SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934. FOR THE PERIOD ENDED MARCH 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934. FOR THE TRANSITION PERIOD FROM TO
--- ---
COMMISSION FILE NUMBER 0-22662
TV GUIDE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 73-1290412
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7140 SOUTH LEWIS AVENUE
TULSA, OKLAHOMA 74136-5422
(Address of principal executive offices) (Zip code)
(918) 488-4000
(Registrant's telephone number, including area code)
Indicate by check whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter periods
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No
--- ---
Number of shares outstanding of each of the registrant's classes of
common stock as of May 12, 1999:
TITLE OF CLASS NUMBER OF SHARES
Class A Common Stock $.01 Par Value 77,065,114
Class B Common Stock $.01 Par Value 74,993,176
1
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TV GUIDE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED
(In thousands, except per share amounts)
March 31, December 31,
1999 1998
---- ----
ASSETS
Current assets:
Cash and cash equivalents $ 98,108 $155,644
Marketable securities, at fair value 280 5,804
Accounts receivable, net of allowance
for doubtful accounts 230,415 64,632
Inventory 40,763 1,220
Prepaid expenses and other 11,471 4,948
Deferred tax asset 4,296 1,811
-------- --------
Total current assets 385,333 234,059
Property, plant and equipment, at cost,
net of accumulated depreciation and
amortization 60,555 45,762
Intangible assets, net of accumulated
amortization 3,150,149 113,523
Other assets, net of accumulated
amortization 27,935 19,162
---------- --------
Total assets $3,623,972 $412,506
========== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 61,608 $ 5,655
Accrued liabilities 125,608 57,365
Note payable and current portion of
capital lease obligations
and long-term debt 4,773 5,463
Customer prepayments 358,781 109,929
---------- --------
Total current liabilities 550,770 178,412
Deferred tax liability 984,346 17,280
Capital lease obligations and
long-term debt 607,329 13,007
Other long-term liabilities 799 367
Minority interest 8,050 3,596
Stockholders' equity:
Preferred stock, $.01 par value -- --
Class A common stock, $.01 par value 770 479
Class B common stock, $.01 par value 750 375
Additional paid-in capital 1,281,532 22,191
Accumulated other comprehensive
earnings (loss), net of tax 12 (54)
Retained earnings 189,614 176,853
---------- --------
Total stockholders' equity 1,472,678 199,844
---------- --------
Total liabilities and stockholders'
equity $3,623,972 $412,506
========== ========
Restated for pooling of interests.
See accompanying notes.
2
<PAGE>
TV GUIDE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(In thousands, except per share amounts)
Three Months Ended
March 31,
1999 1998
---- ----
Revenues:
Satellite-delivered programming
services $130,998 $127,277
Magazine subscription and newsstand
sales 33,572 --
Advertising sales 25,791 9,127
Systems integration services 9,875 9,564
Other 1,606 196
-------- -------
201,842 146,164
Operating expenses:
Programming, printing, distribution
and delivery 103,104 79,111
Selling, general and administrative 51,657 38,307
Depreciation and amortization 15,078 7,078
-------- -------
169,839 124,496
-------- -------
Operating income 32,003 21,668
Gain on issuance of equity by
subsidiary -- 39,225
Interest expense (6,035) (491)
Other income, net 307 1,551
-------- -------
Income before income taxes and
minority interest 26,275 61,953
Provision for income taxes (9,778) (23,025)
Minority interest in (earnings) losses (3,736) 33
-------- -------
Net income $ 12,761 $38,961
======== =======
Net income per share:
Basic $ 0.12 $ 0.45
Diluted $ 0.12 $ 0.45
Restated for pooling of interests.
See accompanying notes.
3
<PAGE>
TV GUIDE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
(In thousands)
Three Months Ended
March 31,
1999 1998
---- ----
Operating activities:
Net income $ 12,761 $ 38,961
Adjustments to reconcile net income to net
cash provided by operating activities:
Gain on issuance of equity by
subsidiary -- (39,225)
Depreciation and amortization 15,078 7,078
Minority interest in earnings 3,736 (33)
Deferred income taxes (2,400) 16,727
Other 1,236 1,137
Changes in operating assets and
liabilities, net of the effect
of acquisitions:
Accounts receivable (18,452) 8,172
Inventory 2,695 (14)
Prepaid expenses and other (2,952) (657)
Accounts payable (8,447) (2,176)
Accrued liabilities 24,246 4,368
Customer prepayments (1,375) 10,962
------- -------
Net cash provided by operating activities 26,126 45,300
Investing activities:
Investments and acquisitions, net of
cash acquired (803,525) --
Capital expenditures (3,733) (1,230)
Purchases of marketable securities (348) (63,757)
Sales of marketable securities 4,812 24,920
Maturities of marketable securities 1,103 41,079
Other (781) (678)
-------- -------
Net cash provided by (used in)
investing activities (802,472) 334
Financing activities:
Issuance of senior subordinated notes 400,000 --
Borrowings under bank credit facilities 195,300 --
Debt issuance costs (14,157) --
Repayment of note payable, capital lease
obligations and long-term debt (1,668) (2,884)
Issuance of common stock 131,236 188
Repurchase of common stock -- (6,743)
Contributions from (distributions to)
Liberty-Netlink Wholesale Division 7,971 (8,335)
Distributions to minority interests -- (408)
Other 128 11
------- -------
Net cash provided by (used in) financing
activities 718,810 (18,171)
------- -------
Net increase (decrease) in cash and cash
equivalents (57,536) 27,463
Cash and cash equivalents at beginning of
period 155,644 32,556
-------- -------
Cash and cash equivalents at end of period $ 98,108 $60,019
======== =======
Supplemental disclosures of cash
flow information:
Interest paid $ 2,301 $ 450
Income taxes paid $ 4,246 $ 2,810
Restated for pooling of interests.
See accompanying notes.
4
<PAGE>
TV GUIDE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
MARCH 31, 1999
1. Organization and Basis of Presentation
TV Guide, Inc. ("TVG" or the "Company") is a media and
communications company that provides print and electronic program
listings guides and program promotion services to households via
magazine subscriptions, newsstands, cable television systems, direct-to-
home satellite providers and the Internet; distributes programming to
cable television systems and direct-to-home satellite providers;
markets satellite-delivered programming to C-band satellite dish
owners; provides software development and systems integration services;
and provides satellite transmission services for private networks. The
majority of the Company's operating income is earned through the sale
and distribution of program listings guides and program promotion
services, the sale of home satellite dish services and satellite
distribution of video services.
Liberty Media Corporation, an indirect wholly owned subsidiary of
AT&T Corp. ("Liberty"), and The News Corporation Limited ("News Corp.")
each directly or indirectly own approximately 44% of the issued and
outstanding common stock of TVG representing approximately 98%
(approximately 49% each) of the total voting power of TVG common stock.
The accompanying interim financial statements are unaudited but,
in the opinion of management, reflect all adjustments (consisting of
normal recurring accruals) necessary for a fair presentation of the
consolidated financial position of the Company and its results of
operations and cash flows for such periods. Operating results for any
interim period are not necessarily indicative of the results that may
be expected for the full year. The financial statements for periods
prior to March 1, 1999 have been restated to reflect a transaction with
Liberty that has been accounted for as a combination of entities under
common control, similar to a pooling of interests. See Note 2.
On March 1, 1999, the Company completed a transaction with a
subsidiary of News Corp. that has been accounted for as a purchase. The
allocation of the purchase price in that transaction is based on
preliminary information. The Company is in the process of obtaining an
independent evaluation of the assets acquired and the results of the
final evaluation could differ significantly from the amounts used in
the March 31, 1999 consolidated financial statements. See Note 2.
Certain financial statement items for prior periods have been
reclassified to conform to the 1999 presentation. The condensed
consolidated financial statements should be read in conjunction with
the historical and supplemental consolidated financial statements and
notes thereto included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1998.
5
<PAGE>
2. Investments and Acquisitions
Liberty and TV Guide Transactions
On March 1, 1999, TVG acquired from Liberty the stock of three of
its subsidiaries that indirectly owned approximately 40% of
Superstar/Netlink Group LLC ("SNG") (bringing TVG's ownership interest
in SNG to approximately 80%) and Liberty's Netlink Wholesale Division,
which includes a business that provides the Denver 6 services and a
separate business that sells programming packages to satellite master
antenna television systems serving hotels and multi-unit dwellings in
exchange for 12,750,000 shares of TVG Class B Common Stock (the
"Liberty Transaction"). This transaction was accounted for as a
combination of entities under common control, similar to a pooling of
interests, from January 25, 1996, the date TVG and the Liberty
businesses were first under common control. Accordingly, the financial
statements have been restated to report the combined financial
position, results of operations and cash flows of the Company and the
businesses acquired from Liberty for periods subsequent to January 25,
1996.
Also on March 1, 1999, immediately after closing the Liberty
Transaction, the Company acquired from a subsidiary of News Corp. the
stock of certain corporations (the "TV Guide Transaction") which
publish TV Guide Magazine and other printed television program listings
guides and distribute, through the Internet, an entertainment service
known as TV Guide Online (formerly TV Guide Entertainment Network or
TVGEN). A subsidiary of News Corp. received 22,503,412 shares of TVG
Class A Common Stock, 37,496,588 shares of TVG Class B Common Stock and
$800 million in cash as consideration. In addition, the subsidiary of
News Corp. acquired 6,534,108 additional shares of TVG Class A Common
Stock for approximately $131 million in cash to equalize the TVG Class
A Common Stock ownership of Liberty and its affiliates and News Corp.
and its affiliates. The $800 million cash consideration portion of the
transaction was funded from existing cash balances, the issuance of
$400 million in 8 1/8% senior subordinated notes due 2009, bank
borrowings of approximately $185 million drawn under a new bank credit
facility and proceeds from the issuance of equity to a subsidiary of
News Corp. The TV Guide Transaction was accounted for as a purchase.
Accordingly, the consolidated financial statements include the results
of operations of the TV Guide businesses from March 1, 1999.
The purchase price for the TV Guide Transaction was $1.9 billion,
consisting of the shares of TVG Class A and Class B Common Stock issued
to a subsidiary of News Corp. at $18.63 per share, the average market
price of the Company's common stock for a few days before and after the
agreement on the TV Guide Transaction was reached and announced, $800
million in cash and certain transaction costs. The purchase price was
allocated to identifiable tangible and intangible assets and
liabilities as follows with the excess of the purchase price over such
identifiable assets and liabilities assigned to goodwill (in
thousands).
Assets:
Current assets $ 193,012
Property, plant and equipment 16,000
Intangible assets 3,035,589
Other assets 3,676
----------
3,248,277
Liabilities:
Current liabilities 358,334
Deferred tax liability 967,000
Other long-term liabilities 412
----------
Net purchase price $1,922,531
==========
Intangible assets are comprised of the following amounts and
lives (in thousands):
Acquired subscriber accounts $ 222,000 1-15 years
Trademarks $ 650,000 40 years
Publishing rights $1,745,000 40 years
Goodwill $ 418,589 40 years
The allocation of the purchase price is based on preliminary
information. The Company is in the process of obtaining an independent
evaluation of the assets acquired and the results of the final
evaluation could differ significantly from the amounts used in the
March 31, 1999 consolidated financial statements. Accordingly, the
allocation of the purchase price and the lives of the intangible
assets, which are based on preliminary information, may differ from the
final purchase price allocation and the final lives assigned to the
assets.
Upon closing of the above transactions, the Company's name was
changed from United Video Satellite Group, Inc. to TV Guide, Inc.
6
<PAGE>
Turner Vision Acquisition
Effective February 1, 1998, Turner Vision, Inc. ("Turner Vision")
contributed its retail C-band home satellite dish business' assets,
obligations and operations to SNG in return for an approximate 20%
interest in SNG. The Company continues to manage SNG and SNG's
operating results continue to be consolidated with those of the
Company.
The contribution was accounted for as a purchase of Turner
Vision's business by SNG. Assets contributed by Turner Vision to SNG
totaled $4.2 million and consisted primarily of $2.5 million of cash
and $1.7 million of accounts receivable. These assets were subject to
liabilities of $27.9 million, consisting primarily of $21.6 million of
customer prepayments and $6.3 million of accounts payable and accrued
liabilities. The purchase price of Turner Vision's business exceeded
the fair value of the underlying net assets acquired by approximately
$61.6 million, which amount was assigned to goodwill and is being
amortized over ten years. As a result of the transaction, the Company
recognized a gain of $39.2 million in the first quarter of 1998.
ODS Technologies Acquisition
On July 13, 1998, the Company increased its ownership interest in
ODS Technologies, LP ("ODS"), a privately held interactive gaming
company, to 98% by purchasing an 88% interest in ODS for approximately
$28.4 million in cash. The purchase price of the Company's ownership
interest in ODS exceeded the fair value of ODS's net assets acquired by
approximately $28.2 million, which was assigned to patents and is being
amortized over 15 years.
The following pro forma financial information reflects the
Company's results of operations for the three months ended March 31,
1999 and 1998 as though the businesses acquired in the TV Guide
Transaction, the retail operations of Turner Vision and ODS had been
acquired as of January 1, 1998, excluding the gain recognized by the
Company as a result of the Turner Vision transaction (in thousands,
unaudited):
1999 1998
---- ----
Pro forma:
Revenues $320,699 $308,464
Net income 14,790 11,755
Net income per share:
Basic $ 0.10 $ 0.08
Diluted 0.10 0.08
7
<PAGE>
3. Senior Subordinated Notes and Revolving Credit Facility
On March 1, 1999, the Company issued $400 million in 8 1/8% senior
subordinated notes due 2009 and entered into a $300 million six-year
revolving credit facility and a $300 million 364-day revolving credit
facility with a group of banks. Proceeds from the issuance of the
senior subordinated notes and borrowings of approximately $185 million
under the six-year revolving credit facility were used to fund a
portion of the TV Guide Transaction cash consideration. Borrowings
outstanding under the 364-day revolving credit facility convert to a
five-year term loan at maturity. Borrowings under the credit facilities
bear interest either at the bank's prime rate or LIBOR, both plus a
margin based on a sliding scale tied to the Company's leverage ratio,
as defined in the facility. For the first year of the credit
facilities, the LIBOR margin is fixed at a minimum of 1.25%. The credit
facilities are subject to prepayment or reduction at any time without
penalty. As of March 31, 1999, the Company had available borrowing
capacity under the six-year revolving credit facility and 364-day
revolving credit facility of approximately $105 million and $300
million, respectively.
The indenture for the notes and the Company's bank credit
facilities impose certain operating and financial restrictions on the
Company. These restrictions include the designation of certain of the
Company's subsidiaries as "restricted" for certain financing and
operating matters which may significantly limit the ability of the
Company to execute transactions, including the transfer of cash,
between subsidiaries in the restricted group and subsidiaries in the
unrestricted group. The subsidiaries in the unrestricted group are not
subject to certain covenants in the indenture for the notes and may
incur indebtedness, grant liens on their assets and sell all or a
portion of their assets, among other things, without satisfying the
restrictions in the indenture.
8
<PAGE>
4. Contingencies
On October 8, 1993, the Company received correspondence from
StarSight Telecast, Inc. ("StarSight"), now a wholly owned subsidiary
of Gemstar Development Corporation ("Gemstar"), bringing to the
Company's attention the existence of three patents and various patent
applications containing claims relating to certain functions performed
by interactive television program schedule services, alleging that the
Company is or may be infringing StarSight issued patents, including
U.S. Patent No. 4,706,121 and then-pending Reexamination Certificate B1
4,706,121 (collectively, the "121 Patent"), and claims of its pending
patent applications, and threatening the Company with enforcement
litigation. On October 19, 1993, the Company filed an action in the
U.S. District Court for the Northern District of Oklahoma seeking a
Declaratory Judgment to the effect that the services offered by the
Company do not infringe the three United States patents issued to
StarSight, including the 121 Patent. On October 22, 1993, StarSight
filed a separate action in the United States District Court for the
Northern District of California, alleging that certain of the Company's
interactive services infringe the 121 Patent. This action was dismissed
by StarSight on May 25, 1994. On July 6, 1994, the Company filed an
Amended Complaint seeking Declaratory Judgment that it did not infringe
the three StarSight patents listed in the original Complaint as well as
five other patents licensed to StarSight. On July 19, 1994, StarSight
refiled its infringement claim against the Company as a counter-claim
to the Company's Amended Complaint seeking damages and injunctive
relief. On February 15, 1995, the Company filed an Amended and
Supplemental Complaint which averred that the 121 Patent is invalid and
not infringed, that the 121 Patent is unenforceable because of
StarSight's inequitable conduct in obtaining the patent and its misuse
of the patent, and that StarSight violated the antitrust laws. The
Company also sought a Declaratory Judgment that the other two patents
identified in the original complaint and the five patents licensed to
StarSight are not infringed by the Company. On March 20, 1995,
StarSight filed an Answer to the Amended and Supplemental Complaint,
reasserting its charge of infringement of the 121 Patent. In December
1995, StarSight moved to file an amended answer to assert infringement
of two additional patents. The Court subsequently granted StarSight's
motion, but stayed all proceedings as to those two patents. Trial of
validity and inequitable conduct unenforceability of the 121 Patent,
and alleged infringement by the Prevue Express product of the 121
Patent, commenced May 8, 1996. Proceedings on all issues other than
liability with respect to the 121 Patent had been stayed. Over the
course of the subsequent two and one-half years, the Court heard
approximately 20 days of testimony, which concluded on July 7, 1998.
The trial was continued at various times at the parties' request to
allow the parties to assess the litigation and consider settlement
possibilities. Although the parties announced a settlement as part of a
business deal on January 20, 1998, it was never finalized, and no
settlement was reached. The parties submitted post-trial papers in
September and October 1998, and presented closing arguments to the
Court on November 12, 1998. The case has been submitted to the Court
and the parties are awaiting a decision on the issues of infringement
and validity of the 121 Patent. Shortly before the closing arguments,
on November 9, 1998, StarSight moved to dismiss the case asserting that
the Company had abandoned the Prevue Express product at issue in the
case and that the Court therefore lacked subject matter jurisdiction
over the matter. The Company opposed the motion on November 12, 1998.
The Court has not yet issued a decision on that motion. On February 19,
1999 the District Court entered Partial Findings of Fact and
Conclusions of Law determining that the 121 Patent is not unenforceable
by reason of inequitable conduct. The Court referred the case to a
Magistrate Judge for settlement conference purposes prior to the Court
entering additional findings of fact and conclusions of law with
respect to the remaining issues tried. There can be no assurance that
this litigation can be resolved without material adverse effect on the
business prospects of the Company and its subsidiaries and the future
financial position or results of the Company and its subsidiaries. The
Company has not provided for any potential loss as a result of this
litigation.
9
<PAGE>
On July 24, 1998, Gemstar and StarSight filed an action in the
U.S. District Court for the Northern District of California asserting
infringement by the Company's TV Guide Networks, Inc. subsidiary
(formerly Prevue Networks, Inc.) of the 121 Patent and U.S. Patent No.
4,751,578 (the "578 patent") seeking damages and injunctive relief. The
original Complaint did not specify a product accused of infringement.
On September 30, 1998, Gemstar and StarSight filed an Amended Complaint
adding SuperGuide Corporation ("SuperGuide") as a plaintiff, Tele-
Communications, Inc. ("TCI") as a defendant, and specifying TV Guide
Interactive as the allegedly infringing product. TCI Communications,
Inc. was subsequently substituted for TCI. TV Guide Networks answered
the Amended Complaint on October 15, 1998, asserting the defenses of
non-infringement, invalidity and estoppel with respect to both the 121
and 578 Patents, and inequitable conduct unenforceability with respect
to the 121 Patent. In addition, TV Guide Networks asserted that
StarSight had violated the antitrust laws. On August 7, 1998, TV Guide
Networks moved to transfer this action to the U.S. District Court for
the Northern District of Oklahoma. On February 2, 1999, the California
Court granted TV Guide Networks' motion to transfer. On December 23,
1998, Gemstar, StarSight and SuperGuide filed a motion before the
Judicial Panel on Multidistrict Litigation ("JPML") to consolidate and
transfer for pretrial proceedings, this action and four other patent
infringement lawsuits Gemstar and its affiliated companies have pending
with manufacturers of cable television set-top boxes. In their motion,
Gemstar and its affiliates suggested either the Central or Northern
District of California as the appropriate venue for pretrial
proceedings. TV Guide Networks opposed the motion for consolidation. A
hearing on the motion to consolidate and transfer took place on March
26, 1999. On January 22, 1999, Gemstar, StarSight and SuperGuide filed
a motion requesting a stay of the action against TV Guide Networks and
TCI Communications, Inc. pending a decision by the JPML on their motion
to consolidate and transfer. On February 2, 1999, the Court deemed the
motion to stay to be moot in light of its decision to transfer the
action on TV Guide Networks' motion to the Northern District of
Oklahoma. On March 22, 1999, the transferred case in the Northern
District of Oklahoma was referred to a Magistrate Judge for settlement
conference purposes. On April 26, 1999, the JPML denied the motion to
transfer the action pending in the Northern District of Oklahoma to
another district court for pretrial proceedings. The JPML also ordered
that the cases against the manufacturers of cable set-top boxes be
transferred to the Northern District of Georgia for pretrial
proceedings. There can be no assurance that this litigation can be
resolved without material adverse effect on the business prospects of
the Company and its subsidiaries and the future financial position or
results of the Company and its subsidiaries. The Company has not
provided for any potential loss as a result of this litigation.
10
<PAGE>
The State of Illinois (the "State") has asserted that certain
uplinking services performed by the Company at its Chicago teleport are
subject to the State's Telecommunications Excise Tax Act. The State
contends that the Company should have collected approximately $1.5
million in excise taxes from its customers during the period August
1985 through June 1994 and remitted such receipts to the State. In
addition to that amount, the State has assessed penalties and interest
of approximately $900,000. The Company, after consulting with outside
counsel, strongly disagrees with the State's position. The Company has
provided a reserve of $275,000 for certain matters associated with the
State's claim. No provision has been made in the Company's financial
statements for the remainder of the State's claim and the Company has
not collected from its customers or remitted their tax (which would
aggregate approximately $300,000 annually) for periods subsequent to
June 1994. However, pursuant to the State's Protest Money Act which
stops further accrual of interest during the appeals process, the
Company has paid into the Illinois Court $2.4 million, which represents
the amount of the State's claim applicable to the period August 1985
through June 1994. Also pursuant to the State's Protest Money Act, the
Company filed a Verified Complaint for Injunctive and Other Relief in
the Cook County Chancery Court on February 28, 1995, and an Amended
Verified Complaint on October 6, 1995. The Company filed a motion for
summary judgment on August 29, 1996, asking the Court for summary
disposition of the case. Pursuant to this motion, the Company received
a partial refund of $123,000 on February 10, 1997. The remaining issues
raised by the motion are still pending. If the Company's motion is not
granted, it is anticipated that a trial date may be scheduled. While
the Company believes that this matter will not have a material adverse
effect on its business, financial position or results of operations,
the ultimate resolution, which may occur within one year, could result
in a loss of up to $4.2 million.
On June 2, 1997, a lawsuit was filed in the United States District
Court for the District of Connecticut against the Company by one of its
mass marketers who claims, among other matters, additional amounts owed
in connection with its past and current business relationship with the
Company. Discussions to resolve these matters are ongoing. On June 11,
1997, the Court denied the marketer's motion for a temporary
restraining order, and on October 10, 1997, denied the marketer's
motion for a preliminary injunction. The marketer appealed the latter
ruling to the United States Court of Appeals for the Second Circuit,
but later filed a Motion for Voluntary Dismissal which was granted. The
Company terminated its relationship with that marketer. The Company has
evaluated these claims and believes them to be without merit. The
Company believes that this matter will not have a material adverse
effect on its financial position or results of operations.
The Company is also a party to certain other claims, actions and
proceedings incidental to its business, none of which is expected to
have a material adverse effect on the business, financial position or
results of operations of the Company.
11
<PAGE>
5. Earnings Per Share
The following information reconciles the number of shares used to
compute basic earnings per share to those used to compute diluted
earnings per share (in thousands, except per share amounts):
1999 1998
-------------------- --------------------
Per Share Per Share
Amount Amount
--------- ---------
Net income $12,761 $38,961
======= =======
Weighted average
number of shares
of common stock
outstanding 107,605 $0.12 86,236 $0.45
===== =====
Effect of dilutive
securities -
stock options 1,445 1,070
------- -------
Weighted average
number of shares
of common stock
and dilutive
potential common
shares 109,050 $0.12 87,306 $0.45
======= ===== ====== =====
12
<PAGE>
6. Segment Information
Segment information has been prepared in accordance with Statement
No. 131, "Disclosures about Segments of an Enterprise and Related
Information". The Company categorizes its businesses into three groups
for internal reporting purposes: TV Guide Magazine Group, TV Guide
Entertainment Group and United Video Group. The Company has four
reportable segments as defined by Statement 131: print program listings
guide services (TV Guide Magazine Group); electronic program promotion
and guide services (TV Guide Entertainment Group); and home satellite
dish services (SNG) and satellite distribution of video entertainment
services (UVTV), both of which are included in the United Video Group.
TV Guide Magazine Group distributes TV Guide magazine to households and
newsstands and provides customized monthly program guides for cable and
satellite operators. TV Guide Entertainment Group markets electronic
programming guide and promotion channels and services to cable
television systems and other multi-channel video programming
distributors. United Video Group includes SNG, which markets and
distributes programming to the C-band direct-to-home satellite dish
subscriber market as well as other telemarketing services, and UVTV,
which markets and distributes to programming distributors certain video
and audio services. United Video Group also operates businesses that
provide software development and systems integration services and
satellite transmission services for private networks and holds certain
other investments.
The Company's reportable segments are strategic business units
that offer different products and services. The reportable segments are
measured based on earnings before interest, income taxes, depreciation
and amortization including allocated corporate expenses (operating
income before depreciation and amortization). The Company accounts for
inter-segment sales as if the sales were to third parties at market
prices.
Segment information as of March 31, 1999 and for each of the three-
month periods ended March 31, 1999 and 1998 is as follows:
<TABLE>
<CAPTION>
TV TV Guide United United United
Guide Enter- Video Video Video
Magazine tainment Group- Group- Group-
Group Group SNG UVTV Other Eliminations Consolidated
<S> <C> <C> <C> <C> <C> <C> <C>
1999
Revenues from external
customers:
Satellite-delivered
programming services $ -- $ 9,675 $101,144 $ 15,215 $ 4,964 $ -- $ 130,998
Magazine subscription
and newsstand sales 33,572 -- -- -- -- -- 33,572
Advertising sales 14,258 11,533 -- -- -- -- 25,791
Systems integration
services -- -- -- -- 9,875 -- 9,875
Other 1,527 -- -- -- 79 -- 1,606
Intersegment revenues -- -- -- 6,561 -- (6,561) --
---------- -------- -------- -------- ---------- ----------- ----------
Total revenues 49,357 21,208 101,144 21,776 14,918 (6,561) 201,842
Operating expenses,
excluding
depreciation
and amortization 34,631 18,330 81,452 10,018 16,891 (6,561) 154,761
---------- -------- -------- -------- ---------- ----------- ----------
Earnings before
interest, income
taxes,
depreciation and
amortization $ 14,726 $ 2,878 $ 19,692 $ 11,758 $ (1,973) $ -- 47,081
========== ======== ========= ========= ========== ===========
Depreciation and
amortization (15,078)
Interest expense (6,035)
Other income, net 307
----------
Income before income
taxes and minority
interest $ 26,275
==========
Segment assets $3,253,459 $ 64,576 $ 152,902 $ 104,841 $ 171,632 $ (123,438) $3,623,972
========== ======== ========= ========= ========== =========== ==========
1998
Revenues from external
customers:
Satellite-delivered
programming services $ -- $ 8,340 $ 96,286 $ 14,970 $ 7,681 $ -- $ 127,277
Advertising sales -- 9,127 -- -- -- -- 9,127
Systems integration
services -- -- -- -- 9,564 -- 9,564
Other -- -- -- -- 196 -- 196
Intersegment revenues -- -- -- 6,044 -- (6,044) --
---------- ------- -------- -------- ---------- ----------- ----------
Total revenues -- 17,467 96,286 21,014 17,441 (6,044) 146,164
Operating expenses,
excluding
depreciation
and amortization -- 13,242 85,895 10,112 14,213 (6,044) 117,418
---------- ------- -------- -------- ---------- ----------- ----------
Earnings before
interest, income
taxes,
depreciation and
amortization $ -- $ 4,225 $ 10,391 $ 10,902 $ 3,228 $ -- 28,746
========== ======== ========= ========= ========== ===========
Depreciation and
amortization (7,078)
Gain on issuance of
equity by subsidiary 39,225
Interest expense (491)
Other income, net 1,551
----------
Income before income
taxes and minority
interest $ 61,953
==========
</TABLE>
Revenue from other non-reportable operating segments primarily
includes revenue derived from system integration and software
development services and from satellite transmission services.
Eliminations include inter-segment revenues and expenses and inter-
segment payables and receivables.
13
<PAGE>
7. Comprehensive Income
Comprehensive income comprises net income plus unrealized holding
gains and losses on available-for-sale securities, net of related tax
effects. Comprehensive income for the three months ended March 31, 1999
and 1998 is $12.8 million and $39.4 million, respectively.
8. Supplemental Guarantor Information
In connection with the TV Guide Transaction, TVG issued $400
million in aggregate principal amount of its senior subordinated notes
due 2009, which are not callable until 2004. A group of TVG's
subsidiaries (the "Guarantors") guarantee the senior subordinated
indebtedness. Supplemental condensed combining financial information of
TVG, the Guarantors and the remainder of TVG's consolidated group (the
"Non-Guarantors") is presented below.
Investments in the Non-Guarantors by their parent companies that
are part of TVG and the Guarantors are presented under the equity
method of accounting in the combining financial information. The
principal elimination entries eliminate intercompany sales and
purchases of video products, intercompany interest income and expense,
equity in earnings of subsidiaries and investments in and amounts due
to and from subsidiaries.
Because of the factual basis underlying the obligations created
pursuant to a senior secured credit facility and other obligations that
may constitute senior indebtedness of the Guarantors of the senior
subordinated notes, it is not possible to predict how a court in
bankruptcy would accord priorities among the obligations of the Company
and its subsidiaries.
14
<PAGE>
<TABLE>
<CAPTION>
SUPPLEMENTAL CONDENSED COMBINING BALANCE SHEETS
As of March 31, 1999
(In thousands)
The Guarantor Non-Guarantor
Company Subsidiaries Subsidiaries Eliminations Consolidated
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents $ -- $ 12,789 $ 85,319 $ -- $ 98,108
Marketable securities,
at fair value -- 203 77 -- 280
Accounts receivable,
net of allowance
for doubtful
accounts -- 196,140 34,275 -- 230,415
Accounts and notes
receivable from
affiliates 5,731 114,203 3,380 (123,314) --
Other current assets -- 48,314 8,216 -- 56,530
---------- ---------- -------- ----------- ----------
Total current
assets 5,731 371,649 131,267 (123,314) 385,333
Property, plant and
equipment, at cost,
net of accumulated
depreciation and
amortization -- 48,127 12,428 -- 60,555
Intangible assets, net
of accumulated
amortization -- 3,037,021 113,128 -- 3,150,149
Investment in
subsidiaries, at
equity 2,147,013 -- 24 (2,147,037) --
Other assets, net of
accumulated
amortization 14,008 12,853 1,095 (21) 27,935
---------- ---------- -------- ----------- ----------
Total assets $2,166,752 $3,469,650 $257,942 $(2,270,372) $3,623,972
========== ========== ======== =========== ==========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ -- $ 59,913 $ 1,695 $ -- $ 61,608
Accounts and notes
payable to
affiliates 93,186 9,111 21,017 (123,314) --
Accrued liabilities 5,588 71,337 48,683 -- 125,608
Note payable and
current portion
of capital lease
obligations and
long-term debt -- 3,811 983 (21) 4,773
Customer prepayments -- 256,402 102,379 -- 358,781
---------- ---------- -------- ----------- ----------
Total current
liabilities 98,774 400,574 174,757 (123,335) 550,770
Deferred tax
liability and other
long-term
liabilities -- 971,745 13,200 -- 985,145
Capital lease
obligations and
long-term debt 595,300 597,329 -- (585,300) 607,329
Minority interest -- -- 4,311 3,739 8,050
Stockholders' equity:
Common stock 1,520 34,299 214 (34,513) 1,520
Other stockholders'
equity 1,471,158 1,465,703 65,260 (1,530,963) 1,471,158
---------- ---------- -------- ----------- ----------
Total stock-
holders' equity 1,472,678 1,500,002 65,474 (1,565,476) 1,472,678
---------- ---------- -------- ----------- ----------
Total liabilities and
stockholders' equity $2,166,752 $3,469,650 $257,942 $(2,270,372) $3,623,972
========== ========== ======== =========== ==========
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
SUPPLEMENTAL CONDENSED COMBINING STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 1999
(In thousands)
The Guarantor Non-Guarantor
Company Subsidiaries Subsidiaries Eliminations Consolidated
<S> <C> <C> <C> <C> <C>
Revenues:
Satellite-delivered
programming services $ -- $ 31,115 $106,444 $ (6,561) $130,998
Magazine subscription
and newsstand sales -- 33,572 -- -- 33,572
Advertising sales -- 23,537 2,254 -- 25,791
Systems integration
services -- -- 9,875 -- 9,875
Other -- 1,527 79 -- 1,606
------- -------- -------- -------- --------
-- 89,751 118,652 $ (6,561) 201,842
Operating expenses:
Programming, printing,
distribution and
delivery -- 35,810 73,855 (6,561) 103,104
Selling, general and
administrative -- 25,291 26,366 -- 51,657
Depreciation and
amortization -- 10,342 4,736 -- 15,078
------- -------- -------- -------- --------
-- 71,443 104,957 (6,561) 169,839
------- -------- -------- -------- --------
Operating income -- 18,308 13,695 -- 32,003
Interest expense (5,731) (6,014) (21) 5,731 (6,035)
Other income, net 18,492 180 127 (18,492) 307
------- -------- -------- -------- --------
Income before income
taxes and minority
interest 12,761 12,474 13,801 (12,761) 26,275
Provision for income
taxes -- (3,975) (5,803) -- (9,778)
Minority interest in
(earnings) losses -- -- (3,936) 200 (3,736)
------- -------- -------- -------- --------
Net income $12,761 $ 8,499 $ 4,062 $(12,561) $ 12,761
======= ======== ======== ======== ========
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
SUPPLEMENTAL CONDENSED COMBINING STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 1998
(In thousands)
The Guarantor Non-Guarantor
Company Subsidiaries Subsidiaries Eliminations Consolidated
<S> <C> <C> <C> <C> <C>
Revenues:
Satellite-delivered
programming services $ -- $ 27,132 $106,189 $ (6,044) $127,277
Advertising sales -- 9,127 -- -- 9,127
Systems integration
services -- -- 9,564 -- 9,564
Other -- -- 196 -- 196
------- -------- -------- -------- --------
-- 36,259 115,949 (6,044) 146,164
Operating expenses:
Programming,
distribution and
delivery -- 8,558 76,597 (6,044) 79,111
Selling, general and
administrative -- 13,990 24,317 -- 38,307
Depreciation and
amortization -- 2,521 4,557 -- 7,078
------- -------- -------- -------- --------
-- 25,069 105,471 (6,044) 124,496
------- -------- -------- -------- --------
Operating income -- 11,190 10,478 -- 21,668
Gain on issuance of
equity by
subsidiary -- -- 39,225 -- 39,225
Interest expense -- (344) (147) -- (491)
Other income, net 38,961 835 716 (38,961) 1,551
------- -------- -------- -------- --------
Income before income
taxes and minority
interest 38,961 11,681 50,272 (38,961) 61,953
Provision for income
taxes -- (4,056) (18,969) -- (23,025)
Minority interest in
losses -- -- -- 33 33
------- -------- -------- -------- --------
Net income $38,961 $ 7,625 $ 31,303 $(38,928) $ 38,961
======= ======== ======== ======== ========
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
SUPPLEMENTAL CONDENSED COMBINING STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1999
(In thousands)
The Guarantor Non-Guarantor
Company Subsidiaries Subsidiaries Eliminations Consolidated
<S> <C> <C> <C> <C> <C>
Net cash provided
by (used in)
operating activities $ -- $ (6,471) $ 32,597 $ -- $ 26,126
Investing activities:
Investments and
acquisitions, net
of cash acquired (800,000) (300) (3,225) -- (803,525)
Capital expenditures -- (2,457) (1,279) 3 (3,733)
Purchases of market-
able securities -- -- (348) -- (348)
Sales and maturities
of marketable
securities -- -- 5,915 -- 5,915
Other -- (239) (523) (19) (781)
--------- -------- -------- -------- ---------
Net cash provided by
(used in) investing
activities (800,000) (2,996) 540 (16) (802,472)
Financing activities:
Issuance of senior
subordinated notes 400,000 -- -- -- 400,000
Borrowings under
bank credit
facilities 195,300 -- -- -- 195,300
Debt issuance
costs (14,157) -- -- -- (14,157)
Repayment of note
payable, capital
lease obligations
and long-term
debt -- (913) (771) 16 (1,668)
Common stock
transactions, net 131,236 -- -- -- 131,236
Contributions from
Liberty-Netlink
Wholesale
Division -- 6,476 1,495 -- 7,971
Intercompany
transfers 87,621 (87,455) (166) -- --
Other -- -- 128 -- 128
--------- -------- -------- -------- ---------
Net cash provided by
(used in) financing
activities 800,000 (81,892) 686 16 718,810
--------- -------- -------- -------- ---------
Net increase (decrease)
in cash and cash
equivalents -- (91,359) 33,823 -- (57,536)
Cash and cash
equivalents at
beginning of
period -- 104,148 51,496 -- 155,644
--------- -------- -------- -------- ---------
Cash and cash
equivalents at
end of period $ -- $ 12,789 $ 85,319 -- $ 98,108
========= ======== ======== ======== =========
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
SUPPLEMENTAL CONDENSED COMBINING STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1998
(In thousands)
The Guarantor Non-Guarantor
Company Subsidiaries Subsidiaries Eliminations Consolidated
<S> <C> <C> <C> <C> <C>
Net cash provided by
operating activities $ -- $ 26,664 $ 18,676 $ (40) $ 45,300
Investing activities:
Capital expenditures -- (668) (588) 26 (1,230)
Purchases of market-
able securities -- (62,533) (1,224) -- (63,757)
Sales and maturities
of marketable
securities -- 64,080 1,919 -- 65,999
Other -- (445) (196) (37) (678)
--------- -------- -------- ------ ---------
Net cash provided by
(used in) investing
activities -- 434 (89) (11) 334
Financing activities:
Repayment of note
payable, capital
lease obligations
and long-term debt -- (852) (2,043) 11 (2,884)
Common stock
transactions, net (6,555) -- -- -- (6,555)
Distributions to
Liberty-Netlink
Wholesale
Division -- (6,462) (1,873) -- (8,335)
Distributions to
minority
interests -- -- (408) -- (408)
Intercompany
transfers 6,555 (5,368) (1,227) 40 --
Other -- -- 11 -- 11
--------- -------- -------- ------ ---------
Net cash provided by
(used in) financing
activities -- (12,682) (5,540) 51 (18,171)
--------- -------- -------- ------ ---------
Net increase in cash
and cash
equivalents -- 14,416 13,047 -- 27,463
Cash and cash
equivalents
at beginning
of period -- 26,124 6,432 -- 32,556
--------- -------- -------- ------ ---------
Cash and cash
equivalents at
end of period $ -- $ 40,540 $ 19,479 $ -- $ 60,019
========= ======== ======== ====== =========
</TABLE>
19
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Company categorizes its businesses into three groups: TV Guide
Magazine Group, which distributes TV Guide magazine to households and
newsstands and provides customized monthly program guides for cable and
satellite operators; TV Guide Entertainment Group, which markets
electronic programming guide and promotion channels and services to
cable television systems and other multi-channel video programming
distributors; and United Video Group, which markets and distributes
programming to the C-band direct-to-home satellite dish subscriber
market (SNG), markets and distributes to programming distributors
certain video and audio services (UVTV), provides software development
and system integration services and satellite transmission services for
private networks and holds certain other investments. The following
table sets forth certain unaudited financial information for the
Company and the businesses operated by it during the three months ended
March 31, 1999 and 1998. Management's Discussion and Analysis of
Financial Condition and Results of Operations contained in this report
should be read in conjunction with Management's Discussion and Analysis
of Financial Condition and Results of Operations included in the
Company's Annual Report on Form 10-K for the year ended December 31,
1998.
Consolidated Guarantor Group (5)
------------ -------------------
Three Months Ended March 31,
1999 1998 1999 1998
------------------ ------------------
Amount Amount Amount Amount
------ ------ ------ ------
(in thousands)
Revenues:
TV Guide Magazine
Group $ 49,357 $ -- $ 49,357 $ --
TV Guide Entertainment
Group (1) 21,208 17,467 18,618 15,245
United Video Group:
SNG (2) 101,144 96,286 -- --
UVTV 21,776 21,014 21,776 21,014
Other 14,918 17,442 -- --
-------- -------- -------- --------
137,838 134,742 21,776 21,014
-------- -------- -------- --------
Eliminations (6,561) (6,045) -- --
-------- -------- -------- --------
Total $201,842 $146,164 $ 89,751 $ 36,259
======== ======== ======== ========
Operating income (loss):
TV Guide Magazine
Group $ 7,188 $ -- $ 7,188 $ --
TV Guide Entertainment
Group (1) 122 1,793 578 2,014
United Video Group:
SNG (2) 17,464 7,704 -- --
UVTV 11,124 10,264 11,124 10,264
Other (3,895) 1,907 (582) (1,088)
-------- -------- -------- --------
24,693 19,875 10,542 9,176
-------- -------- -------- --------
Total $ 32,003 $ 21,668 $ 18,308 $ 11,190
======== ======== ======== ========
Consolidated depreciation
and amortization $ 15,078 $ 7,078 $ 10,342 $ 2,521
Consolidated capital
expenditures 3,733 1,230 2,457 668
Net cash provided by
(used in):
Operating activities 26,126 45,300 (6,471) 26,664
Investing activities (802,472) 334 (802,996) 434
Financing activities 718,810 (18,171) 718,108 (12,682)
Other data:
EBITDA (3) $ 47,081 $ 28,746 $ 28,650 $ 13,711
Ratio of earnings to
fixed charges (4) 4.47 34.25
20
<PAGE>
(1) The revenues and operating income for TV Guide Entertainment Group
(formerly Prevue Networks) include TV Guide Channel, TV Guide
Interactive, TV Guide International, Sneak Prevue, TV Guide Online
and other electronic guide services offered domestically and
internationally.
(2) Beginning February 1, 1998, SNG's operating results also include
the retail C-band operations of Turner Vision, Inc.
(3) EBITDA means operating income before depreciation and
amortization. EBITDA is presented supplementally as the Company
believes it is a widely used financial indicator of a leveraged
company's ability to service and incur indebtedness. The
Company believes EBITDA is a standard measure commonly reported
and widely used by analysts, investors and others associated
with the media and entertainment industry. However, EBITDA does
not take into account substantial costs of doing business, such
as income taxes and interest expense. While many in the financial
community consider EBITDA to be an important measure of
comparative operating performance, it should be considered in
addition to, but not as a substitute for, operating income, net
income, cash flow provided by operating activities and other
measures of financial performance prepared in accordance with GAAP
that are presented in the financial statements. Additionally, the
Company's calculation of EBITDA may be different than the
calculation used by other companies and therefore, comparability
may be affected.
(4) For the ratio of earnings to fixed charges calculations, earnings
available for fixed charges consists of earnings before income
taxes and minority interests in earnings of consolidated
subsidiaries plus fixed charges. Fixed charges consist of interest
on debt and that portion of rental expense the Company believes to
be representative of interest.
(5) Represents the combined results of the Company and its restricted
subsidiaries that guarantee the 8 1/8% senior subordinated notes.
The Company has one partially owned domestic subsidiary and one
partially owned foreign subsidiary that are restricted
subsidiaries under the indenture but are not guarantors of the
notes.
21
<PAGE>
Results of Operations
Consolidated
Revenues for the three months ended March 31, 1999 were $201.8
million, an increase of $55.7 million, or 38%, over the same period in
1998. The increase in revenues for the quarter was primarily due to
$49.4 million of additional revenues attributable to TV Guide magazine,
which was acquired by the Company on March 1, 1999, $9.1 million of
additional revenues attributable to Turner Vision's retail C-band
operations which were combined with those of Superstar's retail C-band
operations effective February 1, 1998 and increased service fee and
advertising revenues by the TV Guide Entertainment Group, partially
offset by other revenue declines.
Operating expenses, excluding depreciation and amortization, were
$154.8 million for the three months ended March 31, 1999, an increase
of $37.3 million, or 32%, when compared to the same period in 1998.
Operating expenses, excluding depreciation and amortization, increased
primarily due to increased operating costs of $34.6 million
attributable to TV Guide magazine, $5.8 million attributable to Turner
Vision, costs incurred to develop and launch the new look of TV Guide
Channel and increased personnel costs primarily attributable to the
growth in the TV Guide Entertainment Group, partially offset by other
expense declines.
Depreciation and amortization during the first quarter of 1999 was
$15.1 million, an increase of $8.0 million, or 113%, over the same
period in 1998. The increase in depreciation and amortization in 1999
was primarily a result of amortization of intangible assets and other
depreciation resulting from the acquisitions of TV Guide magazine and
ODS Technologies coupled with the acquisition of equipment to support
the various TV Guide Entertainment Group products.
In 1998, the Company recognized a gain of $39.2 million associated
with the acquisition of Turner Vision. (See Note 2 of Notes to
Condensed Consolidated Financial Statements).
Interest expense during the first quarter of 1999 was $6.0
million, an increase of $5.5 million over the same period in 1998. The
increase in interest expense is attributable to increased debt levels
resulting from the issuance of $400 million of senior subordinated
notes and $185 million of bank debt to fund a portion of the TV Guide
Transaction.
The Company's effective tax rate, computed as the provision for
income taxes divided by income before income taxes and minority
interest, less that portion of minority interest in earnings
attributable to entities not subject to income taxes, was 43% for the
three-month period ended March 31, 1999 compared to 38% for the same
period in 1998. The increase in the effective rate is due to the
increase in non-deductible goodwill amortization as a result of the TV
Guide and ODS Technologies acquisitions.
Minority interest in earnings for the quarter ended March 31, 1999
of $3.7 million represents that portion of earnings attributable to the
minority ownership in SNG, SSDS, Info Media and Sneak Prevue LLC.
22
<PAGE>
TV Guide Magazine Group
The following table sets forth certain financial information for
TV Guide magazine for the three months ended March 31, 1999 and 1998:
Three Months Ended March 31,
1999 1998
---- ----
(in thousands)
Revenues $168,214 $154,363
Operating expenses 125,542 116,294
Depreciation 1,812 1,930
-------- --------
Operating income before
amortization $ 40,860 $ 36,139
======== ========
Operating margin percentage
(before amortization) 24% 23%
The results of operations of TV Guide magazine have been
consolidated with the results of operations of the Company for
reporting purposes subsequent to March 1, 1999, the date the Company
acquired TV Guide magazine. The above table and following discussion
are based on financial information of TV Guide magazine, both prior to
and subsequent to its March 1, 1999 acquisition date and do not include
the amortization of intangible assets resulting from the acquisition or
that was reflected in its historical financial statements.
TV Guide magazine's revenues for the first three months of 1999
were $168.2 million, an increase of $13.9 million, or 9%, over the same
period in 1998. The increase in revenues during the first quarter of
1999 was primarily due to $11.0 million of additional revenues
attributable to the monthly cable guide business acquired as part of
the acquisition of TVSM, Inc. on June 26, 1998, and an increase in
newsstand rates, partially offset by decreased subscription and
newsstand sales volumes. On August 29, 1998, the magazine increased
the newsstand price for the magazine to $1.49 from $1.19. Paid
subscription circulation for the magazine during the quarter ended
March 31, 1999 was 9.5 million per week, a decrease of 564,000 copies,
or 6%, from the same quarter in the prior year. Newsstand sales for
the magazine averaged 2.3 million copies per week during the quarter
ended March 31, 1999 compared to 3.0 million for the same quarter in
the prior year.
Operating expenses, excluding depreciation and amortization, for
the first three months of 1999 were $125.5 million, an increase of $9.2
million, or 8%, over the same period in 1998. The increase in
operating expenses during the first quarter of 1999 was primarily due
to $9.7 million of additional expenses attributable to the TVSM, Inc.
acquisition partially offset by a reduction in printing costs.
Depreciation in the first quarter of 1999 was $1.8 million,
relatively unchanged compared to the same period in 1998.
23
<PAGE>
TV Guide Entertainment Group
The following table sets forth certain financial information for
the TV Guide Entertainment Group for the three months ended March 31,
1999 and 1998:
Three Months Ended March 31,
1999 1998
---- ----
(in thousands)
Revenues $21,208 $17,467
Operating expenses 18,330 13,242
Depreciation and amortization 2,756 2,432
------- -------
Operating income $ 122 $ 1,793
======= =======
Operating margin percentage 1% 10%
TV Guide Entertainment Group's revenues for the three months ended
March 31, 1999 were $21.2 million, an increase of $3.7 million, or 21%,
over the same period in 1998. The increase in revenues was largely
attributable to advertising revenues, which grew $2.4 million, or 27%,
over the first quarter of 1998 due to higher rates, and increased
service fee revenues attributable to TV Guide Channel and TV Guide
Interactive, which increased $875,000, or 16%, for the quarter when
compared to the same period in 1998. Sneak Prevue and TV Guide Online
revenues were relatively unchanged during the first quarter of 1999
compared to the same quarter in 1998. TV Guide Channel subscriber
counts increased by 2.2 million, or 5%, to 50.0 million as of March 31,
1999 compared to those as of March 31, 1998. Sneak Prevue subscribers
decreased by 865,000, or 2%, to 34.3 million during the same period and
TV Guide Interactive subscribers increased by 1.6 million, to 1.7
million.
Operating expenses, excluding depreciation and amortization,
increased $5.1 million, or 38%, during the first quarter of 1999 when
compared to the same period in 1998. The increase in operating expenses
was due primarily to additional employees added to accommodate the TV
Guide Entertainment Group's growth coupled with approximately $3.5
million of costs incurred to advertise and launch the rebranded TV
Guide Channel compared to approximately $2.3 million of costs incurred
in the prior year to develop and launch a new look for the Prevue
Channel, the predecessor to the TV Guide Channel. In addition, legal
expense increased $800,000, or 144%, when compared to the same period
in 1998. The increase is the result of increased litigation and patent
expense.
Depreciation and amortization during the first quarter of 1999 was
$2.8 million, an increase of $324,000, or 13%, over the same period in
1998. The increase in depreciation and amortization was a result of
the acquisition of additional customer control units and video
production equipment necessary to support the various TV Guide
Entertainment Group products.
24
<PAGE>
United Video Group
Superstar/Netlink Group, LLC
The following table sets forth certain financial information for
SNG for the three months ended March 31, 1999 and 1998:
Three Months Ended March 31,
1999 1998
---- ----
(in thousands)
Revenues $101,144 $96,286
Operating expenses 81,452 85,895
Depreciation and amortization 2,228 2,687
-------- -------
Operating income $ 17,464 $ 7,704
======= =======
Operating margin percentage 17% 8%
Revenues generated by SNG for the three months ended March 31,
1999 were $101.1 million, an increase of $4.9 million, or 5%, over the
same period in 1998. Revenue increased for the three month period due
to $9.1 million of increased revenues attributable to Turner Vision's
retail C-band operations which were acquired by SNG effective February
1, 1998 and increased C-band rates partially offset by a decline in
subscribers. Retail subscribers purchasing programming from SNG as of
March 31, 1999 totaled approximately 1.1 million, a decrease of 52,000
during the quarter and a decrease of 75,000 during the prior twelve
months. During the quarter ended March 31, 1999, the C-band industry
declined 4%, decreasing by 84,000 subscribers, and for the twelve month
period ended March 31, 1999, the industry decreased by 221,000
subscribers, or 11%.
Operating expenses, excluding depreciation and amortization, were
$81.5 million in the first quarter of 1999, a decrease of $4.4 million,
or 5%, compared to the same period in 1998. The decrease in operating
expenses in the first quarter of 1999 as compared to the previous
year's results was due primarily to an overall reduction of expenses
related to general subscriber decline and programming fee reductions,
including one-time programming fee savings of $1.9 million, partially
offset by increased expenses attributable to Turner Vision of $5.8
million.
Depreciation and amortization for the first three months of 1999
was $2.2 million, a decrease of $459,000, or 17%, compared to the same
period in 1998.
25
<PAGE>
UVTV
The following table sets forth certain financial information for
UVTV for the three months ended March 31, 1999 and 1998:
Three Months Ended March 31,
1999 1998 (1)
---- ----
(in thousands)
Revenues $21,776 $21,014
Operating expenses 10,018 10,112
Depreciation and amortization 634 638
------- -------
Operating income $11,124 $10,264
======= =======
Operating margin percentage 51% 49%
(1) The operating results of UVTV have been restated from those
presented in previous reports to include the results of operations
of the Netlink Wholesale Division, which was acquired on March 1,
1999. The acquisition of the Netlink Wholesale Division was
accounted for as a combination of entities under common control,
similar to a pooling of interests.
UVTV's revenues for the first three months of 1999 were $21.8
million, an increase of $762,000, or 4%, when compared to the same
period in 1998. As of March 31, 1999, UVTV/WGN subscribers were 46.1
million, an increase of 4.1 million, or 10%, from March 1998.
Operating expenses, excluding depreciation and amortization, were
$10.0 million, relatively unchanged when compared to the same period in
1998.
Depreciation and amortization in the first quarter of 1999 was
$634,000 relatively unchanged compared to the same period in 1998.
26
<PAGE>
Other
The remaining operations of the United Video Group consist
primarily of those of SSDS, TV Guide Enterprise Solutions, SpaceCom
Systems and the Television Games Network.
Revenues for this group of businesses in the first quarter of 1999
were $14.9 million, a decrease of $2.5 million, or 14%, compared to the
first quarter of 1998. The decrease in revenues is primarily
attributable to the termination of TV Guide Enterprise Solutions
service agent agreements with program suppliers in the direct broadcast
satellite market.
Operating expenses, excluding depreciation and amortization,
increased by $2.7 million, or 19%, during the first quarter of 1999 to
$16.9 million from the same period in 1998. The increase in operating
expenses is primarily attributable to funds expended to develop the
Television Games Network, which is expected to launch in the summer of
this year. The Company increased its ownership interest in ODS
Technologies, a privately held interactive gaming company developing
the Television Games Network, in July 1998.
Depreciation and amortization increased by $601,000, or 45%,
reflecting amortization of intangible assets acquired in the ODS
Technologies acquisition.
Liquidity and Capital Resources
For the three months ended March 31, 1999, net cash flows from
operating activities were $26.1 million. This cash flow, plus existing
cash resources, proceeds from the issuance of $400.0 million in senior
subordinated notes, borrowings of $195.3 million under a revolving bank
credit facility, proceeds of approximately $131.2 million from the
issuance of common shares and from the exercise of stock options, cash
received in conjunction with the Liberty Transaction of $8.0 million
and net sales and maturities of marketable securities of $5.6 million,
were used to fund the Company's investments and acquisitions of $803.5
million, debt issuance costs of $14.2 million, capital expenditures of
$3.7 million and net reduction in the Company's capitalized lease
obligations and note payable of $1.7 million.
At March 31, 1999, the Company's cash, cash equivalents and
marketable securities aggregated $98.4 million, a decrease of $63.1
million from that as of December 31, 1998. The above total includes
$85.2 million of cash and cash equivalents held by SNG, in which the
Company had an approximate 80% ownership interest as of March 31, 1999.
As of March 31, 1999, approximately $280,000 of such securities had
maturities greater than 90 days and were classified as available-for-
sale marketable securities. The Company's policy pertaining to the
temporary investment of cash available for operations currently
prohibits exposure to interest rate fluctuations for periods in excess
of 18 months.
On March 1, 1999, TVG acquired from Liberty the stock of three of
its subsidiaries that indirectly owned approximately 40% of SNG
(bringing TVG's ownership interest in SNG to approximately 80%) and
Liberty's Netlink Wholesale Division, which includes a business that
provides the Denver 6 services and a separate business that sells
programming packages to satellite master antenna television systems
serving hotels and multi-unit dwellings in exchange for 12,750,000
shares of TVG Class B Common Stock (the "Liberty Transaction").
Also on March 1, 1999, immediately after closing the Liberty
Transaction, the Company acquired from a subsidiary of News Corp. the
stock of certain corporations (the "TV Guide Transaction") which
publish TV Guide Magazine and other printed television program listings
guides and distribute, through the Internet, an entertainment service
known as TV Guide Online (formerly TV Guide Entertainment Network or
TVGEN). A subsidiary of News Corp. received 22,503,412 shares of TVG
Class A Common Stock, 37,496,588 shares of TVG Class B Common Stock and
$800 million in cash as consideration. In addition, the subsidiary of
News Corp. acquired 6,534,108 additional shares of TVG Class A Common
Stock for approximately $131 million in cash to equalize the TVG Class
A Common Stock ownership of Liberty and its affiliates and News Corp.
and its affiliates.
27
<PAGE>
On March 1, 1999, the Company issued $400 million in 8 1/8% senior
subordinated notes due 2009 and entered into a $300 million six-year
revolving credit facility and a $300 million 364-day revolving credit
facility with a group of banks. Proceeds from the issuance of the
senior subordinated notes and borrowings of approximately $185 million
under the six-year revolving credit facility were used to fund a
portion of the TV Guide Transaction cash consideration. Borrowings
outstanding under the 364-day revolving credit facility convert to a
five-year term loan at maturity. Borrowings under the credit facilities
bear interest either at the bank's prime rate or LIBOR, both plus a
margin based on a sliding scale tied to the Company's leverage ratio,
as defined in the facility. For the first year of the credit
facilities, the LIBOR margin is fixed at a minimum of 1.25%. The credit
facilities are subject to prepayment or reduction at any time without
penalty. As of March 31, 1999, the Company had available borrowing
capacity under the six-year revolving credit facility and 364-day
revolving credit facility of approximately $105 million and $300
million, respectively.
The Company believes that, based on the Company's current level of
operations, cash and cash equivalents, marketable securities and cash
generated from operations, together with expected availability under
the bank credit facilities, subject to the covenants therein, will be
sufficient to enable the Company to service indebtedness, make capital
expenditures and meet operating costs and expenses for the foreseeable
future. If and when appropriate, the Company or its affiliates may
elect to incur additional indebtedness or to raise equity in the public
or private markets; however, there can be no assurances that the
Company will be able to do so.
The bank credit facilities and the indenture governing the notes
impose significant operating and financial restrictions on the Company.
These restrictions may significantly limit or prohibit the Company from
engaging in certain transactions, including the following: borrowing
additional money, paying dividends or other distributions to
stockholders, allowing restricted subsidiaries to guarantee other debt,
limiting the ability of restricted subsidiaries to make payments to the
Company and other restricted subsidiaries, creating liens on assets,
selling assets, entering into transactions with affiliates, and
engaging in certain mergers or consolidations. In addition, the
indenture limits the Company's ability and the ability of restricted
subsidiaries to make investments, but only if the credit ratings on the
notes fall below certain levels. These restrictions could limit the
Company's ability to obtain financing for working capital, capital
expenditures, acquisitions, debt service requirements and other
purposes. The restrictions may also affect the Company's ability to
actively manage its businesses, including entering into joint ventures
that advance the Company's strategy.
As of March 31, 1999, the Company had approximately $612 million
of long-term debt (including current portions) and unused borrowing
capacity under bank credit facilities of approximately $405 million
(subject to customary borrowing conditions). In addition, subject to
restrictions contained in the bank credit facilities and the indenture
governing the notes, the Company may borrow more money for working
capital, capital expenditures, acquisitions and other purposes. The
Company's significant indebtedness could have important consequences.
