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INSIGHT COMMUNICATIONS CO INC - 10-K405 - 20000330 - NOTES_TO_FINANCIAL_STATEMENT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
A. Organization and Basis of Presentation
On July 26, 1999, Insight Communications Company, Inc. (the "Company") completed
an initial public offering ("IPO") of Class A common stock in which the Company
sold approximately 26,450,000 shares of its common stock. Offering proceeds net
of underwriting discounts and other offering expenses totaled approximately
$607.0 million and were applied primarily toward the repayment of senior
indebtedness and to finance the October 1, 1999 acquisition of Kentucky cable
television systems (Note D). Prior to the IPO, the Company operated as a limited
partnership. The Company was reconstituted as a corporation upon the completion
of the IPO, at which time all of the limited partnership's units were exchanged
for shares of common stock (Note J).
The Company owns and operates cable television systems in Kentucky, Indiana,
Illinois, Ohio, California and Georgia, as described below. The accompanying
consolidated financial statements include the accounts of the Company and its
wholly owned subsidiaries, Insight Communications Company, L.P. ("Insight L.P.")
and Insight Interactive LLC. Insight L.P. owns and operates cable television
systems in Illinois, Indiana, California and Georgia. In addition, Insight L.P.
owns a 50% interest in Insight Midwest, L.P. ("Insight Midwest"), which through
its wholly-owned subsidiaries, Insight Communications of Indiana, LLC ("Insight
Indiana") and Insight Communications of Kentucky, L.P. ("Insight Kentucky") owns
and operates cable television systems in Indiana and Kentucky (Note D). Insight
L.P. is the manager of Insight Midwest and effectively controls all operating
and financial decisions. Therefore, the accompanying consolidated financial
statements include the accounts of Insight Midwest.
Through its wholly-owned subsidiary, Insight Holdings of Ohio, LLC, Insight L.P.
owns a 75% non-voting equity interest in Insight Communications of Ohio, LLC
("Insight Ohio"), which operates cable television systems in the Columbus, Ohio
area (Note E). Insight L.P. accounts for its investment in Insight Ohio under
the equity method of accounting.
The Company's other wholly-owned subsidiary, Insight Interactive LLC ("Insight
Interactive") owns a 50% equity interest in SourceSuite LLC (Note F), which is
also accounted for under the equity method of accounting.
B. Significant Accounting Policies
Basis of Consolidation
The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiaries. As described above, the results of Insight
Midwest, which is 50% owned but effectively controlled by Insight L.P., are
included in the consolidated financial statements. The minority interest
liability represents AT&T Broadband's 50% ownership interest in Insight Midwest.
All significant intercompany balances and transactions have been eliminated in
consolidation.
F-6
INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
B. Significant Accounting Policies (continued)
Revenue Recognition
Revenue includes service fees, connection fees, and launch fees. Service fees
are recorded in the month the cable television and pay television services are
provided to subscribers. Connection fees are charged for the hook-up of new
customers and are recognized as current revenues to the extent of direct selling
costs incurred. Where material, any fees in excess of such costs are deferred
and amortized into income over the period that subscribers are expected to
remain connected to the system.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
Cash Equivalents
The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.
Marketable Securities
Marketable securities consist of debt and equity securities (Note F). All
marketable securities are classified as available-for-sale under Statement of
Financial Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities" ("SFAS No. 115"). In accordance with SFAS No. 115,
available-for-sale securities are carried at fair value, with unrealized gains
and losses, net of income taxes, reported as a separate component of
stockholders' equity. Fair value is based on quoted market prices. The amortized
cost of debt securities is adjusted for the accretion of discounts. Such
accretion as well as interest are included in interest income.
Fixed Assets
Fixed assets include amounts capitalized for labor and overhead expended in
connection with the installation of cable television systems and are stated at
cost. Depreciation for cable plant, furniture, fixtures, office equipment and
buildings is computed using the straight-line method over estimated useful lives
ranging from 3 to 30 years. Leasehold improvements are being amortized using the
straight-line method over the remaining terms of the leases or the estimated
lives of the improvements, whichever period is
F-7
INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
B. Significant Accounting Policies (continued)
shorter. The carrying value of fixed assets is reviewed if facts and
circumstances suggest that they may be impaired. If this review indicates that
the carrying value of the fixed assets will not be recovered from the
undiscounted future cash flows of the Company, an impairment loss would be
recognized for the amount that the asset's carrying value exceeds its fair
value. Management believes that no material impairment of fixed assets existed
at December 31, 1999.
Intangible Assets
Intangible assets consist of franchise costs and goodwill. Costs incurred in
negotiating and renewing franchise agreements are capitalized and amortized over
the life of the franchise. Franchise rights acquired through the purchase of
cable television systems are amortized using the straight-line method over a
period of up to 15 years. Goodwill is amortized using the straight-line method
over a period of 40 years. The carrying value of intangible assets is reviewed
if facts and circumstances suggest that they may be impaired. If this review
indicates that the carrying value of the intangible assets will not be recovered
from the undiscounted future cash flows of the Company, an impairment loss would
be recognized for the amount that the asset's carrying value exceeds its fair
value. Management believes that no material impairment of intangible assets
existed at December 31, 1999.
Deferred Financing Costs
Deferred financing costs relate to costs, primarily legal fees and bank facility
fees, incurred to negotiate and secure bank loans (Note I). These costs are
being amortized on a straight-line basis over the life of the applicable loan.
Earnings Per Share
Earnings per share is calculated in accordance with Statement of Financial
Accounting Standards No. 128, "Earnings Per Share." As a result of the IPO,
earnings per share is presented in the accompanying statements of operations as
if a conversion of securities from partnership units to common shares occurred
at the beginning of all periods presented. Basic earnings per share is computed
using average shares outstanding during the period which includes the effect of
the new shares issued in connection with the IPO. For 1999, diluted earnings per
share equals basic earnings per share as the Company had generated net losses
and the effect of an assumed conversion of certain partnership units and certain
warrants to common shares as well as the assumed exercise of stock options would
be anti-dilutive.
F-8
INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
B. Significant Accounting Policies (continued)
Income Taxes
Income taxes are provided for using the liability method. Under this approach,
differences between the financial statements and tax bases of assets and
liabilities are determined annually, and deferred income tax assets and
liabilities are recorded for those differences that have future tax
consequences. Valuation allowances are established, if necessary, to reduce
deferred tax assets to an amount that will more likely than not be realized in
future periods. Income tax expense is comprised of the current tax payable or
refundable for the period plus or minus the net change in deferred tax assets
and liabilities.
During the year ended December 31, 1999, and in connection with the IPO, a one
time non-recurring charge of $39.5 million was recorded for deferred taxes upon
the exchange of the limited partnership interests in Insight L.P. for the
Company's common stock. See Note O.
Advertising Costs
The cost of advertising is expensed as incurred. For the years ended December
31, 1997, 1998, and 1999 advertising expense approximated $369,000, $702,000,
and $1.6 million, respectively.
Allocation of Profits and Losses
Prior to the exchange of common stock for the outstanding partnership interests
of Insight L.P., profits and losses were allocated between the partners for
financial reporting purposes based on cash distribution and liquidating
distribution preferences per the partnership agreement. For the years ended
December 31, 1997 and 1998 and for the period from January 1, 1999 to July 26,
1999, losses were allocated 1% to the General Partner for its interest and 99%
to the limited partners.
Recent Accounting Pronouncements
During 1999, the Company adopted Statement of Position 98-1, "Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use" (SOP 98-1).
SOP 98-1 requires that companies capitalize qualifying costs incurred during the
application development stage of a software project. All other costs incurred in
connection with an internal use software project are to be expensed as incurred.
The adoption of SOP 98-1 did not have a material impact on the Company's
financial statements.
In June 1998, the FASB issued Statement of Financial Accounting Standards No.
133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS No.
133"). SFAS No. 133, as amended by SFAS No. 137, is effective for all fiscal
years beginning
F-9
INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
B. Significant Accounting Policies (continued)
after June 15, 2000. SFAS No. 133 will require the Company to recognize all
derivatives on the balance sheet at fair value. Although management has not
completed its assessment of the impact of this standard on its results of
operations and financial position, management does not anticipate that adoption
of this standard will be material.
Reclassifications
Certain prior year amounts have been reclassified to conform to the current
year's presentation.
C. Acquisitions and Gain on Cable System Exchanges
Effective December 16, 1997, Insight L.P. exchanged its Phoenix, Arizona system
("Phoenix") servicing 36,250 subscribers for Cox Communications, Inc.'s
Lafayette, Indiana system ("Lafayette") servicing 38,100 subscribers. In
addition to the Lafayette system received, Insight L.P. received $12.6 million
in cash. This transaction has been accounted for by Insight L.P. as a sale of
Phoenix and a purchase of Lafayette. Accordingly, Lafayette has been included in
the accompanying consolidated balance sheets at fair value and Insight L.P.
recognized a gain of approximately $79 million on the sale of the Phoenix
system. The Lafayette purchase price was allocated to the cable television
assets acquired in relation to their fair values as increases in property and
equipment of $22.4 million and franchise costs of $56.6 million. Effective
November 1, 1998, Insight L.P. contributed the Lafayette system into Insight
Indiana (see Note D).
On January 22, 1998, Insight L.P. acquired a cable television system located in
Rockford, Illinois ("Rockford") for $97 million. This acquisition has been
accounted for as a purchase. Insight L.P. paid for the acquisition with
borrowings under its credit facility and with the $12.6 million of cash received
in the aforementioned Phoenix/Lafayette swap. The purchase price was allocated
to the cable television assets acquired in relation to their fair values as
increases in property and equipment of $11.5 million and franchise costs of
$85.5 million. Purchase price adjustments for working capital acquired were not
significant. In connection with the Rockford acquisition, no non-current assets
or non-current liabilities were acquired. Franchise costs, arising from the
acquisition, are being amortized over a period of 15 years. The results of
operations of Rockford have been included in the accompanying statements of
operations since its acquisition date.
Effective October 31, 1998, Insight L.P. exchanged its Sandy, Brigham City and
Vernal, Utah systems (the "Utah Systems") servicing approximately 56,200
subscribers with TCI of Indiana Holdings, LLC ("TCI") for their Jasper and
Evansville, Indiana systems servicing approximately 63,000 subscribers. This
transaction has been accounted for by Insight L.P. as a sale of the Utah Systems
and purchase of the Jasper and Evansville systems. Accordingly, the Evansville
and Jasper systems have been included in the
F-10
INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
C. Acquisitions and Gain on Cable System Exchanges (continued)
accompanying consolidated balance sheets at $125 million (fair value of the Utah
systems) and Insight L.P. recognized a gain on the sale of the Utah systems of
approximately $112 million which amount represents the difference between the
carrying value of the Utah Systems and their fair value. The Evansville and
Jasper systems' purchase price was allocated to the cable television assets
acquired as increases in property and equipment of $24 million and franchise
costs of $101 million. Purchase price adjustments recorded for differences in
working capital between the Utah systems and the Evansville and Jasper systems
were not material. In connection with the Evansville and Jasper systems
exchange, no non-current assets or non-current liabilities were acquired.
Franchise costs arising from the acquisition of the Evansville and Jasper
systems are being amortized over a period of 15 years. In a simultaneous
transaction, the Jasper and Evansville systems were contributed by Insight L.P.
into Insight Indiana (Note D).
On March 22, 1999 Insight L.P. exchanged its Franklin, Virginia cable system
("Franklin") servicing approximately 9,100 subscribers for Falcon Cable's
Scottsburg ("Scottsburg") Indiana system servicing approximately 4,100
subscribers. In connection with the exchange, Insight L.P. received $8 million
in cash. Furthermore, on February 1, 1999, Insight L.P. exchanged its Oldham
Kentucky cable system ("Oldham") servicing approximately 8,500 subscribers for
Intermedia Partners of Kentucky L.P.'s Henderson, Kentucky cable system
("Henderson") servicing approximately 10,600 subscribers. These transactions
have been accounted for by Insight L.P. as sales of the Franklin and Oldham
systems and purchases of the Scottsburg and Henderson systems. Accordingly,
based upon the preliminary purchase price allocation, the Scottsburg and
Henderson systems have been included in the accompanying condensed consolidated
balance sheets at their fair values (approximately $31.3 million) and Insight
L.P. recognized a gain on the sale of the Franklin and Oldham systems of
approximately $16.0 million, which amount represents the difference between the
carrying value of the Franklin and Oldham systems and their fair value. The
Scottsburg and Henderson Systems purchase price was allocated to the cable
television assets acquired in relation to their fair values as increases in
property and equipment of $5.7 million and franchise costs of $25.6 million.
Franchise costs arising from the acquisition of the Scottsburg and Henderson
systems are being amortized over a period of 15 years.
On March 31, 1999 Insight L.P. acquired Americable International of Florida
Inc.'s Portland, Indiana and Fort Recovery, Ohio cable systems ("Portland")
servicing approximately 6,100 subscribers for $10.9 million. The preliminary
purchase price was allocated to the cable television assets acquired in relation
to their fair values as increases in property and equipment of $2.3 million and
franchise costs of $8.6 million. Insight L.P. has accounted for the acquisition
of the Portland systems as a purchase. Insight L.P. paid for the acquisition
with borrowings under its credit facilities and with the $8 million of cash
received in the Franklin/Scottsburg system exchange described above.
F-11
INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
D. Insight Midwest
Insight Midwest was formed in September 1999 to serve as the holding company and
a financing vehicle for the Company's cable television system joint venture with
AT&T Broadband LLC (formerly Tele-Communications, Inc.) ("AT&T Broadband").
Insight Midwest is owned 50% by Insight L.P and 50% by AT&T Broadband, through
its indirect subsidiary TCI of Indiana Holdings, LLC. ("TCI"). On October 1,
1999 the Company's Indiana and Kentucky systems and operations were
contributed to Insight Midwest, as described further below. Through its
operating subsidiaries Insight Indiana and Insight Kentucky, Insight Midwest
owns and operates cable television systems in Indiana and Kentucky, which passed
approximately 1.2 million homes and served approximately 749,000 customers as of
December 31, 1999.
Insight Indiana
On October 31, 1998 Insight L.P. and TCI contributed certain of their cable
television systems located in Indiana and Northern Kentucky (the "Indiana
systems") to Insight Indiana in exchange for 50% equity interests therein. The
cable television systems contributed to Insight Indiana by Insight L.P. included
the Jasper and Evansville systems that were acquired by Insight L.P. from TCI on
October 31, 1998 (Note C) and the Noblesville, Jeffersonville and Lafayette
systems already owned by Insight L.P. (the "Insight Contributed Systems").
Effective October 31, 1998, Insight L.P. entered into a management agreement
with Insight Indiana pursuant to which Insight L.P. agreed to manage the Indiana
systems for an annual fee of 3% of the gross revenues of the Indiana systems. On
October 1, 1999, as part of a joint venture restructuring, Insight Indiana
became a wholly owned subsidiary of Insight Midwest and amended its management
agreement with Insight L.P., confirming the 3% management fee. Such management
fee was approximately $685,000 and $4.4 million for the two months ended
December 31, 1998 and the year ended December 31, 1999, respectively, and is
eliminated in consolidation. In addition to managing the day-to-day operations
of the Indiana systems, Insight L.P. is the general partner and therefore
effectively controls Insight Midwest and is responsible for all of the operating
and financial decisions pertaining to the Indiana systems. Pursuant to the terms
of their respective operating agreements, Insight Midwest and Insight Indiana
will continue for a twelve year term through October 1, 2011, unless extended by
Insight L.P. and TCI.
In accordance with the foregoing, the historical carrying values of the Indiana
systems contributed by TCI were increased by an amount equivalent to 50% of the
difference between the fair value of the systems and their respective carrying
values ($89.1 million) as of October 31, 1998. In addition, the historical
values of the Insight Contributed Systems were increased by $44.3 million, an
amount equivalent to 50% of the difference between the fair value of such
systems and their respective carrying values as of October 31, 1998. The
aggregate step-up to fair value (including the step-up recorded in connection
with the acquisition of the Jasper and Evansville systems--Note C) was
F-12
INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
D. Insight Midwest (continued)
allocated to the cable television assets contributed by TCI in relation to their
fair values as increases in property and equipment of $58.0 million and
franchise costs of $181.6 million. Neither Insight L.P. nor TCI is contractually
required to contribute additional capital to Insight Midwest and, because
Insight Midwest is a limited partnership, neither Insight L.P. nor TCI is liable
for the obligations of Insight Indiana or the Indiana systems.
Insight Kentucky
On October 1, 1999, Insight L.P. acquired a combined 50% interest in InterMedia
Capital Partners VI, L.P. (the "IPVI Partnership") from related parties of
Blackstone Cable Acquisition Company, LLC, related parties of InterMedia Capital
Management VI, LLC and a subsidiary and related party of AT&T Broadband, for
approximately $341.5 million, (inclusive of expenses), and Insight Midwest
assumed debt of approximately $742.1 million (the total debt of the IPVI
Partnership). The IPVI Partnership, through several intermediary partnerships,
owned and operated cable television systems in four major markets in Kentucky:
Louisville, Lexington, Bowling Green and Covington (the "Kentucky systems"). On
October 1, 1999, concurrently with this acquisition, the Kentucky systems were
contributed to Insight Midwest. As a result of the IPVI Partnership's historical
ownership structure, the Kentucky systems are owned and operated by Insight
Kentucky Partners II, L.P. ("Insight Kentucky"), a third-tier subsidiary
partnership of Insight Midwest. Also on October 1, 1999, Insight L.P. entered
into a management agreement with Insight Kentucky, pursuant to which Insight
L.P. manages the Kentucky systems in consideration for a 3% management fee. Such
management fee was approximately $1.6 million for the three months ended
December 31, 1999 and is eliminated in consolidation. Similar to Insight
Indiana, in addition to managing the day-to-day operations of the Kentucky
systems, Insight L.P. is the general partner and effectively controls Insight
Midwest, including all of the operating and financial decisions pertaining to
the Kentucky systems. Insight Kentucky and each of the other Kentucky
partnerships also have twelve-year terms through October 1, 2011, unless
extended by Insight and TCI.
The assets of Insight Kentucky have been valued based on the purchase price and
have been preliminarily allocated between fixed and intangible assets based on
management's evaluation of each individual operating system including such
factors as the age of the cable plant, the progress of rebuilds and franchise
relations. This resulted in a step-up in the carrying values of fixed assets of
approximately $160.3 million and intangible assets of approximately $272.1
million. Fixed assets are being depreciated over their estimated useful lives
and intangible assets are being amortized over 15 years (Note B).
F-13
INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
D. Insight Midwest (continued)
The unaudited pro forma results of operations of the Company for the years ended
December 31, 1998 and 1999, assuming the contribution of the Indiana systems,
the acquisition of the Kentucky systems and each of the acquisitions and
exchanges described in Note C occurred as of January 1, 1998 is as follows (in
thousands, except per share data):
1998 1999
---- ----
Revenue $375,682 $401,890
Loss before extraordinary item (78,101) (122,457)
Net loss (81,368) (122,457)
Basic and diluted net loss per share (4.29) (3.66)
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E. Insight Ohio
On August 21, 1998, Insight L.P. and Coaxial Communications of Central Ohio,
Inc. ("Coaxial") entered into a contribution agreement (the "Coaxial
Contribution Agreement") pursuant to which Coaxial contributed to Insight Ohio
(a newly formed limited liability company) substantially all of the assets and
liabilities of its cable television systems located in Columbus, Ohio and
Insight L.P. contributed to Insight Ohio $10 million in cash. As a result of the
Coaxial Contribution Agreement, Coaxial owns 25% of the non-voting common equity
and Insight L.P., through its subsidiary Insight Holdings of Ohio, LLC, owns 75%
of the non-voting common equity of Insight Ohio. In addition, Coaxial also
received two separate series of voting preferred equity (Series A Preferred
Interest--$140 million and Series B Preferred Interest--$30 million) of Insight
Ohio (collectively the "Voting Preferred Interests").
The Voting Preferred Interests provides for cash distributions to Coaxial and
certain of its affiliates as follows; Series A--10% and Series B--12-7/8%.
Insight Ohio cannot redeem the Voting Preferred Interests without the permission
of Coaxial; however, Insight Ohio will be required to redeem the Series A
Preferred Interest in August 2006 and the Series B Preferred Interest on August
21, 2008. Coaxial has pledged the Series A Preferred Interest and Series B
Preferred Interest as security for $140 million of 10% senior notes due in 2006
issued by Coaxial and an affiliate ("Senior Notes") and $55.9 million of
aggregate principal amount at maturity of 12-7/8% senior discount notes due in
2008 issued by Coaxial's majority shareholder ("Senior Discount Notes"),
respectively. The Senior Notes and Senior Discount Notes are conditionally
guaranteed by Insight Ohio.
Insight Ohio was formed solely for the purpose of completing the aforementioned
transaction. Insight L.P., as manager of Insight Ohio, earns a management fee
from Insight Ohio equal to 3% of Insight Ohio's revenues. For the period from
August 21, 1998 through December 31, 1998, Insight L.P. earned approximately $.5
million in management fees from Insight Ohio and for the year ended December 31,
1999, such management fees were approximately $1.4 million.
F-14
E. Insight Ohio (continued)
Although Insight L.P. manages and controls the day to day operations of Insight
Ohio, the shareholders of Coaxial have significant participating rights.
Accordingly, Insight L.P. is accounting for its investment in Insight Ohio under
the equity method of accounting. Insight L.P. is amortizing the difference
between its initial $10.0 million investment and its 75% interest in Insight
Ohio's deficiency in assets over a period of 12 1/2 years. Such period takes
into account the amortization periods related to the fair value of Insight
Ohio's tangible and intangible assets. Accordingly, the accompanying statement
of operations for the years ended December 31, 1998 and 1999 include Insight
L.P.'s share of Insight Ohio's operating income (loss) of approximately $.1
million and $(4.6) million, respectively and the amortization of the
aforementioned deficiency in assets of approximately $3.4 million and $8.6
million, respectively. The Company has provided a commitment letter to Insight
Ohio to fund any operating shortfall Insight Ohio may experience during the next
year and accordingly, the Company continued to apply the equity method of
accounting for its investment. The Company's investment balance at December 31,
1999 was approximately $(6.5) million.
F. SourceSuite LLC
Effective November 17, 1999, Insight Interactive entered into a Contribution
Agreement with Source Media, Inc. ("Source Media"), providing for the creation
of a joint venture, SourceSuite LLC. Under the terms of the Contribution
Agreement, Source Media contributed its Virtual Modem 2.5 software, the
Interactive Channel products and services, including SourceGuide and LocalSource
television content. Source Media will manage the operations of the joint
venture. The Company contributed $13 million in equity financing. Source Media
and the Company each own 50% of the joint venture.
The Company is accounting for its investment in SourceSuite LLC under the equity
method of accounting. Accordingly, the accompanying statement of operations for
the year ended December 31, 1999 includes a loss of approximately $704,000 which
represents the Company's 50% share of SourceSuite LLC's net loss for the year.
In connection with the Contribution Agreement, the Company and Source Media
entered into a Common Stock and Warrants Purchase Agreement dated as of July 29,
1999, whereby the Company agreed to purchase 842,105 shares of Source Media
common stock at $14.25 per share, representing approximately 6% of Source
Media's outstanding stock, for a purchase price of $12 million in cash. The
Company purchased the shares of common stock on November 17, 1999. As of
December 31, 1999, the Company recorded an unrealized gain of approximately
$3.6 million, which is reflected as a separate
F-15
INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
F. SourceSuite LLC (continued)
component of stockholders' equity. The unrealized gain was calculated as the
difference between the cost of the stock and its fair value at December 31,
1999. Fair value was determined using the quoted market price of the stock.
Source Media also issued to the Company five-year warrants to acquire up to an
additional 4,596,786 shares of its common stock at an exercise price of $20.00
per share. The Company had not exercised any of the warrants as of December 31,
1999.
In addition, in October 1999, the Company purchased $10.2 million face amount of
Source Media's 12% bonds for approximately $4.1 million. The bonds have a
maturity date of November 1, 2004. The bond discount of $6.1 million is being
amortized to interest income over the life of the bonds. As of December 31,
1999, the Company recorded an unrealized gain of approximately $1.8 million,
which is reflected as a separate component of stockholders' equity. The
unrealized gain was calculated as the difference between the amortized cost of
the bonds and their fair value at December 31, 1999. Fair value was determined
using the quoted market price of the bonds.
G. Fixed Assets
Fixed assets consist of:
December 31,
1998 1999
------------------------
(in thousands)
Land, buildings and improvements $ 4,903 $ 13,956
Cable television equipment 181,635 717,707
Furniture, fixtures and office equipment 8,941 16,332
------------------------
195,479 747,995
Less accumulated depreciation and amortization (40,067) (104,857)
------------------------
$ 155,412 $ 643,138
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F-16
INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
H. Intangible Assets
Intangible assets consist of:
December 31,
1998 1999
------------------------------
(in thousands)
Franchise rights $ 493,302 $ 1,233,091
Goodwill 6,943 1,190
------------------------------
500,245 1,234,281
Less accumulated amortization (37,890) (94,164)
------------------------------
$ 462,355 $ 1,140,117
==============================
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I. Debt
Debt consists of:
December 31,
1998 1999
---------------------------
(in thousands)
Revolving Credit Facility $ 111,100 $ 1,000
Insight Indiana Credit Facility 460,000 470,000
Insight Kentucky Credit Facility -- 562,000
Insight Midwest Senior Notes -- 200,000
Note payable to Media One 2,563 --
---------------------------
$ 573,663 $1,233,000
===========================
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Revolving Credit Facility
On January 22, 1998, the Company entered into a third amended and restated
credit facility, which increased the maximum amount of borrowings under the
amended and restated credit facility from $220.0 million to $340.0 million. As a
result of the contribution of certain of the Company's cable television systems
to Insight Indiana and the execution by Insight Indiana of its own credit
facility, the Company entered into a fourth amended and restated credit
agreement which expires in December 2005 and reduced the maximum amount of
borrowings to $140.0 million. Borrowings under the fourth amended and restated
credit facility bear interest at either the Alternative Base Rate (ABR) or
reserve-adjusted London Interbank Offered Rate (LIBOR), plus the Applicable
Margin as defined. The Applicable Margin varies based upon levels of total
leverage ranging from 0.0% to 0.625% under the ABR option and 1.0% to 1.875%
under
F-17
INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
I. Debt (continued)
the LIBOR option. At December 31, 1998 and 1999, approximately $111.0 million
and $1.0 million, respectively, was outstanding under this facility.
The fourth amended and restated credit facility is subject to numerous
restrictive covenants, including but not limited to, restrictions on incurrence
of indebtedness, mergers, acquisitions, asset sales, distributions, and capital
expenditures. In addition, there are a series of financial tests including those
measuring the Company's coverage ratios and leverage. For the years ended
December 31, 1997, 1998, and 1999 average interest rates were 8.4%, 8.2% and
8.0%, respectively. Such amended credit facility is secured by substantially all
the present and future assets of the Company other than those of Insight
Midwest.
In March 1993, the Company issued $108.0 million aggregate principal amount of
11 1/4% Notes due in full on March 1, 2000. Effective March 1, 1997, the Company
repurchased such notes for $111.2 million, which resulted in an extraordinary
loss of $5.2 million.
Insight Indiana Credit Facility
At December 31, 1999, Insight Indiana had a credit facility that provides for
term loans of $300.0 million and for revolving credit loans of up to $250.0
million (the "Insight Indiana Credit Facility"). The Insight Indiana Credit
Facility matures in December 2006, and contains quarterly reductions in the
amount of outstanding loans and commitments commencing in March 2001.
Obligations under this credit facility are secured by all of the membership
interests of Insight Indiana and any amounts payable to its members. Loans under
the Insight Indiana Credit Facility bear interest at an ABR or LIBOR plus an
additional margin tied to certain debt ratios of Insight Indiana. The credit
facility requires Insight Indiana to meet certain debt financial covenants. At
December 31, 1999, $470.0 million was outstanding under the Insight Indiana
Credit Facility. For the two months ended December 31, 1998 and the year ended
December 31, 1999 interest rates approximated 7.60% and 7.43%, respectively.
Insight Kentucky Credit Facility
The Kentucky credit facility (the "Insight Kentucky Credit Facility") provides
for two term loans of $100.0 million and $250.0 million and for revolving credit
loans of up to $325.0 million. Loans under the Insight Kentucky Credit Facility
may be used to refinance debt, finance acquisitions, capital expenditures and
for working capital and general corporate purposes as permitted by the
agreement. The term loans mature in September and December 2007 and the
revolving credit loans mature in October 2006, with quarterly reductions in the
amount of outstanding revolving credit loans and commitments commencing in June
2001. Obligations under the Insight Kentucky Credit
F-18
INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
I. Debt (continued)
Facility are guaranteed by Insight Kentucky and Insight Kentucky Partners II,
L.P. (a subsidiary of Insight Kentucky Partners I, L.P.), and are secured by all
of the partnership interests of Insight Kentucky Partners I, L.P (a subsidiary
of Insight Kentucky) and its subsidiaries and any intercompany notes made in
favor of Insight Kentucky Partners I, L.P. and its subsidiaries. Revolving loans
under the Insight Kentucky Credit Facility bear interest, at Insight Midwest's
option at an alternate base or eurodollar rate, plus an additional margin tied
to Insight Kentucky's ratio of total debt to annualized cash flow. The term
loans under the Insight Kentucky Credit Facility also bear interest, at Insight
Midwest's option, at an alternate base or Eurodollar rate, plus an additional
margin. For the three months December 31, 1999, average interest rates
approximated 8.47%.
The Insight Kentucky Credit Facility contains a number of covenants that, among
other things, restrict the ability of Insight Kentucky to make capital
expenditures, acquire or dispose of assets, enter into mergers, incur additional
indebtedness, pay dividends or other distributions, create liens on assets, make
investments, and engage in transactions with related parties. The Insight
Kentucky Credit Facility permits the distribution to Insight Midwest of amounts
equal to the interest then due and owing on the notes, assuming that the
maturity of the notes has not been accelerated and, before and after giving
effect to such payment, no default exists under the facility.
In addition, the Insight Kentucky Credit Facility requires compliance with
certain financial ratios, requiring Insight Kentucky to enter into interest rate
protection agreements covering at least 50%, subject to increase to 60% under
certain circumstances, of its total indebtedness and also contains customary
events of default. As of December 31, 1999, there was approximately $562.0
million outstanding under the $675.0 million Insight Kentucky Credit Facility.
Insight Midwest Senior Notes
On October 1, 1999 contemporaneously with the closing of Insight Kentucky,
Insight Midwest completed a $200 million high yield offering of 9 3/4 % senior
notes due 2009 (the "Insight Midwest Senior Notes"). The proceeds of the
offering were used to repay certain debt of the IPVI Partnership. Interest on
the Insight Midwest Senior Notes accrues at the rate of 9 3/4% per annum and is
payable semi-annually on April 1 and October 1, commencing on April 1, 2000.
The Insight Midwest Senior Notes are redeemable on or after October 1, 2004. In
addition, up to 35% of the Insight Midwest Senior Notes may be redeemed prior to
October 1, 2002 with the net proceeds from certain sales of Insight Midwest's
equity. Each holder of the Insight Midwest Senior Notes may require Insight
Midwest to redeem all or part of that holder's notes upon a change of control.
The Insight Midwest Senior Notes are general unsecured obligations, and are
subordinate to all liabilities of Insight Midwest's subsidiaries, the amount of
which was approximately $1.1 billion as of
F-19
INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
I. Debt (continued)
December 31, 1999.
The Insight Midwest Senior Notes contain certain covenants that limit, among
other things, the ability of Insight Midwest and its subsidiaries to incur
additional debt; pay dividends on Insight Midwest's capital stock or repurchase
Insight Midwest's capital stock; make investments; use assets as security in
other transactions; and sell certain assets or merge with or into other
companies.
Note payable
On November 24, 1997, the Company purchased the 34% limited partnership interest
held by Media One for $10.3 million. The Company paid $2.6 million in cash and
issued a two-year senior subordinated note payable for $7.7 million. The note
bore interest at a rate of 9% payable annually. The December 31, 1998 balance of
$2.6 million was paid in November 1999.
At December 31, 1999 required annual principal payments under the aforementioned
credit facilities are as follows (in thousands):
2000 $ 1,000
2001 98,000
2002 107,750
2003 129,250
2004 152,500
Thereafter 744,500
------------
$1,233,000
============
|
As required by its credit facilities, the Company enters into interest-rate swap
agreements to modify the interest characteristics of its outstanding debt from a
floating rate to a fixed rate basis. These agreements involve the payment of
fixed rate amounts in exchange for floating rate interest receipts over the life
of the agreement without an exchange of the underlying principal amount. The
differential to be paid or received is accrued as interest rates change and is
recognized as an adjustment to interest expense related to the debt. The related
amount payable to or receivable from counterparties is included in other
liabilities or assets. At December 31, 1999 the Company had entered into various
interest rate swap and collar agreements effectively fixing interest rates
between 4.5% and 7.0%, plus the applicable margin on $766.0 million notional
value of debt. These agreements expire between December 2001 and July 2003. The
fair values of the swap agreements are not recognized in the financial
statements and approximated $7.2 million at December 31, 1999.
F-20
INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
J. Capital Stock
The authorized capitalization of the Company consists of 300,000,000 shares of
Class A common stock, par value $.01 per share, 100,000,000 shares of Class B
common stock, par value $.01 per share and 100,000,000 shares of preferred
stock, par value $.01 per share. The rights of the holders of Class A and Class
B common stock are substantially identical in all respects, except for voting
rights. Holders of Class A common stock are entitled to one vote per share and
holders of Class B commons tock are entitled to ten votes per share. Prior to
the Company's IPO, the Company operated as a limited partnership and had
outstanding limited partnership units. In addition, as of December 31, 1998, the
Company had outstanding redeemable Class B units (Note K). In connection with
the IPO, the limited partnership units and redeemable Class B units were
exchanged for shares of the Company's Class A and Class B common stock as
summarized below.
Common Stock
Redeemable -------------------------
LP Units Class B Units Class A Class B
---------- ------------- ---------- -----------
Balance at December 31, 1998 41,974,421 47,215,859 -- --
Recapitalization, and issuance of common stock
to employees (41,974,421) -- 11,683,044 10,226,050
Issuance of common stock in exchange for
redeemable Class B units -- (47,215,859) 11,024,136 --
Issuance of common stock in IPO -- -- 26,450,000 --
-------------------------------------------------------
Balance at December 31, 1999 -- -- 49,157,180 10,226,050
=======================================================
|
K. Redeemable Class B Common Units, Warrants and Redeemable Preferred Limited
Units
On January 29, 1998, Insight L.P. issued 47,215,859 non-interest bearing Class B
Common Units ("Class B Units") to Vestar Capital Partners III ("Vestar") in
exchange for $50 million in cash, resulting in Vestar holding a 45% ownership
interest on a fully diluted basis in the partnership. In connection with the
issuance of the Class B Units, Insight L.P. paid placement fees and expenses of
$1.7 million to Vestar and $2.7 million to an investment banking institution
which amounts have been netted against the aforementioned proceeds. The Class B
Unit agreement includes a put/call arrangement whereby the Class A partners or
the Class B partners may call or put, respectively, the Class B units during a
60 day period commencing in July 2004 at their fair market value. Distributions
between the Class A Units and Class B Units follow ownership percentage
interests until the Class B Units earn a 25% annual internal rate of return at
which time distributions are amended to approximately 30% to the Class B Unit
holders and 70% to the Class A Unit holders. In addition, management can earn up
to 6% of the Class B holdings upon achieving certain performance measures.
During 1999, in connection with the Company's IPO, the Class B Units were
exchanged for shares of Class A common stock (Note J).
F-21
INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
K. Redeemable Class B Common Units, Warrants and Redeemable Preferred Limited
Units (continued)
In connection with a prior debt issuance, Insight L.P. issued detachable
warrants, which were valued at $5.6 million at the date of issuance. Each
warrant entitled the holder thereof to purchase 4.22 Common Units in the
partnership at an exercise price of $1.61 per warrant. For accounting purposes,
the value of the warrants was determined by management assuming that a sale had
occurred as of each year-end and without regard to the illiquid nature of the
warrants. During 1998, Insight L.P. acquired 512,200 warrants for approximately
$.8 million. During 1998, 599,310 warrants were converted into 2,529,088
partnership units and 383,303 units expired. During 1999, in connection with the
Company's IPO, the partnership units were exchanged for shares of common stock.
