-
sult which would occur upon the giving of written notice by the
Administrative Agent as specified in clauses (i) and (ii) below
shall occur automatically without the giving of any such no-
tice): (i) declare the Total Commitment terminated, whereupon
the Commitment of each Bank shall forthwith terminate im-
mediately and any Commitment Commission shall forthwith become
due and payable without any other notice of any kind; and/or
(ii) declare the principal of and any accrued interest in re-
spect of all Loans and all obligations owing hereunder to be,
whereupon the same shall become, forthwith due and payable
without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower.
SECTION 9. Definitions. As used herein, the follow-
ing terms shall have the meanings herein specified unless the
context otherwise requires. Defined terms in this Agreement
shall include in the singular number the plural and in the plu-
ral the singular:
"Acquisition" shall mean (x) the purchase by the Bor-
rower for cash of outstanding Shares (at a price per share not
to exceed the Maximum Price Per Share) pursuant to the Offer to
Purchase and (y) the Merger.
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"Additional Subsidiary Guarantor" shall mean (i)
Paramount and (ii) each Material Subsidiary of Paramount that
is specified to the Borrower by the Administrative Agent (after
consultation with each Co-Arranger) prior to the Merger Borrow-
ing Date as an entity that is required to become a Subsidiary
Guarantor.
"Additional Tender Offer Documents" shall mean all
amendments and exhibits to, and documents related to, the Ten-
der Offer Documents filed with the SEC under the Securities
Exchange Act of 1934, as amended, or distributed to the stock-
holders of PCI, in each case to the extent delivered to the
Banks after December 30, 1993 and shall include any Merger
Documents first delivered to the Banks after such date.
"Adjusted Certificate of Deposit Rate" shall mean, on
any day, the sum (rounded to the nearest 1/100 of 1%) of (1)
the rate obtained by dividing (x) the most recent weekly aver-
age dealer offering rate for negotiable certificates of deposit
with a three-month maturity in the secondary market as pub-
lished in the most recent Federal Reserve System publication
entitled "Select Interest Rates," published weekly on Form H.15
as of the date hereof, or if such publication or a substitute
containing the foregoing rate information shall not be pub-
lished by the Federal Reserve System for any week, the weekly
average offering rate determined by the Administrative Agent on
the basis of quotations for such certificates received by it
from three certificate of deposit dealers in New York of recog-
nized standing or, if such quotations are unavailable, then on
the basis of other sources reasonably selected by the Adminis-
trative Agent, by (y) a percentage equal to 100% minus the
stated maximum rate of all reserve requirements as specified in
Regulation D applicable on such day to a three-month certifi-
cate of deposit of a member bank of the Federal Reserve System
in excess of $100,000 (including, without limitation, any mar-
ginal, emergency, supplemental, special or other reserves),
plus (2) the then daily net annual assessment rate as estimated
by the Administrative Agent for determining the current annual
assessment payable by the Administrative Agent to the Federal
Deposit Insurance Corporation for insuring three month certifi-
cates of deposit.
"Adjusted Total Cash Interest Expense" shall mean,
for any period, the Total Cash Interest Expense for such period
less all cash dividends paid on the Investor Preferred and
Merger Preferred included in determining such Total Cash Inter-
est Expense.
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"Administrative Agent" shall have the meaning pro-
vided in the first paragraph of this Agreement and shall in-
clude any successor to the Administrative Agent appointed pur-
suant to Section 10.09.
"Affiliate" shall mean, with respect to any Person,
any other Person directly or indirectly controlling (including,
but not limited to, all directors and officers of such Person),
controlled by, or under direct or indirect common control with
such Person. A Person shall be deemed to control a corporation
if such Person possesses, directly or indirectly, the power
(i) to vote 10% or more of the securities having ordinary vot-
ing power for the election of directors of such corporation or
(ii) to direct or cause the direction of the management and
policies of such corporation, whether through the ownership of
voting securities, by contract or otherwise. In any event, the
Specified Equity Investors and BellSouth shall be deemed Af-
filiates of the Borrower for the purposes of Section 7.06 and
Liberty shall not.
"Agreement" shall mean this Credit Agreement, as the
same may be from time to time modified, amended and/or sup-
plemented.
"Alternate Reduction Amount" shall mean, for any is-
suance of Permitted Subordinated Debt made pursuant to Section
7.05(f)(y), an amount equal to (x) the aggregate interest pay-
able on such Permitted Subordinated Debt during the period end-
ing on the Final Maturity Date times (y) 35%.
"Annualized EBITDA" shall mean for (i) the first full
fiscal quarter commencing after the Merger Borrowing Date, (ii)
the first two full fiscal quarters (taken as one accounting
period) commencing after the Merger Borrowing Date and (iii)
the first three full fiscal quarters (taken as one accounting
period) commencing after the Merger Borrowing Date, EBITDA for
such period plus Pro Forma EBITDA for (x) in the case of the
one quarter period, the period of three fiscal quarter quarters
(taken as one accounting period) ending as of the last day (the
"Measurement Date") of the fiscal quarter during which the
Merger Borrowing Date occurs, (y) in the case of such two quar-
ter period, the period of two fiscal quarters (taken as one
accounting period) ending on the Measurement Date and (z) in
the case of such three quarter period, the fiscal quarter end-
ing on the Measurement Date.
"Applicable Base Rate Margin" shall mean (A) with
respect to Tender Offer Loans, 1% and (B) with respect to Term
Loans and Revolving Loans, zero, provided that the Applicable
Base Rate Margin for Term Loans and Revolving Loans shall equal
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(i) .50% at any time during an Excess Leverage Period and (ii)
.75% at any time during an Increased Leverage Period.
"Applicable CC Percentage" shall mean (A) with re-
spect to the Total Tender Offer Commitment, .375% and (B) with
respect to the Total Revolving Commitment, (i) on any day dur-
ing a Category A Period, .20%, (ii) on any day during a Cat-
egory B Period, .25% and (iii) on any day during a Category C
Period, Decreased Interest Coverage Period, Excess Leverage
Period or an Increased Leverage Period, .375%.
"Applicable Eurodollar Margin" shall mean (A) with
respect to Tender Offer Loans, 2% and (B) with respect to Term
Loans and Revolving Loans, (i) on any day during a Category A
Period, .50%, (ii) on any day during a Category B Period, .625%
and (iii) on any day during a Category C Period, .875%, pro-
vided that the Applicable Eurodollar Margin for Term Loans and
Revolving Loans shall equal (iv) 1% at any time during a De-
creased Interest Coverage Period, (v) 1.50% at any time during
an Excess Leverage Period and (vi) 1.75% at any time during an
Increased Leverage Period.
"Arrow" shall mean Arrow Investments, L.P. and/or any
other entity, directly or indirectly, wholly-owned or substan-
tially wholly-owned by Barry Diller.
"Asset Sale" shall mean and include the sale, trans-
fer or other disposition by the Borrower or any of its Subsidi-
aries to any Person (other than the Borrower or any
Wholly-Owned Subsidiary of the Borrower) of any asset of the
Borrower or any of its Subsidiaries (other than (x) sales,
transfers or other dispositions in the ordinary course of busi-
ness of inventory, unproduced or unpublished product and/or
obsolete or excess equipment, (y) investments and contributions
permitted by Section 7.04 and (z) other sales generating net
proceeds in the aggregate for all such sales not in excess of
$10,000,000 in any fiscal year).
"Assignment Agreement" shall have the meaning pro-
vided in Section 11.04(b).
"Authorized Officer" shall mean any senior officer of
any Person designated as such in writing to the Administrative
Agent by the Chief Financial Officer of such Person.
"Bank" shall have the meaning provided in the first
paragraph of this Agreement, and shall include any Bank which
becomes a party to this Agreement in accordance with Section
11.04(b).
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"Bankruptcy Code" shall have the meaning provided in
Section 8.05.
"Base Rate" shall mean the highest of (i) the Prime
Lending Rate, (ii) the Adjusted Certificate of Deposit Rate
plus 1/2 of 1% and (iii) the Federal Funds Rate plus 1/2 of 1%.
"Base Rate Loan" shall mean each Loan bearing inter-
est at the rates provided in Section 1.07(a).
"BellSouth" shall mean BellSouth Corporation.
"BellSouth Conditions" shall mean the conditions, as
specified in the Investment Agreement, that remain to be satis-
fied before BellSouth is obligated to purchase up to
$500,000,000 of Investor Voting Preferred and at least
$1,000,000,000 of Borrower Common Stock.
"BellSouth Documents" shall mean all agreements and
instruments governing, or evidencing the formation of, Finance
Co., QVC Finance Sub and BellSouth Finance and the capital con-
tributions made to Finance Co. and governing or evidencing is-
suance of, and the terms and conditions of, the Subordinated
Finance Co. Note (and including in any event the Investment
Agreement, the Finance Co. Loan Agreement and the Liberty QVC
Agreement), in the form delivered to the Banks pursuant to Sec-
tion 4.01(j) and as the same may be subsequently amended, modi-
fied or supplemented in accordance with the provisions thereof
and hereof.
"BellSouth Equity Investment Date" shall mean the
date on which BellSouth acquires the Investor Voting Preferred
and Borrower Common Stock as provided for in Section 2.01(a) of
the Investment Agreement either for cash or pursuant to the
BellSouth Exchange.
"BellSouth Exchange" shall mean the exchange of all
the capital stock of BellSouth Finance owned by BellSouth and/
or its Affiliates for Investor Voting Preferred and Borrower
Common Stock as contemplated by Section 2.01 of the Investment
Agreement.
"BellSouth Finance" shall mean BellSouth Finance Sub-
sidiary, Inc., a Delaware corporation.
"BellSouth Notice" shall mean the notice given by
BellSouth to the Borrower pursuant to, and in compliance with,
Section 5.02(c) of the Equity Contribution Agreement requiring
the Borrower to sell equity in order to repay the Subordinated
Finance Co. Note.
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"Borrower" shall have the meaning provided in the
first paragraph of this Agreement.
"Borrower Common Stock" shall mean the common stock,
par value $1.00, of the Borrower.
"Borrower Merger" shall mean the merger of the Bor-
rower and Paramount pursuant to documentation, and on terms and
conditions, reasonably satisfactory to the Administrative Agent
and each Co-Arranger.
"Borrower Preferred Stock" shall mean the Investor
Preferred, the Merger Preferred, all other issues of preferred
stock of the Borrower outstanding on December 30, 1993 and such
other issues, if any, of preferred stock of the Borrower satis-
factory to the Required Banks.
"Borrowing" shall mean the incurrence pursuant to a
single Facility of one Type of Loan by the Borrower from all of
the Banks having Commitments with respect to such Facility on a
given date (or resulting from conversions on a given date),
having in the case of Eurodollar Loans the same Interest Pe-
riod, provided that Base Rate Loans incurred pursuant to Sec-
tion 1.09(b) shall be considered part of any related Borrowing
of Eurodollar Loans.
"Business Day" shall mean (i) for all purposes other
than as covered by clause (ii) below, any day excluding Satur-
day, Sunday and any day which shall be in the City of New York
a legal holiday or a day on which banking institutions are au-
thorized by law or other governmental actions to close and (ii)
with respect to all notices and determinations in connection
with, and payments of principal and interest on, Eurodollar
Loans, any day which is a Business Day described in clause (i)
and which is also a day for trading by and between banks in
U.S. dollar deposits in the New York interbank Eurodollar mar-
ket.
"Capitalization" shall mean, at any time, the sum of
Consolidated Indebtedness plus the Net Worth of the Borrower.
"Capitalized Lease Obligations" shall mean all obli-
gations under Capital Leases of the Borrower and its Subsidi-
aries in each case taken at the amount thereof accounted for as
liabilities in accordance with GAAP.