For example, the Company's ability to obtain any necessary financing in
the future for working capital, capital expenditures, acquisitions,
debt service requirements and other purposes may be limited; a large
portion of the cash flow of the Company's subsidiaries must be
dedicated to the payment of interest on debt and will not be available
for financing operations and other business activities; the level of
debt and the covenants governing such debt could limit the Company's
flexibility in planning for, or reacting to, changes in the Company's
business because certain financing options may be limited or
prohibited; the Company's degree of leverage may be more than that of
competitors, which may place the Company at a competitive disadvantage;
and the Company's level of debt may make the Company more vulnerable in
the event of a downturn in the Company's business or the economy in
general.
The Company's ability to meet debt service obligations and
specified financial ratios and tests will depend on future performance.
The Company's future performance, in turn, will be subject to general
economic conditions and to financial, business and other factors
affecting operations, many of which are beyond its control. In the
event of a default under the bank credit facilities, the lenders could
terminate their commitments and declare all amounts borrowed, together
with accrued interest and other fees, to be due and payable. Borrowings
under other debt instruments that contain cross-acceleration or cross-
default provisions may also be accelerated and become due and payable.
If any of these events should occur, the Company may not be able to pay
such amounts.
28
<PAGE>
SSDS has a revolving credit facility with a bank which provides
for borrowings up to the lesser of 80% of billed trade receivables of
SSDS outstanding less than 90 days, subject to certain conditions, or
$5.0 million which expires April 30, 2000. Borrowings under this credit
facility bear interest at the bank's stated prime rate plus a margin.
Outstanding borrowings under the credit facility as of March 31, 1999
were $1.0 million.
The Company collects in advance a majority of its TV Guide
magazine subscription fees, SNG subscription fees and certain of its
UVTV superstation and TV Guide Networks' revenues. As of March 31,
1999, the unearned portion of all prepayments totaled $358.8 million,
of which approximately $252.3 million, or 70%, was attributable to TV
Guide magazine and approximately $100.2 million, or 28%, was
attributable to SNG. Aggregate unearned prepayments increased by
$248.9 million during the quarter ended March 31, 1999, substantially
all of which was attributable to the TV Guide Transaction. The
Company's liability for prepaid magazine subscriptions is limited to
the unearned prepayments in the event customers cancel their
subscriptions. The Company's liability for other prepayments is limited
to a refund of unearned prepayments in the event that the Company is
unable to provide service. No material refunds have been paid to date.
Under the terms of the capital leases for two satellite
transponders placed in service by UVTV and TV Guide Networks in 1992,
the Company was obligated for net minimum lease payments aggregating
$15.8 million as of March 31, 1999, a reduction of $1.0 million, or 6%,
from the obligation existing at the prior year's end. The Company
expects to further reduce the lease obligation during the next twelve
months by approximately $3.8 million. The Company also leases various
other satellite transponders accounted for as operating leases. These
operating leases accounted for approximately $3.2 million in operating
expenses, net of sublease revenue, during the three months ended March
31, 1999.
Capital expenditures during the three months ended March 31, 1999
of $3.7 million were principally attributable to the expansion of the
Company's teleport facilities, purchase of control units provided to TV
Guide Network's cable television customers, data processing equipment
and systems and furniture, fixtures and facilities used by the Company.
The Company is currently reassessing its business iniatives and
associated capital expenditure requirements for the remainder of 1999.
SNG has historically made monthly distributions to its members of
all cash in excess of reasonable cash reserves established for
anticipated working capital requirements and capital expenditures.
However, in anticipation of a possible transaction with a direct
broadcast satellite provider, SNG has been retaining cash in excess of
its anticipated operating and capital needs in order to build working
capital to desired levels. During the quarter ended March 31, 1999, no
cash distributions were made to minority interests in SNG.
The Board of Directors has authorized the Company to repurchase
from time to time up to an aggregate of 7.0 million shares of the
Company's Class A Common Stock using existing cash resources. No
repurchases have been made under this plan during 1999. To date,
approximately 1.4 million shares have been repurchased by the Company.
The Company has evaluated and continues to evaluate possible
strategies, acquisitions and dispositions of related businesses and
assets, some of which may be significant, on an ongoing basis and at
any given time it may be engaged in discussions or negotiations or
enter into agreements with respect to potential transactions and
continues to explore opportunities to expand the market shares of its
existing businesses, develop new products and acquire interests in new
businesses.
29
<PAGE>
Year 2000 Matters
The Company and the businesses acquired in the TV Guide
Transaction and the Liberty Transaction are continuing to address the
year 2000 issue as described in detail below.
In 1997, the Company began the process of identifying, evaluating
and implementing changes to its computer systems, applications and
certain equipment with embedded technology necessary to address the
year 2000 issue. The Company has established an enterprise-wide
program to prepare for the year 2000 and is utilizing both internal and
external resources to identify, correct and test the systems for year
2000 compliance. The historical and estimated future costs related to
the year 2000 issues have not been and are not expected to be a
material cost to the Company.
The objective of the Company's year 2000 efforts is to determine
and assess the risks of the year 2000 issue and to plan and institute
mitigating actions to reduce those risks to acceptable levels. The
Company's standard for compliance requires that a computer system or
business process be designed to be used prior to, on and after January
1, 2000 without error in dates and date related data, including without
limitation, calculating, comparing, indexing and sequencing prior to,
on and after January 1, 2000.
The year 2000 project involves a four-phase approach to
determining year 2000 readiness of the Company's systems, software and
equipment. Phase 1, Assessment, involves the inventory of all systems,
software and equipment and the identification of any year 2000 issues.
Phase 1 was completed in January 1999. Phase 2, Remediation, involves
repairing, upgrading and/or replacing any non-compliant equipment and
systems. Phase 2 is scheduled for completion in May 1999. Phase 3,
Testing, involves testing the Company's systems, software and equipment
for year 2000 readiness, or in certain cases, relying on test results
provided to the Company. Phase 3 is scheduled for completion by July
1999. Phase 4, Implementation, involves placing compliant systems,
software and equipment into production or service. Phase 4 is scheduled
for completion by August 1999. The completion dates set forth above are
based on the Company's current expectations. However, due to the
uncertainties inherent in year 2000 remediation, there can be no
assurance that the projects will be completed on such dates.
30
<PAGE>
The Company's year 2000 project team is focusing on the following
major areas:
Core Computer Systems. Information technology systems account for
much of the year 2000 work and include all computer systems and
technology managed by the Company. The Company's core computer systems
relate to editorial, fulfillment, subscriber management, billing and
production functions. All core systems have been assessed, plans are in
place and work is being undertaken to test and implement changes where
required.
Equipment and Facilities. An inventory of all critical office
equipment and infrastructure has been completed and the Company has
completed minor modifications to these systems.
As part of the year 2000 project, the Company has contacted its
significant suppliers and customers to determine the extent to which
the Company is vulnerable to those third parties' failure to remediate
their year 2000 compliance issues. To date, no significant customers or
vendors have informed the Company that a material year 2000 issue
exists which could have a material effect on the Company. There can be
no assurance that the systems of other companies on which the Company's
business relies will be timely converted or that failure to convert by
another company, or a conversion that is incompatible with the
Company's systems, would not have a material adverse effect on the
Company and its operations.
The Company's failure to resolve year 2000 issues on or before
December 31, 1999 could result in system failures causing disruption in
routine business activities. Also, if critical systems related to the
Company's services are not successfully remediated, the Company could
face claims of breach of contract from customers, certain programming
providers and from other businesses that rely on the Company's
programming services. Additionally, failure of third parties upon whom
the Company relies to timely remediate their year 2000 issues could
result in disruption in the Company's daily operations and core
services. While the Company believes the year 2000 project will
adequately address the internal year 2000 issues, the overall risks
associated with the year 2000 issue remain difficult to accurately
describe and quantify until the Company obtains additional information
regarding the remediation activities of its third party suppliers and
customers. There can be no assurance that the year 2000 issue will not
have a material adverse effect on the Company and its operations.
The Company is in the process of developing contingency plans on
all critical processes to minimize the impact of any year 2000 related
interruption. These plans have been completed at a high level and the
detailed plans are expected to be in place prior to July 31, 1999.
The Company's capital spending plan provides for technology
investments in the periods prior to December 31, 1999, for systems
which would be operational after December 31, 1999. As a result of its
assessment and capital planning, no acceleration of material planned
system replacements were made due to year 2000 issues.
31
<PAGE>
Cautionary Statement
This report contains certain "forward-looking statements" within
the meaning of federal securities laws about the Company's financial
condition, results of operations and business. Such forward-looking
statements may include, among other things, statements concerning:
future acquisitions, changes in net revenues from the Company's
businesses, the impact of governmental regulations, competitive
conditions in industries in which the Company does business, liquidity
and future capital expenditures, year 2000 matters, the outcome of
certain litigation, alternative sources of supplies and services needed
by the Company and developments in the Company's interactive guide
businesses. These forward-looking statements are subject to numerous
assumptions, risks and uncertainties that may cause the Company's
actual results, performance or achievements to be materially different
from any future results, performance or achievements expressed or
implied by the Company in those statements. The important factors that
could prevent the Company from achieving its stated goals include, but
are not limited to, the following:
-- continued declines in circulation and operating profits for TV
Guide Magazine,
-- changes in the regulation of the cable television and/or
satellite industries adverse to the Company's services,
-- loss of the cable and/or satellite compulsory licenses provided
by federal law,
-- the willingness of cable and satellite television systems to
acquire and install new equipment that will allow the Company
to effectively market its interactive technology,
-- increased price and service competition within the industry,
-- the Company's ability to keep pace with technological
developments to protect the Company's intellectual property
rights, and defend against claims by others asserting
infringement of their intellectual property rights,
-- a reduction in demand for advertising and competition from other
media companies for audience and advertising revenues,
-- changes in paper prices or postal rates,
-- operating and financial risks related to integrating the TV
Guide businesses and other acquired businesses and
-- adequacy of capital resources to allow the Company to execute
its business plans.
Because forward-looking statements are subject to risks and
uncertainties, actual results may differ materially from those
expressed or implied by such statements. The cautionary statements
contained or referred to in this section should be considered in
connection with any subsequent written or oral forward-looking
statements that the Company or persons acting on the Company's behalf
may issue. The Company undertakes no obligation to review or confirm
analysts' expectations or estimates or to release publicly any
revisions to any forward-looking statements to reflect events or
circumstances after the date of this report or to reflect the
occurrence of unanticipated events.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's exposure to interest rate changes is primarily
related to variable rate debt issued under its $300 million six-year
revolving credit facility and $300 million 364-day revolving credit
facility, both of which were entered into in conjunction with the TV
Guide Transaction. Borrowings under the 364-day revolving credit
facility convert to a five-year term loan at maturity. Because the
interest rates on these facilities are variable, based upon the bank's
prime rate or LIBOR, the Company's interest expense and cash flow are
affected by interest rate fluctuations. At March 31, 1999, the Company
had $195 million outstanding under the six-year revolving credit
facility and no borrowings outstanding under the 364-day revolving
credit facility. If interest rates were to increase or decrease by 100
basis points, the result, based upon the existing outstanding debt,
would be an annual increase or decrease of $2.0 million in interest
expense and a corresponding decrease or increase of $2.0 million in the
Company's cash flow before income taxes.
32
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is involved in various lawsuits, including lawsuits
charging infringement of patents owned by or licensed to Gemstar
Development Corporation ("Gemstar") and its affiliates relating to
interactive television guides. These lawsuits relate to the Company's
digital and analog interactive guide products. With respect to the
proceedings related to the Company's analog interactive guide product,
Prevue Express, on February 19, 1999, the District Court entered
Partial Findings of Fact and Conclusions of Law determining that the
StarSight Telecast, Inc., United States patent 4,706,121 (the "121
Patent") is not unenforceable by reason of inequitable conduct. The
Court referred the case to a Magistrate Judge to schedule a settlement
conference prior to the Court entering additional findings of fact and
conclusions of law with respect to the validity of certain claims of
the patent and whether or not the Company's Prevue Express guide
infringes certain claims of the 121 Patent. If the Company is not
successful in its lawsuits, the Company may be required to obtain a
license to develop and market one or more of its services, to cease
developing or marketing such services or to redesign such services.
There can be no assurances that the Company will be able to obtain such
licenses or that it will be able to obtain them at commercially
reasonable rates, or if unable to obtain licenses that it will be able
to redesign its services to avoid infringement. The Company's material
litigation, including the lawsuit with Gemstar, is described in note 4
to the financial statements included herein, which is incorporated by
reference in this Item 1.
33
<PAGE>
ITEM 2. CHANGES IN SECURITIES
On March 1, 1999, the Company completed the following
transactions:
a. The Company acquired from TVG Holdings, Inc. ("News
Holdings"), a subsidiary of The News Corporation Limited
("News Corp."), for $800 million in cash, 22,503,412 shares
of Class A Common Stock and 37,496,588 shares of Class B
Common Stock, two corporations that publish TV Guide magazine
and other printed television program listings guides and
operate, through the Internet, an entertainment service now
known as TV Guide Online (the "TV Guide Transaction").
b. The Company acquired from Liberty Media Corporation
("Liberty"), for 12,750,000 shares of Class B Common Stock,
three corporations which own approximately 40% of
Superstar/Netlink Group LLC and the Netlink Wholesale
Division, which includes a business that provides
satellite-transmitted programming services known as the
"Denver 6" and a separate business that sells programming
packages to satellite master antenna television systems (the
"Liberty Transaction");
c. The Company changed its name from United Video Satellite
Group, Inc. to TV Guide, Inc.; and
d. The Company sold to TVG Holdings, Inc. 6,534,108 shares of
Class A Common Stock for approximately $131 million in
cash, which was paid by offset against the cash portion of
the consideration in the TV Guide Transaction.
Liberty is an indirect wholly owned subsidiary of AT&T Corp.
Liberty, directly and through its subsidiary, TCI UVSG, Inc. ("TCI
Holdings"), and News Corp., through News Holdings, each indirectly own
shares representing approximately 44% of the Company's Common Stock and
approximately 49% of the voting power of the Company's Common Stock.
The Company's Class B Common Stock differs from its Class A Common
Stock in that the Class B Common Stock entitles the holder thereof to
ten votes per share and the Class B Common Stock is not publicly
traded. Each share of Class B Common Stock is convertible into one
share of Class A Common Stock at the option of the holder thereof.
The source of funds for the cash portion of the purchase price was
a private placement to institutional investors of $400.0 million of 8
1/8% senior subordinated notes due 2009, bank credit facilities
consisting of a $300 million six-year revolving credit facility and a
$300 million 364-day revolving credit/five-year term loan facility, of
which approximately $185 million was drawn down at closing of the
acquisitions, and existing cash of the Company.
The bank credit facilities and the indenture governing the senior
subordinated notes significantly limit the Company from paying
dividends or other distributions to the Company's stockholders.
The sales of equity and debt securities were not registered under
the Securities Act of 1933, in reliance on the exemption from
registration contained in Section 4(2) of that Act.
34
<PAGE>
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
In connection with the Company's special meeting of stockholders
held on February 19, 1999, the Company submitted for vote of the
stockholders the following matters; 296,086,868 votes of the Company's
Class A Common Stock and Class B Common Stock were entitled to be voted
at the meeting and 292,191,283 votes of the shares were present in
person or by proxy:
a. Proposal to approve the issuance of 12,750,000 shares of the
Company's Class B Common Stock in connection with the
acquisition by the Company from Liberty Media Corporation
of all the outstanding stock of LMC Netlink Corporation,
Westlink, Inc. and Telluride Cablevision, Inc. The
proposal was approved with 288,790,499 votes for, 13,498
votes against, 4,672 votes abstaining and 3,382,614 broker
non-votes.
b. Proposal to approve the issuance of 22,503,412 shares of
the Company's Class A Common Stock and 37,496,588 shares
of the Company's Class B Common Stock in connection with
the acquisition by the Company from The News Corporation
Limited of all of the outstanding stock of News America
Publications Inc. and TVSM, Inc., and the issuance and
sale to Tele-Communications, Inc. or The News Corporation
Limited of such additional shares of Class A Common Stock
as may be required to equalize their holding of the Company's
Class A Common Stock. The proposal was approved with
285,923,631 votes for, 2,881,457 votes against, 3,581 votes
abstaining and 3,382,614 broker non-votes.
c. Proposal to amend the Certificate of Incorporation of the
Company in order to change the Company's name to TV Guide,
Inc. The proposal was approved with 289,795,058 votes for,
2,269,905 votes against, 5,488 votes abstaining and 120,832
broker non-votes.
ITEM 5. OTHER INFORMATION
None
35
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
Exhibit
No. Exhibit Description
3.1 Restated Certificate of Incorporation (2)
3.1.1 Certificate of Amendment to Restated Certificate of
Incorporation (3)
3.1.2 Certificate of Amendment of Restated Certificate of
Incorporation (5)
3.2 Amended and Restated Bylaws (5)
4.1 Specimen of Class A Common Stock certificate (1)
4.2 The Restated Certificate of Incorporation, amendments to the
Restated Certificate of Incorporation and Bylaws of the
Company are filed as Exhibits 3.1 and 3.2
4.3 Indenture between the Company and The Bank of New York
Company, Inc. as trustee dated March 1, 1999 (6)
10.10 Stockholders Agreement dated March 1, 1999 among TVG
Holdings, Inc., The News Corporation Limited, TCI UVSG,
Inc., Liberty Media Corporation, Tele-Communications, Inc.
and the Company, effective as of May 18, 1998 (4)
10.11 ** Facility A Loan Agreement for $300,000,000 Revolving Credit
Facility among the Company and various Financial
Institutions
10.12 ** Facility B Loan Agreement for $300,000,000 364-day Credit
Facility among the Company and various Financial
Institutions
12.1 ** Computation of Ratio of Earnings to Fixed Charges
27.1 ** Financial Data Schedule - Quarter ended March 31, 1999
- -----------
** Filed herewith
(1) Incorporated herein by reference from Amendment No. 1 to Form S-1
filed October 21, 1993; registration number 33-69838.
(2) Incorporated herein by reference from the Company's report on
Form 8-K dated January 25, 1996; Commission File Number 0-22662.
(3) Incorporated herein by reference from the Company's report on
Form 10-Q for the period ended September 30, 1998; Commission
File Number 0-22662.
(4) Incorporated herein by reference from the Company's report on
Form 8-K dated March 16, 1999; Commission File Number 0-22662.
(5) Incorporated herein by reference from the Company's report on
Form 10-K for the year ended December 31, 1998; Commission File
Number 0-22662.
(6) Incorporated herein by reference from Form S-4 filed May 14,
1999, registration number 333-78535.
b. Reports on Form 8-K
The Company filed the following reports on Form 8-K during the
quarter:
On January 12, 1999, the Company filed a report on Form 8-K/A
to amend its report on Form 8-K filed on August 9, 1996 to
correct certain technical matters.
On February 24, 1999, the Company filed a report on Form 8-K
which included financial statements and related notes thereto
of certain businesses to be acquired, the Company's 1998
financial statements and related notes thereto, and
management's 1998 discussion and analysis of financial
condition and results of operations.
On March 16, 1999, the Company filed a report on Form 8-K
reporting that the TV Guide Transaction and Liberty
Transaction had been completed, reporting that the Company
had changed its name to TV Guide, Inc. and reporting the
issuance of equity to a subsidiary of The News Corporation
Limited.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
TV Guide, Inc.
(Registrant)
Date: May 17, 1999 By: /s/ Peter C. Boylan III
-------------------------------
Peter C. Boylan III
Executive Vice President, TV
Guide, Inc.; Chairman and
Chief Executive Officer of
TV Guide Entertainment Group
and United Video Group
By: /s/ Craig M. Waggy
------------------------------
Craig M. Waggy
Senior Vice President and
Chief Financial Officer,
TV Guide, Inc.
37
<PAGE>
FACILITY A
LOAN AGREEMENT
FOR
$300,000,000 REVOLVING CREDIT FACILITY
AMONG
UNITED VIDEO SATELLITE GROUP, INC.,
The Financial Institutions
defined as Lenders herein
and
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION,
as Administrative Agent,
with
TD SECURITIES (USA) INC.,
as Syndication Agent,
and
THE BANK OF NEW YORK COMPANY, INC.
as Documentation Agent
March 1, 1999
i
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C>
ARTICLE 1 - Definitions...........................................................................................1
ARTICLE 2 -Loans and Letters of Credit...........................................................................20
SECTION 2.1 THE FACILITY A LOANS AND LETTERS OF CREDIT....................................................20
SECTION 2.2 MANNER OF BORROWING AND DISBURSEMENT..........................................................21
SECTION 2.3 INTEREST......................................................................................26
SECTION 2.4 FEES..........................................................................................30
SECTION 2.5 REDUCTION OF COMMITMENT.......................................................................31
SECTION 2.6 PREPAYMENT....................................................................................32
SECTION 2.7 REPAYMENT.....................................................................................32
SECTION 2.8 NOTES; LOAN ACCOUNTS..........................................................................32
SECTION 2.9 MANNER OF PAYMENT.............................................................................33
SECTION 2.10 REIMBURSEMENT.................................................................................34
SECTION 2.11 APPLICATION OF PROCEEDS.......................................................................34
SECTION 2.12 CAPITAL ADEQUACY..............................................................................35
SECTION 2.13 LENDER TAX FORMS..............................................................................36
SECTION 2.14 LETTERS OF CREDIT.............................................................................36
ARTICLE 3 - Conditions Precedent.................................................................................41
SECTION 3.1 CONDITIONS PRECEDENT TO EFFECTIVENESS OF AGREEMENT............................................41
SECTION 3.2 CONDITIONS PRECEDENT TO EACH ADVANCE (OTHER THAN COMPETITIVE BID ADVANCES)....................43
SECTION 3.3 CONDITIONS PRECEDENT TO ISSUANCE OF LETTERS OF CREDIT.........................................44
SECTION 3.4 CONDITIONS PRECEDENT TO EACH COMPETITIVE BID ADVANCE..........................................44
ARTICLE 4 - Representations and Warranties.......................................................................45
SECTION 4.1 REPRESENTATIONS AND WARRANTIES................................................................45
SECTION 4.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC...............................................51
ARTICLE 5 - General Covenants....................................................................................51
SECTION 5.1 PRESERVATION OF EXISTENCE AND SIMILAR MATTERS.................................................51
SECTION 5.2 BUSINESS; COMPLIANCE WITH APPLICABLE LAW......................................................51
SECTION 5.3 MAINTENANCE OF PROPERTIES.....................................................................51
SECTION 5.4 ACCOUNTING METHODS AND FINANCIAL RECORDS......................................................52
SECTION 5.5 INSURANCE.....................................................................................52
SECTION 5.6 PAYMENT OF TAXES AND CLAIMS...................................................................52
SECTION 5.7 VISITS AND INSPECTIONS........................................................................52
SECTION 5.8 PAYMENT OF INDEBTEDNESS.......................................................................52
SECTION 5.9 USE OF PROCEEDS...............................................................................53
SECTION 5.10 ERISA.........................................................................................53
SECTION 5.11 INDEMNITY.....................................................................................53
SECTION 5.12 FURTHER ASSURANCES............................................................................54
SECTION 5.13 BROKER'S CLAIMS...............................................................................54
SECTION 5.14 COVENANTS REGARDING FORMATION OF SUBSIDIARIES AND ACQUISITIONS................................54
SECTION 5.15 YEAR 2000 COMPLIANCE..........................................................................55
SECTION 5.16 NON-GUARANTOR SUBSIDIARY DISTRIBUTIONS........................................................55
ARTICLE 6 - Information Covenants................................................................................55
SECTION 6.1 QUARTERLY FINANCIAL STATEMENTS AND INFORMATION................................................55
SECTION 6.2 ANNUAL FINANCIAL STATEMENTS AND INFORMATION; CERTIFICATE OF NO DEFAULT........................56
SECTION 6.3 PERFORMANCE CERTIFICATES......................................................................56
SECTION 6.4 COPIES OF OTHER REPORTS.......................................................................56
SECTION 6.5 NOTICE OF LITIGATION AND OTHER MATTERS........................................................57
SECTION 6.6 LOSS OF AGREEMENTS............................................................................58
ii
<PAGE>
ARTICLE 7 - Negative Covenants...................................................................................58
SECTION 7.1 INDEBTEDNESS OF THE BORROWER..................................................................58
SECTION 7.2 INVESTMENTS AND ACQUISITIONS..................................................................59
SECTION 7.3 LIMITATION ON LIENS...........................................................................61
SECTION 7.4 AMENDMENT AND WAIVER..........................................................................61
SECTION 7.5 LIQUIDATION; DISPOSITION OR ACQUISITION OF ASSETS.............................................61
SECTION 7.6 LIMITATION ON GUARANTIES......................................................................61
SECTION 7.7 RESTRICTED PAYMENTS AND PURCHASES.............................................................62
SECTION 7.8 LEVERAGE RATIO................................................................................62
SECTION 7.9 FIXED CHARGE COVERAGE RATIO...................................................................62
SECTION 7.10 INTEREST COVERAGE RATIO.......................................................................63
SECTION 7.11 AFFILIATE TRANSACTIONS........................................................................63
SECTION 7.12 ERISA LIABILITIES.............................................................................63
SECTION 7.13 LIMITATION ON UPSTREAM DIVIDENDS BY SUBSIDIARIES..............................................63
SECTION 7.14 LIMITATION ON PREPAYMENT OF SUBORDINATED DEBT.................................................64
ARTICLE 8 - Default..............................................................................................64
SECTION 8.1 EVENTS OF DEFAULT.............................................................................64
SECTION 8.2 REMEDIES......................................................................................66
ARTICLE 9 - The Administrative Agent.............................................................................67
SECTION 9.1 APPOINTMENT AND AUTHORIZATION.................................................................67
SECTION 9.2 DELEGATION OF DUTIES..........................................................................68
SECTION 9.3 INTEREST HOLDERS..............................................................................68
SECTION 9.4 CONSULTATION WITH COUNSEL.....................................................................68
SECTION 9.5 DOCUMENTS.....................................................................................68
SECTION 9.6 AGENTS AND AFFILIATES.........................................................................68
SECTION 9.7 RESPONSIBILITY OF THE AGENTS..................................................................68
SECTION 9.8 ACTION BY ADMINISTRATIVE AGENT................................................................69
SECTION 9.9 NOTICE OF DEFAULT.............................................................................69
SECTION 9.10 RESPONSIBILITY DISCLAIMED.....................................................................69
SECTION 9.11 INDEMNIFICATION...............................................................................70
SECTION 9.12 CREDIT DECISION...............................................................................70
SECTION 9.13 SUCCESSOR ADMINISTRATIVE AGENT................................................................71
ARTICLE 10 -Change in Circumstances Affecting LIBOR Advances.....................................................71
SECTION 10.1 LIBOR BASIS DETERMINATION INADEQUATE..........................................................71
SECTION 10.2 ILLEGALITY....................................................................................71
SECTION 10.3 INCREASED COSTS...............................................................................72
SECTION 10.4 EFFECT ON OTHER ADVANCES......................................................................73
ARTICLE 11 - Miscellaneous.......................................................................................73
SECTION 11.1 NOTICES.......................................................................................73
SECTION 11.2 EXPENSES......................................................................................74
SECTION 11.3 WAIVERS.......................................................................................75
SECTION 11.4 SET-OFF.......................................................................................75
SECTION 11.5 ASSIGNMENT....................................................................................76
SECTION 11.6 COUNTERPARTS..................................................................................78
SECTION 11.7 GOVERNING LAW.................................................................................78
SECTION 11.8 SEVERABILITY..................................................................................78
SECTION 11.9 HEADINGS......................................................................................78
SECTION 11.10 INTEREST...................................................................................78
SECTION 11.11 ENTIRE AGREEMENT...........................................................................79
SECTION 11.12 AMENDMENT AND WAIVER.......................................................................79
SECTION 11.13 OTHER RELATIONSHIPS........................................................................79
SECTION 11.14 CONFIDENTIALITY............................................................................79
SECTION 11.15 SURVIVAL OF VARIOUS PROVISIONS.............................................................79
SECTION 11.16 SENIOR DEBT................................................................................80
ARTICLE 12 - Waiver of Jury Trial................................................................................80
SECTION 12.1 WAIVER OF JURY TRIAL..........................................................................80
</TABLE>
iii
<PAGE>
iv
Exhibits
Exhibit A - Form of Assignment and Assumption Agreement
Exhibit B - Form of Assignment of Notes
Exhibit C - Form of Borrower Pledge Agreement
Exhibit D - Form of Competitive Bid Note
Exhibit E - Form of Notice of Competitive Bid Borrowing
Exhibit F - Form of Request for Advance
Exhibit G - Form of Request for Issuance of Letter of Credit
Exhibit H - Form of Facility A Note
Exhibit I - Form of Subsidiary Guaranty
Exhibit J - Form of Subsidiary Pledge Agreement
Exhibit K - Form Borrower Loan Certificate
Exhibit L - Form of Subsidiary Loan Certificate
Exhibit M-1 - Form of Opinion of Borrower's Counsel
Exhibit M-2 - Form of Opinion of FCC Counsel
Exhibit M-3 - Form of Opinion of Borrower's Counsel in connection with high
yield offering
Exhibit M-4 - Form of Opinion given in connection with TV Guide Transaction
Schedules
Schedule 1 - Restricted Subsidiaries
Schedule 2 - Litigation
Schedule 3 - Indebtedness as of the Agreement Date
Schedule 4 - Lenders' Addresses
iv
<PAGE>
FACILITY A
LOAN AGREEMENT
FOR
$300,000,000
Revolving Credit Facility
among
UNITED VIDEO SATELLITE GROUP, INC.,
The Financial Institutions
defined as Lenders herein
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Administrative Agent,
with
TD SECURITIES (USA) INC.,
as Syndication Agent,
and
THE BANK OF NEW YORK COMPANY, INC.
as Documentation Agent
Dated as of the 1st day of March, 1999
WHEREAS, the Borrower (as defined below) has requested and the Lenders
(as defined below) have agreed, subject to the terms and conditions set forth
herein, to make available to the Borrower a $300,000,000 revolving credit
facility;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each of the parties hereto, the
parties hereby agree as follows:
ARTICLE 1
Definitions.
For the purposes of this Agreement:
"Acquisition" shall mean (whether by purchase, exchange, issuance of
stock or other equity or debt securities, merger, reorganization or any other
method) (i) any acquisition by the Borrower or any of its Restricted
Subsidiaries of any other Person, which Person shall then become consolidated
with the Borrower or any such Restricted Subsidiary in accordance with GAAP, or
(ii) any acquisition by the Borrower or any of its Restricted Subsidiaries of
all or any substantial part of the assets of any other Person.
"Administrative Agent" shall mean Bank of America National Trust and
Savings Association, in its capacity as Administrative Agent for the Lenders or
any successor Administrative Agent appointed pursuant to Section 9.13 hereof.
"Administrative Agent's Office" shall mean the office of the
Administrative Agent located at the address set forth in Section 11.1 hereof, or
such other office as may be designated pursuant to the provisions of Section
11.1 hereof.
"Advance" shall mean amounts advanced by the Lenders to the Borrower
pursuant to Article 2 hereof on the occasion of any borrowing; and "Advances"
shall mean more than one Advance.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
the Borrower. For purposes of this definition, "control" when used with respect
to any Person means the power to direct or cause the direction of the management
and policies of such Person, whether by control or otherwise.
"Agreement" shall mean this Loan Agreement, as amended, supplemented,
restated or otherwise modified from time to time.
"Agreement Date" shall mean March 1, 1999.
"Applicable Law" shall mean, in respect of any Person, all provisions
of constitutions, statutes, rules, regulations, and orders of governmental
bodies or regulatory agencies applicable to such Person, including, without
limitation, all orders and decrees of all courts and arbitrators in proceedings
or actions to which the Person in question is a party or by which it is bound.
"Applicable Margin" shall mean the interest rate margin applicable to
Base Rate Advances or LIBOR Advances, as the case may be, in each case
determined in accordance with Section 2.3(g) hereof.
"Arrangers" shall mean collectively, Bank of America National Trust and
Savings Association, Toronto Dominion (Texas), Inc., The Bank of New York and
Credit Lyonnais New York Branch.
"Assignment and Assumption Agreement" shall mean any Assignment and
Assumption Agreement in substantially the form of Exhibit A attached hereto,
pursuant to which any Lender, as further provided in Section 11.5 hereof, sells
a portion of its Facility A Loans and/or Facility A Commitments.
"Assignment of Notes" shall mean any Assignment of Notes Agreement
executed by the Borrower or any of its Restricted Subsidiaries in favor of the
Administrative Agent substantially in the form of Exhibit B attached hereto.
"Authorized Signatory" shall mean, with respect to any Person, such
senior personnel of such Person as may be duly authorized and designated in
writing by such Person to execute documents, agreements, and instruments on
behalf of such Person.
"Available Facility A Commitment" shall mean, as of any particular
time, (a) the Facility A Commitment minus (b) the sum of (i) the Facility A
Loans then outstanding, (ii) the Competitive Bid Loans then outstanding, and
(iii) the aggregate amount of all Letter of Credit Obligations then outstanding.
"Available Letter of Credit Commitment" shall mean, at any time, the
lesser of (a) (i) $50,000,000 minus (ii) all Letter of Credit Obligations then
outstanding and (b) the Available Facility A Commitment.
"Base Rate" shall mean, at any time, a fluctuating interest rate per
annum equal to the sum of (a) the higher of (i) the rate of interest adopted by
Bank of America National Trust and Savings Association, as its reference rate
for the determination of interest rates for loans of varying maturities in
United States dollars to United States residents of varying degrees of
creditworthiness and being quoted at such time by such bank as its "prime rate"
(this prime rate being not necessarily the lowest rate of interest charged to
borrowers of the Bank of America National Trust and Savings Association), or
(ii) the sum of (A) the Federal Funds Rate, plus (B) one-half of one percent
(1/2%), plus (b) the Applicable Margin for Base Rate Advances. The Base Rate
shall be adjusted automatically as of the opening of business on the effective
date of each change in the prime rate or the Federal Funds Rate, as the case may
be, to account for such change, and shall also be changed as and when provided
in Section 2.3(g) hereof to reflect changes in the Applicable Margin for Base
Rate Advances.
"Base Rate Advance" shall mean an Advance which bears interest at the
Base Rate which the Borrower requests to be made as a Base Rate Advance or is
reborrowed as a Base Rate Advance, in accordance with the provisions of Section
2.2 hereof, and which shall be in a principal amount of at least $500,000 and in
an integral multiple of $100,000, except for a Base Rate Advance which is in an
amount equal to the unused amount of the Facility A Commitment, which Advance
may be in such amount.
"Bid" shall have the meaning ascribed thereto in Section 2.2(b)(ii)
hereof.
"Bidder" shall have the meaning ascribed thereto in Section 2.2(b)(ii)
hereof.
"Borrower" shall mean United Video Satellite Group, Inc., a Delaware
corporation.
"Borrower Pledge Agreement" shall mean the Borrower Pledge Agreement
dated as of the Agreement Date given by the Borrower in favor of the
Administrative Agent (for itself and for the benefit of the Lenders) by the
Borrower substantially in the form of Exhibit C herein.
"Business Day" shall mean a day on which banks and foreign exchange
markets are open for the transaction of business required for this Agreement in
London, England, Los Angeles, California and New York, New York, as relevant to
the determination to be made or the action to be taken.
"Capital Expenditures" shall mean in respect to any Person,
expenditures for the purchase of tangible assets of long-term use, which would
be required to be capitalized on the balance sheet of such Person in accordance
with GAAP.
"Capital Stock" shall mean, as applied to any Person, any capital stock
or ownership interests of such Person, regardless of class or designation, and
all warrants, options, purchase rights, conversion or exchange rights, voting
rights, calls or claims of any character with respect thereto.
"Capitalized Lease Obligation" shall mean that portion of any
obligation of a Person as lessee under a lease which at the time would be
required to be capitalized on the balance sheet of such lessee in accordance
with GAAP.
"Cash Equity Proceeds" shall mean the receipt by the Borrower from News
Corporation of not less than $130,000,000 in cash equity proceeds or
subordinated debt proceeds (so long as such subordinated debt (a) is payable in
kind through its final maturity, (b) has terms no more onerous than the
Facilities, (c) has no financial covenants and (d) has a maturity of at least
one year later than the Maturity Date).
"Change of Control" shall mean any change in the ownership of the
Borrower that results in AT&T Corp. (so long as AT&T Corp. owns Liberty directly
or indirectly), Liberty and News Corporation owning, directly or indirectly, in
the aggregate (a) less than a majority of all voting rights (after giving effect
to any member's agreement or voting trust agreements) with respect to the
Capital Stock of the Borrower (including, without limitation, warrants, options,
conversion rights, voting rights and calls or claims of any character with
respect thereto, to the extent exercisable prior to repayment in full of the
Obligations) or (b) less than thirty percent (30%) of the Capital Stock of the
Borrower.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall mean any property of any kind constituting
collateral for the obligations under any of the Security Documents.
"Commercial Letter of Credit" shall mean a documentary letter of credit
in respect of the purchase of goods or services by the Borrower or any of its
Restricted Subsidiaries issued by the Issuing Bank in accordance with the terms
hereof.
"Commitments" shall mean, collectively prior to the Facility B
Conversion Date, the Facility A Commitment and Facility B Commitment.
"Competitive Bid Advance" shall mean an Advance by a Lender to the
Borrower as part of a Competitive Bid Borrowing resulting from the competitive
bidding procedure described in Section 2.2(b) hereof, and shall include a Fixed
Rate Advance and a Competitive Bid LIBOR Advance.
"Competitive Bid Borrowing" shall mean a borrowing consisting of
simultaneous Competitive Bid Advances from each of the Lenders whose offer to
make one or more Competitive Bid Advances as part of such borrowing has been
accepted under the competitive bidding procedure described in Section 2.2(b)
hereof.
"Competitive Bid Loans" shall mean the amounts advanced by the Lenders
to the Borrower as Advances under the Competitive Bid Option and evidenced by
the Competitive Bid Notes.
"Competitive Bid Note" shall mean a promissory note of the Borrower
payable to the order of any Lender making a Competitive Bid Advance, in
substantially the form of Exhibit D attached hereto, evidencing the indebtedness
of the Borrower to such Lender resulting from a Competitive Bid Advance made by
such Lender.
"Competitive Bid Option" shall mean the option of the Borrower to
solicit bids for loans in an aggregate amount not to exceed $300,000,000
pursuant to the competitive bidding procedure described in Section 2.2(b)
hereof.
"Competitive Bid Rate" shall mean with respect to any Competitive Bid
Loan, the interest rate applicable to such Competitive Bid Advance; and
"Competitive Bid Rates" shall mean all such interest rates.
"Competitive LIBOR Advance" shall have the meaning ascribed thereto in
Section 2.2(b)(i) hereof.
"DBS Agreement" shall mean any agreement between the Borrower (or any
of its Restricted Subsidiaries) and a provider of direct broadcast satellite
services pursuant to which such provider agrees, among other things, to
distribute and exhibit to its subscribers programming of the Borrower and/or its
Restricted Subsidiaries.
"Default" shall mean any Event of Default, and any other event
specified in Section 8.1 hereof which with any passage of time or giving of
notice (or both) would constitute such event an Event of Default.
"Default Rate" shall mean following the occurrence of and during the
continuation of a Default, a simple per annum interest rate equal to the sum of
(a) the Base Rate, the LIBOR Basis or the Competitive Bid Rates otherwise
applicable plus (b) two percent (2%) to the end of any existing Interest
Periods, and, thereafter, the sum of (x) Base Rate plus (y) two percent (2%).
"EBITDA" shall mean, with respect to the Borrower and its Restricted
Subsidiaries on an attributable basis in respect of any period, the sum of (a)
operating income for such period, plus (b) to the extent deducted in determining
operating income, the sum of the following for such period: (i) depreciation and
(ii) amortization, all determined in accordance with GAAP; provided, however,
that EBITDA shall be calculated after giving effect to acquisitions and
dispositions of assets of the Borrower or any Restricted Subsidiary during such
period as if such transactions had occurred on the first day of such period and;
provided, further, that (x) dividends received in cash from sources other than
Restricted Subsidiaries shall be included in EBITDA only to the extent such
dividends represent no more then 7.5% of the EBITDA (on an inclusive basis), and
(y) EBITDA shall include only the attributable portion of the EBITDA of the
Non-Guarantor Subsidiaries to the extent actually received by the Borrower.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as in effect on the Agreement Date and as such Act may be amended thereafter
from time to time.
"ERISA Affiliate" shall mean (a) any corporation which is a member of
the same controlled group of corporations (within the meaning of Code Section
414(b)) as is the Borrower, (b) any other trade or business (whether or not
incorporated) under common control (within the meaning of Code Section 414(c))
with the Borrower, (c) any other corporation, partnership or other organization
which is a member of an affiliated service group (within the meaning of Code
Section 414(m)) with the Borrower, or (d) any other entity required to be
aggregated with the Borrower pursuant to regulations under Code Section 414(o).
"Event of Default" shall mean any of the events specified in Section
8.1 hereof, provided that any requirement for notice or lapse of time, or both,
has been satisfied.
"Facility A Commitment" shall mean the several obligations of the
Lenders to lend and relend to the Borrower amounts up to the aggregate amount of
$300,000,000 under the terms and conditions of this Agreement.
"Facility A Commitment Ratios" shall mean the percentages as of the
date of determination in which the Lenders having Facility A Commitments are
severally bound to satisfy their commitments under the Facility A Commitment to
make Advances (other than Competitive Bid Advances) to the Borrower pursuant to
the terms hereof, which as of the Agreement Date, are as set forth below and
"Facility A Commitment Ratio" shall mean the Facility A Commitment Ratio for an
individual Lender:
<TABLE>
<CAPTION>
Percentage Facility A
(Rounded to the Loan Dollar
Lenders nearest 1/1000%) Commitment
<S> <C> <C>
Bank of America National Trust and Savings Association 8.333% $25,000,000.00
Toronto Dominion (Texas), Inc. 8.333% $25,000,000.00
The Bank of New York Company, Inc. 8.333% $25,000,000.00
Credit Lyonnais New York Branch 8.333% $25,000,000.00
BankBoston, N.A. 6.000% $18,000,000.00
Citibank, N.A. 6.000% $18,000,000.00
First Union National Bank 6.000% $18,000,000.00
Fleet National Bank 6.000% $18,000,000.00
Mellon Bank, N.A. 6.000% $18,000,000.00
Barclays Bank, plc 4.500% $13,500,000.00
Banca Commerciale Italiana, New York Branch 3.667% $11,000,000.00
Bank of Oklahoma, N.A. 3.667% $11,000,000.00
The Bank of Nova Scotia 3.667% $11,000,000.00
Compagnie Financiere de CIC et de l'Union Europeenne 3.667% $11,000,000.00
Bank of Hawaii 2.500% $7,500,000.00
Banque Nationale de Paris 2.500% $7,500,000.00
The Dai-Ichi Kangyo Bank, Ltd. 2.500% $7,500,000.00
Erste Bank Der Oesterreichischen Sparkassen 2.500% $7,500,000.00
KBC Bank, N.V. 2.500% $7,500,000.00
Lloyds Bank, plc 2.500% $7,500,000.00
Local Federal Bank, FSB 2.500% $7,500,000.00
TOTALS: 100.000% $300,000,000.00
</TABLE>
"Facility A Loans" shall mean the amounts advanced by the Lenders to
the Borrower as Advances under the Facility A Commitment and evidenced by the
Facility A Notes and the Competitive Bid Loans outstanding and "Facility A Loan"
shall mean any one of the foregoing.
"Facility A Net Proceeds" shall mean the amount of Net Proceeds with
respect to any sale, transfer or other disposition of any assets of the Borrower
or its Restricted Subsidiaries remaining after payment in full of all then
outstanding Facility B Loans, together with accrued interest thereon.
"Facility A Notes" shall mean, collectively, those certain revolving
promissory notes in an aggregate original principal amount equal to the Facility
A Commitment, one such note issued by the Borrower to each of the Lenders with
respect to the Facility A Commitment, each one substantially in the form of
Exhibit G attached hereto, and any extensions renewals or amendment to, or
replacements of, the foregoing.
"Facility B Commitment" shall mean the Facility B Commitment as defined
in the Facility B Loan Agreement.
"Facility B Conversion Date" shall have the meaning as described
thereto in the Facility B Loan Agreement.
"Facility B Loan Agreement" shall mean that certain Facility B Loan
Agreement of even date herewith by and among the Borrower, certain financial
institutions defined as Lenders therein and Bank of America National Trust and
Savings Association, as Administrative Agent.
"Facility B Loans" shall mean those advances outstanding under Facility
B Loan Agreement.
"Facility Fee" shall mean that fee described in Section 2.4(a) hereof.
"Facility Fee Percentage" shall mean the percentage upon which the
facility fee described in Section 2.4(a) hereof shall be based, which percentage
shall be based upon the Leverage Ratio as set forth below:
(a) (i) Prior to the receipt by the Borrower of (A) the
Threshold Debt Proceeds and (B) the Cash Equity Proceeds if:
Leverage Ratio is: then the Facility Fee
Percentage shall be:
Greater than or equal to 2.0 to 1.0 0.500%
Less than 2.0 to 1.0 0.375%
(ii) Notwithstanding the foregoing table above for
all periods prior to the twelve (12) month anniversary of the Agreement
Date, the Facility Fee Percentage will be no lower than 0.500%.
(b) (i) After the receipt by the Borrower of (A) the Threshold
Debt Proceeds and (B) the Cash Equity Proceeds if:
Leverage Ratio is: then the Facility Fee
Percentage shall be:
Greater than or equal to 4.5 to 1.0 0.500%
Greater than or equal to 2.0 to 1.0
but less than 4.5 to 1.0 0.375%
Less than 2.0 to 1.0 0.250%
(ii) Notwithstanding the foregoing table above for
all periods prior to the twelve (12) month anniversary of the Agreement
Date, the Facility Fee Percentage will be no lower than 0.375%.
"FCC" shall mean the Federal Communications Commission, or any
successor thereto.
"Federal Funds Rate" shall mean, as of any date, the weighted average
of the rates on overnight federal funds transactions with the members of the
Federal Reserve System arranged by federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day 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.
"Fee Agreements" shall mean all agreements by and between the Borrower
on the one hand, and the Administrative Agent or the Lenders (or any of them) on
the other hand, setting forth the applicable fees relating to this Agreement.
"Fixed Charges" shall mean, with respect to the Borrower and its
Restricted Subsidiaries on a consolidated basis, for any period, the sum of: (a)
Total Interest Expense for such period, (b) Scheduled Principal Payments during
such period, (c) all scheduled payments of principal made on Indebtedness for
Money Borrowed (other than the Facility A Loans) during such period, (d) Capital
Expenditures made during such period, (e) distributions made in accordance with
Section 7.7(a) hereof during such period, and (f) taxes paid during such period
(excluding, to the extent not the sole obligation of the Borrower, taxes on the
operating income of Non-Guarantor Subsidiaries, to the extent that such
operating income has been excluded from EBITDA).
"Fixed Rate Advance" shall have the meaning ascribed thereto in Section
2.2(b)(i) hereof.
"GAAP" shall mean, as in effect from time to time, generally accepted
accounting principles consistently applied.
"Guaranty" or "Guaranteed," as applied to an obligation (each a
"primary obligation"), shall mean and include (a) any guaranty, direct or
indirect, in any manner, of any part or all of such primary obligation, and (b)
any agreement, direct or indirect, contingent or otherwise, the practical effect
of which is to assure in any way the payment or performance (or payment of
damages in the event of non-performance) of any part or all of such primary
obligation, including, without limiting the foregoing, any reimbursement
obligations as to amounts drawn down by beneficiaries of outstanding letters of
credit or capital call requirements, without limitation, and any obligation of
such Person (the "primary obligor"), whether or not contingent, (i) to purchase
any such primary obligation or any property or asset constituting direct or
indirect security therefor, (ii) to advance or supply funds (A) for the purchase
or payment of such primary obligation or (B) to maintain working capital, equity
capital or the net worth, cash flow, solvency or other balance sheet or income
statement condition of any other Person, (iii) to purchase property, assets,
securities or services primarily for the purpose of assuring the owner or holder
of any primary obligation of the ability of the primary obligor with respect to
such primary obligation to make payment thereof or (iv) otherwise to assure or
hold harmless the owner or holder of such primary obligation against loss in
respect thereof excluding, however, general indemnifications for breach of
contract entered into in the ordinary course of business. For purposes of this
Agreement, a Guaranty shall not include (i) any bond obligation of, or any
Guaranty of or letter of credit securing performance by, a Borrower or a
Restricted Subsidiary undertaken or incurred in the ordinary course of its
business (other than in connection with the borrowing of money or obtaining of
credit) as presently conducted for or on behalf of a Borrower or a Restricted
Subsidiary and (ii) a guaranty or other obligation consisting of a pledge of
such Person's interest in the equity interest in any Unrestricted Subsidiary,
provided that recourse under such guaranty or obligation secured by such pledge
shall be limited solely to such Person's interest in the equity interest in such
Unrestricted Subsidiary so pledged.
"Indebtedness" shall mean, with respect to any Person, (a) all items,
except items of owners', shareholders' and partners' equity or capital stock or
surplus or general contingency or deferred tax reserves, which in accordance
with GAAP would be included in determining total liabilities as shown on the
liability side of a balance sheet of such Person, (b) all direct or indirect
obligations secured by any Lien to which any property or asset owned by such
Person is subject, whether or not the obligation secured thereby shall have been
assumed, (c) to the extent not otherwise included, all Capitalized Lease
Obligations of such Person, (d) all reimbursement obligations with respect to
outstanding letters of credit, and (e) all obligations of such Person to pay the
deferred purchase or acquisition price of property or services.
"Indebtedness for Money Borrowed" shall mean, with respect to any
Person, all money borrowed by such Person and Indebtedness represented by notes
payable by such Person and drafts accepted representing extensions of credit to
such Person, all obligations of such Person evidenced by bonds, debentures,
notes, or other similar instruments, and all Indebtedness of such Person upon
which interest charges are customarily paid, all Capitalized Lease Obligations,
all reimbursement obligations with respect to outstanding letters of credit, all
Indebtedness issued or assumed as full or partial payment for property or
services (other than trade payables arising in the ordinary course of business),
whether or not any such notes, drafts, obligations or Indebtedness represent
Indebtedness for Money Borrowed, and, without duplication, Guaranties of any of
the foregoing. For purposes of this definition, interest which is accrued but
not paid on the original due date or within any applicable cure or grace period
as provided by the underlying contract for such interest shall be deemed
Indebtedness for Money Borrowed. For purposes of this Agreement, a Guaranty
shall not include (i) any bond obligations of, or any Guaranty of or letter of
credit securing performance by, a Borrower or a Restricted Subsidiary undertaken
or incurred in the ordinary course of its business (other than in connection
with the borrowing of money or obtaining of credit) as presently conducted for
or on behalf of a Borrower or a Restricted Subsidiary and (ii) a guaranty or
other obligation consisting of a pledge of such Person's interest in the equity
interest in any Unrestricted Subsidiary, provided that recourse under such
guaranty or obligation secured by such pledge shall be limited solely to such
Person's interest in the equity interest in such Unrestricted Subsidiary so
pledged.
"Interest Hedge Agreement" shall mean the obligations of any Person
pursuant to (a) any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such Person
calculated by applying a fixed or floating rate of interest on the same notional
amount or (b) interest rate swaps, caps, floors, collars and similar agreements.
"Interest Period" shall mean, (a) in connection with any Base Rate
Advance, each calendar quarter; provided, however, that for any Base Rate
Advance made after the first day of any calendar quarter, the first Interest
Period with respect thereto shall be the period beginning on the date such
Advance is made and ending on the last day of the calendar quarter in which such
Advance is made; provided, further, however, that if a Base Rate Advance is made
on the last day of any calendar quarter, it shall have an initial Interest
Period ending on, and its initial Payment Date shall be, the last day of the
following calendar quarter (b) in connection with any LIBOR Advance, the term of
such Advance selected by the Borrower or otherwise determined in accordance with
this Agreement and (c) in connection with any Competitive Bid Advance, the term
of such Advance as determined under Section 2.2(b) hereof. Notwithstanding the
foregoing, however, (i) any applicable Interest Period which would otherwise end
on a day which is not a Business Day shall be extended to the next succeeding
Business Day unless, with respect to LIBOR Advances only, such Business Day
falls in another calendar month, in which case such Interest Period shall end on
the next preceding Business Day; (ii) with respect to LIBOR Advances only, any
applicable Interest Period which begins on a day for which there is no
numerically corresponding day in the calendar month during which such Interest
Period is to end shall (subject to clause (i) above) end on the last day of such
calendar month; and (iii) no Interest Period shall extend beyond the Maturity
Date or such earlier date as would interfere with the repayment obligations of
the Borrower under Section 2.7 hereof. Interest shall be due and payable with
respect to any Advance as provided in Section 2.3 hereof.
"Interest Rate Basis" shall mean the Base Rate or the LIBOR Basis, as
appropriate.
"Issuing Bank" shall mean Bank of America National Trust and Savings
Association, as issuer of the Letters of Credit and its assigns and successors
hereunder.
"Investment" shall mean, with respect to the Borrower or any of its
Restricted Subsidiaries, (a) any loan, advance or extension of credit (other
than to customers in the ordinary course of business) by such Person to, or any
Guaranty or other contingent liability with respect to the capital stock,
indebtedness or other obligations of, or any contributions to the capital of,
any other Person, or any ownership, purchase or other acquisition by such Person
of any interest in any capital stock, limited partnership interests, general
partnership interest, or other securities of such other Person, other than an
Acquisition, and (b) all expenditures by the Borrower or any of its Restricted
Subsidiaries relating to the foregoing.
"Lenders" shall mean the Persons whose names appear as "Lenders" on the
signature pages hereof and any other Person which becomes a "Lender" hereunder
after the Agreement Date; and "Lender" shall mean any one of the foregoing
Lenders.
"Letter of Credit Obligations" shall mean, at any time, the sum of (a)
an amount equal to the aggregate undrawn and unexpired amount (including the
amount to which any such Letter of Credit can be reinstated pursuant to the
terms hereof) of the then outstanding Letters of Credit and (b) an amount equal
to the aggregate drawn, but unreimbursed drawings on any Letters of Credit.
"Letters of Credit" shall mean either Standby Letters of Credit or
Commercial Letters of Credit issued by the Issuing Bank on behalf of the
Borrower and its Restricted Subsidiaries from time to time in accordance with
the terms hereof.
"Leverage Ratio" shall mean, as of any date of determination, the ratio
of (a) Total Debt as of such date to (b) EBITDA for the immediately preceding
four (4) calendar quarters (or, if such date of determination is the last day of
a quarter the four calendar quarters then ended).
"Liberty" shall mean Liberty Media Corporation, a Delaware corporation.
"Liberty Transaction" shall mean, collectively, in exchange for twelve
million seven hundred fifty thousand (12,750,000) shares of the Borrower's
common stock, the acquisition from Liberty of (a) forty percent (40%) of the
ownership interest in SNG; (b) one hundred percent (100%) interest in the
satellite transmitted programming services known as Denver 6; (c) Liberty's
interest in revenue sharing agreements with the Borrower; and (d) one hundred
percent (100%) interest in Liberty's business of selling programming to master
antenna television systems.
"LIBOR" shall mean, for any Interest Period, the interest rate per
annum equal to the offered rate for deposits in United States dollars for an
amount approximately equal to the principal amount of, and for a length of time
approximately equal to the Interest Period for, the LIBOR Advance sought by the
Borrower, which rate appears on the Reuter's Screen LIBO Rate Page (or such
other page as may replace that page in that service) at approximately 11:00 a.m.
(London time) two (2) Business Days before the first day of such Interest
Period; provided, that (i) if more than one such offered rate appears on the
Reuter's Screen, LIBOR shall be the arithmetic average (rounded upward to the
nearest one-sixteenth (1/16) of one percent (1%)) of such offered rates, or (ii)
if the Reuter's Screen is not available, LIBOR shall be the average offered to
the Administrative Agent (or an affiliate thereof) by two (2) leading banks
(rounded upward to the nearest one-sixteenth (1/16) of one percent (1%)) of the
interest rates per annum at which deposits in United States dollars for such
Interest Period are offered to the Administrative Agent in the London eurodollar
interbank borrowing market at approximately 11:00 a.m. (London time) two (2)
Business Days before the first day of such Interest Period, in an amount
approximately equal to the principal amount of, and for a length of time
approximately equal to the Interest Period for, the LIBOR Advance sought by the
Borrower.
"LIBOR Advance" shall mean an Advance (other than a Competitive Bid
Advance) which bears interest at the LIBOR Basis which the Borrower requests to
be made as a LIBOR Advance or which is reborrowed as a LIBOR Advance, in
accordance with the provisions of Section 2.2 hereof, and which shall be in a
principal amount of at least $5,000,000 and in an integral multiple of $500,000,
except for a LIBOR Advance which is in an amount equal to the unused amount of
the Facility A Loan Commitment, which Advance may be in such amount.
"LIBOR Basis" shall mean a simple per annum interest rate equal to the
sum of (a) the quotient of (i) LIBOR divided by (ii) one minus the LIBOR Reserve
Percentage, if any, stated as a decimal plus (b) the Applicable Margin for LIBOR
Advances then in effect. The LIBOR Basis shall be rounded upward to the nearest
one-hundredth of one percent (1/100%) and shall apply to Interest Periods of one
(1), two (2), three (3), and six (6) months, and, once determined, shall be
subject to Article 10 hereof and shall remain unchanged during the applicable
Interest Period. The Borrower may not select an Interest Period for a LIBOR
Advance in excess of six (6) months unless the Administrative Agent has notified
the Borrower (i) that each of the Lenders has available to it funds for such
Lender's share of the proposed Advance which are not required for other purposes
and (ii) that such funds are available to each Lender at a rate (exclusive of
reserves and other adjustments) at or below LIBOR for such proposed Advance and
Interest Period. Interest on LIBOR Advances shall also be subject to adjustment
to reflect changes in the Applicable Margin for LIBOR Advances as provided in
Section 2.3(g) hereof.
"LIBOR Reserve Percentage" shall mean the percentage which is in effect
from time to time under Regulation D of the Board of Governors of the Federal
Reserve System, as such regulation may be amended from time to time, as the
actual reserve requirement applicable with respect to Eurocurrency Liabilities
(as that term is defined in Regulation D), to the extent any Lender has any
Eurocurrency Liabilities subject to such reserve requirement at that time.
"Licenses" shall mean any rights, whether based upon any agreement,
statute, order, ordinance, or otherwise, granted by any governmental authority
to the Borrower or any of its Restricted Subsidiaries to operate its business,
together with any amendment, modification or replacement with respect thereto.
"Lien" shall mean, with respect to any property, any mortgage, lien,
pledge, assignment, charge, security interest, title retention agreement, levy,
execution, seizure, attachment, garnishment, or other encumbrance of any kind in
respect of such property, whether or not choate, vested, or perfected.
"Loan Documents" shall mean this Agreement, the Notes, the Fee
Agreements, the Security Documents, and all Requests for Advance between the
Borrower and the Administrative Agent, the Lenders, or any of them and all other
documents and agreements executed or delivered in connection with or
contemplated by this Agreement.
"Materially Adverse Effect" shall mean any materially adverse effect
upon the business, assets, financial condition or results of operations of the
Borrower and its Restricted Subsidiaries, on a consolidated basis in accordance
with GAAP, taken as a whole, or upon the ability of the Borrower and its
Restricted Subsidiaries, taken as a whole, to perform their obligations under
this Agreement or any other Loan Document.
"Maturity Date" shall mean February 28, 2005, or such earlier date as
the payment of the Facility A Loans shall be due (whether by acceleration or
otherwise).
"MSO Agreement" shall mean any agreement between the Borrower or any of
its Restricted Subsidiaries and a cable television operator pursuant to which
such operator agrees, among other things, to distribute and exhibit to its
subscribers programming of the Borrower or such Restricted Subsidiary.
"Multiemployer Plan" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"Necessary Authorizations" shall mean all authorizations, consents,
permits, approvals, licenses, and exemptions from, and all filings and
registrations with, and all reports to, any governmental or other regulatory
authority whether federal, state, or local, and all agencies thereof necessary
for the conduct of the businesses and the ownership (or lease) of the properties
and assets of the Borrower or its Restricted Subsidiaries, including, without
limitation, the Licenses.