In 1993, Insight L.P. issued redeemable preferred limited units to a group of
investors for a gross purchase price of $27 million. During January 1998, all of
the remaining units were redeemed for $60 million pursuant to a negotiated
agreement. Prior to such redemption, the units had a liquidation preference
equal to the capital contribution plus a cumulative return on such capital at an
annual rate of 12 1/2%. In addition, the units shared in the increase in the
equity value of the partnership.
L. @Home Warrants
Under a distribution agreement with At Home Corporation, a high-speed internet
access service provider, ("@Home"), the Company provides high-speed Internet
access to subscribers over its network in certain of its cable television
systems. In connection with the acquisition of the Kentucky systems, Insight
Kentucky obtained agreements whereby @Home issued warrants to Insight Kentucky
to purchase shares of @Home Series A Common Stock ("@Home Stock") at an exercise
price of $5.25 per share, as adjusted for a two-for-one stock split which
occurred on June 17, 1999. Under the provisions of the agreements, Insight
Kentucky estimates that it may purchase up to 459,200 shares of @Home Stock. The
warrants become vested and exercisable, subject to certain forfeiture and other
conditions, based on operational targets which include offering the @Home
service by Insight Kentucky in its service areas and obtaining specified numbers
of @Home subscribers over the remaining six-year term of the @Home distribution
agreement. The Company has not recognized any income related to the warrants for
the year ended December 31, 1999.
M. Comprehensive Income
SFAS No. 130, "Reporting Comprehensive Income" ("SFAS No. 130"), sets forth
rules for the reporting and display of comprehensive income (net income plus all
other changes in net assets from non owner sources) and its components in the
financial statements. At December 31, 1999, components of other comprehensive
income consisted of the net unrealized gain on marketable securities of
approximately $3.2 million, net of income tax of approximately $2.2 million.
Prior to 1999, there were no items of other comprehensive income.
F-22
INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
N. Earnings Per Share
Earnings per share is calculated in accordance with the FASB Statement No. 128
"Earnings Per Share." The following table sets forth the computation of basic
and diluted earnings (loss) per share. The exchange of limited partnership units
for common stock are included at an exchange ratio of .399 shares per
partnership unit and .238 shares for each redeemable Class B unit from their
issuance date on January 29, 1998. The general partners' interest is reflected
as outstanding in all periods. The warrants are included when dilutive. The
accretion to redemption value of preferred limited units is treated as a
reduction of earnings available to Common holders. Basic earnings per share is
computed using average shares outstanding during the period. Diluted earnings
per share is basic earnings per share adjusted for the dilutive effects of the
warrants.
Year ended December 31,
1997 1998 1999
-----------------------------------
Numerator:
Net income (loss) from before extraordinary item $ 79,125 $ 141,873 $ (84,208)
Accretion of redeemable Class B units -- (5,729) (7,118)
Accretion of redeemable preferred limited units (15,275) -- --
-----------------------------------
Numerator for basic earnings (loss) per share 63,850 136,144 (91,326)
Effect of dilutive securities -- 5,729 --
-----------------------------------
Numerator for diluted earnings (loss) per share 63,850 141,873 (91,326)
Denominator for basic income (loss) per share: --
Weighted average Class A units and general partner's interest 31,635 20,287 35,417
Effect of dilutive securities
Redeemable Class B units -- 10,285 --
Warrants 2,519 621 --
-----------------------------------
Potential dilutive securities 2,519 10,906 --
-----------------------------------
Denominator for dilutive income (loss) per share 34,154 31,193 35,417
===================================
Basic income (loss) per share before extraordinary item $ 2.02 $ 6.71 $ (2.58)
Diluted income (loss) per share before extraordinary item $ 1.87 $ 4.55 $ (2.58)
Basic income (loss) per share $ 1.86 $ 6.55 $ (2.58)
Diluted income (loss) per share $ 1.78 $ 4.61 $ (2.58)
|
F-23
INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
O. Income Taxes
The Company was originally organized as a Delaware limited partnership which
elected to be treated as a "flow-through" entity for federal income tax
purposes. Since the Company was not subject to federal and state income taxes
for the period through July 26, 1999, no income tax provision was recorded.
Instead, each of the individual partners included the taxable income or loss of
the Company in their respective income tax returns.
Effective July 26, 1999, the Company converted to a corporation and is now
subject to federal, state and local income taxes. In connection with the IPO,
the Company recorded a one time non-recurring charge of approximately $39.5
million for deferred taxes upon the exchange of the limited partnership
interests in Insight L.P. for the Company's stock. Such charge relates to the
deferred tax liability associated with the difference between the financial
statements and tax basis of the assets and liabilities of the Company. For the
period ended December 31, 1999, the Company recorded a net deferred tax benefit
of approximately $8.2 million relating to losses from operations subsequent to
the conversion. In addition, the Company recorded a current tax provision for
approximately $300,000 for state and local taxes.
Deferred income taxes represent the net tax effects of temporary differences
between the carrying amount of assets and liabilities for financial reporting
purposes and amounts used for income tax purposes. Significant components of the
Company's deferred tax assets and liabilities consist of the following at
December 31, 1999 (in thousands):
Deferred tax assets:
Net operating loss carryforward $ 2,871
Accounts receivable 145
Investment in unconsolidated affiliates 12,899
Accrued expenses and other liabilities 127
--------
Gross deferred tax asset $ 16,042
Deferred tax liabilities:
Unrealized gain on marketable securities 2,201
Depreciation & amortization 47,370
--------
Gross deferred tax liability 49,571
Net deferred tax liability $(33,529)
========
|
F-24
INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
O. Income Taxes (continued)
The reconciliation of income tax expense computed at the U.S. federal statutory
rate to income tax expense for the years ended December 31, 1997, 1998 and 1999
are as follows:
December 31,
1997 1998 1999
--------------------------------------------
Expense (benefit) at a federal statutory rate (34%) $ 25,100 $ 47,100 $(17,756)
State and local taxes, net -- -- (1,141)
Expenses not deductable for U.S. tax purposes 7 11 196
Adjustment to record charge upon conversion from a
partnership to a corporation -- -- 39,526
Losses (income) for which no expense/benefit has been provided
(25,107) (47,111) 10,761
--------------------------------------------
$ -- $ -- $ 31,586
============================================
|
At December 31, 1999, the Company had a net operating loss carryforward of
approximately $7.0 million for U.S. federal income tax purposes. The Company's
net operating loss began accumulating effective July 26, 1999, the date of the
IPO. The net operating loss will expire in the year 2019.
P. Stock Option Plan and Other Stock Based Compensation
Stock Option Plan
The Company adopted a stock option plan (the "Plan") on June 24, 1999, which
provides for the grant of incentive stock options ("ISOs"), nonqualified stock
options and stock appreciation rights ("SARs"). The Company has reserved
5,000,000 shares of common stock for grant under the Plan. ISOs may be granted
only to officers and key employees of the Company and nonqualified stock options
and SARs may be granted to the Company's officers, employees, directors, agents
and consultants. The Plan provides for the granting of ISOs at an exercise price
that is not less than the fair market value of the stock on the date of grant
and the granting of nonqualified options and SARs with any exercise price.
F-25
INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
P. Stock Option Plan and Other Stock Based Compensation (continued)
Stock options vest over five years and expire ten years from the date granted.
The following summarizes stock option activity for 1999:
Options Weighted Average
Outstanding Exercise Price
---------- ----------------
Outstanding as of January 1, 1999 -- --
Options granted 2,892,500 $24.56
Options exercised -- --
Options canceled/forfeited (15,000) $24.50
------------------------------------
Outstanding as of December 31, 1999 2,877,500 $24.56
====================================
|
The weighted average fair value of options granted in 1999 was $13.39 per share.
The range of exercise prices for options outstanding at December 31, 1999 was
$22.38 to $30.13 with a weighted average contractual life of 9.7 years. None of
the options were exercisable as of December 31, 1999.
Pursuant to Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation" ("SFAS No. 123), the Company has elected to account
for employee stock-based compensation under APB Opinion No. 25, "Accounting for
Stock Issued to Employees," using an intrinsic value approach to measure
compensation expense. Accordingly, no compensation expense has been recognized
for options granted under the Plan since all options were granted to employees
at exercise prices equal to fair market value on the date of grant. Had
compensation cost for the Plan been determined based on the fair value at the
grant date consistent with SFAS No. 123, the Company's net loss and net loss per
share for the year ended December 31, 1999 would have been approximately $86.2
million and $2.63, respectively. The fair value of each option grant is
estimated on the date of grant using the Black-Scholes option-pricing model. The
following assumptions were applied in determining the fair value: weighted
average risk-free interest rate - 6.5%; expected dividend yield - 0%; expected
option life - 7 years; and expected stock price volatility - 42%.
Other Stock Based Compensation
In connection with the IPO, the Company issued a total of 1,412,181 shares of
common stock to its employees. The Company recorded non-cash compensation
expense of approximately $19.3 million in connection with the issuance of these
shares. In October 1999, the Company granted loans to these employees, the
proceeds of which were used to satisfy the individual income tax withholding
obligation with respect to the receipt of these shares. In the aggregate, these
loans total approximately $13.9 million. The loans are non-recourse and are
represented by notes which are secured by Company common stock pledges equal to
the number of shares each individual received as compensation, bear interest at
the rate of 6% per annum and are payable upon the fifth anniversary of the
F-26
INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
P. Stock Option Plan and Other Stock Based Compensation (continued)
note, or 180 days following the termination of employment, provided that the
proceeds of any sales of the pledged shares must be applied towards early
repayment of these loans.
Q. Financial Instruments
Concentrations of Credit Risk
Financial instruments that potentially subject the Company to significant
concentrations of credit risk consist principally of cash investments and
accounts receivable. The Company maintains cash and cash equivalents with
various financial institutions. These financial institutions are located
throughout the country and the Company's policy is designed to limit exposure to
any one institution. Concentrations of credit risk with respect to accounts
receivable are limited due to the large number of customers comprising the
Company's customer base.
The following methods and assumptions were used by the Company in estimating its
fair value disclosures for financial instruments:
Cash and cash equivalents: The carrying amount reported in the balance sheet for
cash and cash equivalents approximates fair value.
Debt: The carrying amounts of the Company's borrowings under its credit
arrangements approximate fair value as they bear interest at floating rates. The
carrying amounts of the Insight Midwest's senior notes approximate fair value as
it bears interest at a fixed rate.
Interest rate swap agreements: The fair value of swap agreements are not
recognized in the financial statements and approximated $7.2 million at December
31, 1999, based on market trading value.
R. Related Party Transactions
Through November 1999, the Company had an agreement with Media One which enabled
the Company to obtain certain services (principally pay and basic cable
programming services) and equipment at rates lower than those which would be
available from independent parties. In each of the years ended December 31,
1997, 1998, and 1999, programming and other operating costs include
approximately $200,000 of expenses for programming services paid directly to
Media One.
In addition, in connection with the Contribution Agreement (Note D), the
Company purchases substantially all of its pay television and other programming
for the Indiana and Kentucky systems from affiliates of TCI. Charges for such
programming were $1.4 million for the two months ended December 31, 1998 and
$29.6 million for the year ended December 31, 1999. Management believes that the
F-27
INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
R. Related Party Transactions (continued)
programming rates charged by TCI affiliates are lower than those which would be
available for independent parties.
S. 401(k) Plan
The Company sponsors a savings and investment 401(k) Plan (the "Plan") for the
benefit of its employees. All employees who have completed six months of
employment and have attained age 21 are eligible to participate in the Plan. The
Company makes matching contributions equal to 25% of the employee's contribution
that is not in excess of 5% of the employee's wages. During 1997, 1998 and 1999
the Company matched contributions of approximately $51,000, $188,000 and
$562,000, respectively.
T. Commitments and Contingencies
The Company leases and subleases equipment and office space under operating
lease arrangements expiring through December 31, 2015. Future minimum rental
payments required under operating leases are as follows (in thousands):
2000 $ 3,227
2001 2,269
2002 1,956
2003 1,841
2004 1,726
Thereafter 9,463
|
Rental expense for the years ended December 31, 1997, 1998 and 1999 approximated
$.7 million, $1.0 million and $2.1 million, respectively.
Certain of the Company's individual systems have been named in purported class
actions in various jurisdictions concerning late fee charges and practices.
Certain of the Company's cable television systems charge late fees to
subscribers who do not pay their cable bills on time. Plaintiffs generally
allege that the late fees charged by such cable
F-28
INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
T. Commitments and Contingencies (continued)
television systems are not reasonably related to the costs incurred by the cable
television systems as a result of the late payment. Plaintiffs seek to require
cable television systems to provide compensation for alleged excessive late fee
charges for past periods. These cases are at various stages of the litigation
process. Based upon the facts available, management believes that, although no
assurances can be given as to the outcome of these actions, the ultimate
disposition of these matters should not have a material adverse effect upon the
financial condition or results of operations of the Company.
The Company is subject to other various legal proceedings that arise in the
ordinary course of business. While it is impossible to determine with certainty
the ultimate outcome of these matters, it is management's opinion that the
resolution of these matters will not have a material adverse affect on the
consolidated financial condition of the Company.
U. Subsequent Events
Managed Indiana Systems
On March 27, 2000, the Company entered into a two-year agreement with InterMedia
Partners Southeast, an affiliate of AT&T Broadband, to provide consulting
services to cable television systems acquired by AT&T Broadband, by which
systems as of December 31, 1999 served approximately 114,000 customers in the
State of Indiana. The Company will earn an annual fee of 3% of gross revenues
for providing such consulting services. For the year ended December 31, 1999,
these Indiana systems had revenues of approximately $55.0 million. Nearly all of
these systems are contiguous to the Company's other Indiana systems.
Transactions with Source Media and Liberate Technologies
On March 3, 2000, pursuant to a merger with a subsidiary of Liberate
Technologies ("Liberate"), SourceSuite LLC (Note F) sold all of its VirtualModem
assets in exchange for the issuance to each of Insight Interactive and Source
Media of 886,000 shares of Liberate common stock. Liberate's common stock had a
closing sale price per share of $82.00 as of March 24, 2000. Insight Interactive
and Source Media have agreed not to sell 80% of their Liberate shares prior to
July 31, 2000. SourceSuite LLC continues to own and operate its programming
assets, LocalSource and SourceGuide, and has entered into preferred content and
programming services agreements with Liberate. As a result of this transaction,
the Company expects to record a gain ranging from approximately $60.0 million to
approximately $72.0 million, which will be recorded during the first quarter of
2000.
Agreement in Principle with AT&T
On March 15, 2000, the Company reached an agreement in principle with AT&T Corp.
for the delivery of telephone service utilizing the Company's cable television
systems
F-29
INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
U. Subsequent Events (continued)
under the "AT&T" brand name. The terms of the agreement in principle provide
that the Company will market, service and bill for local telephone service. AT&T
would be required to install and maintain the necessary switching equipment, and
would be the local exchange carrier of record. AT&T would pay the Company a fee
for the use of the local telephone lines, and will also compensate the Company
for installation and maintenance services at customers' residences. In addition,
AT&T would pay the Company commissions for sales the Company makes to its
customers. The Company expects to sell the AT&T-branded local telephone service
separately and as part of bundled offerings, which would also include the sale
of AT&T long-distance telephone services. The agreement in principle is subject
to the negotiation and execution of definitive agreements.
Greenwood Letter of Intent
On March 21, 2000, Insight Midwest entered into a letter of intent with Cable
One, Inc., a subsidiary of The Washington Post Company, for the acquisition of a
cable television system serving approximately 16,000 customers in Greenwood,
Indiana as of December 31, 1999. Due to its geographic proximity, the Company
intends to integrate the Greenwood system with its Central District in Indiana.
The acquisition by Insight Midwest of the Greenwood system would occur upon
completion of a proposed trade of systems between Cable One and AT&T Broadband.
The transaction is subject to the negotiation and execution of definitive
agreements.
Expansion of Insight Midwest
On March 23, 2000, the Company entered into a letter of intent with AT&T
Broadband to contribute to Insight Midwest additional cable television systems
serving approximately 537,000 customers, nearly doubling the customer base of
Insight Midwest. Through a series of transactions, the Company will contribute
to Insight Midwest its interests in systems serving approximately 187,000
customers and AT&T Broadbond will contribute systems serving approximately
350,000 customers. Initially, the Company would exchange its Claremont,
California system for a system in Freeport, Illinois, subject to completion by
AT&T Broadband of its proposed acquisition of MediaOne. The Freeport system
would be integrated into the Company's Rockford, Illinois system, creating a
cluster of approximately 75,000 customers in the northern part of the state. The
Company would also purchase from AT&T Broadband systems serving approximately
100,000 customers in North Central Illinois. Concurrently with this purchase,
the Company would contribute to Insight Midwest all of its systems not already
owned by Insight Midwest, including the newly purchased Illinois systems, the
expanded Rockford, Illinois cluster, the Company's interest in its Columbus,
Ohio system and its Griffin, Georgia system, as well as systems in Indiana not
already owned by Insight Midwest. At the same time, AT&T Broadband would
contribute to Insight Midwest systems located in Central and North Central
Illinois serving approximately 250,000 customers. As a result, Insight Midwest
would increase its customer base of approximately 748,800 as of December 31,
1999 to approximately 1.3 million, and the Company would increase its total
number of customers served by approximately 350,000. AT&T Broadband would
receive an amount of cash from the Company. Upon completion of the transactions,
Insight Midwest would remain equally owned by the Company and AT&T Broadband,
and the Company would continue to serve as the general partner and manage and
operate the Insight Midwest
F-30
INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
U. Subsequent Events (continued)
systems. The transactions are subject to the negotiation and execution of
definitive agreements.
V. Quarterly Financial Data (Unaudited)
Three months ended
-------------------------------------------------------------- Year ended
1999 March 31 June 30 September 30 December 31 December 31
-----------------------------------------------------------------------------
Revenue $ 45,377 $ 46,406 $ 46,581 $ 104,329 $ 242,693
Operating loss (3,805) (3,065) (24,949) (3,235) (35,054)
Income (loss) before extraordinary item 7,238 (14,912) (67,669) (8,865) (84,208)
Net income (loss) 7,238 (14,912) (67,669) (8,865) (84,208)
Basic income (loss) per share before
extraordinary item $0.24 $(1.07) $(1.43) $(0.15) $(2.58)
Diluted income (loss) per share
before extraordinary item $0.26 $(1.07) $(1.43) $(0.15) $(2.58)
Basic income (loss) per share $0.24 $(1.07) $(1.43) $(0.15) $(2.58)
Diluted income (loss) per share $0.26 $(1.07) $(1.43) $(0.15) $(2.58)
|
Three months ended
-------------------------------------------------------------- Year ended
1998 March 31 June 30 September 30 December 31 December 31
-----------------------------------------------------------------------------
Revenue $ 23,161 $ 25,162 $ 25,480 $ 39,099 $ 112,902
Operating income (loss) 5,863 10,370 6,348 (8,375) 14,206
Income (loss) before extraordinary item 73 4,071 (299) 138,028 141,873
Net income (loss) 73 4,071 (299) 134,761 138,606
Basic income (loss) per share before
extraordinary item $- $0.11 $(0.11) $8.05 $6.71
Diluted income (loss) per share before
extraordinary item $- $0.07 $(0.11) $4.94 $4.55
Basic income (loss) per share $- $0.11 $(0.11) $7.85 $6.55
Diluted income (loss) per share $- $0.07 $(0.11) $4.82 $4.61
|
F-31
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Insight Communications Company, Inc.
Date: March 28, 2000 By: /s/ Michael S. Willner
----------------------
Michael S. Willner, President and
Chief Executive Officer
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
Signatures Title Date
---------- ----- ----
/s/ Sidney R. Knafel
-----------------------
Sidney R. Knafel Chairman of the Board March 28, 2000
/s/ Michael S. Willner
-----------------------
Michael S. Willner President, Chief Executive Officer and March 28, 2000
and Director (Principal Executive Officer)
/s/ Kim D. Kelly
-----------------------
Kim D. Kelly Executive Vice President, Chief Financial March 28, 2000
and Operating Officer, Treasurer and Director
(Principal Financial and Accounting Officer)
/s/ Thomas L. Kempner
-----------------------
Thomas L. Kempner Director March 28, 2000
/s/ James S. Marcus
-----------------------
James S. Marcus Director March 28, 2000
/s/ Prakash A. Melwani
-----------------------
Prakash A. Melwani Director March 28, 2000
/s/ Daniel S. O'Connell
-----------------------
Daniel S. O'Connell Director March 28, 2000
|
EXHIBIT 10.5
AMENDMENT NO. 4
AMENDMENT NO. 4, dated as of September 24, 1999 (this "Amendment"), to the
Fourth Amended and Restated Credit Agreement, dated as of December 21, 1998, by
and among Insight Communications Company, L.P., the Lenders party thereto, CIBC
Inc. and Fleet Bank, N.A., as Co-Agents, and The Bank of New York, as Agent and
as Issuing Bank, as amended by Waiver No. 1 and Amendment No. 1, dated as of
December 21, 1998, Waiver No. 2 and Amendment No. 2, dated as of December 31,
1998, and Amendment No. 3, dated as of July 1, 1999 (as so amended, the "Credit
Agreement").
RECITALS
I. Capitalized terms used herein and not defined herein shall have the
meanings assigned to such terms in the Credit Agreement.
II. The Borrower has proposed to engage in a series of transactions as
follows:
A. The Borrower has agreed to acquire 50.0% of the partnership
interests in InterMedia Capital Partners VI, L.P.
B. The Borrower and a subsidiary of AT&T Broadband & Internet Services
will form a limited partnership and a limited liability company, each to be
50.0% owned by each of them.
C. Each of the Borrower and AT&T Broadband & Internet Services will
cause all of the equity interests in each of Indiana and InterMedia Capital
Partners VI, L.P. to be contributed to the newly formed limited
partnership.
III. In connection with the foregoing, the Borrower has requested that the
Agent agree to amend the Credit Agreement upon the terms and conditions
contained herein, and the Agent is willing so to agree.
Accordingly, in consideration of the Recitals and the terms and conditions
hereinafter set forth, and for other good and valuable consideration, the
receipt and adequacy of which are acknowledged, the Borrower and the Agent agree
as follows:
1. Section 1.1 of the Credit Agreement is amended by (a) deleting the
defined terms "Consolidated Annualized Cash Flow", "Knafel", "Negative Pledge
Agreement", and "Willner" therefrom, and (b) deleting the following from the end
thereof:
Each of the following terms shall have the meaning set forth in
Amendment No. 3, dated as of July 1, 1999, to the Credit Agreement
("Amendment No. 3"):
"Corporate Restructuring"
"Insight Holdings"
"IPO"
Insight Communications Company, L.P. -- Amendment No. 4
2. Section 1.1 of the Credit Agreement is further amended by deleting the
defined term "Super-majority
Lenders" therefrom.
3. Section 1.1 of the Credit Agreement is further amended by adding the
following defined terms thereto in appropriate alphabetical order:
"Approved Subordinated Debt": Indebtedness for borrowed money incurred
by the Borrower to Insight Holdings, provided that (a) the maturity date
therefor is not earlier than December 31, 2006, (b) the terms and
conditions thereof are less restrictive upon the Borrower and the
Subsidiaries than those contained in the Loan Documents, and (c) such
Indebtedness, together with all interest thereon and fees payable in
respect thereof, is subordinated to the obligations of the Credit Parties
under the Loan Documents pursuant to the Approved Subordination Agreement.
"Approved Subordination Agreement": a subordination agreement,
executed and delivered by the Borrower and Insight Holdings to the Agent,
substantially in the form of Exhibit L hereto.
"Effective Acquisition Cost": with respect to any Acquisition, the
Acquisition Cost less the sum of each of the following to the extent
included therein: (a) cash consideration paid or agreed to be paid from the
proceeds of (i) the incurrence by the Borrower of Approved Subordinated
Debt, and/or (ii) additional capital contributed to the Borrower from
Insight Holdings in the form of cash, and (b) consideration in the form of
common stock of Insight Holdings.
"IM6": as defined in Section 8.3(f).
"IM6 Acquisition": as defined in Section 8.3(f).
"Insight Holdings": Insight Communications Company, Inc., a Delaware
corporation.
"Insight-TCI JV Companies": as defined in Section 8.5(i).
"IPO": the initial public offering of shares of common stock of
Insight Holdings.
"Source Media Investment": any and all Investments made pursuant to
Section 8.5(j).
"System Cash Flow": as of any date of determination, an amount equal
to (a) gross revenues minus operating expenses (other than corporate
overhead and administrative expenses), in each case for the fiscal quarter
most recently ended in respect of which the Borrower shall have delivered
the Compliance Certificate pursuant to Section 7.1(c), directly
attributable to the cable television systems owned and operated by the
Borrower and the Restricted Subsidiaries,
2
Insight Communications Company, L.P. -- Amendment No. 4
multiplied by (b) four. Notwithstanding anything to the contrary contained
in this definition, for purposes of determining "System Cash Flow" only,
all Acquisitions, Dispositions and Exchanges occurring during a fiscal
quarter shall be deemed to have occurred on the first day of such quarter.
"Vested Employees": certain employees of the Borrower and/or the
Restricted Subsidiaries.
4. Each of the following terms contained in Section 1.1 of the Credit
Agreement is amended and restated in its entirety as follows:
"Collateral Documents": collectively, the Borrower Security Agreement,
the Subsidiary Guaranty, the Approved Subordination Agreement, if any, the
Pledge Agreement, and all documents executed or delivered in connection
with any of the foregoing.
"Consolidated Cash Flow": for any period, net income of the Borrower
and its Restricted Subsidiaries for such period, determined on a
Consolidated basis in accordance with GAAP plus (i) the sum of, without
duplication, each of the following with respect to the Borrower and its
Restricted Subsidiaries, to the extent utilized in determining such net
income: (a) all interest expense, and (b) depreciation, amortization and
other non-cash charges, minus (ii) the sum of, without duplication, each of
the following with respect to the Borrower and its Restricted Subsidiaries,
to the extent utilized in determining such net income: (a) extraordinary
gains and losses from sales, exchanges and other dispositions of Property
not in the ordinary course of business, (b) other non-recurring items, and
(c) management fees that accrued during such period that were not paid
during such period or at any time before the date of delivery, pursuant to
Section 7.1(c), of the Compliance Certificate for the last full fiscal
quarter included in such period, minus (iii) all Restricted Payments made
by the Borrower pursuant to Section 8.6(iii) during such period.
"Control Group": collectively, Sidney Knafel and his Family Group,
Michael Willner and his Family Group and Kim Kelly and her Family Group.
"Excluded Transactions": the Americable Acquisition, the Falcon Swap,
the Source Media Investment and the IM6 Acquisition.
5. The term "Capital Expenditures" contained in Section 1.1 of the Credit
Agreement is amended by adding the following sentence to the end thereof:
Notwithstanding anything to the contrary contained in this defined term,
"Capital Expenditures" shall exclude, to the extent otherwise included
therein, Capital Expenditures directly attributable to the IM6 Acquisition.
6. The term "Adjusted Consolidated Annualized Cash Flow" contained in
Section 1.1 of the Credit Agreement is amended by replacing the term
"Consolidated Annualized Cash Flow"
3
Insight Communications Company, L.P. -- Amendment No. 4
appearing therein with "Consolidated Cash Flow".
7. The term "Consolidated Fixed Charges" contained in Section 1.1 of the
Credit Agreement is amended by replacing the reference "Section 8.6(ii)" with
"paragraphs (ii) and (iv) of Section 8.6".
8. Clause (v) of the term "Excess Cash Flow" contained in Section 1.1 of
the Credit Agreement is amended and restated in its entirety as follows:
(v) Restricted Payments made pursuant to paragraphs (ii) and (iv) of
Section 8.6 during such fiscal year,
9. The term "Special Counsel" contained in Section 1.1 of the Credit
Agreement is amended by deleting the name "Emmet, Marvin & Martin, LLP" and
inserting in its place the name "Bryan Cave, LLP".
10. The term "Unrestricted Subsidiary" contained in Section 1.1 of the
Credit Agreement is amended by adding the terms "Insight-TCI LP, Insight-TCI
LLC," immediately after the term "ICCO Operating,".
11. Section 7.1(c) of the Credit Agreement is amended and restated in its
entirety as follows:
(c) Within 45 days after the end of each of the first three fiscal
quarters (90 days after the end of the last fiscal quarter) of each fiscal
year (i) a Compliance Certificate, certified by a Financial Officer of the
Borrower, and (ii) a copy of a financial statement setting forth the System
Cash Flow of the Borrower and the Restricted Subsidiaries on a Consolidated
basis for such quarter, setting forth in each case in comparative form the
figures for the corresponding quarter of the immediately preceding fiscal
year, certified by a Financial Officer of the Borrower as presenting fairly
in all material respects the System Cash Flow of the Borrower and the
Restricted Subsidiaries on a Consolidated basis for such quarter.
12. Section 8.1 of the Credit Agreement is amended by (a) replacing the
amount "$5,000,000" in clause (iii) thereof with "$10,000,000", (b) deleting the
word "and" at the end of clause (vi) thereof, and (c) amending and restating
clause (vii) thereof as follows:
(vii)(a) Indebtedness of the Borrower in an aggregate principal amount not
to exceed $25,000,000 at any one time outstanding, (b) Approved
Subordinated Debt of the Borrower, and/or (c) Indebtedness of the Borrower
pursuant to a guarantee of up to $30,000,000 of Indebtedness of certain
subsidiaries of IM6 (the "IM6 Guarantee"), provided that, immediately
before and after giving effect to each incurrence of Indebtedness under
this clause (vii), no Default shall or would have occurred and be
continuing and the Borrower shall be in pro-forma compliance with Section
7.11.
13. Sections 8.3(f) and 8.3(g) of the Credit Agreement are amended and
restated in their entirety as follows:
4
Insight Communications Company, L.P. -- Amendment No. 4
(f) provided that both immediately before and after giving effect
thereto, no Default shall or would exist
(1) the Falcon Swap,
(2) the Acquisition of certain cable television systems located
in Indiana and previously identified to the Lenders from Americable
International - Michigan - Inc. and certain affiliates thereof for
total consideration not in excess of $10,850,000 (exclusive of normal
course adjustments) in cash (the "Americable Acquisition"), and/or
(3) the Acquisition by the Borrower of 50.0% of the partnership
interests in InterMedia Capital Partners VI, L.P. ("IM6"), together
with all of the limited partnership interests in each of the
subsidiaries of IM6 that are not owned by IM6, for $327,185,000
(subject to adjustment as provided in the purchase agreement therefor)
in cash (the "Cash Consideration") plus the assumption of
approximately $430,000,000 million in debt (the "IM6 Acquisition"),
provided that (1) it is consummated in all material respects in
accordance with such purchase agreement, and (2) during the period
beginning on July 1, 1999 and ending on the date of the IM6
Acquisition, Insight Holdings shall have contributed to the Borrower
in the form of additional capital, an aggregate amount in cash equal
to no less than the sum of the Cash Consideration plus an amount equal
to all fees and expenses payable by the Borrower and the Restricted
Subsidiaries in connection with the IM6 Acquisition, in each case to
the extent due and payable on or prior to the closing thereof; and
(g) other Acquisitions, provided, however, that (1) immediately before
and after giving effect to each Acquisition made pursuant to this paragraph
(g) that has an Effective Acquisition Cost in excess of $1.00, the ratio of
Consolidated Total Debt to System Cash Flow shall be less than or equal to
5.00:1.00, (2) the Acquisition Cost in respect of all Acquisitions (other
than Aquisitions of cable television systems) made pursuant to this
paragraph (g) shall not exceed $10,000,000 in the aggregate during any
fiscal year or $25,000,000 in the aggregate during the period from the
Effective Date to the termination of this Agreement, (3) immediately before
and after giving effect to each Acquisition made pursuant to this paragraph
(g), no Default shall or would exist, (4) the Borrower will be in
compliance with each of the financial covenants contained in Section 7.11
on a pro-forma basis after giving effect to such Acquisition and any
Indebtedness incurred or assumed in connection therewith, (5) immediately
after giving effect to each such Acquisition, all of the representations
and warranties contained in Section 4 shall be true and correct as if then
made (except to the extent such representations and warranties specifically
relate to an earlier date, in
5
Insight Communications Company, L.P. -- Amendment No. 4
which case such representations and warranties shall have been true and
correct on and as of such earlier date), and the Agent shall have received
a certificate of a Financial Officer of the Borrower to such effect, (6)
the Agent and the Lenders shall have been given five Business Days' prior
written notice thereof, (7) the Agent shall have received a certificate
signed by a Financial Officer of the Borrower, identifying the Person or
Property to be acquired, the name of the Person making such Acquisition and
setting forth the total consideration to be paid in respect of such
Acquisition, (8) the conditions of Section 8.14 shall have been satisfied,
and (9) the Agent shall have received such other information or documents
as the Agent shall have reasonably requested.
14. Section 8.4(c) of the Credit Agreement is amended by (a) replacing the
percentage "10%" in clause (ii) thereof with "30%", and (b) replacing the
percentage "25%" in clause (iii) thereof with "50%".
15. Section 8.4(d) of the Credit Agreement is amended by replacing the term
"Super-majority" with "Required".
16. Section 8.5 of the Credit Agreement is amended by (i) replacing the
amount "$8,000,000" in paragraph (g) thereof with "$15,000,000", (ii) deleting
the word "and" at the end of paragraph (g) thereof, (iii) replacing the period
at the end of paragraph (h) thereof with a semi-colon, and (iv) adding the
following to the end thereof:
(i)(1) the formation by the Borrower and TCI of Indiana Holdings, Inc.
("TCI Holdings") of a limited partnership ("Insight-TCI LP") and a limited
liability company ("Insight-TCI LLC" and, together with Insight-TCI LP, the
"Insight-TCI JV Companies"), each to be 50.0% owned by the Borrower and TCI
Holdings, (2) the contribution by the Borrower of $15,000 to Insight-TCI
LLC, (3) the contribution by the Borrower to Insight-TCI LP of all of the
partnership interests held by the Borrower in IM6 and the subsidiaries
thereof (collectively, the "IM6 Contribution"), provided that TCI Holdings
causes all of the remaining partnership interests in IM6 to be contributed
to Insight-TCI LP substantially contemporaneously therewith, and/or (4) the
contribution by the Borrower to Insight-TCI LP of all of the membership
interests held by the Borrower in Indiana, provided that (A) TCI Holdings
causes all of the remaining membership interests in Indiana to be
contributed to Insight-TCI LP substantially contemporaneously therewith,
and (B) it is made contemporaneously with the IM6 Contribution; and
(j) the Borrower may (1) purchase common stock and common stock
purchase warrants in Source Media, Inc. for cash consideration not in
excess of $12,000,000, and/or (2) purchase a 50.0% interest in a joint
venture to be formed by the Borrower and Source Media, Inc. for cash
consideration not in excess of $13,000,000, provided that with respect to
each Investment pursuant to this paragraph (j), no Default shall exist
immediately before or after giving effect to such Investment.
6
Insight Communications Company, L.P. -- Amendment No. 4
17. Section 8.6 of the Credit Agreement is amended by (a) deleting the word
"and" at the end of paragraph (i) thereof, (b) deleting the period at the end of
paragraph (ii) thereof, and (c) adding the following to the end thereof:
(iii) the Borrower may at any time and from time to time declare and
pay dividends and other distributions to Insight Holdings in an amount
equal to the Borrower's pro rata share of all out-of-pocket administrative,
legal, accounting, and stock transfer expenses incurred by Insight
Holdings, provided that, immediately before and after giving effect
thereto, no Default shall or would have occurred; and
(iv) the Borrower may at any time and from time to time declare and
pay dividends and other distributions to Insight Holdings in an amount
equal to the Borrower's pro rata share of all out-of-pocket advisory fees
incurred by Insight Holdings to Non-affiliates, provided that, immediately
before and after giving effect thereto, no Default shall or would have
occurred. For purposes hereof, "Non-affiliates" means any Person other than
(a) any Affiliate or other affiliate of Insight Holdings or the General
Partner, including any subsidiary of Insight Holdings or the General
Partner, (b) any partner, director, officer or employee of any Person
listed in clause (a) hereof, or (c) any member of a Family Group of any
Person listed in clauses (a) or (b) hereof.