"Capital Lease," as applied to any Person, shall mean
any lease of any property (whether real, personal or mixed) by
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that Person or any of its Subsidiaries as lessee which, in con-
formity with GAAP, is accounted for as a capital lease on the
consolidated balance sheet of that Person.
"Cash Equivalents" shall mean (i) securities issued
or directly and fully guaranteed or insured by the United
States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States
of America is pledged in support thereof) having maturities of
not more than six months from the date of acquisition,
(ii) U.S. dollar denominated time deposits, certificates of
deposit and bankers acceptances of (x) any Bank that is a do-
mestic commercial bank of recognized standing having capital
and surplus in excess of $500,000,000 or (y) any bank whose
short-term commercial paper rating from S&P is at least A-1 or
the equivalent thereof or from Moody's is at least P-1 or the
equivalent thereof (any such bank, an "Approved Bank"), in each
case with maturities of not more than six months from the date
of acquisition, (iii) commercial paper issued by any Bank or
Approved Bank or by the parent company of any Bank or Approved
Bank and commercial paper issued by, or guaranteed by, any in-
dustrial or financial company with a short-term commercial pa-
per rating of at least A-1 or the equivalent thereof by S&P or
at least P-1 or the equivalent thereof by Moody's (any such
company, an "Approved Company"), or guaranteed by any indus-
trial company with a long term unsecured debt rating of at
least A or A2, or the equivalent of each thereof, from S&P or
Moody's, as the case may be, and in each case maturing within
six months after the date of acquisition, (iv) tax-exempt com-
mercial paper of United States municipal, state or local gov-
ernments rated at least A-1 or the equivalent thereof by S&P or
at least P-1 or the equivalent thereof by Moody's and maturing
within six months after the date of acquisition and (v) any
fund or funds investing solely in investments of the type de-
scribed in clauses (i) through (iv) above.
"Cash Proceeds" shall mean, with respect to any Asset
Sale, the aggregate cash payments (including any cash received
by way of deferred payment pursuant to a note receivable issued
in connection with such Asset Sale, other than the portion of
such deferred payment constituting interest, but only as and
when so received) received by the Borrower or any of its Sub-
sidiaries from such Asset Sale.
"Category A Period" shall mean any period during
which at all times (i) the Credit Rating assigned by S&P is BBB
or above and/or (ii) the Credit Rating assigned by Moody's is
Baa2 or above and/or (iii) the Last Determined Consolidated
Interest Coverage Ratio is greater than 4.0:1, provided that a
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Category A Period shall not exist at any time at which a De-
creased Interest Coverage Period, an Excess Leverage Period or
an Increased Leverage Period exists.
"Category B Period" shall mean any period during
which at all times (i) the Credit Rating assigned by S&P is
BBB- and/or (ii) the Credit Rating assigned by Moody's is Baa3
and/or (iii) the Last Determined Consolidated Interest Coverage
Ratio is greater than 2.5:1 but equal to or less than 4.0:1,
provided that a Category B Period shall not exist at any time
at which a Decreased Interest Coverage Period, a Category A
Period, an Excess Leverage Period or an Increased Leverage Pe-
riod exists.
"Category C Period" shall mean any period when there
exists no Category A Period, Category B Period, Decreased In-
terest Coverage Period, Excess Leverage Period or Increased
Leverage Period.
"CERCLA" shall mean the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended,
42 U.S.C. Section 9601 et seq.
"Change of Control Event" shall mean that (a) both
(I) any Person or group (as such term is defined in Section
13(d)(3) of the Securities Exchange Act of 1934 (the "Exchange
Act")), other than any Person included in, or any such group
composed solely of members of, the Existing Control Group,
shall have acquired, directly or indirectly, beneficial owner-
ship (as such term is defined in Rule 13d-3 promulgated under
the Exchange Act) of more than the greater of (x) 40% of the
outstanding shares of Voting Stock of the Borrower and (y) the
number of shares of Voting Stock of the Borrower then held by
the Existing Control Group and (II) the Administrative Agent,
acting at the direction of the Required Banks, has notified the
Borrower in writing that a Change of Control Event has occurred
as a result of the circumstances described in the preceding
clause (I) or (b) any "change of control" or similar event
shall occur under any material agreement governing or evidenc-
ing Indebtedness of the Borrower or any of its Material Subsid-
iaries (other than any Existing Indebtedness and other than
Indebtedness of PCI and its Subsidiaries existing on the Merger
Agreement Date).
"Chemical Bank" shall mean Chemical Bank in its indi-
vidual capacity.
"Co-Arranger" shall have the meaning provided in the
first paragraph of this Agreement.
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"Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time, and the regulations promulgated
and rulings issued thereunder. Section references to the Code
are to the Code, as in effect at the date of this Agreement and
any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral Agent" shall mean the Administrative
Agent acting as Pledgee under each of the Pledge Agreements.
"Collective Bargaining Agreement" shall have the
meaning provided in Section 4.02(o).
"Commitment" shall mean, with respect to each Bank,
such Bank's Tender Offer Commitment, Term Loan Commitment and
Revolving Loan Commitment and, in the case of Chemical Bank,
the Swingline Commitment.
"Commitment Commission" shall have the meaning pro-
vided in Section 2.01(a).
"Company Stockholder Approval" shall have the meaning
provided in Section 3.01(xvi) of the Investment Agreement.
"Consolidated Indebtedness" shall mean (i) the prin-
cipal amount of all indebtedness of the Borrower and its Sub-
sidiaries required to be accounted for as debt in accordance
with GAAP and (ii) to the extent not otherwise included in
clause (i), the principal amount of all Indebtedness or lease
obligations of Persons guaranteed by the Borrower pursuant to
Section 7.04(l) or (m), but, in any event, shall not include
(x) Indebtedness or lease obligations of Persons not Subsidiar-
ies guaranteed by PCI on the Tender Offer Closing Date (or ex-
tensions and/or replacements of such guarantees permitted by
Section 7.03 (c)) and (y) any indebtedness in respect of the
Subordinated Finance Co. Note.
"Consolidated Interest Coverage Ratio" shall mean,
for any period, the ratio of (i) EBITDA for such period to (ii)
Consolidated Interest Expense for such period.
"Consolidated Interest Expense" shall mean, for any
period, the Total Cash Interest Expense for such period plus
all interest expense for such period not payable in cash.
"Consolidated Net Income" shall mean for any period,
the consolidated net income (or loss) of the Borrower and its
Subsidiaries for such period taken as a single accounting per-
iod determined in conformity with GAAP, as modified in ac-
cordance with Section 11.07(a), provided that there shall be
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excluded the income (or loss) of any Person in which any other
Person (other than the Borrower or a Wholly-Owned Subsidiary of
the Borrower) has a joint interest, except to the extent of the
amount of dividends or other distributions actually paid to the
Borrower by such Person during such period.
"Contingent Obligations" shall mean as to any Person
any obligation of such Person guaranteeing or intended to guar-
antee any Indebtedness, leases, dividends or other obligations
("primary obligations") of any other Person (the "primary obli-
gor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or
not contingent, (a) to purchase any such primary obligation or
any property constituting direct or indirect security therefor,
(b) to advance or supply funds (i) for the purchase or payment
of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor,
(c) to purchase property, securities or services primarily for
the purpose of assuring the owner of any such primary obliga-
tion of the ability of the primary obligor to make payment of
such primary obligation or (d) otherwise to assure or hold
harmless the owner of such primary obligation against loss in
respect thereof; provided, however, that the term Contingent
Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the pri-
mary obligation in respect of which such Contingent Obligation
is made or, if not stated or determinable, the maximum reason-
ably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as determined by such
Person in good faith.
"Conversion Date" shall be the first date on which
all the following have occurred: (i) the BellSouth Equity
Investment Date has occurred and (ii) either (x) the Credit
Rating assigned by S&P is BBB- or above and the Credit Rating
assigned by Moody's is Baa3 or above or (y) as determined as of
the last day of the last two consecutive fiscal quarters, (A)
the ratio of Consolidated Indebtedness on such day to EBITDA
for the period (taken as one accounting period) of four fiscal
quarters ending on such day is 4.0:1 or less and (B) the ratio
of EBITDA for the period (taken as one accounting period) of
four fiscal quarters ending on such day to Adjusted Total Cash
Interest Expense for the period of four fiscal quarters ending
on such day is 4.0:1 or more.
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"Credit Documents" shall mean this Agreement, the
Pledge Documents (while outstanding), the Notes and the Subsid-
iary Guaranty.
"Credit Party" shall mean the Borrower, each Sub-
sidiary Guarantor and after the date, if any, on which Finance
Co. executes the Subsidiary Guaranty and the Finance Co. Pledge
Agreement, Finance Co.
"Credit Rating" shall mean the highest rating level
(a rating level being, e.g., each of BBB, BBB- and BBB+, in the
case of S&P) assigned by each of S&P and Moody's to any of the
long term unsecured debt of the Borrower.
"Currency Agreements" shall mean foreign currency
swaps, hedges or similar agreements designed to protect a Per-
son against fluctuations in currency exchange rates.
"Decreased Interest Coverage Period" shall mean any
period that (i) commences on (x) the date on which an officer's
certificate is delivered pursuant to Section 6.01(c) which es-
tablishes that the Last Determined Consolidated Interest Cover-
age Ratio is 2.25:1 or less or (y) on the date which is 10 days
after the last date on which financial statements required to
be delivered pursuant to Section 6.01(a) or (b) are permitted
to be delivered without creating a Default if the officer's
certificate that sets forth the Last Determined Consolidated
Interest Coverage Ratio and which is to be delivered with such
financial statements has not yet been delivered and (ii) ends
on the first date thereafter on which an officer's certificate
is delivered pursuant to Section 6.01(c) that establishes that
the Last Determined Consolidated Interest Coverage Ratio is
greater than 2.25:1.
"Default" shall mean any event, act or condition
which with notice or lapse of time, or both, would constitute
an Event of Default.
"Differential" shall mean (i) 61,607,894 (or, if
greater, such number that is equal to the number of Shares
equal to 50.1% of the Shares outstanding plus the Shares issu-
able upon the exercise of then exercisable stock options, as of
the Tender Offer Closing Date) times the price per share pay-
able pursuant to the Offer to Purchase less (ii) the sum of (a)
the proceeds of issuances of Investor Preferred and/or Borrower
Common Stock referred to in clause (x) of the definition of
Maximum Price Per Share plus (b) $3,000,000,000.
"Dividends" shall have the meaning provided in Sec-
tion 7.05.
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"Documents" shall mean and include the Credit Docu-
ments and the Transaction Documents.
"EBIT" shall mean, for any period, the Consolidated
Net Income of the Borrower and its Subsidiaries, before inter-
est income, interest expense and provision for taxes and with-
out giving effect to any extraordinary gains in excess of ex-
traordinary losses or gains from sales of assets (other than
sales of inventory in the ordinary course of business) or to
any financing costs related to this Agreement or the Merger.
"EBITDA" for any period shall mean EBIT, adjusted by
adding thereto the amount of all amortization of intangibles
and depreciation plus all non-cash charges in respect of de-
ferred profit sharing plans, deferred compensation plans, pen-
sion plans and employee health plans plus all transaction costs
arising from the Merger, plus all non-cash losses resulting
from write-downs prior to the date 18 months after the Merger
Agreement Date in respect of assets and businesses of PCI and
its Subsidiaries existing at the time of the Merger, in each
case that were deducted in arriving at EBIT for such period.
"Effective Date" shall have the meaning provided in
Section 11.10.
"Eligible Assignee" shall have the meaning provided
in Section 11.04(b).