"Net Proceeds" shall mean, with respect to any sale, lease, transfer,
or other disposition of the assets of the Borrower or any of its Restricted
Subsidiaries, the gross sales price for the assets or securities being sold
(including, without limitation, any payments received for non-competition
covenants), net of (a) amounts reserved or paid, if any, for taxes payable with
respect to the sale, (b) reasonable and customary transaction costs payable by
the Borrower or such Restricted Subsidiary, (c) contingencies with respect to
such sale appropriately reserved for by the Borrower or such Restricted
Subsidiary, and (d) until actually received by the Borrower or such Restricted
Subsidiary, any portion of the sales price held in escrow or paid in
installments. Upon receipt by either the Borrower or any of its Restricted
Subsidiaries of (i) the amounts referred to in item (a) of the preceding
sentence, or (ii) if there shall occur any reduction in the tax reserves
referred to in item (a) of the preceding sentence resulting in payment to either
the Borrower or any of its Restricted Subsidiaries, such amounts shall then be
deemed to be "Net Proceeds."
"News Corporation" shall mean The News Corporation Limited, a South
Australia, Australia corporation.
"Non-Guarantor Subsidiaries" shall mean SNTV Holdings, Inc., SNG,
Television Games Networks, L.L.C., Sneak Prevue LLC, any other Subsidiary
acquired or created by the Borrower or any of its Restricted Subsidiaries after
the Agreement Date which all of the Arrangers have accepted as a Non-Guaranty
Subsidiary and any of their Subsidiaries and "Non-Guarantor Subsidiary" shall
mean any one of the foregoing.
"Notes" shall mean, collectively the Facility A Notes and all
Competitive Bid Notes.
"Notice of Competitive Bid Borrowing" shall mean any certificate signed
by an Authorized Signatory requesting a Competitive Bid Borrowing hereunder,
which shall be in substantially the form of Exhibit E attached hereto and shall,
among other things, specify the requested (a) date of such proposed Competitive
Borrowing, (b) aggregate amount of such proposed Competitive Bid Borrowing,
(c)(i) in the case of a Competitive Bid Borrowing consisting of Competitive
LIBOR Advances, Interest Period and maturity date for repayment of each
Competitive LIBOR Advance to be made a part of such Competitive Bid Borrowing or
(ii) in the case of a Competitive Bid Borrowing consisting of Fixed Rate
Advances, maturity date for repayment of each Fixed Rate Advance to be part of
such Competitive Bid Borrowing (which maturity dates may not be earlier than
thirty (30) days after the date of such Competitive Bid Borrowing nor later than
the earlier of (x) the Maturity Date and (y) 180 days following the date of such
Competitive Bid Borrowing, (d) interest payment date or dates relating thereto,
and (e) other terms (if any) applicable to such Competitive Bid Borrowing.
"Obligations" shall mean (a) all payment and performance obligations of
every kind, nature and description of the Borrower and all other obligors to the
Lenders, the Issuing Bank and the Administrative Agent under this Agreement and
the other Loan Documents (including any interest, fees and other charges on the
Facility A Loans or otherwise under the Loan Documents that would accrue but for
the filing of a bankruptcy action with respect to the Borrower, whether or not a
claim for such amounts is allowed in such bankruptcy action and including
Obligations to the Lenders pursuant to Section 5.11 hereof), as they may be
amended from time to time, or as a result of making the Facility A Loans,
whether such Obligations are direct or indirect, absolute or contingent, due or
not due, contractual or tortious, liquidated or unliquidated, arising by
operation of law or otherwise, now existing or hereafter arising, including,
without limitation, obligations of the Borrower under Interest Hedge Agreements
(only to the extent that such Interest Hedge Agreement has been designated in
writing by the Administrative Agent as an approved Interest Hedge Agreement)
with the Administrative Agent, the Lenders (or a Person who was a Lender or an
affiliate of a Lender when such Interest Hedge Agreement was entered into), or
any of them, and (b) the obligation to pay an amount equal to the amount of any
and all damages which the Lenders, the Issuing Bank and the Administrative
Agent, or any of them, may suffer by reason of a breach by the Borrower or any
other obligor of any obligation, covenant, or undertaking with respect to this
Agreement or any other Loan Document.
"Payment Date" shall mean the last day of each Interest Period.
"Performance Certificate" shall mean that certificate delivered
pursuant to Section 6.3 hereof.
"Permitted Asset Sales" shall mean (a) sales, transfers or other
dispositions of assets by the Borrower or any of its Restricted Subsidiaries in
bona fide arm's-length transactions (i) which do not generate, in the aggregate
during the term hereof, Net Proceeds in excess of $20,000,000 or (ii) the Net
Proceeds of which are reinvested by the Borrower or a Restricted Subsidiary in
similar fixed assets within 180 days from the date of disposition, (b) the
disposition in the ordinary course of business of assets which are no longer
used or useful in the business of the Borrower or any of its Restricted
Subsidiaries, (c) the transfer of assets (including cash or cash equivalents)
among the Borrower and its Restricted Subsidiaries or the transfer of assets
between or among the Restricted Subsidiaries of the Borrower so long as in each
case, such assets remain assets of the Borrower or its Restricted Subsidiaries
and (d) the sale of SNTV Holdings, Inc., SSDS, Spacecom or SNG.
"Permitted Liens" shall mean, as applied to any Person:
(a) any Lien in favor of the Administrative Agent or the
Lenders given to secure the Obligations and any Lien in favor of the
administrative agent or the lenders under the Facility B Loan Agreement (to the
extent that such Lien equally and ratably secures the Obligations);
(b) (i) Liens on real estate for real estate taxes not yet
delinquent and (ii) Liens for taxes, assessments, judgments, governmental
charges or levies, or claims the non-payment of which is being contested in good
faith by appropriate proceedings and for which adequate reserves as required by
GAAP have been set aside on such Person's books, but only so long as no
foreclosure, distraint, sale, or similar proceedings have been commenced with
respect thereto and which remain unstayed for a period of thirty (30) days after
their commencement;
(c) Liens of carriers, warehousemen, mechanics, laborers, and
materialmen incurred in the ordinary course of business for sums not yet due or
being contested in good faith, if such reserve or appropriate provision, if any,
as shall be required by GAAP shall have been made therefor;
(d) Liens incurred in the ordinary course of business in
connection with worker's compensation and unemployment insurance;
(e) restrictions on the transfer of assets imposed by any
agreement, or by any federal, state or local statute, regulation or ordinance
applicable to such person;
(f) easements, rights-of-way, restrictions, and other similar
encumbrances on the use of real property which do not interfere with the
ordinary conduct of the business of such Person, or Liens incidental to the
conduct of the business of such Person or to the ownership of its properties
which were not incurred in connection with Indebtedness or other extensions of
credit and which do not in the aggregate materially detract from the value of
such properties or materially impair their use in the operation of the business
of such Person;
(g) purchase money mortgages or security interests,
conditional sale arrangements and other similar security interests, on any
property or assets of the Borrower; provided; however, that:
(i) the transaction in which any Lien is
proposed to be created is not otherwise prohibited by this Agreement;
(ii) the aggregate outstanding amount of all
Indebtedness secured by Liens permitted hereunder shall not at any time
exceed the amounts set forth with respect thereto in Section 7.1
hereby.
"Person" shall mean an individual, corporation, partnership, limited
liability company, trust, or unincorporated organization, or a government or any
agency or political subdivision thereof.
"Plan" shall mean an employee benefit plan within the meaning of
Section 3(3) of ERISA maintained by or contributed to by the Borrower or any
ERISA Affiliate.
"Regulatory Change" shall mean, with respect to any Lender, any change
on or after the date of this Agreement in United States federal, state or
foreign laws or regulations (including Regulation D) or the adoption or making
on or after such date of any interpretations, directives or requests applying to
a class of banks including such Lender of or under any United States federal or
state, or any foreign, laws or regulations (whether or not having the force of
law) by any court or governmental or monetary authority charged with the
interpretation or administration thereof.
"Reportable Event" shall have the meaning set forth in Section 4043(c)
of ERISA.
"Request for Advance" shall mean any certificate signed by an
Authorized Signatory requesting an Advance (other than a Competitive Bid
Advance) hereunder which will increase the aggregate amount of the Facility A
Loans outstanding, and shall be in substantially the form of Exhibit F attached
hereto. Each Request for Advance shall, among other things, (a) specify the date
of the Advance, which shall be a Business Day, the amount of the Advance, the
type of Advance, and, with respect to LIBOR Advances, the Interest Period
selected by the Borrower, (b) state that the requirements of Section 3.2 hereof
have been satisfied and (c) set forth the calculations for the Leverage Ratio as
of the date of the requested Advance (and after giving effect thereto).
"Request for Issuance of Letter of Credit" shall mean any certificate
signed by an Authorized Signatory of the Borrower requesting that the Issuing
Bank issue a Letter of Credit hereunder, which certificate shall be in
substantially the form of Exhibit G attached hereto and shall, among other
things, specify (a) that the requested Letter of Credit is either a Commercial
Letter of Credit or a Standby Letter of Credit, (b) the stated amount of the
Letter of Credit, (c) the effective date for the issuance of the Letter of
Credit (which shall be a Business Day), (d) the date on which the Letter of
Credit is to expire (which shall be a Business Day), (e) the Person for whose
benefit such Letter of Credit is to be issued, (f) state that the requirements
of Section 3.3 hereof have been satisfied; and (g) other relevant terms of such
Letter of Credit.
"Required Lenders" shall mean those Persons whose Facility A
Commitments equal or exceed fifty-one percent (51%) of the aggregate amount of
the Facility A Commitments (after giving effect to any reductions in such
Facility A Commitments, but without giving effect to any Facility A Loans then
outstanding); provided, however, that if the Facility A Commitments have been
terminated or cancelled, "Required Lenders" shall mean those Persons whose
Facility A Loans and Letter of Credit Obligations equal or exceed fifty-one
percent (51%) of the aggregate amount of the Facility A Loans and Letter of
Credit Obligations then outstanding; provided, further however, that if any
Lender is not entitled to vote pursuant to the terms of Section 2.2(d)(iv)
hereof, the denominator used to determine the aggregate amount of Facility A
Loans or Facility A Commitments shall exclude such Lender's Facility A Loans or
Facility A Commitments.
"Restricted Payment" shall mean, (a) any direct or indirect
distribution, dividend, or other payment to any Person (other than to the
Borrower or any wholly-owned Restricted Subsidiary of the Borrower) on account
of any general or limited partnership interest in, or other securities of, the
Borrower, or any of its Restricted Subsidiaries (other than dividends payable
solely in stock of the Borrower or such Restricted Subsidiary, as applicable,
and stock splits), including, without limitation, any direct or indirect
distribution, dividend or other payment to any Person (other than to the
Borrower or any Restricted Subsidiary of the Borrower) on account of any
warrants or other rights or options to acquire shares of Capital Stock of the
Borrower or any of its Restricted Subsidiaries; and (b) any consulting,
management or other similar fees, or any interest thereon, payable by the
Borrower or any of its Restricted Subsidiaries, to any Affiliate, other than
reimbursement of overhead and employee costs in the ordinary course of business
which are directly attributable to the Borrower and its Restricted Subsidiaries.
"Restricted Purchase" shall mean any payment (including, without
limitation, any sinking fund payment, prepayment or installment payment) on
account of the purchase, redemption, or other acquisition or retirement of any
general or limited partnership interest in, or shares of capital stock or other
securities of, the Borrower or any of its Restricted Subsidiaries, including,
without limitation, any warrants or other rights or options to acquire shares of
capital stock of the Borrower or any of Restricted Subsidiaries or any loan,
advance, release or forgiveness of Indebtedness by the Borrower or any of its
Restricted Subsidiaries to any partner, shareholder or Affiliate of any such
Person.
"Restricted Subsidiaries" shall mean all Subsidiaries of the Borrower
other than the Unrestricted Subsidiaries and "Restricted Subsidiary" shall mean
any one of the foregoing.
"Scheduled Principal Payments" shall mean for any period, the excess,
if any, of (a) the highest amount of the Facility A Loans and Letter of Credit
Obligations outstanding at any time during such period over (b) the amount of
the Facility A Commitment on the last day of such period.
"Security Documents" shall mean the Borrower Pledge Agreement, any
Assignment of Notes, Subsidiary Pledge Agreement and all other documents
evidencing the Lenders' security interest in Borrower's or its Restricted
Subsidiaries' Collateral.
"SNG" shall mean Superstar/Netlink Group, LLC.
"Standby Letter of Credit" shall mean a letter of credit issued to
support obligations of the Borrower incurred in the ordinary course of business,
and which is not a Commercial Letter of Credit.
"Subordinated Debt" shall mean any Indebtedness incurred by the
Borrower which is permitted under Section 7.1(e) hereof or Section 7.1(i)
hereof.
"Subsidiary" shall mean any corporation, association, partnership,
joint venture, limited liability company or other business entity of which the
Borrower and/or any Subsidiary of the Borrower, directly or indirectly, either
(a) in respect of a corporation, owns or controls more than 50% of the
outstanding stock having ordinary voting power to elect a majority of the board
of directors or similar managing body, irrespective of whether or not a class or
classes shall or might have voting power by reason of the happening of any
contingency, or (b) in respect of an associate, partnership, joint venture,
limited liability company or other business entity, is entitled to share in more
than 50% of the profits and losses, however determined. For purposes of this
Loan Agreement, "Subsidiary" shall not include InfoMedia, S.A.
"Subsidiary Guaranty" shall mean each Subsidiary Guaranty in favor of
the Administrative Agent and the Lenders, given by a Restricted Subsidiary of
the Borrower, each substantially in the form of Exhibit I attached hereto.
"Subsidiary Pledge Agreement" shall mean each Subsidiary Pledge
Agreement between a Restricted Subsidiary of the Borrower having one (1) or more
of its own Restricted Subsidiaries, on the one hand, and the Administrative
Agent (for itself and on behalf of the Lenders), on the other hand, each
substantially in the form of Exhibit J attached hereto.
"Threshold Debt Proceeds" shall mean the receipt by the Borrower of not
less than $300,000,000 in Subordinated Debt proceeds (exclusive of any portion
of the Cash Equity Proceeds which arise from subordinated debt).
"Total Debt" shall mean on a consolidated basis, as of any date,
without duplication (a) all outstanding Indebtedness for Money Borrowed of the
Borrower and its Restricted Subsidiaries, (b) the aggregate amount of all
Guarantees by the Borrower and its Restricted Subsidiaries and (c) all
Capitalized Lease Obligations of the Borrower and its Restricted Subsidiaries.
"Total Interest Expense" shall mean, for any designated period, an
amount equal to the sum of (a) the interest paid during such period with respect
to Indebtedness for Money Borrowed of the Borrower and its Restricted
Subsidiaries and (b) commitment, facility and letter of credit fees paid with
respect to the Facility A Loans, the Facility B Loans and outstanding Letters of
Credit during such period.
"Trademarks" shall mean all registered trademarks and pending
applications for trademarks of the Borrower and its Restricted Subsidiaries.
"Transponder Lease Agreement" shall mean any agreement by and between
the Borrower (or any of its Restricted Subsidiaries) and any other Person for
the license, lease or other agreement to use the telecommunications satellites
for purposes of broadcasting the programming of the Borrower and its Restricted
Subsidiaries known as TV Guide Channel, Sneak Prevue and UVTV/WGN and any other
agreement related to the transmission, origination and production of such
programming and the related technical services.
"TV Guide Transaction" shall mean the acquisition by the Borrower of
all of the outstanding Capital Stock of News America Publications, Inc. and
TVSM, Inc. from TVG Holdings, Inc., a subsidiary of News Corporation.
"Unrestricted Subsidiaries" shall mean, as of the Agreement Date, SSDS,
Inc., a Colorado corporation, United Video Properties, Inc., a Delaware
corporation, UVSG Companies, an Oklahoma general partnership and any of their
Subsidiaries and shall include any Subsidiary of the Borrower created or
acquired after the Agreement Date which the Borrower designates as an
"Unrestricted Subsidiary" (and which the Required Lenders accept as an
Unrestricted Subsidiary) until such Subsidiary has been designated as a
Restricted Subsidiary (and which the Required Lenders accept as a Restricted
Subsidiary) and "Unrestricted Subsidiary" shall mean any one of the foregoing.
No Restricted Subsidiary may be designated as an Unrestricted Subsidiary without
the prior written consent of all of the Lenders.
Each definition of an agreement in this Article 1 shall include such
agreement as modified, amended, or supplemented from time to time with the prior
written consent of the Required Lenders, except as provided in Section 11.12
hereof, and except where the context otherwise requires, definitions imparting
the singular shall include the plural and vice versa. Except where otherwise
specifically restricted, reference to a party to a Loan Document includes that
party and its successors and assigns. All terms used herein which are defined in
Article 9 of the Uniform Commercial Code in effect in the State of New York on
the date hereof and which are not otherwise defined herein shall have the same
meanings herein as set forth therein.
All accounting terms used herein without definition shall be used as
defined under GAAP. All references to financial information and results of the
Borrower shall be determined on a consolidated basis with the Borrower's
Restricted Subsidiaries as appropriate.
ARTICLE 2
Facility A Loans and Letters of CreditARTICLE 2 - Loans and
Letters of Credit.
Section 2.1 The Facility A Loans and Letters of Credit.
(a) Facility A Loans. The Lenders having Facility A
Commitments agree, severally in accordance with their respective Facility A
Commitment Ratios and not jointly, upon the terms and subject to the conditions
of this Agreement, to lend and relend to the Borrower, on or prior to the
Maturity Date, amounts which in the aggregate at any one time outstanding do not
exceed the Available Facility A Commitment (as it may be reduced from time to
time pursuant to the terms hereof).
(b) The Letters of Credit. Subject to the terms and conditions
of this Agreement, the Issuing Bank agrees to issue Letters of Credit for the
account of the Borrower pursuant to Section 2.14 hereof in face amounts not to
exceed, in the aggregate at any time, the Available Letter of Credit Commitment.
Section 2.2 Manner of Borrowing and Disbursement.
(a) Advances.
(i) Choice of Interest Rate, etc. Any Advance (other
than a Competitive Bid Advance) shall, at the option of the Borrower,
be made as a Base Rate Advance or a LIBOR Advance; provided, however,
that (A) if the Borrower fails to give the Administrative Agent written
notice specifying whether an Advance is to be repaid or reborrowed on a
Payment Date, such Advance shall be repaid and then reborrowed as a
Base Rate Advance on the Payment Date and (B) the Borrower may not
select a LIBOR Advance if, at the time of such selection, a Default has
occurred and is continuing. LIBOR Advances shall in all cases be
subject to Section 2.3(f) and Article 10 hereof.
(ii) Base Rate Advances.
(A) Advances. The Borrower shall give the
Administrative Agent in the case of Base Rate Advances
irrevocable written notice in the form of a Request for
Advance, or notice by telephone or telecopy followed
immediately by a Request for Advance not later than 12:00 noon
(New York City time) on the date the Advance is requested;
provided, however, that the failure by the Borrower to confirm
any notice by telephone or telecopy with a Request for Advance
shall not invalidate any notice so given. Upon receipt of such
notice from the Borrower, the Administrative Agent shall
promptly notify each Lender by telephone or telecopy of the
contents thereof.
(B) Repayments and Reborrowings. Subject to
the provisions of Sections 2.2(a)(i) and 2.3(f) hereof, the
Borrower may repay or prepay a Base Rate Advance without
regard to its Payment Date and (1) upon irrevocable written
notice in accordance with Section 2.2(a)(ii)(A) hereof,
reborrow all or a portion of the principal amount thereof as
one or more Base Rate Advances, (2) upon at least three (3)
Business Days' irrevocable prior written notice, reborrow all
or a portion of the principal thereof as one or more LIBOR
Advances, or (3) upon at least one (1) Business Day's
irrevocable prior written notice and subject to Section 2.6
hereof, not reborrow all or any portion of such Base Rate
Advance. On the date indicated by the Borrower, such Base Rate
Advance shall be so repaid and, as applicable, reborrowed.
(iii) LIBOR Advances.
(A) Advances. The Borrower shall give the
Administrative Agent in the case of LIBOR Advances at least
three (3) Business Days' irrevocable written notice in the
form of a Request for Advance, or notice by telephone or
telecopy followed immediately by a Request for Advance;
provided, however, that the failure of the Borrower to confirm
any notice by telephone or telecopy with a Request for Advance
shall not invalidate any notice so given. The Administrative
Agent, whose determination shall be conclusive absent manifest
error, shall determine the available LIBOR Bases and shall
notify the Borrower of such LIBOR Bases. The Borrower shall
promptly notify the Administrative Agent by telecopy or by
telephone, and shall immediately confirm any such telephonic
notice in writing, of its selection of a LIBOR Basis and
Interest Period for such Advance. Upon receipt of such notice
from the Borrower, the Administrative Agent shall promptly
notify each Lender by telephone or telecopy of the contents
thereof.
(B) Repayments and Reborrowings. At least
three (3) Business Days prior to each Payment Date for a LIBOR
Advance, subject to Sections 2.2(a)(i) and 2.3(f) hereof, the
Borrower shall give the Administrative Agent written notice
specifying whether all or a portion of any LIBOR Advance
outstanding on the Payment Date (1) is to be repaid and then
reborrowed in whole or in part as a LIBOR Advance, (2) is to
be repaid and then reborrowed in whole or in part as one or
more Base Rate Advances or (3) subject to Section 2.6 hereof,
is to be repaid and not reborrowed. Upon such Payment Date
such LIBOR Advance will, subject to the provisions hereof, be
so repaid and, as applicable, reborrowed.
(b) Competitive Bid Advances. Each Lender severally agrees
that the Borrower may make Competitive Bid Borrowings under this Section 2.2(b)
from time to time on any Business Day during the period from the Agreement Date
through the date which is thirty (30) days prior to the Maturity Date in the
manner set forth below; provided that, following the making of each Competitive
Bid Borrowing, the aggregate amount of all Facility A Loans, Letter of Credit
Obligations and Competitive Bid Loans then outstanding shall not exceed the
Facility A Commitment on such date.
(i) The Borrower may request a Competitive Bid
Borrowing under this Section 2.2(b) by delivering to the Administrative
Agent a written Notice of Competitive Bid Borrowing or notice by
telephone or telecopy followed immediately by a written Notice of
Competitive Bid Borrowing not later than noon (New York City time) (A)
at least one (1) Business Day prior to the date of a proposed
Competitive Bid Borrowing, if the Borrower has requested that the rates
of interest to be offered by the Bidders shall be fixed rates per annum
(the Advances comprising any such Competitive Bid Borrowing being
referred to herein as "Fixed Rate Advances") and (B) at least four (4)
Business Days prior to the date of a proposed Competitive Bid
Borrowing, if the Borrower has requested that the rates of interest to
be offered by the Bidders be based on LIBOR (the Advances comprising
any such Competitive Bid Borrowing being referred to herein as
"Competitive LIBOR Advances"). Each Notice of Competitive Bid Borrowing
shall be irrevocable and binding on the Borrower. Upon receipt of a
Notice of Competitive Bid Borrowing, the Administrative Agent shall
promptly notify each Lender of the contents thereof by sending such
Lender a copy of such Notice of Competitive Bid Borrowing.
(ii) Each Lender may, if, in its sole discretion, it
elects to do so, irrevocably offer to make one or more Competitive Bid
Advances to the Borrower as part of any proposed Competitive Bid
Borrowing (each such Lender being hereafter referred to as a "Bidder")
at a rate or rates of interest specified by such Lender in its sole
discretion, by notifying the Administrative Agent (which shall give
prompt notice thereof to the Borrower), before 9:30 a.m. (New York City
time) (1) on the date of such proposed Competitive Bid Borrowing, in
the case of a Competitive Bid Borrowing consisting of Fixed Rate
Advances, and (2) three (3) Business Days before the date of such
proposed Competitive Bid Borrowing, in the case of a Competitive Bid
Borrowing consisting of Competitive LIBOR Advances, of the minimum
amount and maximum amount of each Competitive Bid Advance which such
Lender would be willing to make as part of such proposed Competitive
Bid Borrowing (which amounts may, subject to Section 2.1(a) hereof,
exceed such Lender's individual Facility A Commitment), the rate or
rates of interest therefor and such Lender's applicable lending office
with respect to such Competitive Bid Advance (each such notice being
hereafter referred to as a "Bid"); provided, however, that if the
Administrative Agent in its capacity as a Lender shall, in its sole
discretion, elect to make any such offer, it shall notify the Borrower
of such offer at least 30 minutes prior to the time and on the date on
which notice of such election is required to be given to the
Administrative Agent by the other Lenders. If any Lender shall elect
not to make such an offer, such Lender shall so notify the
Administrative Agent before 9:30 a.m. (New York City time) on the date
on which notice of such election is to be given to the Administrative
Agent by the other Lenders, and such Lender shall not be obligated to,
and shall not make any Competitive Bid Advance as part of such
Competitive Bid Borrowing; provided, however, that the failure of any
Lender to give such notice shall not cause such Lender to be obligated
to make any Competitive Bid Advance as part of such Competitive Bid
Borrowing.
(iii) The Borrower shall, prior to (X) 11:00 a.m.
(New York City time) on the date of a proposed Competitive Bid
Borrowing consisting of Fixed Rate Advances and (Y) 9:30 a.m. (New York
City time) three (3) Business Days prior to the date of a proposed
Competitive Bid Borrowing consisting of Competitive LIBOR Advances,
either:
(A) cancel such Competitive Bid Borrowing by
giving the Administrative Agent written notice to that effect,
or
(B) accept one or more of such offers made
by any Bidder or Bidders (provided that the Borrower may not
accept bids in excess of the aggregate amount of such
Competitive Bid Borrowing), in its sole discretion, by giving
notice to the Administrative Agent of the amount of each
Competitive Bid Advance (which amount shall be equal to or
greater than the minimum amount, and equal to or less than the
maximum amount, set forth in each Bidder's Bid with respect to
such Competitive Bid Borrowing) to be made by each Bidder as
part of such Competitive Bid Borrowing, and reject any
remaining offers made by Bidders by giving the Administrative
Agent notice to that effect.
The Borrower shall accept Bids in order of the lowest to the highest
rates of interest offered by the Bidders. If two or more Bidders have
offered the same interest rate, the amount to be borrowed at such
interest rate will be allocated among such Bidders in proportion to the
amount that each such Bidder offered at such interest rate.
(iv) If the Borrower accepts one or more of the Bids
made by any Bidder, the Administrative Agent shall in turn promptly
notify (A) each Bidder of the date and aggregate amount of such
Competitive Bid Borrowing and whether or not any Bid or Bids made by
such Bidder have been accepted by the Borrower, (B) each Bidder that is
to make a Competitive Bid Advance as part of such Competitive Bid
Borrowing, of the amount of each Competitive Bid Advance to be made by
such Bidder as part of such accepted Competitive Bid Borrowing, and (C)
each Bidder that is to make a Competitive Bid Advance as part of such
Competitive Bid Borrowing, upon receipt, that the Administrative Agent
has received forms of documents appearing to fulfill the applicable
conditions to such Advances set forth in Article 3 hereof. Each Bidder
that is to make a Competitive Bid Advance as part of such Competitive
Bid Borrowing shall, before 12:00 noon (New York City time) on the date
of such Competitive Bid Borrowing specified in the notice received from
the Administrative Agent pursuant to clause (A) of the preceding
sentence or any later time when such Bidder shall have received notice
from the Administrative Agent pursuant to clause (C) of the preceding
sentence, make available to the Administrative Agent, in same day
funds, such Bidder's portion of such Competitive Bid Borrowing. Upon
fulfillment of the applicable conditions set forth in Article 3 hereof
and after receipt by the Administrative Agent of such funds, the
Administrative Agent will in accordance with Section 2.2(d) hereof make
such funds available to the Borrower. Promptly after each Competitive
Bid Borrowing, the Administrative Agent will notify each Lender of the
amount of the Competitive Bid Borrowing, the consequent reduction to
the Available Facility A Commitment and the dates upon which such
reduction commenced and will terminate.
(v) If the Borrower notifies the Administrative Agent
that it accepts one or more of the Bids made by any Bidder or Bidders
pursuant to Section 2.2(b)(iii) hereof, such notice of acceptance shall
be irrevocable and binding on the Borrower. The Borrower shall
indemnify each Bidder against any loss, cost or expense incurred by
such Bidder as a result of the failure of the Borrower to take any
required Competitive LIBOR Advance whether such failure is a result of
any failure to fulfill on or before the date specified in the related
Notice of Competitive Bid Borrowing for such Competitive Bid Borrowing
the applicable conditions set forth in Article 3 hereof, or otherwise,
including, without limitation, any loss (excluding loss of anticipated
profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Bidder to fund
the Competitive LIBOR Advance to be made by such Bidder as part of such
Competitive Bid Borrowing when such Competitive Bid Advance, as a
result of such failure, is not made on such date.
(vi) Each Competitive Bid Borrowing shall be in an
amount of not less than $10,000,000 and in integral multiples of
$1,000,000 in excess thereof. While any Competitive Bid Borrowing is
outstanding, it will be deemed usage of the Facility A Commitment for
purposes of availability and the Facility A Commitment of each Lender's
portion of the Facility A Commitment (whether or not a Bidder) shall be
reduced and deemed used for all purposes by its pro rata share (based
on its respective Facility A Commitment) of an amount equal to the
outstanding amount of such Advance. However, each Bidder's Advance made
under the Competitive Bid Option shall not reduce such Bidder's
obligation to lend its pro rata share of the remaining undrawn Facility
A Commitment.
(vii) Within the limits and under the conditions of
the Competitive Bid Option, the Borrower may from time to time borrow
under the Competitive Bid Option, repay or pay pursuant to this Section
2.2, and reborrow under the Competitive Bid Option, provided that a
Competitive Bid Borrowing shall not be made with three (3) Business
Days of the date of any other Competitive Bid Borrowing.
(viii) The Borrower shall repay the Administrative
Agent for the account of each Lender that has made a Competitive Bid
Advance, on the maturity date of each Competitive Bid Advance (such
maturity date being that specified by the Borrower for repayment of
such Competitive Bid Advance in the related Notice of Competitive Bid
Borrowing and provided in the Competitive Bid Notes evidencing such
Competitive Bid Advances), the then unpaid principal amount of such
Competitive Bid Advance. The Borrower shall have no right to prepay any
principal amount of a Competitive Bid Advance unless, and then only on
the terms, specified by the Borrower for such Competitive Bid Advance
in the related Notice of Competitive Bid Borrowing delivered pursuant
to Section 2.2(b)(i) hereof and set forth in the Competitive Bid Note
evidencing such Competitive Bid Advance.
(ix) The Indebtedness of the Borrower resulting from
each Competitive Bid Advance shall be evidenced by a separate
Competitive Bid Note payable to the order of each Bidder making such
Competitive Bid Advance and shall, for all purposes hereunder and under
the Loan Documents, be part of the Obligations.
(c) Notification of Lenders. Upon receipt of a Request for
Advance or a written notice under this Section 2.2 from the Borrower with
respect to a reborrowing of any then outstanding Advance on the Payment Date for
such Advance, the Administrative Agent shall promptly notify each Lender by
telephone or telecopy of the contents thereof and the amount of such Lender's
portion of the applicable Advance. Each Lender shall, not later than 2:00 p.m.
(New York City time) on the date specified in such notice, make available to the
Administrative Agent, or at such account as the Administrative Agent shall
designate, the amount of its portion of the applicable Advance in immediately
available funds.
(d) Disbursement.
(i) Prior to 2:00 p.m. (New York City time) on the
date of an Advance hereunder (other than a Competitive Bid Advance),
the Administrative Agent shall, subject to the satisfaction of the
conditions set forth in this Section 2.2 and in Article 3 hereof,
disburse the amounts made available to the Administrative Agent by the
Lenders obligated to make such Advance in immediately available funds
by (A) transferring the amounts so made available by wire transfer
pursuant to the instructions of the Borrower, or (B) in the absence of
such instructions, crediting the amounts so made available to the
account of the Borrower maintained with the Administrative Agent or an
affiliate of the Administrative Agent.
(ii) Unless the Administrative Agent shall have
received notice from a Lender obligated to make such Advance prior to
the date of any Advance that such Lender will not make available to the
Administrative Agent such Lender's portion of such Advance, and so long
as notice has been given as provided in Section 2.2(c) hereof, the
Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Advance and
the Administrative Agent may, in its sole discretion and in reliance
upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent such Lender shall not have
so made such portion available to the Administrative Agent, such Lender
agrees to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from
the date such amount is made available to the Borrower until the date
such amount is repaid to the Administrative Agent, at the Federal Funds
Rate.
(iii) If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount so repaid
shall constitute such Lender's portion of the applicable Advance for
purposes of this Agreement. The failure of any Lender to fund its
portion of any Advance shall not relieve any other Lender of its
obligation, if any, hereunder to fund its respective portion of the
Advance on the date of such borrowing, but no Lender shall be
responsible for any such failure of any other Lender.
(iv) In the event that, at any time when the Borrower
is not in Default, a Lender for any reason fails or refuses to fund its
portion of an Advance, then, until such time as such Lender has funded
its portion of such Advance, or all other Lenders have received payment
in full (whether by repayment or prepayment) of the principal and
interest due in respect of such Advance, such non-funding Lender shall
(A) have no right to vote regarding any issue on which voting is
required or advisable under this Agreement or any other Loan Document,
and (B) not be entitled to receive payments of principal, interest or
fees from the Borrower in respect of such Facility A Loans which such
Lender failed to make.
Section 2.3 Interest.
(a) On Base Rate Advances. Interest on each Base Rate Advance
shall be computed on the basis of a year of 365/366 days (360 days to the extent
based on the Federal Funds Rate) for the actual number of days elapsed and shall
be payable at the Base Rate for such Advance in arrears on the applicable
Payment Date. Interest on Base Rate Advances then outstanding shall also be due
and payable on the Maturity Date.
(b) On LIBOR Advances. Interest on each LIBOR Advance shall be
computed on the basis of a 360-day year for the actual number of days elapsed
and shall be payable at the LIBOR Basis for such Advance in arrears on the
applicable Payment Date, and, in addition, if the Interest Period for a LIBOR
Advance exceeds three (3) months, interest on such LIBOR Advance shall also be
due and payable in arrears on each three (3) month anniversary of the making of
such Advance. Interest on LIBOR Advances then outstanding shall also be due and
payable on the Maturity Date.
(c) Competitive Bid Advances. The Borrower shall pay interest
on the unpaid principal amount of each Competitive Bid Advance from the date of
such Competitive Bid Advance to the date the principal amount of such
Competitive Bid Advance is repaid in full, at the rate of interest for such
Competitive Bid Advance specified by the Bidder making such Competitive Bid
Advance in its notice with respect thereto, payable on the interest payment date
or dates specified by the Borrower for such Competitive Bid Advance in the
related Notice of Competitive Bid Borrowing, as provided in the Competitive Bid
Note evidencing such Competitive Bid Advance.
(d) If No Notice of Selection of Interest Rate Basis. If the
Borrower fails to give the Administrative Agent timely notice of (i) its
selection of a LIBOR Basis, (ii) an election to reborrow an Advance as a LIBOR
Advance or (iii) if, for any reason, a determination of a LIBOR Basis for any
Advance is not timely concluded, the Base Rate shall apply to such Advance, and
if the Borrower shall fail to elect to reborrow any LIBOR Advance then
outstanding prior to the last Payment Date applicable thereto in accordance with
the provisions of Section 2.2 hereof, as applicable, the Base Rate shall apply
to such Advance commencing on and after such Payment Date.
(e) Upon Default. Upon the occurrence and during the
continuance of an Event of Default, the Required Lenders shall have the option
(but shall not be required to give prior notice thereof to the Borrower, to
accelerate the maturity of the Facility A Loans, or exercise any other rights or
remedies hereunder in connection with the exercise of this right), to charge
interest on the outstanding principal balance of the Facility A Loans at the
Default Rate from the date of such Event of Default. Such interest shall be
payable on the earlier of DEMAND or the Maturity Date and shall accrue until the
earlier of (i) waiver or cure (to the satisfaction of the Required Lenders) of
the applicable Event of Default, (ii) agreement by the Required Lenders to
rescind the charging of interest at the Default Rate, or (iii) payment in full
of the Obligations.
(f) LIBOR Advances. At no time may the number of outstanding
LIBOR Advances hereunder exceed 12.
(g) Applicable Margin.
(i) The Applicable Margin shall be subject to
reduction or increase, as applicable, and as set forth in the tables
below, based upon the Leverage Ratio of the Borrower set forth on a pro
forma basis (after giving effect to any requested Advances) in any
Request for Advance and as reflected in the financial statements
required to be delivered for the fiscal quarter most recently ended
pursuant to Section 6.1 or Section 6.2 hereof. The adjustment provided
for in this Section 2.3(g) shall be effective (A) with respect to an
increase of the Applicable Margin, as of the second (2nd) Business Day
after (1) with respect to Base Rate Advances, the day on which any
Request for Advance is delivered, (2) with respect to LIBOR Advances,
the day on which the requested Advance is made or (3) the day on which
financial statements are required to be delivered to the Administrative
Agent pursuant to Sections 6.1 and 6.2 hereof (or, if applicable, the
monthly financial statements delivered by the Borrower), as the case
may be, and (B) with respect to a decrease in the Applicable Margin, as
of the second (2nd) Business Day after (1) with respect to Base Rate
Advances, the day on which any Request for Advance is delivered, (2)
with respect to LIBOR Advances, the day on which the requested Advance
is made or (3) except with respect to Interest Periods ending (or other
payments of interest occurring) before the date that such financial
statements are actually delivered to the Administrative Agent, (x) the
day on which such financial statements are required to be delivered to
the Administrative Agent pursuant to Section 6.1 or 6.2 hereof or (y)
if applicable, the one year anniversary of the Agreement Date, as the
case may be. Notwithstanding the foregoing, if the Borrower shall fail
to deliver financial statements within forty-five (45) days after the
end of any of the first three fiscal quarters of the Borrower's fiscal
year (or within one hundred twenty (120) days after the end of the last
fiscal quarter of the Borrower's fiscal year), as required by Sections
6.1 or 6.2 hereof, it shall be conclusively presumed that the
Applicable Margin is based upon a Leverage Ratio of 4.0 to 1.0 for the
period from and including the forty-sixth (46th) day (or one hundred
twenty-first (121st) day, in the case of the last quarter) after the
end of such fiscal quarter, as the case may be, to the Business Day
following the delivery by the Borrower to the Administrative Agent of
such financial statements. The Applicable Margin in effect on the
Agreement Date shall be based upon a certificate, dated the Agreement
Date, by the Borrower's chief financial officer showing the Leverage
Ratio on a pro forma basis (after giving effect to initial Advances
hereunder) and delivered to the Administrative Agent on the Agreement
Date.
A. (i) Prior to receipt by the Borrower of (x)
Threshold Debt Proceeds and (y) the Cash Equity Proceeds, the
Applicable Margin shall be set forth below:
Base Rate Advance LIBOR Advance
Leverage Ratio Applicable Margin Applicable Margin
Greater than or equal to 4.0 to 1.0 0.250% 1.250%
Greater than or equal to 3.5 to 1.0
but less than 4.0 to 1.0 0.125% 1.125%
Greater than or equal to 3.0 to 1.0
but less than 3.5 to 1.0 0.000% 1.000%
Greater than or equal to 2.5 to 1.0
but less than 3.0 to 1.0 0.000% 0.875%
Greater than or equal to 2.0 to 1.0
but less than 2.5 to 1.0 0.000% 0.750%
Less than 2.0 to 1.0 0.000% 0.875%
(ii) Notwithstanding the foregoing table
above for all periods prior to the twelve (12) month
anniversary of the Agreement Date, the Applicable Margin for
LIBOR borrowings under the Facility A Commitment will be no
lower than 1.000%.
B. (i) following receipt by the Borrower of (ii) the
Threshold Debt Proceeds and (iii) the Cash Equity Proceeds,
the Applicable Margin shall be as set forth below:
Base Rate Advance LIBOR Advance
Leverage Ratio Applicable Margin Applicable Margin
Greater than or equal to 4.5 to 1.0 0.250% 1.250%
Greater than or equal to 4.0 to 1.0
but less than 4.5 to 1.0 0.125% 1.125%
Greater than or equal to 3.5 to 1.0
but less than 4.0 to 1.0 0.000% 1.000%
Greater than or equal to 3.0 to 1.0
but less than 3.5 to 1.0 0.000% 0.875%
Greater than or equal to 2.5 to 1.0
but less than 3.0 to 1.0 0.000% 0.750%
Greater than or equal to 2.0 to 1.0
but less than 2.5 to 1.0 0.000% 0.625%
Less than 2.0 to 1.0 0.000% 0.750%
(ii) Notwithstanding the foregoing table
above for all periods prior to the twelve (12) month
anniversary of the Agreement Date, the Applicable Margin for
LIBOR Advances under the Facility A Commitment will be no
lower than 0.875%.
Section 2.4 Fees.
(a) Facility Fee. The Borrower agrees to pay the
Administrative Agent for the account of each Lender having a Facility A
Commitment a Facility Fee on the actual daily amount of such Lender's Facility A
Commitment for each day from the Agreement Date through the Maturity Date at a
rate equal to the applicable Facility Fee Percentage. The Facility Fee shall be
computed on the basis of a year of 365/366 days for the actual number of days
elapsed and shall be payable quarterly in arrears for each quarter on the last
day of each calendar quarter (and on the Maturity Date) commencing on March 31,
1999. As set forth in the definition of Facility Fee Percentage hereof, the
Facility Fee Percentage shall be subject to increase and decrease based upon the
Leverage Ratio on the dates set forth in Section 2.3(g) hereof for adjustments
to the Applicable Margin. The Facility Fee payable hereunder shall be fully
earned when due and non-refundable when paid.
(b) Commitment Fee. On all times following receipt of the
Threshold Debt Proceeds and the Cash Equity Proceeds, in the event that, and at
all times that the Available Facility A Commitment is greater than 50% of the
total Facility A Commitment, the Borrower shall pay to the Administrative Agent
for the account of the Lenders a commitment fee of (a) 0.125% multiplied by (b)
the Available Facility A Commitment. This fee shall be in addition to the
facility fee payable pursuant to Section 2.4(a) hereof and shall be fully earned
when due and non-refundable when paid.
(c) Letter of Credit Fees.
(i) The Borrower shall pay to the Issuing Bank a fee
on the undrawn face amount of any outstanding Letters of Credit from
the date of issuance through the expiration date of each such Letter of
Credit at a rate of 0.125% per annum, which fee shall be computed on
the basis of a year of 365/366 days for the actual number of days
elapsed, and shall be payable quarterly in arrears on the last day of
each calendar quarter (and on the Maturity Date) commencing on March
31, 1999.
(ii) The Borrower shall also pay to the
Administrative Agent on behalf of the Lenders having Facility A
Commitments in accordance with their respective Facility A Commitment
Ratios, a fee on the undrawn face amount of any outstanding Letters of
Credit for each day from the date of issuance thereof through the
expiration date for each such Letter of Credit at a rate equal to the
Applicable Margin for LIBOR Advances under the Facility A Commitment.
Such letter of credit fee shall be computed on the basis of a year of
365/366 days for the actual number of days elapsed and shall be payable
quarterly in arrears for each quarter on the last day of each calendar
quarter (and on the Maturity Date) commencing on March 31, 1999. The
letter of credit fee set forth in this Section 2.4(b)(ii) shall be
subject to increase and decrease on the dates and in the amounts set
forth in Section 2.3(g) hereof in the same manner as the adjustment of
the Applicable Margin with respect to LIBOR Advances.
(d) Administrative Agent's Fees. The Borrowers shall pay to
the Administrative Agent for its own account such fees as may from time to time
be agreed between the Borrower and the Administrative Agent.
Section 2.5 Reduction of Commitment.
(a) Optional. The Borrower shall have the right, at any time
and from time to time after the Agreement Date and prior to the Maturity Date,
upon at least three (3) Business Days' prior written notice to the
Administrative Agent without premium or penalty, to cancel or reduce permanently
all or a portion of the Facility A Commitment on a pro rata basis among the
Lenders, provided that any such partial reduction shall be made in an amount not
less than $5,000,000 and in integral multiples of not less than $1,000,000. As
of the date of cancellation or reduction set forth in such notice, the Facility
A Commitment shall be permanently reduced to the amount stated in the Borrower's
notice for all purposes herein, and the Borrower shall, subject to Section 2.10
hereof, pay to the Administrative Agent for the account of the Lenders the
amount necessary to reduce the principal amount of the Facility A Loans then
outstanding under the Facility A Commitment to not more than the amount of the
Available Facility A Commitment as so reduced, together with accrued interest on
the amount so prepaid. Reductions hereunder shall be applied to the next
scheduled mandatory reductions under Section 2.5(b) hereof.
(b) Reductions from Asset Sales. Except with respect to
Permitted Asset Sales, on the Business Day after the receipt by the Borrower or
any Restricted Subsidiary of the Borrower of any Facility A Net Proceeds with
respect to any sale of any equity ownership in any Restricted Subsidiary or
assets of the Borrower or any Restricted Subsidiary of the Borrower, the
Facility A Commitment shall be permanently reduced by an amount equal to 100% of
the Facility A Net Proceeds of such sale.
Section 2.6 PrepaymentSection 2.6 Prepayment. LIBOR Advances
may be prepaid prior to the applicable Payment Date, upon three (3) Business
Days' prior written notice to the Administrative Agent, provided that the
Borrower shall reimburse the Lenders and the Administrative Agent, on the
earlier of demand or the Maturity Date, for any loss or out-of-pocket expense
incurred by the Lenders or the Administrative Agent in connection with such
prepayment, as set forth in Section 2.10 hereof. Base Rate Advances may be
prepaid in full or in part at any time without penalty upon written notice to
the Administrative Agent on the date of such prepayment. Each notice of
prepayment shall be irrevocable, and all amounts prepaid on the Facility A Loans
shall be applied first to interest and fees and other amounts due and payable
hereunder as of such date, and then to principal. Partial prepayments shall be
in a principal amount of not less than $1,000,000 and in integral multiples of
$100,000. Upon receipt of any notice of prepayment, the Administrative Agent
shall promptly notify each Lender. The Borrower shall not have the right to
prepay Competitive Bid Loans except as set forth in Section 2.2(b)(viii) hereof.
Section 2.7 Repayment.
(a) Facility A Loans Exceeding Available Facility A
Commitment. If, at any time, the amount of the Facility A Loans and the Letter
of Credit Obligations then outstanding shall exceed the Available Facility A
Commitment, the Borrower shall on such date make a repayment of the principal
amount of the Facility A Loans in an amount equal to such excess.
(b) Repayments from Asset Sales. Except with respect to
Permitted Asset Sales, on the Business Day after the receipt by the Borrower or
any of its Restricted Subsidiaries of any Net Proceeds of any sale of any equity
ownership interest in any Restricted Subsidiary or assets of the Borrower or any
of its Restricted Subsidiaries, the Borrower shall make a repayment of the
Facility A Loans then outstanding in an amount equal to the amount of the
Facility A Net Proceeds.
(c) Maturity. In addition to the foregoing, a final payment of
all Obligations then outstanding shall be due and payable on the Maturity Date.
Section 2.8 Notes; Loan Accounts.
(a) The Facility A Loans shall be repayable in accordance with
the terms and provisions set forth herein, and shall be evidenced by the
Facility A Notes. One (1) of the Notes shall be payable to the order of each
Lender having a Facility A Commitment in accordance with the respective Facility
A Commitment Ratio of such Lender. The Notes shall be issued by the Borrower to
the Lenders and shall be duly executed and delivered by an Authorized Signatory.
(b) Each Lender may open and maintain on its books in the name
of the Borrower a loan account with respect to its Facility A Loans and interest
thereon. Each Lender which opens such loan account or accounts shall debit the
applicable loan account for the principal amount of each Advance made by it and
accrued interest thereon, and shall credit such loan account for each payment on
account of principal of or interest on such Facility A Loans. The records of
each Lender with respect to the loan accounts maintained by it shall be, absent
manifest error, prima facie evidence of its Facility A Loans and accrued
interest thereon, but the failure to maintain such records shall not impair the
obligation of the Borrower to repay Indebtedness hereunder.
(c) Each Advance (other than Competitive Bid Advances) from
the Lenders under this Agreement shall be made pro rata on the basis of their
respective Facility A Commitment Ratios.
Section 2.9 Manner of Payment.
(a) Each payment (including any prepayment) by the Borrower on
account of the principal of or interest on the Facility A Loans, fees, and any
other amount owed to the Lenders or the Administrative Agent under this
Agreement, the Notes, or the other Loan Documents shall be made not later than
1:00 p.m. (New York City time) on the date specified for payment under this
Agreement or such other Loan Document to the Administrative Agent to an account
designated by the Administrative Agent, for the account of the Lenders or the
Administrative Agent, as the case may be, in lawful money of the United States
of America in immediately available funds. The failure of the Borrower to make
any such payment by such time shall not constitute a Default hereunder, provided
that such payment is received by the Administrative Agent in immediately
available funds by 4:00 p.m. (New York City time) on such due date, but any such
payment made after 1:00 p.m. (New York City time) on such due date shall be
deemed to have been made on the next Business Day for the purpose of calculating
interest on amounts outstanding on the Facility A Loans, unless the
Administrative Agent, in fact, was able to remit to such Lender its pro rata
share of such payment by 4:00 p.m. (New York City time) on such due date. In the
case of a payment for the account of a Lender, the Administrative Agent will
promptly thereafter distribute the amount so received in like funds to such
Lender. If the Administrative Agent shall not have received any payment from the
Borrower as and when due, the Administrative Agent will promptly notify the
Lenders accordingly.
(b) If any payment under this Agreement or any of the Notes
shall be specified to be made upon a day which is not a Business Day, it shall
be made on the next day which is a Business Day, and such extension of time
shall in such case be included in computing interest and fees, if any, in
connection with such payment.
(c) So long as the applicable Lender has complied with Section
2.13 hereof, the Borrower agrees to pay principal, interest, fees and all other
amounts due hereunder, under the Notes or under any other Loan Document without
set-off or counterclaim or any deduction whatsoever and free and clear of all
taxes, levies and withholding. So long as the applicable Lender has complied
with Section 2.13 hereof, if the Borrower is required by Applicable Law to
deduct any taxes from or in respect of any sum payable to the such Lender
hereunder, under any Note or under any other Loan Document: (i) the sum payable
hereunder or thereunder, as applicable, shall be increased to the extent
necessary to provide that, after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.9(c)), the
Administrative Agent or such Lender, as applicable, receives an amount equal to
the sum it would have received had no such deductions been made; (ii) the
Borrower shall make such deductions from such sums payable hereunder or
thereunder, as applicable, and pay the amount so deducted to the relevant taxing
authority as required by Applicable Law; and (iii) the Borrower shall provide
the Administrative Agent or such Lender, as applicable, with evidence
satisfactory to the Administrative Agent or such Lender, as applicable, that
such deducted amounts have been paid to the relevant taxing authority. Before
making any such deductions, such Lender shall designate a different lending
office and may take such alternative courses of action if such designation or
alternative courses of action will avoid the need for such deductions and will
not in the good faith judgment of such Lender be otherwise disadvantageous to
such Lender.
Section 2.10 Reimbursement.
(a) Whenever any Lender shall actually incur any losses or
reasonable out-of-pocket expenses (other than losses of the interest rate
margin) in connection with (i) failure by the Borrower to borrow any LIBOR
Advance or Competitive Bid Advance after having given notice of its intention to
borrow in accordance with Section 2.2 hereof (whether by reason of the election
of the Borrower not to proceed or the non-fulfillment of any of the conditions
set forth in Article 3) other than a failure to borrow resulting from an
unavailability which occurs after notice from the Administrative Agent to the
Borrower pursuant to Section 10.1 or 10.2 hereof, or (ii) prepayment of any
LIBOR Advance in whole or in part (including a prepayment pursuant to Sections
10.2 and 10.3(b) hereof), the Borrower agrees to pay to such Lender, upon the
earlier of such Lender's demand or the Maturity Date, an amount sufficient to
compensate such Lender for all such losses and reasonable out-of-pocket
expenses. Such Lender's good faith determination of the amount of such losses
and reasonable out-of-pocket expenses, absent manifest error, shall be binding
and conclusive. Upon request of the Borrower, any Lender seeking reimbursement
under this Section 2.10 shall provide a certificate setting forth the amount to
be paid to it by the Borrower hereunder and calculations therefor.
(b) Losses subject to reimbursement hereunder shall include,
without limiting the generality of the foregoing, but without duplication,
expenses incurred by any Lender or any participant of such Lender permitted
hereunder in connection with the re-employment of funds prepaid, paid, repaid,
not borrowed, not converted or not paid, as the case may be, and will be payable
whether the Maturity Date is changed by virtue of an amendment hereto (unless
such amendment expressly waives such payment) or as a result of acceleration of
the Obligations and whether such Lender has a "matched funding" of such Advance.
Section 2.11 Application of Proceeds. Subsequent to an Event of Default,
payments made to the Administrative Agent or the Lenders, or any of them, or
otherwise received by the Administrative Agent or the Lenders, or any of them
(from realization on collateral for the Obligations or otherwise), shall be
distributed as follows: First, to the reasonable costs and expenses, if any,
incurred by the Administrative Agent or the Lenders, or any of them, to the
extent permitted by Section 11.2 hereof in the collection of such amounts under
this Agreement or any of the other Loan Documents, including, without
limitation, any reasonable costs incurred in connection with the sale or
disposition of any collateral for the Obligations; Second, pro rata among the
Administrative Agent and the Lenders based on the total amount of fees then due
and payable hereunder or under any other Loan Document to any Administrative
Agent's fees then due and payable hereunder or under any other Loan Document and
to such fees then due and payable to the Lenders; Third, to be deposited as set
forth in Section 8.2(b) hereof; Fourth, pro rata among the Lenders based on the
outstanding principal amount of the Facility A Loans outstanding immediately
prior to such payment, to any unpaid interest which may have accrued on the
Facility A Loans; Fifth, pro rata among the Lenders based on the outstanding
principal amount of the Facility A Loans outstanding immediately prior to such
payment, to any unpaid principal of the Facility A Loans; Sixth, to any other
Obligations not otherwise referred to in this Section 2.11 until all such
Obligations are paid in full; Seventh, to damages incurred by the Administrative
Agent or the Lenders, or any of them, by reason of any breach hereof or of any
other Loan Documents; and Eighth, upon satisfaction in full of all Obligations,
to the Borrower or as otherwise required by law. If any Lender shall obtain any
payment (whether involuntary or otherwise) on account of the Facility A Loans
made by it (other than Competitive Bid Loans) in excess of its ratable share of
the Facility A Loans then outstanding and such Lender's share of any expenses,
fees and other items due and payable to it hereunder, such Lender shall
forthwith purchase a participation in the Facility A Loans from the other
Lenders as shall be necessary to cause such purchasing Lender to share the
excess payment ratably with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Lender, such purchase from each Lender shall be rescinded and such Lender shall
repay to the purchasing Lender the purchase price to the extent of such
recovery. The Borrower agrees that any Lender so purchasing a participation from
another Lender pursuant to this Section may, to the fullest extent permitted by
law, exercise all its rights of payment with respect to such participation as
fully as if such Lender were the direct creditor of the Borrower in the amount
of such participation so long as the Borrower's Obligations are not increased.
Section 2.12 Capital Adequacy. In the event that a Regulatory Change does
or shall have the effect of reducing the rate of return on such Lender's capital
as a consequence of its obligations hereunder to a level below that which such
Lender would have achieved but for such adoption, change or compliance (taking
into consideration such Lender's policies with respect to capital adequacy) by
an amount deemed by such Lender to be material, then from time to time, ten (10)
days after submission by such Lender to the Borrower (with a copy to the Agent)
of a written request therefor, together with a certificate (which shall be
conclusive absent manifest error), setting forth the calculations evidencing
such requested additional amount, and the law or regulation with respect thereto
and certifying that such request is consistent with such Lender's treatment of
other similar customers having similar provisions generally in their agreements
with such Lender, and that such request is being made on the basis of a
reasonable allocation of the costs resulting from such law or regulation, the
Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender for such reduction. Allocations shall not be deemed
reasonable unless made ratably, to the extent practicable, to all affected
assets, commitments, activities or other relevant aspects of such Lender's
business, whether or not the Lender is entitled to compensation with respect
thereto. Notwithstanding the foregoing, the Borrower shall only be obligated to
compensate such Lender for any amount under this subsection arising or occurring
during (i) in the case of each such request for compensation, any time or period
commencing not more than ninety (90) days prior to the date on which such Lender
submits such request and (ii) any other time or period during which, because of
the unannounced retroactive application of such law, regulation, interpretation,
request or directive, such Lender could not have known that the resulting
reduction in return might arise. Each Lender will notify the Borrower that it is
entitled to compensation pursuant to this subsection as promptly as practicable
after it determines to request such compensation; provided, however, that the
failure to provide such notice shall not restrict the ability of such Lender to
be reimbursed under this Section 2.12 except as provided in clause (i) above. In
the event the Borrower shall be required to make any payment or reimbursement or
to compensate the Issuing Bank or any Lender under this Section 2.12, so long as
no Default has occurred and is continuing, the Borrower shall be free, at any
time within ninety (90) days after the receipt of a request for compensation
hereunder by the Issuing Bank or any Lender, as applicable, to replace the
Issuing Bank or any such Lender, as applicable, with another major international
bank reasonably acceptable to the Administrative Agent.
Section 2.13 Lender Tax Forms. On or prior to the Agreement Date and on or
prior to the first Business Day of each calendar year thereafter, each Lender
which is organized in a jurisdiction other than the United States shall provide
each of the Administrative Agent and the Borrower with properly executed
originals of Forms 4224 or 1001 (or any successor form) prescribed by the
Internal Revenue Service or other documents satisfactory to the Borrower and the
Administrative Agent, and each such Lender shall provide properly executed
Internal Revenue Service Forms W-8 or W-9, as the case may be, certifying (i) as
to such Lender's status for purposes of determining exemption from United States
withholding taxes with respect to all payments to be made to such Lender
hereunder and under the Notes or (ii) that all payments to be made to such
Lender hereunder and under the Notes are subject to such taxes at a rate reduced
to zero by an applicable tax treaty. Each such Lender agrees to provide the
Administrative Agent and the Borrower with new forms prescribed by the Internal
Revenue Service upon the expiration or obsolescence of any previously delivered
form, or after the occurrence of any event requiring a change in the most recent
forms delivered by it to the Administrative Agent and the Borrower.
Section 2.14 Letters of Credit.
(a) Subject to the terms and conditions hereof, the Issuing
Bank, on behalf of the Lenders, and in reliance on the agreements of the Lenders
set forth in subsection (d) below, hereby agrees to issue one or more Letters of
Credit up to an aggregate face amount equal to the Available Letter of Credit
Commitment; provided, however, that the Issuing Bank shall not issue any Letter
of Credit unless the conditions precedent to the issuance thereof set forth in
Sections 3.1 and 3.3 hereof have been satisfied, and shall have no obligation to
issue any Letter of Credit if any Default then exists or would be caused thereby
or if, after giving effect to such issuance, the Available Facility A Commitment
would be less than zero; and provided further, however, that at no time shall
the total Letter of Credit Obligations outstanding hereunder exceed $50,000,000.
Each Letter of Credit shall (1) be denominated in U.S. dollars, and (2) expire
no later than the earlier to occur of (A) the Maturity Date, and (B) 360 days
after its date of issuance (but may contain provisions for automatic renewal
provided that no Default exists on the renewal date or would be caused by such
renewal). The Issuing Bank shall promptly provide copies to the Lenders of any
Letter of Credit issued hereunder. Each Letter of Credit shall be subject to the
Uniform Customs and Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No. 500 and, to the extent not
inconsistent therewith, the laws of the State of New York. The Issuing Bank
shall not at any time be obligated to issue, or cause to be issued, any Letter
of Credit if such issuance would conflict with, or cause the Issuing Bank to
exceed any limits imposed by, any Applicable Law. If a Letter of Credit provides
that it is automatically renewable unless notice is given by the Issuing Bank
that it will not be renewed, the Issuing Bank shall not be required to give a
notice of non-renewal unless directed to do so by the Required Lenders at least
sixty-five (65) days prior to the then scheduled expiration date of such Letter
of Credit.