For purposes of the preceding clauses (iii) and (iv) of this Section 8.6,
the Borrower's "pro rata share" shall be (a) 100% until such time, if any,
as Insight Holdings has any direct investment in any Person or Operating
Entity (other than the Borrower), and (b) thereafter, such percentage as
shall reasonably approximate the proportion that the Borrower's gross
revenues bears to the sum of (x) the Borrower's gross revenues, plus (y)
the gross revenues attributable to all such direct investments.
18. Section 8.7 of the Credit Agreement is amended by replacing the amount
"$15,000,000" appearing therein with "$20,000,000".
19. Section 8.14(c) of the Credit Agreement is amended by (a) inserting the
designation "(X)" immediately after the phrase "the Borrower or any of its
Restricted Subsidiaries may create or acquire", and (b) inserting the phrase ",
and/or (Y) the Insight-TCI JV Companies" immediately before the period at the
end thereof.
20. Each of Sections 9.1(f) and 9.1(j) of the Credit Agreement is amended
by inserting the term ", Insight Holdings" immediately after the term
"Restricted Subsidiaries" in each place it appears therein.
21. Section 9.1(h) of the Credit Agreement is amended by inserting the term
", Insight Holdings" immediately after the phrase "the General Partner," in each
place it appears therein.
22. Section 9.1(i) of the Credit Agreement is amended by inserting the term
", Insight
7
Insight Communications Company, L.P. -- Amendment No. 4
Holdings" immediately after the phrase "the General Partner" in each place it
appears therein.
23. Section 9.1(n) of the Credit Agreement is amended and restated in its
entirety as follows:
(n) (1) the Borrower shall cease to be, directly or indirectly, a
wholly-owned Subsidiary of Insight Holdings, (2) any of the Capital Stock
of the Borrower shall be subject to any Lien (other than Liens (i) securing
the obligations of the Borrower and the Subsidiaries under the Loan
Documents, and/or (ii) arising by operation of law in the ordinary course
of business of Insight Holdings), (3) the Control Group shall fail to
beneficially own shares of the issued and outstanding common stock of
Insight Holdings representing at least 25.0% of the number of votes of all
classes of common stock of Insight Holdings, voting as a single class, or
(4) any Person or "group" (within the meaning of the Securities Exchange
Act of 1934 and the rules of the Securities and Exchange Commission
thereunder as in effect on the date hereof), shall hold a greater
percentage of the number of votes of all classes of common stock of Insight
Holdings, voting as a single class, than the Control Group; or
24. All of the obligations, if any, of the Borrower, Sidney R. Knafel, ICC
Associates, L.P., Insight Communications, Inc., and Insight Finance Corporation
under the Negative Pledge Agreement and the Affiliate Subordination Agreement
are hereby terminated, other than the obligations, if any, that by the terms of
such agreements survive termination.
25. The Credit Agreement is amended by adding a new Exhibit L thereto in
the form of Exhibit L to this Amendment.
26. Except as otherwise provided in paragraph 27, paragraphs 1 through 25
hereof shall not be effective until such time as each of the following shall
have occurred:
(a) Required Lenders and each of the Guarantors shall have consented
hereto in writing, and
(b) the Borrower shall have paid to the Agent all fees that the
Borrower may have agreed in writing to pay to the Agent (for its own
account or for the account of the Lenders) in connection herewith.
27. Notwithstanding anything to the contrary contained in paragraph 26,
paragraphs 2 and 15 hereof shall not be effective until such time as
Super-majority Lenders shall have consented hereto in writing.
28. The Borrower (a) reaffirms and admits the validity and enforceability
of each Loan Document and all of its obligations thereunder, (b) agrees and
admits that it has no defense to or offset against any such obligation, and (c)
represents and warrants that, as of the date of the execution and delivery
hereof by the Borrower and assuming the effectiveness of all of the provisions
of this Amendment, no Default has occurred and is continuing, and that each of
the representations and warranties made by it in the Credit Agreement is true
and correct with the
8
Insight Communications Company, L.P. -- Amendment No. 4
same effect as though such representation and warranty had been made on such
date, except to the extent such representations and warranties specifically
relate to an earlier date, in which case such representations and warranties
shall have been true and correct on and as of such earlier date.
29. In all other respects, the Loan Documents shall remain in full force
and effect, and no amendment in respect of any term or condition of any Loan
Document shall be deemed to be an amendment in respect of any other term or
condition contained in any Loan Document.
30. This Amendment may be executed in any number of counterparts all of
which, when taken together, shall constitute one agreement. In making proof of
this Amendment, it shall only be necessary to produce the counterpart executed
and delivered by the party to be charged.
31. THIS AMENDMENT IS BEING EXECUTED AND DELIVERED IN, AND IS INTENDED TO
BE PERFORMED IN, THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND ENFORCEABLE IN
ACCORDANCE WITH, AND BE GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
9
Insight Communications Company, L.P. -- Amendment No. 4
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
INSIGHT COMMUNICATIONS COMPANY, L.P.
By: ICC ASSOCIATES, L.P.,
the sole general partner thereof
By: INSIGHT COMMUNICATIONS, INC.,
the sole general partner thereof
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
Insight Communications Company, L.P. -- Amendment No. 4
THE BANK OF NEW YORK,
individually, as Issuing Bank and as Agent
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
Insight Communications Company, L.P. -- Amendment No. 4
CIBC INC.,
individually and as Co-Agent
By: ________________________________________
Name: ______________________________________
Title: Executive Director,
CIBC Oppenheimer Corp.,
As Agent
Insight Communications Company, L.P. -- Amendment No. 4
FLEET BANK, N.A.,
individually and as Co-Agent
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
Insight Communications Company, L.P. -- Amendment No. 4
BANK OF MONTREAL
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
Insight Communications Company, L.P. -- Amendment No. 4
BANKBOSTON, N.A.
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
Insight Communications Company, L.P. -- Amendment No. 4
PNC BANK, NATIONAL ASSOCIATION
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
Insight Communications Company, L.P. -- Amendment No. 4
BANKERS TRUST COMPANY
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
Insight Communications Company, L.P. -- Amendment No. 4
acknowledged and consented to:
INSIGHT FINANCE CORPORATION
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
INSIGHT HOLDINGS OF OHIO, LLC
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
Exhibit 10.9
EXECUTION COPY
AMENDED AND RESTATED
REVOLVING CREDIT AND TERM LOAN AGREEMENT
dated as of October 1, 1999
among
INSIGHT KENTUCKY PARTNERS I, L.P.
f/k/a INTERMEDIA PARTNERS VI, L.P.
and
THE FINANCIAL INSTITUTIONS PARTY HERETO,
and
TORONTO DOMINION (TEXAS), INC.,
as Administrative Agent
BNY Capital Markets, Inc.,
Donaldson, Lufkin & Jenrette Securities Corporation,
Banc of America Securities LLC
TD Securities (USA), Inc.,
as Arranging Agents
and
BNY Capital Markets, Inc.,
Bank of America, N.A.,
as Syndication Agents
TABLE OF CONTENTS
Page
----
ARTICLE I. DEFINITIONS.................................................................................2
Section 1.01. Definitions...............................................................................2
ARTICLE II. THE REVOLVING CREDIT AND TERM LOANS........................................................23
Section 2.01. The Revolving Credit, Term Loans and Swing Line Loans....................................23
Section 2.02. Procedure for Borrowings.................................................................24
Section 2.03. Revolving Credit Notes and Term Notes....................................................25
Section 2.04. Revolving Credit Commitment Fee..........................................................26
Section 2.05. Other Fees...............................................................................27
Section 2.06. Optional Cancellation or Reduction of Total Revolving Credit Commitment and Term
Loans.................................................................................27
Section 2.07. Mandatory Reductions of the Total Revolving Credit Commitment............................27
Section 2.08. Mandatory and Optional Prepayment........................................................28
Section 2.09. Swing Line Loans.........................................................................30
ARTICLE III. INTEREST...................................................................................32
Section 3.01. Interest on Base Rate Loans..............................................................32
Section 3.02. Interest on Eurodollar Loans.............................................................32
Section 3.03. Procedure for Interest Determination.....................................................33
Section 3.04. Post Default Interest....................................................................34
Section 3.05. Maximum Interest Rate....................................................................34
ARTICLE IV. DISBURSEMENT AND PAYMENT...................................................................35
Section 4.01. Pro Rata Treatment.......................................................................35
Section 4.02. Method of Payment........................................................................35
Section 4.03. Compensation for Losses..................................................................35
Section 4.04. Taxes, Reserves and Additional Costs.....................................................36
Section 4.05. Unavailability...........................................................................39
ARTICLE V. REPRESENTATIONS AND WARRANTIES.............................................................40
Section 5.01. Representations and Warranties...........................................................40
ARTICLE VI. CONDITIONS OF LENDING......................................................................49
Section 6.01. Conditions to the Effectiveness of this Agreement........................................49
Section 6.02. Conditions to the Making of Each Loan....................................................51
Section 6.03. Conditions to Issuance of Insight High Yield Debt........................................52
ARTICLE VII. COVENANTS..................................................................................52
Section 7.01. Affirmative Covenants....................................................................52
Section 7.02. Negative Covenants.......................................................................57
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ARTICLE VIII. EVENTS OF DEFAULT..........................................................................64
Section 8.01. Events of Default........................................................................64
Section 8.02. Payments Subsequent to Declaration of Event of Default...................................67
ARTICLE IX. THE ADMINISTRATIVE AGENTS AND THE LENDERS..................................................67
Section 9.01. Appointment, Powers and Immunities.......................................................67
Section 9.02. Sharing of Payments and Expenses.........................................................68
Section 9.03. The Administrative Agent's Liabilities...................................................69
Section 9.04. Defaults and Events of Default...........................................................69
Section 9.05. Rights as a Lender.......................................................................70
Section 9.06. Lender Credit Decision...................................................................70
Section 9.07. Indemnification..........................................................................71
Section 9.08. Failure to Act...........................................................................71
Section 9.09. Resignation of Agent.....................................................................71
Section 9.10 Withholding Tax Exemption................................................................72
Section 9.11. Duties and Obligations of Arranging Agents and Syndication Agents........................72
ARTICLE X. CONSENT TO JURISDICTION, WAIVER OF JURY TRIAL..............................................73
Section 10.01. Consent to Jurisdiction.................................................................73
Section 10.02. Waiver of Jury Trial....................................................................73
ARTICLE XI. MISCELLANEOUS..............................................................................73
Section 11.01. Applicable Law..........................................................................73
Section 11.02. Set-off.................................................................................74
Section 11.03. Expenses; Indemnification...............................................................74
Section 11.04. Amendments..............................................................................75
Section 11.05. Cumulative Rights and No Waiver.........................................................76
Section 11.06. Notices.................................................................................76
Section 11.07. Separability............................................................................77
Section 11.08. Assignments and Participations..........................................................78
Section 11.09. Confidentiality.........................................................................79
Section 11.10. Execution in Counterparts...............................................................80
Section 11.11. Survival................................................................................80
Section 11.12. Consent.................................................................................80
ARTICLE XII. LIMITED RECOURSE...........................................................................81
Section 12.01. Limited Recourse........................................................................81
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EXHIBITS AND SCHEDULES
Exhibit A-1 Form of Revolving Credit Borrowing Notice
Exhibit A-2 Form of Swing Line Borrowing Notice
Exhibit B-1 Form of Revolving Credit Note
Exhibit B-2 Form of Swing Line Note
Exhibit C Form of Term Loan Borrowing Notice
Exhibit D-1 Form of Term Loan A Note
Exhibit D-2 Form of Term Loan B Note
Exhibit E Form of Interest Election
Exhibit F Form of Security and Hypothecation Agreement
Exhibit G Form of Subsidiary Guarantee
Exhibit H Form of Assignment and Assumption Agreement
Schedule 1 Liens on the Closing Date
Schedule 2 Lender Loan Amounts and Notice Addresses
Schedule 3 Environmental
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-iii-
AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT, dated as of
October 1, 1999, between INSIGHT KENTUCKY PARTNERS I, L.P., a Delaware limited
partnership, (f/k/a InterMedia Partners VI, L.P.), each of the several financial
institutions identified on the signature pages hereof (each a "Lender", and
collectively the "Lenders") and Toronto Dominion (Texas), Inc., as
administrative agent (the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Borrower (as defined herein), the Administrative Agent, and the
Lenders are all parties to that certain Revolving Credit and Term Loan Agreement
dated as of April 30, 1998, as amended by that certain First Amendment thereto
dated as of March 23, 1999 (the "Prior Loan Agreement"); and
WHEREAS, the Borrower has requested that the Administrative Agent and the
Lenders consent to certain transactions and amendments to the Prior Loan
Agreement, as more fully set forth in this Amended and Restated Revolving Credit
and Term Loan Agreement; and
WHEREAS, the Administrative Agent and the Lenders have agreed to amend and
restate the Prior Loan Agreement in its entirety as set forth herein; and
WHEREAS, the Borrower acknowledges and agrees that the security interest
granted to the Administrative Agent, for itself and on behalf of the Lenders
pursuant to the Prior Loan Agreement and the Credit Documents (as defined in the
Prior Loan Agreement) executed in connection therewith shall remain outstanding
and in full force and effect in accordance with the Prior Loan Agreement and
shall continue to secure the obligations of the Borrower as set forth herein
(except for the Hypothecation and Security Agreement executed by IMI (as defined
in the Prior Loan Agreement) which shall be terminated and replaced as set forth
herein); and
WHEREAS, the Borrower acknowledges and agrees that (i) the obligations as
set forth herein represent, among other things, the amendment, restatement,
renewal, extension, consolidation and modification of the obligations as set
forth in the Prior Loan Agreement arising in connection with the Prior Loan
Agreement and the other Credit Documents (as defined in the Prior Loan
Agreement) executed in connection therewith; (ii) the parties hereto intend that
the Prior Loan Agreement and the other Credit Documents (as defined in the Prior
Loan Agreement) executed in connection therewith and the collateral pledged
thereunder shall secure, without interruption or impairment of any kind, all
existing Borrowed Money under the Prior Loan Agreement and the other Credit
Documents (as defined in the Prior Loan Agreement) executed in connection
therewith as so amended, restated, restructured, renewed, extended, consolidated
and modified hereunder (except for the Hypothecation and Security Agreement
executed by IMI (as defined in the Prior Loan Agreement), which shall be
terminated and replaced as set forth herein) together with all other obligations
hereunder; (iii) all Liens evidenced by the Prior Loan Agreement and the other
Credit Documents (as defined in the Prior Loan Agreement) executed in connection
therewith are hereby ratified, confirmed and continued (excluding the
Hypothecation and Security Agreement executed by IMI); and (iv) the Credit
Documents (as defined herein) are intended to restructure, restate, renew,
extend, consolidate, amend and modify the Prior Loan Agreement and the other
Credit Documents (as defined in the Prior Loan Agreement) executed in connection
therewith; and
WHEREAS, the parties hereto intend that (i) the provisions of the Prior Loan
Agreement and the other Credit Documents (as defined in the Prior Loan
Agreement) executed in connection therewith, are hereby superseded and replaced
by the provisions hereof and of the Credit Documents (as defined herein); and
(ii) the Notes (as hereinafter defined) amend, renew, extend, modify, replace,
are substituted for and supersede in their entirety, but do not extinguish the
indebtedness arising under, the promissory notes issued pursuant to the Prior
Loan Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each of the parties hereto, the
parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.01. Definitions.
(a) Accounting Terms and Determinations. Unless otherwise specified herein,
all accounting terms used herein shall be interpreted, and all determinations
with respect to accounting matters shall be made, and all financial statements
and certificates and reports as to financial matters required to be delivered
hereunder shall be prepared, in accordance with GAAP as of the date of
determination or preparation; provided, however, that in the event that
application of GAAP, as existing on the date of determination or preparation,
would produce inconsistencies with prior statements, certificates and/or
reports, an explanation of such inconsistencies shall be included with the
current statements, certificates and/or reports being delivered.
(b) Other Terms. The following terms shall have the meanings ascribed to
them below or in the Sections of this Agreement indicated below and shall
include the plural as well as the singular:
"ABS Agreement" has the meaning ascribed to such term in Section 2.09(a).
"Adverse Environmental Condition" means the occurrence of any of the events
referred to in the definition of Environmental Claim.
"Affiliate" of any Person means any Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, such other
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Person. For purposes of this definition, "control" of a Person means the
possession, directly or indirectly, of the power to direct or cause the
direction of its management or policies, whether through the ownership of equity
interests, by contract or otherwise.
"Agreement" means this Amended and Restated Revolving Credit and Term Loan
Agreement, as amended, restated, supplemented or modified from time to time in
accordance herewith.
"Annualized Cash Flow," as of any date, means an amount equal to two times
the Cash Flow for the two most recently completed fiscal quarters, for which the
Borrower is required to have delivered quarterly financial reports pursuant to
Section 7.01(a).
"Annualized Interest Expense" as of any date, means an amount equal to
Interest Expense for the four full most recently completed fiscal quarters.
"Applicable Margin" means a margin based on the Senior Leverage Ratio (after
giving effect to any contemporaneous borrowings or repayments) as follows:
Applicable Margin For Revolving Credit Loans
Base Rate
Eurodollar Revolving Revolving
Senior Leverage Ratio Loans Loans
--------------------- -------------------- ---------
Greater than 6.00:1.00 2.000% 1.000%
Greater than 5.50:1.00 and less than 1.750% 0.750%
or equal 6.00:1.00
Greater than 5.00:1.00 and less than or equal 1.375% 0.375%
or equal 5.50:1.00
Greater than 4.50:1.00 and less than or equal 1.125% 0.125%
or equal 5.00:1.00
Greater than 4.00:1.00 and less than or equal 0.875% 0.000%
or equal 4.50:1.00
Less than or equal to 4.00:1.00 0.750% 0.000%
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Applicable Margin For Term Loan A
---------------------------------
Eurodollar Term Base Rate Term
Senior Leverage Ratio Loan A Loan A
--------------------- -------------- --------------
Greater than 6.00:1.00 2.250% 1.250%
Greater than 5.50:1.00 and less than 2.000% 1.000%
or equal to 6.00:1.00
Less than or equal to 5.50:1.00 1.750% 0.750%
Applicable Margin For Term Loan B
---------------------------------
Eurodollar Term Base Rate Term
Senior Leverage Ratio Loan B Loan B
--------------------- --------------- --------------
Greater than 5.50:1.00 2.500% 1.500%
Less than or equal to 5.50:1.00 2.250% 1.250%
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; provided, however, that
(a) any change in the Applicable Margin shall be effective, with respect
to all Loans, commencing at the earlier of (i) a change in the
amount of Loans outstanding hereunder, and (ii) one Business Day
after the date upon which the financial information and the
certificate of a Responsible Person referred to in Section
7.01(a)(i) was delivered to the Administrative Agent; and
(b) in the event that the financial information and the certificate of a
Responsible Person referred to in Section 7.01(a)(i) are not
delivered when due, then (i) if such financial information and
certificate of a Responsible Person are delivered after the date
such financial information and certificate of a Responsible Person
were required to be delivered and the Applicable Margin increases
from that previously in effect as a result of the delivery of such
financial information and certificate of a Responsible Person, then
the Applicable Margin in respect of all Loans during the period from
one Business Day after the date upon which such financial
information and certificate of a Responsible Person were required to
be delivered until the date upon which they actually are delivered
shall be the Applicable Margin as so increased; and (ii) if such
financial information and certificate of Responsible Person are
delivered after the date such financial information and certificate
of Responsible Person were required to be delivered and the
Applicable Margin decreases from that previously in effect as a
result of the delivery of such financial information and certificate
of Responsible Person, then such decrease
-4-
in the Applicable Margin shall not become effective until one
Business Day after the date upon which such financial information
and certificate of Responsible Person actually are delivered.
"Approved Fund" means, with respect to any Lender that is a fund that
invests in commercial loans, any other fund that invests in commercial loans and
is managed by the same investment advisor as such Lender or by an Affiliate of
such investment advisor.
"Arranging Agents" means BNY Capital Markets, Inc., Donaldson, Lufkin &
Jenrette Securities Corporation, Banc of America Securities LLC and TD
Securities (USA), Inc.
"Asset Acquisition" means (a) the purchase, lease or other acquisition by
the Borrower or any Restricted Subsidiary of any assets (including, but not
limited to, stock or partnership interests, or any other interests) of any
Person or (b) the agreement by the Borrower or any Restricted Subsidiary to do
any of the foregoing where, in either case, the consideration paid by the
Borrower or a Restricted Subsidiary or the fair market value of the assets being
acquired exceeds $1,000,000.
"Asset Sale" means (a) the sale, lease, exchange or other disposition by the
Borrower or any Restricted Subsidiary of any assets (including, but not limited
to, stock or partnership interests, or any other interests) of any Person or (b)
the agreement by the Borrower or any Restricted Subsidiary to do any of the
foregoing, where, in either case, the consideration received by the Borrower or
a Restricted Subsidiary or the fair market value of the assets subject to such
disposition exceeds one million dollars ($1,000,000).
"Assignee" has the meaning ascribed to such term in Section 11.08(c).
"Available Revolving Credit Commitment" means, as of any particular time,
(a) the Revolving Credit Commitment, minus (b) the sum of (i) the Revolving
Credit Loans then outstanding, plus (ii) the Swing Line Loans then outstanding.
"Available Swing Line Commitment" means, at any time, the lesser of (a) (i)
the Swing Line Commitment, minus (ii) Swing Line Advances then outstanding, and
(b) the Available Revolving Credit Commitment.
"Base Rate" means, for any day, a fluctuating interest rate per annum as
shall be in effect from time to time, which rate per annum shall at all times be
equal to the higher of (a) the rate of interest publicly announced by the
Administrative Agent from time to time at its New York branch office as its
prime commercial lending rate and (b) the Federal Funds Rate plus 1/2%.
"Base Rate Loans" has the meaning ascribed to such term in Section 3.01.
-5-
"Base Rate Revolving Loans" means Revolving Credit Loans or portions thereof
which bear interest at the rate and in the manner set forth in Section 3.01.
"Base Rate Term Loans" means Term Loans or portions thereof which bear
interest at the rate and in the manner set forth in Section 3.01.
"Borrowed Money" means as to any Person (a) any obligation of such Person to
repay money borrowed, (b) any indebtedness of such Person evidenced by notes,
debentures or similar instruments, (c) any obligation of such Person to pay for
goods or services under a conditional sale or other title retention agreement,
(d) any obligation of others constituting Borrowed Money secured by any asset of
such Person, whether or not such obligation is assumed by such Person, (e) any
obligation for Borrowed Money of others guaranteed by such Person and, (f) all
Capital Lease Obligations of such Person; provided, however, Borrowed Money
shall not include for (i) the Borrower and its Restricted Subsidiaries (A) any
funds held in escrow, (B) loans made pursuant to the KeepWell Agreement and the
New KeepWell Agreement, (C) Partner Subordinated Loans, (D) trade debt incurred
in the ordinary course of business and payable on terms not longer than ninety
(90) days, (E) Intercompany Loans, (F) indebtedness of any Unrestricted
Subsidiary and (G) the Parent Term Loan B and (ii) the Parent and its Restricted
Subsidiaries (A) any funds held in escrow, (B) loans made pursuant to the
KeepWell Agreement and the New KeepWell Agreement, (C) Partner Subordinated
Loans, (D) trade debt incurred in the ordinary course of business and payable on
terms not longer than ninety (90) days, (E) Intercompany Loans, (F) indebtedness
of any Unrestricted Subsidiary and (G) Parent Term Loan B.
"Borrower" means Insight Kentucky Partners I, L.P., a Delaware limited
partnership (f/k/a InterMedia Partners VI, L.P.).
"Borrower Partnership Agreement" means the Amended and Restated Agreement of
Limited Partnership of the Borrower, dated as of October 1, 1999, between Parent
and Insight Kentucky Capital.
"Borrowing" means the aggregate Revolving Credit Loans, Term Loans and/or
Swing Line Loans made by all Revolving Credit Lenders, Term Loan Lenders and/or
the Swing Line Lender, as the case may be, on a particular Borrowing Date.
"Borrowing Date" has the meaning ascribed to such term in Section 2.02(a).
"Business Day" means any day except a Saturday, Sunday or other day on which
commercial banks and foreign exchange markets in Houston, Texas, New York City
and London, England are authorized or required by law or executive order to
close.
"Capital Lease Obligations" means, as to any Person, the obligations of such
Person to pay rent or other amounts under a lease of (or other agreement
containing the right to use)
-6-
real or personal property, which obligations are required to be classified and
accounted for as capital lease obligations on a balance sheet of such Person
under GAAP, and for the purposes of this Agreement the amount of such
obligations shall be the outstanding amount thereof, determined in accordance
with GAAP.
"Cash Flow" means, for any period for which "Cash Flow" is calculated, the
sum (calculated without duplication) of (a) net income attributable to the
Borrower and the Restricted Subsidiaries for such period, determined in
accordance with GAAP, as adjusted (i) to exclude non-recurring gains and losses
on unusual items and (ii) to give effect, on a pro forma basis, to acquisitions,
exchanges and dispositions of assets of the Borrower or any of the Restricted
Subsidiaries during any relevant period as if such transactions occurred on the
first day of such period; (b) to the extent deducted in the calculation of net
income in clause (a) above, (i) accrued or paid income taxes, (ii) Interest
Expense of the Borrower and the Restricted Subsidiaries, (iii) depreciation,
(iv) amortization, and (v) other non-cash or deferred charges to income; (c) the
amount of Management Fees accrued and unpaid for such period (minus the payment
during such period for any previously deferred Management Fees to the extent not
otherwise excluded in accordance with GAAP); and (d) amounts payable for such
period to the Borrower or its Restricted Subsidiaries by TCI or its Affiliates
in respect of rate roll backs or rate refund amounts.
"Closing Date" means October 1, 1999.
"Code" means the Internal Revenue Code of 1986, as amended.
"Consolidated" means consolidated according to GAAP.
"Contaminant" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, or any regulated constituent of any such substance or waste,
including any such substance regulated under any Environmental Law.
"Contingent Liability" has the meaning ascribed to such term in Section
7.02(e).
"Credit Documents" means this Agreement, the KeepWell Agreement, the
Hypothecation Agreements, the Guarantees, and the Notes, as any of them may be
amended or supplemented from time to time.
"Default" means any event which, with the giving of notice or the lapse of
time, or both, would constitute an Event of Default.
"Election Date" has the meaning ascribed to such term in Section 3.03(b)(i).
-7-
"Environmental Claim" means any claim, assertion, demand, notice of
violation, suit, administrative or judicial proceeding, regulatory action,
investigation, information request or order involving any Hazardous Substance,
Environmental Law, noise or odor pollution or any injury or threat of injury to
human health, property or the environment.
"Environmental Law" means any federal, state, local or foreign statute or
common law, regulation, order, decree, opinion or agency requirement as now in
effect or hereinafter adopted relating to (i) the handling, use, presence,
disposal or release of any Hazardous Substance or (ii) the protection,
preservation or restoration of the environment, natural resources or human
health or safety.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Group" means the Borrower and all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414 of the Code or are considered to be one employer
under Section 4001 of ERISA.
"Eurodollar Base Rate" means, with respect to any Interest Period for a
Eurodollar Loan, the rate per annum determined by the Administrative Agent to be
the offered rate for dollar deposits with a term comparable to such Interest
Period that appears on the display designated as Page 3750 on the Dow Jones
Telerate Service (or such other page as may replace such page on such service,
or on another service designated by the British Bankers' Association, for the
purpose of displaying the rates at which dollar deposits are offered by leading
banks in the London interbank deposit market) at approximately 11:00 A.M.,
London time, on the second full Business Day preceding the first day of such
Interest Period.
"Eurodollar Lending Office" means the office of each Lender designated on
Schedule 2 hereto as its Eurodollar Lending Office or such other office it may
from time to time designate in writing to the Administrative Agent as its
Eurodollar Lending Office.
"Eurodollar Loans" has the meaning ascribed to such term in Section 3.02.
"Eurodollar Reserve Percentage" means that percentage, expressed as a
decimal, which is in effect on such day, prescribed by the Board of Governors of
the Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including, without limitation, any marginal, supplemental
or emergency reserve requirements) for a member bank of the Federal Reserve
System in New York City with deposits exceeding one billion dollars in respect
of eurocurrency funding liabilities.
"Eurodollar Revolving Loans" means Revolving Credit Loans or portions
thereof which bear interest at the rate and in the manner set forth in Section
3.02.
-8-
"Eurodollar Term Loan A" means Term Loan A or portions thereof which bear
interest at the rate and in the manner set forth in Section 3.02.
"Eurodollar Term Loan B" means Term Loan B or portions thereof which bear
interest at the rate and in the manner set forth in Section 3.02.
"Eurodollar Term Loans" means Eurodollar Term Loan A and Eurodollar Term
Loan B.
"Event of Default" has the meaning ascribed to such term in Section 8.01.
"Excess Cash Flow" means, as of the end of any fiscal year of the Borrower
based on the audited financial statements for such fiscal year, the remainder of
(a) Cash Flow for such fiscal year, minus (b) the sum, without duplication, of
the following: (i) capital expenditures made by the Borrower and its Restricted
Subsidiaries during such fiscal year; (ii) scheduled debt service of the
Borrower and the Parent during such fiscal year; (iii) distributions made by the
Borrower and its Restricted Subsidiaries in respect to taxes made pursuant to
Section 7.02(g)(iv) hereof during such fiscal year; and (iv) Interest Expense
during such fiscal year.
"FCC" means the Federal Communications Commission, or any successor thereto.
"FCC Licenses" has the meaning ascribed to such term in Section 5.01(e).
"Federal Funds Rate" means, for any day, a fluctuating interest rate per
annum equal (rounded, if necessary, to the next greater 1/16 of 1%) to the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (i) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (ii) if such rate is not so published for any day, the Federal Funds
Rate for such day shall be the average rate charged to or by the Administrative
Agent on such day on such transactions as determined by the Administrative
Agent.
"Final Maturity Date" means (i) for Term Loan A, September 30, 2007, (ii)
for Term Loan B, December 31, 2007 and (iii) for Revolving Credit Loans, October
31, 2006.
"Franchise" means a franchise, license, authorization or right to construct,
own, operate, promote, extend and/or otherwise utilize any cable television
system operated or to be operated by the Borrower or any Restricted Subsidiary
granted by any state, county, city, town, village or other local government
authority but shall not include any such franchise,
-9-
license, authorization or right which is incidentally required for the purpose
of installing, constructing or extending a cable television system.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession, which are applicable to the circumstances as of the date of
determination.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Gross Operating Revenues" means the "Gross Operating Revenues" of the
Operating Subsidiary as defined in the Management Agreement.
"Guarantees" means the Parent Guarantee and each Subsidiary Guarantee.
The term "guarantee" means (without duplication) any guarantee or other
contingent liability (other than any endorsement for collection or deposit in
the ordinary course of business), direct or indirect, with respect to any
obligations of another Person, through an agreement or otherwise, including,
without limitation, (i) any other endorsement or discount with recourse or
undertaking substantially equivalent to or having economic effect similar to a
guarantee in respect of any such obligations and (ii) any agreement (A) to
purchase, or to advance or supply funds for the payment or purchase of, any such
obligations, (B) to purchase, sell or lease property, products, materials or
supplies, or transportation or services, in respect of enabling such other
Person to pay any such obligation or to assure the owner thereof against loss
regardless of the delivery or nondelivery of the property, products, materials
or supplies or transportation or services or (C) to make any loan, advance or
capital contribution to or other investment in, or to otherwise provide funds to
or for, such other Person in respect of enabling such Person to satisfy any
obligation (including any liability for a dividend, stock liquidation payment or
expense) or to assure a minimum equity, working capital or other balance sheet
condition in respect of any such obligation. The amount of any guarantee shall
be equal to the outstanding amount of the obligations directly or indirectly
guaranteed.
The term "guarantee" shall not include any security bond obligations,
guarantees, or, to the extent of $1,000,000 in the aggregate, letters of credit
as security for the performance of the Borrower or any of its Subsidiaries,
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 the Borrower or any of its Subsidiaries.
-10-
"Guarantors" means the Parent and the Restricted Subsidiaries.
"Hazardous Substance" means any substance, in any concentration or mixture,
that is (i) listed, classified or regulated pursuant to any Environmental Law,
(ii) petroleum product or by-product, asbestos containing material,
polychlorinated biphenyls, radioactive material or radon or (iii) any waste or
other substance regulated by any Governmental Authority or any Environmental
Law.
"Hypothecation Agreements" means the Security and Hypothecation Agreements
by each of the Parent, Insight Kentucky Capital, the Borrower and each
Restricted Subsidiary, substantially in the form of Exhibit F, in each case as
they may be amended or supplemented from time to time.
"ICP-VI" means Insight Capital Partners, L.P., a Delaware limited
partnership (f/k/a InterMedia Capital Partners VI, L.P.).
"ICP-VI Dissolution" means the dissolution and termination of ICP-VI after
the consummation of the Insight Roll-Up and the issuance of the Insight High
Yield Debt.
"Insight High Yield Debt" means the debt issued by Insight Midwest pursuant
to the Insight Indenture to refinance the debt outstanding under the Parent
Credit Documents, which debt shall (a) be in a maximum amount not to exceed
$200,000,000 (b) have a maturity date no earlier than June 30, 2008, and (c) be
issued on terms and conditions reasonably satisfactory to the Administrative
Agent and the Majority Lenders.
"Insight Indenture" means that certain Indenture dated as of October 1, 1999
between Insight Midwest, Insight Capital, Inc. and the Harris Trust Company of
New York, as trustee pursuant to which the Insight High Yield Debt is issued.
"Insight Indenture Event of Default" means each "Event of Default", as such
term is defined in the Insight Indenture.
"Insight Midwest" means Insight Midwest, L.P., a Delaware limited
partnership.
"Insight Kentucky Capital" means Insight Kentucky Capital, LLC, a Delaware
limited liability company.
"Insight Purchase" means the consummation of the purchase by the Manager
pursuant to the Insight Purchase Agreement.
"Insight Purchase Agreement" means that certain Purchase Agreement dated as
of April 18, 1999 among InterMedia Capital Management VI, LLC, InterMedia
Management, Inc., Robert J. Lewis, TCI ICM VI, Inc., InterMedia Capital
Management VI, L.P.,
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Blackstone KC Capital Partners, L.P., Blackstone KC Offshore Capital Partners,
L.P., Blackstone Family Investment Partnership III L.P., Leo J. Hindery, Jr., as
Sellers, TCI LLC, and Manager as Buyer, as amended.
"Insight Roll-Up" means the consolidation and reorganization of the
ownership structure of Insight Communications Company, Inc. occurring
immediately after the consummation of the Insight Purchase pursuant to the
Insight Roll-Up Agreement pursuant to which the ownership interests of ICP-VI
held by the Manager and TCI LLC and TCI ICM VI, Inc. will be contributed to
Insight Midwest (except that if Insight High Yield Debt is not issued on the
Closing Date, .001% of the aggregate ownership interests of ICP-VI will be
contributed to Insight Kentucky Capital).
"Insight Roll-Up Agreement" means that certain Contribution and Formation
Agreement dated April 18, 1999 between TCI of Indiana Holdings, LLC and the
Manager, as such may be amended.
"Intercompany Loan" means any loan made by (i) the Ultimate Parent to
Parent, (ii) the Borrower to a Restricted Subsidiary or the Parent, or (iii) any
Restricted Subsidiary or the Parent to the Borrower, the Parent or any other
Restricted Subsidiary, in each case for general partnership purposes and which
are subordinated to the Loans and evidenced by an Intercompany Note excluding,
in each case loans made pursuant to the KeepWell Agreement and the New KeepWell
Agreement.
"Intercompany Note" means any note evidencing obligations in respect of
Intercompany Loans in a form and containing terms and conditions reasonably
satisfactory to the Arranging Agents, including, without limitation, a letter
from the maker thereof in form and substance reasonably satisfactory to the
Arranging Agents.