"Employment Agreements" shall have the meaning pro-
vided in Section 4.02(o).
"Environmental Claims" means any and all adminis-
trative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigations (other than internal reports prepared by the
Borrower or any of its Subsidiaries solely in the ordinary
course of such Person's business and not in response to any
third party action or request of any kind) or proceedings re-
lating in any way to any Environmental Law or any permit is-
sued, or any approval given, under any such Environmental Law
(hereafter, "Claims"), including, without limitation, (a) any
and all Claims by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other ac-
tions or damages pursuant to any applicable Environmental Law,
and (b) any and all Claims by any third party seeking damages,
contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials arising
from alleged injury or threat of injury to health, safety or
the environment.
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"Environmental Law" means any applicable Federal,
state, foreign or local statute, law, rule, regulation, ordin-
ance, code, guide, policy and rule of common law now or here-
after in effect and in each case as amended, and any judicial
or administrative interpretation thereof, including any jud-
icial or administrative order, consent decree or judgment, re-
lating to the environment, health, safety or Hazardous Materi-
als, including, without limitation, CERCLA; RCRA; the Federal
Water Pollution Control Act, as amended, 33 U.S.C. Section 1251
et seq.; the Toxic Substances Control Act, 15 U.S.C.
Section 7401 et seq.; the Clean Air Act, 42 U.S.C. Section 7401
et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 3808 et
seq.; the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et
seq. and any applicable state and local or foreign counterparts
or equivalents.
"Equity Contribution Agreement" shall mean the Equity
Contribution Agreement in the form delivered to the Banks pur-
suant to Section 4.01(j) and as the same may be amended, modi-
fied or supplemented in accordance with the provisions thereof
and hereof.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time, and the
regulations promulgated and rulings issued thereunder. Section
references to ERISA are to ERISA, as in effect at the date of
this Agreement and any subsequent provisions of ERISA, amenda-
tory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined
in Section 3(9) of ERISA) which together with the Borrower or
any Subsidiary of the Borrower would be deemed to be a "single
employer" within the meaning of Section 414(b), (c), (m) or (o)
of the Code.
"Estimated Net Cash Proceeds" shall mean, with re-
spect to any Asset Sale, an amount equal to 90% of the Net Cash
Proceeds of such Asset Sale as estimated by the Borrower in
good faith and specified to the Administrative Agent in a writ-
ing containing calculations thereof and supporting assumptions
on or prior to the date on which the Borrower or any Subsidiary
is to receive the Cash Proceeds from such Asset Sale.
"Eurodollar Loans" shall mean each Loan bearing in-
terest at the rates provided in Section 1.07(b).
"Eurodollar Rate" shall mean with respect to each
Interest Period for a Eurodollar Loan, the arithmetic average
(rounded to the nearest 1/100 of 1%) of the offered quotation
to first-class banks in the interbank Eurodollar market by each
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Reference Bank for Dollar deposits of amounts in same day funds
comparable to the outstanding principal amount of the Eurodol-
lar Loan of such Reference Bank for which an interest rate is
then being determined with maturities comparable to the Inter-
est Period to be applicable to such Eurodollar Loan, determined
as of 10:00 A.M. (New York time) on the date which is two Busi-
ness Days prior to the commencement of such Interest Period.
"Event of Default" shall have the meaning provided in
Section 8.
"Excess Leverage Period" shall mean any period that
(i) commences on (x) the date on which an officer's certificate
is delivered pursuant to Section 6.01(c) which establishes that
the Last Determined Leverage Ratio is more than 5.5:1 or (y)
the date which is 10 days after the last date on which finan-
cial statements required to be delivered pursuant to Section
6.01(a) or (b) are permitted to be delivered without creating a
Default if the officer's certificate that sets forth the Last
Determined Leverage Ratio and which is to be delivered with
such financial statements has not yet been delivered and (ii)
ends on the first date thereafter on which an officer's cer-
tificate is delivered pursuant to Section 6.01(c) that estab-
lishes that the Last Determined Leverage Ratio is 5.5:1 or
less, provided that an Excess Leverage Period shall not exist
at any time when an Increased Leverage Period exists.
"Existing Control Group" shall include Arrow,
BellSouth, Liberty (until such time as it disposes of its eq-
uity interests in the Borrower pursuant to the Liberty-QVC
Agreement) and/or any of the Specified Equity Investors, and
their Affiliates, and including up to two additional Persons
(and their Affiliates) who acquire equity investments in the
Borrower with the proceeds thereof used to repay and/or redeem
the Subordinated Finance Co. Note to the extent (x) any such
additional Person becomes, prior to the making of such invest-
ment, a party to the QVC Stockholders Agreement entered into by
and among the other members of the Existing Control Group and
(y) such Person or Persons do not acquire the right to nominate
a majority of the Board of Directors of the Borrower under the
terms of the QVC Stockholders Agreement to which such Person
became a party, but excluding any thereof who opposes the elec-
tion to the Board of Directors of the Borrower of the Persons
nominated by the holders of a majority of the Voting Stock held
by such group as a whole.
"Existing Indebtedness" shall have the meaning pro-
vided in Section 5.19.
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"Existing Indebtedness Agreements" shall have the
meaning provided in Section 4.02(o).
"Expiration Date" shall mean June 30, 1994.
"Facility" shall mean any of the four Facilities es-
tablished under this Agreement, i.e., the Tender Offer-A Facil-
ity, the Tender Offer-B Facility, the Term Loan Facility and
the Revolving Credit Facility.
"FCC Long-Form Approval" shall mean action by the
Federal Communications Commission approving the transfer of
control of PCI to Borrower as proposed in file number BTCCT
931029 KE-KK, which approval may be subject to appeal but shall
not be subject to any stay.
"Federal Funds Rate" shall mean for any period, a
fluctuating interest rate equal for each day during such period
to the weighted average of the rates on overnight Federal Funds
transactions with members of the Federal Reserve System ar-
ranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Busi-
ness Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day,
the average of the quotations for such day on such transactions
received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative
Agent.
"Fees" shall mean all amounts payable pursuant to, or
referred to in, Section 2.01.
"Final Maturity Date" shall mean December 31, 2000.
"Final Net Cash Proceeds" shall mean, with respect to
any Asset Sale, the amount of the Net Cash Proceeds resulting
therefrom as determined in good faith by the Borrower, and cer-
tified in writing by the Borrower to the Administrative Agent
no later than 60 days after the date on which any Cash Proceeds
of such Asset Sale were received by the Borrower or any Subsid-
iary.
"Finance Co." shall have the meaning provided in Sec-
tion 4.01(j).
"Finance Co. Control Event" shall mean (i) any event
or circumstance has occurred which permits BellSouth Finance to
become Managing General Partner of Finance Co. and (ii) the
failure of the Subordinated Finance Co. Note to be either (x)
repaid in full (or cancelled) upon the satisfaction of the
BellSouth Conditions or (y) pledged to the Collateral Agent
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pursuant to the Finance Co. Pledge Agreement as provided in
Section 7.14(v).
"Finance Co. Loan Agreement" shall mean the Loan
Agreement between Finance Co. and the Borrower pursuant to
which the Subordinated Finance Co. Note is issued, in the form
delivered pursuant to Section 4.01(j) and as the same may be
amended, modified or supplemented as provided therein and
herein.
"Finance Co. Pledge Agreement" shall mean a pledge
agreement substantially in the form of Exhibit D-4 hereto, as
the same may be amended, modified or supplemented from time to
time.
"Finance Sub" shall mean QVC Finance Sub and, after
the BellSouth Equity Investment Date, BellSouth Finance.
"GAAP" shall mean generally accepted accounting prin-
ciples in the United States of America as in effect on the date
of this Agreement (without taking into effect any application
of Financial Accounting Standards Bulletins Nos. 96 or 106); it
being understood and agreed that determinations in accordance
with GAAP for purposes of Section 7, including defined terms as
used therein, are subject (to the extent provided therein) to
Section 11.07(a).
"GECC Facility" shall have the meaning provided in
Section 7.01(l)
"Hazardous Materials" means (a) any petroleum or pe-
troleum products, radioactive materials, asbestos in any form
that is or could become friable, urea formaldehyde foam insula-
tion, transformers or other equipment that contained, electric
fluid containing levels of polychlorinated biphenyls, and radon
gas; (b) any chemicals, materials or substances defined as or
included in the definition of "hazardous substances," "hazard-
ous waste," "hazardous materials," "extremely hazardous waste,"
"restricted hazardous waste," "toxic substances," "toxic pol-
lutants," "contaminants," or "pollutants," or words of similar
import, under any applicable Environmental Law; and (c) any
other chemical, material or substance, exposure to which is
prohibited, limited or regulated by any governmental authority.
"HSR Condition" shall have the meaning provided in
the Investment Agreement.
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"Increased Leverage Period" shall mean any period
that (i) commences on (x) the date on which an officer's cer-
tificate is delivered pursuant to Section 6.01(c) which estab-
lishes that the Last Determined Leverage Ratio is 6.25:1 or
more or (y) on the date which is 10 days after the last date on
which financial statements required to be delivered pursuant to
Section 6.01(a) or (b) are permitted to be delivered without
creating a Default if the officer's certificate that sets forth
the Last Determined Leverage Ratio and which is to be delivered
with such financial statements has not yet been delivered and
(ii) ends on the first date thereafter on which an officer's
certificate is delivered pursuant to Section 6.01(c) that es-
tablishes that the Last Determined Leverage Ratio is less than
6.25:1.
"Indebtedness" of any Person shall mean without du-
plication (i) all indebtedness of such Person for borrowed
money, (ii) the deferred purchase price of assets or services
which in accordance with generally accepted accounting prin-
ciples would be shown on the liability side of the balance
sheet of such Person, (iii) the face amount of all letters of
credit issued for the account of such Person and, without du-
plication, all drafts drawn thereunder, (iv) all Indebtedness
of a second Person secured by any Lien on any property owned by
such first Person, whether or not such indebtedness has been
assumed, (v) all Capitalized Lease Obligations of such Person,
(vi) all obligations of such Person to pay a specified purchase
price for goods or services whether or not delivered or ac-
cepted, i.e., take-or-pay and similar obligations, (vii) all
obligations of such Person under Interest Rate Protection
Agreements and/or Currency Agreements, (viii) all reimbursement
or other monetary obligations with respect to surety, perfor-
mance and bid bonds, and (ix) all Contingent Obligations of
such Person, provided that Indebtedness shall not include trade
payables and accrued expenses, in each case arising in the or-
dinary course of business.
"Initial Borrowing Date" shall mean the first date,
which shall in any event occur not later than the Expiration
Date, upon which the Tender Offer-A Loans are incurred.
"Initial Subsidiary Guarantor" shall mean each Mate-
rial Subsidiary of the Borrower existing on the Initial Borrow-
ing Date other than (x) PCI and its Subsidiaries and (y) QVC
Finance Sub.
"Interest Period," with respect to any Loan, shall
mean the interest period applicable thereto, as determined pur-
suant to Section 1.08.
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"Interest Rate Protection Agreement" shall mean any
interest rate swap agreement or other similar agreement or ar-
rangement designed to protect a Person against fluctuations in
interest rates but shall not include interest collars, caps or
hedges.
"Investment Agreement" shall mean the Investment
Agreement dated as of January 7, 1994 among the Borrower, the
Specified Equity Investors, Liberty and BellSouth in the form
delivered to the Bank pursuant to Section 4.01(i) and (j) and
as the same may be amended, modified or supplemented in ac-
cordance with the terms thereof and hereof.