(b) The Borrower may from time to time request that the
Issuing Bank issue a Letter of Credit. The Borrower shall execute and deliver to
the Administrative Agent and the Issuing Bank a Request for Issuance of Letter
of Credit for each Letter of Credit to be issued by the Issuing Bank, not later
than 12:00 noon (New York time) on the fifth (5th) Business Day preceding the
date on which the requested Letter of Credit is to be issued, or such shorter
notice as may be acceptable to the Issuing Bank and the Administrative Agent.
Upon receipt of any such Request for Issuance of Letter of Credit, subject to
satisfaction of all conditions precedent thereto as set forth in Section 3.3
hereof, the Issuing Bank shall process such Request for Issuance of Letter of
Credit and the certificates, documents and other papers and information
delivered to it in connection therewith in accordance with its customary
procedures and shall promptly issue the Letter of Credit requested thereby. The
Issuing Bank shall furnish a copy of such Letter of Credit to the Borrower and
to the Administrative Agent following the issuance thereof. The Borrower shall
pay or reimburse the Issuing Bank for normal and customary costs and expenses
incurred by the Issuing Bank in issuing, effecting payment under, amending or
otherwise administering the Letters of Credit.
(c) At such time as the Administrative Agent shall be notified
by the Issuing Bank that the beneficiary under any Letter of Credit has drawn on
the same, the Administrative Agent shall promptly notify the Borrower and each
Lender, by telephone or telecopy, of the amount of the draw and, in the case of
each Lender, such Lender's portion of such draw amount as calculated in
accordance with its Facility A Commitment Ratio.
(d) The Borrower hereby agrees to immediately reimburse the
Issuing Bank for amounts paid by the Issuing Bank in respect of draws under a
Letter of Credit issued at the Borrower's request. In order to facilitate such
repayment, the Borrower hereby irrevocably requests the Lenders that have
Facility A Commitments, and such Lenders hereby severally agree, on the terms
and conditions of this Agreement (other than as provided in Article 2 hereof
with respect to the amounts of, the timing of requests for, and the repayment of
Advances hereunder and in Article 3 hereof with respect to conditions precedent
to Advances hereunder), with respect to any drawing under a Letter of Credit
prior to the occurrence of an event described in clauses (g) or (h) of Section
8.1 hereof, to make an Advance (which Advance may be a LIBOR Advance if the
Borrower so requests in a timely manner or may be converted to a LIBOR Advance
as provided in the Loan Agreement) to the Borrower under the Facility A
Commitment on each day on which a draw is made under any Letter of Credit and in
the amount of such draw, and to pay the proceeds of such Advance directly to the
Issuing Bank to reimburse the Issuing Bank for the amount paid by it upon such
draw. Each Lender having Facility A Commitments shall pay its share of such
Advance by paying its portion of such Advance to the Administrative Agent in
accordance with Section 2.2(c) hereof and its Facility A Commitment Ratio,
without reduction for any set-off or counterclaim of any nature whatsoever and
regardless of whether any Default (other than with respect to an event described
in clauses (g) or (h) of Section 8.1 hereof) then exists or would be caused
thereby. Each Lender having Facility A Commitments shall, automatically upon the
issuance of any Letters of Credit and without any action on the part of the
Issuing Bank, the Borrower, the Administrative Agent or the Lenders, be deemed
to have purchased an undivided participation in the face amount of all Letters
of Credit then outstanding in an amount equal to such Lender's Facility A
Commitment Ratio, and each Lender having Facility A Commitments shall, upon a
drawing under any Letter of Credit, immediately pay to the Administrative Agent
for the account of the Issuing Bank, in immediately available funds, the amount
of such Lender's participation (and the Issuing Bank shall deliver to such
Lender a loan participation certificate dated the date of the occurrence of such
event and in the amount of such Lender's Facility A Commitment Ratio). The
disbursement of funds in connection with a draw under a Letter of Credit
pursuant to this Section hereunder shall be subject to the terms and conditions
of Section 2.2(c) hereof. The obligation of each Lender having a Facility A
Commitment to make payments to the Administrative Agent, for the account of the
Issuing Bank, in accordance with this Section 2.14, absent the gross negligence
or willful misconduct of the Issuing Bank, shall be absolute and unconditional
and no Lender shall be relieved of its obligations to make such payments by
reason of noncompliance by any other Person with the terms of the Letter of
Credit or for any other reason. The Administrative Agent shall promptly remit to
the Issuing Bank the amounts so received from the Lenders having a Facility A
Commitment. Any overdue amounts payable by the Lenders having a Facility A
Commitment to the Issuing Bank in respect of a draw under any Letter of Credit
shall bear interest, payable on demand, at the Federal Funds Rate.
(e) The Borrower agrees that any action taken or omitted to be
taken by the Issuing Bank in connection with any Letter of Credit, except for
such actions or omissions as shall constitute gross negligence or willful
misconduct on the part of the Issuing Bank, shall be binding on the Borrower as
between the Borrower and the Issuing Bank, and shall not result in any liability
of the Issuing Bank to the Borrower. The obligation of the Borrower to reimburse
the Lenders for Advances made to reimburse the Issuing Bank for draws under the
Letter of Credit shall be absolute, unconditional and irrevocable, and shall be
paid strictly in accordance with the terms of this Agreement under all
circumstances whatsoever, including, without limitation, the following
circumstances:
(i) Any lack of validity or enforceability of
any Loan Document;
(ii) Any amendment or waiver of or consent to any
departure from any or all of the Loan Documents;
(iii) Any improper use which may be made of any
Letter of Credit or any improper acts or omissions of any beneficiary
or transferee of any Letter of Credit in connection therewith other
than to the extent such use, action or omission is the result of the
gross negligence or willful misconduct of the Issuing Bank;
(iv) The existence of any claim, set-off, defense or
any right which the Borrower may have at any time against any
beneficiary or any transferee of any Letter of Credit (or Persons for
whom any such beneficiary or any such transferee may be acting) or any
Lender (other than the defense of payment to such Lender in accordance
with the terms of this Agreement) or any other Person, whether in
connection with any Letter of Credit, any transaction contemplated by
any Letter of Credit, this Agreement, any other Loan Document, or any
unrelated transaction;
(v) Any statement or any other documents presented
under any Letter of Credit proving to be insufficient, forged,
fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect whatsoever, provided that such
payment shall not have constituted gross negligence or willful
misconduct of the Issuing Bank;
(vi) The insolvency of any Person issuing any
documents in connection with any Letter of Credit;
(vii) Any breach of any agreement between the
Borrower and any beneficiary or transferee of any Letter of Credit
except to the extent such breach results from the gross negligence or
willful misconduct of the Issuing Bank;
(viii) Any irregularity in the transaction with
respect to which any Letter of Credit is issued, including any fraud by
the beneficiary or any transferee of such Letter of Credit but
excluding any irregularity resulting from the gross negligence or
willful misconduct of the Issuing Bank;
(ix) Any errors, omissions, interruptions or delays
in transmission or delivery of any messages, by mail, cable, telegraph,
wireless or otherwise, whether or not they are in code, provided that
the same shall not be the result of the gross negligence or willful
misconduct of the Issuing Bank;
(x) Any act, error, neglect or default, omission,
insolvency or failure of business of any of the correspondents of the
Issuing Bank, provided that the same shall not have constituted the
gross negligence or willful misconduct of the Issuing Bank;
(xi) Any other circumstances arising from causes
beyond the control of the Issuing Bank;
(xii) Payment by the Issuing Bank under any Letter of
Credit against presentation of a sight draft or a certificate which
does not comply with the terms of such Letter of Credit, provided that
such payment shall not have constituted gross negligence or willful
misconduct of the Issuing Bank; and
(xiii) Any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing, provided
that such other circumstances or happenings shall not have been the
result of gross negligence or willful misconduct of the Issuing Bank or
any Lender.
(f) If any change in Applicable Law, any change in the
interpretation or administration thereof, or any change in compliance with
Applicable Law by the Issuing Bank or any Lender as a result of any official
request or directive of any governmental authority, central bank or comparable
agency (whether or not having the force of law) shall (i) impose, modify or deem
applicable any reserve (including, without limitation, any imposed by the Board
of Governors of the Federal Reserve System), special deposit, capital adequacy,
assessment or other requirements or conditions against letters of credit issued
by the Issuing Bank or against participations by any other Lender in the Letters
of Credit or (ii) impose on the Issuing Bank or any other Lender any other
condition regarding any Letter of Credit or any participation therein, and the
result of any of the foregoing in the reasonable determination of the Issuing
Bank or such Lender, as the case may be, is to increase the cost to the Issuing
Bank or such Lender of issuing or maintaining any Letter of Credit or purchasing
or maintaining any participation therein, as the case may be, by an amount
(which amount shall be reasonably determined) deemed by the Issuing Bank or such
Lender to be material, and the designation of a different lending office will
not avoid the need for additional compensation, then, on request by the Issuing
Bank or such Lender, the Borrower shall immediately pay the Issuing Bank or such
Lender, as the case may be, such additional amount or amounts as the Issuing
Bank or such Lender, as the case may be, so determines will compensate it for
such increased costs. A certificate of the Issuing Bank or such Lender setting
forth the amount, and in reasonable detail the basis for the Issuing Bank or
such Lender's determination of such amount, to be paid to the Issuing Bank or
such Lender by the Borrower as a result of any event referred to in this
paragraph shall, absent manifest error, be conclusive. In the event the Borrower
shall be required to make any payment or reimbursement or to compensate the
Issuing Bank or any Lender under this Section 2.14(f), so long as no Default has
occurred and is continuing, the Borrower shall be free, at any time within
ninety (90) days after the receipt of a request for compensation hereunder by
the Issuing Bank or any Lender, as applicable, to replace the Issuing Bank or
any such Lender, as applicable, with another major international bank reasonably
acceptable to the Administrative Agent.
(g) Each Lender having a Facility A Commitment shall be
responsible (to the extent not reimbursed by the Borrower) for its pro rata
share (based on such Lender's total Facility A Commitment Ratio) of any and all
reasonable out-of-pocket costs, expenses (including reasonable legal fees) and
disbursements which may be incurred or made by the Issuing Bank in connection
with the collection of any amounts due under, the administration of, or the
presentation or enforcement of any rights conferred by any Letter of Credit, the
Borrower's or any guarantor's obligations to reimburse or otherwise, except that
no Lender shall be liable to the Issuing Bank for any portion of such
out-of-pocket costs, expenses (including reasonable legal fees) and
disbursements from the gross negligence or willful misconduct of the Issuing
Bank, as determined by a final, non-appealable judicial order of a court of
competent jurisdiction. In the event the Borrower shall fail to pay such
expenses of the Issuing Bank within ten (10) days after demand for payment by
the Issuing Bank, each Lender having a Facility A Commitment shall thereupon pay
to the Issuing Bank its pro rata share (based on such Lender's total Facility A
Commitment Ratio) of such expenses within five (5) days from the date of the
Issuing Bank's notice to the Lenders having a Facility A Commitment of the
Borrower's failure to pay; provided, however, that if the Borrower or any
guarantor shall thereafter pay such expense, the Issuing Bank will repay to each
Lender the amounts received from such Lender hereunder.
(h) The Borrower agrees that each Advance by the Lenders
having Facility A Commitments to reimburse the Issuing Bank for draws under any
Letter of Credit, shall, for all purposes hereunder, be deemed to be an Advance
to the Borrower under the Facility A Commitment and shall be payable and bear
interest in accordance with all other Facility A Loans to the Borrower.
(i) The Borrower will indemnify and hold harmless the
Administrative Agent, the Issuing Bank and each other Lender and each of their
respective employees, representatives, officers and directors from and against
any and all claims, liabilities, obligations, losses (other than loss of
profits), damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever (including reasonable attorneys'
fees, but excluding taxes) which may be imposed on, incurred by or asserted
against the Administrative Agent, the Issuing Bank or any such other Lender in
any way relating to or arising out of the issuance of a Letter of Credit, except
that the Borrower shall not be liable to the Administrative Agent, the Issuing
Bank or any such Lender for any portion of such claims, liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, or disbursements resulting from the gross negligence or willful
misconduct of the Administrative Agent, the Issuing Bank or such Lender, as the
case may be. This Section 2.14 shall survive termination of this Agreement.
ARTICLE 3
Conditions Precedent
Section 3.1 Conditions Precedent to Effectiveness of Agreement. The
obligation of the Lenders to undertake the Facility A Commitments and to make
the initial Advances hereunder is subject to the prior fulfillment of each of
the following conditions:
(a) The Administrative Agent shall have received each of the
following, in form and substance satisfactory to the Administrative Agent:
(i) duly executed Facility A Notes;
(ii) a duly executed Borrower Pledge Agreement from
the Borrower, which agreement shall be in substantially the form of
Exhibit C attached hereto;
(iii) a duly executed Subsidiary Pledge Agreement
from each Restricted Subsidiary which owns an equity interest in a
Restricted Subsidiary of the Borrower on the Agreement Date;
(iv) a duly executed Subsidiary Guaranty from each
Restricted Subsidiary of the Borrower (excluding Non-Guarantor
Subsidiaries) on the Agreement Date;
(v) the loan certificate of the Borrower, including a
certificate of incumbency with respect to the signature of each
Authorized Signatory, which loan certificate shall be in substantially
the form of Exhibit K attached hereto, together with appropriate
attachments thereto;
(vi) a loan certificate from each Restricted
Subsidiary of the Borrower (excluding Non-Guarantor Subsidiaries) in
substantially the form attached hereto as Exhibit L, including a
certificate of incumbency with respect to each Authorized Signatory of
such Person;
(vii) legal opinions of each of (A) Sherman & Howard
L.L.C., special counsel to the Borrower and its Restricted Subsidiaries
addressed to each Lender and the Administrative Agent and dated as of
the Agreement Date substantially in the form of Exhibit M-1 attached
hereto, (B) Cole, Raywid & Braverman LLC, as FCC counsel to the
Borrower and its Restricted Subsidiaries addressed to each Lender and
the Administrative Agent and dated as of the Agreement Date
substantially in the form of Exhibit M-2 attached hereto, (C) Holme
Roberts & Owen LLP, addressed to each Lender and the Administrative
Agent and dated as of the Agreement Date substantially in the form of
Exhibit M-3 attached hereto, and (D) Squadron, Ellenoff, Plesent &
Sheinfeld, L.L.P. addressed to each Lender and the Administrative Agent
and dated as of the Agreement Date substantially in the form of Exhibit
M-4 attached hereto;
(viii) receipt by the Administrative Agent and the
Lenders of all appropriate fees to be paid to them by the Borrower on
or prior to the Agreement Date;
(ix) any required consents to the closing of this
Agreement or to the execution, delivery and performance of this
Agreement and the other Loan Documents, each of which shall be in form
and substance satisfactory to the Administrative Agent and the Lenders;
(x) duly executed Fee Agreements;
(xi) evidence satisfactory to the Administrative
Agent that the Borrower and its Restricted Subsidiaries have a
Transponder Lease Agreement providing for unqualified access to a
non-preemptable transponder on terms and conditions satisfactory to the
Administrative Agent; and
(xii) all such other documents as the Administrative
Agent may reasonably request, certified by an appropriate governmental
official or Authorized Signatory if so requested.
(b) The Administrative Agent shall have received evidence
satisfactory to it that all necessary consents to the closing of this Agreement,
have been obtained or made, are in full force and effect and are not subject to
any pending or, to the knowledge of the Borrower, threatened reversal or
cancellation, and the Administrative Agent shall have received a certificate of
an Authorized Signatory so stating.
(c) Evidence satisfactory to the Administrative Agent that the
TV Guide Transaction has been consummated substantially in accordance with the
terms and conditions set forth in that certain Letter Agreement dated as of June
10, 1998 by and among News America Inc., the Borrower, Tele-Communications, Inc.
and the News Corp. and the cash portion of such transactions does not exceed
$800,000,000, excluding fees and expenses.
(d) Evidence satisfactory to the Administrative Agent that the
Liberty Transaction has been (or on the Agreement Date will be) consummated
substantially in accordance with the terms and conditions set forth by that
certain Stock Purchase Agreement dated as of May 18, 1998 by and between the
Borrower and Liberty.
Section 3.2 Conditions Precedent to Each Advance (other than Competitive
Bid Advances). The obligation of the Lenders to make each Advance (other than
Competitive Bid Advances), including the initial Advances hereunder, other than
an Advance which does not increase the principal amount of the Facility A Loans
outstanding hereunder, is subject to the fulfillment of each of the following
conditions immediately prior to, or contemporaneously with, such Advance:
(a) All of the representations and warranties of the Borrower
under this Agreement and the other Loan Documents, which, in accordance with
Section 4.2 hereof, are made at and as of the time of such Advance, shall be
true and correct at such time, both before and after giving effect to the
application of the proceeds of the Advance;
(b) There shall not exist, on the date of the making of the
Advance and after giving effect thereto, a Default hereunder and the
Administrative Agent and each of the Lenders shall have received a Request for
Advance so certifying;
(c) With respect to any Advance relating to any Acquisition or
the formation of any Restricted Subsidiary which is permitted hereunder, the
Administrative Agent and the Lenders shall have received such documents and
instruments relating to such Acquisition or formation of a new Restricted
Subsidiary as are described in Section 5.14 hereof or otherwise required herein;
and
(d) The Administrative Agent and the Lenders shall have
received a Performance Certificate setting forth, as of the date of such
Advance, on a pro forma basis (after giving effect to the requested Advance) the
arithmetic calculations required to establish whether or not the Borrower is in
compliance with the requirements set forth in Sections 7.8, 7.9 and 7.10.
The acceptance of the proceeds of any Facility A Loans which would increase the
aggregate dollar amount of the Facility A Loans outstanding shall be deemed to
be a representation and warranty by the Borrower as to compliance with this
Section 3.2 on the date any such Facility A Loan is made.
Section 3.3 Conditions Precedent to Issuance of Letters of Credit. The
obligation of the Issuing Bank to issue each Letter of Credit hereunder is
subject to the fulfillment of each of the following conditions immediately prior
to or contemporaneously with such issuance:
(a) All of the representations and warranties of the Borrower
under this Agreement and the other Loan Documents, which, in accordance with
Section 4.2 hereof, are made at and as of the time of the issuance of such
Letter of Credit, shall be true and correct at such time, both before and after
giving effect to the issuance of such Letter of Credit;
(b) There shall not exist, on the date of the issuance of such
Letter of Credit and after giving effect thereto, a Default hereunder and the
Administrative Agent shall have received a Request for Issuance of a Letter of
Credit so certifying; and
(c) There shall have occurred no Materially Adverse Effect and
no event which, in the reasonable opinion of the Administrative Agent, may be
expected to have a Materially Adverse Effect.
Section 3.4 Conditions Precedent to Each Competitive Bid Advance. The
obligation of each Lender that is to make a Competitive Bid Advance hereunder is
subject to the fulfillment of each of the following conditions immediately prior
to, or contemporaneously with, such issuance:
(a) The Administrative Agent shall have received a Notice of
Competitive Bid Borrowing with respect thereto;
(b) On or before the date of such Competitive Bid Advance, but
prior to such Competitive Bid Advance, if so required by the applicable Lender,
the Administrative Agent shall have received a Competitive Bid Note payable to
the order of such Lender for each of the one or more Competitive Bid Advances to
be made by such Lender, in a principal amount equal to the principal amount of
the Competitive Bid Advance to be evidenced thereby and otherwise on such terms
as were agreed to for such Competitive Bid Advance in accordance with Section
2.2(b) hereof;
(c) All the representations and warranties of the Borrower
under this Agreement and the other Loan Documents, which, in accordance with
Section 4.2 hereof, are made at and as of the time of the issuance of such
Competitive Bid Note, shall be true and correct at such time, both before and
after giving effect to such Competitive Bid Advance; and
(d) There shall not exist, on the date of the issuance of such
Competitive Bid Advance and after giving effect thereto, a Default hereunder and
the Administrative Agent shall have received a Competitive Bid Advance request
so certifying.
The acceptance of the proceeds of any Competitive Bid Advance shall be deemed to
be a representation and warranty by the Borrower as to compliance with this
Section 3.4 on the date of any such Competitive Bid Advance.
ARTICLE 4
Representations and Warranties
Section 4.1 Representations and Warranties. The Borrower hereby agrees,
represents, and warrants that:
(a) Organization; Power; Qualification.
(i) The Borrower is a corporation duly organized and
validly existing under the laws of the State of Delaware. The Borrower
has the power and authority to own or lease and operate its properties
and to carry on its business as now being and hereafter proposed to be
conducted, and is duly qualified and authorized to do business, in each
jurisdiction in which such qualification is necessary in view of the
character of its properties or the nature of its business requires such
qualification or authorization, except for qualifications and
authorizations, the lack of which, singly or in the aggregate, has not
had and is not likely to have a Materially Adverse Effect.
(ii) Each Restricted Subsidiary of the Borrower is a
corporation, partnership or a limited liability company duly organized
and validly existing under the laws of its state of formation. Each
Restricted Subsidiary of the Borrower has the power and the authority
to own or lease and operate its properties and to carry on its business
as now being and hereafter proposed to be conducted, and is duly
qualified and authorized to do business in each jurisdiction in which
such qualification is necessary in view of the character of its
properties or the nature of its business requires such qualification or
authorization, except for qualifications and authorizations, the lack
of which, singly or in the aggregate, has not had and is not likely to
have a Materially Adverse Effect.
(b) Authorization; Enforceability. The Borrower has the
necessary power and has taken all necessary action to authorize it to execute,
deliver, and perform this Agreement and each of the other Loan Documents to
which it is a party in accordance with the terms thereof and to consummate the
transactions contemplated hereby and thereby. This Agreement has been duly
executed and delivered by the Borrower, and is, and each of the other Loan
Documents to which the Borrower is a party is, a legal, valid and binding
obligation of the Borrower, enforceable in accordance with its terms, subject to
limitations on enforceability under bankruptcy, reorganization, insolvency and
similar laws affecting creditors' rights generally and limitations on the
availability of the remedy of specific performance imposed by the application of
general equity principles.
(c) Restricted Subsidiaries' Authorization; Enforceability.
The Restricted Subsidiaries and the Borrower's direct and indirect ownership
thereof as of the Agreement Date are as set forth on Schedule 1 attached hereto,
and to the extent such Restricted Subsidiaries are corporations, the Borrower
has the unrestricted right to vote the issued and outstanding shares of the
Restricted Subsidiaries thereof and such shares of such Restricted Subsidiaries
have been duly authorized and issued and are fully paid and nonassessable. Each
Restricted Subsidiary has the necessary power and has taken all necessary action
to authorize it to execute, deliver and perform each of the Loan Documents to
which it is a party in accordance with their respective terms and to consummate
the transactions contemplated by this Agreement and by such Loan Documents. Each
of the Loan Documents to which any Restricted Subsidiary is party is a legal,
valid and binding obligation of such Restricted Subsidiary enforceable against
such Restricted Subsidiary in accordance with its terms, subject, to limitations
on enforceability under bankruptcy, reorganization, insolvency and similar laws
affecting creditors' rights generally and limitations on the availability of the
remedy of specific performance imposed by the application of general equity
principles. The Borrower's ownership interest in each of the Restricted
Subsidiaries represents a direct or indirect controlling interest of such
Restricted Subsidiary for purposes of directing or causing the direction of the
management and policies of each Restricted Subsidiary.
(d) Compliance with Laws, Other Loan Documents, and
Contemplated Transactions. The execution, delivery, and performance by the
Borrower and its Restricted Subsidiaries of this Agreement and each of the other
Loan Documents in accordance with the terms thereof and the consummation of the
transactions contemplated hereby and thereby do not and will not (i) violate any
Applicable Law, (ii) result in a breach of, or constitute a default under, the
certificate or articles of incorporation or by-laws or partnership agreements,
as the case may be, as amended, of the Borrower or of any Restricted Subsidiary
of the Borrower or under any indenture, agreement, or other instrument to which
the Borrower or any of its Restricted Subsidiaries is a party or by any of them
or any of their respective properties may be bound, or (iii) result in or
require the creation or imposition of any Lien upon or with respect to any
property now owned or hereafter acquired by the Borrower or any of its
Restricted Subsidiaries except Permitted Liens; except where such violations,
breaches, defaults or Liens, if any, singly or in the aggregate, has not had and
is not likely to have a Materially Adverse Effect.
(e) Necessary Authorizations. No approval or consent of, or
filing or registration with, any federal, state or local commission or other
regulatory authority is required in connection with the execution, delivery and
performance by the Borrower or any of its Restricted Subsidiaries of such of
this Agreement, the Facility A Notes, and the other Loan Documents to which any
of them is a party.
(f) Title to Properties. The Borrower has good, marketable,
and legal title to, or a valid leasehold interest in, all of its respective
material tangible properties and assets free and clear of all Liens, except
Permitted Liens. Except for financing statements evidencing Permitted Liens, no
financing statement under the Uniform Commercial Code as in effect in any
jurisdiction and no other filing which names the Borrower or any of the
Restricted Subsidiaries as debtor or which covers or purports to cover any of
the assets of the Borrower or any of its Restricted Subsidiaries is currently
effective and on file in any state or other jurisdiction, and neither the
Borrower nor any of its Restricted Subsidiaries has signed any such financing
statement or filing or any security agreement authorizing any secured party
thereunder to file any such financing statement or filing.
(g) Collective Bargaining. There are no collective bargaining
agreements between the Borrower or any of its Restricted Subsidiaries and any
trade or labor union or other employee collective bargaining agent.
(h) Taxes. All federal, state, and other tax returns of the
Borrower and each Restricted Subsidiary of the Borrower required by law to be
filed have been duly filed, and all federal, state, and other taxes,
assessments, and other governmental charges or levies upon the Borrower or any
of the Restricted Subsidiaries of the Borrower or any of their respective
properties, income, profits, and assets, which are due and payable, have been
paid, except any such tax payment (i) of which the Borrower or any Restricted
Subsidiary of the Borrower is diligently contesting in good faith by appropriate
proceedings, (ii) for which adequate reserves as required by GAAP have been
provided on the books of the Borrower or any Restricted Subsidiary of the
Borrower and (iii) as to which neither any Lien other than a Permitted Lien has
attached nor any foreclosure, distraint, sale, or similar proceedings have been
commenced. The charges, accruals, and reserves on the books of the Borrower or
any of its Restricted Subsidiaries in respect of taxes are, in the reasonable
judgment of the Borrower, adequate.
(i) Financial Statements. The Borrower has furnished, or
caused to be furnished, to the Lenders (i) audited financial statements for the
Borrower which present fairly in accordance with GAAP the financial position of
the Borrower and its consolidated Subsidiaries as of December 31, 1997, and (ii)
unaudited financial statements for the Borrower, which present fairly in
accordance with GAAP the financial position of the Borrower and its consolidated
Subsidiaries of June 30, 1998 and, in each case, the results of operations for
the periods then ended. Except as disclosed in the financial statements most
recently furnished to the Lenders pursuant to Section 6.2 hereof (or until such
financial statements are delivered hereunder, the audited financial statement
referred to in the preceding sentence) neither the Borrower or any of its
Restricted Subsidiaries had any material liabilities, contingent or otherwise,
and there are no material unrealized or anticipated losses of the Borrower which
have not heretofore been disclosed in writing to the Lenders.
(j) Licenses, etc. The material Licenses have been duly issued
and are in full force and effect. The Borrower and its Restricted Subsidiaries
are in compliance in all material respects with all of the provisions thereof.
The Borrower and its Restricted Subsidiaries have secured all material Necessary
Authorizations and all such Necessary Authorizations are in full force and
effect. Neither any material License nor any material Necessary Authorization is
the subject of any pending or, to the best of the Borrower's knowledge,
threatened revocation.
(k) No Adverse Change. There has occurred no event since June
30, 1998, which has had or could reasonably be expected to have a Materially
Adverse Effect.
(l) Investments and Guaranties. The Borrower has not made
material investments, advances to, or guaranties of, the obligations of any
Person, except as reflected in the financial statements referred to in Section
4.1(i) above or as otherwise permitted by the terms of this Agreement.
(m) Liabilities, Litigation, etc. Except for liabilities
incurred in the normal course of business, neither the Borrower nor any of its
Restricted Subsidiaries has any material (individually or in the aggregate)
liabilities, direct or contingent, except as disclosed or referred to in the
financial statements referred to in Section 4.1(i) above. Except as set forth on
Schedule 2 attached hereto, there is no material litigation, legal or
administrative proceeding, investigation, or other action of any nature pending
or, to the knowledge of the Borrower, threatened against or affecting the
Borrower, any of its Restricted Subsidiaries or any of its properties which
involves the possibility of any material judgment or liability not fully covered
by insurance.
(n) ERISA. The Borrower and each ERISA Affiliate and each of
their respective Plans are in substantial compliance with ERISA and the Code and
neither the Borrower nor any of its ERISA Affiliates has incurred any
accumulated funding deficiency with respect to any such Plan within the meaning
of ERISA or the Code. The Borrower and each of its ERISA Affiliates have
complied with all requirements of ERISA Sections 601 through 608 and Code
Section 4980B in all material respects. The Borrower has incurred no material
liability to the Pension Benefit Guaranty Corporation in connection with any
Plan. The assets of each Plan which is subject to Title IV of ERISA are
sufficient to provide the benefits under such Plan, the payment of which the
Pension Benefit Guaranty Corporation would guarantee if such Plan were
terminated, and such assets are also sufficient to provide all other "benefit
liabilities" (as defined in ERISA Section 4001(a)(16)) due under the Plan upon
termination. No Reportable Event for which advance notice to the PBGC is
required under Section 4043 of ERISA has occurred and is continuing with respect
to any Plan. No Plan or trust created thereunder, or party in interest (as
defined in Section 3(14) of ERISA, or any fiduciary (as defined in Section 3(21)
of ERISA), has engaged in a "prohibited transaction" (as such term is defined in
Section 406 of ERISA or Section 4975 of the Code) which would subject the
Borrower or any ERISA Affiliate to a material penalty or tax on "prohibited
transactions" imposed by Section 502 of ERISA or Section 4975 of the Code.
Neither the Borrower nor any of its ERISA Affiliates is a participant in or is
obligated to make any payment to a Multiemployer Plan which has or is expected
to have any withdrawal liability if such Plan were terminated or if such Person
were to withdraw from such Plan which could reasonably be likely to have a
Materially Adverse Effect.
(o) Patents, Trademarks, etc. The Borrower and each of its
Restricted Subsidiaries owns, possesses or has the right to use all licenses and
rights to all patents, Trademarks, trademark rights, trade names, trade name
rights, service marks, and copyrights, and rights with respect thereto,
necessary to conduct its business in all material respects as now conducted,
without known conflict with any patent, Trademark, trade name, service mark,
license or copyright of any other Person, and in each case, with respect to
patents, Trademarks, trademark rights, trade names, trade name and copyrights
and licenses with respect thereto owned by Borrower or its Restricted
Subsidiaries, subject to no mortgage, pledge, lien, lease, encumbrance, charge,
security interest, title retention agreement or option other than Permitted
Liens. All such licenses and rights with respect to patents, Trademarks,
trademark rights, trade names, trade name rights, service marks and copyrights
are in full force and effect, and to the extent applicable, the Borrower and its
Restricted Subsidiaries are in full compliance in all material respects with all
of the provisions thereof. No such patent, Trademark, trademark rights, trade
names, trade name rights, service marks, copyrights or licenses is subject to
any pending or, to the best of the Borrower's knowledge, threatened attack or
revocation which could reasonably be considered to have a Materially Adverse
Effect.
(p) Compliance with Law; Absence of Default. The Borrower and
each of its Restricted Subsidiaries is in compliance with all Applicable Laws,
and no event has occurred or has failed to occur which has not been remedied or
waived, the occurrence or non-occurrence of which constitutes (i) a Default or
(ii) a default by the Borrower or any of its Restricted Subsidiaries under any
other indenture, agreement, or other instrument, or any judgment, decree, or
order to which the Borrower or any of its Restricted Subsidiaries is a party or
by which the Borrower or any of its Restricted Subsidiaries or any of its or
their properties may be bound, which default could reasonably be considered to
have a Materially Adverse Effect.
(q) Compliance with Regulations U and X. The Borrower is
neither engaged principally in, nor as one of its important activities in the
business of, extending credit for the purpose of purchasing or carrying any
"margin security" or "margin stock" as defined in Regulations U and X (12 C.F.R.
Parts 221 and 224) of the Board of Governors of the Federal Reserve System
(herein called "margin stock"). None of the proceeds of the Facility A Loans
will be used, directly or indirectly, for the purpose of purchasing or carrying
any margin stock or for the purpose of reducing or retiring Indebtedness which
was originally incurred to purchase or carry margin stock or for any other
purpose which might constitute this transaction a "purpose credit" within the
meaning of said Regulations U and X. Neither the Borrower nor any bank acting on
its behalf has taken or will take any action which might cause this Agreement or
the Notes to violate Regulation U or X or any other regulation of the Board of
Governors of the Federal Reserve System or to violate the Securities Exchange
Act of 1934, in each case as now in effect or as the same may hereafter be in
effect. If so requested by the Lender, the Borrower will furnish the Lender with
(i) a statement or statements in conformity with the requirements of Federal
Reserve Forms G-3 and/or U-1 referred to in Regulation U of said Board of
Governors and (ii) other documents evidencing its compliance with the margin
regulations, including without limitation an opinion of counsel in form and
substance satisfactory to the Lenders. Neither the making of the Facility A
Loans nor the use of proceeds thereof will violate, or be inconsistent with, the
provisions of Regulation U or X of said Board of Governors.
(r) Solvency. As of the Agreement Date and after giving effect
to the transactions contemplated by the Loan Documents (i) the property of the
Borrower and its Restricted Subsidiaries, taken as a whole, at a fair valuation,
will exceed their debt; (ii) the capital of the Borrower and its Restricted
Subsidiaries, taken as a whole, will not be unreasonably small to conduct their
business; (iii) the Borrower and its Restricted Subsidiaries, taken as a whole,
will not have incurred debts, or have intended to incur debts, beyond their
ability to pay such debts as they mature; and (iv) the present fair salable
value of the assets of the Borrower and its Restricted Subsidiaries, taken as a
whole, will be greater than the amount that will be required to pay their
probable liabilities (including debts) as they become absolute and matured. For
purposes of this Section, "debt" means any liability on a claim, and "claim"
means (i) the right to payment, whether or not such right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
undisputed, legal, equitable, secured or unsecured, or (ii) the right to an
equitable remedy for breach of performance if such breach gives rise to a right
to payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, undisputed, secured or
unsecured.
(s) Broker's or Finder's Commissions. No broker's or finder's
fee or commission will be payable with respect to the issuance of the Notes, and
no other similar fees or commissions will be payable by the Borrower for any
other services rendered to the Borrower ancillary to the transactions
contemplated herein.
(t) Governmental Regulation. Neither the Borrower nor any of
its Restricted Subsidiaries is required to obtain any consent, approval,
authorization, permit or license which has not already been obtained from, or
effect any filing or registration which has not already been effected with, any
federal, state or local regulatory authority in connection with the performance,
in accordance with their respective terms, of this Agreement or any other Loan
Document the failure of which to obtain could have a Materially Adverse Effect.
(u) Accuracy and Completeness of Information. All information,
reports, prospectuses and other papers and data relating to the Borrower or any
of its Restricted Subsidiaries and furnished by or on behalf of the Borrower or
any of its Restricted Subsidiaries to the Administrative Agent or the Lenders
were, at the time furnished, true, complete and correct in all material respects
to the extent necessary to give the Administrative Agent and the Lenders true
and accurate knowledge of the subject matter.
(v) Payment of Wages. The Borrower and each of its Restricted
Subsidiaries are in compliance with the Fair Labor Standards Act, as amended, in
all material respects, and to the knowledge of the Borrower and each of its
Restricted Subsidiaries, such Persons have paid all minimum and overtime wages
required by law to be paid to their respective employees.
(w) Business. The Borrower's business and the business of its
Restricted Subsidiaries include distributing and acquiring various types of
video, audio, data and program promotion services via satellite and the
internet, and distributing and selling such programming to cable television
systems, satellite dish owners, private network users and other non-broadcast
delivery systems and magazine publishing and related printing activities.
(x) Investment Company Act. Neither the Borrower nor any of
its Restricted Subsidiaries is required to register under the provisions of the
Investment Company Act of 1940, as amended, and neither the entering into or
performance by the Borrower and its Restricted Subsidiaries of this Agreement
and the Loan Documents to which they are respectively party nor the issuance of
the Notes violates any provision of such Act or requires any consent, approval,
or authorization of, or registration with, the Securities and Exchange
Commission, any governmental or public body or authority pursuant to any of the
provisions of such Act.
(y) Year 2000 Compliance. The Borrower and its Restricted
Subsidiaries have reviewed the areas within their businesses and operations
which could be adversely affected by, and have developed or are developing a
program to address on a timely basis, the "Year 2000 Problem" (that is, the risk
that computer applications used by the Borrower and its Restricted Subsidiaries
may be unable to recognize and perform properly date-sensitive functions
involving certain dates prior to and any date after December 31, 1999). Based on
such review and program, the Borrower reasonably believes that the Year 2000
Problem will not have a Materially Adverse Effect on the financial condition,
operations, business, prospects or property of the Borrower and its Restricted
Subsidiaries taken as a whole since December 31, 1997.
Section 4.2 Survival of Representations and Warranties, etc.Section 4.2
Survival of Representations and Warranties, etc. All representations and
warranties made under this Agreement shall be deemed to be made, and shall be
true and correct, at and as of the Agreement Date and the date of each Advance
hereunder, except to the extent previously fulfilled in accordance with the
terms hereof and to the extent subsequently inapplicable. All representations
and warranties made under this Agreement shall survive, and not be waived by,
the execution hereof by the Lenders and the Administrative Agent, any
investigation or inquiry by any Lender or the Administrative Agent, or the
making of any Advance under this Agreement.
ARTICLE 5
General Covenants
So long as any of the Obligations are outstanding and unpaid or the
Borrower shall have the right to borrow hereunder (whether or not the conditions
to borrowing have been or can be fulfilled), and unless the Required Lenders
shall otherwise consent in writing:
Section 5.1 Preservation of Existence and Similar Matters. The Borrower
will, and, except as permitted by Section 7.5 hereof, will cause each of its
Restricted Subsidiaries to, (i) preserve and maintain its existence, rights,
licenses, and privileges in its jurisdiction of formation and (ii) qualify and
remain qualified and authorized to do business in each jurisdiction in which
such qualification is necessary in view of the character of its properties or
the nature of its business requires such qualification or authorization, except
for qualifications and authorizations, the lack of which, singly or in the
aggregate, has not had and is not likely to have a Materially Adverse Effect.
Section 5.2 Business; Compliance with Applicable Law. The Borrower will,
and will cause each of its Restricted Subsidiaries to (a) engage primarily in
the business described in Section 4.1(w) hereof and related businesses and (b)
comply with the requirements of all Applicable Law, including environmental
laws, except for those laws the non-compliance with which could not reasonably
be expected to have a Materially Adverse Effect.
Section 5.3 Maintenance of Properties. The Borrower will, and will cause
each of its Restricted Subsidiaries to, maintain or cause to be maintained in
the ordinary course of business in good repair, working order, and condition all
properties necessary in its business (whether owned or held under lease).
Section 5.4 Accounting Methods and Financial Records. The Borrower will,
and will cause each of its Restricted Subsidiaries on a consolidated and
consolidating basis to, maintain a system of accounting established and
administered in accordance with GAAP, and will keep adequate records and books
of account in which complete entries will be made in accordance with GAAP and
reflecting all transactions required to be reflected by GAAP and keep accurate
and complete records of their respective properties and assets. The Borrower and
its Restricted Subsidiaries will maintain a fiscal year ending on December 31
unless otherwise agreed by all of the Arrangers.
Section 5.5 Insurance. The Borrower will, and will cause each of its
Restricted Subsidiaries to maintain insurance on its assets and properties and
on its operations including, but not limited to, public liability, business
interruption, property and crime, from responsible insurance companies in such
amounts and against such risks as shall be customary for similar businesses. The
Borrower and each of its Restricted Subsidiaries shall at all times maintain
insurance coverage comparable to that in place on the Agreement Date, taking
into account the growth of the Borrower's and the Restricted Subsidiaries'
business and operations after the Agreement Date.
Section 5.6 Payment of Taxes and Claims. The Borrower will, and will cause
each of its Restricted Subsidiaries to, pay and discharge all taxes,
assessments, and governmental charges or levies imposed upon it or upon its
incomes or profits or upon any properties belonging to it prior to the date on
which penalties attach thereto, and all lawful claims for labor, materials, and
supplies which, if unpaid, might become a Lien other than a Permitted Lien upon
any of its properties; except that, no such tax, assessment, charge, levy, or
claim need be paid which is being contested in good faith by appropriate
proceedings and for which adequate reserves as required by GAAP shall have been
set aside on the appropriate books, but only so long as such tax, assessment,
charge, levy, or claim does not become a Lien or charge other than a Permitted
Lien and no foreclosure, distraint, sale, or similar proceedings shall have been
commenced and remain unstayed for a period of thirty (30) days after such
commencement. The Borrower will, and will cause each of its Restricted
Subsidiaries to, timely file all information returns required by federal, state
or local tax authorities.
Section 5.7 Visits and Inspections. The Borrower will permit, and will
cause each of its Restricted Subsidiaries to permit, representatives of the
Administrative Agent and each Lender to (a) visit and inspect the properties of
the Borrower and each of its Restricted Subsidiaries at reasonable times during
normal business hours, (b) inspect and make extracts from and copies of their
respective books and records, and (c) discuss with their respective principal
officers its businesses, assets, liabilities, financial positions, results of
operations, and business prospects relating to the Borrower and each of its
Restricted Subsidiaries. The Borrower and each of its Restricted Subsidiaries
will also permit representatives of the Administrative Agent to discuss with
their respective accountants the Borrower's and its Restricted Subsidiaries'
businesses, assets, liabilities, financial positions, results of operations and
business prospects.
Section 5.8 Payment of Indebtedness. The Borrower will pay, and will cause
each of its Restricted Subsidiaries to pay, subject to any provisions therein
regarding subordination, any and all of their respective Indebtedness when and
as the same becomes due, other than Indebtedness the non-payment of which could
not reasonably be expected to have a Materially Adverse Effect, and which the
Borrower or such Restricted Subsidiary is contesting in good faith and has
established adequate reserves on its books and records.
Section 5.9 Use of Proceeds. The Borrower will use the proceeds of the
Facility A Loans for (1) general corporate purposes, including payment of
transaction fees and expenses; (2) working capital and capital expenditures; and
(3) payment of the purchase price for the TV Guide Transaction, the Liberty
Transaction and other Acquisitions and Investments permitted herein, and (4) for
payment of the purchase price for the TV Guide Transaction, the cash portion of
which shall not exceed $800,000,000.
Section 5.10 ERISA. The Borrower shall (a) notify the Lenders as soon as
practicable of any Reportable Event for which the Pension Benefit Guaranty
Corporation has not waived the thirty (30) day notice requirement and of any
additional act or condition arising in connection with any such Plan which the
Borrower believes might constitute grounds for the termination thereof by the
Pension Benefit Guaranty Corporation or for the appointment by the appropriate
United States District Court of a trustee to administer such Plan and (b)
furnish to the Lenders, promptly upon the Lenders' request therefor, such
additional information concerning any such Plan as may be reasonably requested
by the Lenders.
Section 5.11 Indemnity. The Borrower agrees to indemnify and hold harmless
each Lender and the Administrative Agent, and each of their respective
affiliates, employees, representatives, shareholders, officers and directors
(any of the foregoing shall be an "Indemnitee") from and against any and all
claims, liabilities, losses, damages, actions, reasonable attorneys' fees and
expenses (as such fees and expenses are incurred) and demands by any party
(other than the Borrower), including the costs of investigating and defending
such claims, whether or not the Borrower, any of its Restricted Subsidiaries or
the Person seeking indemnification is the prevailing party, (a) resulting from
any breach or alleged breach by the Borrower or any of its Restricted
Subsidiaries of the Borrower of any representation or warranty made hereunder;
or (b) otherwise arising out of (i) the Facility A Commitments or otherwise
under this Agreement, any Loan Document, any Letter of Credit or any transaction
contemplated hereby or thereby, including, without limitation, the use of the
proceeds of the Facility A Loans hereunder in any fashion by the Borrower or the
performance of their respective obligations under the Loan Documents by the
Borrower, (ii) allegations of any participation by the Lenders or the
Administrative Agent, or any of them, in the affairs of the Borrower or any of
its Restricted Subsidiaries, or allegations that any of them has any joint
liability with the Borrower or any of its Restricted Subsidiaries for any
reason, (iii) any claims against the Lenders or the Administrative Agent, or any
of them, by any shareholder or other investor in or lender to the Borrower or
any of its Restricted Subsidiaries, by any brokers or finders or investment
advisers or investment bankers retained by the Borrower or by any other third
party, arising out of the Facility A Commitment or otherwise under this
Agreement or any other Loan Document; or (c) in connection with taxes (not
including federal or state income taxes or other taxes based solely upon the
revenues of such Persons), fees, and other charges payable in connection with
the Facility A Loans, or the execution, delivery, and enforcement of this
Agreement, the Security Documents, the other Loan Documents, and any amendments
thereto or waivers of any of the provisions thereof; unless the Person seeking
indemnification hereunder is determined in such case to have acted with gross
negligence or willful misconduct, in any case, by a final, non-appealable
judicial order. The obligations of the Borrower under this Section 5.11 are in
addition to, and shall not otherwise limit, any liabilities which the Borrower
might otherwise have in connection with any warranties or similar obligations of
the Borrower in any other Loan Document.
Section 5.12 Further Assurances. The Borrower will promptly cure, or cause
to be cured, defects in the creation and issuance of the Notes and the execution
and delivery of the Loan Documents (including this Agreement), resulting from
any act or failure to act by the Borrower or any of its Restricted Subsidiaries
or any employee or officer thereof. The Borrower at its expense will promptly
execute and deliver to the Administrative Agent and the Lenders, or cause to be
executed and delivered to the Administrative Agent and the Lenders, all such
other and further documents, agreements, and instruments in compliance with or
accomplishment of the covenants and agreements of the Borrower in the Loan
Documents, including this Agreement, or to correct any omissions in the Loan
Documents, or more fully to state the obligations set out herein or in any of
the Loan Documents, or to obtain any consents, all as may be necessary or
appropriate in connection therewith as may be reasonably requested.
5.13 Broker's Claims. The Borrower hereby indemnifies and agrees to hold
the Administrative Agent and each of the Lenders harmless from and against any
and all losses, liabilities, damages, costs and expenses which may be suffered
or incurred by the Administrative Agent and each of the Lenders in respect of
any claim, suit, action or cause of action now or hereafter asserted by a broker
or any Person acting in a similar capacity arising from or in connection with
the execution and delivery of this Agreement or any other Loan Document or the
consummation of the transactions contemplated herein or therein.
Section 5.14 Covenants Regarding Formation of Subsidiaries and
Acquisitions. At the time of (a) any Acquisition by a Restricted Subsidiary of
the Borrower, (b) any Acquisition of a Person which becomes a Restricted
Subsidiary of the Borrower, or (c) the formation of any new Restricted
Subsidiary of the Borrower which is permitted under this Agreement, (i) the
Borrower will, and will cause its Restricted Subsidiaries, as appropriate, to
(A) pledge to the Administrative Agent all of the stock, partnership interests
or other ownership interests (or other instruments or securities evidencing
ownership) and intercompany indebtedness of such Restricted Subsidiary which is
acquired, formed, or beneficially owned by the Borrower or any of its Restricted
Subsidiaries, as the case may be, as additional Collateral for the Obligations
to be held by the Administrative Agent in accordance with the terms of an extant
Borrower Pledge Agreement, an extant Subsidiary Pledge Agreement, or a new
Borrower Pledge Agreement or Subsidiary Pledge Agreement in substantially the
forms of Exhibits C and J, respectively, attached hereto, and, if such
Restricted Subsidiary is a Non-Guarantor Subsidiary, an Assignment of Notes, if
applicable, and (B) execute and deliver to the Administrative Agent all such
documentation for such pledge as, in the reasonable opinion of the
Administrative Agent, is appropriate with respect to such Acquisition or the
formation of such Restricted Subsidiary, and (ii) if such Restricted Subsidiary
is not a Non-Guarantor Subsidiary, the Borrower shall cause such Restricted
Subsidiary to execute and deliver a Subsidiary Guaranty substantially in the
form of Exhibit I attached hereto. Notwithstanding the foregoing, the Borrower
shall cause any Restricted Subsidiary that makes a loan to a Non-Guarantor
Subsidiary at any time to execute and deliver an Assignment of Notes
substantially in the form of Exhibit B attached hereto at the time of the making
of such loan. Any document, agreement or instrument executed or issued pursuant
to this Section 5.14 shall be a "Loan Document" for purposes of this Agreement.
Section 5.15 Year 2000 Compliance. The Borrower will, and will cause each
of its Restricted Subsidiaries to, promptly notify the Administrative Agent in
the event that the Borrower or any of its Restricted Subsidiaries discovers or
determines that any computer application (including those of its suppliers,
vendors, and customers) that is material to the Borrower's or any of its
Restricted Subsidiaries' businesses and operations will not be Year 2000
compliant, except to the extent that such failure could not reasonably be
expected to have a Materially Adverse Effect.
Section 5.16 Non-Guarantor Subsidiary Distributions. On the last day of
each calendar quarter, the Borrower shall cause each Non-Guarantor Subsidiary to
make a distribution to the Borrower in an amount equal to the Borrower's
attributable portion of the EBITDA of such Non-Guarantor Subsidiary for the four
(4) quarter period then ended less the amount of all other distributions made
during such period in respect of the EBITDA of such Non-Guarantor Subsidiary;
provided however, that with respect to (a) SNG only, the Borrower may permit SNG
to retain (i) any EBITDA attributable to any period ending prior to the
Agreement Date and (ii) up to $12,000,000 of EBITDA attributable to any period
after the Agreement Date and (b) Sneak Prevue LLC only, the Borrower may permit
Sneak Prevue LLC to retain up to $3,000,000 of EBITDA after the Agreement Date.
ARTICLE 6
Information Covenants
So long as any of the Obligations is outstanding and unpaid or the
Borrower has a right to borrow hereunder (whether or not the conditions to
borrowing have been or can be fulfilled) and unless the Required Lenders shall
otherwise consent in writing, the Borrower will furnish or cause to be furnished
to each Lender and to the Administrative Agent at their respective offices:
Section 6.1 Quarterly Financial Statements and Information. Within
forty-five (45) days after the last day of each of the first three (3) quarters
in each calendar year, the unaudited consolidated and consolidating balance
sheet of the Borrower and its Subsidiaries as of the end of such quarter, and
the related unaudited consolidated and consolidating statement of operations and
related unaudited consolidated statement of cash flows of the Borrower and its
Subsidiaries for the elapsed portion of the year ended with the last day of such
quarter, certified by an Authorized Signatory of the Borrower to have been
prepared in accordance with GAAP and, in his or her opinion, present fairly the
financial position of the Borrower and its Subsidiaries, as of the end of such
period and the results of operations for such period, and for the elapsed
portion of the year ended with the last day of such period, subject only to
normal year-end adjustments.
Section 6.2 Annual Financial Statements and Information; Certificate of No
Default. Within ninety (90) days after the end of each calendar year the audited
consolidated balance sheet of the Borrower and its Subsidiaries and the related
audited consolidated statements of operations and related audited consolidated
statements of cash flows of the Borrower and its Subsidiaries for such calendar
year and set forth in comparative form such figures as of the end of and for the
previous calendar year, all in reasonable detail, and in each case prepared in
accordance with GAAP throughout the periods involved and shall be certified by
independent certified public accountants of recognized national standing which
certification shall (a) be accompanied by the opinion of such accountants
without reservation or exception as to the scope of their audit, (b) state that
the examination by such accountants in connection with the financial statements
has been made in accordance with generally accepted auditing standards, (c)
include the opinion of such accountants that such financial statements have been
prepared in accordance with GAAP, except as otherwise specified in such opinion,
and (d) stating that, in making the examination necessary for their audit of the
financial statements of the Borrower for such year, nothing came to their
attention of a financial or accounting nature that caused them to believe that
the Borrower was not in compliance with the terms, covenants, provisions or
conditions of this Agreement, or that there shall have occurred any condition or
event which would constitute a Default or, if so, specifying all such instances
of non-compliance and the nature and status thereof.
Section 6.3 Performance Certificates. At the time the financial statements
are furnished pursuant to Sections 6.1 and 6.2 hereof, a certificate of an
Authorized Signatory of the Borrower in form and substance satisfactory to the
Administrative Agent:
(a) setting forth as of the end of such quarter or calendar
year, as the case may be, the arithmetical calculations required to establish
(i) adjustments to the Applicable Margin, as provided for in Section 2.3(g)
hereof, and the Facility Fees and (ii) whether or not the Borrower was in
compliance with the requirements of Sections 7.8, 7.9 and 7.10 hereof;
(b) stating that the signer has reviewed the terms of this
Agreement and that in the course of the performance of his or her duties, he or
she would normally have knowledge of any condition or event which would
constitute a Default and certifying that, to the best of his or her knowledge,
no Default has occurred as of the end of such quarter or year, as the case may
be, or, if a Default has occurred, disclosing each such Default and its nature,
when it occurred, whether it is continuing, and the steps being taken by the
Borrower with respect to such Default; and
(c) with respect to the financial statements furnished
pursuant to Section 6.2 hereof, attaching unaudited consolidating schedules with
respect to the balance and statement of operations.
Section 6.4 Copies of Other Reports.
(a) Promptly upon receipt thereof, copies of all reports, if
any, submitted to the Borrower by its independent public accountants including,
without limitation, any management report prepared in connection with the annual
financial statements referred to in Section 6.2 hereof.
(b) Within ninety (90) days after the end of each calendar
year of the Borrower, the annual budget for the Borrower.
(c) Promptly after the preparation of the same, copies of all
material reports or financial information filed with any governmental agency,
department, bureau, division or other governmental authority or regulatory body
evidencing facts or containing information which could have a Materially Adverse
Effect.
(d) From time to time and promptly upon each request, such
data, certificates, reports, statements, documents, or further information
regarding the business, assets, liabilities, financial position, projections,
results of operations of the Borrower or any of its Restricted Subsidiaries as
the Administrative Agent, upon request of the Required Lenders, may reasonably
request.
Section 6.5 Notice of Litigation and Other Matters. Prompt notice of the
following events as to which the Borrower has received notice or otherwise
become aware thereof:
(a) The commencement of all proceedings and investigations by
or before any governmental body and all actions and proceedings in any court or
before any arbitrator against or in any other way relating adversely and
directly to the Borrower or any of its Restricted Subsidiaries or any of its
properties, assets, or businesses, or which calls into question the validity of
this Agreement or any other Loan Document, which, if determined adversely to the
Borrower or such Restricted Subsidiary, could reasonably be expected to have a
Materially Adverse Effect.
(b) Any material adverse change with respect to the business,
assets, liabilities, financial position, or results of operations of the
Borrower or any of its Restricted Subsidiaries, other than changes in the
ordinary course of business which have not had and are not likely to have a
Materially Adverse Effect.
(c) Any Default or the occurrence or non-occurrence of any
event (A) which constitutes, or which with the passage of time or giving of
notice or both would constitute a default by the Borrower or any Restricted
Subsidiary of the Borrower under any material agreement to which the Borrower or
any Restricted Subsidiary of the Borrower is party or by which any of their
respective properties may be bound, and (B) which could reasonably be expected
to have a Materially Adverse Effect, giving in each case the details thereof and
specifying the action proposed to be taken with respect thereto.
(d) The occurrence of any Reportable Event or a "prohibited
transaction" (as such term is defined in Section 406 of ERISA or Section 4975 of
the Code) with respect to any Plan or the institution or threatened institution
by the Pension Benefit Guaranty Corporation of proceedings under ERISA to
terminate or to partially terminate any such Plan or the commencement or
threatened commencement of any litigation regarding any such Plan or naming it
or the trustee of any such Plan with respect to such Plan.
(e) The occurrence of any event subsequent to the Agreement
Date which, if such event had occurred prior to the Agreement Date, would have
constituted an exception to the representation and warranty in Section 4.1(n) of
this Agreement.
Section 6.6 Loss of Agreements. The Borrower shall notify the
Administrative Agent and the Lenders within fifteen (15) days of the occurrence
of any termination of any MSO Agreement or DBS Agreement which results in a
reduction of twenty-five percent (25%) or more of the subscribers of all
distributors of the programming of the Borrower and its Restricted Subsidiaries
in any calendar quarter when added to all other terminations and after giving
effect to any additions in such quarter. In addition, the Borrower shall notify
the Administrative Agent and Lenders promptly upon receipt of any notice that a
Transponder Lease Agreement is in default.
ARTICLE 7
Negative Covenants
So long as any of the Obligations is outstanding and unpaid or the
Borrower has a right to borrow hereunder (whether or not the conditions to
borrowing have been or can be fulfilled) and unless the Required Lenders shall
otherwise give their prior consent in writing:
Section 7.1 Indebtedness of the Borrower. The Borrower shall not create,
assume, incur or otherwise become or remain obligated in respect of, or permit
to be outstanding, and the Borrower shall not permit any of its Restricted
Subsidiaries to create, assume, incur or otherwise become or remain obligated in
respect of or permit to be outstanding, any Indebtedness for Money Borrowed
except:
(a) the Obligations;
(b) Indebtedness existing as of the Agreement Date as
described on Schedule 3 attached hereto;
(c) Indebtedness owed to the Borrower or to any of its
Restricted Subsidiaries (other than Non-Guarantor Subsidiaries) by the Borrower
or any of its Restricted Subsidiaries (other than Non-Guarantor Subsidiaries);
(d) obligations under Interest Hedge Agreements in respect of
the Facility A Loans and the Facility B Loans;
(e) unsecured subordinated Indebtedness; provided, that (i)
such Indebtedness (A) is expressly subordinated in all respects to the
Obligations, (B) has a final maturity at least one year after the Maturity Date,
and (C) has no terms or conditions (including payment terms) which are more
onerous than the terms and conditions contained herein and in the other Loan
Documents, and (ii) on the date of incurrence thereof, no Default exists or
would be caused thereby;
(f) Indebtedness for Money Borrowed assumed in connection with
any Acquisition permitted hereunder; provided, that (i) such Indebtedness for
Money Borrowed (A) is unsecured, (B) has a final maturity at least one year
after the Maturity Date, (C) has no terms or conditions (including payment
terms) which are more onerous than the terms and conditions contained herein and
in the other Loan Documents and (D) was not incurred to finance all or part of
the purchase price with respect to such Acquisition and (ii) on the date of
assumption thereof, no Default exists or would be caused thereby;
(g) other Indebtedness for Money Borrowed of the Borrower not
to exceed $50,000,000 in the aggregate at any time outstanding; provided,
however, that (i) no Default exists prior to or after giving effect to the
incurrence thereof, (ii) the principal amount thereof which is secured by Liens
does not exceed $20,000,000 in the aggregate outstanding at any time and (iii)
the principal amount thereof incurred by Non-Guarantor subsidiaries does not
exceed $10,000,000 in the aggregate;
(h) Indebtedness of the Non-Guarantor Subsidiaries owed
to the Borrower as permitted in Section 7.2(c); and
(i) Indebtedness evidenced by the Borrower's 8.125% Senior
Subordinated Notes due 2009 in an aggregate principal amount not to exceed
$400,000,000 and Guarantees thereof by the Restricted Subsidiaries (other than
Non-Guarantor Subsidiaries) of the Borrower.