"Intercreditor Agreement" means that Intercreditor Agreement dated as of
April 30, 1998 among the Administrative Agent, the Parent Administrative Agent,
the Lenders, the lenders under the Parent Term Loan A Agreement and the Borrower
as such may be amended and which agreement shall be terminated upon the issuance
of the Insight High Yield Debt.
"Interest Coverage Ratio" means the ratio of (i) Annualized Cash Flow of the
Borrower and the Restricted Subsidiaries to (ii) Annualized Interest Expense of
the Borrower, the Restricted Subsidiaries and the Parent.
"Interest Expense" means as to any Person and for any period, without
duplication, the aggregate amount of all cash payments (a) of interest on
indebtedness for Borrowed Money of such Person (including payments representing
the interest portion of Capital Lease Obligations as determined in accordance
with GAAP) which were actually made during such period; (b) of amounts (which
may be negative) scheduled to be made (net of scheduled
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payments from counterparties) by such Person in respect of all Interest Rate
Agreements for such period; and (c) distributions made pursuant to Section
7.02(g)(iii)(B) hereof to make payments in respect of the Insight High Yield
Debt; provided that Interest Expense shall not include any payments in kind and
interest on amounts held in escrow.
"Interest Period" means each one-, two-, three-, six- or, subject to
availability by each Lender, twelve-month period, in the case of Eurodollar
Loans; such period being selected by the Borrower pursuant to Section 3.02(a) or
3.02(b) hereof and commencing on the date the relevant Eurodollar Loan is made
or the last day of the current Interest Period, as the case may be.
"Interest Rate Agreement" means any interest rate swap agreement, interest
rate cap agreement or similar arrangement used by a Person to fix or cap a
floating rate of interest on indebtedness for Borrowed Money.
"IP-Kentucky" means InterMedia Partners of Kentucky, L.P., a Delaware
limited partnership.
"IPG-VI" means InterMedia Partners Group VI, L.P., a Delaware limited
partnership.
"KeepWell Agreement" means that certain KeepWell Agreement in favor of the
Lenders originally dated as of April 30, 1998 among the TCI Subsidiaries, TCI
LLC, TCI CVC, the Administrative Agent and the Administrative Agent under the
Parent Term Loan A Agreement as amended and restated in its entirety as of
October 1, 1999, (and adding TCI of Indiana Holdings, LLC as a party thereto),
which agreement shall be terminated upon the issuance of the Insight High Yield
Debt.
"KeepWell Subordination Agreement" means that certain Subordination
Agreement originally dated as of April 30, 1998 among the TCI Subsidiaries, TCI
LLC, TCI CVC, the Borrower, the Parent, the Administrative Agent and the
Administrative Agent under the Parent Term Loan A Agreement, as amended and
restated in its entirety on October 1, 1999, (and adding TCI of Indiana
Holdings, LLC as a party thereto), which agreement shall be terminated upon the
issuance of the Insight High Yield Debt.
"LIBOR" means with respect to any Interest Period the rate per annum
determined pursuant to the following formula:
LIBOR = Eurodollar Base Rate
1 - Eurodollar Reserve Percentage;
LIBOR shall be adjusted automatically on and as of the effective date of any
change in the Eurodollar Reserve Percentage.
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"Lien" means any lien, mortgage, pledge, security interest, charge or
encumbrance of any kind (including any conditional sale or other title retention
agreement, any lease in the nature thereof, and any agreement to give any
security interest).
"Loans" means, collectively, the Revolving Credit Loans, the Term Loans and
the Swing Line Loans outstanding hereunder from time to time.
"Majority Lenders" means at any date Lenders having at least 51% of the sum
of outstanding Term Loans plus the Total Revolving Credit Commitment or, if the
Total Revolving Credit Commitment has been terminated, holding Notes evidencing
at least 51% of the aggregate unpaid principal amount of the Loans.
"Management Agreement" means that certain Management Agreement dated as of
October 1, 1999 between the Operating Subsidiary and the Manager.
"Management Fee" means the management fees to be paid to the Manager by the
Operating Subsidiary pursuant to the Management Agreement in an aggregate amount
not to exceed three percent (3%) of Gross Operating Revenue per fiscal year.
"Manager" means Insight Communications Company, L.P., a Delaware limited
partnership.
"Material Adverse Effect" means (i) any material adverse effect on the
business, properties, conditions (financial or otherwise), or present
operations, of the Borrower and the Guarantors, taken as a whole, since the
Closing Date, (ii) any event or circumstance which is reasonably probable to
occur and which is reasonably probable to have a material adverse effect on the
prospective business, properties, conditions (financial or otherwise) or
operations of the Borrower and the Guarantors, taken as a whole, since the
Closing Date, (iii) any material adverse effect on the ability of the Borrower
and the Guarantors, taken as a whole, to perform the material obligations
hereunder and under the other Credit Documents, (iv) any material adverse effect
on the legality, validity, binding effect or enforceability of any material
provision of this Agreement or any other material Credit Document, or (v) any
material adverse effect on the perfection or priority of the Lenders' Liens upon
the collateral described in the Hypothecation Agreements.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA to which any member of the ERISA Group is making or accruing
an obligation to make contributions or has within the preceding five plan years
made or accrued contributions.
"New KeepWell Agreement" means that certain KeepWell Agreement by the TCI
Subsidiaries, TCI LLC and TCI of Indiana Holdings, LLC in favor of Insight
Midwest, ICP-
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VI, the Parent and the Borrower dated as of October 1, 1999 which agreement will
become effective upon or before the termination of the KeepWell Agreement.
"Notes" means, collectively, the Revolving Credit Notes, the Term Notes and
the Swing Line Note.
"Operating Subsidiary" means Insight Kentucky Partners II, L.P., a Delaware
limited partnership (f/k/a IP-Kentucky).
"Other Fees" has the meaning ascribed to such term in Section 2.05.
"Parent" means Insight Communications of Kentucky, L.P., a Delaware limited
partnership (f/k/a IPG-VI).
"Parent Administrative Agent" means Toronto-Dominion (Texas), Inc. or any
successor acting as administrative agent under the Parent Loan Agreements.
"Parent Credit Document" means each "Credit Document", as such term is
defined in each Parent Loan Agreement.
"Parent Guarantee" means the subordinated guarantee by the Parent of the
obligations of the Borrower under this Agreement substantially in the form of
Exhibit G-1.
"Parent Loan Agreements" means each of the Parent Term Loan A Agreement and
the Parent Term Loan B Agreement.
"Parent Partnership Agreement" means the Amended and Restated Agreement of
Limited Partnership of the Parent dated as of October 1, 1999.
"Parent Term Loan A Agreement" means, in the event that the Insight High
Yield Debt is not issued, the Amended and Restated Parent Term Loan A Agreement
dated as of October 1, 1999 and among Parent, Toronto Dominion (Texas), Inc., as
Administrative Agent, Bank of America, N.A., as Documentation Agent, and the
financial institutions party thereto.
"Parent Term Loan A Event of Default" means each "Event of Default", as such
term is defined in the Parent Term Loan A Agreement.
"Parent Term Loan B Agreement" means the Parent Term Loan B Agreement dated
as of April 30, 1998 and among Parent, Toronto Dominion (Texas), Inc., as
Administrative Agent, The Bank of New York Company, Inc., as Documentation
Agent, and the financial institutions party thereto, as amended by that certain
First Amendment to Term Loan B Agreement dated as of March 23, 1999, as amended
by that certain Second Amendment to
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Term Loan B Agreement dated as of May 14, 1999, and, in the event that the
Insight High Yield Debt is not issued, as further amended by that certain Third
Amendment to Term Loan B Agreement dated as of October 1, 1999.
"Parent Term Loan B Event of Default" means each "Event of Default", as such
term is defined in the Parent Term Loan B Agreement.
"Parent Term Loan A" means the loan issued and described as "Loans" pursuant
to the Parent Term Loan A Agreement.
"Parent Term Loan B" means the loan issued and described as "Loans" pursuant
to the Parent Term Loan B Agreement.
"Participant" has the meaning ascribed to such term in Section 11.08(b).
"Partnership Agreements" means the Borrower Partnership Agreement, the
Parent Partnership Agreement and the partnership agreement or other governing
documents of each Restricted Subsidiary.
"Partner Subordinated Loans" means any loans (a) made to the Borrower or any
Restricted Subsidiary directly or indirectly from proceeds of loans made by any
partner of the Ultimate Parent and (b) subordinate in right of payment to all
obligations of the Borrower under this Agreement on terms reasonably
satisfactory to the Arranging Agents.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"Pension Plan" means a Plan that (i) is an employee pension benefit plan, as
defined in Section 3(3) of ERISA (other than a Multiemployer Plan) and (ii) is
subject to the provisions of Title IV of ERISA or is subject to the minimum
funding standards under Section 412 of the Code.
"Permitted Acquisitions" means acquisitions of cable systems and any assets
to be used in the operation of, and the equity interests of any Person which
owns, cable systems in Georgia, Indiana, Kentucky, North Carolina, South
Carolina and Tennessee.
"Permitted Encumbrances" means (i) Liens in favor of the Administrative
Agent or any Lender to secure the Secured Obligations (as defined in the
Hypothecation Agreements), (ii) Liens for taxes not delinquent or being
contested in good faith and by appropriate proceedings and for which adequate
reserves are being maintained, (iii) Liens (other than Liens imposed with
respect to any Plan) incurred or deposits or pledges to secure obligations under
workmen's compensation, social security or similar laws, or under unemployment
insurance, (iv) deposits or pledges to secure bids, tenders, contracts (other
than contracts for the payment of money), Franchises, pole rentals, leases,
statutory obligations, surety and
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appeal bonds and other obligations of like nature arising in the ordinary course
of business, (v) mechanics', workmen's, materialmen's or other like Liens
arising in the ordinary course of business with respect to obligations which are
not due or which are being contested in good faith, (vi) minor imperfections of
title on real estate, provided such imperfections do not render title
unmarketable, (vii) Liens incurred in the ordinary course of business which,
individually or in the aggregate, do not exceed ten million dollars
($10,000,000), (viii) Liens arising in the ordinary course of business in favor
of landlords of real property leases to the extent of assets of the Borrower or
a Restricted Subsidiary actually located on the premises, (ix) the Liens
specified on Schedule 1, and (x) restrictions and prohibitions included in, or
applicable to, Franchises, Pole Attachment Agreements, leases and licenses
issued by Governmental Authorities, including FCC Licenses.
"Person" means any individual, sole proprietorship, partnership, limited
liability company, joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, entity or
government (whether federal, state, county, city, municipal or otherwise,
including, without limitation, any instrumentality, division, agency, body or
department thereof).
"Plan" means an employee benefit plan as defined in Section 3(3) of ERISA
(other than a Multiemployer Plan) which is maintained or contributed to by the
Borrower or any member of the ERISA Group.
"Pole Attachment Agreements" means, collectively, all agreements, contracts
or licenses relating to the licensing or other grant of rights for use of
municipal or utility company, telephone or other poles, conduits or trenches for
the purpose of supporting or housing cables comprising an element of any System.
"Principal Office" means, with respect to the Administrative Agent, its
principal office located at 909 Fannin Street, Suite 900, Houston, Texas 77010.
"Prior Loan Agreement" means the Revolving Credit and Term Loan Agreement
dated as of April 30, 1998 among InterMedia Partners VI, L.P., the financial
institutions party thereto and Toronto Dominion (Texas), Inc. as Administrative
Agent as amended by that certain First Amendment dated as of March 23, 1999.
"Pro Forma Debt Service" means, as of any date, the sum of (calculated
without duplication): (a) the Pro Forma Interest Expense for the Borrower, (b)
the Pro Forma Interest Expense for the Parent, excluding, however, Pro Forma
Interest Expense on the Parent Term Loan B, (c) repayments that result from any
reduction of the Total Revolving Credit Commitment pursuant to Section 2.07
hereof for the next succeeding four fiscal quarters, (d) scheduled Term Loan
payments required to be made pursuant to Section 2.08 for the next succeeding
four fiscal quarters, (e) scheduled payments on the Parent Term Loan A for the
next succeeding four fiscal quarters and (f) after the issuance of the Insight
High Yield Debt,
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Pro Forma Interest Expense in respect of the Insight High Yield Debt. On and
after January 1, 2006, the amount of the Term Loan payments calculated pursuant
to clause (d) above shall be reduced by the amount of cash and other immediately
available funds in excess of one million dollars ($1,000,000) held by the
Borrower and its Restricted Subsidiaries on the first day of the fiscal quarter
for which Annualized Cash Flow shall be determined in respect of calculating
compliance with the covenant in Section 7.02(n).
"Pro Forma Interest Expense" means, in respect of a Person as of any date,
the sum (calculated without duplication) of (a) the aggregate amount of all
payments of interest (other than payments in kind) on indebtedness for Borrowed
Money of such Person (including payments representing the interest portion of
Capital Lease Obligations of such Person as determined in accordance with GAAP)
scheduled to be made for the next succeeding four fiscal quarters, (b) the
amount (which may be negative) of all payments scheduled to be made (net of
scheduled payments from counterparties) by such Person in respect of all
Interest Rate Agreements for such next succeeding four fiscal quarters, and (c)
in respect of the Insight High Yield Debt, the amount of all payments projected
to be distributed by the Borrower pursuant to Section 7.02(g)(iii)(B) for such
succeeding next four (4) fiscal quarters as projected by the Borrower in good
faith. For purposes of this definition, the interest rates in effect on such
date with respect to any indebtedness for Borrowed Money or Interest Rate
Agreements will, subject to contractual, non-contingent changes in the interest
rate, be assumed to be in effect for such indebtedness for Borrowed Money or
Interest Rate Agreement as long as it is outstanding and the principal amount of
such indebtedness for Borrowed Money outstanding as of such date (after giving
effect to any contemporaneous borrowings or repayments) will, subject to
contractual, non-contingent obligations to make mandatory payments or
prepayments of principal, be deemed to be outstanding during such four fiscal
quarter period.
"Quarterly Date" means the last day of each March, June, September and
December, provided that, if any such date is not a Business Day, the relevant
Quarterly Date shall be the next succeeding Business Day.
"Related Documents" means, collectively, (a) the Intercompany Notes, (b) the
Partnership Agreements, (c) the Management Agreement, (d) the Insight Purchase
Agreement, (e) the Insight Rollup Agreement and (f) prior to the issuance of the
Insight High Yield Debt, the Parent Credit Documents and thereafter, the Insight
Indenture.
"Responsible Person" means Michael S. Willner, Kim D. Kelly, Steven E. Sklar
and Daniel Mannino, so long as each is acting as an officer of Manager or
Insight Communications Company, Inc. or any other individual acceptable to the
Administrative Agent who is designated by the general partner of the Borrower.
"Restricted Payments" means (i) the declaration or payment of any dividends
or distributions on any partnership or other ownership interest in the Borrower
or any Restricted
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Subsidiary, (ii) the application of any property or the assets of the Borrower
or any Restricted Subsidiary to the purchase or acquisition, redemption or other
retirement of, or the setting apart of any sum for the payment of any
distributions on, or for the purchase, redemption or other retirement of, or the
making of any other distribution by reduction of partnership or other ownership
interests or otherwise in respect of any partnership or other ownership interest
in the Borrower or any Restricted Subsidiary, (iii) the application of any
property or assets of the Borrower or any Restricted Subsidiary to the
prepayment of principal, and premium, if any, purchase or other acquisition,
redemption or other retirement of indebtedness for Borrowed Money of the
Borrower or any Restricted Subsidiary that is subordinate or junior in right of
payment to the Loans or Intercompany Loans or the setting aside of any sum
therefor, (iv) any payment or other advance to any Affiliate of the Borrower and
(v) the payment of any administration fee or management fee to any Person.
"Restricted Subsidiary" means (a) Operating Subsidiary, (b) any other
Subsidiary designated as a Restricted Subsidiary by the Borrower which is
acquired or created in connection with a Permitted Acquisition and (c) any other
Subsidiary that the Borrower elects to designate as a Restricted Subsidiary;
provided that at the time of the Borrower's designation, such Subsidiary: (i)
either (x) is directly or indirectly at least 99.999% owned by the Borrower or a
Restricted Subsidiary or (y) meets the requirements of clauses (ii) to (iv)
below and the Borrower is entitled to receive 100% of such Subsidiary's cash
flow and all of the equity interests of such Subsidiary are pledged to the
Administrative Agent, all on terms reasonably satisfactory to the Administrative
Agent and at least 80% of the fully diluted equity of such Subsidiary is
directly or indirectly owned by the Borrower and/or a Restricted Subsidiary,
(ii) has been designated in writing by the Borrower to the Administrative Agent
as a Restricted Subsidiary, (iii) has entered into a Subsidiary Guarantee, and,
in the event such Subsidiary has any subsidiaries, such subsidiary has entered
into a Hypothecation Agreement with respect to such types of collateral as are
hypothecated by the Borrower and its Restricted Subsidiaries pursuant to the
Hypothecation Agreements, and (iv) shall agree in writing that it shall be
treated as a Restricted Subsidiary for purposes of this Agreement.
"Revolving Credit Lender" means each Lender with a Revolving Credit
Commitment.
"Revolving Credit Borrowing" means a Borrowing consisting of Revolving
Credit Loans.
"Revolving Credit Commitment" means the several obligations of the Lenders
to advance an aggregate amount of up to $325,000,000 at any one time
outstanding, not to exceed the Available Revolving Credit Commitment, in
accordance with each Lender's Revolving Credit Commitment set forth opposite
such Lender's name under the heading "Revolving Credit Commitment" on Schedule 2
hereto (or any supplement thereto).
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"Revolving Credit Commitment Fee" has the meaning ascribed to such term in
Section 2.04.
"Revolving Credit Loans" has the meaning ascribed to such term in Section
2.01.
"Revolving Credit Notes" has the meaning ascribed to such term in Section
2.03.
"Revolving Credit Termination Date" has the meaning ascribed to such term in
Section 2.01.
"Senior Debt" means, on any date, the principal amount of Consolidated
indebtedness and guarantees of the Borrower and the Restricted Subsidiaries, in
each case for Borrowed Money outstanding on such date.
"Senior Leverage Ratio" means at any date the ratio of (i) Senior Debt at
such time, to (ii) Annualized Cash Flow as of the end of the most recently
completed fiscal quarter, each as of the determination date.
"SSI" has the meaning ascribed to such term in Section 7.02(g)(v).
"Subsidiary" means any Person in which the Borrower owns a direct or
indirect equity interest.
"Subsidiary Guarantee" means each guarantee by each Restricted Subsidiary of
the obligations of the Borrower hereunder substantially in the form of Exhibit
G.
"Supermajority Lenders" means at any date Lenders having at least 75% of the
sum of outstanding Term Loans plus the Total Revolving Credit Commitment or, if
the Total Revolving Credit Commitment has been terminated, holding Notes
evidencing at least 75% of the aggregate unpaid principal amount of the Loans.
"Swing Line Advance" or "Swing Line Advances" means amounts advanced by the
Swing Line Lender to the Borrower pursuant to Section 2.09 hereof on the
occasion of any Borrowing. Swing Line Advances may be in any amount agreed to by
the Borrower and the Swing Line Lender, provided that such amount is a whole
dollar amount and that such amount does not exceed the Available Swing Line
Commitment.
"Swing Line Borrowing Notice" means any certificate signed by the Borrower
requesting a Swing Line Advance hereunder which will increase the aggregate
amount of the Swing Line Loans outstanding, which certificate shall be
denominated a "Swing Line Borrowing Notice," and shall be in substantially the
form of Exhibit A-2 attached hereto and shall, among other things, (a) specify
the date of the Swing Line Advance, which shall be a Business Day, (b) specify
the amount of the Swing Line Advance and certify that the use of
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the proceeds thereof will be in compliance with the terms of this Agreement, (c)
state that there shall not exist, on the date of the requested Swing Line
Advance and after giving effect thereto, a Default or an Event of Default, (d)
state that all conditions precedent to the making of the Swing Line Advance have
been satisfied and (e) certify that the aggregate amount of the Swing Line Loans
and the Revolving Credit Loans, together with the amount of the Swing Line
Advance, does not exceed the lesser of (i) the Available Revolving Credit
Commitment and (ii) the Available Swing Line Commitment.
"Swing Line Commitment" means the agreement of the Swing Line Lender to
advance funds in the aggregate sum of up to $5,000,000.00 to the Borrower
pursuant to the terms hereof.
"Swing Line Lender" means Mellon Bank, N.A., a national banking association
or any other Lender agreed to by the Borrower and the
Administrative Agent.
"Swing Line Loans" means the aggregate principal amount of all Swing Line
Advances.
"Swing Line Note" means that certain promissory note in the principal amount
of $5,000,000.00 issued by the Borrower to the Swing Line Lender, substantially
in the form of Exhibit B-2 attached hereto, any other swing line note issued
pursuant to this Agreement in respect of the Swing Line Commitment, and any
extensions, renewals or amendments to any of the foregoing.
"Swing Line Rate" means the per annum interest rate identified by the Swing
Line Lender as its standard swing line rate offered by the Swing Line Lender for
swing lines; provided, however, that if such identified rate is based on LIBOR,
then the applicable margin to be added to such identified rate shall be equal to
the Applicable Margin.
"Syndication Agents" means BNY Capital Markets, Inc. and Bank of America,
N.A.
"System" means each cable television system owned by the Borrower or a
Restricted Subsidiary.
"Taxes" has the meaning ascribed to such term in Section 4.04(a).
"TCI" means Tele-Communications, Inc.
"TCI CVC" means CVC KeepWell LLC, a Delaware limited liability company.
-------
"TCI LLC" means TCI IP-VI, LLC, a Delaware limited liability company.
-------
|
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"TCI Subsidiaries" means TCI TKR of Jefferson County, Inc., a Delaware
corporation, TCI Cablevision of Kentucky, Inc., a Kentucky corporation, TCI of
North Central Kentucky, Inc., a Kentucky corporation, TCI of Lexington, Inc., a
Kentucky corporation, and TCI of Radcliff, Inc,, a Kentucky corporation and/or
their respective successors and assigns.
"Term Loan A" has the meaning ascribed to such term in Section 2.01.
"Term Loan A Amount" has the meaning ascribed to such term in Section 2.01.
"Term Loan A Lender" means each Lender which has a Term Loan Amount on which
it has made a Term Loan A.
"Term Loan A Notes" has the meaning ascribed to such term in Section 2.03.
"Term Loan Amount" means the sum of the Term Loan A Amount and the Term Loan
B Amount.
"Term Loan B" has the meaning ascribed to such term in Section 2.01.
"Term Loan B Amount" has the meaning ascribed to such term in Section 2.01.
"Term Loan B Lender" means each Lender which has a Term Loan B Amount on
which it has made a Term Loan B.
"Term Loan B Notes" has the meaning ascribed to such term in Section 2.03.
"Term Loan Lenders" means the Term Loan A Lenders and Term Loan B Lenders.
"Term Loans" means Term Loan A and Term Loan B.
"Term Notes" means Term Loan A Notes and Term Loan B Notes.
"Total Term Loan A Amount" has the meaning ascribed to such term in Section
2.01.
"Total Term Loan B Amount" has the meaning ascribed to such term in Section
2.01.
"Total Revolving Credit Commitment" means the aggregate sum of each Lender's
Revolving Credit Commitment, as the same may be reduced from time to time
pursuant to Sections 2.06 and 2.07 hereof.
"Total Term Loan Amount" means the sum of the Total Term Loan A Amount and
the Total Term Loan B Amount.
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"Ultimate Parent" means, prior to the ICP-VI Dissolution, ICP-VI, and
thereafter, Insight Midwest.
"Unrestricted Subsidiary" means any Subsidiary which is acquired or created
which is not a Restricted Subsidiary.
"Unused Amounts" means (i) the aggregate amount of capital expenditures
which the Borrower and the Restricted Subsidiaries were permitted to make during
the two prior fiscal years pursuant to Section 7.02(k) (including Unused
Amounts) minus (ii) the aggregate amount of capital expenditures which the
Borrower and the Restricted Subsidiaries made during the two prior fiscal years.
ARTICLE II.
THE REVOLVING CREDIT AND TERM LOANS
Section 2.01. The Revolving Credit, Term Loans and Swing Line Loans. (a)
Subject to the terms and conditions of this Agreement, (i) each of the Lenders,
severally and not jointly with the other Lenders, agrees to make, subject to the
Available Revolving Credit Commitment, revolving credit loans (each a "Revolving
Credit Loan") to the Borrower from time to time before October 31, 2006 (the
"Revolving Credit Termination Date") in an aggregate principal amount at any one
time outstanding not to exceed such Lender's Revolving Credit Commitment, and
(ii) the Swing Line Lender agrees, subject to the terms and conditions of this
Agreement and such other terms and conditions as may be agreed to by the
Borrower and the Swing Line Lender from time to time, to lend and relend to the
Borrower, prior to the Revolving Credit Termination Date, Swing Line Advances
which in the aggregate at any one time outstanding do not exceed the Available
Swing Line Commitment. Each Swing Line Advance shall be made and administered in
accordance with the procedures and terms set forth in Section 2.09 hereof. The
Borrower hereby acknowledges that all obligations with respect to "Revolving
Credit Loans" outstanding on the Closing Date under the "Revolving Credit
Commitment" (as such terms are defined in the Prior Loan Agreement) shall be
deemed to have been made to the Borrower as Revolving Credit Loans under the
Revolving Credit Commitment hereunder and shall constitute a portion of the
obligations of the Borrower hereunder; and that all obligations with respect to
"Swing Line Loans" outstanding on the Closing Date under the "Swing Line
Commitment" (as such terms are defined in the Prior Loan Agreement) shall be
deemed to have been made to the Borrower as Swing Line Loans under the Swing
Line Commitment hereunder and shall constitute a portion of the obligations of
the Borrower hereunder.
(b) Subject to the terms and conditions of the Prior Loan Agreement, each of
the Lenders (as defined in the Prior Loan Agreement), severally and not jointly
with the other
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Lenders (as defined in the Prior Loan Agreement), agreed to make (i) a Term Loan
A in a single Borrowing on the date of the initial Revolving Credit Loan in the
amount of its respective Term Loan A Amount under the Prior Loan Agreement (as
all terms in this subsection (i) are defined in the Prior Loan Agreement) and
(ii) a Term Loan B (with the Term Loan A, the "Terms Loans") in a single
Borrowing on the date of the initial Revolving Credit Loan in the amount of its
respective Term Loan B Amount under the Prior Loan Agreement (as all such terms
in this subsection (ii) are defined in the Prior Loan Agreement). The Borrower
hereby acknowledges that all obligations with respect to the "Term Loans" (as
such term is defined in the Prior Loan Agreement) outstanding on the Closing
Date shall be deemed to have been made to the Borrower as Term Loans hereunder
and shall constitute a portion of the obligations of the Borrower hereunder.
Section 2.02. Procedure for Borrowings. (a) Except for each Swing Line
Advance, which shall be made pursuant to and in accordance with Section 2.09
hereof, the Borrower may borrow pursuant to this Article II by giving the
Administrative Agent, (i) in the case of Base Rate Loans, written notice prior
to 11:00 A.M., New York City time, on the day and (ii) in the case of Eurodollar
Loans, not less than three (3) Business Days' written notice, of its request for
such Loans, which, in the case of either (i) or (ii) above, shall be in the
aggregate amount of $1,000,000 (and in increments of $500,000 in excess
thereof), such notice to be substantially in the form of Exhibit A-1 attached
hereto in the case of Revolving Credit Loans and substantially in the form of
Exhibit C attached hereto in the case of Term Loans. Such notice shall specify
(i) the date of the proposed borrowing (the "Borrowing Date"), (ii) the amount
of such Borrowing, (iii) whether the Loans are to bear interest as Base Rate
Loans or Eurodollar Loans, (iv) if the Loans are to bear interest as Eurodollar
Loans, the term of the initial Interest Period therefor, and (v) the Applicable
Margin initially in effect for such Loans and the Applicable Margin in effect
for all other outstanding Loans hereunder (in each case after giving effect to
such Revolving Credit Borrowings and any other contemporaneous borrowings and
repayments of indebtedness for Borrowed Money of the Borrower).
(b) Upon receipt of any such notice from the Borrower, the Administrative
Agent shall forthwith give notice to each Revolving Credit Lender, Term Loan A
Lender or Term Loan B Lender, as the case may be, of the substance thereof. Not
later than 2:00 P.M., New York City time on the Borrowing Date specified in such
notice, each Revolving Credit Lender, Term Loan A Lender or Term Loan B Lender,
as the case may be, shall make available to the Administrative Agent in
immediately available funds at the Principal Office of the Administrative Agent,
such Revolving Credit Lender's, Term Loan A Lender's or Term Loan B Lender's, as
the case may be, pro rata share of the requested Loans.
(c) Upon receipt by the Administrative Agent of all such funds and upon
satisfaction of each of the conditions set forth in Section 6.02 hereof, the
Administrative Agent shall disburse to the Borrower (or to such third parties as
the Borrower may direct in writing) the Loans requested in such notice;
provided, however, that in the event that all
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funds necessary to make the requested Loans are not received by the
Administrative Agent prior to the time requested in the Borrower's notice, the
Administrative Agent shall disburse to the Borrower (or to such third parties as
the Borrower may direct in writing) the Loans in an amount equal to the amount
of such funds as have been actually received by the Administrative Agent and are
available for disbursement and shall promptly disburse amounts thereafter
received to the Borrower. The Administrative Agent may, but shall not be
required to, advance on behalf of any Revolving Credit Lender, Term Loan A
Lender or Term Loan B Lender, as the case may be, such Lender's pro rata share
of the Loans requested to be made on a Borrowing Date unless such Revolving
Credit Lender, Term Loan A Lender or Term Loan B Lender shall have notified the
Administrative Agent prior to the Borrowing Date that it does not intend to make
available its pro rata share of the Loans on such date. If the Administrative
Agent makes such advance, the Administrative Agent shall be entitled to recover
such amount on demand from the Lender on whose behalf such advance was made, and
if such Lender does not pay the Administrative Agent the amount of such advance
on demand, the Borrower shall pay such amount to the Administrative Agent on
demand. Until such amount is repaid to the Administrative Agent by such
Revolving Credit Lender, Term Loan A Lender or Term Loan B Lender or the
Borrower, as the case may be, such advance shall be deemed for all purposes to
be a Loan made by the Administrative Agent. The Administrative Agent shall be
entitled to recover from the Revolving Credit Lender, Term Loan A Lender, Term
Loan B Lender, or the Borrower, as the case may be, interest on the amount
advanced by it for each day such amount is made available at a rate per annum
equal to the applicable rate on the Loans made on the Borrowing Date.
(d) In lieu of delivering the written notice described above, the Borrower
may give the Administrative Agent telephonic notice of any request for borrowing
by the time required under this Section 2.02; provided that such telephonic
notice shall be confirmed in writing by delivery (which may include telecopy
transmission) of a written notice to the Administrative Agent by the close of
business on the date of such telephonic notice; provided, that the Borrower's
failure to confirm any telephonic notice in writing shall not invalidate any
notice so given if acted upon by the Administrative Agent.
Section 2.03. Revolving Credit Notes and Term Notes. The Borrower's
obligation to repay the Revolving Credit Loans shall be evidenced by promissory
notes of the Borrower, substantially in the form of Exhibit B-1 (each, a
"Revolving Credit Note"), the Borrower's obligation to repay Term Loan A shall
be evidenced by promissory notes of the Borrower, substantially in the form of
Exhibit D-1 attached hereto (each, a "Term Loan A Note") and the Borrower's
obligation to repay Term Loan B shall be evidenced by promissory notes of the
Borrower, substantially in the form of Exhibit D-2 attached hereto (each a "Term
Loan B Note"), one such Note payable to the order of each Revolving Credit
Lender, Term Loan A Lender or Term Loan B Lender, as the case may be. The
Revolving Credit Note of each Revolving Credit Lender shall be in the principal
amount of such Revolving Credit Lender's Revolving Credit Commitment, dated the
Closing Date, and be stated to mature on the Revolving Credit Termination Date
and bear interest from the date thereof until maturity on
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the principal balance (from time to time outstanding thereunder) payable at the
rates and in the manner provided herein. The Term Loan A Note of each Term Loan
A Lender shall be in the principal amount of such Term Loan A Lender's Term Loan
A Amount, dated the date on which the Term Loan A is made and be stated to
mature in installments as set forth in Section 2.08 hereof and bear interest
from the date thereof until maturity on the principal amount of the Term Loan A
outstanding thereunder payable at the rates and in the manner determined
pursuant to Section 3.03 hereof. The Term Loan B Note of each Term Loan B Lender
shall be in the principal amount of such Term Loan B Lender's Term Loan B
Amount, dated the date on which the Term Loan B is made and be stated to mature
in installments as set forth in Section 2.08 hereof and bear interest from the
date thereof until maturity on the principal amount of the Term Loan B
outstanding thereunder payable at the rates and in the manner determined
pursuant to Section 3.03 hereof. Each Revolving Credit Lender, Term Loan A
Lender or Term Loan B Lender, as the case may be, is authorized to indicate upon
the grid attached to either its Revolving Credit Note, Term Loan A Note or Term
Loan B Note, as the case may be, all Loans made by it pursuant to this
Agreement, all interest elections and payments of principal and interest
thereon. Such notations shall be presumed correct absent manifest error as to
such interest elections, the aggregate unpaid principal amount of all Revolving
Credit Loans, Term Loan A or Term Loan B, as the case may be, made by such
Revolving Credit Lender, Term Loan A Lender or Term Loan B Lender, as the case
may be, and interest due thereon, but the failure by such Revolving Credit
Lender, Term Loan A Lender or Term Loan B Lender, as the case may be, to make
such notations or the inaccuracy or incompleteness of any such notations shall
not affect the obligations of the Borrower hereunder or under the Revolving
Credit Notes, Term Loan A Notes or Term Loan B Notes, as the case may be.
Section 2.04. Revolving Credit Commitment Fee. The Borrower shall pay to the
Administrative Agent for the account of the Revolving Credit Lenders the
commitment fee (the "Revolving Credit Commitment Fee") as set forth below:
(a) at such time as the Senior Leverage Ratio is greater than 5.00:1.00, an
amount equal to 0.375% per annum of the average daily unused amount of the Total
Revolving Credit Commitment on the basis of a 365/6-day year for the actual
number of days elapsed; and
(b) at such time as the Senior Leverage Ratio is less than or equal to
5.00:1.00, an amount equal to 0.250% per annum of the average daily unused
amount of the Total Revolving Credit Commitment on the basis of a 365/6-day year
for the actual number of days elapsed.
The Revolving Credit Commitment Fee shall be payable in arrears on each
Quarterly Date and on the Revolving Credit Termination Date or the earlier
termination of the Total Revolving Credit Commitment.
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Section 2.05. Other Fees. The Borrower shall pay to the Administrative
Agent, the Arranging Agents, the Syndication Agents and the Lenders certain
closing-related fees and to pay to the Administrative Agent and the Arranging
Agents other fees (the "Other Fees") in the amounts and at the time or times as
may have been agreed between such parties.
Section 2.06. Optional Cancellation or Reduction of Total Revolving Credit
Commitment and Term Loans. (a) The Borrower shall have the right, upon not less
than three (3) Business Days' written notice to the Administrative Agent and
upon payment of the Revolving Credit Commitment Fee accrued through the date of
such cancellation or reduction, to cancel the Total Revolving Credit Commitment
in full or to reduce the amount thereof in part in minimum amounts as required
by Section 2.06(b) below; provided that the amount of the Total Revolving Credit
Commitment shall at no time be less than the unpaid principal amount of all
Revolving Credit Loans then outstanding. All cancellations or reductions shall
be permanent.