"Investor Documents" shall mean all agreements, cer-
tificates, and instruments governing the issuance to the Speci-
fied Equity Investors of, and the terms and conditions of, the
Investor Preferred and Borrower Common Stock, including the
Investment Agreement and the certificates of designation for
each series of Investor Preferred, in the form delivered to the
Banks pursuant to Section 4.01(i) and as the same may be subse-
quently amended, modified or supplemented in accordance with
the terms thereof and hereof.
"Investor Non-Voting Preferred" shall mean and in-
clude (x) the Series F Non-Voting Preferred and (y) if issued,
the Series G Non-Voting Preferred.
"Investor Preferred" shall mean and include the In-
vestor Non-Voting Preferred and when issued in exchange for
Series F Non-Voting Preferred, the Investor Voting Preferred.
"Investor Voting Preferred" shall mean the shares of
the Borrower's Series E Convertible Exchangeable Preferred
Stock issued to the Specified Equity Investors in exchange for
the Series F Non-Voting Preferred upon satisfaction of the con-
ditions for such exchange as specified in the Investment Agree-
ment and, to the extent issued, the up to 500,000 shares of the
Borrower's Series E Convertible Exchangeable Preferred Stock
issued to BellSouth for a purchase price not in excess of
$500,000,000 upon satisfaction of all remaining BellSouth Con-
ditions, plus in any event shares thereof representing payment
in lieu of dividends.
"Last Determined Consolidated Interest Coverage Ra-
tio" shall mean at any time, the ratio, if any, that is cor-
rectly specified in the then latest officer's certificate de-
livered to the Banks pursuant to Section 6.01(c) as the Con-
solidated Interest Coverage Ratio for the consecutive four fis-
cal quarter periods (or if less the period comprised of the
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completed fiscal quarters which commenced after the Merger Bor-
rowing Date) ended on the last day of the fiscal quarter with
respect to which such officer's certificate has been delivered.
"Last Determined Leverage Ratio" shall mean at any
time, the ratio, if any, that is correctly specified in the
then latest officer's certificate delivered to the Banks pursu-
ant to Section 6.01(c) as the Leverage Ratio as at the end of
the fiscal quarter with respect to which such officer's cer-
tificate has been delivered.
"Leverage Ratio" shall mean as at the end of any fis-
cal quarter the ratio of (i) Consolidated Indebtedness plus, to
the extent not subject to the Finance Co. Pledge Agreement ex-
ecuted by Finance Co. on or after the BellSouth Equity Invest-
ment Date, the outstanding principal amount of the Subordinated
Finance Co. Note to (ii) EBITDA for the four quarters ending at
the end of such quarter (or if such quarter is one of the first
three full quarters commencing after the Merger Borrowing Date,
the Annualized EBITDA at the end of such quarter).
"Liberty" shall mean Liberty Media Corporation, a
Delaware corporation.
"Liberty Put Obligation" shall mean the obligations,
as set forth in the Liberty-QVC Agreement, of the Borrower to
repurchase shares of the Borrower's equity held by Liberty and/
or its affiliates on November 11, 1993, and/or to make certain
other payments in respect of such shares, all in accordance
with the terms and provisions of the Liberty-QVC Agreement.
"Liberty-QVC Agreement" shall mean the Agreement
dated as of November 11, 1993 between Liberty and the Borrower
in respect of, inter alia, the Liberty Put Obligation in the
form delivered to the Banks pursuant to Section 4.01(j).
"Lien" shall mean any mortgage, pledge, security in-
terest, encumbrance, lien or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or
other title retention agreement or any lease in the nature
thereof).
"Loan" shall mean each and every Loan made by any
Bank hereunder, including Tender Offer Loans, Term Loans Re-
volving Loans and Swingline Loans.
"Management Agreements" shall have the meaning pro-
vided in Section 4.02(o).
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"Mandatory Borrowing" shall have the meaning provided
in Section 1.01(A)(e).
"Margin Stock" shall have the meaning provided in
Regulation U.
"Material Adverse Effect" shall mean a material ad-
verse effect on the business, properties, assets, liabilities,
or condition (financial or otherwise) of the Borrower and its
Subsidiaries taken as a whole.
"Material Subsidiary" shall mean any Wholly-Owned
Subsidiary having gross assets with a value of at least
$10,000,000 and/or EBITDA for the last four fiscal quarters of
at least $2,000,000 and shall in any event include QVC Finance
Sub.
"Maximum Price Per Share" shall mean $92 or such
higher amount (x) funded solely with the proceeds of the sale
of Investor Preferred and/or Borrower Common Stock for cash
proceeds in excess of $1,500,000,000, (y) agreed to by each of
the Co-Arrangers prior to the Effective Date or (z) agreed to
by each of the Co-Arrangers and the Required Banks after the
Effective Date.
"Merger" shall mean the merger of PCI and Merger Sub.
"Merger Agreement" shall mean the Agreement and Plan
of Merger dated as of December 22, 1993 between the Borrower
and PCI relating to the Merger (x) in the form delivered to the
Co-Arrangers prior to December 31, 1993 and as the same may be
amended, modified or amended prior to the Tender Offer Closing
Date with the consent of each Co-Arranger and as the same may
be subsequently amended, modified or supplemented in accordance
with the provisions thereof and hereof.
"Merger Agreement Date" shall mean the later of (x)
the Tender Offer Closing Date and (y) the date on which the
Merger Agreement is executed.
"Merger Borrowing Date" shall mean the date on which
the Merger shall have been consummated.
"Merger Documents" shall mean all agreements and in-
struments, including the Merger Agreement, the certificate of
Merger, all Proxy Materials and any other document or infor-
mation sent by the Borrower or PCI or PCI's stockholders or
filed with the SEC under the Securities Exchange Act of 1934,
as amended, in respect of the Merger, effecting, evidencing or
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governing the Merger, in the form delivered to the Banks pursu-
ant to Section 4.02(f) and as the same may be subsequently
amended, modified or supplemented in accordance with the provi-
sions thereof and hereof.
"Merger Preferred" shall mean the preferred stock of
the Borrower satisfactory to the Required Banks that is issued
to PCI shareholders pursuant to the Merger (which includes the
preferred stock on the terms described in the Offer to Pur-
chase).
"Merger Sub" shall mean QVC Merger Sub, Inc., a Dela-
ware corporation created by the Borrower to effect the Merger.
"Merger Warrants" shall mean the warrants to acquire
shares of Borrower Common Stock issued to PCI shareholders pur-
suant to the Merger on the terms described in the Offer to Pur-
chase and otherwise on terms acceptable to each Co-Arranger.
"MFJ Condition" shall have the meaning provided in
the Investment Agreement.
"MFJ Transactions" shall have the meaning provided in
the Investment Agreement.
"Minimum Assignment Amount" shall mean, with respect
to any assignment by any Bank of its Loans or Commitments here-
under, (x) $25,000,000 times (y) (a) prior to the Merger Bor-
rowing Date, 100% or (b) on and after the Merger Borrowing
Date, a fraction (i) the numerator of which is the sum of the
then outstanding principal amount of Term Loans plus the Total
Revolving Credit Commitment at such time and (ii) the denomina-
tor of which is $3,000,000,000.
"Minimum Borrowing Amount" shall mean (i) for Tender
Offer-A Loans, $100,000,000, (ii) for Tender Offer-B Loans,
$25,000,000, (iii) for Term Loans, $100,000,000, (iv) for Re-
volving Loans, $10,000,000 and (v) for Swingline Loans,
$1,000,000.
"Moody's shall mean Moody's Investors Service, Inc.
or any successor corporation thereto.
"Net Cash Proceeds" shall mean, with respect to any
Asset Sale, the Cash Proceeds resulting therefrom net of rea-
sonable costs and expenses of sale and related cash settlements
(including fees, commissions, sales and transfer taxes, payment
of severance and other termination costs, other current li-
abilities attaching to the assets sold and retained by the
seller and principal, premium and interest of Indebtedness
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other than the Loans, required to be, and which is, repaid un-
der the terms thereof as a result of such Asset Sale) and in-
cremental income taxes paid or payable as a result thereof.
"Net Debt Issuance Proceeds" shall mean the proceeds
(net of reasonable costs, fees and expenses associated there-
with) received from the incurrence of Indebtedness.
"Net Equity Issuance Proceeds" shall mean the pro-
ceeds (net of underwriting discounts and commissions and other
reasonable costs, fees and expenses associated therewith) re-
ceived from the sale of equity.
"Net Worth" shall mean, at any date, the stockhold-
ers' equity of the Borrower and its Subsidiaries determined in
accordance with GAAP and as would be reflected on a consoli-
dated balance sheet of the Borrower and shall in any event be
computed to include therein the Borrower Common Stock and Bor-
rower Preferred Stock subject to the Liberty Put Obligations
and the Investor Preferred.
"Note" shall mean each Tender Offer-A Note, Tender
Offer-B Note, Term Note, Revolving Note and the Swingline Note.
"Notice of Borrowing" shall have the meaning provided
in Section 1.02(a).
"Notice of Conversion" shall have the meaning pro-
vided in Section 1.05(a).
"Notice Office" shall mean the office of the Adminis-
trative Agent at 270 Park Avenue, New York, New York or such
other office as the Administrative Agent may designate to the
Borrower and the Banks from time to time.
"Obligations" shall mean all amounts, direct or indi-
rect, contingent or absolute, of every type or description, and
at any time existing, owing to the Administrative Agent or any
Bank pursuant to the terms of this Agreement or any other
Credit Document.
"Offer to Purchase" shall mean the Offer to Purchase
dated October 27, 1993, issued in connection with the Acquisi-
tion, as amended and supplemented prior to December 31, 1993
and as further amended, modified or supplemented as provided in
Section 4.01(g) or otherwise with the consent of the Required
Banks.
"Paramount" shall mean Paramount Communications Inc.,
a Delaware corporation, as the surviving entity of the Merger.
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"Payment Office" shall mean the office of the Admin-
istrative Agent at 270 Park Avenue, New York, New York or such
other office as the Administrative Agent may designate to the
Borrower and the Banks from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corpo-
ration established pursuant to Section 4002 of ERISA, or any
successor thereto.
"PCI" shall mean Paramount Communications Inc., a
Delaware corporation, prior to giving effect to the Merger.
"Permitted Encumbrances" shall mean (i) those ease-
ments, encroachments, covenants, rights of way, minor defects,
irregularities or encumbrances on title which are not unusual
with respect to property similar in character to any such
property and which do not materially impair such property for
the purpose for which it is held by the owner thereof, (ii)
municipal and zoning ordinances, which are not violated by the
existing improvements and the present use made by the owner
thereof, (iii) general real estate taxes and assessments not
yet delinquent, and (iv) such other similar items as the Admin-
istrative Agent may consent to.
"Permitted Liens" shall have the meaning provided in
Section 7.02(c).
"Permitted Subordinated Debt" shall mean subordinated
debt of the Borrower, all of the terms (including the principal
amount thereof if, and only if, such principal amount exceeds
(x) the stated amount of the Borrower's monetary obligations
under the Liberty Put Obligation, (y) the purchase price paid
for Investor Preferred being exchanged or redeemed or (z) the
liquidation value of the Merger Preferred being exchanged or
redeemed, as the case may be, plus in the case of clauses (y)
and (z), any accrued and unpaid (in cash) dividends thereon)
and conditions of which are acceptable to the Administrative
Agent and the Required Banks (and which may differ among the
issues utilized for the foregoing different purposes), issued
(i) to finance the Borrower's monetary obligations under the
Liberty Put Obligation and/or (ii) in exchange for, and/or to
repay or redeem, the Investor Preferred and/or Merger Preferred
as provided in Section 7.05, together with accrued and unpaid
(in cash) dividends thereon, provided that the terms and condi-
tions of the Junior Subordinated Exchange Indenture set forth
in Exhibit 6 to the Investment Agreement shall be deemed ac-
ceptable to the Administrative Agent and the Required Banks.