Section 7.2 Investments and Acquisitions. The Borrower shall not, and shall
not permit any of its Restricted Subsidiaries to, make any loan, advance, or
otherwise acquire evidences of indebtedness, Capital Stock or other securities
of any Person, except that the Borrower and its Restricted Subsidiaries may:
(a) complete (i) the TV Guide Transaction and (ii) the
Liberty Transaction;
(b) make loans or advances to Non-Guarantor Subsidiaries for
working capital and cash management purposes;
(c) if the Leverage Ratio (after giving effect to such
Acquisition or Investment) on the date of such Acquisition or Investment is
equal to or less than 3.5 to 1.0 and so long as no Default then exists or would
be caused thereby, make any other Acquisition or Investment; and
(d) if the Leverage Ratio (after giving effect to such
Acquisition or Investment) on the date of such Acquisition or Investment is
greater than 3.5 to 1.0 and so long as no Default then exists or would be caused
thereby, make any other Acquisition or Investment that does not exceed (i)
$150,000,000 for any single Investment or Acquisition and (ii) $400,000,000 in
the aggregate for all Investments and Acquisitions after the Agreement Date; and
(e) purchase or otherwise acquire and own any of the
following:
(i) direct obligations of the United States of
America (including any agency or instrumentality thereof) for the
payment of which the full faith and credit of the United States of
America is pledged maturing within three hundred sixty-five (365) days
of the date of acquisition thereof;
(ii) time deposit accounts, certificates of deposit
and money market deposits maturing within ninety (90) days of the date
of acquisition thereof issued by a bank or trust company organized
under the laws of the United States of America or any state thereof
having capital, surplus and undivided profits aggregating in excess of
$500,000,000 and whose long-term debt is rated "A-3" or "A-" (or
higher) according to Moody's Investors Service, Inc. or Standard and
Poor's Ratings Group, a division of McGraw-Hill, Inc. (or such similar
equivalent rating by at least one "nationally recognized statistical
rating organization" (as defined in Rule 436 under the Securities and
Exchange Act of 1993, as amended));
(iii) repurchase obligations with a term of not more
than thirty (30) days for underlying securities of the types described
in clause (i) entered into with:
(A) a bank meeting the qualifications
described in clause (ii) above, or
(B) any primary government securities dealer
reporting to the Market Reports Division of the Federal
Reserve Bank of New York;
(iv) commercial paper, maturing not more than ninety
(90) days after the date of acquisition, issued by a corporation (other
than an Affiliate of the Borrower) organized and in existence under the
laws of the United States of America with a rating at the time as of
which any Investment therein is made of "P-1" (or higher) according to
Moody's Investors Service, Inc. or "A-1" (or higher) according to
Standard and Poor's Ratings Group, a division of McGraw-Hill, Inc. (or
such similar equivalent rating by at least one "nationally recognized
statistical rating organization" (as defined in Rule 436 under the
Securities and Exchange Act of 1993, as amended)); and
(v) direct obligations (or certificates representing
an ownership interest in such obligations) of any state of, or
municipality within, the United States of America (including any agency
or instrumentality thereof) for the payment of which the full faith and
credit of such state or municipality is pledged and which are not
callable or redeemable at the issuer's option, provided that:
(A) the long-term debt of such state or
municipality is rated "A-3" or "A-" (or higher) according to
Moody's Investor Service, Inc. or Standard and Poor's Ratings
Group, a division of McGraw-Hill, Inc. (or such similar
equivalent rating by at least one "nationally recognized
statistical rating organization" (as defined in Rule 436 under
the Securities and Exchange Act of 1993, as amended)), and
(B) such obligations mature within one
hundred eighty (180) days of the date of acquisition thereof.
Section 7.3 Limitation on Liens. The Borrower shall not create, assume,
incur or permit to exist or to be created, assumed, incurred or permitted to
exist, directly or indirectly, and the Borrower shall not permit any of its
Restricted Subsidiaries to create, assume, incur or permit to exist, or to be
created, assumed or incurred or permitted to exist, directly or indirectly, any
Lien on any of its properties or assets, whether now owned or hereafter
acquired, except for Permitted Liens. The Borrower shall not permit any of its
Restricted Subsidiaries to undertake, covenant or agree with any third party
that it will not create, assume, incur or permit to exist any lien in favor of
the Administrative Agent or the Lenders securing the Obligations on any of its
assets or properties, whether now owned or hereafter acquired, except for
Permitted Liens.
Section 7.4 Amendment and Waiver. The Borrower shall not enter into any
material amendment of, or agree to or accept any material waiver of the Articles
of Incorporation and Bylaws of the Borrower or its Restricted Subsidiaries, in
each case which would have or could reasonably be expected to have an adverse
effect upon the rights and remedies of the Lenders hereunder or under any Loan
Document.
Section 7.5 Liquidation; Disposition or Acquisition of Assets. The Borrower
shall not and shall not at any time permit any of its Restricted Subsidiaries to
(a) liquidate or dissolve itself (or suffer any liquidation or dissolution) or
otherwise wind up, or (b) enter into any merger or consolidation, or (c) sell,
lease, abandon, transfer or otherwise dispose of any assets (other than contract
rights) or business other than, subject to compliance with Section 2.7(b)
hereof, Permitted Asset Sales so long as the Borrower is in pro forma compliance
with Sections 2.7(b), 7.8, 7.9 and 7.10 after giving effect to any such asset
sale provided that if the Net Proceeds of such sale, transfer or disposition are
greater than $100,000,000, the Borrower provides to the Administrative Agent a
certificate indicating pro forma compliance with Sections 7.8, 7.9 and 7.10 from
the date of such sale, transfer or disposition through the Maturity Date and;
provided, however that (i) the Borrower may merge or consolidate with a
wholly-owned Restricted Subsidiary of the Borrower (so long as the Borrower is
the surviving entity), and (ii) wholly-owned Restricted Subsidiaries of the
Borrower may merge or consolidate with other wholly-owned Restricted Subsidiary
or with the Borrower.
Section 7.6 Limitation on Guaranties. The Borrower shall not, and shall not
permit any of its Restricted Subsidiaries to, at any time Guaranty, or assume,
be obligated with respect to, or permit to be outstanding any Guaranty of, any
obligation of any other Person other than (a) as may be contained in any Loan
Document, (b) obligations under agreements to indemnify Persons who have issued
bid or performance bonds or letters of credit issued in lieu of such bonds in
the ordinary course of business of the Borrower or its Restricted Subsidiaries,
as the case may be, securing other performance by the Borrower or any of its
Restricted Subsidiaries of activities otherwise permissible hereunder, (c) a
guaranty by endorsement of negotiable instruments for collection in the ordinary
course of business and (d) Guaranties of Indebtedness permitted under Section
7.1 hereof.
Section 7.7 Restricted Payments and Purchases. The Borrower shall not, and
shall not permit any of its Restricted Subsidiaries to, directly or indirectly
declare or make any Restricted Payment or Restricted Purchase, provided, however
that (a) so long as no Default then exists or would be caused thereby, and so
long as on such date, the Borrower demonstrates that its Leverage Ratio before
and after giving effect to such Restricted Payment is less than 3.0 to 1.0, and
that it will be in compliance on a pro forma basis with Sections 7.8, 7.9 and
7.10 hereof from the date of such Restricted Payment through the Maturity Date
after giving effect to such Restricted Payment, the Borrower may make Restricted
Payments in an amount not to exceed the amount of (i) its EBITDA for the
immediately preceding four (4) calendar quarters minus (ii) the aggregate amount
of any Restricted Payments made under this Section 7.7 during the immediately
preceding four (4) calendar quarters, (b) any Restricted Subsidiary of the
Borrower may make distributions to the Borrower or another Restricted Subsidiary
of the Borrower and (c) to the extent that a Restricted Subsidiary has made
distributions to the Borrower or another Restricted Subsidiary, such Restricted
Subsidiary may make distributions to other holders of equity interests in such
Restricted Subsidiary in proportion to the ownership interest in such Restricted
Subsidiary held by such holder.
Section 7.8 Leverage Ratio. (a) As of the end of any calendar quarter, (b)
at the time of the issuance of any Letter of Credit (after giving effect to such
Letter of Credit), (c) at the time of any Advance increasing the principal
amount of the Facility A Loans (after giving effect to any such Advance), and
(d) at the time of any Competitive Bid Advance, the Borrower shall not permit
the Leverage Ratio to exceed the ratios set forth below during the periods
indicated:
(i) Prior to the receipt of (x) the Threshold Debt Proceeds
and (y) the Cash Equity Proceeds:
Period Ratio
Agreement Date through March 30, 2000 4.50 to 1.0
March 31, 2000 through March 30, 2002 4.00 to 1.0
March 31, 2002 and thereafter 3.50 to 1.0
(ii) After the receipt of (x) the Threshold Debt Proceeds and
(y) the Cash Equity Proceeds:
Period Ratio
Agreement Date through March 30, 2002 5.00 to 1.0
March 31, 2002 and thereafter 4.00 to 1.0
Section 7.9 Fixed Charge Coverage Ratio. (a) As of the end of any calendar
quarter, (b) at the time of any issuance of any Letter of Credit (after giving
effect to the issuance of such Letter of Credit), (c) at the time of any Advance
increasing the principal amount of the Facility A Loans (after giving effect to
such Advances) and (d) at the time of any Competitive Bid Advance (after giving
effect to any such Advance), the Borrower shall not permit the ratio of (x) its
EBITDA for the four (4) calendar quarters immediately preceding (or, in the case
of Section 7.9(a) hereof, ending on) the calculation date to (y) its Fixed
Charges for such period to be less than 1.25 to 1.0.
Section 7.10 Interest Coverage Ratio. (a) As of the end of any calendar
quarter, (b) at the time of any issuance of any Letter of Credit (after giving
effect to such Letter of Credit) and (c) at the time of any Advance increasing
the principal amount of the Facility A Loans (after giving to effect to such
Advance) and (d) at the time of any Competitive Bid Advance (after giving effect
to any such Advance), the Borrower shall not permit the ratio of (x) its EBITDA
for the four (4) calendar quarters immediately preceding (or, in the case of
Section 7.10(a) hereof, ending on) the calculation date to (y) Total Interest
Expense for such period to be less than the amounts set forth for such date in
the table below:
Period Interest Coverage Ratio
Agreement Date through March 30, 2002 2.50 to 1.0
March 31, 2002 and all periods thereafter 3.00 to 1.0
Section 7.11 Affiliate Transactions. Except for transactions pursuant to
any Transponder Lease Agreement between the Borrower and an Affiliate,
agreements which are direct cost or direct revenue pass through in nature and
any renewals or extensions of any of the foregoing, the Borrower shall not, and
shall not permit any of its Restricted Subsidiaries to, at any time engage in
any transaction with an Affiliate (other than the Borrower or a Restricted
Subsidiary of the Borrower), nor make an assignment or other transfer of any of
its assets to any Affiliate (other than the Borrower or a Restricted Subsidiary
of the Borrower), on terms less advantageous than would be the case if such
transaction had been effected with a non-Affiliate.
Section 7.12 ERISA Liabilities. The Borrower shall not, and shall not
permit any of its ERISA Affiliates to, fail to meet all of the applicable
minimum funding requirements of ERISA and the Code, without regard to any
waivers thereof, and, to the extent that the assets of any of its Plans would be
less than an amount sufficient to provide all accrued benefits payable under
such Plans, shall make the maximum deductible contributions allowable under the
Code. The Borrower shall not, and shall not permit any of its Restricted
Subsidiaries to, become a participant in any Multiemployer Plan.
Section 7.13 Limitation on Upstream Dividends by Subsidiaries. The Borrower
shall not permit any of its Restricted Subsidiaries to enter into or agree, or
otherwise become subject, to any agreement, contract or other arrangement with
any Person pursuant to the terms of which (a) such Restricted Subsidiary is or
would be prohibited from declaring or paying any cash dividends or distributions
on any class of its stock or any partnership interests owned directly or
indirectly by the Borrower or from making any other distribution on account of
any class of any such stock or any such partnership interests owned directly or
indirectly by the Borrower (herein referred to as "Upstream Dividends") or (b)
the declaration or payment of Upstream Dividends by a Restricted Subsidiary to
the Borrower or to another Restricted Subsidiary of the Borrower, on an annual
or cumulative basis, is or would be otherwise limited or restricted.
Section 7.14 Limitation on Prepayment of Subordinated Debt. The
Borrower shall not redeem any Subordinated Debt prior to the maturity date
thereof unless the Leverage Ratio covenant set forth in Section 7.8 hereof has
been permanently set at a maximum permitted Leverage Ratio of 3.5 to 1.0 and the
Borrower is in compliance therewith.
ARTICLE 8
Default
Section 8.1 Events of Default. Each of the following shall constitute an
Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule, or regulation of any
governmental or non-governmental body:
(a) Any representation or warranty made under this Agreement
shall prove incorrect or misleading in any material respect when made or deemed
to have been made pursuant to Section 4.2 hereof;
(b) The Borrower shall default in the payment of (i) any
interest, fees and other amounts payable hereunder or under the Notes, this Loan
Agreement, or any of them, or under the other Loan Documents and such default
shall continue unremedied for a period of five (5) days or (ii) any principal
when due under the Notes, this Loan Agreement, or any of them;
(c) The Borrower shall default in the performance or
observance of any agreement or covenant contained in (i) Sections 6.1, 6.2 or
6.3 hereof, which default shall continue for a period of ten (10) days or (ii)
Section 6.6 or Article 7 hereof;
(d) The Borrower shall default in the performance or
observance of any other agreement or covenant contained in this Agreement not
specifically referred to elsewhere in this Section 8.1, and such default shall
not be cured to the Required Lenders' satisfaction within a period of thirty
(30) days from the date of the occurrence of such default;
(e) There shall occur any Default in the performance or
observance of any agreement or covenant or breach of any representation or
warranty contained in any of the Loan Documents (other than this Agreement or as
otherwise provided in this Section 8.1 of this Agreement), which shall not be
cured to the Required Lenders' satisfaction within a period of thirty (30) days
from the occurrence of such default;
(f) There shall be entered a decree or order for relief in
respect of any of the Borrower or any Restricted Subsidiary of the Borrower
under Title 11 of the United States Code, as now constituted or hereafter
amended, or any other applicable federal or state bankruptcy law or other
similar law, or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator, or similar official for the Borrower or any Restricted Subsidiary
of the Borrower or of any substantial part of their respective properties, or
ordering the winding-up or liquidation of the affairs of the Borrower or its
Restricted Subsidiaries or an involuntary petition shall be filed against the
Borrower or any of its Restricted Subsidiaries and a temporary stay entered, and
(i) such petition and stay shall not be diligently contested, or (ii) any such
petition and stay shall continue undismissed for a period of sixty (60)
consecutive days;
(g) The Borrower or any Restricted Subsidiary of the Borrower
shall file a petition, answer, or consent seeking relief under Title 11 of the
United States Code, as now constituted or hereafter amended, or any other
applicable federal or state bankruptcy law or other similar law, or the Borrower
or any Restricted Subsidiary of the Borrower shall consent to the institution of
proceedings thereunder or to the filing of any such petition or to the
appointment or taking of possession of a receiver, liquidator, assignee,
trustee, custodian, sequestrator, or other similar official for the Borrower or
any Restricted Subsidiary of the Borrower or of any substantial part of their
respective properties, or the Borrower or any Subsidiary of the Borrower shall
fail generally to pay its respective debts as they become due, or the Borrower
or any Restricted Subsidiary of the Borrower shall take any action in
furtherance of any such action;
(h) A final judgment shall be entered by any court against the
Borrower or any of its Restricted Subsidiaries for the payment of money which
exceeds $1,000,000, which judgment is not covered by insurance or a warrant of
attachment or execution or similar process shall be issued or levied against
property of the Borrower or any Restricted Subsidiary of the Borrower which,
together with all other such property of the Borrower and its Restricted
Subsidiaries subject to other such process, exceeds in value $1,000,000 in the
aggregate, and if, within thirty (30) days after the entry, issue, or levy
thereof, such judgment, warrant, or process shall not have been paid or
discharged or stayed pending appeal, or if, after the expiration of any such
stay, such judgment, warrant, or process shall not have been paid or discharged;
(i) (i) There shall be at any time any "accumulated funding
deficiency," as defined in ERISA or in Section 412 of the Code, with respect to
any Plan; or (ii) a trustee shall be appointed by a United States District Court
to administer any Plan; or the Pension Benefit Guaranty Corporation shall
institute proceedings to terminate any Plan; or (iii) any of the Borrower and
its ERISA Affiliates shall incur any liability to the Pension Benefit Guaranty
Corporation in connection with the termination of any Plan; or (iv) any Plan or
trust created under any Plan of any of the Borrower and its ERISA Affiliates
shall engage in a non-exempt "prohibited transaction" (as such term is defined
in Section 406 of ERISA or Section 4975 of the Code) which would subject the
Borrower or any ERISA Affiliate to the tax or penalty on "prohibited
transactions" imposed by Section 502 of ERISA or Section 4975 of the Code; and
by reason of any or all of the events described in clauses (i) through (iv), as
applicable, the Borrower shall have waived (and/or is likely to incur) and/or
incurred liability in excess of $1,000,000 in the aggregate;
(j) There shall occur any (i) default under (A) the Facility B
Loan Agreement or (B) any indenture, agreement, or instrument evidencing
Indebtedness for Money Borrowed of the Borrower or any of its Restricted
Subsidiaries having an aggregate principal amount in excess of $20,000,000,
which default is not cured or waived within any applicable cure period and which
default shall give the holder thereof the right to accelerate the obligations
thereunder or (ii) payment default under (after giving effect to any applicable
grace period) or acceleration of the maturity of any Indebtedness for Money
Borrowed of the Borrower or any of its Restricted Subsidiaries having an
aggregate principal amount in excess of $20,000,000;
(k) All or any portion of any Loan Document shall at any time
and for any reason be declared by a court of competent jurisdiction in a suit
with respect to such Loan Document to be null and void, or a proceeding shall be
commenced by any governmental authority involving a legitimate dispute or by the
Borrower or any of its Restricted Subsidiaries having jurisdiction over the
Borrower or any of its Restricted Subsidiaries seeking to establish the
invalidity or unenforceability thereof (exclusive of questions of interpretation
of any provision thereof);
(l) There shall occur any default by the Borrower under or a
cancellation of, without replacement, any Transponder Lease Agreement which
results (or is reasonably likely to result in) a termination of the Borrower's
access to a transponder thereunder;
(m) There shall occur any Change of Control; or
(n) Any Security Document shall for any reason fail or cease
(except by reason of lapse of time) to create a valid and perfected and
first-priority Lien on or security interest in any portion of the Collateral
purported to be covered thereby.
Section 8.2 Remedies. If an Event of Default shall have occurred and shall
be continuing:
(a) With the exception of an Event of Default specified in
Sections 8.1(f) or (g) hereof, the Administrative Agent, shall at the request,
or may with the consent, of the Required Lenders, (i) (A) terminate the Facility
A Commitment, and/or (B) declare the principal of and interest on the Facility A
Loans and the Notes and all other Obligations to be forthwith due and payable,
without presentment, demand, protest, or notice of any kind, all of which are
hereby expressly waived, anything in this Agreement or in the Notes to the
contrary notwithstanding, or both and (ii) require the Borrower to, and the
Borrower shall thereupon, deposit in an interest bearing account with the
Administrative Agent, as cash collateral for the Obligations, an amount equal to
the maximum amount currently or at any time thereafter available to be drawn on
all outstanding Letters of Credit, and the Borrower hereby pledges to the
Administrative Agent, the Lenders and the Issuing Bank and grants to them a
security interest in, all such cash as security for the Obligations.
(b) Upon the occurrence an Event of Default under Sections
8.1(f) or (g) hereof, such principal, interest, and other obligations shall
thereupon and concurrently therewith become due and payable, and the Facility A
Commitment shall forthwith terminate, all without any action by the
Administrative Agent, the Issuing Bank or the Lenders or the holders of the
Notes, and the Borrower shall thereupon forthwith deposit in an interest bearing
account with the Administrative Agent, as cash collateral for the Obligations,
an amount equal to the maximum amount concurrently or at any time thereafter
available to be drawn on all outstanding Letters of Credit, all without
presentment, demand, protest, or other notice of any kind, all of which are
expressly waived, anything in this Agreement or in the Notes to the contrary
notwithstanding, and the Borrower hereby pledges to the Administrative Agent,
the Lenders and the Issuing Bank, and grants to the Administrative Agent, the
Lenders and the Issuing Bank a security interest in, all such cash as security
for the Obligations.
(c) The Administrative Agent, with the concurrence of the
Required Lenders, shall exercise all or part of the post-default rights granted
to it and to them under the Loan Documents or under Applicable Law.
(d) Upon acceleration of the Notes, as provided in subsection
(a) or (b) of this Section 8.2, the Administrative Agent, upon request of the
Required Lenders, shall have the right to the appointment of a receiver for the
properties and assets of the Borrower and its Restricted Subsidiaries, and the
Borrower, for itself and on behalf of its Restricted Subsidiaries, hereby
consents to such rights and such appointment and hereby waives any objection the
Borrower or any Restricted Subsidiary of the Borrower may have thereto or the
right to have a bond or other security posted by the Administrative Agent on
behalf of the Lenders, in connection therewith. The rights of the Administrative
Agent under this Section 8.2(d) shall be subject to its prior compliance with
the Communications Act and the FCC rules and policies promulgated thereunder to
the extent applicable to the exercise of such rights.
(e) The rights and remedies of the Administrative Agent and
the Lenders hereunder shall be cumulative, and not exclusive.
(f) In the event that the Administrative Agent establishes a
cash collateral account as contemplated by this Section 8.2, the Administrative
Agent shall invest all funds in such account in such investments as the
Administrative Agent in its sole and absolute discretion deems appropriate. The
Borrower hereby acknowledges and agrees that any interest earned on such funds
shall be retained by the Administrative Agent as additional Collateral for the
Obligations. Upon satisfaction in full of all Obligations, the Administrative
Agent shall pay any amounts then held in such account to the Borrower.
ARTICLE 9
The Administrative Agent
Section 9.1 Appointment and Authorization. Each Lender hereby irrevocably
appoints and authorizes, and hereby agrees that it will require any transferee
of any of its interest in its Facility A Loans and in its Notes irrevocably to
appoint and authorize, the Administrative Agent to take such actions as its
agent on its behalf and to exercise such powers hereunder as are delegated by
the terms hereof, together with such powers as are reasonably incidental
thereto. Neither the Administrative Agent nor any of its directors, officers,
employees, or agents shall be liable for any action taken or omitted to be taken
by it or them hereunder or in connection herewith, except for its or their own
gross negligence or willful misconduct as determined by a final non-appealable
judicial order of a court of competent jurisdiction.
Section 9.2 Delegation of Duties. The Administrative Agent may execute any
of its duties under the Loan Documents by or through agents or attorneys
selected by it using reasonable care and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible to any Lender for the negligence or misconduct of any agents
or attorneys selected by it with reasonable care.
Section 9.3 Interest Holders. The Administrative Agent may treat each
Lender, or the Person designated in the last notice filed with the
Administrative Agent under this Section 9.3, as the holder of all of the
interests of such Lender in its Facility A Loans and in its Notes until written
notice of transfer, signed by such Lender (or the Person designated in the last
notice filed with the Administrative Agent) and by the Person designated in such
written notice of transfer, in form and substance satisfactory to the
Administrative Agent, shall have been filed with the Administrative Agent.
Section 9.4 Consultation with Counsel. The Administrative Agent may consult
with legal counsel selected by it and shall not be liable for any action taken
or suffered by it in good faith in reliance thereon.
Section 9.5 Documents. The Administrative Agent shall not be under any duty
to examine, inquire into, or pass upon the validity, effectiveness, or
genuineness of this Agreement, any Note, or any instrument, document, or
communication furnished pursuant hereto or in connection herewith, and the
Administrative Agent shall be entitled to assume that they are valid, effective,
and genuine, have been signed or sent by the proper parties, and are what they
purport to be.
Section 9.6 Agents and Affiliates. With respect to the Facility A
Commitments and the Facility A Loans, any Lender which is an Affiliate of the
Administrative Agent shall have the same rights and powers hereunder as any
other Lender, and the Administrative Agent and its other Affiliates may accept
deposits from, lend money to, and generally engage in any kind of business with
the Borrower or any Affiliates of, or Persons doing business with, the Borrower,
as if it were not affiliated with the Administrative Agent and without any
obligation to account therefor.
Section 9.7 Responsibility of the Agents. The duties and obligations of the
Administrative Agent under this Agreement are only those expressly set forth in
this Agreement. The Administrative Agent shall be entitled to assume that no
Default or Event of Default has occurred and is continuing unless it has actual
knowledge, or has been notified by the Borrower, of such fact, or has been
notified by a Lender in writing that such Lender considers that a Default or an
Event of Default has occurred and is continuing, and such Lender shall specify
in detail the nature thereof. The Administrative Agent shall not be liable
hereunder for any action taken or omitted to be taken except for its own gross
negligence or willful misconduct as determined by a final, non-appealable
judicial order of a court of competent jurisdiction. The Administrative Agent
shall provide each Lender with copies of such documents received from the
Borrower as such Lender may reasonably request.
Section 9.8 Action by Administrative Agent.
(a) The Administrative Agent shall be entitled to use its
discretion with respect to exercising or refraining from exercising any rights
which may be vested in it by, and with respect to taking or refraining from
taking any action or actions which it may be able to take under or in respect
of, this Agreement, unless the Administrative Agent shall have been instructed
by the Required Lenders to exercise or refrain from exercising such rights or to
take or refrain from taking such action, provided that the Administrative Agent
shall not exercise any rights under Section 8.2(a) of this Agreement without the
request of the Required Lenders unless time is of the essence, in which case,
such action can be taken. The Administrative Agent shall incur no liability
under or in respect of this Agreement with respect to anything which it may do
or refrain from doing in the reasonable exercise of its judgment or which may
seem to it to be necessary or desirable in the circumstances, except for its
gross negligence or willful misconduct as determined by a final, non-appealable
judicial order of a court of competent jurisdiction.
(b) The Administrative Agent shall not be liable to the
Lenders or to any Lender in acting or refraining from acting under this
Agreement in accordance with the instructions of the Required Lenders (or, if so
required, all Lenders), and any action taken or failure to act pursuant to such
instructions shall be binding on all Lenders. The Administrative Agent shall not
be obligated to take any action which is contrary to law or which would, in its
reasonable opinion, subject it to liability.
Section 9.9 Notice of Default. In the event that the Administrative Agent
or any Lender shall acquire actual knowledge, or shall have been notified in
writing, of any Default, the Administrative Agent or such Lender shall promptly
notify the Lenders and the Administrative Agent (provided failure to give such
notice shall not result in any liability on the part of such Lender or
Administrative Agent), and the Administrative Agent shall take such action and
assert such rights under this Agreement as the Required Lenders shall request in
writing, and the Administrative Agent shall not be subject to any liability by
reason of its acting pursuant to any such request. If the Required Lenders shall
fail to request that the Administrative Agent to take action or to assert rights
under this Agreement in respect of any Default or Event of Default within ten
(10) days after their receipt of the notice of any Default or Event of Default
from the Administrative Agent, or shall request inconsistent action with respect
to such Default or Event of Default, the Administrative Agent may, but shall not
be required to, take such action and assert such rights (other than rights under
Article 8 hereof) as it deems in its discretion to be advisable for the
protection of the Lenders, except that, if the Required Lenders have instructed
the Administrative Agent not to take such action or assert such right, in no
event shall the Administrative Agent act contrary to such instructions unless
time is of the essence, in which case, the Administrative Agent may act in
accordance with its reasonable discretion.
Section 9.10 Responsibility Disclaimed. The Administrative Agent shall not
have any liability or responsibility whatsoever in their capacity as
Administrative Agent:
(a) To the Borrower or any other Person or entity as a
consequence of any failure or delay in performance by or any breach by, any
Lender or Lenders of any of its or their obligations under this Agreement;
(b) To any Lender or Lenders, as a consequence of any failure
or delay in performance by, or any breach by, (i) the Borrower of any of its
obligations under this Agreement or the Notes or any other Loan Document (ii)
any Restricted Subsidiary or any other obligor under any Loan Document;
(c) To any Lender or Lenders for any statements,
representations, or warranties in this Agreement, or any other document
contemplated by this Agreement or any information provided pursuant to this
Agreement, any other Loan Document, or any other document contemplated by this
Agreement, or for the validity, effectiveness, enforceability, or sufficiency of
this Agreement, the Notes, any other Loan Document, or any other document
contemplated by this Agreement; or
(d) To any Person for any act or omission other than that
arising from gross negligence or willful misconduct of the Administrative Agent
as determined by a final, non-appealable judicial order of a court of competent
jurisdiction.
Section 9.11 Indemnification. The Lenders agree to indemnify the
Administrative Agent (to the extent not reimbursed by the Borrower) pro rata
according to their respective Facility A Commitment Ratios, from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including fees and expenses of experts,
agents, consultants, and counsel), or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against the
Administrative Agent in any way relating to or arising out of this Agreement,
any other Loan Document, or any other document contemplated by this Agreement or
any action taken or omitted by the Administrative Agent under this Agreement,
any other Loan Document, or any other document contemplated by this Agreement,
except that no Lender shall be liable to the Administrative Agent for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses, or disbursements resulting from the gross
negligence or willful misconduct of the Administrative Agent, as the case may
be, as determined by a final, non-appealable judicial order of a court of
competent jurisdiction. The provisions of this Section 9.11 shall survive the
termination of this Agreement.
Section 9.12 Credit Decision. Each Lender represents and warrants to each
other and to the Administrative Agent that:
(a) In making its decision to enter into this Agreement and to
make Advances it has independently taken whatever steps it considers necessary
to evaluate the financial condition and affairs of the Borrower and that it has
made an independent credit judgment, and that it has not relied upon information
provided by the Administrative Agent; and
(b) So long as any portion of the Facility A Loans remains
outstanding, it will continue to make its own independent evaluation of the
financial condition and affairs of the Borrower.
Section 9.13 Successor Administrative Agent. Subject to the appointment and
acceptance of a successor Administrative Agent as provided below, the
Administrative Agent may resign at any time by giving written notice thereof to
the Lenders and the Borrower and may be removed at any time for cause by the
Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint a successor Administrative Agent. If no
successor Administrative Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment within thirty (30) days after
the retiring Administrative Agent's giving of notice of resignation or the
Required Lenders' removal of the retiring Administrative Agent, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent which shall be any Lender or a commercial bank organized
under the laws of the United States of America or any political subdivision
thereof which has combined capital and reserves in excess of $250,000,000. Upon
the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges,
duties, and obligations of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. After any retiring Administrative Agent's resignation or removal
hereunder as Administrative Agent, the provisions of this Section 9.13 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as the Administrative Agent.
ARTICLE 10
Change in Circumstances Affecting LIBOR Advances
Section 10.1 LIBOR Basis Determination Inadequate. Notwithstanding anything
contained herein which may be construed to the contrary, if with respect to any
proposed LIBOR Advance for any Interest Period, the Administrative Agent
determines after consultation with the Lenders that deposits in dollars (in the
applicable amount) are not being offered to the Required Lenders in the relevant
market for such Interest Period, the Administrative Agent shall forthwith give
notice thereof to the Borrower and the Lenders, whereupon until the
Administrative Agent notifies the Borrower that the circumstances giving rise to
such situation no longer exist, the obligations of the Lenders to make LIBOR
Advances shall be suspended.
Section 10.2 Illegality. If after the date hereof, the adoption of any
Applicable Law, or any change in any Applicable Law, or any change in
interpretation or administration thereof by any governmental authority, central
bank, or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender with any request or directive (whether or
not having the force of law) of any such authority, central bank, or comparable
agency, shall make it unlawful or impossible for any Lender to make, maintain,
or fund its LIBOR Advances, such Lender shall so notify the Administrative
Agent, and the Administrative Agent shall forthwith give notice thereof to the
other Lenders and the Borrower. Before giving any notice to the Administrative
Agent pursuant to this Section 10.2, such Lender shall designate a different
lending office and shall take such alternative courses of action if such
designation or courses of action will avoid the need for giving such notice and
will not, in the good faith judgment of such Lender, be otherwise
disadvantageous to such Lender. Upon receipt of such notice, notwithstanding
anything contained in Article 2 hereof, the Borrower shall repay in full the
then outstanding principal amount of each affected LIBOR Advance of such Lender
so affected, together with accrued interest thereon, either (a) on the last day
of the then current Interest Period applicable to such Advance if such Lender
may lawfully continue to maintain and fund such Advance to such day or (b)
immediately if such Lender may not lawfully continue to fund and maintain such
Advance to such day. Concurrently with repaying each affected LIBOR Advance of
such Lender, notwithstanding anything contained in Article 2 hereof, the
Borrower shall borrow a Base Rate Advance from such Lender, and such Lender
shall make such Base Rate Advance in an amount such that the outstanding
principal amount of the Note held by such Lender shall equal the outstanding
principal amount of such Note immediately prior to such repayment.
Section 10.3 Increased Costs.
(a) If any Regulatory Change:
(i) shall subject any Lender to any tax, duty, or
other charge with respect to its obligation to make LIBOR Advances, or
shall change the basis of taxation of payments to any Lender of the
principal of or interest on its LIBOR Advances or in respect of any
other amounts due under this Agreement in respect of its LIBOR Advances
or its obligation to make LIBOR Advances (except for changes in the
rate of tax on the overall net income of such Lender); or
(ii) shall impose, modify, or deem applicable any
reserve (including, without limitation, any imposed by the Board of
Governors of the Federal Reserve System and any change in the LIBOR
Reserve Percentage), special deposit, capital adequacy, assessment, or
other requirement or condition against assets of, deposits with or for
the account of, or commitments or credit extended by any Lender, or
shall impose on any Lender or the eurodollar interbank borrowing market
any other condition affecting its obligation to make such LIBOR
Advances;
and the result of any of the foregoing is to increase the cost to such Lender of
making or maintaining any such LIBOR Advances, or to reduce the amount of any
sum received or receivable by such Lender under this Agreement or under its
Notes with respect thereto, then, on the earlier of demand by such Lender or the
Maturity Date, the Borrower agrees to pay to such Lender such additional amount
or amounts as will compensate such Lender for such increased costs. Each Lender
will promptly notify the Borrower and the Administrative Agent of any event of
which it has knowledge, occurring after the date hereof, which will entitle such
Lender to compensation pursuant to this Section 10.3 and will designate a
different lending office and shall take alternative courses of action if such
designation or courses of action will avoid the need for, or reduce the amount
of, such compensation and will not, in the good faith judgment of such Lender,
be otherwise disadvantageous to such Lender.
(b) A certificate of any Lender claiming compensation under
this Section 10.3 and setting forth the additional amount or amounts to be paid
to it hereunder and calculations therefor shall be conclusive in the absence of
manifest error. In determining such amount, such Lender may use any reasonable
averaging and attribution methods. If any Lender demands compensation under this
Section 10.3, the Borrower may at any time, upon at least five (5) Business
Days' prior notice to such Lender, prepay in full the then outstanding affected
LIBOR Advances of such Lender, together with accrued interest thereon to the
date of prepayment, along with any reimbursement required under Section 2.10
hereof. Concurrently with prepaying such LIBOR Advances, the Borrower shall
borrow a Base Rate Advance from such Lender, and such Lender shall make such
Base Rate Advance in an amount such that the outstanding principal amount of the
Notes held by such Lender shall equal the outstanding principal amount of such
Notes immediately prior to such prepayment.
Section 10.4 Effect On Other Advances. If notice has been given pursuant to
Section 10.1, 10.2 or 10.3 hereof suspending the obligation of any Lender to
make any LIBOR Advance, or requiring LIBOR Advances of any Lender to be repaid
or prepaid, then, unless and until such Lender notifies the Borrower that the
circumstances giving rise to such repayment no longer apply, all Advances which
would otherwise be made by such Lender as to the LIBOR Advances shall, at the
option of the Borrower, be made instead as Base Rate Advances.
ARTICLE 11
Miscellaneous
Section 11.1 Notices.
(a) All notices and other communications under this Agreement
shall be in writing and shall be deemed to have been given three (3) days after
deposit in the mail, designated as certified mail, return receipt requested,
post-prepaid, or one (1) day after being entrusted to a reputable commercial
overnight delivery service, or telecopy addressed to the party to which such
notice is directed at its address determined as provided in this Section 11.1.
All notices and other communications under this Agreement shall be given to the
parties hereto at the following addresses:
(i) If to the Borrower, to it at:
TV Guide, Inc.
7140 South Lewis
Tulsa, Oklahoma 74136-5422
Attn: Craig Waggy
Telecopy No. (918) 488-4986
with a copy to:
Sherman & Howard L.L.C.
633 Seventeenth Street, Suite 3000
Denver, Colorado 80202
Attn: Steven D. Miller, Esq.
Telecopy No.: (303) 298-0940
(ii) If to the Administrative Agent, to it at:
Bank of America National Trust and Savings
Association
555 South Flower Street
11th Floor
Los Angeles, California 90071
Attn: Janice Hammond
Telecopy No.: (213) 228-2299
with a copy to:
Powell, Goldstein, Frazer & Murphy LLP
191 Peachtree Street, N.E.
16th Floor
Atlanta, Georgia 30303
Attn: Douglas S. Gosden, Esq.
Telecopy No.: (404) 572-6999
(iii) If to the Lenders, to them at the addresses
set forth on Schedule 4 attached hereto.
Copies shall be provided to persons other than parties hereto only in the case
of notices under Article 8 hereof and failure to provide such copies shall not
affect the validity of the notice given to the primary recipient.
(b) Any party hereto may change the address to which notices
shall be directed under this Section 11.1 by giving ten (10) days' written
notice of such change to the other parties.
Section 11.2 Expenses. The Borrower agrees to promptly pay:
(a) All reasonable out-of-pocket expenses of the
Administrative Agent in connection with the preparation, negotiation, execution,
and delivery of this Agreement and the other Loan Documents executed on the
Agreement Date, the transactions contemplated hereunder and thereunder, and the
making of the initial Advances hereunder (whether or not such Advances are made)
including, but not limited to, the fees and disbursements of counsel for the
Administrative Agent;
(b) All reasonable out-of-pocket expenses of the
Administrative Agent in connection with the preparation, negotiation, execution
and delivery of any waiver, amendment, or consent by the Administrative Agent
and Lenders, or any of them, relating to this Agreement or the other Loan
Documents whether or not executed, including, but not limited to, the fees and
disbursements of counsel for the Administrative Agent; and
(c) All reasonable out-of-pocket costs and expenses of
enforcement of rights and collection if an Event of Default occurs in the
payment of the Notes, which in each case shall include fees and out-of-pocket
expenses of counsel (including the allocated cost of in-house counsel) for the
Administrative Agent and each of the Lenders, and the reasonable fees and
out-of-pocket expenses of counsel and of any experts, agents, or consultants of
the Administrative Agent and each of the Lenders.
Section 11.3 WaiversSection 11.3 Waivers. The rights and remedies of
the Administrative Agent and the Lenders under this Agreement and the other Loan
Documents shall be cumulative and not exclusive of any rights or remedies which
they would otherwise have. No failure or delay by the Administrative Agent, the
Required Lenders, or the Lenders in exercising any right shall operate as a
waiver of such right. The Administrative Agent and the Lenders expressly reserve
the right to require strict compliance with the terms of this Agreement in
connection with any funding of a request for an Advance. In the event the
Lenders decide to fund a request for an Advance at a time when the Borrower is
not in strict compliance with the terms of this Agreement, such decision by the
Lenders shall not be deemed to constitute an undertaking by the Lenders to fund
any further requests for Advances or preclude the Lenders from exercising any
rights available to the Lenders under the Loan Documents or at law or equity.
Any waiver or indulgence granted by the Lenders or by the Required Lenders shall
not constitute a modification of this Agreement, except to the extent expressly
provided in such waiver or indulgence, or constitute a course of dealing by the
Lenders at variance with the terms of the Agreement such as to require further
notice by the Lenders of the Lenders' intent to require strict adherence to the
terms of the Agreement in the future.
Section 11.4 Set-Off. In addition to any rights now or hereafter granted
under Applicable Law and not by way of limitation of any such rights, after the
Maturity Date of either Commitment whether by acceleration or otherwise), the
Administrative Agent and the Lenders and any subsequent holder or holders of the
Notes are hereby authorized by the Borrower at any time or from time to time,
without notice 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, time or demand, including, but not limited to,
Indebtedness evidenced by certificates of deposit, in each case whether matured
or unmatured) and any other Indebtedness at any time held or owing by the
Lenders or such holder to or for the credit or the account of the Borrower,
against and on account of the obligations and liabilities of the Borrower, to
the Lenders or such holder under this Agreement, the Notes, and any other Loan
Document, including, but not limited to, all Obligations and any other claims of
any nature or description arising out of or connected with this Agreement, the
Notes, or any other Loan Document, irrespective of whether or not (a) the
Administrative Agent and the Lenders or the holder of the Notes shall have made
any demand hereunder or (b) the Administrative Agent and the Lenders shall have
declared the principal of and interest on the Facility A Loans and Notes and
other amounts due hereunder to be due and payable as permitted by Section 8.2
hereof and although said obligations and liabilities, or any of them, shall be
contingent or unmatured. Any sums obtained by the Administrative Agent, any
Lender or any subsequent holder of the Notes shall be subject to the application
of payments provisions of Article 2 hereof. Upon direction by the Administrative
Agent, with the consent of the Required Lenders, after the Maturity Date
(whether by reason of acceleration or otherwise) each Lender holding deposits of
the Borrower shall exercise its set-off rights as so directed.
Section 11.5 Assignment.
(a) The Borrower may not assign or transfer any of its rights
or obligations hereunder or under the Notes without the prior written consent of
each Lender.
(b) Each of the Lenders may at any time enter into assignment
agreements or participations with respect to its interest hereunder and under
the other Loan Documents with one or more other banks or other Persons,
provided, that (i) all assignments (other than assignments described in clause
(ii) hereof) shall be in minimum principal amounts of $5,000,000 (unless the
Borrower and the Administrative Agent otherwise consent), (ii) each Lender may
sell assignments and participations of up to one hundred percent (100%) of its
interest hereunder to (A) one or more affiliates of such Lender, (B) any Federal
Reserve Bank as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any Operating Circular issued by
such Federal Reserve Bank (no such assignment or participation shall relieve
such Lender from its obligations hereunder) or (C) one or more Lenders, and
(iii) all assignments and participations (other than assignments and
participations described in clause (ii) hereof and participations in Competitive
Bid Loans) hereunder shall be subject to the following additional terms and
conditions:
(A) No such assignment shall be sold without the
written consent of the Administrative Agent, and prior to the
occurrence of a Default, the Borrower, which consents shall not be
unreasonably withheld.
(B) Any Person purchasing a participation or an
assignment of the Facility A Loans (other than Competitive Bid Loans)
from any Lender shall be required to represent and warrant that its
purchase shall not constitute a "prohibited transaction" (as defined in
Section 4.1(n) hereof).
(C) The Borrower, the Lenders, and the Administrative
Agent agree that assignments permitted hereunder (including the
assignment of any Advance or portion thereof) may be made with all
voting rights and shall be made pursuant to an Assignment and
Assumption Agreement. An administrative fee of $3,500 shall be payable
to the Administrative Agent by the assigning Lender at the time of any
assignment hereunder.
(D) No participation agreement shall confer any
rights under this Agreement or any other Loan Document to any purchaser
thereof, or relieve any issuing Lender from any of its obligations
under this Agreement, and all actions hereunder shall be conducted as
if no such participation had been granted; provided, however, that any
participation agreement may confer on the participant the right to
approve or disapprove decreases in the interest rate, increases or
forgiveness of the principal amount of the Facility A Loans
participated in by such participant, decreases in fees, releases of the
Collateral or guarantors, except for Collateral the sale or disposition
of which is permitted hereunder, and extensions of the Maturity Date or
other principal payment date for the Facility A Loans.
(E) Each Lender agrees to provide the Administrative
Agent and the Borrower with prompt written notice of any issuance of
assignments of its interests hereunder.
(F) No assignment, participation or other transfer of
any rights hereunder or under the Notes shall be effected that would
result in any interest requiring registration under the Securities and
Exchange Act of 1933, as amended, or qualification under any state
securities law.
(G) No such assignment may be made to any bank or
other financial institution (x) with respect to which a receiver or
conservator (including, without limitation, the Federal Deposit
Insurance Corporation, the Resolution Trust Corporation or the Office
of Thrift Supervision) has been appointed or (y) that has failed to
meet any of the capital requirements of its primary regulator or
insurer.
(H) If applicable, each Lender shall, and shall cause
each of its assignees to provide to the Administrative Agent on or
prior to the Agreement Date or effective date of any assignment, as the
case may be, an appropriate Internal Revenue Service form as required
by Applicable Law supporting such Lender's position that no withholding
by the Borrower or the Administrative Agent for U.S. income tax payable
by the Lender in respect of amounts received by it hereunder is
required. For purposes of this Agreement, an appropriate Internal
Revenue Service form shall mean Form 1001 (Ownership Exemption or
Reduced Rate Certificate of the U.S. Department of Treasury), or Form
4224 (Exemption from Withholding of Tax on Income Effectively Connected
with the Conduct of a Trade or Business in the United States), or any
successor or related forms adopted by the relevant U.S. taxing
authorities.
(c) Except specifically set forth in Section 11.5(b) hereof,
nothing in this Agreement or the Notes, expressed or implied, is intended to or
shall confer on any Person other than the respective parties hereto and thereto
and their successors and assignees permitted hereunder and thereunder any
benefit or any legal or equitable right, remedy or other claim under this
Agreement or the Notes.
(d) In the case of any participation, all amounts payable by
the Borrower under the Loan Documents shall be calculated and made in the manner
and to the parties hereto as if no such participation had been sold.
Section 11.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.
Section 11.7 Governing Law. This Agreement and the Notes shall be construed
in accordance with and governed by the internal laws of the State of New York
applicable to agreements made and to be performed in New York. If any action or
proceeding shall be brought by the Administrative Agent or any Lender hereunder
or under any other Loan Document in order to enforce any right or remedy under
this Agreement or under any Note or any other Loan Document, the Borrower hereby
consents and will, and the Borrower will cause each Restricted Subsidiary to,
submit to the jurisdiction of any state or federal court of competent
jurisdiction sitting within the area comprising the Southern District of New
York on the date of this Agreement. The Borrower, for itself and on behalf of
its Restricted Subsidiaries, hereby agrees that service of the summons and
complaint and all other process which may be served in any such suit, action or
proceeding may be effected by mailing by registered mail a copy of such process
to the offices of the Borrower at the address given in Section 11.1 hereof and
that personal service of process shall not be required. Nothing herein shall be
construed to prohibit service of process by any other method permitted by law,
or the bringing of any suit, action or proceeding in any other jurisdiction. The
Borrower agrees that final judgment in such suit, action or proceeding shall be
conclusive and may be enforced in any other jurisdiction by suit on the judgment
or in any other manner provided by Applicable Law.
Section 11.8 Severability. Any provision of this Agreement which is
prohibited or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof in that jurisdiction or affecting the validity or enforceability of such
provision in any other jurisdiction.
Section 11.9 Headings. Headings used in this Agreement are for convenience
only and shall not be used in connection with the interpretation of any
provision hereof.
Section 11.10 Interest.
(a) In no event shall the amount of interest due or payable
hereunder or under the Notes exceed the maximum rate of interest allowed by
Applicable Law, and in the event any such payment is inadvertently made by the
Borrower or is inadvertently received by any Lender, then such excess sum shall
be credited as a payment of principal, unless the Borrower shall notify such
Lender in writing that it elects to have such excess sum returned forthwith. It
is the express intent hereof that the Borrower not pay and the Lenders not
receive, directly or indirectly in any manner whatsoever, interest in excess of
that which may legally be paid by the Borrower under Applicable Law.
(b) Notwithstanding the use by the Lenders of the "prime
rate," the LIBO Rate and the Federal Funds Rate as reference rates for the
determination of interest on the Facility A Loans, the Lenders shall be under no
obligation to obtain funds from any particular source in order to charge
interest to the Borrower at interest rates tied to such reference rates.
Section 11.11 Entire Agreement. Except as otherwise expressly provided
herein, this Agreement, the Notes, and the Loan Documents to which the Borrower
is a party embody the entire Agreement and understanding among the parties
hereto and thereto and supersede all prior agreements, understandings, and
conversations relating to the subject matter hereof and thereof.
Section 11.12 Amendment and Waiver. Neither this Agreement nor any term
hereof nor any Loan Document may be amended orally, nor may any provision hereof
be waived orally, but only by an instrument in writing signed by the Required
Lenders or the Borrower, as the case may be, and, in the case of an amendment,
by the Borrower and the Required Lenders, except that in the event of (a) any
decrease (other than pro rata) or increase in the amount of the Facility A
Commitments, (b) any change in the timing of, or reduction of the amount of,
payments of principal, interest, and fees due hereunder, (c) any release or
impairment of collateral or any guaranty issued in favor of the Administrative
Agent and the Lenders (except in connection with any asset sale permitted
hereunder), (d) any waiver of any Event of Default due to the failure by the
Borrower to pay any sum due hereunder, (e) any amendment of this Section 11.12,
Section 11.5(a) or of the definition of Required Lenders, or (f) any waiver of
any condition precedent specified in Section 3.1 to the initial Advance
hereunder, any amendment or waiver may be made only by an instrument in writing
signed by each of the Lenders and, in the case of an amendment, also by the
Borrower. Any amendment to any provision hereunder governing the rights,
obligations, or liabilities of the Administrative Agent in its capacity as such,
may be made only by an instrument in writing signed by such affected Person and
by each of the Lenders.
Section 11.13 Other Relationships. No relationship created hereunder or
under any other Loan Document shall in any way affect the ability of the
Administrative Agent and each Lender to enter into or maintain business
relationships with the Borrower, or any of its Affiliates, beyond the
relationships specifically contemplated by this Agreement and the other Loan
Documents.
Section 11.14 Confidentiality. Each Lender and the Administrative Agent
agrees (on behalf of itself and each of its Affiliates, directors, officers,
employees and representatives) to use reasonable precautions to keep
confidential, in accordance with their customary procedures for handling
confidential information of the same nature and in accordance with safe and
sound banking practices, any non-public information supplied to it by the
Borrower pursuant to this Agreement that is identified by such Person as being
confidential at the time the same is delivered to the Lenders or the
Administrative Agent, provided that (a) nothing herein shall limit the
disclosure of any such information (i) to the extent required by statute, rule,
regulation or judicial process, (ii) to counsel for any of the Lenders or the
Administrative Agent, (iii) to bank examiners, auditors or accountants, (iv) to
the Administrative Agent or any other Lender, (v) in connection with any
litigation to which any one or more of the Lenders or the Administrative Agent
is a party, or (vi) to any assignee or participant (or prospective assignee or
participant) so long as such assignee or participant (or prospective assignee or
participant) shall have agreed to keep such information confidential as set
forth herein, and (b) in no event shall any Lender or the Administrative Agent
be obligated or required to return any materials furnished by the Borrower.
Section 11.15 Survival of Various Provisions. Notwithstanding anything
herein which may be construed to the contrary, rights pursuant to Sections
2.9(c), 2.10, 2.14(f), 5.11, 9.11 and 10.3 hereof shall survive the termination
of this Agreement and the payment and performance of all other Obligations.
Section 11.16 Senior Debt. The Obligations are secured by the Security
Documents and are intended by the parties hereto to be in parity with the
Interest Hedge Agreement and senior in right of payment to all other
Indebtedness of the Borrower.
ARTICLE 12
Waiver of Jury Trial
Section 12.1 Waiver of Jury Trial. THE BORROWER, FOR ITSELF AND ON BEHALF
OF ITS RESTRICTED SUBSIDIARIES, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY
AGREE TO WAIVE AND HEREBY WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY COURT AND IN
ANY ACTION OR PROCEEDING OF ANY TYPE IN WHICH THE BORROWER, ANY OF ITS
RESTRICTED SUBSIDIARIES, ANY OF THE LENDERS, THE ADMINISTRATIVE AGENT OR ANY OF
THEIR RESPECTIVE SUCCESSORS OR ASSIGNS IS A PARTY, AS TO ALL MATTERS AND THINGS
ARISING DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT, ANY OF THE NOTES OR THE
OTHER LOAN DOCUMENTS AND THE RELATIONS AMONG THE PARTIES LISTED IN THIS SECTION
12.1. EXCEPT AS PROHIBITED BY LAW, EACH PARTY TO THIS AGREEMENT WAIVES ANY
RIGHTS IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THIS
SECTION, ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. EACH PARTY TO THIS
AGREEMENT (i) CERTIFIES THAT NONE OF THE REPRESENTATIVES, AGENTS OR ATTORNEYS OF
THE ADMINISTRATIVE AGENT OR ANY LENDER HAVE REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT THE ADMINISTRATIVE AGENT OR ANY LENDER WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (ii) ACKNOWLEDGES THAT IT
HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. THE
PROVISIONS OF THIS SECTION HAVE BEEN FULLY DISCLOSED BY AND TO THE PARTIES AND
THE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NO PARTY HAS IN ANY WAY AGREED
WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS SECTION WILL
NOT BE FULLY ENFORCED IN ALL INSTANCES.
[Remainder of Page Intentionally Left Blank]
<PAGE>
TV GUIDE, INC.
FACILITY A LOAN AGREEMENT
Signature Page 22
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused it to be executed by their duly authorized officers, all as of the day
and year first above written.
BORROWER: UNITED VIDEO SATELLITE GROUP, INC.,
a Delaware corporation
By: /s/
Title:
ADMINISTRATIVE AGENT: BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: /s/
Its:
ISSUING BANK AND LENDERS: BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Issuing
Bank and as a Lender
By: /s/
Its:
<PAGE>
TORONTO DOMINION (TEXAS) INC., as a
Lender
By: /s/
Its:
<PAGE>
THE BANK OF NEW YORK COMPANY, INC.,
as a Lender
By: /s/
Its:
<PAGE>
CREDIT LYONNAIS NEW YORK BRANCH, as
a Lender
By: /s/
Its:
<PAGE>
BANCA COMMERCIALE ITALIANA, NEW YORK
BRANCH, as a Lender
By: /s/
Its:
By: /s/
Its:
<PAGE>
BANK OF HAWAII, as a Lender
By: /s/
Its:
<PAGE>
BANK OF OKLAHOMA, N.A., as a Lender
By: /s/
Its:
<PAGE>
BANKBOSTON, N.A., as a Lender
By: /s/
Its:
<PAGE>
BANQUE NATIONALE DE PARIS, as a
Lender
By: /s/
Its:
By: /s/
Its:
<PAGE>
BARCLAYS BANK, PLC, as a Lender
By: /s/
Its:
By: /s/
Its:
<PAGE>
THE BANK OF NOVA SCOTIA, as a Lender
By: /s/
Its:
<PAGE>
CITIBANK, N.A., as a Lender
By: /s/
Its:
<PAGE>
COMPAGNIE FINANCIERE DE CIC ET DE
L'UNION EUROPEENNE, as a Lender
By: /s/
Its:
By: /s/
Its:
<PAGE>
THE DAI-ICHI KANGYO BANK, LTD., as a
Lender
By: /s/
Its:
<PAGE>
ERSTE BANK DER OESTERREICHISCHEN
SPARKASSEN, as a Lender
By: /s/
Its:
By: /s/
Its:
<PAGE>
FIRST UNION NATIONAL BANK, as a
Lender
By: /s/
Its:
<PAGE>
FLEET NATIONAL BANK, as a Lender
By: /s/
Its:
<PAGE>
KBC BANK, N.V., as a Lender
By: /s/
Its:
By: /s/
Its:
<PAGE>
LLOYDS BANK, PLC, as a Lender
By: /s/
Its:
By: /s/
Its:
<PAGE>
LOCAL FEDERAL BANK, FSB, as a Lender
By: /s/
Its:
<PAGE>
MELLON BANK, N.A., as a Lender
By: /s/
Its:
FACILITY B
LOAN AGREEMENT
FOR
$300,000,000 364-DAY CREDIT FACILITY
AMONG
UNITED VIDEO SATELLITE GROUP, INC.,
The Financial Institutions
defined as Lenders herein
and
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION,
as Administrative Agent,
with
TD SECURITIES (USA) INC.,
as Syndication Agent,
and
THE BANK OF NEW YORK COMPANY, INC.
as Documentation Agent
March 1, 1999
i
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Page
ARTICLE 1 - Definitions...........................................................................................1
ARTICLE 2 -Loans.................................................................................................20
SECTION 2.1 THE FACILITY B LOANS..........................................................................20
SECTION 2.2 MANNER OF BORROWING AND DISBURSEMENT..........................................................21
SECTION 2.3 INTEREST......................................................................................23
SECTION 2.4 FEES..........................................................................................27
SECTION 2.5 REDUCTION OF COMMITMENT.......................................................................27
SECTION 2.6 PREPAYMENT....................................................................................28
SECTION 2.7 REPAYMENT.....................................................................................28
SECTION 2.8 NOTES; LOAN ACCOUNTS..........................................................................29
SECTION 2.9 MANNER OF PAYMENT.............................................................................29
SECTION 2.10 REIMBURSEMENT.................................................................................30
SECTION 2.11 APPLICATION OF PROCEEDS.......................................................................31
SECTION 2.12 CAPITAL ADEQUACY..............................................................................32
SECTION 2.13 LENDER TAX FORMS..............................................................................32
ARTICLE 3 - Conditions Precedent.................................................................................33
SECTION 3.1 CONDITIONS PRECEDENT TO EFFECTIVENESS OF AGREEMENT............................................33
SECTION 3.2 CONDITIONS PRECEDENT TO EACH ADVANCE..........................................................35
ARTICLE 4 - Representations and Warranties.......................................................................36
SECTION 4.1 REPRESENTATIONS AND WARRANTIES................................................................36
SECTION 4.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC...............................................42
ARTICLE 5 - General Covenants....................................................................................42
SECTION 5.1 PRESERVATION OF EXISTENCE AND SIMILAR MATTERS.................................................42
SECTION 5.2 BUSINESS; COMPLIANCE WITH APPLICABLE LAW......................................................42
SECTION 5.3 MAINTENANCE OF PROPERTIES.....................................................................43
SECTION 5.4 ACCOUNTING METHODS AND FINANCIAL RECORDS......................................................43
SECTION 5.5 INSURANCE.....................................................................................43
SECTION 5.6 PAYMENT OF TAXES AND CLAIMS...................................................................43
SECTION 5.7 VISITS AND INSPECTIONS........................................................................44
SECTION 5.8 PAYMENT OF INDEBTEDNESS.......................................................................44
SECTION 5.9 USE OF PROCEEDS...............................................................................44
SECTION 5.10 ERISA.........................................................................................44
SECTION 5.11 INDEMNITY.....................................................................................44
SECTION 5.12 FURTHER ASSURANCES............................................................................45
SECTION 5.13 BROKER'S CLAIMS...............................................................................45
SECTION 5.14 COVENANTS REGARDING FORMATION OF SUBSIDIARIES AND ACQUISITIONS................................46
SECTION 5.15 YEAR 2000 COMPLIANCE..........................................................................46
SECTION 5.16 NON-GUARANTOR SUBSIDIARY DISTRIBUTIONS........................................................46
ARTICLE 6 - Information Covenants................................................................................47
SECTION 6.1 QUARTERLY FINANCIAL STATEMENTS AND INFORMATION................................................47
SECTION 6.2 ANNUAL FINANCIAL STATEMENTS AND INFORMATION; CERTIFICATE OF NO DEFAULT........................47
SECTION 6.3 PERFORMANCE CERTIFICATES......................................................................48
SECTION 6.4 COPIES OF OTHER REPORTS.......................................................................48
SECTION 6.5 NOTICE OF LITIGATION AND OTHER MATTERS........................................................49
SECTION 6.6 LOSS OF AGREEMENTS............................................................................49
ii
<PAGE>
ARTICLE 7 - Negative Covenants...................................................................................50
SECTION 7.1 INDEBTEDNESS OF THE BORROWER..................................................................50
SECTION 7.2 INVESTMENTS AND ACQUISITIONS..................................................................51
SECTION 7.3 LIMITATION ON LIENS...........................................................................53
SECTION 7.4 AMENDMENT AND WAIVER..........................................................................53
SECTION 7.5 LIQUIDATION; DISPOSITION OR ACQUISITION OF ASSETS.............................................53
SECTION 7.6 LIMITATION ON GUARANTIES......................................................................53
SECTION 7.7 RESTRICTED PAYMENTS AND PURCHASES.............................................................54
SECTION 7.8 LEVERAGE RATIO................................................................................54
SECTION 7.9 FIXED CHARGE COVERAGE RATIO...................................................................55
SECTION 7.10 INTEREST COVERAGE RATIO.......................................................................55
SECTION 7.11 AFFILIATE TRANSACTIONS........................................................................55
SECTION 7.12 ERISA LIABILITIES.............................................................................55
SECTION 7.13 LIMITATION ON UPSTREAM DIVIDENDS BY SUBSIDIARIES..............................................55
SECTION 7.14 LIMITATION ON PREPAYMENT OF SUBORDINATED DEBT.................................................56
ARTICLE 8 - Default..............................................................................................56
SECTION 8.1 EVENTS OF DEFAULT.............................................................................56
SECTION 8.2 REMEDIES......................................................................................58
ARTICLE 9 - The Administrative Agent.............................................................................60
SECTION 9.1 APPOINTMENT AND AUTHORIZATION.................................................................60
SECTION 9.2 DELEGATION OF DUTIES..........................................................................60
SECTION 9.3 INTEREST HOLDERS..............................................................................60
SECTION 9.4 CONSULTATION WITH COUNSEL.....................................................................60
SECTION 9.5 DOCUMENTS.....................................................................................60
SECTION 9.6 AGENTS AND AFFILIATES.........................................................................60
SECTION 9.7 RESPONSIBILITY OF THE AGENTS..................................................................61
SECTION 9.8 ACTION BY ADMINISTRATIVE AGENT................................................................61
SECTION 9.9 NOTICE OF DEFAULT.............................................................................61
SECTION 9.10 RESPONSIBILITY DISCLAIMED.....................................................................62
SECTION 9.11 INDEMNIFICATION...............................................................................62
SECTION 9.12 CREDIT DECISION...............................................................................63
SECTION 9.13 SUCCESSOR ADMINISTRATIVE AGENT................................................................63
ARTICLE 10 -Change in Circumstances Affecting LIBOR Advances.....................................................64
SECTION 10.1 LIBOR BASIS DETERMINATION INADEQUATE..........................................................64
SECTION 10.2 ILLEGALITY....................................................................................64
SECTION 10.3 INCREASED COSTS...............................................................................65
SECTION 10.4 EFFECT ON OTHER ADVANCES......................................................................66
ARTICLE 11 - Miscellaneous.......................................................................................66
SECTION 11.1 NOTICES.......................................................................................66
SECTION 11.2 EXPENSES......................................................................................67
SECTION 11.3 WAIVERS.......................................................................................68
SECTION 11.4 SET-OFF.......................................................................................68
SECTION 11.5 ASSIGNMENT....................................................................................69
SECTION 11.6 COUNTERPARTS..................................................................................71
SECTION 11.7 GOVERNING LAW.................................................................................71
SECTION 11.8 SEVERABILITY..................................................................................71
SECTION 11.9 HEADINGS......................................................................................71
SECTION 11.10 INTEREST......................................................................................72
SECTION 11.11 ENTIRE AGREEMENT..............................................................................72
SECTION 11.12 AMENDMENT AND WAIVER..........................................................................72
SECTION 11.13 OTHER RELATIONSHIPS...........................................................................72
SECTION 11.14 CONFIDENTIALITY...............................................................................73
SECTION 11.15 SURVIVAL OF VARIOUS PROVISIONS................................................................73
SECTION 11.16 SENIOR DEBT...................................................................................73
ARTICLE 12 - Waiver of Jury Trial................................................................................74
SECTION 12.1 WAIVER OF JURY TRIAL..........................................................................74
</TABLE>
iii
<PAGE>
Exhibits
Exhibit A - Form of Assignment and Assumption Agreement
Exhibit B - Form of Assignment of Notes
Exhibit C - Form of Borrower Pledge Agreement
Exhibit D - Form of Request for Advance
Exhibit E - Form of Facility B Note
Exhibit F - Form of Subsidiary Guaranty
Exhibit G - Form of Subsidiary Pledge Agreement
Exhibit H - Form Borrower Loan Certificate
Exhibit I - Form of Subsidiary Loan Certificate
Exhibit J-1 - Form of Opinion of Borrower's Counsel
Exhibit J-2 - Form of Opinion of FCC Counsel
Exhibit J-3 - Form of Opinion of Borrower's Counsel in connection with
high yield offering
Exhibit J-4 - Form of Opinion given in connection with TV Guide
Transaction
Schedules
Schedule 1 - Restricted Subsidiaries
Schedule 2 - Litigation
Schedule 3 - Indebtedness as of the Agreement Date
Schedule 4 - Lenders' Addresses
iv
<PAGE>
FACILITY B
LOAN AGREEMENT
FOR
$300,000,000
364-Day Credit Facility
among
UNITED SATELLITE GROUP, INC.,
The Financial Institutions
defined as Lenders herein
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Administrative Agent,
with
TD SECURITIES (USA) INC.,
as Syndication Agent,
and
THE BANK OF NEW YORK COMPANY, INC.
as Documentation Agent
Dated as of the 1st day of March, 1999
WHEREAS, the Borrower (as defined below) has requested and the Lenders
(as defined below) have agreed, subject to the terms and conditions set forth
herein, to make available to the Borrower a $300,000,000 364- day credit
facility that will convert into a term loan;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each of the parties hereto, the
parties hereby agree as follows:
ARTICLE 1
DefinitionsARTICLE 1 - Definitions.