(b) On the date of any reduction of the Total Revolving Credit Commitment
pursuant to this Section 2.06, the Borrower shall prepay the Term Loans in a
principal amount equal to (i) the aggregate amount of Term Loans outstanding
immediately prior to such reduction of the Total Revolving Credit Commitment
multiplied by (ii) the quotient obtained by dividing the amount of such
reduction of the Total Revolving Credit Commitment by the amount of the Total
Revolving Credit Commitment immediately prior to such reduction of the Total
Revolving Credit Commitment. The aggregate amount of any reduction of the Total
Revolving Credit Commitment plus the amount of the repayment of the Term Loans
made pursuant to the immediately preceding sentence shall not be less than
$5,000,000. The Borrower shall also be required to pay all accrued interest on
the principal of the Loans being prepaid to the date of prepayment, and in the
case of Eurodollar Loans which are prepaid prior to the last day of the Interest
Period therefor, the amounts required by Section 4.03. All prepayments of Term
Loans made pursuant to this Section 2.06(b) shall be permanent and shall be
applied pro rata between Term Loan A and Term Loan B to installments of
principal in inverse order of their maturities. In allocating hereunder between
Revolving Credit Loans and Term Loans, or Term Loan A and Term Loan B, as the
case may be, such allocations may be rounded to the nearest $100,000.
Section 2.07. Mandatory Reductions of the Total Revolving Credit Commitment.
The Total Revolving Credit Commitment will be reduced on the dates and to the
amounts set forth below:
Total Revolving Credit
Date Commitment
---- ----------
June 30, 2001 $311,700,000
September 30, 2001 298,400,000
December 31, 2001 285,000,000
March 31, 2002 277,500,000
|
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Total Revolving Credit
Date Commitment
---- ----------
June 30, 2002 270,000,000
September 30, 2002 262,500,000
December 31, 2002 255,000,000
March 31, 2003 246,250,000
June 30, 2003 237,500,000
September 30, 2003 228,750,000
December 31, 2003 220,000,000
March 31, 2004 207,500,000
June 30, 2004 195,000,000
September 30, 2004 182,500,000
December 31, 2004 170,000,000
March 31, 2005 152,500,000
June 30, 2005 135,000,000
September 30, 2005 117,500,000
December 31, 2005 100,000,000
March 31, 2006 80,000,000
June 30, 2006 60,000,000
September 30, 2006 40,000,000
Revolving Credit Termination Date 0
|
; provided that if prior to any such date the Borrower shall have reduced the
Total Revolving Credit Commitment to less than the amount set forth above next
to such date in accordance with Section 2.06, no such reduction of the Total
Revolving Credit Commitment shall be made on such date.
Section 2.08. Mandatory and Optional Prepayment. (a) The Borrower shall have
the right, on not less than two (2) Business Days' written notice to the
Administrative Agent, in the case of either Eurodollar Revolving Loans or
Eurodollar Term Loans, and on written notice prior to 1:00 P.M. New York time,
on the day to the Administrative Agent, in the case of either Base Rate
Revolving Loans or Base Rate Term Loans, to prepay Revolving Credit Loans or
prepay portions of the Term Loan A or the Term Loan B, as the case may be, of
the Revolving Credit Lenders, the Term Loan A Lenders or the Term Loan B
Lenders, as the case may be, bearing interest on the same basis and having the
same Interest Periods, if any, in whole or in part, without premium or penalty,
and if in part, in the aggregate principal amount required by Section 2.08(c) in
the case of Term Loans, and in the aggregate principal
amount of $500,000 or an integral multiple thereof in the case of Revolving
Credit Loans, together with accrued interest on the principal being prepaid to
the date of prepayment, and in the case of Eurodollar Loans which are prepaid
prior to the last day of the Interest Period therefor, the amounts required by
Section 4.03, subject in each case, to the second sentence of Section 2.08(a).
Each partial prepayment of Term Loans shall be applied pro rata between Term
Loan A and Term Loan B to installments of principal in the inverse order of
their maturities. All Term Loan prepayments made pursuant to this Section
2.08(a) shall be
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permanent. Subject to Section 2.01, all Revolving Credit Loan
amounts prepaid may be reborrowed.
(b) In the event that the aggregate unpaid principal amount of the
outstanding Revolving Credit Loans shall at any time exceed the Total Revolving
Credit Commitment, such excess shall be immediately due and payable to the
Revolving Credit Lenders, pro rata in proportion to their respective Revolving
Credit Commitments.
(c) On the date of any optional prepayment of Term Loans pursuant to Section
2.08(a), the Total Revolving Credit Commitment shall be reduced by an amount
equal to (i) the amount of the Total Revolving Credit Commitment immediately
prior to such optional prepayment of the Term Loans multiplied by (ii) the
quotient obtained by dividing the amount of such optional prepayment by the
Total Term Loan Amount immediately prior to such optional prepayment of the Term
Loans. The aggregate amount of any optional prepayment of Term Loans made in
accordance with Section 2.08(a) plus the amount of the reduction of the Total
Revolving Credit Commitment made pursuant to the immediately preceding sentence
shall not be less than $5,000,000. If, as a result of a reduction of the Total
Revolving Credit Commitment made pursuant to this Section 2.08(c), the aggregate
unpaid principal amount of the outstanding Revolving Credit Loans shall exceed
the Total Revolving Credit Commitment, such excess shall be immediately due and
payable to the Revolving Credit Lenders, pro rata in proportion to their
respective Revolving Credit Commitments.
(d) Term Loan A shall be repaid in installments payable (i) on each
Quarterly Date, commencing in June 2001 and ending in December 2006, in an
amount equal to $250,000, and (ii) on each of March 31, 2007 and September 30,
2007 in an amount equal to $47,125,000.
(e) Term Loan B shall be repaid in installments payable (i) on each
Quarterly Date, commencing in June 2001 and ending in June 2007, in an amount
equal to $625,000 and (ii) on each of September 30, 2007 and December 31, 2007
in an amount equal to $117,187,500.
Section 2.09. Swing Line Loans.
(a) Swing Line Advances. In the event the Borrower desires to obtain a Swing
Line Loan subject to and upon the terms and conditions set forth herein, at any
time and from time to time on and after the date of this Agreement and prior to
the Revolving Credit Termination Date, the Borrower may either (i) give to the
Swing Line Lender an irrevocable written notice in the form of a Swing Line
Borrowing Notice or telephonic notice followed immediately by a Swing Line
Borrowing Notice; provided, however, that the failure by the Borrower to confirm
any telephonic notice with a Swing Line Borrowing Notice shall not invalidate
any notice so given; or (ii) borrow the Swing Line Loans in accordance with an
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automatic cash management arrangement between the Borrower and the Swing Line
Lender which shall be in form and substance reasonably satisfactory to the Swing
Line Lender and the Administrative Agent (any such agreement, the "ABS
Agreement"); provided that the acceptance of an automatic borrowing by the
Borrower shall be deemed to be a representation that all of the conditions in
Section 6.02 have been satisfied both before and after giving effect to such
Swing Line Loan; provided further that in no case shall any Swing Line Loan be
made under the Swing Line Commitment if such funding would increase the
aggregate Swing Line Loans to an amount in excess of the Available Swing Line
Commitment or if aggregate amounts of all Revolving Credit Loans and Swing Line
Loans outstanding would exceed the Available Revolving Credit Commitment.
Notwithstanding the foregoing, at any time when the Available Revolving Credit
Commitment is $10,000,000 or less, no Swing Line Loan shall be made hereunder
without prior written notice to and the prior written consent of the
Administrative Agent, such consent not to be unreasonably withheld.
(b) Prepayment and Repayment.
(i) In order to facilitate repayment of the Swing Line Loans,
the Borrower hereby irrevocably requests the Lenders, and the
Lenders hereby severally agree, on the terms and conditions of this
Agreement (other than as provided in Article II hereof with respect
to the amounts of, the time of requests for and the repayment of
Advances hereunder and in Article VI hereof with respect to
conditions precedent to Advances hereunder), with respect to Swing
Line Loans outstanding, upon request of the Swing Line Lender or the
Borrower (including, without limitation, after any Default or Event
of Default, but prior to the occurrence of an event described in
clauses (h) or (i) of Section 8.01 hereof), to make an Advance for
the Borrower in the amount of such outstandings and to pay the
proceeds of such Advance directly to the Administrative Agent to
reimburse the Swing Line Lender for the amount of the Swing Line
Loans then outstanding; provided, however, that no Lender shall be
required to make such Advance if, at the time that the Swing Line
Lender agreed to fund any Swing Line Advance, the Swing Line Lender
had knowledge of the existence of a Default. Each Lender shall pay
its share of such Advance by paying its portion of such Advance to
the Administrative Agent in accordance with its Revolving Credit
Commitment, without reduction for any set-off or counterclaim of any
nature whatsoever and regardless of whether any Default or Event of
Default (other than with respect to an event described in clauses
(h) or (i) of Section 8.01 hereof) then exists or would be caused
thereby. If, at any time that the Swing Line Loans are outstanding,
any of the events described in clauses (h) or (i) of Section 8.01
hereof shall have occurred and be continuing, then each Lender
shall, automatically upon the occurrence of any such event and
without any action on the part of the Swing Line Lender, the
Borrower, the Administrative Agent or the Lenders, or any of them,
be deemed to have purchased an undivided participation in the then
outstanding principal amount of the Swing Line Loans then
outstanding in an amount equal to
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such Lender's Revolving Credit Commitment, times the principal
amount of the Swing Line Loans then outstanding, and each Lender
shall, notwithstanding such Event of Default, immediately pay to the
Administrative Agent for the account of the Swing Line Lender, in
immediately available funds, the amount of such Lender's
participation (and the Swing Line Lender shall deliver to such
Lender a written confirmation of such loan participation dated the
date of the occurrence of such event and in the amount of such
Lender's Revolving Credit Commitment, times the principal amount of
the Swing Line Loans then outstanding). Notwithstanding any of the
foregoing, the Borrower shall repay in full any Swing Line Loan
outstanding, together with accrued interest thereon, on or before
the earlier of (i) the date and time required by any ABS Agreement,
(ii) the last day of each calendar quarter in which a Swing Line
Loan is made and (iii) the Revolving Credit Termination Date.
(ii) If any payment under this Agreement or the Swing Line Note
shall be specified to be made upon a day which is not a Business
Day, it shall be made on the next succeeding 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.
(iii) The Borrower agrees to pay principal, interest, fees and
all other amounts due hereunder or under the Swing Line Note without
set-off or counterclaim or any deduction whatsoever and free and
clear of all Taxes.
(iv) The Borrower hereby agrees that the provisions of Section
4.04 hereof shall also be applicable to Swing Line Loans and the
Swing Line Lender.
(v) If the Swing Line Lender shall obtain any payment (whether
involuntary or otherwise) on account of the Swing Line Loans in
excess of the Swing Line Loans then outstanding and the Swing Line
Lender's share of any expenses, fees and other items due and payable
to it hereunder, the Swing Line Lender shall forthwith return such
excess payment to the Administrative Agent for distribution among
the Lenders based on the provisions of this Agreement.
(c) Interest and Payments on Swing Line Advances. Interest on each Swing
Line Advance shall be, at the option of the Borrower, either (i) computed in the
same manner as interest on Base Rate Revolving Loans, or (ii) the Swing Line
Rate, and in each case, shall be payable on the same terms as interest on each
Base Rate Revolving Loan; provided, however, no Swing Line Advance may remain
outstanding beyond the earlier of (i) the date and time required by any ABS
Agreement, (ii) the last day of any calendar quarter in which such Swing Line
Advance was made and (iii) the Revolving Credit Termination Date.
(d) Amendment. Notwithstanding anything to the contrary contained herein,
the parties hereto agree that the provisions of this section 2.09 and the
definitions of the terms
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Swing Line Commitment and Available Swing Line Commitment may be modified,
amended or waived, only by a writing signed by the Borrower, the Administrative
Agent, the Majority Lenders and the Swing Line Lender.
ARTICLE III.
INTEREST
Section 3.01. Interest on Base Rate Loans. Each Base Rate Revolving Loan and
each Base Rate Term Loan (collectively, the "Base Rate Loans") shall bear
interest from the date of such Base Rate Loan until maturity, or a conversion to
a Eurodollar Loan, as the case may be, payable in arrears on the last Business
Day of each calendar quarter of each year, commencing with the first such date
after the date hereof, and on the Final Maturity Date, at a rate per annum (on
the basis of a 360-day year for the actual number of days involved whenever the
Base Rate is based on the Federal Funds Rate and otherwise on the basis of a
365/6-day year for the actual number of days involved) equal to the sum of (i)
the Applicable Margin and (ii) the Base Rate in effect from time to time, which
rate shall change as and when said Base Rate or Applicable Margin shall change.
Section 3.02. Interest on Eurodollar Loans. (a) Each Eurodollar
Revolving Loan and each Eurodollar Term Loan (collectively, the "Eurodollar
Loans") shall bear interest from (and including) the first day of each Interest
Period to (but excluding) the last day of such Interest Period, payable in
arrears with respect to Interest Periods of three months or less, on the last
day of the applicable Interest Period, and with respect to Interest Periods
longer than three months, on the three-month anniversary of the commencement of
such Interest Period and on the last day of such Interest Period, at a rate per
annum (on the basis of a 360-day year for the actual number of days involved),
determined by the Administrative Agent with respect to each Interest Period,
equal to the sum (rounded upwards to the nearest 1/16 of 1%) of (i) the
Applicable Margin and (ii) LIBOR, which rate shall change as and when said
Applicable Margin shall change.
(b) The Interest Period for each Eurodollar Loan shall be initially selected
by the Borrower at least three (3) Business Days not later than 11 A.M. New York
time prior to the beginning of such Interest Period in its notice of borrowing
pursuant to Section 2.02 in the case of the Eurodollar Revolving Loans, or
pursuant to Section 3.03 in the case of Eurodollar Term Loans. Subsequent
Interest Periods shall be selected pursuant to the procedures set forth in
Section 3.03. If the Borrower fails to notify the Administrative Agent of the
Interest Period desired at least three (3) Business Days prior to the last day
of the then current Interest Period for an outstanding Eurodollar Loan, then
such outstanding Eurodollar Loan shall become a Base Rate Loan at the end of the
current Interest Period for such outstanding Eurodollar Loan.
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(c) Notwithstanding the foregoing: (i) if any Interest Period for a
Eurodollar Loan would otherwise end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless the
result of such extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end on the immediately
preceding Business Day; and (ii) no Interest Period for a Eurodollar Loan may
extend beyond the mandatory prepayment or commitment reduction date where the
making of such prepayment or commitment reduction would otherwise result in
breakage costs with respect to such Interest Period unless Borrower reimburses
Lenders for such breakage cost in accordance with Section 4.03.
(d) Eurodollar Loans shall be made by each Lender from its branch or
affiliate identified as its Eurodollar Lending Office on Schedule 2 hereto, or
such other branch or affiliate as it may hereafter designate to the Borrower and
the Administrative Agent as its Eurodollar Lending Office.
Section 3.03. Procedure for Interest Determination. (a) Except for the Swing
Line Loans, unless the Borrower shall make an election pursuant to Section
3.03(b) that the Loans or portions thereof shall bear interest as Eurodollar
Loans, the Loans shall bear interest as Base Rate Loans.
(b) The Borrower shall give the Administrative Agent not less than three (3)
Business Days' not later than 11 A.M. New York time written notice of its
request for portions of the Loans in the aggregate amount of $500,000 or an
integral multiple thereof to bear interest as Eurodollar Loans. Such notice
shall be in the form of Exhibit E attached hereto and shall specify (i) the date
on which such election is to take effect (the "Election Date"), (ii) the
aggregate amount of the Loans which are to bear interest as Base Rate Loans or
Eurodollar Loans, (iii) when required, the term of the Interest Period therefor
and (iv) the Applicable Margin in effect for such Loans and the Applicable
Margin in effect for all other outstanding Loans hereunder (in each case after
giving effect to any contemporaneous borrowings and repayments of indebtedness
for Borrowed Money of the Borrower); provided, however, that there shall at no
time be Eurodollar Loans outstanding having more than twenty (20) different
Interest Periods; provided further that no Loan may commence
bearing interest as a Eurodollar Loan so long as any Event of Default shall have
occurred and be continuing.
(c) Upon receipt of any such notice from the Borrower, the Administrative
Agent shall forthwith give notice to each Revolving Credit Lender, Term Loan A
Lender or Term Loan B Lender, as the case may be, of the substance thereof.
Effective on such Election Date, the Loans or portions thereof as to which the
election was made shall commence to accrue interest as set forth in this Article
III for the interest rate selected by the Borrower.
(d) In lieu of delivering the above described notice, the Borrower may give
the Administrative Agent telephonic notice hereunder by the required time under
this Section
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3.03; provided that such telephonic notice shall be confirmed in
writing by delivery (which may include telecopy transmission) of a written
notice to the Administrative Agent by the close of business on the date of such
telephonic notice.; provided, that the Borrower's failure to confirm any
telephone notice in writing shall not invalidate any notice so given if acted
upon by the Administrative Agent.
(e) No Loan shall be deemed to have been made for purposes of Article VI
hereof solely on account of the Borrower selecting an Interest Period pursuant
to Section 3.02(b) or delivering any notice pursuant to Section 3.03(b) or (d).
Section 3.04. Post Default Interest. After the occurrence and during the
continuance of any Event of Default and until such Event of Default is cured,
the Applicable Margin shall increase by 2.00% per annum.
Section 3.05. Maximum Interest Rate. (a) Nothing in this Agreement or
the Notes shall require the Borrower to pay interest at a rate exceeding the
maximum rate permitted by applicable law. Neither this Section nor Section 11.01
is intended to limit the rate of interest payable for the account of any Lender
to the maximum rate permitted by the laws of the State of New York (or any other
applicable law) if a higher rate is permitted with respect to such Lender by
supervening provisions of U.S. federal law.
(b) If the amount of interest payable for the account of any Lender on any
interest payment date in respect of the immediately preceding interest
computation period, computed pursuant to this Article III, would exceed the
maximum amount permitted by applicable law to be charged by such Lender, the
amount of interest payable for its account on such interest payment date shall
automatically be reduced to such maximum permissible amount.
(c) If the amount of interest payable for the account of any Lender in
respect of any interest computation period is reduced pursuant to Section
3.05(b) and the amount of interest payable for its account in respect of any
subsequent interest computation period would be less than the maximum amount
permitted by law to be charged by such Lender, then the amount of interest
payable for its account in respect of such subsequent interest
computation period shall be automatically increased to such maximum permissible
amount; provided that at no time shall the aggregate amount by which interest
paid for the account of any Lender has been increased pursuant to this Section
3.05(c) exceed the aggregate amount by which interest paid for its account has
theretofore been reduced pursuant to Section 3.05(b).
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ARTICLE IV.
DISBURSEMENT AND PAYMENT
Section 4.01. Pro Rata Treatment. Except for payments with respect to any
Swing Line Loan, all payments of interest and principal on the Loans, each
payment of the Revolving Credit Commitment Fee and (except as provided in
Section 4.04(c)) each reduction of the Total Revolving Credit Commitment shall
be apportioned (i) in the case of payments relating to Revolving Credit
Commitments or Revolving Credit Loans, among the Revolving Credit Lenders pro
rata in the proportion which their respective outstanding Revolving Credit Loans
bear to all outstanding Revolving Credit Loans, or if no Revolving Credit Loans
are outstanding, their outstanding Revolving Credit Commitments bear to the
Total Revolving Credit Commitment, and (ii) in the case of payments relating to
Term Loan A or Term Loan B, pro rata among the Term Loan A Lenders or Term Loan
B Lenders, as the case may be, in the proportion which their respective
outstanding Term Loan A or Term Loan B, as the case may be, bear to all
outstanding Term Loan A or Term Loan B, as the case may be. Except as permitted
pursuant to Section 4.05, the Revolving Credit Notes or portions thereof as to
which an election has been made pursuant to Section 3.03 and the Term Notes or
portions thereof as to which an election has been made pursuant to Section 3.03
hereof shall at all times bear interest on the same basis (as Base Rate Loans
and Eurodollar Loans), and the Interest Periods applicable thereto, if any,
shall be of the same duration.
Section 4.02. Method of Payment. Except for payments with respect to any
Swing Line Loan, all payments hereunder and under the Notes shall be made to the
Administrative Agent for the account of the Lender or Lenders entitled thereto
in lawful money of the United States and in immediately available funds at the
Principal Office of the Administrative Agent at or prior to 1:00 P.M., New York
City time, on the date when due. Any payment received after 1:00 P.M., New York
City time, shall be deemed to have been made on the next succeeding Business
Day.
Section 4.03. Compensation for Losses. In the event that the Borrower makes
any prepayment of any Eurodollar Loan hereunder (including upon acceleration of
the Notes as provided in Section 8.01) or in the event an Election Date selected
pursuant to Section 3.03 falls on a day other than the last day of the Interest
Period for the amount so prepaid or as to which an election is made, or in the
event the Borrower revokes any notice given under Section 2.02 or 3.03 with
respect to a Eurodollar Loan, the Borrower shall pay to each Lender upon its
demand an amount which will compensate such Lender for any loss or premium or
penalty reasonably incurred by such Lender (or any Participant in the related
Loan) as a result of such prepayment, election or revocation of notice in
respect of funds obtained for the purpose of making or maintaining such Lender's
loans, or any part thereof. Such compensation shall include, without limitation,
an amount equal to the excess, if any, of (i) the amount of interest which would
have accrued on the amount so paid or prepaid, or not
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borrowed, for the period from the date of such payment or prepayment or failure
to borrow to the last day of such Interest Period (or, in the case of a failure
to borrow, the Interest Period that would have commenced on the date of such
failure to borrow), in each case at the applicable rate of interest for such
Loan provided for herein (excluding, however, the Applicable Margin included
therein) over (ii) the amount of interest (as reasonably determined by such
Lender or Participant) which would have accrued to such Lender or Participant on
such amount by placing such amount on deposit for a comparable period with
leading banks in the London interbank market; provided that such Lender shall
have delivered to the Borrower, within sixty (60) days after the date of such
payment or prepayment or failure to borrow, a certificate as to the amount of
such loss or expense, which certificate shall set forth in reasonable detail the
basis for such loss or expense and shall be conclusive in the absence of
manifest error.
Section 4.04. Taxes, Reserves and Additional Costs.
(a) Taxes, Reserves and Additional Costs. In the event that any change in
any present or future applicable law, rule or regulation, or any change in the
interpretation or administration thereof, including any formal request,
guideline, directive or policy (whether or not having the force of law) by any
Governmental Authority charged with the administration or interpretation
thereof, or compliance by any Lender with any formal request, guideline,
directive or policy of any such Governmental Authority:
(i) subjects any Lender or its applicable lending office to any tax,
duty, levy, impost, deduction, fee, liability or other charge (including the
imposition of any withholding tax so long as such Lender has complied with
Section 9.10) with respect to any Loan or any part of its Revolving Credit
Commitment (other than any tax on or measured by the overall net income of
such Lender) (individually a "Tax" and collectively "Taxes"); or
(ii) changes the basis of taxation of payments to any Lender through its
applicable lending office of principal of, or interest on, any Loan made by
such Lender with respect to its Revolving Credit Commitment or of any other
amounts payable hereunder, or any combination of the foregoing or subjects
any such payment to any Tax (including the imposition of any withholding tax
so long as such Lender has complied with Section 9.10) (other than any tax
on or measured by the overall net income of such Lender); or
(iii) imposes, modifies or deems applicable any reserve, capital
adequacy, deposit or similar requirement against any assets held by,
deposits with or for the account of, or loans or commitments by, or any
acquisition of funds by or for the account of an office of any Lender or its
holding company in connection with any Loan, including, without limitation,
Statutory Reserves (as defined below); or
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(iv) imposes upon any Lender any other condition with respect to any
Loan, any part of such Lender's Revolving Credit Commitment, or this
Agreement;
and the result of any of the foregoing (taking such Lender's policies into
account) is to (x) increase the cost to such Lender of making, funding or
maintaining any Loan or any part of its Revolving Credit Commitment hereunder or
(y) reduce the amount of any payment (whether of principal, interest or
otherwise) received or receivable by such Lender or (z) require such Lender or
its holding company to deposit any reserve, increase its capital or make any
payment on or calculated by reference to any Loan made or sum received by it, or
any part of its Revolving Credit Commitment, in each case by an amount which
such Lender in its judgment reasonably deems material; then
(A) such Lender shall promptly notify the Borrower and the
Administrative Agent of the happening of such event;
(B) such Lender shall promptly, and in any case within ninety (90)
days of the date when it becomes aware of the happening of such an
event, deliver to the Borrower and the Administrative Agent a
certificate, executed by an authorized officer of such Lender and
delivered by a relationship officer thereof, stating the change which
has occurred or the reserve requirements or other conditions which have
been imposed or the formal request, direction or requirement with which
such Lender has complied or will comply, or Tax to which it has or will
become subject, together with the date thereof, the amount of such
increased costs, reduction or payment (including any interest, penalties
or expenses incurred or to be incurred in connection with the payment of
any Tax), the way in which such amount has been calculated, and shall
certify that this is the Lender's standard method of calculating such
amount, that such amount is or will be calculated in a similar way for
other borrowers of the Lender under similar circumstances, that
compliance with such formal request, direction or requirement does not
result in such Lender treating the Borrower in a manner inconsistent
with its treatment of other borrowers which are subject to similar
provisions, and that its method of allocating any such costs, reductions
or payments is fair and reasonable; and
(C) the Borrower shall promptly pay to the Administrative Agent for
transfer to such affected Lender such amount or amounts set forth in
such certificate as will compensate such Lender for such additional
costs, reduction or payment.
For purposes of this Section 4.04(a), "Statutory Reserves" shall mean, with
respect to a Eurodollar Loan, the quotient (expressed as a decimal, rounded to
the nearest 1/100 of 1%) obtained by dividing (i) the number one by (ii) one
minus the aggregate of the reserve percentages expressed as a decimal
established by the Board of Governors of the Federal Reserve System for
Eurocurrency Liabilities as prescribed under Regulation D of said Board of
Governors.
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The certificate of the affected Lender as to the additional amounts payable
pursuant to this Section 4.04(a) delivered to the Borrower shall contain in
reasonable detail the basis upon which such additional amounts have been
calculated and shall be presumed correct absent manifest error. The provisions
of this Section 4.04(a) shall be applicable to the Borrower and the affected
Lender regardless of any possible contention of invalidity or inapplicability of
the law, regulation or condition which has been imposed. Notwithstanding the
foregoing, the Borrower will not be required to reimburse any Lender for any
increased costs, reductions or payments under this Section 4.04(a) in respect of
a period prior to ninety (90) days preceding the date of request, unless the
applicable law or regulation is imposed retroactively. In the case of a law or
regulation which is retroactive in effect, such notice shall be provided to the
Borrower not later than ninety (90) days from the date that such Lender
reasonably should have learned of such law or regulation, and the Borrower's
obligation to compensate such Lender for such increased cost or reduction is
contingent upon the provision of such timely notice (but any failure by such
Lender to provide such timely notice shall not affect the Borrower's
reimbursement obligations with respect to (a) costs or reduction incurred from
the date as of which the law or regulation is effective to the date that is
ninety (90) days after such Lender reasonably should have learned of such law or
regulation and (b) costs or reductions incurred following the provision of such
notice). No failure on the part of any Lender to demand compensation under this
Section 4.04(a) shall constitute a waiver of its right to demand such
compensation on any other occasion in connection with any other similar or
dissimilar event. If the affected Lender shall subsequently recoup costs for
which such Lender has theretofore been compensated by the Borrower, such Lender
shall promptly remit to the Borrower the amount of the recoupment.
Upon receipt of any certificate delivered in accordance with this Section
4.04(a), the Borrower shall execute and deliver to any Lender upon its request
such further instruments as may be necessary or desirable to give full force and
effect to any payment required as set forth in such certificate, including,
without limitation, a new Note of the Borrower to be issued in exchange for any
Note theretofore issued.
The Borrower shall also hold each Lender harmless and indemnify it for any
stamp or other taxes (other than any tax on or measured by the overall net
income of such Lender) with respect to the preparation, execution, delivery,
recording, performance or enforcement of the Credit Documents (all of which
shall be included in "Taxes"). The Borrower shall deliver to the Administrative
Agent certificates or other valid vouchers for all Taxes or other charges
deducted from or paid with respect to payments made by the Borrower hereunder.
(b) Lending Office Designations. Before giving any notice to the Borrower
pursuant to this Section, a Lender shall, if possible, designate a different
lending office if such designation will avoid the need for giving such notice
and will not, in the judgment of the Lender, be otherwise disadvantageous to the
Lender.
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(c) Replacement. Notwithstanding anything in this Agreement to the contrary,
upon delivery to the Borrower by a Lender of a notice under Section 4.04 or 4.05
hereof or a request for compensation or additional amounts pursuant to Section
4.04(a), the Borrower shall be entitled, at any time within sixty (60) days of
the receipt of such notice, to (i) pay all amounts then owing, whether or not
due, to such Lender under this Agreement including the compensation or
additional amounts so requested and (ii) either (A) replace such Lender with
another bank reasonably acceptable to the Administrative Agent or (B) reduce the
Total Revolving Credit Commitment provided under this Agreement by terminating
in whole or in part the Revolving Credit Commitment of such Lender. Any
reduction of the Total Revolving Credit Commitment pursuant to subclause (B)
above shall not affect the aggregate dollar amount of the Revolving Credit
Commitments of the remaining Lenders under this Agreement.
Section 4.05. Unavailability. If at any time any Lender shall have
determined in good faith (which determination shall be conclusive in the absence
of manifest error) that the making or maintenance of any part of such Lender's
Eurodollar Loans has been made impracticable or unlawful because of compliance
by such Lender in good faith with any law or guideline or interpretation or
administration thereof by any official body charged with the interpretation or
administration thereof or with any request or directive of such body (whether or
not having the effect of law), because U.S. dollar deposits in the amount and
requested maturity of such Eurodollar Loan are not available to the Lender in
the London Eurodollar interbank market or because of any other reason, then the
Administrative Agent, upon notification to it of such determination by such
Lender, shall forthwith advise the other Lenders and the Borrower thereof. Upon
such date as shall be specified in such notice and until such time as the
Administrative Agent, upon notification to it by such Lender, shall notify the
Borrower and the other Lenders that the circumstances specified by it in such
notice no longer apply, (i) notwithstanding any other provision of this
Agreement, such Lender's portion of such Eurodollar Loan shall automatically and
without requirement of notice by the Borrower be converted to a Base Rate Loan
and (ii) the obligation of only such Lender to allow borrowing, elections and
renewals of Eurodollar Loans shall be suspended, and, if the Borrower shall in a
notice of borrowing or election request that such Lender make a Eurodollar Loan,
the loan requested to be made by such Lender shall instead be made as a Base
Rate Loan.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Section 5.01. Representations and Warranties. The Borrower and, to the
extent any of the following representations are applicable to the Parent, the
Parent represent and warrant to the Lenders that after giving effect to
transactions to be completed on the Closing Date:
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(a) Good Standing, Power and Partnership Interests.
(i) The Borrower is a limited partnership duly organized and validly
existing, in good standing, under the laws of the jurisdiction of its
organization, and has the power to own its property and to carry on its
business as now being conducted and is duly qualified to do business and is
in good standing in each jurisdiction in which the character of the
properties owned or leased by it therein or in which the transaction of its
business makes such qualification necessary, except where the failure to be
so qualified would not have a Material Adverse Effect. The Borrower is
classified as a partnership for federal tax purposes and as a limited
partnership for state income tax purposes and is not taxable as an
association.
(ii) The general partner of the Borrower is a limited partnership, duly
organized and validly existing, in good standing, under the laws of the
jurisdiction of its organization, and has the power to own its property, to
carry on its business as now being conducted and to act as a general partner
of the Borrower and is duly qualified to do business and is in good standing
in each jurisdiction in which the character of the properties owned or
leased by it therein or in which the transaction of its business, including
without limitation, acting as a general partner of the Borrower makes such
qualification necessary, except where the failure to be so qualified would
not have a Material Adverse Effect. The general partner of the Borrower is
classified as a partnership for federal income tax purposes and as a limited
partnership for state income tax purposes and is not taxable as an
association.
(iii) Operating Subsidiary is a limited partnership, duly organized and
validly existing, in good standing, under the laws of the jurisdiction of
its organization, and it has the power to own its property, to carry on its
business as now being conducted and is duly qualified to do business and is
in good standing in each jurisdiction in which the character of the
properties owned or leased by it therein or in which the transaction of its
business makes such qualification necessary, except where the failure to be
so qualified would not have a Material Adverse Effect. Operating Subsidiary
is classified as a partnership for federal income tax purposes and as a
limited partnership for state income tax purposes and is not taxable as an
association.
(b) Parent, Insight Kentucky Capital, Operating Subsidiary and the Borrower.
(i) Parent and Insight Kentucky Capital are the only partners of the
Borrower. The partnership interests of the Borrower which are owned by
Parent and Insight Kentucky Capital are authorized by the Borrower
Partnership Agreement and are free and clear of all Liens other than the
Liens created pursuant to this Agreement by the Hypothecation Agreements and
the Parent Credit Documents.
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(ii) Except as provided in the Borrower Partnership Agreement or the
partnership agreements, articles of incorporation or by-laws, as the case
may be, of Parent or Operating Subsidiary, there are no agreements or
understandings with respect to the voting of the partnership or other equity
interests of such entities; and there are no existing options, warrants,
calls, convertible securities, commitments or agreements of any character
calling for the issuance of additional partnership or other equity interests
by any such entity, or for the transfer of any partnership interest or other
equity interest to any Person.
(c) Subsidiaries.
(i) Operating Subsidiary is the only Subsidiary of the Borrower on the
Closing Date.
(ii) After giving effect to the transactions contemplated hereunder, the
partnership interests and other equity interests in the Restricted
Subsidiaries are owned free and clear of all Liens other than Liens created
pursuant to this Agreement by the Hypothecation Agreements and the Parent
Credit Documents.
(d) Authority.
(i) The Borrower has full power and authority to execute, deliver and
perform each of the Credit Documents and each of the Related Documents to
which it is a party, to grant to the Lenders the security interests and
Liens described therein, to make the borrowings contemplated hereby, to
execute and deliver the Notes and to incur the obligations provided for
herein and therein, all of which have been duly authorized by all proper and
necessary partnership action of the Borrower and its partners. No consent or
approval of the partners of the Borrower is required as a condition to the
validity or performance of, or the exercise by the Lenders or the
Administrative Agent of any of their rights and remedies under, the Credit
Documents to which it is a party (other than the execution of such Credit
Documents by the general partner(s) of the Borrower) except for such
consents and approvals which have been obtained and are in full force and
effect.
(ii) Each Restricted Subsidiary has full power and authority to execute,
deliver and perform each of the Credit Documents and each of the Related
Documents to which it is a party, to grant to the Lenders the security
interests and Liens described therein and to incur the obligations provided
for therein, all of which have been duly authorized by all proper and
necessary partnership action of such Restricted Subsidiary and its partners
or shareholders, as the case may be. No consent or approval of the partners
or shareholders of any Restricted Subsidiary is required as a condition to
the validity or performance of, or the exercise by the Lenders or the
Administrative Agent of any of their rights and remedies under, the Credit
Documents
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to which the Restricted Subsidiaries are a party (other than the
execution of such Credit Documents by the partner(s) or authorized officers
of the Restricted Subsidiaries), except for such consents and approvals
which have been obtained and are in full force and effect.
(iii) Parent has full power and authority to execute, deliver and
perform its obligations under this Agreement and to incur the obligations
provided for herein, all of which have been duly authorized by all proper
and necessary partnership action of Parent and its general partner. No
consent or approval of the general partner of Parent is required as a
condition to the validity or performance of, or the exercise by the Lenders
or the Administrative Agent of their rights and remedies under, this
Agreement (other than the execution of this Agreement by the general partner
of Parent), except for such consents and approvals which have been obtained
and are in full force and effect.
(e) Authorizations. All material authorizations, consents, approvals,
registrations, notices, exemptions and licenses with, to or from Governmental
Authorities and other Persons which are necessary in connection with the
borrowings hereunder, the grant of the security interests in and Liens on the
collateral described in the Hypothecation Agreements, the Guarantees, the
execution and delivery of the Credit Documents and the Related Documents by the
Borrower, the Parent and any Restricted Subsidiary, the performance by the
Borrower, the Parent and the Restricted Subsidiaries of their respective
obligations hereunder and thereunder and, except for any further filing with or
approval of any office or agency of the Governmental Authorities for the
transfer of the Franchises which it issued to the Borrower or its Subsidiaries
to provide cable television services in the Systems and the FCC for the transfer
of licenses or authorizations issued by it (the "FCC Licenses"), the exercise by
the Administrative Agent and the Lenders of their remedies hereunder and
thereunder have been effected or obtained and are in full force and effect.