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"Person" shall mean any individual, partnership,
joint venture, firm, corporation, association, trust or other
enterprise or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" shall mean any multiemployer or single-em-
ployer plan as defined in Section 4001 of ERISA and covered by
Title IV thereof, which is maintained or contributed to by (or
to which there is an obligation to contribute of), or at any
time during the five calendar years preceding the date of this
Agreement was maintained or contributed to by (or to which
there was an obligation to contribute of) the Borrower, any of
its Subsidiaries or an ERISA Affiliate with respect to which
any material liability exists currently or could reasonably be
expected to exist at any time while this Agreement is in ef-
fect.
"Pledge Agreements" shall mean and include (x) the
Pledge Agreement executed by the Borrower and delivered pursu-
ant to Section 4.01(e), (y) the Pledge Agreement executed by
the VTA Trustee and delivered pursuant to Section 4.01(e), in
each case as the same may be amended, modified or supplemented
from time to time and (z) once executed and delivered, the Fi-
nance Co. Pledge Agreement.
"Pledge Documents" shall mean the Pledge Agreements
and the VTA.
"Prime Lending Rate" shall mean the rate which the
Administrative Agent announces from time to time as its prime
lending rate, the Prime Lending Rate to change when and as such
prime lending rate changes. The Prime Lending Rate is a refer-
ence rate and does not necessarily represent the lowest or best
rate actually charged to any customer. The Administrative
Agent may make commercial loans or other loans at rates of in-
terest at, above or below the Prime Lending Rate.
"Principal Stockholders" shall mean the Specified
Equity Investors, BellSouth and Arrow.
"Pro Forma EBITDA" shall mean the good faith esti-
mate, as set forth in a schedule delivered to the Administra-
tive Agent prior to the Merger Borrowing Date (which shall pro-
vide a copy to each Bank) and found reasonably satisfactory by
the Administrative Agent, of the pro forma combined EBITDA for
the Borrower and its Subsidiaries, together with PCI and its
Subsidiaries, for the respective fiscal periods described in
the definition of Annualized EBITDA.
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"Projections" shall have the meaning provided in Sec-
tion 5.11(f).
"Proxy Materials" shall mean all proxy materials, if
any, sent by PCI to its stockholders in connection with the
Merger.
"QVC Finance Sub" shall mean QVC Finance Subsidiary,
Inc., a Delaware corporation.
"RCRA" shall mean the Resource Conservation and Re-
covery Act, as amended, 42 U.S.C. Section 6901 et seq.
"Real Property" of any Person shall mean all of the
right, title and interest of such Person in and to land, im-
provements and fixtures, including leaseholds.
"Reference Banks" shall mean and include Barclays
Bank PLC, Toronto Dominion (Texas), Inc. and Chemical Bank.
"Regulation D" shall mean Regulation D of the Board
of Governors of the Federal Reserve System as from time to time
in effect and any successor to all or a portion thereof estab-
lishing reserve requirements.
"Regulation U" shall mean Regulation U of the Board
of Governors of the Federal Reserve System as from time to time
in effect and any successor to all or a portion thereof estab-
lishing margin requirements.
"Replacement Facilities" shall have the meaning pro-
vided in Section 7.01(l).
"Reportable Event" shall mean an event described in
Section 4043(b) of ERISA with respect to a Plan as to which the
30-day notice requirement has not been waived by the PBGC.
"Required Banks" shall mean (x) if prior to the
Merger Borrowing Date, Banks whose Tender Offer Commitments,
Term Loan Commitments and Revolving Commitments exceed 50% of
the sum of the Total Tender Offer Commitment, the Total Term
Loan Commitment and the Total Revolving Commitment and (y) on
and after the Merger Borrowing Date, Banks whose outstanding
Term Loans and Revolving Commitments exceed 50% of the total
outstanding Term Loans and Total Revolving Commitment.
"Revolving Commitment" shall mean, with respect to
each Bank, the amount set forth opposite such Bank's name in
Schedule I hereto directly below the column entitled "Revolving
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Commitment," as same may be reduced from time to time pursuant
to Sections 2.02, 2.03 and/or 8.
"Revolving Credit Facility" shall mean the Facility
evidenced by the Total Revolving Commitment.
"Revolving Loan" shall have the meaning provided in
Section 1.01(A)(d).
"Revolving Note" shall have the meaning provided in
Section 1.04(a)(iv).
"RL Bank" shall mean at any time each Bank with a
Revolving Commitment.
"S&P" shall mean Standard & Poor's Corporation, or
any successor corporation thereto.
"Scheduled Repayment" shall have the meaning provided
in Section 3.02(A)(b).
"Scheduled Repayment Date" shall have the meaning
provided in Section 3.02(A)(b).
"Scheduled Reduction" shall have the meaning provided
in Section 2.03(g).
"SEC" shall mean the Securities and Exchange Commis-
sion or any successor thereto.
"Section 3.02(A)(e)(vii) Issuance" shall have the
meaning provided in Section 7.01(j).
"Series F Non-Voting Preferred" shall mean the
Borrower's Series F Convertible Non-Voting Preferred Stock is-
sued to the Specified Equity Investors pursuant to, and in ac-
cordance with, Section 2.02 of the Investment Agreement for a
purchase price of not in excess of $750,000,000.
"Series G Non-Voting Preferred" shall mean the
Borrower's Series G Convertible Non-Voting Preferred Stock, if
any, issued to the Specified Equity Investors pursuant to, and
in accordance with, Section 2.02 of the Investment Agreement
for the purchase price of at least $750,000,000, which pre-
ferred stock is convertible into Borrower Common Stock.
"Shareholders' Agreements" shall have the meaning
provided in Section 4.02(o).
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"Share Purchase Loans" shall mean the Tender Offer
Loans the proceeds of which are utilized on the date incurred
to purchase Shares pursuant to the Offer to Purchase.
"Shares" shall mean shares of common stock of PCI.
"Special Funding Procedures Letter" shall mean a let-
ter agreement among the Borrower and each Bank, substantially
in the form of Exhibit H hereto.
"Specified Equity Investors" shall mean Comcast Cor-
poration, Cox Enterprises, Inc. and Advance Publications, Inc.,
or their affiliates as provided for in the Investment Agree-
ment.
"Subordinated Finance Co. Note" shall mean the prom-
issory note issued by the Borrower to Finance Co. to evidence
the subordinated loan of $1,500,000,000 made by Finance Co. to
the Borrower on or prior to the Initial Borrowing Date and as
the same may be subsequently amended, modified or supplemented
in accordance with the terms thereof and hereof.
"Subsidiary" of any Person shall mean and include
(i) any corporation more than 50% of whose stock of any class
or classes having by the terms thereof ordinary voting power to
elect a majority of the directors of such corporation (irre-
spective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting
power by reason of the happening of any contingency) is at the
time owned by such Person directly or indirectly through Sub-
sidiaries and (ii) any partnership, association, joint venture
or other entity in which such Person directly or indirectly
through Subsidiaries, has more than a 50% equity interest at
the time. Unless otherwise expressly provided, (x) all refer-
ences herein to "Subsidiary" shall mean a Subsidiary of the
Borrower and (y) PCI and its Subsidiaries will be deemed Sub-
sidiaries of the Borrower on and after the Tender Offer Closing
Date, provided that no action taken or authorized by PCI and/or
any of its Subsidiaries prior to the earlier of (i) the Merger
Borrowing Date and (ii) the tenth Business Day following the
date on which the FCC Long-Form Approval has been obtained (or
such longer period as is required to satisfy Rule 14f-1 of the
Securities Exchange Act of 1934, to the extent applicable)
will, to the extent such action does not violate any of the
covenants and agreements of PCI contained in the Merger Agree-
ment, result in a breach or violation of any of the covenants
contained in Sections 6 and 7 hereof to the extent that any
default of any such covenants that would otherwise result in
the absence of this proviso is cured no later than the Merger
Borrowing Date.
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"Subsidiary Guarantor" shall mean and include (x)
each Initial Subsidiary Guarantor, (y) on and after the Merger
Borrowing Date, each Additional Subsidiary Guarantor and (z)
such other Wholly-Owned Subsidiaries of the Borrower that be-
come a Subsidiary Guarantor by executing, and delivering to the
Administrative Agent, a counterpart of the Subsidiary Guaranty.
"Subsidiary Guaranty" shall have the meaning provided
in Section 4.01(d).
"Swingline Commitment" shall mean $25,000,000.
"Swingline Expiry Date" shall mean the Business Day
which is five Business Days prior to the Final Maturity Date.
"Swingline Facility" shall mean the facility evi-
denced by the Swingline Commitment.
"Swingline Loan" shall have the meaning provided in
Section 1.01(A)(e).
"Swingline Note" shall have the meaning provided in
Section 1.04(a).
"Syndication Date" shall mean the earlier of (x) the
date which is 90 days after the Initial Borrowing Date and (y)
the date specified by the Administrative Agent in writing to
the Borrower as the date on which the primary syndication of
the Total Commitment has been completed.
"Taxes" shall have the meaning provided in Section
3.04.
"Tax Sharing Agreements" shall have the meaning pro-
vided in Section 4.02(o).
"Tender Offer" shall mean the tender offer commenced
by the Borrower pursuant to the Offer to Purchase.
"Tender Offer-A Commitment" shall mean at any time,
with respect to each Bank, such Bank's TO Percentage of the
Total Tender Offer-A Commitment at such time.
"Tender Offer-A Facility" shall mean the Facility
evidenced by the Total Tender Offer-A Commitment.
"Tender Offer-A Loan" shall have the meaning provided
in Section 1.01(A)(a).
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"Tender Offer-A Note" shall have the meaning provided
in Section 1.04(a)(i).
"Tender Offer-B Commitment" shall mean at any time,
with respect to each Bank, such Bank's TO Percentage of the
Total Tender Offer-B Commitment at such time.
"Tender Offer-B Facility" shall mean the Facility
evidenced by the Total Term Loan-B Commitment.
"Tender Offer-B Loan" shall have the meaning provided
in Section 1.01(A)(b).
"Tender Offer-B Note" shall have the meaning provided
in Section 1.04(a)(ii).
"Tender Offer Closing Date" shall mean the date of
the closing of the Tender Offer, which shall also be the date
Shares are accepted for payment by the Borrower, provided, that
if prior to the date of the closing of the Tender Offer the
Borrower has given the Administrative Agent written notice that
it will not utilize the Special Funding Procedures Letter, the
Tender Offer Closing Date shall then be the Initial Borrowing
Date.
"Tender Offer Commitment" shall mean, with respect to
each Bank, its Tender Offer-A Commitment plus its Tender
Offer-B Commitment.
"Tender Offer Documents" shall mean the Offer to Pur-
chase, the Schedule 14D-1 filed by the Borrower, the Schedule
14D-9 filed by PCI with respect to the Offer to Purchase and
all amendments and exhibits thereto and related documents filed
with the SEC or distributed to the stockholders of PCI, in each
case prior to December 31, 1993, and shall, in any event, in-
clude any Merger Documents first delivered to the Banks during
such period.
"Tender Offer Loans" shall mean and include Tender
Offer-A Loans and Tender Offer-B Loans.
"Tender Offer Maturity Date" shall mean the earlier
of (i) the date which is nine months after the Tender Offer
Closing Date and (ii) the date on which the Merger shall have
been consummated.
"Tender Offer Notes" shall mean and include Tender
Offer-A Notes and Tender Offer-B Notes.
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"Term Loan" shall have the meaning provided in Sec-
tion 1.01(A)(c).