For the purposes of this Agreement:
"Acquisition" shall mean (whether by purchase, exchange, issuance of
stock or other equity or debt securities, merger, reorganization or any other
method) (i) any acquisition by the Borrower or any of its Restricted
Subsidiaries of any other Person, which Person shall then become consolidated
with the Borrower or any such Restricted Subsidiary in accordance with GAAP, or
(ii) any acquisition by the Borrower or any of its Restricted Subsidiaries of
all or any substantial part of the assets of any other Person.
"Administrative Agent" shall mean Bank of America National Trust and
Savings Association, in its capacity as Administrative Agent for the Lenders or
any successor Administrative Agent appointed pursuant to Section 9.13 hereof.
"Administrative Agent's Office" shall mean the office of the
Administrative Agent located at the address set forth in Section 11.1 hereof, or
such other office as may be designated pursuant to the provisions of Section
11.1 hereof.
"Advance" shall mean amounts advanced by the Lenders to the Borrower
pursuant to Article 2 hereof on the occasion of any borrowing; and "Advances"
shall mean more than one Advance.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
the Borrower. For purposes of this definition, "control" when used with respect
to any Person means the power to direct or cause the direction of the management
and policies of such Person, whether by control or otherwise.
"Agreement" shall mean this Loan Agreement, as amended, supplemented,
restated or otherwise modified from time to time.
"Agreement Date" shall mean March 1, 1999.
"Applicable Law" shall mean, in respect of any Person, all provisions
of constitutions, statutes, rules, regulations, and orders of governmental
bodies or regulatory agencies applicable to such Person, including, without
limitation, all orders and decrees of all courts and arbitrators in proceedings
or actions to which the Person in question is a party or by which it is bound.
"Applicable Margin" shall mean the interest rate margin applicable to
Base Rate Advances or LIBOR Advances, as the case may be, in each case
determined in accordance with Section 2.3(g) hereof.
"Arrangers" shall mean collectively, Bank of America National Trust and
Savings Association, Toronto Dominion (Texas), Inc., The Bank of New York and
Credit Lyonnais New York Branch.
"Assignment and Assumption Agreement" shall mean any Assignment and
Assumption Agreement in substantially the form of Exhibit A attached hereto,
pursuant to which any Lender, as further provided in Section 11.5 hereof, sells
a portion of its Facility B Loans and/or Facility B Commitments.
"Assignment of Notes" shall mean any Assignment of Notes Agreement
executed by the Borrower or any of its Restricted Subsidiaries in favor of the
Administrative Agent substantially in the form of Exhibit B attached hereto.
"Authorized Signatory" shall mean, with respect to any Person, such
senior personnel of such Person as may be duly authorized and designated in
writing by such Person to execute documents, agreements, and instruments on
behalf of such Person.
"Available Facility B Commitment" shall mean, as of any particular
time, (a) the Facility B Commitment minus (b) the Facility B Loans then
outstanding.
"Base Rate" shall mean, at any time, a fluctuating interest rate per
annum equal to the sum of (a) the higher of (i) the rate of interest adopted by
Bank of America National Trust and Savings Association, as its reference rate
for the determination of interest rates for loans of varying maturities in
United States dollars to United States residents of varying degrees of
creditworthiness and being quoted at such time by such bank as its "prime rate"
(this prime rate being not necessarily the lowest rate of interest charged to
borrowers of the Bank of America National Trust and Savings Association), or
(ii) the sum of (A) the Federal Funds Rate, plus (B) one-half of one percent
(1/2%), plus (b) the Applicable Margin for Base Rate Advances. The Base Rate
shall be adjusted automatically as of the opening of business on the effective
date of each change in the prime rate or the Federal Funds Rate, as the case may
be, to account for such change, and shall also be changed as and when provided
in Section 2.3(g) hereof to reflect changes in the Applicable Margin for Base
Rate Advances.
"Base Rate Advance" shall mean an Advance which bears interest at the
Base Rate which the Borrower requests to be made as a Base Rate Advance or is
reborrowed as a Base Rate Advance, in accordance with the provisions of Section
2.2 hereof, and which shall be in a principal amount of at least $500,000 and in
an integral multiple of $100,000, except for a Base Rate Advance which is in an
amount equal to the unused amount of the Facility B Commitment, which Advance
may be in such amount.
"Borrower" shall mean United Video Satellite Group, Inc., a Delaware
corporation.
"Borrower Pledge Agreement" shall mean the Borrower Pledge Agreement
dated as of the Agreement Date given by the Borrower in favor of the
Administrative Agent (for itself and for the benefit of the Lenders) by the
Borrower substantially in the form of Exhibit C herein.
"Business Day" shall mean a day on which banks and foreign exchange
markets are open for the transaction of business required for this Agreement in
London, England, Los Angeles, California and New York, New York, as relevant to
the determination to be made or the action to be taken.
"Capital Expenditures" shall mean in respect to any Person,
expenditures for the purchase of tangible assets of long-term use, which would
be required to be capitalized on the balance sheet of such Person in accordance
with GAAP.
"Capital Stock" shall mean, as applied to any Person, any capital stock
or ownership interests of such Person, regardless of class or designation, and
all warrants, options, purchase rights, conversion or exchange rights, voting
rights, calls or claims of any character with respect thereto.
"Capitalized Lease Obligation" shall mean that portion of any
obligation of a Person as lessee under a lease which at the time would be
required to be capitalized on the balance sheet of such lessee in accordance
with GAAP.
"Cash Equity Proceeds" shall mean the receipt by the Borrower from News
Corporation of not less than $130,000,000 in cash equity proceeds or
subordinated debt proceeds (so long as such subordinated debt (a) is payable in
kind through its final maturity, (b) has terms no more onerous than the
Facilities, (c) has no financial covenants and (d) has a maturity of at least
one year later than the Maturity Date).
"Change of Control" shall mean any change in the ownership of the
Borrower that results in AT&T Corp. (so long as AT&T Corp. owns Liberty directly
or indirectly), Liberty and News Corporation owning, directly or indirectly, in
the aggregate (a) less than a majority of all voting rights (after giving effect
to any member's agreement or voting trust agreements) with respect to the
Capital Stock of the Borrower (including, without limitation, warrants, options,
conversion rights, voting rights and calls or claims of any character with
respect thereto, to the extent exercisable prior to repayment in full of the
Obligations) or (b) less than thirty percent (30%) of the Capital Stock of the
Borrower.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall mean any property of any kind constituting
collateral for the obligations under any of the Security Documents.
"Commercial Letter of Credit" shall mean a documentary letter of credit
in respect of the purchase of goods or services by the Borrower or any of its
Restricted Subsidiaries issued by the Issuing Bank in accordance with the terms
hereof.
"Commitment Fee" shall have the meaning set forth in Section 2.4(a)
hereof.
"Commitment Fee Percentage" shall mean the percentage upon which the
commitment fee described in Section 2.4(a) hereof shall be based, which
percentage shall be based upon the Leverage Ratio as set forth below:
(a) (i) Prior to the receipt by the Borrower of (A)
the Threshold Debt Proceeds and (B) the Cash Equity Proceeds, if:
Leverage Ratio is: then the Commitment Fee
Percentage is:
greater than or equal to 4.0 to 1.0 0.3750%
greater than or equal to 2.0 to 1.0
but less than 4.0 to 1.0 0.2500%
less than 2.0 to 1.0 0.1875%
(ii) Notwithstanding the foregoing table above for
all periods prior to the twelve (12) month anniversary of the Agreement
Date, the Commitment Fee Percentage shall be no lower than 0.2500%.
(b) (i) After receipt by the Borrower of (A) the Threshold
Debt Proceeds and (B) the Cash Equity Proceeds, if:
Leverage Ratio is: then the Commitment Fee
Percentage is:
greater than or equal to 4.5 to 1.0 0.3750%
greater than or equal to 2.0 to 1.0
but less than 4.5 to 1.0 0.2500%
less than 2.0 to 1.0 0.1875%
(ii) Notwithstanding the foregoing table above for
all periods prior to the twelve (12) month anniversary of the Agreement
Date, the Commitment Fee Percentage shall be no lower than 0.250%.
"Commitments" shall mean, collectively, the Facility A Commitment and,
prior to the Facility B Conversion Date, Facility B Commitment.
"DBS Agreement" shall mean any agreement between the Borrower (or any
of its Restricted Subsidiaries) and a provider of direct broadcast satellite
services pursuant to which such provider agrees, among other things, to
distribute and exhibit to its subscribers programming of the Borrower and/or its
Restricted Subsidiaries.
"Default" shall mean any Event of Default, and any other event
specified in Section 8.1 hereof which with any passage of time or giving of
notice (or both) would constitute such event an Event of Default.
"Default Rate" shall mean following the occurrence of and during the
continuation of a Default, a simple per annum interest rate equal to the sum of
(a) the Base Rate, the LIBOR Basis or the Competitive Bid Rates otherwise
applicable plus (b) two percent (2%) to the end of any existing Interest
Periods, and, thereafter, the sum of (x) Base Rate plus (y) two percent (2%).
"EBITDA" shall mean, with respect to the Borrower and its Restricted
Subsidiaries on an attributable basis in respect of any period, the sum of (a)
operating income for such period, plus (b) to the extent deducted in determining
operating income, the sum of the following for such period: (i) depreciation and
(ii) amortization, all determined in accordance with GAAP; provided, however,
that EBITDA shall be calculated after giving effect to acquisitions and
dispositions of assets of the Borrower or any Restricted Subsidiary during such
period as if such transactions had occurred on the first day of such period and;
provided, further, that (x) dividends received in cash from sources other than
Restricted Subsidiaries shall be included in EBITDA only to the extent such
dividends represent no more then 7.5% of the EBITDA (on an inclusive basis), and
(y) EBITDA shall include only the attributable portion of the EBITDA of the
Non-Guarantor Subsidiaries to the extent actually received by the Borrower.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as in effect on the Agreement Date and as such Act may be amended thereafter
from time to time.
"ERISA Affiliate" shall mean (a) any corporation which is a member of
the same controlled group of corporations (within the meaning of Code Section
414(b)) as is the Borrower, (b) any other trade or business (whether or not
incorporated) under common control (within the meaning of Code Section 414(c))
with the Borrower, (c) any other corporation, partnership or other organization
which is a member of an affiliated service group (within the meaning of Code
Section 414(m)) with the Borrower, or (d) any other entity required to be
aggregated with the Borrower pursuant to regulations under Code Section 414(o).
"Event of Default" shall mean any of the events specified in Section
8.1 hereof, provided that any requirement for notice or lapse of time, or both,
has been satisfied.
"Facility A Commitment" shall mean the Facility A Commitment as defined
in the Facility A Loan Agreement.
"Facility A Loan Agreement" shall mean that certain Facility A Loan
Agreement of even date herewith by and among the Borrower, the Issuing Bank,
certain financial institutions defined as Lenders therein and Bank of America
National Trust and Savings Association, as Administrative Agent.
"Facility A Loans" shall mean those advances outstanding under Facility
A Loan Agreement.
"Facility B Commitment" shall mean the several obligations of the
Lenders to lend and relend to the Borrower amounts up to the aggregate amount of
$300,000,000 under the terms and conditions of this Agreement.
"Facility B Commitment Ratios" shall mean the percentages as of the
date of determination in which the Lenders having Facility B Commitments are
severally bound to satisfy their commitments under the Facility B Commitment to
make Advances to the Borrower pursuant to the terms hereof, which as of the
Agreement Date, are as set forth below and "Facility B Commitment Ratio" shall
mean the Facility B Commitment Ratio for an individual Lender:
<TABLE>
<CAPTION>
Percentage
(Rounded to the Facility A
Lenders nearest 1/1000%) Loan Dollar Commitment
<S> <C> <C>
Bank of America National Trust and Savings Association 8.333% $25,000,000.00
Toronto Dominion (Texas), Inc. 8.333% $25,000,000.00
The Bank of New York Company, Inc. 8.333% $25,000,000.00
Credit Lyonnais New York Branch 8.333% $25,000,000.00
BankBoston, N.A. 6.000% $18,000,000.00
Citibank, N.A. 6.000% $18,000,000.00
First Union National Bank 6.000% $18,000,000.00
Fleet National Bank 6.000% $18,000,000.00
Mellon Bank, N.A. 6.000% $18,000,000.00
Barclays Bank, plc 4.500% $13,500,000.00
Banca Commerciale Italiana, New York Branch 3.667% $11,000,000.00
Bank of Oklahoma, N.A. 3.667% $11,000,000.00
The Bank of Nova Scotia 3.667% $11,000,000.00
Compagnie Financiere de CIC et de l'Union Europeenne 3.667% $11,000,000.00
Bank of Hawaii 2.500% $7,500,000.00
Banque Nationale de Paris 2.500% $7,500,000.00
The Dai-Ichi Kangyo Bank, Ltd. 2.500% $7,500,000.00
Erste Bank Der Oesterreichischen Sparkassen 2.500% $7,500,000.00
KBC Bank, N.V. 2.500% $7,500,000.00
Lloyds Bank, plc 2.500% $7,500,000.00
Local Federal Bank, FSB 2.500% $7,500,000.00
TOTALS: 100.000% $300,000,000.00
</TABLE>
"Facility B Loans" shall mean the amounts advanced by the Lenders to
the Borrower as Advances under the Facility B Commitment and evidenced by the
Facility B Notes outstanding and "Facility B Loan" shall mean any one of the
foregoing.
"Facility B Net Proceeds" shall mean the amount of Net Proceeds (up to
the amount of the Facility B Loans then outstanding plus accrued interest
thereon) with respect to any sale, transfer or other disposition of assets by
the Borrower or any Restricted Subsidiary.
"Facility B Notes" shall mean, collectively, those certain revolving
promissory notes in an aggregate original principal amount equal to the Facility
B Commitment, one such note issued by the Borrower to each of the Lenders with
respect to the Facility B Commitment, each one substantially in the form of
Exhibit E attached hereto, and any extensions renewals or amendment to, or
replacements of, the foregoing.
"Facility B Conversion Date" shall mean the 365th day following the
Agreement Date.
"FCC" shall mean the Federal Communications Commission, or any
successor thereto.
"Federal Funds Rate" shall mean, as of any date, the weighted average
of the rates on overnight federal funds transactions with the members of the
Federal Reserve System arranged by federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day 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.
"Fee Agreements" shall mean all agreements by and between the Borrower
on the one hand, and the Administrative Agent or the Lenders (or any of them) on
the other hand, setting forth the applicable fees relating to this Agreement.
"Fixed Charges" shall mean, with respect to the Borrower and its
Restricted Subsidiaries on a consolidated basis, for any period, the sum of: (a)
Total Interest Expense for such period, (b) Scheduled Principal Payments during
such period, (c) all scheduled payments of principal made on Indebtedness for
Money Borrowed (other than the Facility A Loans) during such period, (d) Capital
Expenditures made during such period, (e) distributions made in accordance with
Section 7.7(a) hereof during such period, and (f) taxes paid during such period
(excluding, to the extent not the sole obligation of the Borrower, taxes on the
operating income of Non-Guarantor Subsidiaries, to the extent that such
operating income has been excluded from EBITDA).
"Fixed Rate Advance" shall have the meaning ascribed thereto in Section
2.2(b)(i) hereof.
"GAAP" shall mean, as in effect from time to time, generally accepted
accounting principles consistently applied.
"Guaranty" or "Guaranteed," as applied to an obligation (each a
"primary obligation"), shall mean and include (a) any guaranty, direct or
indirect, in any manner, of any part or all of such primary obligation, and (b)
any agreement, direct or indirect, contingent or otherwise, the practical effect
of which is to assure in any way the payment or performance (or payment of
damages in the event of non-performance) of any part or all of such primary
obligation, including, without limiting the foregoing, any reimbursement
obligations as to amounts drawn down by beneficiaries of outstanding letters of
credit or capital call requirements, without limitation, and any obligation of
such Person (the "primary obligor"), whether or not contingent, (i) to purchase
any such primary obligation or any property or asset constituting direct or
indirect security therefor, (ii) to advance or supply funds (A) for the purchase
or payment of such primary obligation or (B) to maintain working capital, equity
capital or the net worth, cash flow, solvency or other balance sheet or income
statement condition of any other Person, (iii) to purchase property, assets,
securities or services primarily for the purpose of assuring the owner or holder
of any primary obligation of the ability of the primary obligor with respect to
such primary obligation to make payment thereof or (iv) otherwise to assure or
hold harmless the owner or holder of such primary obligation against loss in
respect thereof excluding, however, general indemnifications for breach of
contract entered into in the ordinary course of business. For purposes of this
Agreement, a Guaranty shall not include (i) any bond obligation of, or any
Guaranty of or letter of credit securing performance by, a Borrower or a
Restricted Subsidiary undertaken or incurred in the ordinary course of its
business (other than in connection with the borrowing of money or obtaining of
credit) as presently conducted for or on behalf of a Borrower or a Restricted
Subsidiary and (ii) a guaranty or other obligation consisting of a pledge of
such Person's interest in the equity interest in any Unrestricted Subsidiary,
provided that recourse under such guaranty or obligation secured by such pledge
shall be limited solely to such Person's interest in the equity interest in such
Unrestricted Subsidiary so pledged.
"Indebtedness" shall mean, with respect to any Person, (a) all items,
except items of owners', shareholders' and partners' equity or capital stock or
surplus or general contingency or deferred tax reserves, which in accordance
with GAAP would be included in determining total liabilities as shown on the
liability side of a balance sheet of such Person, (b) all direct or indirect
obligations secured by any Lien to which any property or asset owned by such
Person is subject, whether or not the obligation secured thereby shall have been
assumed, (c) to the extent not otherwise included, all Capitalized Lease
Obligations of such Person, (d) all reimbursement obligations with respect to
outstanding letters of credit, and (e) all obligations of such Person to pay the
deferred purchase or acquisition price of property or services.
"Indebtedness for Money Borrowed" shall mean, with respect to any
Person, all money borrowed by such Person and Indebtedness represented by notes
payable by such Person and drafts accepted representing extensions of credit to
such Person, all obligations of such Person evidenced by bonds, debentures,
notes, or other similar instruments, and all Indebtedness of such Person upon
which interest charges are customarily paid, all Capitalized Lease Obligations,
all reimbursement obligations with respect to outstanding letters of credit, all
Indebtedness issued or assumed as full or partial payment for property or
services (other than trade payables arising in the ordinary course of business),
whether or not any such notes, drafts, obligations or Indebtedness represent
Indebtedness for Money Borrowed, and, without duplication, Guaranties of any of
the foregoing. For purposes of this definition, interest which is accrued but
not paid on the original due date or within any applicable cure or grace period
as provided by the underlying contract for such interest shall be deemed
Indebtedness for Money Borrowed. For purposes of this Agreement, a Guaranty
shall not include (i) any bond obligations of, or any Guaranty of or letter of
credit securing performance by, a Borrower or a Restricted Subsidiary undertaken
or incurred in the ordinary course of its business (other than in connection
with the borrowing of money or obtaining of credit) as presently conducted for
or on behalf of a Borrower or a Restricted Subsidiary and (ii) a guaranty or
other obligation consisting of a pledge of such Person's interest in the equity
interest in any Unrestricted Subsidiary, provided that recourse under such
guaranty or obligation secured by such pledge shall be limited solely to such
Person's interest in the equity interest in such Unrestricted Subsidiary so
pledged.
"Interest Hedge Agreement" shall mean the obligations of any Person
pursuant to (a) any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such Person
calculated by applying a fixed or floating rate of interest on the same notional
amount or (b) interest rate swaps, caps, floors, collars and similar agreements.
"Interest Period" shall mean, (a) in connection with any Base Rate
Advance, each calendar quarter; provided, however, that for any Base Rate
Advance made after the first day of any calendar quarter, the first Interest
Period with respect thereto shall be the period beginning on the date such
Advance is made and ending on the last day of the calendar quarter in which such
Advance is made; provided, further, however, that if a Base Rate Advance is made
on the last day of any calendar quarter, it shall have an initial Interest
Period ending on, and its initial Payment Date shall be, the last day of the
following calendar quarter (b) in connection with any LIBOR Advance, the term of
such Advance selected by the Borrower or otherwise determined in accordance with
this Agreement and (c) in connection with any Competitive Bid Advance, the term
of such Advance as determined under Section 2.2(b) hereof. Notwithstanding the
foregoing, however, (i) any applicable Interest Period which would otherwise end
on a day which is not a Business Day shall be extended to the next succeeding
Business Day unless, with respect to LIBOR Advances only, such Business Day
falls in another calendar month, in which case such Interest Period shall end on
the next preceding Business Day; (ii) with respect to LIBOR Advances only, any
applicable Interest Period which begins on a day for which there is no
numerically corresponding day in the calendar month during which such Interest
Period is to end shall (subject to clause (i) above) end on the last day of such
calendar month; and (iii) no Interest Period shall extend beyond the Maturity
Date or such earlier date as would interfere with the repayment obligations of
the Borrower under Section 2.7 hereof. Interest shall be due and payable with
respect to any Advance as provided in Section 2.3 hereof.
"Interest Rate Basis" shall mean the Base Rate or the LIBOR Basis, as
appropriate.
"Issuing Bank" shall mean Bank of America National Trust and Savings
Association, as issuer of the Letters of Credit, under the Facility A Loan
Agreement, and its assigns and successors hereunder.
"Investment" shall mean, with respect to the Borrower or any of its
Restricted Subsidiaries, (a) any loan, advance or extension of credit (other
than to customers in the ordinary course of business) by such Person to, or any
Guaranty or other contingent liability with respect to the capital stock,
indebtedness or other obligations of, or any contributions to the capital of,
any other Person, or any ownership, purchase or other acquisition by such Person
of any interest in any capital stock, limited partnership interests, general
partnership interest, or other securities of such other Person, other than an
Acquisition, and (b) all expenditures by the Borrower or any of its Restricted
Subsidiaries relating to the foregoing.
"Lenders" shall mean the Persons whose names appear as "Lenders" on the
signature pages hereof and any other Person which becomes a "Lender" hereunder
after the Agreement Date; and "Lender" shall mean any one of the foregoing
Lenders.
"Letter of Credit Obligations" shall have the meaning ascribed thereto
in the Facility A Loan Agreement.
"Letters of Credit" shall have the meaning ascribed thereto in the
Facility A Loan Agreement.
"Leverage Ratio" shall mean, as of any date of determination, the ratio
of (a) Total Debt as of such date to (b) EBITDA for the immediately preceding
four (4) calendar quarters (or, if such date of determination is the last day of
a quarter the four calendar quarters then ended).
"Liberty" shall mean Liberty Media Corporation, a Delaware corporation.
"Liberty Transaction" shall mean, collectively, in exchange for twelve
million seven hundred fifty thousand (12,750,000) shares of the Borrower's
common stock, the acquisition from Liberty of (a) forty percent (40%) of the
ownership interest in SNG; (b) one hundred percent (100%) interest in the
satellite transmitted programming services known as Denver 6; (c) Liberty's
interest in revenue sharing agreements with the Borrower; and (d) one hundred
percent (100%) interest in Liberty's business of selling programming to master
antenna television systems.
"LIBOR" shall mean, for any Interest Period, the interest rate per
annum equal to the offered rate for deposits in United States dollars for an
amount approximately equal to the principal amount of, and for a length of time
approximately equal to the Interest Period for, the LIBOR Advance sought by the
Borrower, which rate appears on the Reuter's Screen LIBO Rate Page (or such
other page as may replace that page in that service) at approximately 11:00 a.m.
(London time) two (2) Business Days before the first day of such Interest
Period; provided, that (i) if more than one such offered rate appears on the
Reuter's Screen, LIBOR shall be the arithmetic average (rounded upward to the
nearest one-sixteenth (1/16) of one percent (1%)) of such offered rates, or (ii)
if the Reuter's Screen is not available, LIBOR shall be the average offered to
the Administrative Agent (or an affiliate thereof) by two (2) leading banks
(rounded upward to the nearest one-sixteenth (1/16) of one percent (1%)) of the
interest rates per annum at which deposits in United States dollars for such
Interest Period are offered to the Administrative Agent in the London eurodollar
interbank borrowing market at approximately 11:00 a.m. (London time) two (2)
Business Days before the first day of such Interest Period, in an amount
approximately equal to the principal amount of, and for a length of time
approximately equal to the Interest Period for, the LIBOR Advance sought by the
Borrower.
"LIBOR Advance" shall mean an Advance which bears interest at the LIBOR
Basis which the Borrower requests to be made as a LIBOR Advance or which is
reborrowed as a LIBOR Advance, in accordance with the provisions of Section 2.2
hereof, and which shall be in a principal amount of at least $5,000,000 and in
an integral multiple of $500,000, except for a LIBOR Advance which is in an
amount equal to the unused amount of the Facility B Loan Commitment, which
Advance may be in such amount.
"LIBOR Basis" shall mean a simple per annum interest rate equal to the
sum of (a) the quotient of (i) LIBOR divided by (ii) one minus the LIBOR Reserve
Percentage, if any, stated as a decimal plus (b) the Applicable Margin for LIBOR
Advances then in effect. The LIBOR Basis shall be rounded upward to the nearest
one-hundredth of one percent (1/100%) and shall apply to Interest Periods of one
(1), two (2), three (3), and six (6) months, and, once determined, shall be
subject to Article 10 hereof and shall remain unchanged during the applicable
Interest Period. The Borrower may not select an Interest Period for a LIBOR
Advance in excess of six (6) months unless the Administrative Agent has notified
the Borrower (i) that each of the Lenders has available to it funds for such
Lender's share of the proposed Advance which are not required for other purposes
and (ii) that such funds are available to each Lender at a rate (exclusive of
reserves and other adjustments) at or below LIBOR for such proposed Advance and
Interest Period. Interest on LIBOR Advances shall also be subject to adjustment
to reflect changes in the Applicable Margin for LIBOR Advances as provided in
Section 2.3(g) hereof.
"LIBOR Reserve Percentage" shall mean the percentage which is in effect
from time to time under Regulation D of the Board of Governors of the Federal
Reserve System, as such regulation may be amended from time to time, as the
actual reserve requirement applicable with respect to Eurocurrency Liabilities
(as that term is defined in Regulation D), to the extent any Lender has any
Eurocurrency Liabilities subject to such reserve requirement at that time.
"Licenses" shall mean any rights, whether based upon any agreement,
statute, order, ordinance, or otherwise, granted by any governmental authority
to the Borrower or any of its Restricted Subsidiaries to operate its business,
together with any amendment, modification or replacement with respect thereto.
"Lien" shall mean, with respect to any property, any mortgage, lien,
pledge, assignment, charge, security interest, title retention agreement, levy,
execution, seizure, attachment, garnishment, or other encumbrance of any kind in
respect of such property, whether or not choate, vested, or perfected.
"Loan Documents" shall mean this Agreement, the Notes, the Fee
Agreements, the Security Documents, and all Requests for Advance between the
Borrower and the Administrative Agent, the Lenders, or any of them and all other
documents and agreements executed or delivered in connection with or
contemplated by this Agreement.
"Materially Adverse Effect" shall mean any materially adverse effect
upon the business, assets, financial condition or results of operations of the
Borrower and its Restricted Subsidiaries, on a consolidated basis in accordance
with GAAP, taken as a whole, or upon the ability of the Borrower and its
Restricted Subsidiaries, taken as a whole, to perform their obligations under
this Agreement or any other Loan Document.
"Maturity Date" shall mean February 28, 2005, or such earlier date as
the payment of the Facility B Loans shall be due (whether by acceleration or
otherwise).
"MSO Agreement" shall mean any agreement between the Borrower or any of
its Restricted Subsidiaries and a cable television operator pursuant to which
such operator agrees, among other things, to distribute and exhibit to its
subscribers programming of the Borrower or such Restricted Subsidiary.
"Multiemployer Plan" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"Necessary Authorizations" shall mean all authorizations, consents,
permits, approvals, licenses, and exemptions from, and all filings and
registrations with, and all reports to, any governmental or other regulatory
authority whether federal, state, or local, and all agencies thereof necessary
for the conduct of the businesses and the ownership (or lease) of the properties
and assets of the Borrower or its Restricted Subsidiaries, including, without
limitation, the Licenses.
"Net Proceeds" shall mean, with respect to any sale, lease, transfer,
or other disposition of the assets of the Borrower or any of its Restricted
Subsidiaries, the gross sales price for the assets or securities being sold
(including, without limitation, any payments received for non-competition
covenants), net of (a) amounts reserved or paid, if any, for taxes payable with
respect to the sale, (b) reasonable and customary transaction costs payable by
the Borrower or such Restricted Subsidiary, (c) contingencies with respect to
such sale appropriately reserved for by the Borrower or such Restricted
Subsidiary, and (d) until actually received by the Borrower or such Restricted
Subsidiary, any portion of the sales price held in escrow or paid in
installments. Upon receipt by either the Borrower or any of its Restricted
Subsidiaries of (i) the amounts referred to in item (a) of the preceding
sentence, or (ii) if there shall occur any reduction in the tax reserves
referred to in item (a) of the preceding sentence resulting in payment to either
the Borrower or any of its Restricted Subsidiaries, such amounts shall then be
deemed to be "Net Proceeds."
"News Corporation" shall mean The News Corporation Limited, a South
Australia, Australia corporation.
"Non-Guarantor Subsidiaries" shall mean SNTV Holdings, Inc., SNG,
Television Games Networks, L.L.C., Sneak Prevue LLC, any other Subsidiary
acquired or created by the Borrower or any of its Restricted Subsidiaries after
the Agreement Date which all of the Arrangers have accepted as a Non-Guarantor
Subsidiary and any of their Subsidiaries; and "Non-Guarantor Subsidiary" shall
mean any one of the foregoing.
"Notes" shall mean, collectively the Facility B Notes.
"Obligations" shall mean (a) all payment and performance obligations of
every kind, nature and description of the Borrower and all other obligors to the
Lenders, the Issuing Bank and the Administrative Agent under this Agreement and
the other Loan Documents (including any interest, fees and other charges on the
Facility B Loans or otherwise under the Loan Documents that would accrue but for
the filing of a bankruptcy action with respect to the Borrower, whether or not a
claim for such amounts is allowed in such bankruptcy action and including
Obligations to the Lenders pursuant to Section 5.11 hereof), as they may be
amended from time to time, or as a result of making the Facility B Loans,
whether such Obligations are direct or indirect, absolute or contingent, due or
not due, contractual or tortious, liquidated or unliquidated, arising by
operation of law or otherwise, now existing or hereafter arising, including,
without limitation, obligations of the Borrower under Interest Hedge Agreements
(only to the extent that such Interest Hedge Agreement has been designated in
writing by the Administrative Agent as an approved Interest Hedge Agreement)
with the Administrative Agent, the Lenders (or a Person who was a Lender or an
affiliate of a Lender when such Interest Hedge Agreement was entered into), or
any of them, and (b) the obligation to pay an amount equal to the amount of any
and all damages which the Lenders, the Issuing Bank and the Administrative
Agent, or any of them, may suffer by reason of a breach by the Borrower or any
other obligor of any obligation, covenant, or undertaking with respect to this
Agreement or any other Loan Document.
"Payment Date" shall mean the last day of each Interest Period.
"Performance Certificate" shall mean that certificate delivered
pursuant to Section 6.3 hereof.
"Permitted Asset Sales" shall mean (a) sales, transfers or other
dispositions of assets by the Borrower or any of its Restricted Subsidiaries in
bona fide arm's-length transactions (i) which do not generate, in the aggregate
during the term hereof, Net Proceeds in excess of $20,000,000 or (ii) the Net
Proceeds of which are reinvested by the Borrower or a Restricted Subsidiary in
similar fixed assets within 180 days from the date of disposition, (b) the
disposition in the ordinary course of business of assets which are no longer
used or useful in the business of the Borrower or any of its Restricted
Subsidiaries, (c) the transfer of assets (including cash or cash equivalents)
among the Borrower and its Restricted Subsidiaries or the transfer of assets
between or among the Restricted Subsidiaries of the Borrower so long as in each
case, such assets remain assets of the Borrower or its Restricted Subsidiaries
and (d) the sale of SNTV Holdings, Inc., SSDS, Spacecom or SNG.
"Permitted Liens" shall mean, as applied to any Person:
(a) any Lien in favor of the Administrative Agent or the
Lenders given to secure the Obligations any Lien in favor of the administrative
agent or the lenders under the Facility A Loan Agreement (to the extent that
such Lien equally and ratably secures the Obligations);
(b) (i)......Liens on real estate for real estate taxes not
yet delinquent and (ii) Liens for taxes, assessments, judgments, governmental
charges or levies, or claims the non-payment of which is being contested in good
faith by appropriate proceedings and for which adequate reserves as required by
GAAP have been set aside on such Person's books, but only so long as no
foreclosure, distraint, sale, or similar proceedings have been commenced with
respect thereto and which remain unstayed for a period of thirty (30) days after
their commencement;
(c) Liens of carriers, warehousemen, mechanics, laborers, and
materialmen incurred in the ordinary course of business for sums not yet due or
being contested in good faith, if such reserve or appropriate provision, if any,
as shall be required by GAAP shall have been made therefor;
(d) Liens incurred in the ordinary course of business in
connection with worker's compensation and unemployment insurance;
(e) restrictions on the transfer of assets imposed by any
agreement, or by any federal, state or local statute, regulation or ordinance
applicable to such person;
(f) easements, rights-of-way, restrictions, and other similar
encumbrances on the use of real property which do not interfere with the
ordinary conduct of the business of such Person, or Liens incidental to the
conduct of the business of such Person or to the ownership of its properties
which were not incurred in connection with Indebtedness or other extensions of
credit and which do not in the aggregate materially detract from the value of
such properties or materially impair their use in the operation of the business
of such Person;
(g) purchase money mortgages or security interests,
conditional sale arrangements and other similar security interests, on any
property or assets of the Borrower; provided; however, that:
(i) the transaction in which any Lien is
proposed to be created is not otherwise
prohibited by this Agreement;
(ii) the aggregate outstanding amount of all
Indebtedness secured by Liens permitted hereunder shall not at any time
exceed the amounts set forth with respect thereto in Section 7.1
hereby.
"Person" shall mean an individual, corporation, partnership, limited
liability company, trust, or unincorporated organization, or a government or any
agency or political subdivision thereof.
"Plan" shall mean an employee benefit plan within the meaning of
Section 3(3) of ERISA maintained by or contributed to by the Borrower or any
ERISA Affiliate.
"Regulatory Change" shall mean, with respect to any Lender, any change
on or after the date of this Agreement in United States federal, state or
foreign laws or regulations (including Regulation D) or the adoption or making
on or after such date of any interpretations, directives or requests applying to
a class of banks including such Lender of or under any United States federal or
state, or any foreign, laws or regulations (whether or not having the force of
law) by any court or governmental or monetary authority charged with the
interpretation or administration thereof.
"Reportable Event" shall have the meaning set forth in Section 4043(b)
of ERISA.
"Request for Advance" shall mean any certificate signed by an
Authorized Signatory requesting an Advance hereunder which will increase the
aggregate amount of the Facility B Loans outstanding, and shall be in
substantially the form of Exhibit D attached hereto. Each Request for Advance
shall, among other things, (a) specify the date of the Advance, which shall be a
Business Day, the amount of the Advance, the type of Advance, and, with respect
to LIBOR Advances, the Interest Period selected by the Borrower, (b) state that
the requirements of Section 3.2 hereof have been satisfied and (c) set forth the
calculations for the Leverage Ratio as of the date of the requested Advance (and
after giving effect thereto).
"Required Lenders" shall mean, (1) prior to the Facility B Conversion
Date, those Persons whose Facility B Commitments equal or exceed fifty-one
percent (51%) of the aggregate amount of the Facility B Commitments (after
giving effect to any reductions in such Facility B Commitments, but without
giving effect to any Facility B Loans then outstanding) and (2) from and after
the Facility B Conversion Date, those Persons whose Facility B Loans then
outstanding equal or exceed fifty-one percent (51%) of the aggregate amount of
the Facility B Loans then outstanding; provided, however, that if the Facility B
Commitments have been terminated or cancelled, "Required Lenders" shall mean
those Persons whose Facility B Loans equal or exceed fifty-one percent (51%) of
the aggregate of the Facility B Loans then outstanding; provided further,
however, that if any Lender is not entitled to vote pursuant to the terms of
Section 2.2(c)(iv) hereof, the denominator used to determine the aggregate
amount of Facility B Loans or Facility B Commitments shall exclude such Lender's
Facility B Loans or Facility B Commitments.
"Restricted Payment" shall mean, (a) any direct or indirect
distribution, dividend, or other payment to any Person (other than to the
Borrower or any wholly-owned Restricted Subsidiary of the Borrower) on account
of any general or limited partnership interest in, or other securities of, the
Borrower, or any of its Restricted Subsidiaries (other than dividends payable
solely in stock of the Borrower or such Restricted Subsidiary, as applicable,
and stock splits), including, without limitation, any direct or indirect
distribution, dividend or other payment to any Person (other than to the
Borrower or any Restricted Subsidiary of the Borrower) on account of any
warrants or other rights or options to acquire shares of Capital Stock of the
Borrower or any of its Restricted Subsidiaries; and (b) any consulting,
management or other similar fees, or any interest thereon, payable by the
Borrower or any of its Restricted Subsidiaries, to any Affiliate, other than
reimbursement of overhead and employee costs in the ordinary course of business
which are directly attributable to the Borrower and its Restricted Subsidiaries.
"Restricted Purchase" shall mean any payment (including, without
limitation, any sinking fund payment, prepayment or installment payment) on
account of the purchase, redemption, or other acquisition or retirement of any
general or limited partnership interest in, or shares of capital stock or other
securities of, the Borrower or any of its Restricted Subsidiaries, including,
without limitation, any warrants or other rights or options to acquire shares of
capital stock of the Borrower or any of Restricted Subsidiaries or any loan,
advance, release or forgiveness of Indebtedness by the Borrower or any of its
Restricted Subsidiaries to any partner, shareholder or Affiliate of any such
Person.
"Restricted Subsidiaries" shall mean all Subsidiaries of the Borrower
other than the Unrestricted Subsidiaries and "Restricted Subsidiary" shall mean
any one of the foregoing.
"Scheduled Principal Payments" shall mean for any period, the excess,
if any, of (a) the highest amount of the Facility A Loans and Letter of Credit
Obligations outstanding at any time during such period over (b) the amount of
the Facility A Commitment on the last day of such period.
"Security Documents" shall mean the Borrower Pledge Agreement, any
Assignment of Notes, Subsidiary Pledge Agreement and all other documents
evidencing the Lenders' security interest in Borrower's or its Restricted
Subsidiaries' Collateral.
"SNG" shall mean Superstar/Netlink Group, LLC.
"Subordinated Debt" shall mean any Indebtedness incurred by the
Borrower which is permitted under Section 7.1(e) hereof or Section 7.1(i)
hereof.
"Subsidiary" shall mean any corporation, association, partnership,
joint venture, limited liability company or other business entity of which the
Borrower and/or any Subsidiary of the Borrower, directly or indirectly, either
(a) in respect of a corporation, owns or controls more than 50% of the
outstanding stock having ordinary voting power to elect a majority of the board
of directors or similar managing body, irrespective of whether or not a class or
classes shall or might have voting power by reason of the happening of any
contingency, or (b) in respect of an associate, partnership, joint venture,
limited liability company or other business entity, is entitled to share in more
than 50% of the profits and losses, however determined. For purposes of this
Loan Agreement, "Subsidiary" shall not include InfoMedia, S.A.
"Subsidiary Guaranty" shall mean each Subsidiary Guaranty in favor of
the Administrative Agent and the Lenders, given by a Restricted Subsidiary of
the Borrower, each substantially in the form of Exhibit F attached hereto.
"Subsidiary Pledge Agreement" shall mean each Subsidiary Pledge
Agreement between a Restricted Subsidiary of the Borrower having one (1) or more
of its own Restricted Subsidiaries, on the one hand, and the Administrative
Agent (for itself and on behalf of the Lenders), on the other hand, each
substantially in the form of Exhibit G attached hereto.
"Threshold Debt Proceeds" shall mean the receipt by the Borrower of not
less than $300,000,000 in Subordinated Debt proceeds (exclusive of any portion
of the Cash Equity Proceeds which arise from subordinated debt).
"Total Debt" shall mean on a consolidated basis, as of any date,
without duplication (a) all outstanding Indebtedness for Money Borrowed of the
Borrower and its Restricted Subsidiaries, (b) the aggregate amount of all
Guarantees by the Borrower and its Restricted Subsidiaries and (c) all
Capitalized Lease Obligations of the Borrower and its Restricted Subsidiaries.
"Total Interest Expense" shall mean, for any designated period, an
amount equal to the sum of (a) the interest paid during such period with respect
to Indebtedness for Money Borrowed of the Borrower and its Restricted
Subsidiaries and (b) commitment, facility and letter of credit fees paid with
respect to the Facility A Loans, Facility B Loans and outstanding Letters of
Credit during such period.
"Trademarks" shall mean all registered trademarks and pending
applications for trademarks of the Borrower and its Restricted Subsidiaries.
"Transponder Lease Agreement" shall mean any agreement by and between
the Borrower (or any of its Restricted Subsidiaries) and any other Person for
the license, lease or other agreement to use the telecommunications satellites
for purposes of broadcasting the programming of the Borrower and its Restricted
Subsidiaries known as TV Guide Channel, Sneak Prevue and UVTV/WGN and any other
agreement related to the transmission, origination and production of such
programming and the related technical services.
"TV Guide Transaction" shall mean the acquisition by the Borrower of
all of the outstanding Capital Stock of News America Publications, Inc. and
TVSM, Inc. from TVG Holdings, Inc., a subsidiary of News Corporation.
"Unrestricted Subsidiaries" shall mean, as of the Agreement Date, SSDS,
Inc., a Colorado corporation, United Video Properties, Inc., a Delaware
corporation, UVSG Companies, an Oklahoma general partnership, and any of their
Subsidiaries and shall include any Subsidiary of the Borrower created or
acquired after the Agreement Date which the Borrower designates as an
"Unrestricted Subsidiary" (and which the Required Lenders accept as an
Unrestricted Subsidiary) until such Subsidiary has been designated as a
Restricted Subsidiary (and which the Required Lenders accept as a Restricted
Subsidiary) and "Unrestricted Subsidiary" shall mean any one of the foregoing.
No Restricted Subsidiary may be designated as an Unrestricted Subsidiary without
the prior written consent of all of the Lenders.
Each definition of an agreement in this Article 1 shall include such
agreement as modified, amended, or supplemented from time to time with the prior
written consent of the Required Lenders, except as provided in Section 11.12
hereof, and except where the context otherwise requires, definitions imparting
the singular shall include the plural and vice versa. Except where otherwise
specifically restricted, reference to a party to a Loan Document includes that
party and its successors and assigns. All terms used herein which are defined in
Article 9 of the Uniform Commercial Code in effect in the State of New York on
the date hereof and which are not otherwise defined herein shall have the same
meanings herein as set forth therein.
All accounting terms used herein without definition shall be used as
defined under GAAP. All references to financial information and results of the
Borrower shall be determined on a consolidated basis with the Borrower's
Restricted Subsidiaries as appropriate.
ARTICLE 2
ARTICLE 2 - Loans
Section 2.1 The Facility B Loans. The Lenders having Facility B Commitments
agree, severally in accordance with their respective Facility B Commitment
Ratios and not jointly, upon the terms and subject to the conditions of this
Agreement, to lend and relend to the Borrower, prior to the Facility B
Conversion Date, amounts which in the aggregate at any one time outstanding do
not exceed the Available Facility B Commitment (as it may be reduced from time
to time pursuant to the terms hereof). On the Facility B Conversion Date, all
outstanding Facility B Loans shall convert to term loans and there shall be no
increase in the principal amount outstanding under the Facility B Loans on or
after the Facility B Conversion Date. Subject to the terms hereof, after the
Facility B Conversion Date, Advances under the Facility B Commitment may be
repaid and reborrowed only to effect a change in the Interest Rate Basis or
Interest Periods relating thereto.
Section 2.2 Manner of Borrowing and Disbursement.
(a) Advances.
(i) Choice of Interest Rate, etc. Any Advance (other
than a Competitive Bid Advance) shall, at the option of the Borrower,
be made as a Base Rate Advance or a LIBOR Advance; provided, however,
that (A) if the Borrower fails to give the Administrative Agent written
notice specifying whether an Advance is to be repaid or reborrowed on a
Payment Date, such Advance shall be repaid and then reborrowed as a
Base Rate Advance on the Payment Date and (B) the Borrower may not
select a LIBOR Advance if, at the time of such selection, a Default has
occurred and is continuing. LIBOR Advances shall in all cases be
subject to Section 2.3(f) and Article 10 hereof.
(ii) Base Rate Advances.
(A) Advances. The Borrower shall give the
Administrative Agent in the case of Base Rate Advances
irrevocable written notice in the form of a Request for
Advance, or notice by telephone or telecopy followed
immediately by a Request for Advance not later than 12:00 noon
(New York City time) on the date the Advance is requested;
provided, however, that the failure by the Borrower to confirm
any notice by telephone or telecopy with a Request for Advance
shall not invalidate any notice so given. Upon receipt of such
notice from the Borrower, the Administrative Agent shall
promptly notify each Lender by telephone or telecopy of the
contents thereof.
(B) Repayments and Reborrowings. Subject to
the provisions of Sections 2.2(a)(i) and 2.3(f) hereof, the
Borrower may repay or prepay a Base Rate Advance without
regard to its Payment Date and (1) upon irrevocable written
notice in accordance with Section 2.2(a)(ii)(A) hereof,
reborrow all or a portion of the principal amount thereof as
one or more Base Rate Advances, (2) upon at least three (3)
Business Days' irrevocable prior written notice, reborrow all
or a portion of the principal thereof as one or more LIBOR
Advances, or (3) upon at least one (1) Business Day's
irrevocable prior written notice and subject to Section 2.6
hereof, not reborrow all or any portion of such Base Rate
Advance. On the date indicated by the Borrower, such Base Rate
Advance shall be so repaid and, as applicable, reborrowed.
(iii) LIBOR Advances.
(A) Advances. The Borrower shall give the
Administrative Agent in the case of LIBOR Advances at least
three (3) Business Days' irrevocable written notice in the
form of a Request for Advance, or notice by telephone or
telecopy followed immediately by a Request for Advance;
provided, however, that the failure of the Borrower to confirm
any notice by telephone or telecopy with a Request for Advance
shall not invalidate any notice so given. The Administrative
Agent, whose determination shall be conclusive absent manifest
error, shall determine the available LIBOR Bases and shall
notify the Borrower of such LIBOR Bases. The Borrower shall
promptly notify the Administrative Agent by telecopy or by
telephone, and shall immediately confirm any such telephonic
notice in writing, of its selection of a LIBOR Basis and
Interest Period for such Advance. Upon receipt of such notice
from the Borrower, the Administrative Agent shall promptly
notify each Lender by telephone or telecopy of the contents
thereof.
(B) Repayments and Reborrowings. At least
three (3) Business Days prior to each Payment Date for a LIBOR
Advance, subject to Sections 2.2(a)(i) and 2.3(f) hereof, the
Borrower shall give the Administrative Agent written notice
specifying whether all or a portion of any LIBOR Advance
outstanding on the Payment Date (1) is to be repaid and then
reborrowed in whole or in part as a LIBOR Advance, (2) is to
be repaid and then reborrowed in whole or in part as one or
more Base Rate Advances or (3) subject to Section 2.6 hereof,
is to be repaid and not reborrowed. Upon such Payment Date
such LIBOR Advance will, subject to the provisions hereof, be
so repaid and, as applicable, reborrowed.
(b) Notification of Lenders. Upon receipt of a Request for
Advance or a written notice under this Section 2.2 from the Borrower with
respect to a reborrowing of any then outstanding Advance on the Payment Date for
such Advance, the Administrative Agent shall promptly notify each Lender by
telephone or telecopy of the contents thereof and the amount of such Lender's
portion of the applicable Advance. Each Lender shall, not later than 2:00 p.m.
(New York City time) on the date specified in such notice, make available to the
Administrative Agent, or at such account as the Administrative Agent shall
designate, the amount of its portion of the applicable Advance in immediately
available funds.
(c) Disbursement.
(i) Prior to 2:00 p.m. (New York City time) on the
date of an Advance hereunder, the Administrative Agent shall, subject
to the satisfaction of the conditions set forth in this Section 2.2 and
in Article 3 hereof, disburse the amounts made available to the
Administrative Agent by the Lenders obligated to make such Advance in
immediately available funds by (A) transferring the amounts so made
available by wire transfer pursuant to the instructions of the
Borrower, or (B) in the absence of such instructions, crediting the
amounts so made available to the account of the Borrower maintained
with the Administrative Agent or an affiliate of the Administrative
Agent.
(ii) Unless the Administrative Agent shall have
received notice from a Lender obligated to make such Advance prior to
the date of any Advance that such Lender will not make available to the
Administrative Agent such Lender's portion of such Advance, and so long
as notice has been given as provided in Section 2.2(c) hereof, the
Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Advance and
the Administrative Agent may, in its sole discretion and in reliance
upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent such Lender shall not have
so made such portion available to the Administrative Agent, such Lender
agrees to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from
the date such amount is made available to the Borrower until the date
such amount is repaid to the Administrative Agent, at the Federal Funds
Rate.
(iii) If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount so repaid
shall constitute such Lender's portion of the applicable Advance for
purposes of this Agreement. The failure of any Lender to fund its
portion of any Advance shall not relieve any other Lender of its
obligation, if any, hereunder to fund its respective portion of the
Advance on the date of such borrowing, but no Lender shall be
responsible for any such failure of any other Lender.
(iv) In the event that, at any time when the Borrower
is not in Default, a Lender for any reason fails or refuses to fund its
portion of an Advance, then, until such time as such Lender has funded
its portion of such Advance, or all other Lenders have received payment
in full (whether by repayment or prepayment) of the principal and
interest due in respect of such Advance, such non-funding Lender shall
(A) have no right to vote regarding any issue on which voting is
required or advisable under this Agreement or any other Loan Document,
and (B) not be entitled to receive payments of principal, interest or
fees from the Borrower in respect of such Facility B Loans which such
Lender failed to make.
Section 2.3 Interest.
(a) On Base Rate Advances. Interest on each Base Rate Advance
shall be computed on the basis of a year of 365/366 days (360 days to the extent
based on the Federal Funds Rate) for the actual number of days elapsed and shall
be payable at the Base Rate for such Advance in arrears on the applicable
Payment Date. Interest on Base Rate Advances then outstanding shall also be due
and payable on the Maturity Date.
(b) On LIBOR Advances. Interest on each LIBOR Advance shall be
computed on the basis of a 360-day year for the actual number of days elapsed
and shall be payable at the LIBOR Basis for such Advance in arrears on the
applicable Payment Date, and, in addition, if the Interest Period for a LIBOR
Advance exceeds three (3) months, interest on such LIBOR Advance shall also be
due and payable in arrears on each three (3) month anniversary of the making of
such Advance. Interest on LIBOR Advances then outstanding shall also be due and
payable on the Maturity Date.
(c) If No Notice of Selection of Interest Rate Basis. If the
Borrower fails to give the Administrative Agent timely notice of (i) its
selection of a LIBOR Basis, (ii) an election to reborrow an Advance as a LIBOR
Advance or (iii) if, for any reason, a determination of a LIBOR Basis for any
Advance is not timely concluded, the Base Rate shall apply to such Advance, and
if the Borrower shall fail to elect to reborrow any LIBOR Advance then
outstanding prior to the last Payment Date applicable thereto in accordance with
the provisions of Section 2.2 hereof, as applicable, the Base Rate shall apply
to such Advance commencing on and after such Payment Date.
(d) Upon Default. Upon the occurrence and during the
continuance of an Event of Default, the Required Lenders shall have the option
(but shall not be required to give prior notice thereof to the Borrower, to
accelerate the maturity of the Facility B Loans, or exercise any other rights or
remedies hereunder in connection with the exercise of this right), to charge
interest on the outstanding principal balance of the Facility B Loans at the
Default Rate from the date of such Event of Default. Such interest shall be
payable on the earlier of DEMAND or the Maturity Date and shall accrue until the
earlier of (i) waiver or cure (to the satisfaction of the Required Lenders) of
the applicable Event of Default, (ii) agreement by the Required Lenders to
rescind the charging of interest at the Default Rate, or (iii) payment in full
of the Obligations.
(e) LIBOR Advances. At no time may the number of outstanding
LIBOR Advances hereunder exceed 12.
(f) Applicable Margin.
(i) The Applicable Margin shall be subject to
reduction or increase, as applicable, and as set forth in the tables
below, based upon the Leverage Ratio of the Borrower set forth on a pro
forma basis (after giving effect to any requested Advances) in any
Request for Advance and as reflected in the financial statements
required to be delivered for the fiscal quarter most recently ended
pursuant to Section 6.1 or Section 6.2 hereof. The adjustment provided
for in this Section 2.3(g) shall be effective (A) with respect to an
increase of the Applicable Margin, as of the second (2nd) Business Day
after (1) with respect to Base Rate Advances, the day on which any
Request for Advance is delivered, (2) with respect to LIBOR Advances,
the day on which the requested Advance is made or (3) the day on which
financial statements are required to be delivered to the Administrative
Agent pursuant to Sections 6.1 and 6.2 hereof (or, if applicable, the
monthly financial statements delivered by the Borrower), as the case
may be, and (B) with respect to a decrease in the Applicable Margin, as
of the second (2nd) Business Day after (1) with respect to Base Rate
Advances, the day on which any Request for Advance is delivered, (2)
with respect to LIBOR Advances, the day on which the requested Advance
is made or (3) except with respect to Interest Periods ending (or other
payments of interest occurring) before the date that such financial
statements are actually delivered to the Administrative Agent, (x) the
day on which such financial statements are required to be delivered to
the Administrative Agent pursuant to Section 6.1 or 6.2 hereof or (y)
if applicable, the one year anniversary of the Agreement Date, as the
case may be. Notwithstanding the foregoing, if the Borrower shall fail
to deliver financial statements within forty-five (45) days after the
end of any of the first three fiscal quarters of the Borrower's fiscal
year (or within one hundred twenty (120) days after the end of the last
fiscal quarter of the Borrower's fiscal year), as required by Sections
6.1 or 6.2 hereof, it shall be conclusively presumed that the
Applicable Margin is based upon a Leverage Ratio of 4.0 to 1.0 for the
period from and including the forty-sixth (46th) day (or one hundred
twenty-first (121st) day, in the case of the last quarter) after the
end of such fiscal quarter, as the case may be, to the Business Day
following the delivery by the Borrower to the Administrative Agent of
such financial statements. The Applicable Margin in effect on the
Agreement Date shall be based upon a certificate, dated the Agreement
Date, by the Borrower's chief financial officer showing the Leverage
Ratio on a pro forma basis (after giving effect to initial Advances
hereunder) and delivered to the Administrative Agent on the Agreement
Date.