(f) Binding Agreement. This Agreement, each of the other Credit Documents
(other than the Notes) and each Related Document executed on or prior to the
date hereof to which the Borrower, the Parent or any Restricted Subsidiary is a
party constitutes, and the Notes and other Credit Documents and Related
Documents executed after the date hereof, when executed and delivered pursuant
hereto for value received, will constitute, the valid and
legally binding obligations of the Borrower, the Parent or any Restricted
Subsidiary, as the case may be, enforceable in accordance with their respective
terms, subject to bankruptcy, insolvency, reorganization and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
(g) Litigation.
(i) On the Closing Date, there are no proceedings, investigations, or
labor controversies pending or, so far as the Borrower knows, threatened
before any court
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or arbitrator or before any Governmental Authority which enjoins or seeks to
enjoin the consummation of the transactions contemplated by the Insight
Purchase Agreement or the making of the Loans hereunder.
(ii) After the Closing Date, other than proceedings affecting the cable
television industry generally, there are no proceedings, investigations or
labor controversies pending or, so far as the Borrower knows, threatened
before any court or arbitrator or before or by any Governmental Authority
which, in any one case or in the aggregate, if there is a reasonable
possibility of a determination adverse to the interests of the Borrower, the
Parent or any Restricted Subsidiary, could reasonably be expected to have a
Material Adverse Effect or which calls into question the validity of any
Credit Document or Related Document or the transactions contemplated hereby
or thereby.
None of ICP-VI, the Borrower, the Parent nor any Restricted Subsidiary
is in default under or in violation of any Order of any court, arbitrator or
Governmental Authority or of any statute or law or of any rule or regulation
of any Governmental Authority, which default or violation has or could
reasonably be expected to have a Material Adverse Effect; and none of them
is subject to or a party to any Order of any court or Governmental Authority
arising out of any action, suit or proceeding under any statute or other law
respecting antitrust, monopoly, restraint of trade, unfair competition or
similar matters that could reasonably be expected to have a Material Adverse
Effect. As used herein, the term "Order" includes any order, writ,
injunction, decree, judgment, award, determination or written direction or
demand of any court, arbitrator or Governmental Authority.
(h) No Conflicts. There is no statute, regulation, rule, order or judgment,
and no provision of any agreement or instrument binding on the Borrower, the
Parent or any Restricted Subsidiary or affecting their respective properties
(including each System previously acquired by the Borrower or a Restricted
Subsidiary) and no provision of the Borrower Partnership Agreement, the Parent
Partnership Agreement or the partnership agreement or by-laws, as the case may
be, of any of the Restricted Subsidiaries or any general partner or shareholder
thereof which would prohibit or in any material way conflict with or prevent the
execution, delivery, or performance of the terms of any Credit Document
or any Related Document or result in or require the creation or imposition of
any Lien (other than Permitted Encumbrances) on any of the properties of the
Borrower, the Parent or any of the Restricted Subsidiaries (including each
System previously acquired by Borrower, or a Restricted Subsidiary) as a
consequence of the execution, delivery and performance of any Credit Document or
Related Document or the transactions contemplated hereby and thereby except such
statute, regulation, rule, order or judgment or provision which, upon exercise
of remedies by the Administrative Agent and the Lenders, requires filing with or
approval of a Governmental Authority for the transfer of the Franchises and FCC
Licenses. The execution, delivery and performance by the Borrower, the Parent
and the Restricted Subsidiaries of each
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Credit Document and Related Document to which they are a party and the
execution, issuance, delivery and performance of the Notes by the Borrower do
not, and will not, as the case may be, (i) violate any provision of law
applicable to the Borrower, the Parent or any Restricted Subsidiary or any of
its general partners or shareholders, the Borrower Partnership Agreement or the
partnership agreement of any of the Borrower's general partners or the
partnership agreement or by-laws of any Restricted Subsidiary, or any order,
judgment or decree of any court or other agency of government binding on the
Borrower, any of its general partners or any Restricted Subsidiary, (ii)
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any agreement or instrument binding on the
Borrower or any of its general partners or any Restricted Subsidiary, or
affecting their respective properties, or (iii) require any approval of partners
or shareholders (other than the execution thereof by the partner(s) or
authorized officer(s) of the Borrower or any Restricted Subsidiary) or any
approval or consent of any Person under any agreement or instrument binding on
the Borrower or any of its partners or any Restricted Subsidiary, or affecting
their respective properties (including each System previously acquired by
Borrower), other than approvals which have been previously obtained and are in
full force and effect, and except for conflicts, inconsistencies, Liens,
violations, breaches, approvals or consents which individually, or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
(i) Financial Condition. There has heretofore been delivered to the Lenders
the audited financial statements for the Borrower and its Restricted
Subsidiaries on a consolidated basis for the fiscal year ended December 31,
1998, and the unaudited financial statements for the fiscal quarter ended June
30, 1999, all of which, together with other financial statements furnished to
the Lenders subsequent to the Closing Date, have been prepared in accordance
with GAAP and present fairly in all material respects the financial position of
the Borrower and the Restricted Subsidiaries on a consolidated and consolidating
basis, as the case may be, on and as at such dates and the results of operations
for the periods then ended (subject, in the case of unaudited financial
statements, to normal year-end and audit adjustments). Neither the Borrower nor
any of the Restricted Subsidiaries has any material liabilities, contingent or
otherwise, other than as disclosed in the financial statements referred to in
the preceding sentence or as set forth or referred to in this Agreement, and
there are no material unrealized losses of the Borrower or any of the Restricted
Subsidiaries and no material anticipated losses of the Borrower or any of the
Restricted Subsidiaries other than those which have been previously disclosed in
writing to the Administrative Agent and the Lenders and identified as such.
(j) Taxes. The Borrower, the Parent and each Restricted Subsidiary have
paid, or have made adequate provision for the payment of, all taxes shown to be
due and payable on any assessment made against the Borrower, the Parent or any
Restricted Subsidiary or any of their respective properties and all other taxes,
assessments, fees, liabilities or other charges imposed on the Borrower, the
Parent or any Restricted Subsidiary or any of their respective properties by any
Governmental Authority, except for any taxes, assessments, fees, liabilities or
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other charges which are being contested in good faith and for which reserves
which are adequate under GAAP have been established.
(k) Margin Regulations. No part of the proceeds of any Loan will be used to
purchase or carry, or to reduce or retire or refinance any credit incurred to
purchase or carry, or extend credit to others for the purpose of purchasing or
carrying, any "margin security" as defined in Regulation U of the Board of
Governors of the Federal Reserve System. The making of the Loans hereunder, the
use of the proceeds thereof as contemplated hereby and the security arrangements
contemplated hereby and by the Hypothecation Agreements and the Guarantees will
not violate or be inconsistent with any of the provisions of Regulations U, T or
X of the Board of Governors of the Federal Reserve System.
(l) Disclosure. The information relating to the Borrower delivered in
writing in the Offering Memorandum dated September 28, 1999 for the Insight High
Yield Debt to any Arranging Agent or any Lender in connection with the
negotiation, execution and delivery of this Agreement when taken as a whole,
does not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading, except
that with respect to the projections contained in such information, the Borrower
hereby instead represents and warrants that such projections were prepared on a
reasonable basis and in good faith by the Borrower.
(m) Title to Properties. The Borrower and the Restricted Subsidiaries have
good, valid and marketable title to, or valid leasehold interests in, all
properties and assets as owned on the Closing Date and all properties and assets
thereafter acquired in connection with the purchase of any System, except for
such immaterial properties and assets as have been disposed of in the ordinary
course of business and except for such defects in title which would not have a
Material Adverse Effect. All such assets and properties are free and clear of
all Liens and encumbrances except Permitted Encumbrances.
(n) Compliance with ERISA.
(i) Neither the Borrower nor any Restricted Subsidiary has engaged in a
transaction with respect to any Plan which could reasonably be expected to
subject the Borrower or any Restricted Subsidiary to a tax or penalty
imposed by either Section 4975 of the Code or Section 502(i) of ERISA in an
amount that could reasonably be expected to have a Material Adverse Effect.
(ii) Neither the Borrower nor any Restricted Subsidiary sponsors,
contributes to or otherwise participates in any Multiemployer Plan or any
Pension Plan subject to the minimum funding requirements of ERISA, or has
done so at any time in the past six years.
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(o) Conduct of Business. The Borrower and the Restricted Subsidiaries hold
all authorizations, consents, approvals, registrations, franchises, rights
pursuant to Pole Attachment Agreements, licenses and permits, with or from
Governmental Authorities and other Persons as are required or necessary for them
to own their respective properties and conduct their respective businesses as
now conducted and as currently proposed to be conducted, except for those which
the failure to so hold, in any one case or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
(p) Compliance with Laws and Organizational Documents. None of the Borrower,
the Parent or any Restricted Subsidiary is in violation of (i) any law, statute,
rule, regulation, or order of any Governmental Authority (including, without
limitation, Environmental Laws) applicable to any of them or any of their
respective properties or assets except for such violations which, individually
and in the aggregate, could not reasonably be expected to have a Material
Adverse Effect or (ii) their respective partnership agreements, articles of
incorporation, by-laws or other organizational documents.
(q) Government Regulation. None of the Borrower, the Parent or any
Restricted Subsidiary is or will be, after giving effect to the transactions
contemplated by the Credit Documents and the Related Documents and the receipt
of and use of Loans to be made hereunder, (i) an "investment company" or a
company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended, or (ii) subject to regulation under
the Public Utility Holding Company Act of 1935 or the Federal Power Act or (iii)
subject to any foreign, federal, state or local statute or regulation limiting
their respective ability to incur indebtedness for Borrowed Money, pledge assets
as collateral for such indebtedness or guarantee such indebtedness, as
contemplated by any Credit Document or Related Document.
(r) Documents. As of the Closing Date, each of the representations and
warranties given by or with respect to the Borrower, the Parent or any
Restricted Subsidiary in the Related Documents (other than the Parent Credit
Documents) is true and correct in all material respects, and each of the
representations and warranties given in the Related Documents (other than the
Parent Credit Documents) by or with respect to the other parties thereto is, to
the best of the Borrower's knowledge, true and correct in all material respects,
in either case, except those inaccuracies which could not reasonably be expected
to have a Material Adverse Effect. There has been no material amendment,
modification or waiver of the terms of any Related Document since the Closing
Date, other than such amendments, modifications or waivers permitted by Section
7.02(j). None of the Borrower, the Parent or any Restricted Subsidiary or, to
the best of the Borrower's knowledge, any other Person is in default of any of
its material obligations under any of the Related Documents, and each of the
Related Documents (other than the Parent Credit Documents) is in full force and
effect.
(s) Hypothecation Agreements. The provisions of the Hypothecation Agreements
are effective to create in favor of the Lenders a valid, binding and enforceable
security
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interest or Lien in all right, title and interest of the pledgors under the
Hypothecation Agreements in the collateral described therein, and shall, upon
proper recording or filing with the proper state and county authorities or
delivery to the Administrative Agent of the Intercompany Notes, if any,
constitute a fully perfected first and prior security interest, Lien or
mortgage, in all right, title and interest of the pledgors under the
Hypothecation Agreements in such collateral, superior in right to any liens
except for Liens, if any, permitted hereunder or under the Hypothecation
Agreements, existing or future except, with respect to future Liens, as
otherwise provided in the applicable Uniform Commercial Code, which the Borrower
or any third Person may have against such collateral or interests therein.
(t) Environmental Protection. Except as set forth on Schedule 3 hereto, to
the Borrower's knowledge, all real property directly or indirectly owned or
leased by the Borrower is free of contamination from any substance or
constituent thereof, currently identified or listed as hazardous or toxic
pursuant to the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. 9601 et seq., or any other Environmental Laws, that could result
in the incurrence of material liabilities, or any other substance which has in
the past or could at any time in the future cause or constitute a material
health, safety or environmental hazard to any person or property, including
asbestos in any building, petroleum products, Contaminants, pesticides, or
radioactive materials. Except as set forth on Schedule 3 hereto, to the
Borrower's knowledge, based on reasonable investigation, the Borrower has not
caused or suffered to occur any release of any Contaminant into the environment
or any other conditions that could result in the incurrence of material
liabilities nor any material violations of any Environmental Laws. Except as set
forth on Schedule 3 hereto, to the Borrower's knowledge, based on reasonable
investigation, the Borrower has not caused or suffered to occur any condition on
any of the Borrower's property that could give rise to the imposition of any
material lien under the Environmental Laws. Except as set forth on Schedule 3
hereto, to the Borrower's knowledge, based on reasonable investigation, the
Borrower is not engaged in any manufacturing or any other operations which have
a material effect on the Borrower, other than the use of petroleum products for
vehicles, that require the use, handling, transportation, storage or disposal of
any Contaminant, where such operations require permits or are otherwise
regulated pursuant to the Environmental Laws.
(u) Insurance. All of the properties and operations of the Borrower and each
Restricted Subsidiary of a character usually insured by companies of established
reputation engaged in the same or a similar business similarly situated are
insured in customary amounts, by financially sound and reputable insurers,
against loss or damage of the kinds and in amounts customarily insured against
by such Persons, and the Borrower and the Restricted Subsidiaries carry, with
such insurers in customary amounts, such other insurance, including larceny,
embezzlement or other criminal misappropriation insurance and business
interruption insurance, as is usually carried by companies of established
reputation engaged in the same or a similar business similarly situated.
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(v) Material Contracts. None of the Borrower, the Parent or any Restricted
Subsidiary is a party to, and none of them and none of their respective
properties are subject to or bound by, any agreement or instrument (other than
the Credit Documents and the Related Documents) which could reasonably be
expected to have a Material Adverse Effect.
(w) Performance of Agreements. None of the Borrower, the Parent or any
Restricted Subsidiary is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
contractual obligation of the Borrower, the Parent or any Restricted Subsidiary,
as the case may be, including, without limitation, the Related Documents (other
than the Parent Credit Documents), and no condition exists which, with the
giving of notice or the lapse of time or both, would constitute such a default,
except where the consequences, direct or indirect, of such default or defaults,
if any, would not reasonably be expected to have a Material Adverse Effect.
(x) Pole Attachment Agreements, Franchises, Licenses, Approvals of
Regulatory Authorities, etc. Each Franchise necessary for the operation of the
Systems is in full force and effect and no material default has occurred and is
continuing under or in respect of any of the provisions of any such Franchise
except where such failure could not reasonably be expected to have a Material
Adverse Effect. Each Pole Attachment Agreement necessary for the operation of
the Systems is in full force and effect and no material default has occurred and
is continuing under or in respect of any of the provisions of any such Pole
Attachment Agreement, except to the extent that the absence of such Pole
Attachment Agreement or such default, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect. No approval,
application, filing, registration, consent or other action of any Governmental
Authority is required to enable the Borrower or any Restricted Subsidiary, as
the case may be, to act pursuant to any such Pole Attachment Agreement or
Franchise. Neither the Borrower nor any Restricted Subsidiary has received any
notice from the granting body, any other Governmental Authority or any other
Person with respect to, nor does the Borrower or any Restricted Subsidiary have
any knowledge of, any breach of any covenant under, or any default with respect
to, or the termination, or threatened termination, for any reason of any such
Pole Attachment Agreement or Franchise, which could have a Material Adverse
Effect. The Borrower or a Restricted Subsidiary, as appropriate, will own or be
licensed or otherwise have the right to use all licenses, permits, patents,
trademarks, service-marks, trade names, copyrights, franchises, including
authorizations and other rights (including, without limitation, rights under
Pole Attachment Agreements, easement agreements, leases of real and/or personal
property, right-of-way agreements, railroad crossing agreements, multiple
dwelling unit agreements, programming agreements, transmission and
retransmission agreements and subscriber agreements that are necessary for the
operation of any System by the Borrower or such Restricted Subsidiary), except
to the extent that the absence thereof shall not have a Material Adverse Effect.
The Borrower or a Restricted Subsidiary, as appropriate, will own or be licensed
or otherwise have the right to use all Franchises that are necessary for the
operation of each System, except to the extent that the failure to so own or use
shall not have a Material Adverse Effect. The Borrower and
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each Restricted Subsidiary have complied in all material respects in
accordance with cable industry standards with the Copyright Act of 1976, as
amended, including (without limitation) filing the statements of account and
making the royalty payments specified in Section 111 therein.
(y) Year 2000 Issues. The Borrower and the Restricted Subsidiaries have
initiated a review of their operations with a view to assessing whether their
business or operations will, in the receipt, transmission, processing,
manipulation, storage, retrieval, retransmission or other utilization of data,
be vulnerable to any significant risk that computer hardware or software used in
their business or operations will not, in the case of dates or time periods
occurring after December 31, 1999, function at least as effectively as in the
case of dates or time periods occurring prior to January 1, 2000. Based on such
review, the Borrower has no reason to believe that a Material Adverse Effect
will occur with respect to such business or operations resulting from any such
risk.
ARTICLE VI.
CONDITIONS OF LENDING
Section 6.01. Conditions to the Effectiveness of this Agreement. The
effectiveness of this Agreement (except for Section 11.12 herein) and the
Lenders' consent to the Insight Roll-Up are subject to the conditions precedent
that:
(a) The Notes. The Administrative Agent on behalf of the Lenders shall have
received the Notes, as set forth in Section 2.03 hereof, duly executed by the
Borrower.
(b) Opinion of Company Counsel. The Administrative Agent shall have received
a favorable written opinion of Dow, Lohnes & Albertson, PLLC, corporate and
special regulatory counsel for the Borrower and its Restricted Subsidiaries,
addressed to the Administrative Agent and the Lenders, dated the Closing Date in
form and substance reasonably satisfactory to the Administrative Agent,
addressed to the Administrative Agent and the Lenders, dated the Closing Date in
form and substance satisfactory to the Administrative Agent.
(c) Confirmation of Security Documents. The Administrative Agent on behalf
of the Lenders shall have received duly executed confirmations of the
Hypothecation Agreements and Guarantees executed prior to the Closing Date
(except the Security and Hypothecation Agreement executed by IMI).
(d) Insight Kentucky Capital. The Administrative Agent on behalf of the
Lenders shall have received a Hypothecation Agreement, duly executed by Insight
Kentucky Capital granting in favor of the Lenders a first priority perfected
security interest in the collateral
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specified therein, together with (i) appropriate Financing Statements (Form UCC-
1) under the Uniform Commercial Code for all jurisdictions as may be necessary
or, in the opinion of the Lenders, advisable to perfect the security interests
created by the Hypothecation Agreements, signed by the pledgors thereunder and
in a form suitable for filing, (ii) such other documents and instruments in a
form suitable for recording or filing, as necessary or, in the opinion of the
Lenders, advisable to perfect the security interests created by the
Hypothecation Agreements, (iii) all Intercompany Notes, if any, endorsed in
blank and (iv) evidence of the completion of such other actions necessary, or,
in the opinion of the Lenders, advisable to perfect the security interests
created by the Hypothecation Agreements.
(e) Regulatory Approvals. Each consent, license, authorization or approval
required to be obtained as of the Closing Date in connection with the execution,
delivery, performance, validity and enforceability of this Agreement, the other
Credit Documents and the Related Documents, including without limitation the
security interests in the collateral created by the Hypothecation Agreements,
shall have been received and shall be in full force and effect (except for such
consents, licenses, authorizations or approvals required by any party to the
Insight Purchase Agreement to be delivered under the Insight Purchase Agreement,
the delivery of which has been waived by such party).
(f) Related Documents. The Administrative Agent shall have received
certified copies of the Related Documents which shall be in form and substance
reasonably satisfactory to the Lenders (except as otherwise set forth herein);
all representations and warranties contained therein on the part of the
Borrower, the pledgors under the Hypothecation Agreements or the Guarantors
shall be true and correct in all respects and no material condition contained
therein shall have been waived except for inaccuracies and waivers which could
not reasonably be expected to have a Material Adverse Effect; and the
Administrative Agent shall have received a copy of each opinion of counsel
delivered in connection with each of the Related Documents and each transaction
contemplated thereby.
(g) Payment of Fees. The Borrower shall have paid to the Administrative
Agent for the account of the applicable Lenders all fees due and payable to the
Administrative Agent and the Lenders on the Closing Date.
(h) Parent Loan Agreements. The Administrative Agent shall have received
either (i) evidence of the successful issuance of the Insight High Yield Debt or
(ii) the satisfactory amendments of the Parent Loan Agreements.
(i) Insight Purchase. The Administrative Agent shall have received evidence
satisfactory to it that the Insight Purchase has been consummated on
substantially the terms and conditions specified in the Insight Purchase
Agreement.
(j) Insight Roll-Up. The Administrative Agent shall have received evidence
satisfactory to it that the Insight Roll-Up has been consummated on
substantially the terms
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and conditions set forth in the Insight Roll-Up Agreement. By execution hereof,
the Lenders hereby consent to the consummation of the Insight Roll-Up on
substantially the terms and conditions set forth in the Insight Roll-Up
Agreement.
(k) Loan Certificates. The Administrative Agent shall have received the loan
certificates of the Parent, the Borrower and each Restricted Subsidiary of the
Borrower, each in form and substance reasonably satisfactory to the
Administrative Agent and including, without limitation, a certificate of
incumbency of each Responsible Person.
(l) Borrower's Certificate. The Administrative Agent shall have received a
certificate of the Borrower which certifies to the Administrative Agent and the
Lenders that to the Borrower's knowledge, after due inquiry, that each of the
representations and warranties in Article V hereof and each other Credit
Document is true and correct in all material respects as of the Closing Date
with the same effect as though such representations and warranties had been made
at the Closing Date except to the extent such representations and warranties
relate to a specific date they shall have been true as of such date, that no
Default or Event of Default then exists or is continuing or will be caused by
the execution of this Agreement, the Insight Purchase or the Insight Roll-Up and
that there does not exist as of the Closing Date any action, suit, proceeding or
investigation pending against or, to the knowledge of the Borrower, threatened
against or in any manner relating adversely to, the Parent, the Borrower, any of
its Restricted Subsidiaries, any of their properties or the transactions
contemplated hereby, which could be expected to have a Material Adverse Effect.
(m) Other Documents. The Administrative Agent shall have received all such
other documents as the Administrative Agent or any Lender may reasonably
request, certified by an appropriate government official or a responsible
person, if so requested.
Section 6.02. Conditions to the Making of Each Loan. The obligation of each
Lender to make each of its Loans (including the Borrower's conversion, election
or renewal of an existing Borrowing) hereunder is subject to the conditions
precedent that on the Borrowing Date and after giving effect to such requested
Loan (i) there shall have occurred no Default or Event of Default and (ii) the
representations and warranties contained in Article V shall be true and correct
in all material respects with the same effect as though such representations and
warranties had been made at the time of such Loan except to the extent such
representations and warranties relate to a specific date they shall have been
true as of such date. The Borrower's (a) notice of borrowing pursuant to Section
2.02 hereof or (b) notice of borrowing or borrowing under the ABS Agreement
pursuant to Section 2.09 hereof shall be deemed to constitute a certification to
the foregoing effect.
Section 6.03. Conditions to Issuance of Insight High Yield Debt. The
effectiveness of the Lenders' consent to the Insight High Yield Debt are subject
to the conditions precedent that:
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(a) Borrower's Certificate. The Administrative Agent shall have received a
certificate of the Borrower which certifies to the Administrative Agent and the
Lenders that no Default or Event of Default then exists or is continuing or will
be caused by the issuance of the Insight High Yield Debt.
(b) Insight High Yield Debt. The Administrative Agent shall have received
evidence satisfactory to it that (i) the proceeds of the Insight High Yield Debt
have been used to pay off all the obligations under the Parent Loan Agreements
and (ii) the Insight High Yield Debt has been issued on substantially the terms
and conditions specified in the Offering Memorandum dated September 28, 1999.
ARTICLE VII.
COVENANTS
Section 7.01. Affirmative Covenants. So long as the Borrower may borrow
hereunder and until payment in full of the Notes and performance of all other
obligations of the Borrower hereunder, the Borrower will:
(a) Financial Statements. Furnish to the Administrative Agent with
sufficient copies for each Lender (i) as soon as available but in no event more
than forty-five (45) days after the end of each of the Borrower's first three
fiscal quarters of each fiscal year, Consolidated balance sheets of the Borrower
and the Restricted Subsidiaries as of the close of such period and Consolidated
statements of income and expense and cash flows from the beginning of the then
current fiscal year and from the beginning of such fiscal quarter to the close
of such period, certified by a Responsible Person and accompanied by a
certificate of said Responsible Person providing a calculation of the Senior
Leverage Ratio as of the end of such fiscal quarter and stating whether or not
the Applicable Margin should be adjusted, stating whether any event has occurred
which constitutes a Default or Event of Default and as to which is no longer
continuing and as to which the Lenders have been notified and, if so, stating
the facts with respect thereto, and providing calculations which establish the
Borrower's compliance with the requirements or restrictions imposed by Sections
7.02(a), (k), (l), (m) and (n); (ii) as soon as available but in no event more
than one hundred twenty (120) days after the close of each of the Borrower's
fiscal years, copies of the annual audit report relating to the Borrower and its
Restricted Subsidiaries in reasonable detail satisfactory to the Arranging
Agents and prepared in accordance with GAAP by Price Waterhouse or other
independent public accountants satisfactory to the Arranging Agents, together
with financial statements consisting of Consolidated balance sheets of the
Borrower and the Restricted Subsidiaries as of the end of such fiscal year and
Consolidated statements of income and expense, changes in partners capital and
cash flows of the Borrower and the Restricted Subsidiaries for such fiscal year,
together with a certificate of a Responsible
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Person providing a calculation of the Senior Leverage Ratio and stating whether
or not the Applicable Margin should be adjusted, stating whether any event has
occurred which constitutes a Default or Event of Default and, if so, stating the
facts with respect thereto, and providing calculations which establish the
Borrower's compliance with the requirements or restrictions imposed by Sections
7.02(a), (k), (l), (m) and (n); (iii) as soon as available but in no event more
than one hundred twenty (120) days after the close of each of the Borrower's
fiscal years, a letter or opinion of the accountants who prepared the annual
audit report relating to the Borrower and the Restricted Subsidiaries stating
whether anything in such accountants' examination has revealed the existence of
any event which is continuing that constitutes an Event of Default under
Sections 7.02(a), (k), (l), (m) and (n), and, if so, stating the facts with
respect thereto; (iv) upon request, copies of any reports and management letters
submitted to the Borrower by the Borrower's accountants in connection with any
annual or interim audit of the books of the Borrower and the Restricted
Subsidiaries, together with the Borrower's responses thereto, if any; (v) as
soon as available, copies of monthly consolidated income statements sent by the
Borrower in a general mailing to its partners; and (vi) such additional
information, reports or statements as the Administrative Agent may from time to
time reasonably request. Upon receipt of any such financial statements or
additional information, the Administrative Agent shall forthwith forward copies
thereof to each Lender.
(b) Taxes. Pay and discharge, and cause each Restricted Subsidiary to pay
and discharge, all taxes, assessments and governmental charges upon it, its
income and its properties prior to the date on which penalties are attached
thereto, unless and to the extent only that (i) such taxes, assessments and
governmental charges shall be contested in good faith and by appropriate
proceedings by the Borrower or a Restricted Subsidiary, as the case may be, (ii)
reserves which are adequate under GAAP are maintained by the Borrower or a
Restricted Subsidiary, as the case may be, with respect thereto, and (iii) any
failure to pay and discharge such taxes, assessments and governmental charges
will not have a Material Adverse Effect.
(c) Insurance. Maintain, and cause each Restricted Subsidiary to maintain,
insurance with responsible insurance companies against such risks, on such
properties and in such amounts as is customarily maintained by similar
businesses.
(d) Existence. (i) Maintain, and subject to Section 7.02(c), cause each
Restricted Subsidiary to maintain, its partnership or corporate existence in
good standing and (ii) qualify and remain qualified to do business as a foreign
partnership or corporation in each jurisdiction in which the character of the
properties owned or leased by it therein or in which the transaction of its
business is such that the failure to qualify would have a Material Adverse
Effect. The Borrower will maintain, and will cause the Restricted Subsidiaries
to maintain, a fiscal year ending December 31.
(e) Authorizations. Obtain, make and keep in full force and effect, and
cause each Restricted Subsidiary to obtain, make and keep in full force and
effect, all material
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authorizations from and registrations with Governmental Authorities that may be
required for the validity or enforceability against the Borrower, the Parent and
the Restricted Subsidiaries of the Credit Documents.
(f) Maintenance of Records. For the Borrower and each of the Restricted
Subsidiaries, keep proper books of record and account in which full, true and
correct entries will be made of all dealings or transactions of or in relation
to its business and affairs. All determinations pursuant to this subsection
shall be made in accordance with, or as required by, GAAP consistently applied
in the opinion of such independent public accountants as shall then be regularly
engaged by the Borrower.
(g) Inspection. Permit, and cause each of the Restricted Subsidiaries to
permit, the Administrative Agent and the Lenders to have one or more of their
officers and employees, or any other Person designated by the Administrative
Agent or the Lenders, upon prior reasonable notice, to visit and inspect any of
the properties of the Borrower and the Restricted Subsidiaries and to examine
the minute books, books of account and other records of the Borrower and the
Restricted Subsidiaries and make copies thereof or extracts therefrom, and
discuss its affairs, finances and accounts with its officers and, at the request
of the Lenders, with the Borrower's independent accountants, during normal
business hours and at such other reasonable times and as often as the Lenders
may reasonably desire.
(h) Maintenance of Property, etc. Subject to Section 7.02(c), (i) except for
ordinary wear and tear, maintain, keep and preserve, and cause each of the
Restricted Subsidiaries to maintain, keep and preserve, all of their respective
material properties in good repair, working order and condition and from time to
time make all necessary and proper repairs, renewals, replacements, and
improvements thereto, and (ii) maintain, preserve and protect, and cause each of
the Restricted Subsidiaries to maintain, preserve and protect, all Franchises,
licenses, copyrights, patents and trademarks (except where the failure so to do,
could not reasonably be expected to have a Material Adverse Effect) so that the
businesses carried on in connection therewith may be properly conducted at all
times.
(i) Conduct of Business. (i) Engage in, and cause each Restricted Subsidiary
to engage in, as their respective principal businesses, the direct or indirect
ownership or operation of cable television systems or in directly related media
activities including, without limitation, data transmission services, telephony
and the production and distribution of programming, (ii) preserve, renew and
keep in full force and effect, and cause each Restricted Subsidiary to preserve,
renew and keep in full force and effect, all their respective material
contracts, (iii) preserve, renew and keep in full force and effect and cause
each Restricted Subsidiary to preserve, renew, and keep in full force and
effect, all its Franchises and licenses necessary or desirable in the normal
conduct of its business as now conducted, and (iv) comply with, and cause each
Restricted Subsidiary to comply with, the terms of all instruments which
evidence, secure or govern the indebtedness for Borrowed Money of the Borrower
or any Restricted Subsidiary and the rules and regulations of all Governmental
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Authorities, including without limitation all rules and regulations promulgated
by the FCC or any successor Governmental Authority thereto, except where the
failure to comply with clauses (i) through (iv), in any one case or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
(j) Notification of Events of Default and Adverse Developments. Promptly
notify the Administrative Agent upon the discovery by any Responsible Person or
officer of the Borrower of the occurrence of (i) any Default or Event of Default
hereunder; (ii) any event, development or circumstance whereby the financial
statements most recently furnished to the Administrative Agent fail in any
material respect to present fairly, in accordance with GAAP, the financial
condition and operating results of the Borrower and the Restricted Subsidiaries
as of the date of such financial statements; (iii) any litigation or proceedings
that are instituted or threatened (to the knowledge of the Borrower) against the
Borrower or any Restricted Subsidiary or any of their respective assets which,
if there is a reasonable possibility of a determination adverse to the interests
of the Borrower or any Restricted Subsidiary, could reasonably be expected to
have a Material Adverse Effect; and (iv) each and every event which would be an
Event of Default (or an event which with the giving of notice or lapse of time
or both would be an Event of Default) under any indebtedness of the Borrower or
any Restricted Subsidiary for Borrowed Money, such notice to include the names
and addresses of the holders of such indebtedness and the amount thereof; (v)
the repeal or revocation of any Franchise, Pole Attachment Agreement,
authorization, consent, exemption or license with, to or from Governmental
Authorities and other Persons which are necessary in connection with the
operation of the Systems owned by a Restricted Subsidiary, except, to the extent
that the repeal or revocation thereof, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect; and (vi) any other
development in the business or affairs of the Borrower if the effect thereof
could reasonably be expected to have a Material Adverse Effect; in each case
describing the nature thereof and the action the Borrower proposes to take or
cause to be taken with respect thereto. Upon receipt of any such notice of
default or adverse development, the Administrative Agent shall forthwith give
notice to each Lender of the details thereof. The Borrower shall notify the
Administrative Agent and the Lenders of any and all amendments, modifications
and waivers under any and all Related Documents promptly following such
amendments, modifications and waivers.
(k) ERISA. Furnish to the Lenders within ten days after a Responsible
Officer knows that any "reportable event" (as defined in Section 4043(b) of
ERISA), other than a reportable event for which the 30-day notice requirement
has been waived by the PBGC, has occurred with respect to a Pension Plan, a
statement setting forth details as to such reportable event and the action
proposed to be taken with respect thereto.
(l) Environmental Matters. (i) Except as set forth on Schedule 3 hereto,
comply, and cause each Restricted Subsidiary to comply, in all material
respects, with all applicable Environmental Laws, (ii) notify the Administrative
Agent promptly after a Responsible
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Person becomes aware of any material release, adverse environmental condition or
material Environmental Claim in connection with the properties or facilities of
the Borrower or any Subsidiary and (iii) promptly forward to the Administrative
Agent a copy of any order, notice, permit, application, or any other
communication or report received by the Borrower or any Subsidiary in connection
with any such matters as they may affect such premises, if such matter would be
reasonably likely to cause a Material Adverse Effect.
(m) Intercompany Notes. Cause the payee of each Intercompany Note to deliver
the original of such Intercompany Note endorsed in blank to the Administrative
Agent promptly upon receipt thereof, together with such evidence of the due
execution and delivery thereof as the Administrative Agent may reasonably
request.
(n) Interest Rate Agreements. Commencing ninety (90) days following the
Closing Date, maintain either a fixed rate of interest or one or more Interest
Rate Agreements with respect to a notional amount equal to no less than 50% of
the outstanding Loans, which Interest Rate Agreements shall have an initial
minimum term at the time entered into ending May 1, 2001 and shall contain such
terms and conditions as shall be satisfactory to the Arranging Agents; provided,
however, that commencing five (5) days following the tenth (10th) consecutive
Business Day on which the Eurodollar Base Rate for an Interest Period of one
month has been equal to or greater than six and one-half percent (6.50%) per
annum, additional Interest Rate Agreements shall be entered into such that the
notional amount, when added to (1) the notional amount of the Parent Term Loan A
with respect to which the Parent maintains either a fixed rate of interest or
interest rate swap agreements and (2) the Loans already subject to the Interest
Rate Agreements shall equal to no less than sixty percent (60%) of the sum of
(A) the Loans and (B) the Parent Term Loan A, which Interest Rate Agreements
shall be maintained until May 1, 2001.
(o) KeepWell Loans. Use the proceeds of all loans received under the
KeepWell Agreement and the New KeepWell Agreement solely to pay the interest of
or principal of the Loans for which loans under the KeepWell Agreement and the
New KeepWell Agreement were made.
(p) Covenants Regarding Restricted Subsidiaries and Permitted Acquisitions.
At the time of (i) the purchase by the Borrower or any Restricted Subsidiary of
any interests in any other Restricted Subsidiary, or (ii) the formation or
designation of any new Restricted Subsidiary which is permitted under this
Agreement, the Borrower will, and will cause such Restricted Subsidiary, as
appropriate, to (A) provide to the Administrative Agent an executed
Hypothecation Agreement for any new Restricted Subsidiary, in substantially the
form of Exhibit F attached hereto, together with appropriate financing
statements under the Uniform Commercial Code for all jurisdictions as may be
necessary, and an executed Subsidiary Guarantee for such new Restricted
Subsidiary, in substantially the form of Exhibit G attached hereto, which shall
constitute Credit Documents for purposes of this Agreement; and (B) pledge to
the Administrative Agent all Intercompany Notes of such Restricted Subsidiary in
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respect of any Intercompany Loans to be held by the Administrative Agent in
accordance with the terms of the Hypothecation Agreement, and execute and
deliver to the Administrative Agent all such documentation for such pledge as,
in the reasonable opinion of the Administrative Agent, is appropriate.