"Term Loan Commitment" shall mean, with respect to
each Bank, the amount, if any, set forth opposite such Bank's
name on Schedule I hereto directly below the column entitled
"Term Loan Commitment" as the same may be reduced or terminated
pursuant to Section 2.03.
"Term Loan Facility" shall mean the Facility evi-
denced by the Total Term Loan Commitment.
"Term Loan Reduction" shall mean the repayment of
$500,000,000 of the Scheduled Repayments coming due on or after
March 31, 2000.
"Term Note" shall have the meaning provided in Sec-
tion 1.04(a)(iii).
"TO Percentage" shall mean, with respect to each
Bank, the percentage, if any, set forth opposite such Bank's
name on Schedule I hereto directly below the column entitled
"TO Percentage," as the same may be adjusted pursuant to Sec-
tion 11.04.
"Total Cash Interest Expense" shall mean for any pe-
riod total interest expense of the Borrower and its Subsidi-
aries on a consolidated basis (including, without limitation,
the interest expense associated with Capitalized Lease Obliga-
tions and cash dividends paid on the Investor Preferred and
Merger Preferred during such period but excluding expense for
interest not payable in cash (including amortized financing
costs and interest in respect of the Subordinated Finance Co.
Note to the extent not payable in cash)) during such period net
of cash interest income for such period.
"Total Commitment" shall mean the sum of the Total
Tender Offer Commitment, the Total Term Loan Commitment and the
Total Revolving Commitment.
"Total Revolving Commitment" shall mean the sum of
the Revolving Commitments of each of the Banks.
"Total Tender Offer-A Commitment" shall mean, at any
time, the lesser of (x) the Total Tender Offer Commitment and
(y) an amount equal to 50% of the total purchase price paid by
the Borrower to purchase Shares pursuant to the Offer to Pur-
chase.
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"Total Tender Offer-B Commitment" shall mean, at any
time, (x) the Total Tender Offer Commitment less (y) the Total
Tender Offer-A Commitment.
"Total Tender Offer Commitment" shall mean
$3,000,000,000, as the same may be reduced from time to time
pursuant to Section 2.03 and/or 8.
"Total Term Loan Commitment" shall mean the sum of
the Term Loan Commitments of each of the Banks.
"Transaction Documents" shall mean and include the
Tender Offer Documents, the Additional Tender Offer Documents,
the Merger Documents, the Specified Equity Investor Documents
and the BellSouth Documents.
"Two Thirds Banks" shall mean (x) if prior to the
Merger Borrowing Date, Banks whose Tender Offer Commitments,
Term Loan Commitments and Revolving Commitments equal to 66-
2/3% or more of the sum of the Total Tender Offer Commitment,
the Total Term Loan Commitment and the total Revolving Commit-
ment and (y) on and after the Merger Borrowing Date, Banks
whose outstanding Term Loans and Revolving Commitments equal to
66-2/3% or more of the total outstanding Term Loans and Total
Revolving Commitment.
"Type" shall mean any type of Loan determined with
respect to the interest option applicable thereto, i.e., a Base
Rate Loan or Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code.
"Unfunded Current Liability" of any Plan shall mean
the amount, if any, by which the present value of the accrued
benefits under the Plan as of the close of its most recent plan
year, determined in accordance with Statement of Financial Ac-
counting Standards No. 35, based upon the actuarial assumptions
used by the Plan's actuary in the most recent annual valuation
of the Plan, exceeds the fair market value of the assets al-
locable thereto, determined in accordance with Section 412 of
the Code.
"Unused Basket" shall mean, at any time, (i) the ag-
gregate Net Debt Issuance Proceeds and Net Equity Issuance Pro-
ceeds theretofore received by the Borrower and/or any of its
Subsidiaries and not required to be utilized to repay Loans as
a result of only 75% of Net Debt Issuance Proceeds and/or Net
Equity Issuance Proceeds being required to be applied to repay
Loans pursuant to Section 3.02(A)(d)(y) or 3.02(A)(e)(II), as
the case may be, less (ii) the aggregate amounts theretofore
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expended pursuant to Section 7.01(k), Section 7.04(m) or the
proviso to Section 7.05(b)(y).
"Voting Stock" shall mean the shares of capital stock
and any other securities of any Person entitled to vote gener-
ally for the election of directors of such Person or any other
securities (including, without limitation, rights and options),
convertible into, exchangeable into or exercisable for, any of
the foregoing (whether or not presently exercisable, convert-
ible or exchangeable).
"VTA" shall mean the Voting Trust Agreement substan-
tially in the form of Exhibit D-1 and the same may be amended,
modified or supplemented as provided for therein and in the
VTA.
"VTA Trustee" shall have the meaning provided in Sec-
tion 4.01(e).
"Wholly-Owned Subsidiary" of any Person shall mean
any Subsidiary of such Person to the extent all of the capital
stock or other ownership interests in such Subsidiary, other
than directors' qualifying shares, is owned directly or indi-
rectly by such Person.
"Written" or "in writing" shall mean any form of writ-
ten communication or a communication by means of telex, tele-
copier device, telegraph or cable.
SECTION 10. The Administrative Agent.
10.01 Appointment. Each Bank hereby irrevocably
designates and appoints Chemical Bank as Administrative Agent
(which term shall include Chemical Bank acting as Collateral
Agent) of such Bank to act as specified herein and in the other
Credit Documents, and each such Bank hereby irrevocably author-
izes Chemical Bank as the Administrative Agent for such Bank,
to take such action on its behalf under the provisions of this
Agreement and the other Credit Documents and to exercise such
powers and perform such duties as are expressly delegated to
the Administrative Agent by the terms of this Agreement and the
other Credit Documents, together with such other powers as are
reasonably incidental thereto. The Administrative Agent agrees
to act as such upon the express conditions contained in this
Section 11. Notwithstanding any provision to the contrary
elsewhere in this Agreement, neither the Administrative Agent
(nor any Co-Arranger) shall have any duties or responsibil-
ities, except those expressly set forth herein or in the other
Credit Documents, or any fiduciary relationship with any Bank,
and no implied covenants, functions, responsibilities, duties,
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obligations or liabilities shall be read into this Agreement or
otherwise exist against the Administrative Agent or any
Co-Arranger. The provisions of this Section 11 are solely for
the benefit of the Administrative Agent, each Co-Arranger and
the Banks, and no Credit Party shall have any rights as a third
party beneficiary of any of the provisions hereof. In perform-
ing its functions and duties under this Agreement, the Adminis-
trative Agent shall act solely as agent of the Banks and the
Administrative Agent does not assume and shall not be deemed to
have assumed any obligation or relationship of agency or trust
with or for any Credit Party. The Co-Arrangers (in their ca-
pacities as such) shall have no express or implied duties,
functions or responsibilities under or in connection with any
of the Credit Documents.
10.02 Delegation of Duties. The Administrative
Agent may execute any of its duties under this Agreement or any
other Credit Document by or through agents or attorneys-
in-fact and shall be entitled to advice of counsel concerning
all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reason-
able care except to the extent otherwise required by Section
11.03.
10.03 Exculpatory Provisions. The Administrative
Agent, or any of its respective officers, directors, employees,
agents, attorneys-in-fact or affiliates shall not be (i) liable
for any action lawfully taken or omitted to be taken by it or
such Person under or in connection with this Agreement (except
for its or such Person's own gross negligence or willful mis-
conduct) or (ii) responsible in any manner to any of the Banks
for any recitals, statements, representations or warranties
made by any Credit Party or any of their respective officers
contained in this Agreement, any other Credit Document or in
any certificate, report, statement or other document referred
to or provided for in, or received by the Administrative Agent
under or in connection with, this Agreement or any other Credit
Document or for any failure of any Credit Party or any of their
respective officers to perform its obligations hereunder or
thereunder. The Administrative Agent shall not be under any
obligation to any Bank to ascertain or to inquire as to the
observance or performance of any of the agreements contained
in, or conditions of, this Agreement, or to inspect the proper-
ties, books or records of any Credit Party. The Administrative
Agent shall not be responsible to any Bank for the effective-
ness, genuineness, validity, enforceability, collectibility or
sufficiency of this Agreement or any Credit Document or for any
representations, warranties, recitals or statements made herein
or therein or made in any written or oral statement or in any
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financial or other statements, instruments, reports, certifi-
cates or any other documents in connection herewith or there-
with furnished or made by the Administrative Agent to the Banks
or by or on behalf of any Credit Party to the Administrative
Agent or any Bank or be required to ascertain or inquire as to
the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained herein or therein
or as to the use of the proceeds of the Loans or of the exist-
ence or possible existence of any Default or Event of Default.
10.04 Reliance by Administrative Agent. The Admin-
istrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, no-
tice, consent, certificate, affidavit, letter, cablegram, tele-
gram, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal coun-
sel (including, without limitation, counsel to the Credit Par-
ties), independent accountants and other experts selected by
the Administrative Agent. The Administrative Agent shall be
fully justified in failing or refusing to take any action under
this Agreement or any other Credit Document unless it shall
first receive such advice or concurrence of the Required Banks
as it deems appropriate or it shall first be indemnified to its
satisfaction by the Banks against any and all liability and
expense which may be incurred by it by reason of taking or con-
tinuing to take any such action. The Administrative Agent
shall in all cases be fully protected in acting, or in refrain-
ing from acting, under this Agreement and the other Credit
Documents in accordance with a request of the Required Banks,
and such request and any action taken or failure to act pursu-
ant thereto shall be binding upon all the Banks.
10.05 Notice of Default. The Administrative Agent
shall not be deemed to have knowledge or notice of the occur-
rence of any Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Bank or the
Borrower or any other Credit Party referring to this Agreement,
describing such Default or Event of Default and stating that
such notice is a "notice of default." In the event that the
Administrative Agent receives such a notice, the Administrative
Agent shall give prompt notice thereof to the Banks. The Ad-
ministrative Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by
the Required Banks, provided that, unless and until the Admin-
istrative Agent shall have received such directions, the Admin-
istrative Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to
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such Default or Event of Default as it shall deem advisable in
the best interests of the Banks.
10.06 Non-Reliance on Administrative Agent and Other
Banks. Each Bank expressly acknowledges, notwithstanding any
other provision of this Agreement, that neither the Administra-
tive Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates (and that neither any
Co-Arranger nor any of its officials, directors, employees,
agents, attorneys-in-fact or affiliates) have made any repre-
sentations or warranties to it and that no act by the Adminis-
trative Agent hereinafter taken, including any review of the
affairs of the Borrower or any of its Subsidiaries, shall be
deemed to constitute any representation or warranty by the Ad-
ministrative Agent to any Bank. Each Bank represents to the
Administrative Agent (and each Co-Arranger) that it has, inde-
pendently and without reliance upon the Administrative Agent,
the any Co-Arranger or any other Bank, and based on such docu-
ments and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, assets,
operations, property, financial and other conditions, prospects
and creditworthiness of the Credit Parties and made its own
decision to make its Loans hereunder and enter into this Agree-
ment. Each Bank also represents that it will, independently
and without reliance upon the Administrative Agent, any
Co-Arranger 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 analysis, appraisals and decisions in
taking or not taking action under this Agreement, and to make
such investigation as it deems necessary to inform itself as to
the business, assets, operations, property, financial and other
conditions, prospects and creditworthiness of the Credit Par-
ties. The Administrative Agent shall not have any duty or re-
sponsibility to provide any Bank with any credit or other in-
formation concerning the business, operations, assets, prop-
erty, financial and other conditions, prospects or creditwor-
thiness of any Credit Party which may come into the possession
of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
10.07 Indemnification. The Banks agree to indemnify
each of the Administrative Agent in its capacity as such rat-
ably according to the Banks' aggregate Commitments, from and
against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, reasonable expen-
ses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the
payment of the Obligations) be imposed on, incurred by or as-
serted against the Administrative Agent in its capacity as such
in any way relating to or arising out of this Agreement or any
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other Credit Document, or any documents contemplated by or re-
ferred to herein or the transactions contemplated hereby or any
action taken or omitted to be taken by the Administrative Agent
under or in connection with any of the foregoing, but only to
the extent that any of the foregoing is not paid by the Bor-
rower, provided that no Bank shall be liable to the Administra-
tive Agent for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting solely from
the gross negligence or willful misconduct of the Administra-
tive Agent. If any indemnity furnished to the Administrative
Agent for any purpose shall, in the opinion of the Administra-
tive Agent, be insufficient or become impaired, the Administra-
tive Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such ad-
ditional indemnity is furnished. The agreements in this Sec-
tion 10.07 shall survive the payment of all Obligations.