<TABLE>
<CAPTION>
A. (i) Prior to receipt by the Borrower of (x) Threshold Debt
Proceeds and (y) the Cash Equity Proceeds, the Applicable Margin shall be set forth below:
Base Rate Advance LIBOR Advance
Leverage Ratio Applicable Margin Applicable Margin
-------------- ----------------- -----------------
<S> <C> <C> <C>
Greater than or equal to 4.0 to 1.0 0.750% 1.750%
Greater than or equal to 3.5 to 1.0
but less than 4.0 to 1.0 0.625% 1.625%
Greater than or equal to 3.0 to 1.0
but less than 3.5 to 1.0 0.500% 1.500%
Greater than or equal to 2.5 to 1.0
but less than 3.0 to 1.0 0.500% 1.375%
Greater than or equal to 2.0 to 1.0
but less than 2.5 to 1.0 0.500% 1.250%
Less than 2.0 to 1.0 0.375% 1.250%
</TABLE>
(ii) Notwithstanding the
foregoing table above for all periods prior to the twelve (12)
month anniversary of the Agreement Date, the Applicable Margin
for LIBOR borrowings under the Facility B Commitment will be
no lower than 1.500%.
B. (i) following receipt by the Borrower of
(ii) the Threshold Debt Proceeds and (iii) the Cash Equity
Proceeds, the Applicable Margin shall be as set forth below:
<TABLE>
<CAPTION>
Base Rate Advance LIBOR Advance
Leverage Ratio Applicable Margin Applicable Margin
<S> <C> <C>
Greater than or equal to 4.5 to 1.0 0.750% 1.750%
Greater than or equal to 4.0 to 1.0
but less than 4.5 to 1.0 0.500% 1.500%
Greater than or equal to 3.5 to 1.0
but less than 4.0 to 1.0 0.375% 1.375%
Greater than or equal to 3.0 to 1.0
but less than 3.5 to 1.0 0.375% 1.250%
Greater than or equal to 2.5 to 1.0
but less than 3.0 to 1.0 0.375% 1.125%
Greater than or equal to 2.0 to 1.0
but less than 2.5 to 1.0 0.375% 1.000%
Less than 2.0 to 1.0 0.250% 1.000%
</TABLE>
(ii)Notwithstanding the foregoing table above for all periods
prior to the twelve (12) month anniversary of the Agreement
Date, the Applicable Margin for LIBOR Advances under the
Facility B Commitment will be no lower than 1.250%.
Section 2.4 Fees
(a) Commitment Fee. The Borrower agrees to pay the
Administrative Agent for the account of each Lender having a Facility B
Commitment a commitment fee on the actual daily amount of the unused portion of
such Lender's Facility B Commitment for each day from the Agreement Date to the
Facility B Conversion Date at a rate equal to the applicable Commitment Fee
Percentage. The commitment fee shall be computed on the basis of a year of
365/366 days for the actual number of days elapsed and shall be payable
quarterly in arrears for each quarter on the last day of each calendar quarter
(and on the Facility B Conversion Date) commencing on March 31, 1999. As set
forth in the definition hereof, the Commitment Fee Percentage shall be subject
to increase and decrease based upon the Leverage Ratio on the dates set forth in
Section 2.3(g) hereof for adjustments to the Applicable Margin. The commitment
fee payable hereunder shall be fully earned when due and non-refundable when
paid.
(b) Administrative Agent's Fees. The Borrowers shall pay to
the Administrative Agent for its own account such fees as may from time to time
be agreed between the Borrower and the Administrative Agent.
Section 2.5 Reduction of Commitment.
(a) Optional. The Borrower shall have the right, at any time
and from time to time after the Agreement Date and prior to the Facility B
Conversion Date, upon at least three (3) Business Days' prior written notice to
the Administrative Agent without premium or penalty, to cancel or reduce
permanently all or a portion of the Facility B Commitment on a pro rata basis
among the Lenders, provided that any such partial reduction shall be made in an
amount not less than $5,000,000 and in integral multiples of not less than
$1,000,000. As of the date of cancellation or reduction set forth in such
notice, the Facility B Commitment shall be permanently reduced to the amount
stated in the Borrower's notice for all purposes herein, and the Borrower shall,
subject to Section 2.10 hereof, pay to the Administrative Agent for the account
of the Lenders the amount necessary to reduce the principal amount of the
Facility B Loans then outstanding under the Facility B Commitment to not more
than the amount of the Available Facility B Commitment as so reduced, together
with accrued interest on the amount so prepaid. Reductions hereunder shall be
applied to the next scheduled mandatory reductions under Section 2.5(b) hereof.
(b) Reductions from Asset Sales. Except with respect to
Permitted Asset Sales, at any time prior to the Facility B Conversion Date, on
the Business Day after the receipt by the Borrower or any Restricted Subsidiary
of the Borrower of any Facility B Net Proceeds with respect to any sale of any
equity ownership in any Restricted Subsidiary or assets of the Borrower or any
Restricted Subsidiary of the Borrower, the Facility B Commitment shall be
permanently reduced by an amount equal to 100% of the Facility B Net Proceeds of
such sale.
Section 2.6 Prepayment. LIBOR Advances may be prepaid prior to the
applicable Payment Date, upon three (3) Business Days' prior written notice to
the Administrative Agent, provided that the Borrower shall reimburse the Lenders
and the Administrative Agent, on the earlier of demand or the Maturity Date, for
any loss or out-of-pocket expense incurred by the Lenders or the Administrative
Agent in connection with such prepayment, as set forth in Section 2.10 hereof.
Base Rate Advances may be prepaid in full or in part at any time without penalty
upon written notice to the Administrative Agent on the date of such prepayment.
Each notice of prepayment shall be irrevocable, and all amounts prepaid on the
Facility B Loans shall be applied first to interest and fees and other amounts
due and payable hereunder as of such date, and then to principal. Partial
prepayments shall be in a principal amount of not less than $1,000,000 and in
integral multiples of $100,000. Upon receipt of any notice of prepayment, the
Administrative Agent shall promptly notify each Lender.
Section 2.7 Repayment.
(a) Mandatory Repayment of Facility B Loans. After the
Facility B Conversion Date, the Facility B Loans outstanding on March 30, 2001
shall be repaid in the percentages pursuant to the table below, commencing on
March 31, 2001 as follows:
Quarterly Repayment Percentage
of Facility B Loans Outstanding
Dates of Repayment on March 30, 2001
------------------ -----------------
March 31, 2001, June 30, 2001,
September 30, 2001 and December 31, 2001 5.00%
March 31, 2002, June 30, 2002,
September 30, 2002 and December 31, 2002 5.00%
March 31, 2003, June 30, 2003,
September 30, 2003 and December 31, 2003 7.50%
March 31, 2004, June 30, 2004,
September 30, 2004 and December 31, 2004 7.50%
(b) Facility B Loans Exceeding Available Facility B
Commitment. If, at any time, the amount of the Facility B Loans then outstanding
shall exceed the Available Facility B Commitment, the Borrower shall on such
date make a repayment of the principal amount of the Facility B Loans in an
amount equal to such excess.
(c) Repayments from Asset Sales. Except with respect to
Permitted Asset Sales, on the Business Day after the receipt by the Borrower or
any of its Restricted Subsidiaries of any Net Proceeds of any sale of any equity
ownership interest in any Restricted Subsidiary or assets of the Borrower or any
of its Restricted Subsidiaries, the Borrower shall make a repayment of the
Facility B Loans then outstanding in an amount equal to the amount of the
Facility B Net Proceeds.
(d) Maturity. In addition to the foregoing, a final payment of
all Obligations then outstanding shall be due and payable on the Maturity Date.
Section 2.8 Notes; Loan Accounts.
(a) The Facility B Loans shall be repayable in accordance with
the terms and provisions set forth herein, and shall be evidenced by the
Facility B Notes. One (1) of the Notes shall be payable to the order of each
Lender having a Facility B Commitment in accordance with the respective Facility
B Commitment Ratio of such Lender. The Notes shall be issued by the Borrower to
the Lenders and shall be duly executed and delivered by an Authorized Signatory.
(b) Each Lender may open and maintain on its books in the name
of the Borrower a loan account with respect to its Facility B Loans and interest
thereon. Each Lender which opens such loan account or accounts shall debit the
applicable loan account for the principal amount of each Advance made by it and
accrued interest thereon, and shall credit such loan account for each payment on
account of principal of or interest on such Facility B Loans. The records of
each Lender with respect to the loan accounts maintained by it shall be, absent
manifest error, prima facie evidence of its Facility B Loans and accrued
interest thereon, but the failure to maintain such records shall not impair the
obligation of the Borrower to repay Indebtedness hereunder.
(c) Each Advance from the Lenders under this Agreement shall
be made pro rata on the basis of their respective Facility B Commitment Ratios.
Section 2.9 Manner of Payment.
(a) Each payment (including any prepayment) by the Borrower on
account of the principal of or interest on the Facility B Loans, fees, and any
other amount owed to the Lenders or the Administrative Agent under this
Agreement, the Notes, or the other Loan Documents shall be made not later than
1:00 p.m. (New York City time) on the date specified for payment under this
Agreement or such other Loan Document to the Administrative Agent to an account
designated by the Administrative Agent, for the account of the Lenders or the
Administrative Agent, as the case may be, in lawful money of the United States
of America in immediately available funds. The failure of the Borrower to make
any such payment by such time shall not constitute a Default hereunder, provided
that such payment is received by the Administrative Agent in immediately
available funds by 4:00 p.m. (New York City time) on such due date, but any such
payment made after 1:00 p.m. (New York City time) on such due date shall be
deemed to have been made on the next Business Day for the purpose of calculating
interest on amounts outstanding on the Facility B Loans, unless the
Administrative Agent, in fact, was able to remit to such Lender its pro rata
share of such payment by 4:00 p.m. (New York City time) on such due date. In the
case of a payment for the account of a Lender, the Administrative Agent will
promptly thereafter distribute the amount so received in like funds to such
Lender. If the Administrative Agent shall not have received any payment from the
Borrower as and when due, the Administrative Agent will promptly notify the
Lenders accordingly.
(b) If any payment under this Agreement or any of the Notes
shall be specified to be made upon a day which is not a Business Day, it shall
be made on the next day which is a Business Day, and such extension of time
shall in such case be included in computing interest and fees, if any, in
connection with such payment.
(c) So long as the applicable Lender has complied with Section
2.13 hereof, the Borrower agrees to pay principal, interest, fees and all other
amounts due hereunder, under the Notes or under any other Loan Document without
set-off or counterclaim or any deduction whatsoever and free and clear of all
taxes, levies and withholding. So long as the applicable Lender has complied
with Section 2.13 hereof, if the Borrower is required by Applicable Law to
deduct any taxes from or in respect of any sum payable to the such Lender
hereunder, under any Note or under any other Loan Document: (i) the sum payable
hereunder or thereunder, as applicable, shall be increased to the extent
necessary to provide that, after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.9(c)), the
Administrative Agent or such Lender, as applicable, receives an amount equal to
the sum it would have received had no such deductions been made; (ii) the
Borrower shall make such deductions from such sums payable hereunder or
thereunder, as applicable, and pay the amount so deducted to the relevant taxing
authority as required by Applicable Law; and (iii) the Borrower shall provide
the Administrative Agent or such Lender, as applicable, with evidence
satisfactory to the Administrative Agent or such Lender, as applicable, that
such deducted amounts have been paid to the relevant taxing authority. Before
making any such deductions, such Lender shall designate a different lending
office and may take such alternative courses of action if such designation or
alternative courses of action will avoid the need for such deductions and will
not in the good faith judgment of such Lender be otherwise disadvantageous to
such Lender.
Section 2.10 Reimbursement.
(a) Whenever any Lender shall actually incur any losses or
reasonable out-of-pocket expenses (other than losses of the interest rate
margin) in connection with (i) failure by the Borrower to borrow any LIBOR
Advance after having given notice of its intention to borrow in accordance with
Section 2.2 hereof (whether by reason of the election of the Borrower not to
proceed or the non-fulfillment of any of the conditions set forth in Article 3)
other than a failure to borrow resulting from an unavailability which occurs
after notice from the Administrative Agent to the Borrower pursuant to Section
10.1 or 10.2 hereof, or (ii) prepayment of any LIBOR Advance in whole or in part
(including a prepayment pursuant to Sections 10.2 and 10.3(b) hereof), the
Borrower agrees to pay to such Lender, upon the earlier of such Lender's demand
or the Maturity Date, an amount sufficient to compensate such Lender for all
such losses and reasonable out-of-pocket expenses. Such Lender's good faith
determination of the amount of such losses and reasonable out-of-pocket
expenses, absent manifest error, shall be binding and conclusive. Upon request
of the Borrower, any Lender seeking reimbursement under this Section 2.10 shall
provide a certificate setting forth the amount to be paid to it by the Borrower
hereunder and calculations therefor.
(b) Losses subject to reimbursement hereunder shall include,
without limiting the generality of the foregoing, but without duplication,
expenses incurred by any Lender or any participant of such Lender permitted
hereunder in connection with the re-employment of funds prepaid, paid, repaid,
not borrowed, not converted or not paid, as the case may be, and will be payable
whether the Maturity Date is changed by virtue of an amendment hereto (unless
such amendment expressly waives such payment) or as a result of acceleration of
the Obligations and whether such Lender has a "matched funding" of such Advance.
Section 2.11 Application of Proceeds. Subsequent to an Event of Default,
payments made to the Administrative Agent or the Lenders, or any of them, or
otherwise received by the Administrative Agent or the Lenders, or any of them
(from realization on collateral for the Obligations or otherwise), shall be
distributed as follows: First, to the reasonable costs and expenses, if any,
incurred by the Administrative Agent or the Lenders, or any of them, to the
extent permitted by Section 11.2 hereof in the collection of such amounts under
this Agreement or any of the other Loan Documents, including, without
limitation, any reasonable costs incurred in connection with the sale or
disposition of any collateral for the Obligations; Second, pro rata among the
Administrative Agent and the Lenders based on the total amount of fees then due
and payable hereunder or under any other Loan Document to any Administrative
Agent's fees then due and payable hereunder or under any other Loan Document and
to such fees then due and payable to the Lenders; Third, to be deposited as set
forth in Section 8.2(b) hereof; Fourth, pro rata among the Lenders based on the
outstanding principal amount of the Facility B Loans outstanding immediately
prior to such payment, to any unpaid interest which may have accrued on the
Facility B Loans; Fifth, pro rata among the Lenders based on the outstanding
principal amount of the Facility B Loans outstanding immediately prior to such
payment, to any unpaid principal of the Facility B Loans; Sixth, to any other
Obligations not otherwise referred to in this Section 2.11 until all such
Obligations are paid in full; Seventh, to damages incurred by the Administrative
Agent or the Lenders, or any of them, by reason of any breach hereof or of any
other Loan Documents; and Eighth, upon satisfaction in full of all Obligations,
to the Borrower or as otherwise required by law. If any Lender shall obtain any
payment (whether involuntary or otherwise) on account of the Facility B Loans
made by it in excess of its ratable share of the Facility B Loans then
outstanding and such Lender's share of any expenses, fees and other items due
and payable to it hereunder, such Lender shall forthwith purchase a
participation in the Facility B Loans from the other Lenders as shall be
necessary to cause such purchasing Lender to share the excess payment ratably
with each of them; provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender, such purchase from
each Lender shall be rescinded and such Lender shall repay to the purchasing
Lender the purchase price to the extent of such recovery. The Borrower agrees
that any Lender so purchasing a participation from another Lender pursuant to
this Section may, to the fullest extent permitted by law, exercise all its
rights of payment with respect to such participation as fully as if such Lender
were the direct creditor of the Borrower in the amount of such participation so
long as the Borrower's Obligations are not increased.
Section 2.12 Capital Adequacy. In the event that a Regulatory Change does
or shall have the effect of reducing the rate of return on such Lender's capital
as a consequence of its obligations hereunder to a level below that which such
Lender would have achieved but for such adoption, change or compliance (taking
into consideration such Lender's policies with respect to capital adequacy) by
an amount deemed by such Lender to be material, then from time to time, ten (10)
days after submission by such Lender to the Borrower (with a copy to the Agent)
of a written request therefor, together with a certificate (which shall be
conclusive absent manifest error), setting forth the calculations evidencing
such requested additional amount, and the law or regulation with respect thereto
and certifying that such request is consistent with such Lender's treatment of
other similar customers having similar provisions generally in their agreements
with such Lender, and that such request is being made on the basis of a
reasonable allocation of the costs resulting from such law or regulation, the
Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender for such reduction. Allocations shall not be deemed
reasonable unless made ratably, to the extent practicable, to all affected
assets, commitments, activities or other relevant aspects of such Lender's
business, whether or not the Lender is entitled to compensation with respect
thereto. Notwithstanding the foregoing, the Borrower shall only be obligated to
compensate such Lender for any amount under this subsection arising or occurring
during (i) in the case of each such request for compensation, any time or period
commencing not more than ninety (90) days prior to the date on which such Lender
submits such request and (ii) any other time or period during which, because of
the unannounced retroactive application of such law, regulation, interpretation,
request or directive, such Lender could not have known that the resulting
reduction in return might arise. Each Lender will notify the Borrower that it is
entitled to compensation pursuant to this subsection as promptly as practicable
after it determines to request such compensation; provided, however, that the
failure to provide such notice shall not restrict the ability of such Lender to
be reimbursed under this Section 2.12 except as provided in clause (i) above. In
the event the Borrower shall be required to make any payment or reimbursement or
to compensate the Issuing Bank or any Lender under this Section 2.12, so long as
no Default has occurred and is continuing, the Borrower shall be free, at any
time within ninety (90) days after the receipt of a request for compensation
hereunder by the Issuing Bank or any Lender, as applicable, to replace the
Issuing Bank or any such Lender, as applicable, with another major international
bank reasonably acceptable to the Administrative Agent.
Section 2.13 Lender Tax Forms. On or prior to the Agreement Date and on or
prior to the first Business Day of each calendar year thereafter, each Lender
which is organized in a jurisdiction other than the United States shall provide
each of the Administrative Agent and the Borrower with properly executed
originals of Forms 4224 or 1001 (or any successor form) prescribed by the
Internal Revenue Service or other documents satisfactory to the Borrower and the
Administrative Agent, and each such Lender shall provide properly executed
Internal Revenue Service Forms W-8 or W-9, as the case may be, certifying (i) as
to such Lender's status for purposes of determining exemption from United States
withholding taxes with respect to all payments to be made to such Lender
hereunder and under the Notes or (ii) that all payments to be made to such
Lender hereunder and under the Notes are subject to such taxes at a rate reduced
to zero by an applicable tax treaty. Each such Lender agrees to provide the
Administrative Agent and the Borrower with new forms prescribed by the Internal
Revenue Service upon the expiration or obsolescence of any previously delivered
form, or after the occurrence of any event requiring a change in the most recent
forms delivered by it to the Administrative Agent and the Borrower.
ARTICLE 3
Conditions Precedent
Section 3.1 Conditions Precedent to Effectiveness of Agreement. The
obligation of the Lenders to undertake the Facility B Commitments and to make
the initial Advances hereunder is subject to the prior fulfillment of each of
the following conditions:
(a) The Administrative Agent shall have received each of the
following, in form and substance satisfactory to the Administrative Agent:
(i) duly executed Facility B Notes;
(ii) a duly executed Borrower Pledge Agreement from
the Borrower, which agreement shall be in substantially the form of
Exhibit C attached hereto;
(iii) a duly executed Subsidiary Pledge Agreement
from each Restricted Subsidiary which owns an equity interest in a
Restricted Subsidiary of the Borrower on the Agreement Date;
(iv) a duly executed Subsidiary Guaranty from each
Restricted Subsidiary of the Borrower (excluding Non-Guarantor
Subsidiaries) on the Agreement Date;
(v) the loan certificate of the Borrower, including a
certificate of incumbency with respect to the signature of each
Authorized Signatory, which loan certificate shall be in substantially
the form of Exhibit H attached hereto, together with appropriate
attachments thereto;
(vi) a loan certificate from each Restricted
Subsidiary of the Borrower (excluding Non-Guarantor Subsidiaries) in
substantially the form attached hereto as Exhibit I, including a
certificate of incumbency with respect to each Authorized Signatory of
such Person;
(vii) legal opinions of each of (A) Sherman & Howard
L.L.C., special counsel to the Borrower and its Restricted Subsidiaries
addressed to each Lender and the Administrative Agent and dated as of
the Agreement Date substantially in the form of Exhibit J-1 attached
hereto, (B) Cole, Raywid & Braverman LLC, as FCC counsel to the
Borrower and its Restricted Subsidiaries addressed to each Lender and
the Administrative Agent and dated as of the Agreement Date
substantially in the form of Exhibit J-2 attached hereto, (C) Holme
Roberts & Owen LLP, addressed to each Lender and the Administrative
Agent and dated as of the Agreement Date substantially in the form of
Exhibit J-3 attached hereto, and (D) Squadron, Ellenoff, Plesent &
Sheinfeld, L.L.P. addressed to each Lender and the Administrative Agent
and dated as of the Agreement Date substantially in the form of Exhibit
J-4 attached hereto;
(viii) receipt by the Administrative Agent and the
Lenders of all appropriate fees to be paid to them by the Borrower on
or prior to the Agreement Date;
(ix) any required consents to the closing of this
Agreement or to the execution, delivery and performance of this
Agreement and the other Loan Documents, each of which shall be in form
and substance satisfactory to the Administrative Agent and the Lenders;
(x) duly executed Fee Agreements;
(xi) evidence satisfactory to the Administrative
Agent that the Borrower and its Restricted Subsidiaries have a
Transponder Lease Agreement providing for unqualified access to a
non-preemptable transponder on terms and conditions satisfactory to the
Administrative Agent; and
(xii) all such other documents as the Administrative
Agent may reasonably request, certified by an appropriate governmental
official or Authorized Signatory if so requested.
(b) The Administrative Agent shall have received evidence
satisfactory to it that all necessary consents to the closing of this Agreement,
have been obtained or made, are in full force and effect and are not subject to
any pending or, to the knowledge of the Borrower, threatened reversal or
cancellation, and the Administrative Agent shall have received a certificate of
an Authorized Signatory so stating.
(c) Evidence satisfactory to the Administrative Agent that
the TV Guide Transaction has been consummated substantially in accordance with
the terms and conditions set forth in that certain Letter Agreement dated as of
June 10, 1998 by and among News America Inc., the Borrower, Tele-Communications,
Inc. and the News Corp and the cash portion of such transaction does not exceed
$800,000,000, excluding fees and expenses.
(d) Evidence satisfactory to the Administrative Agent that
the Liberty Transaction has been (or on the Agreement Date will be) consummated
substantially in accordance with the terms and conditions set forth by that
certain Stock Purchase Agreement dated as of May 18, 1998 by and between the
Borrower and Liberty.
Section 3.2 Conditions Precedent to Each Advance. The obligation of the
Lenders to make each Advance, including the initial Advances hereunder, other
than an Advance which does not increase the principal amount of the Facility B
Loans outstanding hereunder, is subject to the fulfillment of each of the
following conditions immediately prior to, or contemporaneously with, such
Advance:
(a) All of the representations and warranties of the Borrower
under this Agreement and the other Loan Documents, which, in accordance with
Section 4.2 hereof, are made at and as of the time of such Advance, shall be
true and correct at such time, both before and after giving effect to the
application of the proceeds of the Advance;
(b) There shall not exist, on the date of the making of the
Advance and after giving effect thereto, a Default hereunder and the
Administrative Agent and each of the Lenders shall have received a Request for
Advance so certifying;
(c) With respect to any Advance relating to any Acquisition or
the formation of any Restricted Subsidiary which is permitted hereunder, the
Administrative Agent and the Lenders shall have received such documents and
instruments relating to such Acquisition or formation of a new Restricted
Subsidiary as are described in Section 5.14 hereof or otherwise required herein;
and
(d) The Administrative Agent and the Lenders shall have
received a Performance Certificate setting forth, as of the date of such
Advance, on a pro forma basis (after giving effect to the requested Advance) the
arithmetic calculations required to establish whether or not the Borrower is in
compliance with the requirements set forth in Sections 7.8, 7.9 and 7.10.
The acceptance of the proceeds of any Facility B Loans which would increase the
aggregate dollar amount of the Facility B Loans outstanding shall be deemed to
be a representation and warranty by the Borrower as to compliance with this
Section 3.2 on the date any such Facility B Loan is made.
ARTICLE 4
Representations and Warranties
Section 4.1 Representations and Warranties. The Borrower hereby agrees,
represents, and warrants that:
(a) Organization; Power; Qualification.
(i) The Borrower is a corporation duly organized and
validly existing under the laws of the State of Delaware. The Borrower
has the power and authority to own or lease and operate its properties
and to carry on its business as now being and hereafter proposed to be
conducted, and is duly qualified and authorized to do business, in each
jurisdiction in which such qualification is necessary in view of the
character of its properties or the nature of its business requires such
qualification or authorization, except for qualifications and
authorizations, the lack of which, singly or in the aggregate, has not
had and is not likely to have a Materially Adverse Effect.
(ii) Each Restricted Subsidiary of the Borrower is a
corporation, partnership or a limited liability company duly organized
and validly existing under the laws of its state of formation. Each
Restricted Subsidiary of the Borrower has the power and the authority
to own or lease and operate its properties and to carry on its business
as now being and hereafter proposed to be conducted, and is duly
qualified and authorized to do business in each jurisdiction in which
such qualification is necessary in view of the character of its
properties or the nature of its business requires such qualification or
authorization, except for qualifications and authorizations, the lack
of which, singly or in the aggregate, has not had and is not likely to
have a Materially Adverse Effect.
(b) Authorization; Enforceability. The Borrower has the
necessary power and has taken all necessary action to authorize it to execute,
deliver, and perform this Agreement and each of the other Loan Documents to
which it is a party in accordance with the terms thereof and to consummate the
transactions contemplated hereby and thereby. This Agreement has been duly
executed and delivered by the Borrower, and is, and each of the other Loan
Documents to which the Borrower is a party is, a legal, valid and binding
obligation of the Borrower, enforceable in accordance with its terms, subject to
limitations on enforceability under bankruptcy, reorganization, insolvency and
similar laws affecting creditors' rights generally and limitations on the
availability of the remedy of specific performance imposed by the application of
general equity principles.
(c) Restricted Subsidiaries' Authorization; Enforceability.
The Restricted Subsidiaries and the Borrower's direct and indirect ownership
thereof as of the Agreement Date are as set forth on Schedule 1 attached hereto,
and to the extent such Restricted Subsidiaries are corporations, the Borrower
has the unrestricted right to vote the issued and outstanding shares of the
Restricted Subsidiaries thereof and such shares of such Restricted Subsidiaries
have been duly authorized and issued and are fully paid and nonassessable. Each
Restricted Subsidiary has the necessary power and has taken all necessary action
to authorize it to execute, deliver and perform each of the Loan Documents to
which it is a party in accordance with their respective terms and to consummate
the transactions contemplated by this Agreement and by such Loan Documents. Each
of the Loan Documents to which any Restricted Subsidiary is party is a legal,
valid and binding obligation of such Restricted Subsidiary enforceable against
such Restricted Subsidiary in accordance with its terms, subject, to limitations
on enforceability under bankruptcy, reorganization, insolvency and similar laws
affecting creditors' rights generally and limitations on the availability of the
remedy of specific performance imposed by the application of general equity
principles. The Borrower's ownership interest in each of the Restricted
Subsidiaries represents a direct or indirect controlling interest of such
Restricted Subsidiary for purposes of directing or causing the direction of the
management and policies of each Restricted Subsidiary.
(d) Compliance with Laws, Other Loan Documents, and
Contemplated Transactions. The execution, delivery, and performance by the
Borrower and its Restricted Subsidiaries of this Agreement and each of the other
Loan Documents in accordance with the terms thereof and the consummation of the
transactions contemplated hereby and thereby do not and will not (i) violate any
Applicable Law, (ii) result in a breach of, or constitute a default under, the
certificate or articles of incorporation or by-laws or partnership agreements,
as the case may be, as amended, of the Borrower or of any Restricted Subsidiary
of the Borrower or under any indenture, agreement, or other instrument to which
the Borrower or any of its Restricted Subsidiaries is a party or by any of them
or any of their respective properties may be bound, or (iii) result in or
require the creation or imposition of any Lien upon or with respect to any
property now owned or hereafter acquired by the Borrower or any of its
Restricted Subsidiaries except Permitted Liens; except where such violations,
breaches, defaults or Liens, if any, singly or in the aggregate, has not had and
is not likely to have a Materially Adverse Effect.
(e) Necessary Authorizations. No approval or consent of, or
filing or registration with, any federal, state or local commission or other
regulatory authority is required in connection with the execution, delivery and
performance by the Borrower or any of its Restricted Subsidiaries of such of
this Agreement, the Facility B Notes, and the other Loan Documents to which any
of them is a party.
(f) Title to Properties. The Borrower has good, marketable,
and legal title to, or a valid leasehold interest in, all of its respective
material tangible properties and assets free and clear of all Liens, except
Permitted Liens. Except for financing statements evidencing Permitted Liens, no
financing statement under the Uniform Commercial Code as in effect in any
jurisdiction and no other filing which names the Borrower or any of the
Restricted Subsidiaries as debtor or which covers or purports to cover any of
the assets of the Borrower or any of its Restricted Subsidiaries is currently
effective and on file in any state or other jurisdiction, and neither the
Borrower nor any of its Restricted Subsidiaries has signed any such financing
statement or filing or any security agreement authorizing any secured party
thereunder to file any such financing statement or filing.
(g) Collective Bargaining. There are no collective bargaining
agreements between the Borrower or any of its Restricted Subsidiaries and any
trade or labor union or other employee collective bargaining agent.
(h) Taxes. All federal, state, and other tax returns of the
Borrower and each Restricted Subsidiary of the Borrower required by law to be
filed have been duly filed, and all federal, state, and other taxes,
assessments, and other governmental charges or levies upon the Borrower or any
of the Restricted Subsidiaries of the Borrower or any of their respective
properties, income, profits, and assets, which are due and payable, have been
paid, except any such tax payment (i) of which the Borrower or any Restricted
Subsidiary of the Borrower is diligently contesting in good faith by appropriate
proceedings, (ii) for which adequate reserves as required by GAAP have been
provided on the books of the Borrower or any Restricted Subsidiary of the
Borrower and (iii) as to which neither any Lien other than a Permitted Lien has
attached nor any foreclosure, distraint, sale, or similar proceedings have been
commenced. The charges, accruals, and reserves on the books of the Borrower or
any of its Restricted Subsidiaries in respect of taxes are, in the reasonable
judgment of the Borrower, adequate.
(i) Financial Statements. The Borrower has furnished, or
caused to be furnished, to the Lenders (i) audited financial statements for the
Borrower which present fairly in accordance with GAAP the financial position of
the Borrower and its consolidated Subsidiaries as of December 31, 1997, and (ii)
unaudited financial statements for the Borrower, which present fairly in
accordance with GAAP the financial position of the Borrower and its consolidated
Subsidiaries of June 30, 1998 and, in each case, the results of operations for
the periods then ended. Except as disclosed in the financial statements most
recently furnished to the Lenders pursuant to Section 6.2 hereof (or until such
financial statements are delivered hereunder, the audited financial statement
referred to in the preceding sentence) neither the Borrower or any of its
Restricted Subsidiaries had any material liabilities, contingent or otherwise,
and there are no material unrealized or anticipated losses of the Borrower which
have not heretofore been disclosed in writing to the Lenders.
(j) Licenses, etc. The material Licenses have been duly issued
and are in full force and effect. The Borrower and its Restricted Subsidiaries
are in compliance in all material respects with all of the provisions thereof.
The Borrower and its Restricted Subsidiaries have secured all material Necessary
Authorizations and all such Necessary Authorizations are in full force and
effect. Neither any material License nor any material Necessary Authorization is
the subject of any pending or, to the best of the Borrower's knowledge,
threatened revocation.
(k) No Adverse Change. There has occurred no event since June
30, 1998, which has had or could reasonably be expected to have a Materially
Adverse Effect.
(l) Investments and Guaranties. The Borrower has not made
material investments, advances to, or guaranties of, the obligations of any
Person, except as reflected in the financial statements referred to in Section
4.1(i) above or as otherwise permitted by the terms of this Agreement.
(m) Liabilities, Litigation, etc. Except for liabilities
incurred in the normal course of business, neither the Borrower nor any of its
Restricted Subsidiaries has any material (individually or in the aggregate)
liabilities, direct or contingent, except as disclosed or referred to in the
financial statements referred to in Section 4.1(i) above. Except as set forth on
Schedule 2 attached hereto, there is no material litigation, legal or
administrative proceeding, investigation, or other action of any nature pending
or, to the knowledge of the Borrower, threatened against or affecting the
Borrower, any of its Restricted Subsidiaries or any of its properties which
involves the possibility of any material judgment or liability not fully covered
by insurance.
(n) ERISA. The Borrower and each ERISA Affiliate and each of
their respective Plans are in substantial compliance with ERISA and the Code and
neither the Borrower nor any of its ERISA Affiliates has incurred any
accumulated funding deficiency with respect to any such Plan within the meaning
of ERISA or the Code. The Borrower and each of its ERISA Affiliates have
complied with all requirements of ERISA Sections 601 through 608 and Code
Section 4980B in all material respects. The Borrower has incurred no material
liability to the Pension Benefit Guaranty Corporation in connection with any
Plan. The assets of each Plan which is subject to Title IV of ERISA are
sufficient to provide the benefits under such Plan, the payment of which the
Pension Benefit Guaranty Corporation would guarantee if such Plan were
terminated, and such assets are also sufficient to provide all other "benefit
liabilities" (as defined in ERISA Section 4001(a)(16)) due under the Plan upon
termination. No Reportable Event for which advance notice to the PBGC is
required under Section 4043 of ERISA has occurred and is continuing with respect
to any Plan. No Plan or trust created thereunder, or party in interest (as
defined in Section 3(14) of ERISA, or any fiduciary (as defined in Section 3(21)
of ERISA), has engaged in a "prohibited transaction" (as such term is defined in
Section 406 of ERISA or Section 4975 of the Code) which would subject the
Borrower or any ERISA Affiliate to a material penalty or tax on "prohibited
transactions" imposed by Section 502 of ERISA or Section 4975 of the Code.
Neither the Borrower nor any of its ERISA Affiliates is a participant in or is
obligated to make any payment to a Multiemployer Plan which has or is expected
to have any withdrawal liability if such Plan were terminated or if such Person
were to withdraw from such Plan which could reasonably be likely to have a
Materially Adverse Effect.
(o) Patents, Trademarks, etc. The Borrower and each of its
Restricted Subsidiaries owns, possesses or has the right to use all licenses and
rights to all patents, Trademarks, trademark rights, trade names, trade name
rights, service marks, and copyrights, and rights with respect thereto,
necessary to conduct its business in all material respects as now conducted,
without known conflict with any patent, Trademark, trade name, service mark,
license or copyright of any other Person, and in each case, with respect to
patents, Trademarks, trademark rights, trade names, trade name and copyrights
and licenses with respect thereto owned by Borrower or its Restricted
Subsidiaries, subject to no mortgage, pledge, lien, lease, encumbrance, charge,
security interest, title retention agreement or option other than Permitted
Liens. All such licenses and rights with respect to patents, Trademarks,
trademark rights, trade names, trade name rights, service marks and copyrights
are in full force and effect, and to the extent applicable, the Borrower and its
Restricted Subsidiaries are in full compliance in all material respects with all
of the provisions thereof. No such patent, Trademark, trademark rights, trade
names, trade name rights, service marks, copyrights or licenses is subject to
any pending or, to the best of the Borrower's knowledge, threatened attack or
revocation which could reasonably be considered to have a Materially Adverse
Effect.
(p) Compliance with Law; Absence of Default. The Borrower and
each of its Restricted Subsidiaries is in compliance with all Applicable Laws,
and no event has occurred or has failed to occur which has not been remedied or
waived, the occurrence or non-occurrence of which constitutes (i) a Default or
(ii) a default by the Borrower or any of its Restricted Subsidiaries under any
other indenture, agreement, or other instrument, or any judgment, decree, or
order to which the Borrower or any of its Restricted Subsidiaries is a party or
by which the Borrower or any of its Restricted Subsidiaries or any of its or
their properties may be bound, which default could reasonably be considered to
have a Materially Adverse Effect.
(q) Compliance with Regulations U and X. The Borrower is
neither engaged principally in, nor as one of its important activities in the
business of, extending credit for the purpose of purchasing or carrying any
"margin security" or "margin stock" as defined in Regulations U and X (12 C.F.R.
Parts 221 and 224) of the Board of Governors of the Federal Reserve System
(herein called "margin stock"). None of the proceeds of the Facility B Loans
will be used, directly or indirectly, for the purpose of purchasing or carrying
any margin stock or for the purpose of reducing or retiring Indebtedness which
was originally incurred to purchase or carry margin stock or for any other
purpose which might constitute this transaction a "purpose credit" within the
meaning of said Regulations U and X. Neither the Borrower nor any bank acting on
its behalf has taken or will take any action which might cause this Agreement or
the Notes to violate Regulation U or X or any other regulation of the Board of
Governors of the Federal Reserve System or to violate the Securities Exchange
Act of 1934, in each case as now in effect or as the same may hereafter be in
effect. If so requested by the Lender, the Borrower will furnish the Lender with
(i) a statement or statements in conformity with the requirements of Federal
Reserve Forms G-3 and/or U-1 referred to in Regulation U of said Board of
Governors and (ii) other documents evidencing its compliance with the margin
regulations, including without limitation an opinion of counsel in form and
substance satisfactory to the Lenders. Neither the making of the Facility B
Loans nor the use of proceeds thereof will violate, or be inconsistent with, the
provisions of Regulation U or X of said Board of Governors.
(r) Solvency. As of the Agreement Date and after giving effect
to the transactions contemplated by the Loan Documents (i) the property of the
Borrower and its Restricted Subsidiaries, taken as a whole, at a fair valuation,
will exceed their debt; (ii) the capital of the Borrower and its Restricted
Subsidiaries, taken as a whole, will not be unreasonably small to conduct their
business; (iii) the Borrower and its Restricted Subsidiaries, taken as a whole,
will not have incurred debts, or have intended to incur debts, beyond their
ability to pay such debts as they mature; and (iv) the present fair salable
value of the assets of the Borrower and its Restricted Subsidiaries, taken as a
whole, will be greater than the amount that will be required to pay their
probable liabilities (including debts) as they become absolute and matured. For
purposes of this Section, "debt" means any liability on a claim, and "claim"
means (i) the right to payment, whether or not such right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
undisputed, legal, equitable, secured or unsecured, or (ii) the right to an
equitable remedy for breach of performance if such breach gives rise to a right
to payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, undisputed, secured or
unsecured.
(s) Broker's or Finder's Commissions. No broker's or finder's
fee or commission will be payable with respect to the issuance of the Notes, and
no other similar fees or commissions will be payable by the Borrower for any
other services rendered to the Borrower ancillary to the transactions
contemplated herein.
(t) Governmental Regulation. Neither the Borrower nor any of
its Restricted Subsidiaries is required to obtain any consent, approval,
authorization, permit or license which has not already been obtained from, or
effect any filing or registration which has not already been effected with, any
federal, state or local regulatory authority in connection with the performance,
in accordance with their respective terms, of this Agreement or any other Loan
Document the failure of which to obtain could have a Materially Adverse Effect.
(u) Accuracy and Completeness of Information. All information,
reports, prospectuses and other papers and data relating to the Borrower or any
of its Restricted Subsidiaries and furnished by or on behalf of the Borrower or
any of its Restricted Subsidiaries to the Administrative Agent or the Lenders
were, at the time furnished, true, complete and correct in all material respects
to the extent necessary to give the Administrative Agent and the Lenders true
and accurate knowledge of the subject matter.
(v) Payment of Wages. The Borrower and each of its Restricted
Subsidiaries are in compliance with the Fair Labor Standards Act, as amended, in
all material respects, and to the knowledge of the Borrower and each of its
Restricted Subsidiaries, such Persons have paid all minimum and overtime wages
required by law to be paid to their respective employees.
(w) Business. The Borrower's business and the business of its
Restricted Subsidiaries include distributing and acquiring various types of
video, audio, data and program promotion services via satellite and the
internet, and distributing and selling such programming to cable television
systems, satellite dish owners, private network users and other non-broadcast
delivery systems and magazine publishing and related printing activities.
(x) Investment Company Act. Neither the Borrower nor any of
its Restricted Subsidiaries is required to register under the provisions of the
Investment Company Act of 1940, as amended, and neither the entering into or
performance by the Borrower and its Restricted Subsidiaries of this Agreement
and the Loan Documents to which they are respectively party nor the issuance of
the Notes violates any provision of such Act or requires any consent, approval,
or authorization of, or registration with, the Securities and Exchange
Commission, any governmental or public body or authority pursuant to any of the
provisions of such Act.
(y) Year 2000 Compliance. The Borrower and its Restricted
Subsidiaries have reviewed the areas within their businesses and operations
which could be adversely affected by, and have developed or are developing a
program to address on a timely basis, the "Year 2000 Problem" (that is, the risk
that computer applications used by the Borrower and its Restricted Subsidiaries
may be unable to recognize and perform properly date-sensitive functions
involving certain dates prior to and any date after December 31, 1999). Based on
such review and program, the Borrower reasonably believes that the Year 2000
Problem will not have a Materially Adverse Effect on the financial condition,
operations, business, prospects or property of the Borrower and its Restricted
Subsidiaries taken as a whole since December 31, 1997.
Section 4.2 Survival of Representations and Warranties, etc. All
representations and warranties made under this Agreement shall be deemed to be
made, and shall be true and correct, at and as of the Agreement Date and the
date of each Advance hereunder, except to the extent previously fulfilled in
accordance with the terms hereof and to the extent subsequently inapplicable.
All representations and warranties made under this Agreement shall survive, and
not be waived by, the execution hereof by the Lenders and the Administrative
Agent, any investigation or inquiry by any Lender or the Administrative Agent,
or the making of any Advance under this Agreement.
ARTICLE 5
General Covenants
So long as any of the Obligations are outstanding and unpaid or the
Borrower shall have the right to borrow hereunder (whether or not the conditions
to borrowing have been or can be fulfilled), and unless the Required Lenders
shall otherwise consent in writing:
Section 5.1 Preservation of Existence and Similar Matters. The Borrower
will, and, except as permitted by Section 7.5 hereof, will cause each of its
Restricted Subsidiaries to, (i) preserve and maintain its existence, rights,
licenses, and privileges in its jurisdiction of formation and (ii) qualify and
remain qualified and authorized to do business in each jurisdiction in which
such qualification is necessary in view of the character of its properties or
the nature of its business requires such qualification or authorization, except
for qualifications and authorizations, the lack of which, singly or in the
aggregate, has not had and is not likely to have a Materially Adverse Effect.
Section 5.2 Business; Compliance with Applicable Law. The Borrower will,
and will cause each of its Restricted Subsidiaries to (a) engage primarily in
the business described in Section 4.1(w) hereof and related businesses and (b)
comply with the requirements of all Applicable Law, including environmental
laws, except for those laws the non-compliance with which could not reasonably
be expected to have a Materially Adverse Effect.
Section 5.3 Maintenance of Properties. The Borrower will, and will cause
each of its Restricted Subsidiaries to, maintain or cause to be maintained in
the ordinary course of business in good repair, working order, and condition all
properties necessary in its business (whether owned or held under lease).
Section 5.4 Accounting Methods and Financial Records. The Borrower will,
and will cause each of its Restricted Subsidiaries on a consolidated and
consolidating basis to, maintain a system of accounting established and
administered in accordance with GAAP, and will keep adequate records and books
of account in which complete entries will be made in accordance with GAAP and
reflecting all transactions required to be reflected by GAAP and keep accurate
and complete records of their respective properties and assets. The Borrower and
its Restricted Subsidiaries will maintain a fiscal year ending on December 31
unless otherwise agreed by all of the Arrangers.
Section 5.5 Insurance. The Borrower will, and will cause each of its
Restricted Subsidiaries to maintain insurance on its assets and properties and
on its operations including, but not limited to, public liability, business
interruption, property and crime, from responsible insurance companies in such
amounts and against such risks as shall be customary for similar businesses. The
Borrower and each of its Restricted Subsidiaries shall at all times maintain
insurance coverage comparable to that in place on the Agreement Date, taking
into account the growth of the Borrower's and the Restricted Subsidiaries'
business and operations after the Agreement Date.
Section 5.6 Payment of Taxes and Claims. The Borrower will, and will cause
each of its Restricted Subsidiaries to, pay and discharge all taxes,
assessments, and governmental charges or levies imposed upon it or upon its
incomes or profits or upon any properties belonging to it prior to the date on
which penalties attach thereto, and all lawful claims for labor, materials, and
supplies which, if unpaid, might become a Lien other than a Permitted Lien upon
any of its properties; except that, no such tax, assessment, charge, levy, or
claim need be paid which is being contested in good faith by appropriate
proceedings and for which adequate reserves as required by GAAP shall have been
set aside on the appropriate books, but only so long as such tax, assessment,
charge, levy, or claim does not become a Lien or charge other than a Permitted
Lien and no foreclosure, distraint, sale, or similar proceedings shall have been
commenced and remain unstayed for a period of thirty (30) days after such
commencement. The Borrower will, and will cause each of its Restricted
Subsidiaries to, timely file all information returns required by federal, state
or local tax authorities.
Section 5.7 Visits and Inspections. The Borrower will permit, and will
cause each of its Restricted Subsidiaries to permit, representatives of the
Administrative Agent and each Lender to (a) visit and inspect the properties of
the Borrower and each of its Restricted Subsidiaries at reasonable times during
normal business hours, (b) inspect and make extracts from and copies of their
respective books and records, and (c) discuss with their respective principal
officers its businesses, assets, liabilities, financial positions, results of
operations, and business prospects relating to the Borrower and each of its
Restricted Subsidiaries. The Borrower and each of its Restricted Subsidiaries
will also permit representatives of the Administrative Agent to discuss with
their respective accountants the Borrower's and its Restricted Subsidiaries'
businesses, assets, liabilities, financial positions, results of operations and
business prospects.
Section 5.8 Payment of Indebtedness. The Borrower will pay, and will cause
each of its Restricted Subsidiaries to pay, subject to any provisions therein
regarding subordination, any and all of their respective Indebtedness when and
as the same becomes due, other than Indebtedness the non-payment of which could
not reasonably be expected to have a Materially Adverse Effect, and which the
Borrower or such Restricted Subsidiary is contesting in good faith and has
established adequate reserves on its books and records.
Section 5.9 Use of Proceeds. The Borrower will use the proceeds of the
Facility B Loans for (1) general corporate purposes, including payment of
transaction fees and expenses; (2) working capital and capital expenditures; and
(3) payment of the purchase price for the TV Guide Transaction, the Liberty
Transaction and other Acquisitions and Investments permitted herein, and (4) for
payment of the purchase price for the TV Guide Transaction, the cash portion of
which shall not exceed $800,000,000.
Section 5.10 ERISA. The Borrower shall (a) notify the Lenders as soon as
practicable of any Reportable Event for which the Pension Benefit Guaranty
Corporation has not waived the thirty (30) day notice requirement and of any
additional act or condition arising in connection with any such Plan which the
Borrower believes might constitute grounds for the termination thereof by the
Pension Benefit Guaranty Corporation or for the appointment by the appropriate
United States District Court of a trustee to administer such Plan and (b)
furnish to the Lenders, promptly upon the Lenders' request therefor, such
additional information concerning any such Plan as may be reasonably requested
by the Lenders.
Section 5.11 Indemnity. The Borrower agrees to indemnify and hold harmless
each Lender and the Administrative Agent, and each of their respective
affiliates, employees, representatives, shareholders, officers and directors
(any of the foregoing shall be an "Indemnitee") from and against any and all
claims, liabilities, losses, damages, actions, reasonable attorneys' fees and
expenses (as such fees and expenses are incurred) and demands by any party
(other than the Borrower), including the costs of investigating and defending
such claims, whether or not the Borrower, any of its Restricted Subsidiaries or
the Person seeking indemnification is the prevailing party, (a) resulting from
any breach or alleged breach by the Borrower or any of its Restricted
Subsidiaries of the Borrower of any representation or warranty made hereunder;
or (b) otherwise arising out of (i) the Facility B Commitments or otherwise
under this Agreement, any Loan Document or any transaction contemplated hereby
or thereby, including, without limitation, the use of the proceeds of the
Facility B Loans hereunder in any fashion by the Borrower or the performance of
their respective obligations under the Loan Documents by the Borrower, (ii)
allegations of any participation by the Lenders or the Administrative Agent, or
any of them, in the affairs of the Borrower or any of its Restricted
Subsidiaries, or allegations that any of them has any joint liability with the
Borrower or any of its Restricted Subsidiaries for any reason, (iii) any claims
against the Lenders or the Administrative Agent, or any of them, by any
shareholder or other investor in or lender to the Borrower or any of its
Restricted Subsidiaries, by any brokers or finders or investment advisers or
investment bankers retained by the Borrower or by any other third party, arising
out of the Facility B Commitment or otherwise under this Agreement or any other
Loan Document; or (c) in connection with taxes (not including federal or state
income taxes or other taxes based solely upon the revenues of such Persons),
fees, and other charges payable in connection with the Facility B Loans, or the
execution, delivery, and enforcement of this Agreement, the Security Documents,
the other Loan Documents, and any amendments thereto or waivers of any of the
provisions thereof; unless the Person seeking indemnification hereunder is
determined in such case to have acted with gross negligence or willful
misconduct, in any case, by a final, non-appealable judicial order. The
obligations of the Borrower under this Section 5.11 are in addition to, and
shall not otherwise limit, any liabilities which the Borrower might otherwise
have in connection with any warranties or similar obligations of the Borrower in
any other Loan Document.
Section 5.12 Further Assurances. The Borrower will promptly cure, or cause
to be cured, defects in the creation and issuance of the Notes and the execution
and delivery of the Loan Documents (including this Agreement), resulting from
any act or failure to act by the Borrower or any of its Restricted Subsidiaries
or any employee or officer thereof. The Borrower at its expense will promptly
execute and deliver to the Administrative Agent and the Lenders, or cause to be
executed and delivered to the Administrative Agent and the Lenders, all such
other and further documents, agreements, and instruments in compliance with or
accomplishment of the covenants and agreements of the Borrower in the Loan
Documents, including this Agreement, or to correct any omissions in the Loan
Documents, or more fully to state the obligations set out herein or in any of
the Loan Documents, or to obtain any consents, all as may be necessary or
appropriate in connection therewith as may be reasonably requested.
Section 5.13 Broker's Claims. The Borrower hereby indemnifies and agrees to
hold the Administrative Agent and each of the Lenders harmless from and against
any and all losses, liabilities, damages, costs and expenses which may be
suffered or incurred by the Administrative Agent and each of the Lenders in
respect of any claim, suit, action or cause of action now or hereafter asserted
by a broker or any Person acting in a similar capacity arising from or in
connection with the execution and delivery of this Agreement or any other Loan
Document or the consummation of the transactions contemplated herein or therein.
Section 5.14 Covenants Regarding Formation of Subsidiaries and
Acquisitions. At the time of (i) any Acquisition by a Restricted Subsidiary of
the Borrower, (ii) any Acquisition of a Person which becomes a Restricted
Subsidiary of the Borrower, or (iii) the formation of any new Restricted
Subsidiary of the Borrower which is permitted under this Agreement, (X) the
Borrower will, and will cause its Restricted Subsidiaries, as appropriate, (1)
to pledge to the Administrative Agent all of the stock, partnership interests or
other ownership interests (or other instruments or securities evidencing
ownership) and intercompany indebtedness of such Restricted Subsidiary which is
acquired, formed, or beneficially owned by the Borrower or any of its Restricted
Subsidiaries, as the case may be, as additional Collateral for the Obligations
to be held by the Administrative Agent in accordance with the terms of an extant
Borrower Pledge Agreement, an extant Subsidiary Pledge Agreement, or a new
Borrower Pledge Agreement or Subsidiary Pledge Agreement in substantially the
forms of Exhibits C and G, respectively, attached hereto and, if such Restricted
Subsidiary is a Non-Guarantor Subsidiary, an Assignment of Notes, if applicable,
and (2) execute and deliver to the Administrative Agent all such documentation
for such pledge as, in the reasonable opinion of the Administrative Agent, is
appropriate with respect to such Acquisition or the formation of such Restricted
Subsidiary, and (Y) if such Restricted Subsidiary is not a Non-Guarantor
Subsidiary, the Borrower shall cause such Restricted Subsidiary to execute and
deliver a Subsidiary Guaranty substantially in the form of Exhibit F attached
hereto. Notwithstanding the foregoing, the Borrower shall cause any Restricted
Subsidiary that makes a loan to a Non-Guarantor Subsidiary at any time to
execute and deliver an Assignment of Notes substantially in the form of Exhibit
B attached hereto at the time of the making of such loan. Any document,
agreement or instrument executed or issued pursuant to this Section 5.14 shall
be a "Loan Document" for purposes of this Agreement.
Section 5.15 Year 2000 Compliance. The Borrower will, and will cause each
of its Restricted Subsidiaries to, promptly notify the Administrative Agent in
the event that the Borrower or any of its Restricted Subsidiaries discovers or
determines that any computer application (including those of its suppliers,
vendors, and customers) that is material to the Borrower's or any of its
Restricted Subsidiaries' businesses and operations will not be Year 2000
compliant, except to the extent that such failure could not reasonably be
expected to have a Materially Adverse Effect.
Section 5.16 Non-Guarantor Subsidiary Distributions. On the last day of
each calendar quarter, the Borrower shall cause each Non-Guarantor Subsidiary to
make a distribution to the Borrower in an amount equal to the Borrower's
attributable portion of the EBITDA of such Non-Guarantor Subsidiary for the four
(4) quarter period then ended less the amount of all other distributions made
during such period in respect of the EBITDA of such Non-Guarantor Subsidiary;
provided however, that with respect to (a) SNG only, the Borrower may permit SNG
to retain (a) any EBITDA attributable to any period prior to the Agreement Date
and (ii) up to $12,000,000 of EBITDA attributable to any period after the
Agreement Date and (b) Sneak Prevue LLC only, the Borrower may permit Sneak
Prevue LLC to retain up to $3,000,000 of EBITDA after the Agreement Date.
ARTICLE 6
Information Covenants
So long as any of the Obligations is outstanding and unpaid or the
Borrower has a right to borrow hereunder (whether or not the conditions to
borrowing have been or can be fulfilled) and unless the Required Lenders shall
otherwise consent in writing, the Borrower will furnish or cause to be furnished
to each Lender and to the Administrative Agent at their respective offices:
Section 6.1 Quarterly Financial Statements and Information. Within
forty-five (45) days after the last day of each of the first three (3) quarters
in each calendar year, the unaudited consolidated and consolidating balance
sheet of the Borrower and its Subsidiaries as of the end of such quarter, and
the related unaudited consolidated and consolidating statement of operations and
related unaudited consolidated statement of cash flows of the Borrower and its
Subsidiaries for the elapsed portion of the year ended with the last day of such
quarter, certified by an Authorized Signatory of the Borrower to have been
prepared in accordance with GAAP and, in his or her opinion, present fairly the
financial position of the Borrower and its Subsidiaries, as of the end of such
period and the results of operations for such period, and for the elapsed
portion of the year ended with the last day of such period, subject only to
normal year-end adjustments.
Section 6.2 Annual Financial Statements and Information; Certificate of No
Default. Within ninety (90) days after the end of each calendar year the audited
consolidated balance sheet of the Borrower and its Subsidiaries and the related
audited consolidated statements of operations and related audited consolidated
statements of cash flows of the Borrower and its Subsidiaries for such calendar
year and set forth in comparative form such figures as of the end of and for the
previous calendar year, all in reasonable detail, and in each case prepared in
accordance with GAAP throughout the periods involved and shall be certified by
independent certified public accountants of recognized national standing which
certification shall (i) be accompanied by the opinion of such accountants
without reservation or exception as to the scope of their audit, (ii) state that
the examination by such accountants in connection with the financial statements
has been made in accordance with generally accepted auditing standards, (iii)
include the opinion of such accountants that such financial statements have been
prepared in accordance with GAAP, except as otherwise specified in such opinion,
and (iv) stating that, in making the examination necessary for their audit of
the financial statements of the Borrower for such year, nothing came to their
attention of a financial or accounting nature that caused them to believe that
the Borrower was not in compliance with the terms, covenants, provisions or
conditions of this Agreement, or that there shall have occurred any condition or
event which would constitute a Default or, if so, specifying all such instances
of non-compliance and the nature and status thereof.
Section 6.3 Performance Certificates. At the time the financial statements
are furnished pursuant to Sections 6.1 and 6.2 hereof, a certificate of an
Authorized Signatory of the Borrower in form and substance satisfactory to the
Administrative Agent:
(a) setting forth as of the end of such quarter or calendar
year, as the case may be, the arithmetical calculations required to establish
(i) adjustments to the Applicable Margin, as provided for in Section 2.3(g)
hereof, and (ii) whether or not the Borrower was in compliance with the
requirements of Sections 7.8, 7.9 and 7.10 hereof;
(b) stating that the signer has reviewed the terms of this
Agreement and that in the course of the performance of his or her duties, he or
she would normally have knowledge of any condition or event which would
constitute a Default and certifying that, to the best of his or her knowledge,
no Default has occurred as of the end of such quarter or year, as the case may
be, or, if a Default has occurred, disclosing each such Default and its nature,
when it occurred, whether it is continuing, and the steps being taken by the
Borrower with respect to such Default; and
(c) with respect to the financial statements furnished
pursuant to Section 6.2 hereof, attaching unaudited consolidating schedules with
respect to the balance and statement of operations.
Section 6.4 Copies of Other Reports.
(a) Promptly upon receipt thereof, copies of all reports, if
any, submitted to the Borrower by its independent public accountants including,
without limitation, any management report prepared in connection with the annual
financial statements referred to in Section 6.2 hereof.
(b) Within ninety (90) days after the end of each calendar
year of the Borrower, the annual budget for the Borrower.
(c) Promptly after the preparation of the same, copies of all
material reports or financial information filed with any governmental agency,
department, bureau, division or other governmental authority or regulatory body
evidencing facts or containing information which could have a Materially Adverse
Effect.
(d) From time to time and promptly upon each request, such
data, certificates, reports, statements, documents, or further information
regarding the business, assets, liabilities, financial position, projections,
results of operations of the Borrower or any of its Restricted Subsidiaries as
the Administrative Agent, upon request of the Required Lenders, may reasonably
request.
Section 6.5 Notice of Litigation and Other Matters. Prompt notice of the
following events as to which the Borrower has received notice or otherwise
become aware thereof:
(a) The commencement of all proceedings and investigations by
or before any governmental body and all actions and proceedings in any court or
before any arbitrator against or in any other way relating adversely and
directly to the Borrower or any of its Restricted Subsidiaries or any of its
properties, assets, or businesses, or which calls into question the validity of
this Agreement or any other Loan Document, which, if determined adversely to the
Borrower or such Restricted Subsidiary, could reasonably be expected to have a
Materially Adverse Effect.
(b) Any material adverse change with respect to the business,
assets, liabilities, financial position, or results of operations of the
Borrower or any of its Restricted Subsidiaries, other than changes in the
ordinary course of business which have not had and are not likely to have a
Materially Adverse Effect.
(c) Any Default or the occurrence or non-occurrence of any
event (A) which constitutes, or which with the passage of time or giving of
notice or both would constitute a default by the Borrower or any Restricted
Subsidiary of the Borrower under any material agreement to which the Borrower or
any Restricted Subsidiary of the Borrower is party or by which any of their
respective properties may be bound, and (B) which could reasonably be expected
to have a Materially Adverse Effect, giving in each case the details thereof and
specifying the action proposed to be taken with respect thereto.
(d) The occurrence of any Reportable Event or a "prohibited
transaction" (as such term is defined in Section 406 of ERISA or Section 4975 of
the Code) with respect to any Plan or the institution or threatened institution
by the Pension Benefit Guaranty Corporation of proceedings under ERISA to
terminate or to partially terminate any such Plan or the commencement or
threatened commencement of any litigation regarding any such Plan or naming it
or the trustee of any such Plan with respect to such Plan.
(e) The occurrence of any event subsequent to the Agreement
Date which, if such event had occurred prior to the Agreement Date, would have
constituted an exception to the representation and warranty in Section 4.1(n) of
this Agreement.