Section 7.02. Negative Covenants. So long as the Borrower may borrow
hereunder and until payment in full of the Notes and performance of all other
obligations of the Borrower hereunder:
(a) Borrowing. The Borrower will not:
(i) Create, incur or assume any liability or obligation for Borrowed
Money or permit any Restricted Subsidiary so to do, except, (A) the Loans,
obligations under the Credit Documents, (B) prior to issuance of the Insight
High Yield Debt, obligations under the Parent Credit Documents, (C)
Capitalized Lease Obligations in an aggregate amount not greater than five
million dollars ($5,000,000) and (D) other indebtedness of the Borrower or
any Restricted Subsidiary containing terms and conditions no more onerous
than contained herein in an aggregate principal amount (not including the
indebtedness for Borrowed Money specified in clause (C) (above) not
exceeding ten million dollars ($10,000,000); or
(ii) Permit any Unrestricted Subsidiary to create, incur, assume or
suffer to exist any liability or obligation of indebtedness for Borrowed
Money unless the terms of the agreements evidencing such indebtedness for
Borrowed Money shall explicitly (A) limit the lender's recourse thereunder
to the assets of such Unrestricted Subsidiary and (B) provide that such
Unrestricted Subsidiary's partners or shareholders, as the case may be,
shall have no liability in respect of such indebtedness for Borrowed Money.
(b) Mortgages and Pledges. The Borrower will not create, incur, assume or
suffer to exist, or permit any Restricted Subsidiary to create, incur, assume or
suffer to exist, any Lien upon or in any of their respective properties or
assets, whether now owned or hereafter acquired or enter into or suffer to exist
any agreement or other instrument binding on the Borrower or any Restricted
Subsidiary or affecting any of their respective properties which prohibits,
requires the consent of any Person for or otherwise restricts the creation of
any Lien in favor of the Lenders, except (i) Liens incurred in the ordinary
course of business (other than Liens to secure indebtedness for Borrowed Money),
(ii) Liens in respect of Capitalized Lease Obligations which are permitted to be
incurred under Section 7.02(a)(i), (iii) Liens incurred in connection with a
Permitted Acquisition (including Liens not created at the time of or in
contemplation of the Permitted Acquisition) and (iv) Permitted Encumbrances.
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(c) Asset Acquisitions and Sales. The Borrower will not:
(i) enter into, or permit any Restricted Subsidiary to enter into, any
Asset Acquisition or Asset Sale, except the Borrower and the Restricted
Subsidiaries may:
(A) transfer to or exchange with each other any of their respective
assets or equity interests in any Restricted Subsidiary; provided that in
connection with each such exchange, the Borrower and each Restricted
Subsidiary shall execute, deliver and file each document and other
instrument necessary to maintain the Liens granted under the Hypothecation
Agreements;
(B) consummate Asset Sales with any Person; provided that such
assets sold or exchanged (1) do not contribute more than 15% of Cash Flow
for the most recently completed four fiscal quarters and (2) when aggregated
with all Asset Sales previously consummated by the Borrower and the
Restricted Subsidiaries since the Closing Date, would not have generated
Cash Flow in an amount in excess of 30% of Cash Flow for the most recently
completed four fiscal quarters;
(C) acquire any Permitted Acquisition; provided that the purchase
price of such acquisitions, when aggregated with the purchase price of all
Permitted Acquisitions which were acquired by the Borrower or a Restricted
Subsidiary since April 30, 1998 shall not be greater than fifty million
dollars ($50,000,000) (not taking into account acquisitions otherwise
permitted by this Section 7.02(c)(i));
(D) purchase assets that constitute capital expenditures to the
extent permitted by Section 7.02(k);
(E) sell, lease or otherwise dispose of any of their obsolete
equipment, excess equipment no longer needed in the conduct of business and
equipment being replaced with other equipment;
(F) make transfers permitted pursuant to Section 7.02(g);
(G) the Borrower and the Restricted Subsidiaries may purchase,
acquire, sell or otherwise dispose of stock or partnership interests, or any
other interest, of any Person to the extent permitted by Section 7.02(f);
and
(H) the Borrower and the Restricted Subsidiaries may sell, exchange
or otherwise dispose of obsolete cable, fiber or similar items, which have
been replaced through capital expenditures permitted by Section 7.02(k), in
the ordinary course of business.
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(ii) Permit any Unrestricted Subsidiary to purchase, lease or otherwise
acquire assets of any Person or sell, lease, or otherwise dispose of any of
its assets, except purchases, leases, sales or other acquisitions or
dispositions of assets, (A) on terms no less favorable than if such
purchase, lease, sale or other acquisition or disposition were conducted on
an arm's-length basis, (B) pursuant to agreements which expressly limit the
recourse of the other party thereunder to such Unrestricted Subsidiary's
assets and (C) pursuant to agreements which expressly provide that such
Unrestricted Subsidiary's partners or shareholders, as the case may be,
shall have no liability for any claims or obligations owing in respect of
such agreements.
(d) Mergers and Consolidations. The Borrower will not
(i) enter into, or permit any Restricted Subsidiary to enter into, any
merger or consolidation, except such acquisitions by merger or consolidation
whereby upon completion of the merger the surviving entity becomes a
Restricted Subsidiary; provided that any Restricted Subsidiary may merge
with and into the Borrower or any other Restricted Subsidiary, so long as
the Borrower is the surviving entity in the case of a merger with the
Borrower; or
(ii) Permit any Unrestricted Subsidiary to enter into any merger or
consolidation, except mergers or consolidations (A) with any required
consent of the partners or shareholders, as the case may be, (B) pursuant to
agreements which expressly limit the recourse of the other party thereunder
to such Unrestricted Subsidiary's assets and (C) pursuant to agreements
which expressly provide that such Unrestricted Subsidiary's partners or
shareholders, as the case may be, shall have no liability for any claims or
obligations owing in respect of such agreements.
(e) Contingent Liabilities. The Borrower shall not assume, guarantee,
endorse, contingently agree to purchase or otherwise become liable upon, or
permit any Restricted Subsidiary or Unrestricted Subsidiary to assume,
guarantee, endorse, contingently agree to purchase or otherwise become liable
upon, the obligation of any Person (all such transactions herein being referred
to as "Contingent Liabilities"), except:
(i) in the ordinary course of business of the Borrower, a Restricted
Subsidiary or an Unrestricted Subsidiary, as the case may be;
(ii) the Contingent Liabilities which will be incurred in connection
with a Permitted Acquisition; provided that the incurrence of such
Contingent Liabilities, individually or in the aggregate, could not be
reasonably expected to have a Material Adverse Effect;
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(iii) by the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business of the
Borrower, a Restricted Subsidiary or an Unrestricted Subsidiary, as the case
may be;
(iv) Contingent Liabilities created, incurred or assumed by any
Unrestricted Subsidiary, provided that the terms of the agreements
evidencing such Contingent Liabilities shall explicitly (1) limit recourse
thereunder to the assets of such Unrestricted Subsidiary and (2) provide
that such Unrestricted Subsidiary's partners or shareholders, as the case
may be, shall have no liability in respect of such contingent liability; and
(v) in connection with the Credit Documents and Related Documents.
(f) Loans and Investments. The Borrower shall not purchase or acquire, or
permit any Restricted Subsidiary to purchase or acquire, the obligations, stock
or partnership interest of, or any other interest in, or make loans or advances
to, any Person, except (i) direct obligations of the United States of America
with a maturity not exceeding one year, (ii) certificates of deposit with a
maturity not exceeding one year issued by a Lender or a commercial bank,
chartered under the laws of the United States of America or one of the states
thereof and a member of the Federal Reserve System with a long-term debt rating
in one of the two highest categories then provided for by a nationally
recognized rating agency, (iii) commercial paper with a remaining maturity of
two hundred seventy (270) days or less with a debt rating in the highest
category then provided for by a nationally recognized rating agency and issued
by a corporation organized under the laws of any state, (iv) investments in
mutual funds that invest in any of the foregoing investments described in
clauses (i)-(iii) above, (v) Intercompany Loans, (vi) other loans to and
investments in Persons that are engaged primarily in the cable television
business, including pay cable service, or in the business of acquiring, owning,
expanding, operating and maintaining cable television systems, or in directly
related media activities including without limitations, data transmission
services, telephony and the production and distribution of programming; provided
that (x) the Senior Leverage Ratio (taking into account the Senior Debt on the
date of determination) is less than 4.00:1.00 and (y) the aggregate principal
amount of such loans and investments do not exceed twenty-five million dollars
($25,000,000), and (vii) loans or investments made or incurred in connection
with Permitted Acquisitions and the other transactions permitted by Section
7.02(c)(i).
(g) Restricted Payments By Borrower. The Borrower shall not make, or permit
any Restricted Subsidiary to make, any Restricted Payment, except the following
Restricted Payments may be made from time to time:
(i) each of the Borrower and its Restricted Subsidiaries may make
Restricted Payments to each other;
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(ii) the Operating Subsidiary may pay Management Fees payable under the
Management Agreement if no Default or Event of Default exists or would exist
after giving effect to such Restricted Payment;
(iii) (A) prior to the issuance of the Insight High Yield Debt, the
Borrower may make a Restricted Payment in an amount equal to the amount of
the interest or scheduled installments of principal of the Parent Term Loan
A as in effect on the Closing Date to be paid under the Parent Term Loan A
Agreement at the time such interest payment or scheduled installments of
principal are due and payable thereunder if no Default or Event of Default
exists or would exist after giving effect to such Restricted Payment; and
(B) after the issuance of the Insight High Yield Debt, the Borrower may make
a Restricted Payment in an amount equal to the amount of scheduled cash
interest payments on the Insight High Yield Debt at the time such interest
payment is due and payable if no Default or Event of Default exists or would
exist after giving effect to such Restricted Payment;
(iv) the Borrower may pay a dividend or distribution to the Manager and
TCI of Indiana Holdings, LLC in respect of its equity interests of Borrower
to the extent necessary to permit the Manager and TCI of Indiana Holdings,
LLC to receive tax distributions in an amount equal to the cumulative
taxable income of Borrower allocated to the Manager and TCI of Indiana
Holdings, LLC multiplied by the highest applicable combined federal, state
and city individual income tax rate (including, to the extent applicable,
alternative minimum tax) solely as a result of Borrower (and any
intermediate entity through which such holder owns such equity interests)
being a partnership or similar pass-through entity for federal income tax
purposes; provided that no Default or Event of Default exists or would exist
after giving effect to the contemplated Restricted Payment;
(v) in the event Satellite Services, Inc. ("SSI") is deemed an Affiliate
of the Borrower, the Borrower may make payments to SSI as provided in the
Satellite Services, Inc. Agreement between the Borrower and SSI;
(vi) the Borrower and its Subsidiaries may repay any loans made pursuant
to the KeepWell Agreement;
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(vii) the Borrower and its Restricted Subsidiaries may make Restricted
Payments in an amount not to exceed 50% of Excess Cash Flow of the
immediately preceding fiscal year if (A) no Default or Event of Default
exists or would exist after giving effect to such Restricted Payment and (B)
the Senior Leverage Ratio (taking into account the Senior Debt on the date
of determination) is less than 5.00 to 1.00; and
(viii) the Operating Subsidiary and the Borrower may make payments which
are required to be made to TCI LLC or the TCI Subsidiaries under Section
10.2 of that certain Contribution Agreement dated as of October 30, 1997
between InterMedia Capital Management VI, L.P. ("ICM") and the TCI
Subsidiaries, as assigned by ICM to Leo J. Hindery, Jr. ("Hindery"), by
Hindery to ICP-VI, by ICP-VI to the Parent, by the Parent to the Borrower
and by the Borrower to the Operating Subsidiary, and as assigned by the TCI
Subsidiaries to TCI LLC, as amended, restated, modified or supplemented from
time to time.
(h) Subsidiaries. The Borrower shall not own any Subsidiary other than the
Restricted Subsidiaries and the Unrestricted Subsidiaries.
(i) Transactions with Affiliates. The Borrower shall not enter into or
permit to exist, or cause any Restricted Subsidiary to enter into or permit to
exist, any transaction (including, without limitation, the purchase, sale, lease
or exchange of any property or the rendering of any service) with any Affiliate
of the Borrower on terms that are less favorable to the Borrower or such
Restricted Subsidiary than those that would be obtainable at the time in an
arm's-length transaction with any Person who is not such an Affiliate; provided
that this subsection (i) shall not be deemed to prohibit (i) any transaction or
payment provided for in any Related Document, (ii) any Restricted Payment
permitted under Section 7.02(g) hereof, (iii) any transaction or payment between
Restricted Subsidiaries or between the Borrower and any Restricted Subsidiary,
or (iv) transactions contemplated by the KeepWell Agreement and the New Keepwell
Agreement, subject to the terms and conditions hereunder.
(j) Related Documents. Neither the Borrower nor the Parent shall amend,
supplement or otherwise modify or waive any material term or condition of any
Related Document (other than the Parent Credit Documents) or the Insight
Indenture or other documents pertaining to the issuance of the Insight High
Yield Debt in any respect materially adverse to the Lenders without the consent
of the Arranging Agents.
(k) Capital Expenditures. Until the Senior Leverage Ratio is below
5.00:1.00, the Borrower shall not incur, or permit any Restricted Subsidiary to
incur, any capital expenditure exceeding in the aggregate the amounts set forth
below (on the Closing Date hereof, the amount of such Unused Amount being
$74,100,000):
Capital Expenditure Limit Period
------------------------- ------
$52,800,000 plus On or after the Closing Date and
Unused Amounts before January 1, 2000
$39,300,000 plus On or after January 1, 2000 and
Unused Amounts before January 1, 2001
|
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and on or after January 1, 2001 such limit on capital expenditures for any
fiscal year shall be equal to 115% of the projected yearly capital
expenditures as set forth in the projections dated as of Closing Date
delivered to the Lenders plus all Unused Amounts.
(l) Senior Leverage Ratio. The Borrower shall not permit, as of the end of
any fiscal quarter, the Senior Leverage Ratio to be more
than:
Ratio Period
----- ------
6.50:1.00 On or after the Closing Date and before April 1, 2000
6.25:1.00 On or after April 1, 2000 and before October 1, 2000
6.00:1.00 On or after October 1, 2000 and before April 1, 2001
5.50:1.00 On or after April 1, 2001 and before January 1, 2002
5.00:1.00 On or after January 1, 2002 and before January 1, 2003
4.50:1.00 On or after January 1, 2003
|
(m) Interest Coverage Ratio. The Borrower shall not permit, as of the end of
any fiscal quarter, the Interest Coverage Ratio to be less than:
Ratio Period
----- ------
1.40:1.00 On or after the Closing Date and before July 1, 2000
1.50:1.00 On or after July 1, 2000 and before January 1, 2002
1.75:1.00 On or after January 1, 2002 and before July 1, 2002
2.00:1.00 On or after July 1, 2002
|
(n) Annualized Cash Flow to Pro Forma Debt Service. The Borrower shall not
permit, as of the end of any fiscal quarter, the ratio of Annualized Cash Flow
to Pro Forma Debt Service to be less than 1.10:1.00.
(o) Use of Proceeds. The Borrower shall use the proceeds of the Loans only
(i) to make or enable a Restricted Subsidiary to make Permitted Acquisitions,
(ii) for general partnership purposes of the Borrower or its Restricted
Subsidiaries, including working capital, capital expenditures and transaction
costs associated with any transaction consummated by the Borrower or any
Restricted Subsidiary which are permitted by the terms
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of this Agreement and (iii) to make the payments required to be made in
connection with the consummation of the transactions contemplated by this
Agreement, the Borrower Partnership Agreement, the other Related Documents and
the Parent Loan Agreements.
(p) ERISA. Neither the Borrower nor any member of the Borrower's ERISA Group
will sponsor, contribute to or otherwise participate in, or obligate itself to a
sponsor, contribute to or otherwise participate in, any Multiemployer Plan or
any Pension Plan subject to the minimum funding requirements of ERISA.
ARTICLE VIII.
EVENTS OF DEFAULT
Section 8.01. Events of Default. If one or more of the following events
(each an "Event of Default") shall occur:
(a) Default shall be made in the payment of (i) any installment of principal
of any Loan when due and payable, whether at maturity or otherwise; or (ii) any
installment of interest upon any Loan when due and payable or of any other
amounts due hereunder, and such default shall continue unremedied for three (3)
Business Days; or
(b) (i) Default shall be made in the due observance or performance of any
term, covenant, or agreement contained in (A) Sections 7.01(d)(i), (B) Section
7.02, (C) any Hypothecation Agreement; (D) any Guarantee or (E) Section 2 of the
KeepWell Agreement; or (ii) default shall be made in the due observance or
performance of any other term, covenant, or agreement contained in the KeepWell
Agreement, and such default shall have continued unremedied for a period of
fifteen (15) days after TCI CVC or the TCI Subsidiaries (as such term is defined
in the KeepWell Agreement) becomes aware of such default; or
(c) (i) prior to the issuance of the Insight High Yield Debt, (A) a Parent
Term Loan A Event of Default (other than a Parent Term Loan A Event of Default
arising solely as a result of an Event of Default occurring hereunder) shall
have occurred and be continuing; or (B) a Parent Term Loan B Event of Default
set forth in Section 8.01(b) or Sections 8.01(h) or (i) with respect to any
Guarantor (as defined in the Parent Term Loan B Agreement) shall have occurred
and be continuing; or (ii) after the issuance of the Insight High Yield Debt, an
Insight Indenture Event of Default (other than an Insight Indenture Event of
Default arising solely as a result of an Event of Default occurring hereunder)
shall have occurred and be continuing; or
(d) Default shall be made in the due observance or performance of any other
term, covenant or agreement contained in this Agreement, and such default shall
have continued
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unremedied for a period of thirty (30) days after any Responsible Person becomes
aware of such default; or
(e) Any representation or warranty made in any Credit Document or any
statement or representation made in any certificate, report or opinion delivered
in connection herewith shall prove to have been misleading in any material
respect when made; or
(f) Any obligation of the Borrower (other than its obligations hereunder),
any Restricted Subsidiary or any Guarantor for the payment of indebtedness for
Borrowed Money (to the extent that such indebtedness exceeds five million
dollars ($5,000,000) in the aggregate) is not paid when due or becomes or is
declared to be due and payable prior to the expressed maturity thereof, or there
shall have occurred an event which, with the giving of notice or lapse of time,
or both, would cause any such obligation to become, or allow any such obligation
to be declared to be, due and payable, except obligations in the aggregate not
in excess of five million dollars ($5,000,000); or
(g) The Liens created by the Hypothecation Agreements shall at any time not
constitute a valid and perfected Lien on the collateral described therein (to
the extent perfection by filing, registration or possession is required herein
or therein), subject to no pari passu or prior Lien other than Liens permitted
hereunder or under the Hypothecation Agreements, or any material provision of
any Hypothecation Agreement shall at any time cease to be in full force and
effect (other than in accordance with the terms thereof) other than any loss of
perfection or priority of the Lien on the Intercompany Notes, stock certificates
or any Securities as defined in the Uniform Commercial Code, due to the
Administrative Agent's failure to maintain proper possession thereof, or any
party (other than the Lenders) thereto shall so assert in writing; or
(h) An involuntary case or other proceeding shall be commenced against the
Borrower, any Restricted Subsidiary or any Guarantor or any general partner of
the Borrower, any Restricted Subsidiary or a Guarantor seeking liquidation,
reorganization or other relief with respect to it or its debts under any
applicable federal or state bankruptcy, insolvency, reorganization or similar
law now or hereafter in effect or seeking the appointment of a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar official of it
or any substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed, or an order or decree
approving or ordering any of the foregoing shall be entered and continued
unstayed and in effect, in any such event, for a period of sixty (60) days; or
(i) The commencement by the Borrower, any Restricted Subsidiary or any
Guarantor or any general partner of the Borrower, any Restricted Subsidiary or a
Guarantor of a voluntary liquidation or case or proceeding under any applicable
federal or state bankruptcy, insolvency, reorganization or other similar law or
of any other case or proceeding to be adjudicated a bankrupt or insolvent, or
the consent by any of them to the
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entry of a decree or order for relief in respect of the Borrower, any Restricted
Subsidiary or any Guarantor or any general partner of the Borrower, any
Restricted Subsidiary or a Guarantor in an involuntary case or proceeding under
any applicable federal or state bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against any of them, or the filing by any of them of a petition or
answer or consent seeking reorganization or relief under any applicable federal
or state law, or the consent by any of them to the filing of such petition or to
the appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or similar official of the Borrower, any
Restricted Subsidiary or any Guarantor or any general partner of the Borrower,
any Restricted Subsidiary or a Guarantor or any substantial part of their
respective property, or the making by any of them of an assignment for the
benefit of creditors, or the admission by any of them in writing of inability to
pay their debts generally as they become due, or the taking of any action by the
Borrower, any Restricted Subsidiary or any Guarantor or any general partner of
the Borrower, any Restricted Subsidiary or a Guarantor in furtherance of any
such action; or
(j) One or more judgments against the Borrower, any Restricted Subsidiary or
any Guarantor or any general partner of the Borrower, any Restricted Subsidiary
or a Guarantor or attachments against its property, which in the aggregate
exceed five million dollars ($5,000,000) (to the extent not covered by
insurance), or the operation or result of which could be to interfere materially
and adversely with the conduct of the business of the Borrower, such Restricted
Subsidiary or such Guarantor or general partner remain unpaid, unstayed on
appeal, undischarged, unbonded, or undismissed for a period of thirty (30) days;
or
(k) There shall have occurred a breach of the Borrower Partnership
Agreement, resulting in the Parent no longer acting as the general partner
thereof; or there shall have occurred a breach of the Parent Partnership
Agreement, resulting in the Ultimate Parent no longer acting as the general
partner thereof;
(l) The Parent shall fail to own directly 99.999% of the Borrower or Insight
Kentucky Capital shall fail to own .001% of the Borrower; or
(m) TCI shall fail to own directly or indirectly at least 30% of the equity
of the Borrower on a fully diluted basis at all times;
then (i) upon the occurrence or at any time during the continuance of any of the
foregoing Events of Default, the obligation of the Lenders to make any further
Loans under this Agreement shall terminate upon declaration to that effect
delivered by the Administrative Agent to the Borrower and (ii) upon the
happening of any of the foregoing Events of Default which shall be continuing,
the Notes shall become and be immediately due and payable upon declaration to
that effect delivered by the Administrative Agent to the Borrower; provided that
upon the happening of any event specified in Section 8.01(h) or (i), the Notes
shall
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become immediately due and payable and the obligation of the Lenders to make any
further Loans hereunder shall terminate without declaration or other notice to
the Borrower. At any time the Notes shall become and be immediately due and
payable in accordance with the foregoing, any Lender may realize on the security
interest and lien, and exercise the rights, granted to it in Section 11.02. The
Borrower expressly waives any presentment, demand, protest or other notice of
any kind.
Section 8.02. Payments Subsequent to Declaration of Event of Default.
Subsequent to the acceleration of the Loans under Section 8.01 hereof, payments
and prepayments under this Agreement made to any of the Administrative Agent and
the Lenders or otherwise received by any of such Persons (from realization on
Collateral for the Loans or otherwise) shall be paid over to the Administrative
Agent (if necessary) and distributed by the Administrative Agent as follows:
first, to the Administrative Agent's reasonable costs and expenses, if any,
incurred in connection with the collection of such payment or prepayment,
including, without limitation, any reasonable costs incurred by it in connection
with the sale or disposition of any Collateral for the obligations and all
amounts under Section 11.03 hereof; second, to the Lenders and the
Administrative Agent for any fees hereunder or under any of the other Credit
Documents then due and payable; third, to the Lenders and the Swing Line Lender
pro rata on the basis of their respective unpaid principal amounts, to the
payment of any unpaid interest which may have accrued on the Loans; fourth, to
the Swing Line Lender, to any unpaid principal of Swing Line Loans outstanding;
fifth, to the Lenders pro rata until all Loans have been paid in full (and, for
purposes of this clause, obligations under Interest Rate Agreements with the
Lenders or any of them shall be paid on a pro rata basis with the Loans); sixth,
to the Lenders and the Swing Line Lender pro rata on the basis of their
respective unpaid amounts, to the payment of any other unpaid amounts under the
Credit Documents; and seventh, to the Borrower or as otherwise required by law.
ARTICLE IX.
THE ADMINISTRATIVE AGENTS AND THE LENDERS
Section 9.01. Appointment, Powers and Immunities.
(a) Each Lender hereby irrevocably appoints and authorizes the
Administrative Agent to act as its agent hereunder with such powers as are
specifically delegated to it by the terms of this Agreement and the other Credit
Documents, together with such other powers as are reasonably incidental thereto,
including, without limitation, the execution and delivery by the Administrative
Agent on behalf of such Lender of any document related thereto and the exercise
by the Administrative Agent of the powers delegated to the Administrative Agent
thereby, and the Administrative Agent hereby accepts such appointment subject to
the terms hereof. The relationship between the Administrative Agent and the
Lenders shall be that of agent and principal only and nothing herein shall be
construed to constitute the
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Administrative Agent a trustee for any Lender nor to impose on the
Administrative Agent duties or obligations other than those expressly provided
for herein. The Administrative Agent: (i) shall not be responsible to any of the
Lenders for any recitals, statements, representations or warranties contained in
this Agreement, the Hypothecation Agreements, the Guarantees or any other Credit
Document, or any certificate or other document referred to or provided for in,
or received by any of the Lenders under or in connection with, this Agreement or
the other Credit Documents, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement, or the other
Credit Documents or any other document referred to or provided for herein or
therein or for any failure by the Borrower or any other Person to perform any of
its obligations hereunder or thereunder; (ii) shall not be required to initiate
or conduct any litigation or collection proceedings hereunder except to the
extent requested by the Majority Lenders; and (iii) shall not be responsible for
any action taken or omitted to be taken by it hereunder or under any other
document or instrument referred to or provided for herein or in connection
herewith except for its own gross negligence or willful misconduct. The
Administrative Agent may employ agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agents or attorneys-in-
fact selected by it with reasonable care; and
(b) Notwithstanding any other provision hereunder, each Lender hereby
instructs and authorizes the Administrative Agent to, upon the issuance of the
Insight High Yield Debt, terminate the following agreements: (i) the KeepWell
Agreement, including the negative pledge of the capital stock of TCI CVC and of
the securities held at TCI CVC pursuant to the KeepWell Agreement; (ii) the
KeepWell Subordination Agreement; and (iii) the Intercreditor Agreement. The
foregoing agreements will be deemed automatically terminated upon issuance of
the Insight High Yield Debt. Upon the issuance of the Insight High Yield Debt,
all provisions relating to any of the aforementioned documents and to the Parent
Term Loans shall no longer have any force and effect thereafter.
Section 9.02. Sharing of Payments and Expenses. Except for payments with
respect to any Swing Line Loan and except as provided in Section 8.02, all funds
received by the Administrative Agent in respect of payments made by the Borrower
pursuant to, or from any Person on account of, this Agreement or any other
Credit Document shall be distributed forthwith by the Administrative Agent, in
like currency and funds as received, ratably among the Revolving Credit Loans,
Term Loan A and Term Loan B on the basis of the respective unpaid principal
amounts outstanding under the Notes immediately prior to such payment and then
among the Lenders, in accordance with Section 4.01. In the event that any Lender
shall receive from the Borrower or any other source any payment of, on account
of, or for or under this Agreement or any other Credit Document (whether
received pursuant to the exercise of any right of set-off, banker's lien,
realization upon any security held for or appropriated to such obligation or
otherwise as permitted by law) other than pro rata, then such Lender shall
purchase from each other Lender so much of its interest in obligations of the
Borrower as shall be necessary in order that each Lender shall share such
payment proportionately with each of the other Lenders; provided that no Lender
shall purchase any
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interest of any Lender that does not, to the extent that it may lawfully do so,
set off against the balance of any deposit accounts maintained with it the
obligations due to it under this Agreement; and provided further that nothing
herein contained shall obligate any Lender to apply any set-off or banker's lien
or collateral security permitted hereby first to the obligations of the Borrower
hereunder if the Borrower is obligated to such Lender pursuant to other loans or
notes, but any such application of proceeds shall be pro rata among the
obligations of the Borrower to such Lender. In the event that any purchasing
Lender shall be required to return any excess payment received by it, the
purchase shall be rescinded and the purchase price restored to the extent of
such return, but without interest.
Section 9.03. The Administrative Agent's Liabilities. Each of the Lenders
and the Borrower agrees that (a) neither the Administrative Agent in such
capacity nor any of its officers or employees shall be liable for any action
taken or omitted to be taken by any of them hereunder except for their own gross
negligence or willful misconduct, (b) neither the Administrative Agent in such
capacity nor any of its officers or employees shall be liable for any action
taken or omitted to be taken by any of them in good faith in reliance upon the
advice of counsel, independent public accountants or other experts selected by
the Administrative Agent, and (c) the Administrative Agent in such capacity
shall be entitled to rely upon any notice, consent, certificate, statement or
other document (including any telegram, cable, telex, facsimile or telephone
transmission) believed by it to be genuine and correct and to have been signed
and/or sent by the proper Persons.
Section 9.04. Defaults and Events of Default. The Administrative Agent shall
not be deemed to have knowledge of the occurrence of a Default or Event of
Default (other than the non-payment of principal of or interest on Loans) unless
it shall have received notice from a Lender or the Borrower specifying such
Default or Event of Default and stating that such notice is a "Notice of
Default". In the event that the Administrative Agent receives such a notice of
the occurrence of a Default or Event of Default, the Administrative Agent shall
give prompt notice thereof to the Lenders (and shall give each Lender prompt
notice of each such non-payment). The Administrative Agent shall (subject to
Section 9.08 hereof) take such action with respect to such Default or Event of
Default as shall be reasonably directed by the Majority Lenders; provided that,
unless and until the Administrative Agent shall have received such directions,
the Administrative Agent may take such action, or refrain from taking such
action, with respect to such Default and Event of Default as the Administrative
Agent shall deem advisable in the best interest of the Lenders.
Section 9.05. Rights as a Lender. With respect to its Revolving Credit
Commitment and the Loans made by it, Toronto Dominion (Texas), Inc., in its
capacity as a Lender hereunder, shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it was not acting as the
Administrative Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Administrative Agent in its individual
capacity. The Administrative Agent may (without having to account therefor to
any Lender) accept deposits from, lend money to and generally
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engage in any kind of banking, trust or other business with the Borrower and any
affiliates of the Borrower as if it were not acting as the Administrative Agent,
and the Administrative Agent may accept fees and other consideration from the
Borrower for services in connection with this Agreement or otherwise without
having to account for the same to the Lenders.
The Borrower and each Lender, by their execution of this Agreement, hereby
acknowledge that one or more of the Lenders or their affiliates may own or
hereafter acquire limited partnership interests in the Parent or the Ultimate
Parent. The Borrower and each Lender agree that such Lenders shall be entitled
to exercise or refrain from exercising their rights hereunder in their sole
discretion and regardless of the interests of the other Lenders hereunder. The
Borrower and each Lender hereby waive, to the extent permitted by applicable
law, any action, claim, or defense against such Lenders based on or arising out
of such ownership. Such waiver shall be binding upon each Participant or
Assignee hereunder.
Section 9.06. Lender Credit Decision. Neither the Administrative Agent nor
any of its officers or employees has any responsibility for, gives any guaranty
in respect of, nor makes any representation to the Lenders as to, (a) the
condition, financial or otherwise, of the Borrower, any Subsidiary, the pledgor
under any Hypothecation Agreement or any Guarantor or the truth of any
representation or warranty made herein or in any other Credit Document, or in
connection herewith or therewith or (b) the validity, execution, sufficiency,
effectiveness, construction, adequacy, enforceability or value of this Agreement
or any other Credit Document or any other document or instrument related hereto
or thereto. Except as otherwise provided herein, the Administrative Agent shall
have no duty or responsibility, either initially or on a continuing basis, to
provide any Lender with any credit or other information with respect to the
operations, business, property, condition or creditworthiness of the Borrower,
any Subsidiary, any Guarantor or any pledgor under a Hypothecation Agreement,
whether such information comes into its possession on or before the date hereof
or at any time thereafter. Each Lender acknowledges that it has, independently
and without reliance upon the Administrative Agent or any other Lender, based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will independently and without reliance upon the
Administrative Agent or any other Lender, based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement or any
other Credit Document.
Section 9.07. Indemnification. The Lenders agree (which agreement shall
survive payment of the Loans and the Notes) to indemnify the Administrative
Agent, to the extent not reimbursed by the Borrower or Guarantors, ratably in
accordance with the sum of their respective Term Loans plus their respective
Revolving Credit Commitments or after the Revolving Credit Termination Date,
their respective Revolving Credit Loans (as of the time of the incurrence of the
liability being indemnified against) from and against any and all liabilities,
obligations, losses, claims, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on,
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incurred by, or asserted against the Administrative Agent in any way
relating to or arising out of this Agreement or any other Credit Document, or
any action taken or omitted to be taken by the Administrative Agent hereunder or
thereunder; provided that no Lender shall be liable 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 or any of its officers or employees.
Without limitation of the foregoing, each Lender agrees to reimburse the
Administrative Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including counsel fees) incurred by the Administrative
Agent in such capacity in connection with the preparation, execution or
enforcement of, or legal advice in respect of rights or responsibilities under,
this Agreement or any other Credit Document or any amendments or supplements
hereto or thereto, to the extent that the Administrative Agent is not reimbursed
for such expenses by or on behalf of the Borrower.
Section 9.08. Failure to Act. Except for action expressly required of the
Administrative Agent hereunder or under any other Credit Document, the
Administrative Agent shall, in all cases, be fully justified in failing or
refusing to act hereunder or thereunder unless it shall be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
Section 9.09. Resignation of Administrative Agent. Subject to the
appointment and acceptance of a successor to the Administrative Agent as
provided below, the Administrative Agent may resign at any time by giving notice
thereof to the Lenders and the Borrower. Upon any such resignation or removal,
the Majority Lenders shall have the right to appoint a successor Administrative
Agent reasonably acceptable to the Borrower. If no successor Administrative
Agent reasonably acceptable to the Borrower shall have been so appointed by the
Majority Lenders and shall have accepted such appointment within thirty (30)
days after a retiring Administrative Agent's giving of notice of resignation or
the Majority Lenders' removal of such retiring Administrative Agent, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent reasonably acceptable to the Borrower, which shall either
be a Lender or be a bank organized under the laws of the United States of
America or any state having an office (or an affiliate with an office) in New
York, New York, and a combined capital and surplus of at least $500,000,000.
Upon the acceptance of any appointment as an 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
and duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. After a
retiring Administrative Agent's resignation or removal hereunder as
Administrative Agent, the provisions of this Article IX 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 an Administrative Agent.
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Section 9.10 Withholding Tax Exemption. Not later than the Closing Date
or, if such date does not occur within thirty (30) days after the date of this
Agreement, by the end of such thirty day period, each Lender agrees that it will
deliver to the Borrower and the Administrative Agent (a), if such Lender is a
"bank" under Section 881(c)(3)(A) of the Code, either (i) a statement that it is
organized under the laws of or incorporated in the United States of America or
(ii) two duly completed copies of United States Internal Revenue Service Form
1001 or 4224, or successor applicable form, as the case may be, indicating in
each case that such Lender is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal income taxes as
permitted by the Code or, (b) if such Lender is not a "bank" within the meaning
of Section 881(c)(3)(A) of the Code and which intends to claim exemption from
U.S. Federal withholding tax under Section 871(h) or 881(c) of the Code with
respect to payments of "portfolio interest", a Form W-8, or any subsequent
versions thereof or successors thereto (and, if such Lender delivers a Form W-8,
a certificate representing that such Lender is not a bank for purposes of
Section 881(c) of the Code, is not a 10-percent shareholder (within the meaning
of Section 871(h)(3)(B) of the Code and is not a controlled foreign corporation
related to the Borrower (within the meaning of Section 864(d)(4) of the Code)),
properly completed and duly executed by such Lender, indicating that such Lender
is entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes as permitted by the Code.