10.08 Administrative Agent in Its Individual Capac-
ity. The Administrative Agent (and each Co-Arranger) and its
and their respective affiliates may make loans to, accept de-
posits from and generally engage in any kind of business with
the Borrower and its Subsidiaries as though the Administrative
Agent (or any Co-Arranger) were not the Administrative Agent
(or a Co-Arranger, as the case may be) hereunder. With respect
to the Loans made by it and all Obligations owing to it, the
Administrative Agent and each Co-Arranger each shall have the
same rights and powers under this Agreement as any Bank and may
exercise the same as though it were not the Administrative
Agent (or a Co-Arranger) and the terms "Bank" and "Banks" shall
include the Administrative Agent and each Co-Arranger each in
its individual capacity.
10.09 Resignation of Administrative Agent; Successor
Administrative Agent. The Administrative Agent may resign as
the Administrative Agent upon 20 days' notice to the Banks and
the Borrower. Upon the resignation of the Administrative
Agent, the Required Banks shall appoint from among the
Co-Arrangers a successor Administrative Agent for the Banks
subject to prior approval by the Borrower (such approval not to
be unreasonably withheld), whereupon such successor agent shall
succeed to the rights, powers and duties of the Administrative
Agent, and the term "Administrative Agent" shall include such
successor agent effective upon its appointment and acceptance,
and the resigning Administrative Agent's rights, powers and
duties as the Administrative Agent shall be terminated, without
any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement.
After the retiring Administrative Agent's resignation hereunder
as the Administrative Agent, the provisions of this Section 11
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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.
SECTION 11. Miscellaneous.
11.01 Payment of Expenses, etc. The Borrower agrees
to: (i) whether or not the transactions herein contemplated are
consummated, pay all reasonable out-of-pocket costs and ex-
penses of the Administrative Agent and each Co-Arranger in
connection with the negotiation, preparation, execution and
delivery of the Credit Documents and the documents and instru-
ments referred to therein and any amendment, waiver or consent
relating thereto (including, without limitation, the reasonable
fees and disbursements of White & Case (it being understood
that the Borrower shall not be responsible for the fees and
disbursements of any other counsel in connection with any of
the foregoing) and of the Administrative Agent) and the reason-
able fees and disbursements of the Administrative Agent and
each of the Banks in connection with the enforcement of the
Credit Documents and the documents and instruments referred to
therein (including, without limitation, the reasonable fees and
disbursements of counsel for the Administrative Agent and for
each of the Banks); (ii) pay and hold each of the Banks harm-
less from and against any and all present and future stamp and
other similar taxes with respect to the foregoing matters and
save each of the Banks harmless from and against any and all
liabilities with respect to or resulting from any delay or
omission (other than to the extent attributable to such Bank)
to pay such taxes; and (iii) indemnify the Administrative Agent
and each Bank, their respective officers, directors, employees,
representatives and agents (each, an "indemnified person") from
and hold each of them harmless against any and all losses, li-
abilities, claims, damages or expenses incurred by any of them
as a result of, or arising out of, or in any way related to, or
by reason of, (a) any investigation, litigation or other pro-
ceeding (whether or not any Bank is a party thereto) related to
the entering into and/or performance of any Credit Document or
the use of the proceeds of any Loans hereunder or the Merger or
the consummation of any other transactions contemplated in any
Credit Document, (b) any settlement entered into in connection
with the foregoing to the extent such settlement has been con-
sented to by the Borrower, which consent shall not be unreason-
ably withheld or (c) the actual or alleged presence of Hazard-
ous Materials on, or released from, any Real Property of the
Borrower or any Environmental Claim with respect to the Bor-
rower, in each case including, without limitation, the reason-
able fees and disbursements of a single counsel incurred in
connection with any such investigation, litigation, Environ-
mental Claim or any of the Borrower's or any Subsidiary's acts,
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omissions, business, operations or Real Property, or other pro-
ceeding (but excluding any such losses, liabilities, claims,
damages or expenses to the extent incurred by reason of the
gross negligence or willful misconduct of the Person to be in-
demnified). To the extent that the undertaking to indemnify
and hold harmless set forth in this Section 11.01 may be unen-
forceable because it is violative of any law or public policy
as determined by a final judgment of a court of competent ju-
risdiction, the Borrower shall make the maximum contribution to
the payment and satisfaction of each of the liabilities giving
rise to claims under the indemnification provisions of this
Section 11.01 which is permissible under applicable law.
11.02 Right of Setoff. In addition to any rights
now or hereafter granted under applicable law or otherwise, and
not by way of limitation of any such rights, upon the occur-
rence of an Event of Default, each Bank is hereby authorized,
to the full extent not prohibited by applicable law, at any
time or from time to time, without presentment, demand, protest
or other notice of any kind to the Borrower or to any other
Person, any such notice being hereby expressly waived, to set
off and to appropriate and apply any and all deposits (general
or special) and any other Indebtedness at any time held or ow-
ing by such Bank (including, without limitation, by branches
and agencies of such Bank wherever located) to or for the
credit or the account of the Borrower against and on account of
the Obligations and liabilities of the Borrower to such Bank
under this Agreement or under any of the other Credit Docu-
ments, including, without limitation, all interests in Obliga-
tions of the Borrower (but excluding any amounts held by such
Bank in a trustee capacity) purchased by such Bank pursuant to
Section 11.06(b), and all other claims of any nature or de-
scription arising out of or connected with this Agreement or
any other Credit Document, irrespective of whether or not such
Bank shall have made any demand hereunder and although said
Obligations, liabilities or claims, or any of them, shall be
contingent or unmatured.
11.03 Notices. Except as otherwise expressly pro-
vided herein, all notices and other communications provided for
hereunder shall be in writing and mailed, telegraphed, telexed,
telecopied, cabled or delivered, if to the Borrower, at the
address specified opposite its signature below; if to any Bank,
at its address specified for such Bank on Schedule II hereto;
or, at such other address as shall be designated by any party
in a written notice to the other parties hereto. All such no-
tices and communications shall be mailed, telegraphed, telexed,
telecopied, or cabled or sent by overnight courier, and shall
be effective when received.
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11.04 Benefit of Agreement. (a) This Agreement
shall be binding upon and inure to the benefit of and be en-
forceable by the respective successors and assigns of the par-
ties hereto; provided that no Credit Party may assign or trans-
fer any of its rights or obligations hereunder without the
prior written consent of the Banks. Nothing in this Section
11.04 shall prevent or prohibit any Bank from pledging its
Loans and/or Notes hereunder to a Federal Reserve Bank in sup-
port of borrowings made by such Bank from such Federal Reserve
Bank. Each Bank may at any time grant participations in any of
its rights hereunder or under any of the Notes to a commercial
bank, other financial institution, mutual fund or "Accredited
Investor" as such term is defined in Regulation D of the Secu-
rities Act of 1933, as amended, provided that in the case of
any such participation, the participant shall not have any
rights under this Agreement or any of the other Credit Docu-
ments (the participant's rights against such Bank in respect of
such participation to be those set forth in the agreement ex-
ecuted by such Bank in favor of the participant relating
thereto) and all amounts payable by the Borrower hereunder
shall be determined as if such Bank had not sold such partici-
pation, except that the participant shall be entitled to the
benefits of Sections 1.09, 1.10 and 3.04 of this Agreement to
the extent that such Bank would be entitled to such benefits if
the participation had not been entered into or sold, and pro-
vided further that no Bank shall transfer, grant or assign any
participation under which the participant shall have rights to
approve any amendment to or waiver of this Agreement or any
other Credit Document except to the extent such amendment or
waiver would (i) extend the final scheduled maturity of any
Loan or Note in which such participant is participating (it
being understood that any waiver of an installment on, the ap-
plication of any prepayment or the method of any application of
any prepayment to, the amortization of the Term Loans shall not
constitute an extension of the final maturity date) or reduce
the rate or extend the time of payment of interest or Fees
thereon (except in connection with a waiver of the applicabil-
ity of any post-default increase in interest rates or interest
on unpaid interest), or reduce the principal amount thereof, or
increase such participant's participating interest in any Com-
mitment over the amount thereof then in effect (it being under-
stood that a waiver of any Default or Event of Default or of a
mandatory reduction in the Total Commitment, or a mandatory
prepayment, shall not constitute a change in the terms of any
Commitment), (ii) release all or substantially all of the Col-
lateral or (iii) consent to the assignment or transfer by any
Credit Party of any of its rights and obligations under this
Agreement.
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(b) Notwithstanding the foregoing, (x) any Bank may
assign all or a portion of its Loans and/or Commitments and its
rights and obligations hereunder to its parent company and/or
any affiliate of such Bank which is at least 50% owned by such
Bank or its parent company or to one or more Banks and (y) any
Bank may assign a portion, in an amount equal to at least the
Minimum Assignment Amount of its Loans and/or Commitments and
its rights and obligations hereunder to any other commercial
banks, other financial institutions, mutual funds or "Accred-
ited Investors" as such term is defined in Regulation D of the
Securities Act of 1933, as amended, other than in any event any
competitor of the Borrower and/or its Subsidiaries (each an
"Eligible Assignee") each of which assignees to become a party
to this Agreement as a Bank prior to or after the Initial Bor-
rowing Date by executing an assignment agreement in the form of
Exhibit G hereto, appropriately completed (an "Assignment
Agreement") with the assigning Bank, provided that, in each
case, (i) assignments of Revolving Credit Commitments and/or
unfunded Term Loan Commitments or Tender Offer Commitments may
be made to Persons which are not commercial banks or financial
institutions only with the consent of the Borrower, which shall
not be unreasonably withheld, (ii) at such time Schedule I
shall be deemed to have been modified to reflect the TO Per-
centages, Loans and/or Commitments of such new Bank and of the
existing Banks, (iii) if requested by such new Bank or the
assigning Bank, the Borrower shall issue (upon return of the to
be replaced existing Notes) new Notes to such new Bank and to
the assigning Bank in conformity with the requirements of Sec-
tion 1.04 to the extent needed to reflect the revised Loans
and/or Commitments, (iv) the Administrative Agent shall have
received at the time of each such assignment (other than any
assignment made pursuant to the primary syndication of the To-
tal Commitment) from either the assigning or assignee Bank the
payment of a nonrefundable assignment fee of $3,500 ($2,000 if
both the assignee and assignor were existing Banks) and (v) no
such assignment shall be effected if after giving effect
thereto the aggregate of Term Loans and/or Tender Offer Loans,
together with Revolving Commitments held by such assignor,
would be less than the Minimum Assignment Amount at such time.
Assignments pursuant to this Section 11.04(b) shall not be re-
quired to be pro rata among the Commitments. To the extent of
any assignment pursuant to this Section 11.04(b), the assigning
Bank shall be relieved of its obligations hereunder with re-
spect to its assigned Loans and/or Commitment.