Section 6.6 Loss of Agreements. The Borrower shall notify the
Administrative Agent and the Lenders within fifteen (15) days of the occurrence
of any termination of any MSO Agreement or DBS Agreement which results in a
reduction of twenty-five percent (25%) or more of the subscribers of all
distributors of the programming of the Borrower and its Restricted Subsidiaries
in any calendar quarter when added to all other terminations and after giving
effect to any additions in such quarter. In addition, the Borrower shall notify
the Administrative Agent and Lenders promptly upon receipt of any notice that a
Transponder Lease Agreement is in default.
ARTICLE 7
Negative Covenants
So long as any of the Obligations is outstanding and unpaid or the
Borrower has a right to borrow hereunder (whether or not the conditions to
borrowing have been or can be fulfilled) and unless the Required Lenders shall
otherwise give their prior consent in writing:
Section 7.1 Indebtedness of the Borrower. The Borrower shall not create,
assume, incur or otherwise become or remain obligated in respect of, or permit
to be outstanding, and the Borrower shall not permit any of its Restricted
Subsidiaries to create, assume, incur or otherwise become or remain obligated in
respect of or permit to be outstanding, any Indebtedness for Money Borrowed
except:
(a) the Obligations;
(b) Indebtedness existing as of the Agreement Date as
described on Schedule 3 attached hereto;
(c) Indebtedness owed to the Borrower or to any of its
Restricted Subsidiaries (other than Non-Guarantor Subsidiaries) by the Borrower
or any of its Restricted Subsidiaries (other than Non-Guarantor Subsidiaries);
(d) obligations under Interest Hedge Agreements in respect of
the Facility B Loans and the Facility A Loans;
(e) unsecured subordinated Indebtedness; provided, that (i)
such Indebtedness (A) is expressly subordinated in all respects to the
Obligations, (B) has a final maturity at least one year after the Maturity Date,
and (C) has no terms or conditions (including payment terms) which are more
onerous than the terms and conditions contained herein and in the other Loan
Documents, and (ii) on the date of incurrence thereof, no Default exists or
would be caused thereby;
(f) Indebtedness for Money Borrowed assumed in connection with
any Acquisition permitted hereunder; provided, that (i) such Indebtedness for
Money Borrowed (A) is unsecured, (B) has a final maturity at least one year
after the Maturity Date, (C) has no terms or conditions (including payment
terms) which are more onerous than the terms and conditions contained herein and
in the other Loan Documents and (D) was not incurred to finance all or part of
the purchase price with respect to such Acquisition and (ii) on the date of
assumption thereof, no Default exists or would be caused thereby;
(g) other Indebtedness for Money Borrowed of the Borrower not
to exceed $50,000,000 in the aggregate at any time outstanding; provided,
however, that (i) no Default exists prior to or after giving effect to the
incurrence thereof, (ii) the principal amount thereof which is secured by Liens
does not exceed $20,000,000 in the aggregate outstanding at any time and (iii)
the principal amount thereof incurred by Non-Guarantor subsidiaries does not
exceed $10,000,000 in the aggregate;
(h) Indebtedness of the Non-Guarantor Subsidiaries owed
to the Borrower as permitted in Section 7.2(c); and
(i) Indebtedness evidenced by the Borrower's 8.125% Senior
Subordinated Notes due 2009 in an aggregate principal amount not to exceed
$400,000,000 and Guarantees thereof by the Restricted Subsidiaries (other than
Non-Guarantor Subsidiaries) of the Borrower.
Section 7.2 Investments and Acquisitions. The Borrower shall not, and shall
not permit any of its Restricted Subsidiaries to, make any loan, advance, or
otherwise acquire evidences of indebtedness, Capital Stock or other securities
of any Person, except that the Borrower and its Restricted Subsidiaries may:
(a) complete (i) the TV Guide Transaction and (ii) the
Liberty Transaction;
(b) make loans or advances to Non-Guarantor Subsidiaries for
working capital and cash management purposes;
(c) if the Leverage Ratio (after giving effect to such
Acquisition or Investment) on the date of such Acquisition or Investment is
equal to or less than 3.5 to 1.0 and so long as no Default then exists or would
be caused thereby, make any other Acquisition or Investment; and
(d) if the Leverage Ratio (after giving effect to such
Acquisition or Investment) on the date of such Acquisition or Investment is
greater than 3.5 to 1.0 and so long as no Default then exists or would be caused
thereby, make any other Acquisition or Investment that does not exceed (i)
$150,000,000 for any single Investment or Acquisition and (ii) $400,000,000 in
the aggregate for all Investments and Acquisitions after the Agreement Date; and
(e) purchase or otherwise acquire and own any of the
following:
(i) direct obligations of the United States of
America (including any agency or instrumentality thereof) for the
payment of which the full faith and credit of the United States of
America is pledged maturing within three hundred sixty-five (365) days
of the date of acquisition thereof;
(ii) time deposit accounts, certificates of deposit
and money market deposits maturing within ninety (90) days of the date
of acquisition thereof issued by a bank or trust company organized
under the laws of the United States of America or any state thereof
having capital, surplus and undivided profits aggregating in excess of
$500,000,000 and whose long-term debt is rated "A-3" or "A-" (or
higher) according to Moody's Investors Service, Inc. or Standard and
Poor's Ratings Group, a division of McGraw-Hill, Inc. (or such similar
equivalent rating by at least one "nationally recognized statistical
rating organization" (as defined in Rule 436 under the Securities and
Exchange Act of 1993, as amended));
(iii) repurchase obligations with a term of not more
than thirty (30) days for underlying securities of the types described
in clause (i) entered into with:
(A) a bank meeting the qualifications
described in clause (ii) above, or
(B) any primary government securities dealer
reporting to the Market Reports Division of the Federal
Reserve Bank of New York;
(iv) commercial paper, maturing not more than ninety
(90) days after the date of acquisition, issued by a corporation (other
than an Affiliate of the Borrower) organized and in existence under the
laws of the United States of America with a rating at the time as of
which any Investment therein is made of "P-1" (or higher) according to
Moody's Investors Service, Inc. or "A-1" (or higher) according to
Standard and Poor's Ratings Group, a division of McGraw-Hill, Inc. (or
such similar equivalent rating by at least one "nationally recognized
statistical rating organization" (as defined in Rule 436 under the
Securities and Exchange Act of 1993, as amended)); and
(v) direct obligations (or certificates representing
an ownership interest in such obligations) of any state of, or
municipality within, the United States of America (including any agency
or instrumentality thereof) for the payment of which the full faith and
credit of such state or municipality is pledged and which are not
callable or redeemable at the issuer's option, provided that:
(A) the long-term debt of such state or
municipality is rated "A-3" or "A-" (or higher) according to
Moody's Investor Service, Inc. or Standard and Poor's Ratings
Group, a division of McGraw-Hill, Inc. (or such similar
equivalent rating by at least one "nationally recognized
statistical rating organization" (as defined in Rule 436 under
the Securities and Exchange Act of 1993, as amended)), and
(B) such obligations mature within one
hundred eighty (180) days of the date of acquisition thereof.
Section 7.3 Limitation on Liens. The Borrower shall not create, assume,
incur or permit to exist or to be created, assumed, incurred or permitted to
exist, directly or indirectly, and the Borrower shall not permit any of its
Restricted Subsidiaries to create, assume, incur or permit to exist, or to be
created, assumed or incurred or permitted to exist, directly or indirectly, any
Lien on any of its properties or assets, whether now owned or hereafter
acquired, except for Permitted Liens. The Borrower shall not permit any of its
Restricted Subsidiaries to undertake, covenant or agree with any third party
that it will not create, assume, incur or permit to exist any lien in favor of
the Administrative Agent or the Lenders securing the Obligations on any of its
assets or properties, whether now owned or hereafter acquired, except for
Permitted Liens.
Section 7.4 Amendment and Waiver. The Borrower shall not enter into any
material amendment of, or agree to or accept any material waiver of the Articles
of Incorporation and Bylaws of the Borrower or its Restricted Subsidiaries, in
each case which would have or could reasonably be expected to have an adverse
effect upon the rights and remedies of the Lenders hereunder or under any Loan
Document.
Section 7.5 Liquidation; Disposition or Acquisition of Assets. The Borrower
shall not and shall not at any time permit any of its Restricted Subsidiaries to
(a) liquidate or dissolve itself (or suffer any liquidation or dissolution) or
otherwise wind up, or (b) enter into any merger or consolidation, or (c) sell,
lease, abandon, transfer or otherwise dispose of any assets (other than contract
rights) or business other than, subject to compliance with Section 2.7(b)
hereof, Permitted Asset Sales so long as the Borrower is in pro forma compliance
with Sections 2.7(b), 7.8, 7.9 and 7.10 after giving effect to any such asset
sale provided that if the Net Proceeds of such sale, transfer or disposition are
greater than $100,000,000, the Borrower provides to the Administrative Agent a
certificate indicating pro forma compliance with Sections 7.8, 7.9 and 7.10 from
the date of such sale, transfer or disposition through the Maturity Date and;
provided, however that (i) the Borrower may merge or consolidate with a
wholly-owned Restricted Subsidiary of the Borrower (so long as the Borrower is
the surviving entity), and (ii) wholly-owned Restricted Subsidiaries of the
Borrower may merge or consolidate with other wholly-owned Restricted Subsidiary
or with the Borrower.
Section 7.6 Limitation on Guaranties. The Borrower shall not, and shall not
permit any of its Restricted Subsidiaries to, at any time Guaranty, or assume,
be obligated with respect to, or permit to be outstanding any Guaranty of, any
obligation of any other Person other than (a) as may be contained in any Loan
Document, (b) obligations under agreements to indemnify Persons who have issued
bid or performance bonds or letters of credit issued in lieu of such bonds in
the ordinary course of business of the Borrower or its Restricted Subsidiaries,
as the case may be, securing other performance by the Borrower or any of its
Restricted Subsidiaries of activities otherwise permissible hereunder, (c) a
guaranty by endorsement of negotiable instruments for collection in the ordinary
course of business and (d) Guaranties of Indebtedness permitted under Section
7.1 hereof.
Section 7.7 Restricted Payments and Purchases. The Borrower shall not, and
shall not permit any of its Restricted Subsidiaries to, directly or indirectly
declare or make any Restricted Payment or Restricted Purchase, provided, however
that (a) so long as no Default then exists or would be caused thereby, and so
long as on such date, the Borrower demonstrates that its Leverage Ratio before
and after giving effect to such Restricted Payment is less than 3.0 to 1.0, and
that it will be in compliance on a pro forma basis with Sections 7.8, 7.9 and
7.10 hereof from the date of such Restricted Payment through the Maturity Date
after giving effect to such Restricted Payment, the Borrower may make Restricted
Payments in an amount not to exceed the amount of (i) its EBITDA for the
immediately preceding four (4) calendar quarters minus (ii) the aggregate amount
of any Restricted Payments made under this Section 7.7 during the immediately
preceding four (4) calendar quarters, (b) any Restricted Subsidiary of the
Borrower may make distributions to the Borrower or another Restricted Subsidiary
of the Borrower and (c) to the extent that a Restricted Subsidiary has made
distributions to the Borrower or another Restricted Subsidiary, such Restricted
Subsidiary may make distributions to other holders of equity interests in such
Restricted Subsidiary in proportion to the ownership interest in such Restricted
Subsidiary held by such holder.
Section 7.8 Leverage Ratio. (a) As of the end of any calendar quarter and
(b) at the time of any Advance increasing the principal amount of the Facility B
Loans (after giving effect to any such Advance), the Borrower shall not permit
the Leverage Ratio to exceed the ratios set forth below during the periods
indicated:
(i) Prior to the receipt of (x) the Threshold Debt
Proceeds and (y) the Cash Equity Proceeds:
Period Ratio
Agreement Date through March 30, 2000 4.50 to 1.0
March 31, 2000 through March 30, 2002 4.00 to 1.0
March 31, 2002 and thereafter 3.50 to 1.0
(ii) After the receipt of (x) the Threshold Debt
Proceeds and (y) the Cash Equity Proceeds:
Period Ratio
Agreement Date through March 30, 2002 5.00 to 1.0
March 31, 2002 and thereafter 4.00 to 1.0
Section 7.9 Fixed Charge Coverage Ratio. (a) As of the end of any calendar
quarter and (b) at the time of any Advance increasing the principal amount of
the Facility B Loans (after giving effect to such Advances), the Borrower shall
not permit the ratio of (x) its EBITDA for the four (4) calendar quarters
immediately preceding (or, in the case of Section 7.9(a) hereof, ending on) the
calculation date to (y) its Fixed Charges for such period to be less than 1.25
to 1.0.
Section 7.10Interest Coverage Ratio. (a) As of the end of any calendar
quarter and (b) at the time of any Advance increasing the principal amount of
the Facility B Loans (after giving to effect to such Advance), the Borrower
shall not permit the ratio of (x) its EBITDA for the four (4) calendar quarters
immediately preceding (or, in the case of Section 7.10(a) hereof, ending on) the
calculation date to (y) Total Interest Expense for such period to be less than
the amounts set forth for such date in the table below:
Period Interest Coverage Ratio
Agreement Date through March 30, 2002 2.50 to 1.0
March 31, 2002 and all periods thereafter 3.00 to 1.0
Section 7.11 Affiliate Transactions. Except for transactions pursuant to
any Transponder Lease Agreement between the Borrower and an Affiliate,
agreements which are direct cost or direct revenue pass through in nature and
any renewals or extensions of any of the foregoing, the Borrower shall not, and
shall not permit any of its Restricted Subsidiaries to, at any time engage in
any transaction with an Affiliate (other than the Borrower or a Restricted
Subsidiary of the Borrower), nor make an assignment or other transfer of any of
its assets to any Affiliate (other than the Borrower or a Restricted Subsidiary
of the Borrower), on terms less advantageous than would be the case if such
transaction had been effected with a non-Affiliate.
Section 7.12 ERISA Liabilities. The Borrower shall not, and shall not
permit any of its ERISA Affiliates to, fail to meet all of the applicable
minimum funding requirements of ERISA and the Code, without regard to any
waivers thereof, and, to the extent that the assets of any of its Plans would be
less than an amount sufficient to provide all accrued benefits payable under
such Plans, shall make the maximum deductible contributions allowable under the
Code. The Borrower shall not, and shall not permit any of its Restricted
Subsidiaries to, become a participant in any Multiemployer Plan.
Section 7.13 Limitation on Upstream Dividends by Subsidiaries. The Borrower
shall not permit any of its Restricted Subsidiaries to enter into or agree, or
otherwise become subject, to any agreement, contract or other arrangement with
any Person pursuant to the terms of which (a) such Restricted Subsidiary is or
would be prohibited from declaring or paying any cash dividends or distributions
on any class of its stock or any partnership interests owned directly or
indirectly by the Borrower or from making any other distribution on account of
any class of any such stock or any such partnership interests owned directly or
indirectly by the Borrower (herein referred to as "Upstream Dividends") or (b)
the declaration or payment of Upstream Dividends by a Restricted Subsidiary to
the Borrower or to another Restricted Subsidiary of the Borrower, on an annual
or cumulative basis, is or would be otherwise limited or restricted.
Section 7.14 Limitation on Prepayment of Subordinated Debt. The
Borrower shall not redeem any Subordinated Debt prior to the maturity date
thereof unless the Leverage Ratio covenant set forth in Section 7.8 hereof has
been permanently set at a maximum permitted Leverage Ratio of 3.5 to 1.0 and the
Borrower is in compliance therewith.
ARTICLE 8
Default
Section 8.1 Events of Default. Each of the following shall constitute an
Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule, or regulation of any
governmental or non-governmental body:
(a) Any representation or warranty made under this Agreement
shall prove incorrect or misleading in any material respect when made or deemed
to have been made pursuant to Section 4.2 hereof;
(b) The Borrower shall default in the payment of (i) any
interest, fees and other amounts payable hereunder or under the Notes, this Loan
Agreement, or any of them, or under the other Loan Documents and such default
shall continue unremedied for a period of five (5) days or (ii) any principal
when due under the Notes, this Loan Agreement, or any of them;
(c) The Borrower shall default in the performance or
observance of any agreement or covenant contained in (i) Sections 6.1, 6.2 or
6.3 hereof, which default shall continue for a period of ten (10) days, or (ii)
Section 6.6 or Article 7 hereof;
(d) The Borrower shall default in the performance or
observance of any other agreement or covenant contained in this Agreement not
specifically referred to elsewhere in this Section 8.1, and such default shall
not be cured to the Required Lenders' satisfaction within a period of thirty
(30) days from the date of the occurrence of such default;
(e) There shall occur any Default in the performance or
observance of any agreement or covenant or breach of any representation or
warranty contained in any of the Loan Documents (other than this Agreement or as
otherwise provided in this Section 8.1 of this Agreement), which shall not be
cured to the Required Lenders' satisfaction within a period of thirty (30) days
from the occurrence of such default;
(f) There shall be entered a decree or order for relief in
respect of any of the Borrower or any Restricted Subsidiary of the Borrower
under Title 11 of the United States Code, as now constituted or hereafter
amended, or any other applicable federal or state bankruptcy law or other
similar law, or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator, or similar official for the Borrower or any Restricted Subsidiary
of the Borrower or of any substantial part of their respective properties, or
ordering the winding-up or liquidation of the affairs of the Borrower or its
Restricted Subsidiaries or an involuntary petition shall be filed against the
Borrower or any of its Restricted Subsidiaries and a temporary stay entered, and
(i) such petition and stay shall not be diligently contested, or (ii) any such
petition and stay shall continue undismissed for a period of sixty (60)
consecutive days;
(g) The Borrower or any Restricted Subsidiary of the Borrower
shall file a petition, answer, or consent seeking relief under Title 11 of the
United States Code, as now constituted or hereafter amended, or any other
applicable federal or state bankruptcy law or other similar law, or the Borrower
or any Restricted Subsidiary of the Borrower shall consent to the institution of
proceedings thereunder or to the filing of any such petition or to the
appointment or taking of possession of a receiver, liquidator, assignee,
trustee, custodian, sequestrator, or other similar official for the Borrower or
any Restricted Subsidiary of the Borrower or of any substantial part of their
respective properties, or the Borrower or any Subsidiary of the Borrower shall
fail generally to pay its respective debts as they become due, or the Borrower
or any Restricted Subsidiary of the Borrower shall take any action in
furtherance of any such action;
(h) A final judgment shall be entered by any court against the
Borrower or any of its Restricted Subsidiaries for the payment of money which
exceeds $1,000,000, which judgment is not covered by insurance or a warrant of
attachment or execution or similar process shall be issued or levied against
property of the Borrower or any Restricted Subsidiary of the Borrower which,
together with all other such property of the Borrower and its Restricted
Subsidiaries subject to other such process, exceeds in value $1,000,000 in the
aggregate, and if, within thirty (30) days after the entry, issue, or levy
thereof, such judgment, warrant, or process shall not have been paid or
discharged or stayed pending appeal, or if, after the expiration of any such
stay, such judgment, warrant, or process shall not have been paid or discharged;
(i) (i) There shall be at any time any "accumulated funding
deficiency," as defined in ERISA or in Section 412 of the Code, with respect to
any Plan; or (ii) a trustee shall be appointed by a United States District Court
to administer any Plan; or the Pension Benefit Guaranty Corporation shall
institute proceedings to terminate any Plan; or (iii) any of the Borrower and
its ERISA Affiliates shall incur any liability to the Pension Benefit Guaranty
Corporation in connection with the termination of any Plan; or (iv) any Plan or
trust created under any Plan of any of the Borrower and its ERISA Affiliates
shall engage in a non-exempt "prohibited transaction" (as such term is defined
in Section 406 of ERISA or Section 4975 of the Code) which would subject the
Borrower or any ERISA Affiliate to the tax or penalty on "prohibited
transactions" imposed by Section 502 of ERISA or Section 4975 of the Code; and
by reason of any or all of the events described in clauses (i) through (iv), as
applicable, the Borrower shall have waived (and/or is likely to incur) and/or
incurred liability in excess of $1,000,000 in the aggregate;
(j) There shall occur any (i) default under (A) the Facility A
Loan Agreement or (B) any indenture, agreement, or instrument evidencing
Indebtedness for Money Borrowed of the Borrower or any of its Restricted
Subsidiaries having an aggregate principal amount in excess of $20,000,000,
which default is not cured or waived within any applicable cure period and which
default shall give the holder thereof the right to accelerate the obligations
thereunder or (ii) payment default under (after giving effect to any applicable
grace period) or acceleration of the maturity of any Indebtedness for Money
Borrowed of the Borrower or any of its Restricted Subsidiaries having an
aggregate principal amount in excess of $20,000,000;
(k) All or any portion of any Loan Document shall at any time
and for any reason be declared by a court of competent jurisdiction in a suit
with respect to such Loan Document to be null and void, or a proceeding shall be
commenced by any governmental authority involving a legitimate dispute or by the
Borrower or any of its Restricted Subsidiaries having jurisdiction over the
Borrower or any of its Restricted Subsidiaries seeking to establish the
invalidity or unenforceability thereof (exclusive of questions of interpretation
of any provision thereof);
(l) There shall occur any default by the Borrower under or a
cancellation of, without replacement, any Transponder Lease Agreement which
results (or is reasonably likely to result in) a termination of the Borrower's
access to a transponder thereunder;
(m) There shall occur any Change of Control; or
(n) Any Security Document shall for any reason fail or cease
(except by reason of lapse of time) to create a valid and perfected and
first-priority Lien on or security interest in any portion of the Collateral
purported to be covered thereby.
Section 8.2 Remedies. If an Event of Default shall have occurred and shall
be continuing:
(a) With the exception of an Event of Default specified in
Sections 8.1(f) or (g) hereof, the Administrative Agent, shall at the request,
or may with the consent, of the Required Lenders, (i) terminate the Facility B
Commitment, and/or (ii) declare the principal of and interest on the Facility A
Loans and the Notes and all other Obligations to be forthwith due and payable,
without presentment, demand, protest, or notice of any kind, all of which are
hereby expressly waived, anything in this Agreement or in the Notes to the
contrary notwithstanding, or both.
(b) Upon the occurrence an Event of Default under Sections
8.1(f) or (g) hereof, such principal, interest, and other obligations shall
thereupon and concurrently therewith become due and payable, and the Facility B
Commitment shall forthwith terminate, all without any action by the
Administrative Agent or the Lenders or the holders of the Notes, and the
Borrower shall thereupon forthwith deposit in an interest bearing account with
the Administrative Agent, as cash collateral for the Obligations, an amount
equal to the maximum amount concurrently or at any time thereafter available to
be drawn on all outstanding Letters of Credit, all without presentment, demand,
protest, or other notice of any kind, all of which are expressly waived,
anything in this Agreement or in the Notes to the contrary notwithstanding, and
the Borrower hereby pledges to the Administrative Agent and the Lenders and
grants to the Administrative Agent, the Lenders and the Issuing Bank a security
interest in, all such cash as security for the Obligations.
(c) The Administrative Agent, with the concurrence of the
Required Lenders, shall exercise all or part of the post-default rights granted
to it and to them under the Loan Documents or under Applicable Law.
(d) Upon acceleration of the Notes, as provided in subsection
(a) or (b) of this Section 8.2, the Administrative Agent, upon request of the
Required Lenders, shall have the right to the appointment of a receiver for the
properties and assets of the Borrower and its Restricted Subsidiaries, and the
Borrower, for itself and on behalf of its Restricted Subsidiaries, hereby
consents to such rights and such appointment and hereby waives any objection the
Borrower or any Restricted Subsidiary of the Borrower may have thereto or the
right to have a bond or other security posted by the Administrative Agent on
behalf of the Lenders, in connection therewith. The rights of the Administrative
Agent under this Section 8.2(d) shall be subject to its prior compliance with
the Communications Act and the FCC rules and policies promulgated thereunder to
the extent applicable to the exercise of such rights.
(e) The rights and remedies of the Administrative Agent and
the Lenders hereunder shall be cumulative, and not exclusive.
(f) In the event that the Administrative Agent establishes a
cash collateral account as contemplated by this Section 8.2, the Administrative
Agent shall invest all funds in such account in such investments as the
Administrative Agent in its sole and absolute discretion deems appropriate. The
Borrower hereby acknowledges and agrees that any interest earned on such funds
shall be retained by the Administrative Agent as additional Collateral for the
Obligations. Upon satisfaction in full of all Obligations, the Administrative
Agent shall pay any amounts then held in such account to the Borrower.
ARTICLE 9
The Administrative Agent
Section 9.1 Appointment and Authorization. Each Lender hereby irrevocably
appoints and authorizes, and hereby agrees that it will require any transferee
of any of its interest in its Facility B Loans and in its Notes irrevocably to
appoint and authorize, the Administrative Agent to take such actions as its
agent on its behalf and to exercise such powers hereunder as are delegated by
the terms hereof, together with such powers as are reasonably incidental
thereto. Neither the Administrative Agent nor any of its directors, officers,
employees, or agents shall be liable for any action taken or omitted to be taken
by it or them hereunder or in connection herewith, except for its or their own
gross negligence or willful misconduct as determined by a final non-appealable
judicial order of a court of competent jurisdiction.
Section 9.2 Delegation of Duties. The Administrative Agent may execute any
of its duties under the Loan Documents by or through agents or attorneys
selected by it using reasonable care and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible to any Lender for the negligence or misconduct of any agents
or attorneys selected by it with reasonable care.
Section 9.3 Interest Holders. The Administrative Agent may treat each
Lender, or the Person designated in the last notice filed with the
Administrative Agent under this Section 9.3, as the holder of all of the
interests of such Lender in its Facility B Loans and in its Notes until written
notice of transfer, signed by such Lender (or the Person designated in the last
notice filed with the Administrative Agent) and by the Person designated in such
written notice of transfer, in form and substance satisfactory to the
Administrative Agent, shall have been filed with the Administrative Agent.
Section 9.4 Consultation with Counsel. The Administrative Agent may consult
with legal counsel selected by it and shall not be liable for any action taken
or suffered by it in good faith in reliance thereon.
Section 9.5 Documents. The Administrative Agent shall not be under any duty
to examine, inquire into, or pass upon the validity, effectiveness, or
genuineness of this Agreement, any Note, or any instrument, document, or
communication furnished pursuant hereto or in connection herewith, and the
Administrative Agent shall be entitled to assume that they are valid, effective,
and genuine, have been signed or sent by the proper parties, and are what they
purport to be.
Section 9.6 Agents and Affiliates. With respect to the Facility B
Commitments and the Facility B Loans, any Lender which is an Affiliate of the
Administrative Agent shall have the same rights and powers hereunder as any
other Lender, and the Administrative Agent and its other Affiliates may accept
deposits from, lend money to, and generally engage in any kind of business with
the Borrower or any Affiliates of, or Persons doing business with, the Borrower,
as if it were not affiliated with the Administrative Agent and without any
obligation to account therefor.
Section 9.7 Responsibility of the Agents. The duties and obligations of the
Administrative Agent under this Agreement are only those expressly set forth in
this Agreement. The Administrative Agent shall be entitled to assume that no
Default or Event of Default has occurred and is continuing unless it has actual
knowledge, or has been notified by the Borrower, of such fact, or has been
notified by a Lender in writing that such Lender considers that a Default or an
Event of Default has occurred and is continuing, and such Lender shall specify
in detail the nature thereof. The Administrative Agent shall not be liable
hereunder for any action taken or omitted to be taken except for its own gross
negligence or willful misconduct as determined by a final, non-appealable
judicial order of a court of competent jurisdiction. The Administrative Agent
shall provide each Lender with copies of such documents received from the
Borrower as such Lender may reasonably request.
Section 9.8 Action by Administrative Agent.
(a) The Administrative Agent shall be entitled to use its
discretion with respect to exercising or refraining from exercising any rights
which may be vested in it by, and with respect to taking or refraining from
taking any action or actions which it may be able to take under or in respect
of, this Agreement, unless the Administrative Agent shall have been instructed
by the Required Lenders to exercise or refrain from exercising such rights or to
take or refrain from taking such action, provided that the Administrative Agent
shall not exercise any rights under Section 8.2(a) of this Agreement without the
request of the Required Lenders unless time is of the essence, in which case,
such action can be taken. The Administrative Agent shall incur no liability
under or in respect of this Agreement with respect to anything which it may do
or refrain from doing in the reasonable exercise of its judgment or which may
seem to it to be necessary or desirable in the circumstances, except for its
gross negligence or willful misconduct as determined by a final, non-appealable
judicial order of a court of competent jurisdiction.
(b) The Administrative Agent shall not be liable to the
Lenders or to any Lender in acting or refraining from acting under this
Agreement in accordance with the instructions of the Required Lenders (or, if so
required, all Lenders), and any action taken or failure to act pursuant to such
instructions shall be binding on all Lenders. The Administrative Agent shall not
be obligated to take any action which is contrary to law or which would, in its
reasonable opinion, subject it to liability.
Section 9.9 Notice of Default. In the event that the Administrative Agent
or any Lender shall acquire actual knowledge, or shall have been notified in
writing, of any Default, the Administrative Agent or such Lender shall promptly
notify the Lenders and the Administrative Agent (provided failure to give such
notice shall not result in any liability on the part of such Lender or
Administrative Agent), and the Administrative Agent shall take such action and
assert such rights under this Agreement as the Required Lenders shall request in
writing, and the Administrative Agent shall not be subject to any liability by
reason of its acting pursuant to any such request. If the Required Lenders shall
fail to request that the Administrative Agent to take action or to assert rights
under this Agreement in respect of any Default or Event of Default within ten
(10) days after their receipt of the notice of any Default or Event of Default
from the Administrative Agent, or shall request inconsistent action with respect
to such Default or Event of Default, the Administrative Agent may, but shall not
be required to, take such action and assert such rights (other than rights under
Article 8 hereof) as it deems in its discretion to be advisable for the
protection of the Lenders, except that, if the Required Lenders have instructed
the Administrative Agent not to take such action or assert such right, in no
event shall the Administrative Agent act contrary to such instructions unless
time is of the essence, in which case, the Administrative Agent may act in
accordance with its reasonable discretion.
Section 9.10 Responsibility Disclaimed. The Administrative Agent shall not
have any liability or responsibility whatsoever in their capacity as
Administrative Agent:
(a) To the Borrower or any other Person or entity as a
consequence of any failure or delay in performance by or any breach by, any
Lender or Lenders of any of its or their obligations under this Agreement;
(b) To any Lender or Lenders, as a consequence of any failure
or delay in performance by, or any breach by, (i) the Borrower of any of its
obligations under this Agreement or the Notes or any other Loan Document (ii)
any Restricted Subsidiary or any other obligor under any Loan Document;
(c) To any Lender or Lenders for any statements,
representations, or warranties in this Agreement, or any other document
contemplated by this Agreement or any information provided pursuant to this
Agreement, any other Loan Document, or any other document contemplated by this
Agreement, or for the validity, effectiveness, enforceability, or sufficiency of
this Agreement, the Notes, any other Loan Document, or any other document
contemplated by this Agreement; or
(d) To any Person for any act or omission other than that
arising from gross negligence or willful misconduct of the Administrative Agent
as determined by a final, non-appealable judicial order of a court of competent
jurisdiction.
Section 9.11 Indemnification. The Lenders agree to indemnify the
Administrative Agent (to the extent not reimbursed by the Borrower) pro rata
according to their respective Facility B Commitment Ratios, from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including fees and expenses of experts,
agents, consultants, and counsel), or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against the
Administrative Agent in any way relating to or arising out of this Agreement,
any other Loan Document, or any other document contemplated by this Agreement or
any action taken or omitted by the Administrative Agent under this Agreement,
any other Loan Document, or any other document contemplated by this Agreement,
except that no Lender shall be liable to the Administrative Agent for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses, or disbursements resulting from the gross
negligence or willful misconduct of the Administrative Agent, as the case may
be, as determined by a final, non-appealable judicial order of a court of
competent jurisdiction. The provisions of this Section 9.11 shall survive the
termination of this Agreement.
Section 9.12 Credit Decision. Each Lender represents and warrants to each
other and to the Administrative Agent that:
(a) In making its decision to enter into this Agreement and to
make Advances it has independently taken whatever steps it considers necessary
to evaluate the financial condition and affairs of the Borrower and that it has
made an independent credit judgment, and that it has not relied upon information
provided by the Administrative Agent; and
(b) So long as any portion of the Facility B Loans remains
outstanding, it will continue to make its own independent evaluation of the
financial condition and affairs of the Borrower.
Section 9.13 Successor Administrative Agent. Subject to the appointment and
acceptance of a successor Administrative Agent as provided below, the
Administrative Agent may resign at any time by giving written notice thereof to
the Lenders and the Borrower and may be removed at any time for cause by the
Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint a successor Administrative Agent. If no
successor Administrative Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment within thirty (30) days after
the retiring Administrative Agent's giving of notice of resignation or the
Required Lenders' removal of the retiring Administrative Agent, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent which shall be any Lender or a commercial bank organized
under the laws of the United States of America or any political subdivision
thereof which has combined capital and reserves in excess of $250,000,000. Upon
the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges,
duties, and obligations of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. After any retiring Administrative Agent's resignation or removal
hereunder as Administrative Agent, the provisions of this Section 9.13 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as the Administrative Agent.
ARTICLE 10
Change in Circumstances Affecting LIBOR Advances
Section 10.1 LIBOR Basis Determination Inadequate. Notwithstanding anything
contained herein which may be construed to the contrary, if with respect to any
proposed LIBOR Advance for any Interest Period, the Administrative Agent
determines after consultation with the Lenders that deposits in dollars (in the
applicable amount) are not being offered to the Required Lenders in the relevant
market for such Interest Period, the Administrative Agent shall forthwith give
notice thereof to the Borrower and the Lenders, whereupon until the
Administrative Agent notifies the Borrower that the circumstances giving rise to
such situation no longer exist, the obligations of the Lenders to make LIBOR
Advances shall be suspended.
Section 10.2 Illegality. If after the date hereof, the adoption of any
Applicable Law, or any change in any Applicable Law, or any change in
interpretation or administration thereof by any governmental authority, central
bank, or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender with any request or directive (whether or
not having the force of law) of any such authority, central bank, or comparable
agency, shall make it unlawful or impossible for any Lender to make, maintain,
or fund its LIBOR Advances, such Lender shall so notify the Administrative
Agent, and the Administrative Agent shall forthwith give notice thereof to the
other Lenders and the Borrower. Before giving any notice to the Administrative
Agent pursuant to this Section 10.2, such Lender shall designate a different
lending office and shall take such alternative courses of action if such
designation or courses of action will avoid the need for giving such notice and
will not, in the good faith judgment of such Lender, be otherwise
disadvantageous to such Lender. Upon receipt of such notice, notwithstanding
anything contained in Article 2 hereof, the Borrower shall repay in full the
then outstanding principal amount of each affected LIBOR Advance of such Lender
so affected, together with accrued interest thereon, either (a) on the last day
of the then current Interest Period applicable to such Advance if such Lender
may lawfully continue to maintain and fund such Advance to such day or (b)
immediately if such Lender may not lawfully continue to fund and maintain such
Advance to such day. Concurrently with repaying each affected LIBOR Advance of
such Lender, notwithstanding anything contained in Article 2 hereof, the
Borrower shall borrow a Base Rate Advance from such Lender, and such Lender
shall make such Base Rate Advance in an amount such that the outstanding
principal amount of the Note held by such Lender shall equal the outstanding
principal amount of such Note immediately prior to such repayment.
Section 10.3 Increased Costs.
(a) If any Regulatory Change:
(i) shall subject any Lender to any tax, duty, or
other charge with respect to its obligation to make LIBOR Advances, or
shall change the basis of taxation of payments to any Lender of the
principal of or interest on its LIBOR Advances or in respect of any
other amounts due under this Agreement in respect of its LIBOR Advances
or its obligation to make LIBOR Advances (except for changes in the
rate of tax on the overall net income of such Lender); or
(ii) shall impose, modify, or deem applicable any
reserve (including, without limitation, any imposed by the Board of
Governors of the Federal Reserve System and any change in the LIBOR
Reserve Percentage), special deposit, capital adequacy, assessment, or
other requirement or condition against assets of, deposits with or for
the account of, or commitments or credit extended by any Lender, or
shall impose on any Lender or the eurodollar interbank borrowing market
any other condition affecting its obligation to make such LIBOR
Advances;
and the result of any of the foregoing is to increase the cost to such Lender of
making or maintaining any such LIBOR Advances, or to reduce the amount of any
sum received or receivable by such Lender under this Agreement or under its
Notes with respect thereto, then, on the earlier of demand by such Lender or the
Maturity Date, the Borrower agrees to pay to such Lender such additional amount
or amounts as will compensate such Lender for such increased costs. Each Lender
will promptly notify the Borrower and the Administrative Agent of any event of
which it has knowledge, occurring after the date hereof, which will entitle such
Lender to compensation pursuant to this Section 10.3 and will designate a
different lending office and shall take alternative courses of action if such
designation or courses of action will avoid the need for, or reduce the amount
of, such compensation and will not, in the good faith judgment of such Lender,
be otherwise disadvantageous to such Lender.
(b) A certificate of any Lender claiming compensation under
this Section 10.3 and setting forth the additional amount or amounts to be paid
to it hereunder and calculations therefor shall be conclusive in the absence of
manifest error. In determining such amount, such Lender may use any reasonable
averaging and attribution methods. If any Lender demands compensation under this
Section 10.3, the Borrower may at any time, upon at least five (5) Business
Days' prior notice to such Lender, prepay in full the then outstanding affected
LIBOR Advances of such Lender, together with accrued interest thereon to the
date of prepayment, along with any reimbursement required under Section 2.10
hereof. Concurrently with prepaying such LIBOR Advances, the Borrower shall
borrow a Base Rate Advance from such Lender, and such Lender shall make such
Base Rate Advance in an amount such that the outstanding principal amount of the
Notes held by such Lender shall equal the outstanding principal amount of such
Notes immediately prior to such prepayment.
Section 10.4 Effect On Other Advances. If notice has been given pursuant to
Section 10.1, 10.2 or 10.3 hereof suspending the obligation of any Lender to
make any LIBOR Advance, or requiring LIBOR Advances of any Lender to be repaid
or prepaid, then, unless and until such Lender notifies the Borrower that the
circumstances giving rise to such repayment no longer apply, all Advances which
would otherwise be made by such Lender as to the LIBOR Advances shall, at the
option of the Borrower, be made instead as Base Rate Advances.
ARTICLE 11
Miscellaneous
Section 11.1 Notices.
(a) All notices and other communications under this Agreement
shall be in writing and shall be deemed to have been given three (3) days after
deposit in the mail, designated as certified mail, return receipt requested,
post-prepaid, or one (1) day after being entrusted to a reputable commercial
overnight delivery service, or telecopy addressed to the party to which such
notice is directed at its address determined as provided in this Section 11.1.
All notices and other communications under this Agreement shall be given to the
parties hereto at the following addresses:
(i) If to the Borrower, to it at:
TV Guide, Inc.
7140 South Lewis
Tulsa, Oklahoma 74136-5422
Attn: Craig Waggy
Telecopy No. (918) 488-4986
with a copy to:
Sherman & Howard L.L.C.
633 Seventeenth Street, Suite 3000
Denver, Colorado 80202
Attn: Steven D. Miller, Esq.
Telecopy No.: (303) 298-0940
(ii) If to the Administrative Agent, to it at:
Bank of America National Trust and Savings
Association
555 South Flower Street
11th Floor
Los Angeles, California 90071
Attn: Janice Hammond
Telecopy No.: (213) 228-2299
with a copy to:
Powell, Goldstein, Frazer & Murphy LLP
191 Peachtree Street, N.E.
16th Floor
Atlanta, Georgia 30303
Attn: Douglas S. Gosden, Esq.
Telecopy No.: (404) 572-6999
(iii) If to the Lenders, to them at the addresses
set forth on Schedule 4 attached
hereto.
Copies shall be provided to persons other than parties hereto only in the case
of notices under Article 8 hereof and failure to provide such copies shall not
affect the validity of the notice given to the primary recipient.
(b) Any party hereto may change the address to which notices
shall be directed under this Section 11.1 by giving ten (10) days' written
notice of such change to the other parties.
Section 11.2 Expenses. The Borrower agrees to promptly pay:
(a) All reasonable out-of-pocket expenses of the
Administrative Agent in connection with the preparation, negotiation, execution,
and delivery of this Agreement and the other Loan Documents executed on the
Agreement Date, the transactions contemplated hereunder and thereunder, and the
making of the initial Advances hereunder (whether or not such Advances are made)
including, but not limited to, the fees and disbursements of counsel for the
Administrative Agent;
(b) All reasonable out-of-pocket expenses of the
Administrative Agent in connection with the preparation, negotiation, execution
and delivery of any waiver, amendment, or consent by the Administrative Agent
and Lenders, or any of them, relating to this Agreement or the other Loan
Documents whether or not executed, including, but not limited to, the fees and
disbursements of counsel for the Administrative Agent; and
(c) All reasonable out-of-pocket costs and expenses of
enforcement of rights and collection if an Event of Default occurs in the
payment of the Notes, which in each case shall include fees and out-of-pocket
expenses of counsel (including the allocated cost of in-house counsel) for the
Administrative Agent and each of the Lenders, and the reasonable fees and
out-of-pocket expenses of counsel and of any experts, agents, or consultants of
the Administrative Agent and each of the Lenders.
Section 11.3 Waivers. The rights and remedies of the Administrative Agent
and the Lenders under this Agreement and the other Loan Documents shall be
cumulative and not exclusive of any rights or remedies which they would
otherwise have. No failure or delay by the Administrative Agent, the Required
Lenders, or the Lenders in exercising any right shall operate as a waiver of
such right. The Administrative Agent and the Lenders expressly reserve the right
to require strict compliance with the terms of this Agreement in connection with
any funding of a request for an Advance. In the event the Lenders decide to fund
a request for an Advance at a time when the Borrower is not in strict compliance
with the terms of this Agreement, such decision by the Lenders shall not be
deemed to constitute an undertaking by the Lenders to fund any further requests
for Advances or preclude the Lenders from exercising any rights available to the
Lenders under the Loan Documents or at law or equity. Any waiver or indulgence
granted by the Lenders or by the Required Lenders shall not constitute a
modification of this Agreement, except to the extent expressly provided in such
waiver or indulgence, or constitute a course of dealing by the Lenders at
variance with the terms of the Agreement such as to require further notice by
the Lenders of the Lenders' intent to require strict adherence to the terms of
the Agreement in the future.
Section 11.4 Set-Off. In addition to any rights now or hereafter granted
under Applicable Law and not by way of limitation of any such rights, after the
Maturity Date of either Commitment whether by acceleration or otherwise), the
Administrative Agent and the Lenders and any subsequent holder or holders of the
Notes are hereby authorized by the Borrower at any time or from time to time,
without notice 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, time or demand, including, but not limited to,
Indebtedness evidenced by certificates of deposit, in each case whether matured
or unmatured) and any other Indebtedness at any time held or owing by the
Lenders or such holder to or for the credit or the account of the Borrower,
against and on account of the obligations and liabilities of the Borrower, to
the Lenders or such holder under this Agreement, the Notes, and any other Loan
Document, including, but not limited to, all Obligations and any other claims of
any nature or description arising out of or connected with this Agreement, the
Notes, or any other Loan Document, irrespective of whether or not (a) the
Administrative Agent and the Lenders or the holder of the Notes shall have made
any demand hereunder or (b) the Administrative Agent and the Lenders shall have
declared the principal of and interest on the Facility B Loans and Notes and
other amounts due hereunder to be due and payable as permitted by Section 8.2
hereof and although said obligations and liabilities, or any of them, shall be
contingent or unmatured. Any sums obtained by the Administrative Agent, any
Lender or any subsequent holder of the Notes shall be subject to the application
of payments provisions of Article 2 hereof. Upon direction by the Administrative
Agent, with the consent of the Required Lenders, after the Maturity Date
(whether by reason of acceleration or otherwise) each Lender holding deposits of
the Borrower shall exercise its set-off rights as so directed.
Section 11.5 Assignment.
(a) The Borrower may not assign or transfer any of its rights
or obligations hereunder or under the Notes without the prior written consent of
each Lender.
(b) Each of the Lenders may at any time enter into assignment
agreements or participations with respect to its interest hereunder and under
the other Loan Documents with one or more other banks or other Persons,
provided, that (i) all assignments (other than assignments described in clause
(ii) hereof) shall be in minimum principal amounts of $5,000,000 (unless the
Borrower and the Administrative Agent otherwise consent), (ii) each Lender may
sell assignments and participations of up to one hundred percent (100%) of its
interest hereunder to (A) one or more affiliates of such Lender, (B) any Federal
Reserve Bank as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any Operating Circular issued by
such Federal Reserve Bank (no such assignment or participation shall relieve
such Lender from its obligations hereunder) or (C) one or more Lenders, and
(iii) all assignments and participations (other than assignments and
participations described in clause (ii) hereof and participations in Competitive
Bid Loans) hereunder shall be subject to the following additional terms and
conditions:
(A) No such assignment shall be sold without
the written consent of the Administrative Agent, and prior to
the occurrence of a Default, the Borrower, which consents
shall not be unreasonably withheld.
(B) Any Person purchasing a participation or
an assignment of the Facility B Loans from any Lender shall be
required to represent and warrant that its purchase shall not
constitute a "prohibited transaction" (as defined in Section
4.1(n) hereof).
(C) The Borrower, the Lenders, and the
Administrative Agent agree that assignments permitted
hereunder (including the assignment of any Advance or portion
thereof) may be made with all voting rights and shall be made
pursuant to an Assignment and Assumption Agreement. An
administrative fee of $3,500 shall be payable to the
Administrative Agent by the assigning Lender at the time of
any assignment hereunder.
(D) No participation agreement shall confer
any rights under this Agreement or any other Loan Document to
any purchaser thereof, or relieve any issuing Lender from any
of its obligations under this Agreement, and all actions
hereunder shall be conducted as if no such participation had
been granted; provided, however, that any participation
agreement may confer on the participant the right to approve
or disapprove decreases in the interest rate, increases or
forgiveness of the principal amount of the Facility B Loans
participated in by such participant, decreases in fees,
releases of the Collateral or guarantors, except for
Collateral the sale or disposition of which is permitted
hereunder, and extensions of the Maturity Date or other
principal payment date for the Facility B Loans.
(E) Each Lender agrees to provide the
Administrative Agent and the Borrower with prompt written
notice of any issuance of assignments of its interests
hereunder.
(F) No assignment, participation or other
transfer of any rights hereunder or under the Notes shall be
effected that would result in any interest requiring
registration under the Securities Act of 1933, as amended, or
qualification under any state securities law.
(G) No such assignment may be made to any
bank or other financial institution (x) with respect to which
a receiver or conservator (including, without limitation, the
Federal Deposit Insurance Corporation, the Resolution Trust
Corporation or the Office of Thrift Supervision) has been
appointed or (y) that has failed to meet any of the capital
requirements of its primary regulator or insurer.
(H) If applicable, each Lender shall, and
shall cause each of its assignees to provide to the
Administrative Agent on or prior to the Agreement Date or
effective date of any assignment, as the case may be, an
appropriate Internal Revenue Service form as required by
Applicable Law supporting such Lender's position that no
withholding by the Borrower or the Administrative Agent for
U.S. income tax payable by the Lender in respect of amounts
received by it hereunder is required. For purposes of this
Agreement, an appropriate Internal Revenue Service form shall
mean Form 1001 (Ownership Exemption or Reduced Rate
Certificate of the U.S. Department of Treasury), or Form 4224
(Exemption from Withholding of Tax on Income Effectively
Connected with the Conduct of a Trade or Business in the
United States), or any successor or related forms adopted by
the relevant U.S. taxing authorities.
(c) Except specifically set forth in Section 11.5(b) hereof,
nothing in this Agreement or the Notes, expressed or implied, is intended to or
shall confer on any Person other than the respective parties hereto and thereto
and their successors and assignees permitted hereunder and thereunder any
benefit or any legal or equitable right, remedy or other claim under this
Agreement or the Notes.
(d) In the case of any participation, all amounts payable by
the Borrower under the Loan Documents shall be calculated and made in the manner
and to the parties hereto as if no such participation had been sold.
Section 11.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.
Section 11.7 Governing Law. This Agreement and the Notes shall be construed
in accordance with and governed by the internal laws of the State of New York
applicable to agreements made and to be performed in New York. If any action or
proceeding shall be brought by the Administrative Agent or any Lender hereunder
or under any other Loan Document in order to enforce any right or remedy under
this Agreement or under any Note or any other Loan Document, the Borrower hereby
consents and will, and the Borrower will cause each Restricted Subsidiary to,
submit to the jurisdiction of any state or federal court of competent
jurisdiction sitting within the area comprising the Southern District of New
York on the date of this Agreement. The Borrower, for itself and on behalf of
its Restricted Subsidiaries, hereby agrees that service of the summons and
complaint and all other process which may be served in any such suit, action or
proceeding may be effected by mailing by registered mail a copy of such process
to the offices of the Borrower at the address given in Section 11.1 hereof and
that personal service of process shall not be required. Nothing herein shall be
construed to prohibit service of process by any other method permitted by law,
or the bringing of any suit, action or proceeding in any other jurisdiction. The
Borrower agrees that final judgment in such suit, action or proceeding shall be
conclusive and may be enforced in any other jurisdiction by suit on the judgment
or in any other manner provided by Applicable Law.
Section 11.8 Severability. Any provision of this Agreement which is
prohibited or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof in that jurisdiction or affecting the validity or enforceability of such
provision in any other jurisdiction.
Section 11.9 Headings. Headings used in this Agreement are for convenience
only and shall not be used in connection with the interpretation of any
provision hereof.
Section 11.10 Interest.
(a) In no event shall the amount of interest due or payable
hereunder or under the Notes exceed the maximum rate of interest allowed by
Applicable Law, and in the event any such payment is inadvertently made by the
Borrower or is inadvertently received by any Lender, then such excess sum shall
be credited as a payment of principal, unless the Borrower shall notify such
Lender in writing that it elects to have such excess sum returned forthwith. It
is the express intent hereof that the Borrower not pay and the Lenders not
receive, directly or indirectly in any manner whatsoever, interest in excess of
that which may legally be paid by the Borrower under Applicable Law.
(b) Notwithstanding the use by the Lenders of the "prime
rate," the LIBO Rate and the Federal Funds Rate as reference rates for the
determination of interest on the Facility B Loans, the Lenders shall be under no
obligation to obtain funds from any particular source in order to charge
interest to the Borrower at interest rates tied to such reference rates.
Section 11.11 Entire Agreement. Except as otherwise expressly provided
herein, this Agreement, the Notes, and the Loan Documents to which the Borrower
is a party embody the entire Agreement and understanding among the parties
hereto and thereto and supersede all prior agreements, understandings, and
conversations relating to the subject matter hereof and thereof.
Section 11.12 Amendment and Waiver. Neither this Agreement nor any term
hereof nor any Loan Document may be amended orally, nor may any provision hereof
be waived orally, but only by an instrument in writing signed by the Required
Lenders or the Borrower, as the case may be, and, in the case of an amendment,
by the Borrower and the Required Lenders, except that in the event of (a) any
decrease (other than pro rata) or increase in the amount of the Facility B
Commitments, (b) any change in the timing of, or reduction of the amount of,
payments of principal, interest, and fees due hereunder, (c) any release or
impairment of collateral or any guaranty issued in favor of the Administrative
Agent and the Lenders (except in connection with any asset sale permitted
hereunder), (d) any waiver of any Event of Default due to the failure by the
Borrower to pay any sum due hereunder, (e) any amendment of this Section 11.12,
Section 11.5(a) or of the definition of Required Lenders, or (f) any waiver of
any condition precedent specified in Section 3.1 to the initial Advance
hereunder, any amendment or waiver may be made only by an instrument in writing
signed by each of the Lenders and, in the case of an amendment, also by the
Borrower. Any amendment to any provision hereunder governing the rights,
obligations, or liabilities of the Administrative Agent in its capacity as such,
may be made only by an instrument in writing signed by such affected Person and
by each of the Lenders.
Section 11.13 Other Relationships. No relationship created hereunder or
under any other Loan Document shall in any way affect the ability of the
Administrative Agent and each Lender to enter into or maintain business
relationships with the Borrower, or any of its Affiliates, beyond the
relationships specifically contemplated by this Agreement and the other Loan
Documents.
Section 11.14 Confidentiality. Each Lender and the Administrative Agent
agrees (on behalf of itself and each of its Affiliates, directors, officers,
employees and representatives) to use reasonable precautions to keep
confidential, in accordance with their customary procedures for handling
confidential information of the same nature and in accordance with safe and
sound banking practices, any non-public information supplied to it by the
Borrower pursuant to this Agreement that is identified by such Person as being
confidential at the time the same is delivered to the Lenders or the
Administrative Agent, provided that (a) nothing herein shall limit the
disclosure of any such information (i) to the extent required by statute, rule,
regulation or judicial process, (ii) to counsel for any of the Lenders or the
Administrative Agent, (iii) to bank examiners, auditors or accountants, (iv) to
the Administrative Agent or any other Lender, (v) in connection with any
litigation to which any one or more of the Lenders or the Administrative Agent
is a party, or (vi) to any assignee or participant (or prospective assignee or
participant) so long as such assignee or participant (or prospective assignee or
participant) shall have agreed to keep such information confidential as set
forth herein, and (b) in no event shall any Lender or the Administrative Agent
be obligated or required to return any materials furnished by the Borrower.
Section 11.15 Survival of Various Provisions. Notwithstanding anything
herein which may be construed to the contrary, rights pursuant to Sections
2.9(c), 2.10, 2.14(f), 5.11, 9.11 and 10.3 hereof shall survive the termination
of this Agreement and the payment and performance of all other Obligations.
Section 11.16 Senior Debt. The Obligations are secured by the Security
Documents and are intended by the parties hereto to be in parity with the
Interest Hedge Agreement and senior in right of payment to all other
Indebtedness of the Borrower.
ARTICLE 12
Waiver of Jury Trial
Section 12.1 Waiver of Jury Trial. THE BORROWER, FOR ITSELF AND ON BEHALF
OF ITS RESTRICTED SUBSIDIARIES, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY
AGREE TO WAIVE AND HEREBY WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY COURT AND IN
ANY ACTION OR PROCEEDING OF ANY TYPE IN WHICH THE BORROWER, ANY OF ITS
RESTRICTED SUBSIDIARIES, ANY OF THE LENDERS, THE ADMINISTRATIVE AGENT OR ANY OF
THEIR RESPECTIVE SUCCESSORS OR ASSIGNS IS A PARTY, AS TO ALL MATTERS AND THINGS
ARISING DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT, ANY OF THE NOTES OR THE
OTHER LOAN DOCUMENTS AND THE RELATIONS AMONG THE PARTIES LISTED IN THIS SECTION
12.1. EXCEPT AS PROHIBITED BY LAW, EACH PARTY TO THIS AGREEMENT WAIVES ANY
RIGHTS IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THIS
SECTION, ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. EACH PARTY TO THIS
AGREEMENT (i) CERTIFIES THAT NONE OF THE REPRESENTATIVES, AGENTS OR ATTORNEYS OF
THE ADMINISTRATIVE AGENT OR ANY LENDER HAVE REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT THE ADMINISTRATIVE AGENT OR ANY LENDER WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (ii) ACKNOWLEDGES THAT IT
HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. THE
PROVISIONS OF THIS SECTION HAVE BEEN FULLY DISCLOSED BY AND TO THE PARTIES AND
THE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NO PARTY HAS IN ANY WAY AGREED
WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS SECTION WILL
NOT BE FULLY ENFORCED IN ALL INSTANCES.
[Remainder of Page Intentionally Left Blank]
<PAGE>
TV GUIDE, INC.
FACILITY B LOAN AGREEMENT
Signature Page 22
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused it to be executed by their duly authorized officers, all as of the day
and year first above written.
BORROWER: UNITED VIDEO SATELLITE GROUP, INC.,
a Delaware corporation
By: /s/
Title:
<PAGE>
ADMINISTRATIVE AGENT: BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: /s/
Its:
ISSUING BANK AND LENDERS: BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Issuing
Bank and as a Lender
By: /s/
Its:
<PAGE>
TORONTO DOMINION (TEXAS) INC., as a
Lender
By: /s/
Its:
<PAGE>
THE BANK OF NEW YORK COMPANY, INC.,
as a Lender
By: /s/
Its:
<PAGE>
CREDIT LYONNAIS NEW YORK BRANCH, as
a Lender
By: /s/
Its:
<PAGE>
BANCA COMMERCIALE ITALIANA, NEW YORK
BRANCH, as a Lender
By: /s/
Its:
By: /s/
Its:
<PAGE>
BANK OF HAWAII, as a Lender
By: /s/
Its:
<PAGE>
BANK OF OKLAHOMA, N.A., as a Lender
By: /s/
Its:
<PAGE>
BANKBOSTON, N.A., as a Lender
By: /s/
Its:
<PAGE>
BANQUE NATIONALE DE PARIS, as a
Lender
By: /s/
Its:
By: /s/
Its:
<PAGE>
BARCLAYS BANK, PLC, as a Lender
By: /s/
Its:
By: /s/
Its:
<PAGE>
THE BANK OF NOVA SCOTIA, as a Lender
By: /s/
Its:
<PAGE>
CITIBANK, N.A., as a Lender
By: /s/
Its:
<PAGE>
COMPAGNIE FINANCIERE DE CIC ET DE
L'UNION EUROPEENNE, as a Lender
By: /s/
Its:
By: /s/
Its:
<PAGE>
THE DAI-ICHI KANGYO BANK, LTD., as a
Lender
By: /s/
Its:
<PAGE>
ERSTE BANK DER OESTERREICHISCHEN
SPARKASSEN, as a Lender
By: /s/
Its:
By: /s/
Its:
<PAGE>
FIRST UNION NATIONAL BANK, as a
Lender
By: /s/
Its:
<PAGE>
FLEET NATIONAL BANK, as a Lender
By: /s/
Its:
<PAGE>
KBC BANK, N.V., as a Lender
By: /s/
Its:
By: /s/
Its:
<PAGE>
LLOYDS BANK, PLC, as a Lender
By: /s/
Its:
By: /s/
Its:
<PAGE>
LOCAL FEDERAL BANK, FSB, as a Lender
By: /s/
Its:
<PAGE>
MELLON BANK, N.A., as a Lender
By: /s/
Its:
Exhibit 12.1
TV GUIDE, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
THREE MONTHS ENDED MARCH 31,
(amounts in thousands, except for ratios)
(unaudited)
1999 1998
---- ----
Earnings Available for Fixed Charges:
Income before income taxes
and minority interest $26,275 $61,953
Interest and expense on
indebtedness 6,035 491
One-third of rental expense,
net of sub-leasing income
for operating leases 1,547 1,372
------- -------
$33,857 $63,816
======= =======
Fixed Charges:
Interest and expense on
indebtedness $ 6,035 $ 491
One-third of rental expense,
net of sub-leasing income,
for operating leases 1,547 1,372
------- -------
$ 7,582 $ 1,863
======= =======
Ratio of earnings to fixed
charges 4.47 34.25
======= =======
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND THE CONSOLIDATED STATEMENT OF INCOME INCLUDED IN
THE QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED MARCH 31, 1999 OF TV
GUIDE, INC. AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<CIK> 0000913061
<NAME> TV GUIDE, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 98,108
<SECURITIES> 280
<RECEIVABLES> 241,537
<ALLOWANCES> 11,122
<INVENTORY> 0
<CURRENT-ASSETS> 385,333
<PP&E> 147,170
<DEPRECIATION> 86,615
<TOTAL-ASSETS> 3,623,972
<CURRENT-LIABILITIES> 550,770
<BONDS> 0
0
0
<COMMON> 1,520
<OTHER-SE> 1,471,158
<TOTAL-LIABILITY-AND-EQUITY> 3,623,972
<SALES> 0
<TOTAL-REVENUES> 201,842
<CGS> 0
<TOTAL-COSTS> 118,182
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,035
<INCOME-PRETAX> 26,275
<INCOME-TAX> 9,778
<INCOME-CONTINUING> 12,761
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,761
<EPS-PRIMARY> 0.12
<EPS-DILUTED> 0.12
</TABLE>