(c) Notwithstanding any other provisions of this
Section 11.04, no transfer or assignment of the interests or
obligations of any Bank hereunder or any grant of participa-
tions therein shall be permitted if such transfer, assignment
or grant would require the Borrower to file a registration
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statement or qualify an indenture with the SEC or to qualify
the Loans under the "Blue Sky" laws of any State.
(d) Each Bank initially party to this Agreement
hereby represents, and each Person that becomes a Bank pursuant
to an assignment permitted by this Section 11.04 will, upon its
becoming party to this Agreement, represent that it is a com-
mercial lender, other financial institution or other "Ac-
credited Investor" which makes and/or invests in loans in the
ordinary course of its business and that it will make or ac-
quire Loans for its own account in the ordinary course of such
business, provided that, subject to the preceding clauses (a)
and (b), the disposition of any promissory notes or other evi-
dences of or interests in Indebtedness held by such Bank shall
at all times be within its exclusive control.
11.05 No Waiver; Remedies Cumulative. No failure or
delay on the part of the Administrative Agent or any Bank in
exercising any right, power or privilege hereunder or under any
other Credit Document and no course of dealing between any
Credit Party and the Administrative Agent or any Bank shall
operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under
any other Credit Document preclude any other or further exer-
cise thereof or the exercise of any other right, power or priv-
ilege hereunder or thereunder. The rights and remedies herein
expressly provided are cumulative and not exclusive of any
rights or remedies which the Administrative Agent or any Bank
would otherwise have. No notice to or demand on any Credit
Party in any case shall entitle any Credit Party to any other
or further notice or demand in similar or other circumstances
or constitute a waiver of the rights of the Administrative
Agent or the Banks to any other or further action in any cir-
cumstances without notice or demand.
11.06 Payments Pro Rata. (a) The Administrative
Agent agrees that promptly after its receipt of each payment
from or on behalf of the Borrower in respect of any Obliga-
tions, it shall, except as otherwise provided in this Agree-
ment, distribute such payment to the Banks (other than any Bank
that has consented in writing to waive its pro rata share of
such payment) pro rata based upon their respective shares, if
any, of the Obligations with respect to which such payment was
received.
(b) Each of the Banks agrees that, if it should re-
ceive any amount hereunder (whether by voluntary payment, by
realization upon security, by the exercise of the right of set-
off or banker's lien, by counterclaim or cross action, by the
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enforcement of any right under the Credit Documents, or other-
wise) which is applicable to the payment of the principal of,
or interest on, the Loans or Fees, of a sum which with respect
to the related sum or sums received by other Banks is in a
greater proportion than the total of such Obligation then owed
and due to such Bank bears to the total of such Obligation then
owed and due to all of the Banks immediately prior to such re-
ceipt, then such Bank receiving such excess payment shall pur-
chase for cash without recourse or warranty from the other
Banks an interest in the Obligations in such amount as shall
result in a proportional participation by all of the Banks in
such amount, provided that if all or any portion of such excess
amount is thereafter recovered from such Bank, such purchase
shall be rescinded and the purchase price restored to the ex-
tent of such recovery, but without interest.
11.07 Calculations; Computations. (a) The finan-
cial statements to be furnished to the Banks pursuant hereto
shall be made and prepared in accordance with GAAP consistently
applied throughout the periods involved (except as set forth in
the notes thereto or as otherwise disclosed in writing by the
Borrower to the Banks), provided that, except as otherwise spe-
cifically provided herein, all computations determining compli-
ance with Section 7, including definitions used therein, shall
utilize accounting principles and policies in effect at the
time of the preparation of, and in conformity with those used
to prepare, the historical financial statements of the Borrower
delivered to the Banks pursuant to Section 5.11(b). At any
time the computations determining compliance with Section 7
utilize accounting principles or treatments different from
those utilized in the financial statements then being furnished
to the Banks pursuant to Section 6.01, such financial state-
ments shall be accompanied by reconciliation work-sheets.
(b) All computations of (x) interest on Eurodollar
Loans hereunder shall be made on the actual number of days
elapsed over a year of 360 days and (y) interest on Base Rate
Loan and Fees hereunder shall be made on the actual number of
days elapsed over a year of 365 or 366 days, as the case may
be.
11.08 Governing Law; Submission to Jurisdiction;
Venue. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THERE-
UNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAW OF THE STATE OF NEW YORK. Any legal action or proceed-
ing with respect to this Agreement or any other Credit Document
may be brought in the courts of the State of New York or of the
United States for the Southern District of New York, and, by
execution and delivery of this Agreement, the Borrower hereby
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irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the afore-
said courts. The Borrower hereby irrevocably designates, ap-
points and empowers Corporation Service Company with offices on
the date hereof at 4 Central Avenue, Albany, NY 12210 as their
designee, appointee and agent to receive, accept and acknowl-
edge for and on their behalf, and in respect of their property,
service of any and all legal process, summons, notices and
documents which may be served in any such action or proceeding.
The Administrative Agent agrees to use reasonable good faith
efforts to mail, by registered or certified mail, to the Bor-
rower at its address set forth opposite its signatures below,
copies of any and all legal process, summons, notices and docu-
ments mailed or delivered to Corporation Service Company in
connection with the immediately preceding sentence; provided
that the failure of the Borrower to receive, for any reason,
copies of such correspondence shall not in any way affect the
effectiveness of the delivery of any legal process, summons,
notice or documents delivered to Corporation Service Company.
If for any reason such designee, appointee and agent shall
cease to be available to act as such, the Borrower agrees to
designate a new designee, appointee and agent in New York City
on the terms and for the purposes of this provision satisfac-
tory to the Administrative Agent. The Borrower further ir-
revocably 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 Borrower at its address set forth op-
posite its signatures below, such service to become effective
thirty days after such mailing. Nothing herein shall affect
the right of the Administrative Agent, any Bank or the holder
of any Note to serve process in any other manner permitted by
law or to commence legal proceedings or otherwise proceed
against the Borrower in any other jurisdiction.
(b) The Borrower hereby irrevocably waives any ob-
jection 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 or any other Credit
Document brought in the courts referred to in clause (a) above
and hereby further irrevocably waive and agree 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. The Borrower further waives any right it may have to
trial by jury in any court or jurisdiction, including without
limitation those referred to in clause (a) above, in respect of
any matter arising out of or relating to this Agreement and the
other Credit Documents.
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11.09 Counterparts. This Agreement may be executed
in any number of counterparts and by the different parties
hereto on separate counterparts, each of which when so executed
and delivered shall be an original, but all of which shall to-
gether constitute one and the same instrument. A set of coun-
terparts executed by all the parties hereto shall be lodged
with the Borrower and the Administrative Agent.
11.10 Effectiveness. This Agreement shall become
effective on the date (the "Effective Date") on which the Bor-
rower and each of the Banks shall have signed a copy hereof
(whether the same or different copies) and shall have delivered
the same to the Administrative Agent at the Notice Office of
the Administrative Agent or, in the case of the Banks, shall
have given to the Administrative Agent telephonic (confirmed in
writing), written, telex or telecopy notice (actually received)
at such office that the same has been signed and mailed to it.
The Administrative Agent will give the Borrower and each Bank
prompt written notice of the occurrence of the Effective Date.
11.11 Headings Descriptive. The headings of the
several sections and subsections of this Agreement are inserted
for convenience only and shall not in any way affect the mean-
ing or construction of any provision of this Agreement.
11.12 Amendment or Waiver. Neither this Agreement
nor any other Credit Document nor any terms hereof or thereof
may be changed, waived, discharged or terminated unless such
change, waiver, discharge or termination is in writing signed
by the Borrower and the Required Banks (or the Two Thirds Banks
if such change or waive is to Section 2.03(g) or Section
3.02(A)(b)) provided that no such change, waiver, discharge or
termination shall, without the consent of each Bank affected
thereby, (i) extend the final scheduled maturity of any Loan or
Note (it being understood that any waiver of an installment on,
the application of any prepayment or the method of application
of any prepayment to the amortization of the Loans shall not
constitute an extension of the final maturity date), or reduce
the rate or extend the time of payment of interest (other than
as a result of waiving the applicability of any post-default
increase in interest rates or interest on unpaid interest) or
Fees thereon, or reduce the amount thereof, or increase the
Commitments of any Bank over the amount thereof then in effect
(it being understood that a waiver of any Default or Event of
Default or of a mandatory reduction in the Total Commitment (or
any component thereof) or mandatory prepayment, shall not con-
stitute a change in the terms of any Commitment of any Bank),
(ii) amend, modify or waive any provision of this Section, or
Section 8.01, 10.07, 11.01, 11.02, 11.04, 11.06 or 11.07(b),
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(iii) reduce the percentage specified in the definition of Re-
quired Banks or (iv) consent to the assignment or transfer by
any Credit Party of any of its rights and obligations under any
Credit Document. No provision of Section 10 may be amended
without the consent of the Administrative Agent.
11.13 Survival. All indemnities set forth herein
including, without limitation, in Section 1.09, 1.10, 3.04,
10.07 or 11.01 shall survive the execution and delivery of this
Agreement and the making and repayment of the Loans and the
satisfaction of all other Obligations.
11.14 Domicile of Loans. Each Bank may transfer and
carry its Loans at, to or for the account of any branch office,
subsidiary or affiliate of such Bank, provided that the Bor-
rower shall not be responsible for costs arising under Section
1.09, 1.10, or 3.04 resulting from any such transfer to the
extent not otherwise applicable to such Bank prior to such
transfer.
11.15 Confidentiality. Each Bank shall hold all
non-public information obtained pursuant to the requirements of
this Agreement which has been identified as such by the Bor-
rower in accordance with its customary procedure for handling
confidential information of this nature and in accordance with
safe and sound banking practices and in any event may make dis-
closure reasonably required by any bona fide transferee or par-
ticipant in connection with the contemplated transfer of any
Loans or participation therein or as required or requested by
any governmental agency or representative thereof or pursuant
to legal process; provided, that unless specifically prohibited
by applicable law or court order, each Bank shall notify the
Borrower of any request by any governmental agency or represen-
tative thereof (other than any such request in connection with
an examination of the financial condition of such Bank by such
governmental agency) for disclosure of any such non-public in-
formation prior to disclosure of such information; and provided
further, that in no event shall any Bank be obligated or re-
quired to return any materials furnished the Borrower or any
Subsidiary. Each Bank agrees that it will not provide to pro-
spective assignees, transferees or participants any of such
confidential information unless such Person has executed an
agreement containing provisions substantially identical to
those contained in this Section 11.15.
* * *
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IN WITNESS WHEREOF, each of the parties hereto has
caused a counterpart of this Agreement to be duly executed and
delivered as of the date first above written.
QVC NETWORK, INC.
By /s/ William F. Costello
Title: Executive Vice President
and Chief Financial
Officer
CHEMICAL BANK
Individually, as
Co-Arranger and as
Administrative Agent
By /s/ Joseph A. Coneeny
Title: Managing Director
THE BANK OF NOVA SCOTIA
Individually and as
Co-Arranger
By /s/ James N. Tryforos
Title: Authorized Signatory
BARCLAYS BANK PLC
Individually and as
Co-Arranger
By /s/ Andrew M. Wynn
Title: Director
By /s/ Craig J. Lewis
Title: Associate
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LTCB TRUST COMPANY,
Individually and as
Co-Arranger
By /s/ Fumi Kamoshida
Title: Senior Vice President
NATIONSBANK OF TEXAS, N.A.,
Individually and as
Co-Arranger
By /s/ Thomas E. Carter
Title: Senior Vice President
TORONTO DOMINION (TEXAS),
INC., Individually and as
Co-Arranger
By /s/ C.A. Clause
Title: Vice President
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