Each Lender which delivers to the Borrower and the Administrative Agent a Form
1001, 4224 or W-8, or successor applicable form, pursuant to the next preceding
sentence further undertakes to deliver to the Borrower and the Administrative
Agent two further copies of the said Form 1001, 4224 or W-8, or successor
applicable form, as the case may be, as and when the previous form filed by it
hereunder shall expire or shall become incomplete or inaccurate in any respect,
unless in any of such cases an event has occurred prior to the date on which any
such delivery would otherwise be required which renders such forms inapplicable.
Section 9.11. Duties and Obligations of Arranging Agents and Syndication
Agents. The Arranging Agents and Syndication Agents have no duties or
obligations in such capacity under this Agreement.
ARTICLE X.
CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
Section 10.01. Consent to Jurisdiction. The Borrower and the Parent each
hereby irrevocably submit to the non-exclusive jurisdiction of any state or
federal court in The City of New York located in the borough of Manhattan for
the purpose of any suit, action, proceeding or judgment relating to or arising
out of this Agreement and each other Credit Document. The Borrower and the
Parent each hereby appoint The United States Corporation Company, with offices
on the date hereof at 375 Hudson Street, New York, New York,
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10014-3660, as its authorized agent on whom process may be served in any action
which may be instituted against it by the Administrative Agent or the Lenders in
any state or federal court in New York City, arising out of or relating to any
Loan or this Agreement and each other Credit Document. Service of process upon
such authorized agent and written notice of such service to the Borrower or the
Parent, as the case may be, shall be deemed in every respect effective service
of process upon the Borrower or the Parent, as the case may be, and the Borrower
and the Parent each hereby irrevocably consent to the jurisdiction of any such
court in any such action and to the laying of venue in The City of New York. The
Borrower and the Parent each hereby irrevocably waive any objection to the
laying of the venue of any such suit, action or proceeding brought in the
aforesaid courts and hereby irrevocably waives any claim that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum. Notwithstanding the foregoing, nothing herein shall in any
way affect the right of the Administrative Agent or any Lender to bring any
action arising out of or relating to the Loans or this Agreement and each other
Credit Document in any competent court elsewhere having jurisdiction over the
Borrower or the Parent, as the case may be, or their property.
SECTION 10.02. WAIVER OF JURY TRIAL. EACH OF THE PARTIES TO THIS
AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
ARTICLE XI.
MISCELLANEOUS
Section 11.01. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF
AMERICA.
Section 11.02. Set-off. As security for its obligations hereunder, the
Borrower hereby grants to each Lender a security interest in, lien upon, and
right of set-off against any amounts standing to the credit of the Borrower on
the books of such Lender in any deposit or other account maintained with any
branch of such Lender.
Section 11.03. Expenses; Indemnification. The Borrower agrees to pay
(a) all reasonable out-of-pocket expenses of the Arranging Agents (including the
reasonable fees and expenses of Powell, Goldstein, Frazer & Murphy LLP, as
counsel to the Administrative Agent in an amount, when added to the fees and
expenses incurred in connection with the Parent Loan Agreements, not to exceed
three hundred thousand dollars ($300,000)) in connection with the preparation of
this Agreement and the other Credit Documents and any
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amendments or supplements hereto or thereto or waivers or consents relating
hereto or thereto and (b) all out-of-pocket expenses incurred by the
Administrative Agent and any Lender, including reasonable fees and disbursements
of counsel and other professional fees, in connection with a Default or Event of
Default, the enforcement of the Credit Documents and collection and other
proceedings resulting therefrom. The Borrower shall indemnify each Lender
against any transfer taxes, documentary taxes, assessments or charges made by
any Governmental Authority by reason of the execution and delivery of this
Agreement or the other Credit Documents.
In addition to the payment of expenses pursuant to the preceding paragraph,
whether or not the transactions contemplated hereby shall be consummated, the
Borrower agrees (which agreement is in addition to the provisions of Section
4.04(a) and not in duplication or limitation thereof) to indemnify, pay and hold
the Lenders and the Arranging Agents, and the officers, directors, employees and
agents of the Lenders and the Arranging Agents (collectively called the
"Indemnitees"), harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements of any kind or nature whatsoever (including,
without limitation, the reasonable fees and disbursements of counsel for such
Indemnitees in connection with any investigative, administrative or judicial
proceeding, whether or not such Indemnitee shall be designated a party thereto)
that may be imposed on, incurred by, or asserted against such Indemnitee, in any
manner relating to or arising out of this Agreement or the other Credit
Documents and any liability arising from any Environmental Law, the Lenders'
agreement to make the Loans or, the making of the Loans, or in any way arising
from any actions in connection with the transactions contemplated by the Related
Documents, including without limitation, the pledge or release of any collateral
and in particular the pledges of partnership interests or the use or intended
use of the proceeds of the Loans (the "indemnified liabilities"); provided that
the Borrower shall have no obligation to an Indemnitee hereunder with respect to
indemnified liabilities arising from the gross negligence or willful misconduct
of such Indemnitee. To the extent that the undertaking to indemnify, pay and
hold harmless set forth in the preceding sentence may be unenforceable because
it is violative of any law or public policy, the Borrower shall contribute the
maximum portion which it is permitted to pay and satisfy under applicable law to
the payment and satisfaction of all indemnified liabilities incurred by the
Indemnitees or any of them.
Section 11.04. Amendments.
(a) Any provision of this Agreement, the Notes or the other Credit Documents
(other than the KeepWell Agreement) may be amended or waived, or the KeepWell
Agreement may be released, if, but only if, such amendment, waiver or release is
in writing and is signed by the Borrower and the Majority Lenders (and, if the
rights or duties of the Administrative Agent are affected thereby, by the
Administrative Agent); provided that no such amendment, waiver or modification
shall, unless signed by all the Lenders, (i) increase the Revolving Credit
Commitment, Term Loan A Amount or Term Loan B Amount of any
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Lender or subject any Lender to any additional obligation, (ii) reduce, or
extend the time of payment for, the principal of or rate of interest on any Loan
or any fees hereunder, contained in Section 2.07, (iii) make any change in the
amortization schedule of the Term Loans contained in 2.08(d) and (e) or any
scheduled reduction in the Total Revolving Commitment; (iv) extend the final
scheduled maturity of any Loan beyond the Final Maturity Date of such Loan; (v)
amend this Section 11.04 or (vi) change (a) the percentage of (I) any of the
Revolving Credit Commitments or (II) the aggregate unpaid principal amount of
the Notes, or (b) the percentage of Lenders which shall be required for the
Lenders or any of them to take any action under this Section or any other
provision of this Agreement; provided further that no such amendment, waiver or
modification shall, unless signed by the Supermajority Lenders, (x) release any
Guarantor from its obligations under its Guarantee or (y) release all or
substantially all of the Liens or collateral under any Hypothecation Agreement
(except Liens on property which is otherwise permitted to be disposed of
hereunder). Any Lender which has sold a participating interest in its Loans or
its Revolving Credit Commitment pursuant to Section 11.08 shall be entitled to
split its vote to account for the exercise of any voting right granted to a
Participant with respect to such participating interest permitted by Section
11.08. Notwithstanding the foregoing, should any of the information or
disclosures provided on any of the Schedules originally attached hereto or to
any Credit Document become outdated or incorrect solely as a result of the
consummation of a Permitted Acquisition in compliance with the terms hereunder,
the Borrower may unilaterally make such revisions or updates to the Schedule(s)
as may be necessary or appropriate to update or correct such Schedule(s) by
delivering to the Administrative Agent revised schedules as part of a
certificate of a Responsible Person required pursuant to Section7.1(a); provided
that no such revisions or updates to any Schedule(s) shall be deemed to have
amended, modified or superseded such Schedule(s) as originally attached hereto,
unless and until the Administrative Agent shall have accepted in writing such
revisions or updates to such Schedule(s).
(b) Each Lender hereby authorizes and directs the Administrative Agent to
execute the KeepWell Agreement, the KeepWell Subordination Agreement, the other
Credit Documents and related documents to which it is a party on behalf of such
Lender. Any provision of the Intercreditor Agreement or the KeepWell
Subordination Agreement may be amended or waived by the Administrative Agent on
behalf of the Lenders, but only if such amendment or waiver is executed at the
direction and with the consent of the Majority Lenders. Any provision of the
KeepWell Agreement may be amended or waived by the Administrative Agent on
behalf of the Lenders, but no material term or condition of the KeepWell
Agreement may be amended or waived in any respect materially adverse to the
Lenders without the consent of the Majority Lenders.
Section 11.05. Cumulative Rights and No Waiver. Each and every right granted
to the Lenders hereunder or under any other document delivered hereunder or in
connection herewith, or allowed them by law or equity, shall be cumulative and
may be exercised from time to time. No failure on the part of the Administrative
Agent, the Arranging Agent or the
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Lenders to exercise, and no delay in exercising, any right will operate as a
waiver thereof, nor will any single or partial exercise by the Administrative
Agent, the Arranging Agents or the Lenders of any right preclude any other or
future exercise thereof or the exercise of any other right.
Section 11.06. Notices. Any communication, demand or notice to be given
hereunder or with respect to the Notes will be duly given when delivered in
writing (which may include by telecopy transmission) to a party at its address:
If to the Borrower, at
c/o Insight Communications Company, Inc.
126 East 56th Street
New York, New York 10022
Attention: Kim D. Kelly/Steven E. Sklar
Telecopy: (212) 371-1549
with copies to
Shelley Rothenberg
295 N. Maple Avenue
Basking Ridge, NJ 07920-1002
Telecopy: (908) 630-1965
AT&T Broadband & Internet Services
9197 South Peoria Street
Englewood, Colorado 80112
Attention: Derek Chang
Telecopy: (870) 875-5396
Dow Lohnes & Albertson PLLC
1200 New Hampshire Avenue, N.W.
Suite 800
Washington, D.C. 20036-6802
Attention: Leonard J. Baxt, Esq./J. Kevin Mills, Esq.
Telecopy: (202) 776-2222
If to the Administrative Agent, at
Toronto Dominion (Texas), Inc.
c/o TD Securities (USA) Inc.
31 West 52nd Street
New York, New York 10019-6101
Attention: John Bown
Telecopy: (212) 262-1928
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with a copy to
Powell, Goldstein, Frazer & Murphy LLP
191 Peachtree Street, N.E.
16th Floor
Atlanta, Georgia 30303
Attention: Cindy A. Brazell, Esq.
Telecopy: (404) 572-6999
with a copy to, in the case of all Borrowing notices, prepayment notices under
Section 2.02 and notices under Section 3.03(b), and to the attention of, in the
case of all fundings by the Lenders and the financial statements required under
Section 7.01(a):
Toronto Dominion (Texas), Inc.
909 Fannin Street
Suite 1700
Houston, Texas 77010
Attention: Kimberly Burleson/Diane Bailey
Telecopy: (713) 951-9921
except that any notice, request or demand by the Borrower to or upon the
Administrative Agent or the Lenders pursuant to Sections 2.02 and 3.03(b) shall
not be effective until received.
If to any Lender, at its address as indicated on Schedule 2 hereto.
Section 11.07. Separability. In case any one or more of the provisions
contained in this Agreement shall be invalid, illegal or unenforceable in any
respect under any law, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.
Section 11.08. Assignments and Participations.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower and the Lenders and their respective successors and assigns, except
that the Borrower may not assign any of its rights hereunder without the prior
written consent of the Lenders.
(b) Any Lender may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Revolving
Credit Commitment or any or all of its Loans, in each case, in minimum amounts
of the lesser of (x) the entire remaining
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amount of such Lender's Loans and Commitments or (y) five million dollars
($5,000,000); provided that no minimum amount shall be required in respect of
any participation in whole or in part, (i) to another Lender or (ii) to an
Affiliate of any Lender. In the event of any such grant by a Lender of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Administrative Agent, such Lender shall remain responsible for
the performance of its obligations hereunder, and the Borrower and the
Administrative Agent shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under this Agreement.
Any agreement pursuant to which any Lender may grant such a participating
interest shall provide that such Lender shall retain the sole right and
responsibility to enforce the obligations of the Borrower hereunder including,
without limitation, the right to approve any amendment, modification or waiver
of any provision of this Agreement; provided that such participation agreement
may provide that such Lender will not agree to any modifications, amendments or
waivers of this Agreement which require the consent of such Lender without the
consent of the Participant. The Borrower agrees that each Participant shall be
entitled to the benefits of Sections 4.03, 4.04 and 11.03 with respect to its
participating interest; provided that all amounts payable to a Lender for the
account of a Participant under Sections 4.03, 4.04 and 11.03 shall be determined
as if such Lender had not granted such participation to the Participant. An
assignment or other transfer which is not permitted by Section 11.08(c) shall be
given effect for purposes of this Agreement only to the extent of a
participating interest granted in accordance with this Section 11.08(b).
(c) With the written consent of the Borrower (which consent will not be
unreasonably withheld or delayed) and the Administrative Agent, any Lender may
assign to one or more banks or other institutions (each an "Assignee") all, or a
part of its rights and obligations under this Agreement and the Notes, in each
case, in minimum amounts of the lesser of (x) the entire remaining amount of
such Lender's Loans and Commitments or (y) five million dollars ($5,000,000),
and such Assignee shall assume such rights and obligations, pursuant to an
instrument executed by such Assignee and such transferor Lender which shall be
substantially in the form of Exhibit H hereto; provided that the written consent
of the Borrower shall not be required in respect of any assignment in whole or
in part, (i) to another Lender, (ii) to an Affiliate or Approved Fund of any
Lender or (iii) to a Federal Reserve Bank or (iv) to any Person if an Event of
Default under Sections 8.01(a), (h) or (i) has occurred and is continuing;
provided further that no minimum amount or consent of the Administrative Agent
shall be required in respect of any assignment in whole or in part, (i) to
another Lender, (ii) to an Affiliate or Approved Fund of any Lender or (iii) to
a Federal Reserve Bank. Upon execution and delivery of such an instrument and
upon notice to the Administrative Agent together with payment to the
Administrative Agent of a processing fee in the amount of three thousand five
hundred dollars ($3,500), such Assignee shall be a Lender party to this
Agreement and shall have all the rights and obligations of a Lender as set forth
in such instrument of assumption, and the transferor Lender shall be released
from its obligations hereunder to a corresponding extent, and no further consent
or action by any party shall be required. Upon the consummation of any
assignment pursuant to this
-78-
Section 11.08(c), the transferor Lender, the Administrative Agent and the
Borrower shall make appropriate arrangements so that, if required, new Notes are
issued to the Assignee.
(d) No Assignee, Participant or other transferee of any Lender's rights
shall be entitled to receive any greater payment under Section 4.04 than such
Lender would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrower's prior written
consent or by reason of the provisions of Section 4.04 requiring such Lender to
designate a different Lending Office under certain circumstances or at a time
when the circumstances giving rise to such payment did not exist.
(e) Notwithstanding any other provision in this Agreement, any Lender that
is a fund that invests in bank loans may, without the consent of the Agent or
the Borrower, pledge all or any portion of its rights under, and interest in,
this Agreement and the Notes to any trustee or to any other representative of
holders of obligations owed or securities issued, by such fund as security for
such obligations or securities; provided, however, that any transfer to any
Person upon the enforcement of such pledge or security interest may only be made
subject to the assignment provisions of Section 11.08.
Section 11.09. Confidentiality. Each Lender agrees to hold any confidential
information that it may receive from the Borrower or its Subsidiaries pursuant
to this Agreement in confidence, except for disclosure: (a) to other Lenders or
any affiliate or any Approved Fund of such Lender; (b) to legal counsel and
accountants for Borrower or any Lender; (c) to other professional advisors to
the Borrower or any Lender, provided that the recipient has delivered to the
Lender a written confidentiality agreement substantially similar to this Section
11.09; (d) to regulatory officials having jurisdiction over that Lender; (e) as
required by law or legal process or in connection with any legal proceeding to
which that Lender and the Borrower are adverse parties; (f) to another financial
institution in connection with a disposition or proposed disposition to that
financial institution of all or part of that Lender's interests hereunder or a
participation interest in its Note; (g) to prospective purchasers of any
Collateral in connection with any disposition thereof; or (h) to any direct or
indirect contractual counterparty in swap agreements or such counterparty's
professional advisor (so long as such contractual counterparty or professional
advisor to such contractual counterparty agrees to be bound by the provisions of
this Section 11.09). Each Lender further agrees that it will not use any such
confidential information in any activity or for any purpose other than the
administration of the credit facilities extended to Borrower under this
Agreement. For purposes of the foregoing, "confidential information" shall mean
any information respecting the Borrower and its Subsidiaries reasonably
considered to be confidential (including any information stamped or otherwise
designated as confidential by the Borrower on the face thereof), other than (i)
information previously filed with any Governmental Authority and available to
the public, (ii) information previously published in any public medium, and
(iii) information previously disclosed by the Borrower to any Person not
associated with the Borrower without a written confidentiality agreement
substantially similar to this Section 11.09. Nothing in this Section 11.09 shall
be construed to create or
-79-
give rise to any fiduciary duty on the part of the Administrative Agent or the
Lenders to the Borrower. Certain of the confidential information provided by
Borrower and its Subsidiaries to the Lenders pursuant to this Agreement is or
may be valuable proprietary information that constitutes a trade secret of the
Borrower or such Subsidiary; neither the provision of such confidential
information to the Lenders or the limited disclosures thereof permitted by this
Section 11.09 shall affect the status of any such confidential information as a
trade secret of the Borrower or such Subsidiary. Each Lender, and each other
Person who agrees to be bound by this Section 11.09, acknowledges that any
breach of the agreements contained in this Section 11.09 would result in losses
that could not be reasonably or adequately compensated by money damages.
Accordingly, if any Lender or such other Person breaches its obligations
hereunder, such Lender or other Person recognizes and consents to the right of
Borrower to seek injunctive relief to compel such Lender or other Person to
abide by the terms of this Section 11.09.
Section 11.10. Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all the counterparts shall together constitute one and the same instrument.
Section 11.11 Survival. All representations and warranties made by
the Borrower in this Agreement, and in the certificates or other instruments
prepared or delivered in connection with or pursuant to this Agreement, (i)
shall be considered to have been relied upon by the Lenders and shall survive
the making of the Loans regardless of any investigation made by, or on behalf
of, the Lenders, and (ii) shall continue in full force and effect as long as any
Loan or any fee payable or contemplated hereunder or any other amount payable
under any other Credit Document is outstanding and unpaid and so long as the
Total Revolving Credit Commitment has not been terminated.
Section 11.12. Consent. Upon execution hereof by the Majority Lenders,
the Lenders hereby consent to (a) the consummation of the Insight Purchase on
substantially the terms and conditions set forth in the Insight Purchase
Agreement, provided, however, contemporaneously with such transfer, Insight
Kentucky Capital delivers to the Administrative Agent a Security and
Hypothecation Agreement executed by Insight Kentucky Capital dated as of October
1, 1999 in form and substance satisfactory to the Administrative Agent, (b) the
payment by the Borrower and the Restricted Subsidiaries on or before the Closing
Date of the amounts contemplated by Section 6.14 of the Insight Purchase
Agreement under the Services Agreement, Administration Fee Agreement and
Monitoring Fee Agreements referenced therein, (c) the transfer by InterMedia
Management Inc. ("IMI") of its ownership interests in the Borrower, Parent and
Operating Subsidiary to Insight Kentucky Capital free and clear of the liens
created by the Security and Hypothecation Agreement executed by IMI, which
agreement shall be deemed automatically terminated upon consummation of the
Insight Purchase, (d) the transfer by TCI IP-VI, LLC of its ownership interests
in ICP-VI required by the Insight Purchase Agreement notwithstanding
-80-
any provision of the KeepWell Agreement, (e) the execution and delivery of the
KeepWell Agreement and (f) the execution and delivery of the KeepWell
Subordination Agreement. Notwithstanding any provisions herein, this Consent is
not contingent upon the fulfillment of the Conditions Precedent set forth in
Section 6.01 herein and is effective upon the receipt of the executed signature
pages hereof of the Majority Lenders.
ARTICLE XII.
LIMITED RECOURSE
Section 12.01. Limited Recourse. No Lender shall have recourse to any
limited or general partner of the Borrower or any limited or general partner of
such partner for the payment of any obligation of the Parent and the Borrower,
except as expressly provided in the KeepWell Agreement, the Guarantees and the
Hypothecation Agreements to the extent such partner is a party thereto.
-81-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
BORROWER: INSIGHT KENTUCKY PARTNERS I, L.P.
(f/k/a INTERMEDIA PARTNERS VI, L.P.), a Delaware limited partnership
By: Insight Communications of Kentucky, L.P.
(f/k/a InterMedia Partners Group VI, L.P.),
a Delaware limited partnership, its General Partner
By: Insight Midwest, L.P.,
a Delaware limited partnership, its General Partner
By: Insight Communications Company, L.P.,
a Delaware limited partnership, its General Partner
By: Insight Communications Company, Inc.,
a Delaware corporation, its General Partners
By:____________________________________________
Kim D. Kelly
Executive Vice President
and Chief Financial Officer
INSIGHT COMMUNICATIONS OF KENTUCKY, L.P., a
Delaware limited partnership f/k/a INTERMEDIA PARTNER
GROUP VI, L.P.), solely for purposes of its representations
contained in Section 5.01 and the covenant contained in Section
7.02(j) hereof:
By: Insight Midwest, L.P., a Delaware limited
partnership, its General Partner
By: Insight Communications Company, L.P.,
a Delaware limited partnership, its General Partner
By: Insight Communications Company,
Inc., a Delaware corporation, its
General Partner
By:____________________________________________
Kim D. Kelly
Executive Vice President
and Chief Financial Officer
ADMINISTRATIVE TORONTO DOMINION (TEXAS), INC., as Administrative
AGENT AND Agent and as a Lender
LENDERS:
By:______________________________________________
Name:_________________________________________
Title:________________________________________
BBL (USA) CAPITAL CORP., as a Lender
By:______________________________________________
Name:_________________________________________
Title:________________________________________
BANK OF AMERICA, N.A., as a Lender
By:______________________________________________
Name:_________________________________________
Title:________________________________________
BANK OF HAWAII, as a Lender
By:______________________________________________
Name:_________________________________________
Title:________________________________________
THE BANK OF NEW YORK COMPANY, INC., as a Lender
By:______________________________________________
Name:_________________________________________
Title:________________________________________
THE BANK OF NOVA SCOTIA, as a Lender
By:_____________________________________________
Name:________________________________________
Title:_______________________________________
THE BANK OF TOKYO-MITSUBISHI TRUST COMPANY, as a Lender
By:______________________________________________
Name:_________________________________________
Title:________________________________________
BARCLAYS BANK PLC, as a Lender
By:______________________________________________
Name:_________________________________________
Title:________________________________________
BAYERISCHE HYPO-UND VEREINSBANK AG,
NEW YORK BRANCH, as a Lender
By:______________________________________________
Name:_________________________________________
Title:________________________________________
By:_______________________________________________
Name:__________________________________________
Title:_________________________________________
BHF (USA) CAPITAL CORP., as a Lender
By:______________________________________________
Name:_________________________________________
Title:________________________________________
BALANCED HIGH-YIELD FUND I LTD., as a Lender
By: BHF (USA) Capital Corp.
Acting as Attorney-in-Fact
By:______________________________________________
Name:_________________________________________
Title:________________________________________
BALANCED HIGH-YIELD FUND II LTD., as a Lender
By: BHF (USA) Capital Corp.
Acting as Attorney-in-Fact
By:______________________________________________
Name:_________________________________________
Title:________________________________________
THE CHASE MANHATTAN BANK, as a Lender
By:______________________________________________
Name:_________________________________________
Title:________________________________________
CANADIAN IMPERIAL BANK OF COMMERCE, as a Lender
By:______________________________________________
Name:_________________________________________
Title:________________________________________
CREDIT LYONNAIS NEW YORK BRANCH, as a Lender
By:______________________________________________
Name:_________________________________________
Title:________________________________________
THE DAI-ICHI KANGYO BANK, LIMITED, as a Lender
By:______________________________________________
Name:_________________________________________
Title:________________________________________
DELANO COMPANY, as a Lender
By:______________________________________________
Name:_________________________________________
Title:________________________________________
ROYALTON COMPANY, as a Lender
By:______________________________________________
Name:_________________________________________
Title:________________________________________
CAPTIVA III FINANCE LTD, as a Lender
as advised by Pacific Investment Management Company
By:______________________________________________
Name:_________________________________________
Title:________________________________________
CAPTIVA IV FINANCE LTD, as a Lender
as advised by Pacific Investment Management Company
By:______________________________________________
Name:_________________________________________
Title:________________________________________
DEUTSCHE BANK AG, NEW YORK AND/OR CAYMAN
ISLANDS BRANCH, as a Lender
By:______________________________________________
Name:_________________________________________
Title:________________________________________
By:______________________________________________
Name:_________________________________________
Title:________________________________________
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK, as a Lender
By:______________________________________________
Name:_________________________________________
Title:________________________________________
By:______________________________________________
Name:_________________________________________
Title:________________________________________
DLJ CAPITAL FUNDING, INC., as a Lender
By:______________________________________________
Name:_________________________________________
Title:________________________________________
DRESDNER BANK AG, NEW YORK AND GRAND
CAYMAN BRANCHES, as a Lender
By:______________________________________________
Name:_________________________________________
Title:________________________________________
By:_______________________________________________
Name:__________________________________________
Title:_________________________________________
EATON VANCE INSTITUTIONAL SENIOR LOAN FUND, as a Lender
By: Eaton Vance Management as Investment Advisor
By:______________________________________________
Name:_________________________________________
Title:________________________________________
OXFORD STRATEGIC INCOME FUND, as a Lender
By: Eaton Vance Management, as Investment Advisor
By:______________________________________________
Name:_________________________________________
Title:________________________________________
SENIOR DEBT PORTFOLIO, as a Lender
By: Boston Management and Research, as Investment Advisor
By:______________________________________________
Name:_________________________________________
Title:________________________________________
FIRST HAWAIIAN BANK, as a Lender
By:______________________________________________
Name:_________________________________________
Title:________________________________________
FLEET NATIONAL BANK, as a Lender
By:______________________________________________
Name:_________________________________________
Title:________________________________________
THE FUJI BANK, LIMITED, as a Lender
By:______________________________________________
Name:_________________________________________
Title:________________________________________
GENERAL ELECTRIC CAPITAL CORPORATION, as a Lender
By:______________________________________________
Name:_________________________________________
Title:________________________________________
GENERAL RE INSURANCE COMPANY, as a Lender
By:_____________________________________________
Name:_________________________________________
Title:________________________________________
IMPERIAL BANK, A CALIFORNIA BANKING CORPORATION, as a Lender
By:______________________________________________
Name:__________________________________________
Title:_________________________________________
ING HIGH INCOME PRINCIPAL PRESERVATION FUND
HOLDINGS, LDC, as a Lender
By: ING Capital Advisors, Inc., as Investment Advisor
By:______________________________________________
Name:__________________________________________
Title:_________________________________________
KZH PONDVIEW, LLC, as a Lender
By:_______________________________________________
Name:__________________________________________
Title:_________________________________________
KZH SOLEIL-2, LLC, as a Lender
By:_______________________________________________
Name:__________________________________________
Title:_________________________________________
MELLON BANK, N.A., as a Lender
By:_______________________________________________
Name:__________________________________________
Title:_________________________________________
MERRILL LYNCH GLOBAL INVESTMENT SERIES:
INCOME STRATEGIES PORTFOLIO, as a Lender
By:Merrill Lynch Asset Management, L.P.,
as Investment Advisor
By:_______________________________________________
Name:__________________________________________
Title:_________________________________________
MERRILL LYNCH DEBT STRATEGIES PORTFOLIO, as a Lender
By:Merrill Lynch Asset Management, L.P.,
as Investment Advisor
By:_______________________________________________
Name:__________________________________________
Title:_________________________________________
MERRILL LYNCH PRIME RATE PORTFOLIO, as a Lender
By:Merrill Lynch Asset Management, L.P.,
as Investment Advisor
By:_______________________________________________
Name:__________________________________________
Title:_________________________________________
MERRILL LYNCH SENIOR FLOATING RATE FUND, INC., as a Lender
By:_______________________________________________
Name:__________________________________________
Title:_________________________________________
METROPOLITAN LIFE INSURANCE COMPANY, as a Lender
By:_______________________________________________
Name:__________________________________________
Title:_________________________________________
NATEXIS BANQUE BFCE, as a Lender
By:_______________________________________________
Name:__________________________________________
Title:_________________________________________
By:_______________________________________________
Name:__________________________________________
Title:_________________________________________
OCTAGON LOAN TRUST, as a Lender
By: Octagon Credit Investors, as Manager
By:_______________________________________________
Name:__________________________________________
Title:_________________________________________
OCTAGON INVESTMENT PARTNERS II, LLC, as a Lender
By:_______________________________________________
Name:__________________________________________
Title:_________________________________________
ORIX USA CORPORATION, as a Lender
By:_______________________________________________
Name:__________________________________________
Title:_________________________________________
PAM CAPITAL FUNDING, L.P., as a Lender
By: Highland Capital Management, L.P., as Collateral Manager
By:_______________________________________________
Name:__________________________________________
Title:_________________________________________
PARIBAS, as a Lender
By:_______________________________________________
Name:__________________________________________
Title:_________________________________________
By:_______________________________________________
Name:__________________________________________
Title:_________________________________________
PINEHURST TRADING, INC., as a Lender
By:_______________________________________________
Name:__________________________________________
Title:_________________________________________
PNC BANK, NATIONAL ASSOCIATION, as a Lender
By:_______________________________________________
Name:__________________________________________
Title:_________________________________________
SOCIETE GENERALE, as a Lender
By:_______________________________________________
Name:__________________________________________
Title:_________________________________________
SUNTRUST BANK, CENTRAL FLORIDA, N.A., as a Lender
By:_______________________________________________
Name:__________________________________________
Title:_________________________________________
TRANSAMERICA LIFE INSURANCE AND ANNUITY COMPANY, as a Lender
By:_______________________________________________
Name:___________________________________________
Title:__________________________________________
UNION BANK OF CALIFORNIA, N.A., as a Lender
By:_______________________________________________
Name:__________________________________________
Title:_________________________________________
VAN KAMPEN PRIME RATE INCOME TRUST, as a Lender
By:_______________________________________________
Name:__________________________________________
Title:_________________________________________
Exhibit 10.21
INSIGHT MIDWEST, L.P.
INSIGHT CAPITAL, INC.
SERIES A AND SERIES B
9 3/4% SENIOR NOTES DUE 2009
INDENTURE
Dated as of October 1, 1999
HARRIS TRUST COMPANY OF NEW YORK
Trustee
Trust Indenture
Act Section Indenture Section
310(a) (1)...................................... 7.10
(a)(2)...................................... 7.10
(a)(3)...................................... N.A.
(a)(4)...................................... N.A.
(a)(5)...................................... 7.10
(b)......................................... 7.10
(c)......................................... N.A.
311 (a)......................................... 7.11
(b)......................................... 7.11
(c)......................................... N.A.
312 (a)......................................... 2.05
(b)......................................... 10.03
(c)......................................... 10.03
313 (a)......................................... 7.06
(b)(2)...................................... 7.07
(c)......................................... 7.06;10.02
(d)......................................... 7.06
314 (a)......................................... 4.03;10.02
(c)(1)...................................... 10.04
(c)(2)...................................... 10.04
(c)(3)...................................... N.A.
(e)......................................... 10.05
(f)......................................... N.A.
315 (a)......................................... 7.01
(b)......................................... 7.05,10.02
(c)......................................... 7.01
(d)......................................... 7.01
(e)......................................... 6.11
316 (a) (last sentence)......................... 2.09
(a)(1)(A)................................... 6.05
(a)(1)(B)................................... 6.04
(a)(2)...................................... N.A.
(b)......................................... 6.07
(c)......................................... 2.12
317 (a)(1)...................................... 6.08
(a)(2)...................................... 6.09
(b)......................................... 2.04
318 (a)......................................... 10.01
(b)......................................... N.A.
(c)......................................... 10.01
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N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions................................................... ................................1
Section 1.02. Other Definitions.............................................................................16
Section 1.03. Incorporation by Reference of Trust Indenture Act.............................................16
Section 1.04. Rules of Construction.........................................................................17
ARTICLE 2.
THE NOTES
Section 2.01. Form and Dating...............................................................................17
Section 2.02. Execution and Authentication..................................................................18
Section 2.03. Registrar and Paying Agent....................................................................19
Section 2.04. Paying Agent to Hold Money in Trust...........................................................19
Section 2.05. Holder Lists..................................................................................19
Section 2.06. Transfer and Exchange.........................................................................19
Section 2.07. Replacement Notes.............................................................................31
Section 2.08. Outstanding Notes.............................................................................31
Section 2.09. Treasury Notes................................................................................31
Section 2.10. Temporary Notes...............................................................................32
Section 2.11. Cancellation..................................................................................32
Section 2.12. Defaulted Interest............................................................................32
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee............................................................................32
Section 3.02. Selection of Notes to Be Redeemed.............................................................32
Section 3.03. Notice of Redemption..........................................................................33
Section 3.04. Effect of Notice of Redemption................................................................34
Section 3.05. Deposit of Redemption Price...................................................................34
Section 3.06. Notes Redeemed in Part........................................................................34
Section 3.07. Optional Redemption...........................................................................34
Section 3.08. Mandatory Redemption..........................................................................35
Section 3.09. Offer to Purchase by Application of Excess Proceeds...........................................35
ARTICLE 4.
COVENANTS
Section 4.01. Payment of Notes..............................................................................36
Section 4.02. Maintenance of Office or Agency...............................................................37
Section 4.03. Reports.......................................................................................37
Section 4.04. Compliance Certificate........................................................................38
Section 4.05. Taxes.........................................................................................38
Section 4.06. Stay, Extension and Usury Laws................................................................38
Section 4.07. Restricted Payments...........................................................................39
Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries................................40
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock....................................41
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Section 4.10. Asset Sales...................................................................................43
Section 4.11. Transactions with Affiliates..................................................................45
Section 4.12. Liens.........................................................................................45
Section 4.13. Designation of Restricted and Unrestricted Subsidiaries.......................................45
Section 4.14. Corporate Existence...........................................................................46
Section 4.15. Offer to Repurchase Upon Change of Control....................................................46
Section 4.16. Limitation on Sale and Leaseback Transactions.................................................47
Section 4.17. Payments for Consent..........................................................................47
Section 4.18. Restrictions on Activities of Insight Capital.................................................47
ARTICLE 5.
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets......................................................48
Section 5.02. Successor Corporation Substituted.............................................................48
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.............................................................................48
Section 6.02. Acceleration..................................................................................50
Section 6.03. Other Remedies................................................................................51
Section 6.04. Waiver of Past Defaults.......................................................................51
Section 6.05. Control by Majority...........................................................................51
Section 6.06. Limitation on Suits...........................................................................51
Section 6.07. Rights of Holders of Notes to Receive Payment.................................................52
Section 6.08. Collection Suit by Trustee....................................................................52
Section 6.09. Trustee May File Proofs of Claim..............................................................52
Section 6.10. Priorities....................................................................................52
Section 6.11. Undertaking for Costs.........................................................................53
ARTICLE 7.
TRUSTEE
Section 7.01. Duties of Trustee.............................................................................53
Section 7.02. Rights of Trustee.............................................................................54
Section 7.03. Individual Rights of Trustee..................................................................54
Section 7.04. Trustee's Disclaimer..........................................................................55
Section 7.05. Notice of Defaults............................................................................55
Section 7.06. Reports by Trustee to Holders of the Notes....................................................55
Section 7.07. Compensation and Indemnity....................................................................55
Section 7.08. Replacement of Trustee........................................................................56
Section 7.09. Successor Trustee by Merger, etc..............................................................57
Section 7.10. Eligibility; Disqualification.................................................................57
Section 7.11. Preferential Collection of Claims Against the Issuers.........................................57
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance......................................57
Section 8.02. Legal Defeasance and Discharge................................................................57
Section 8.03. Covenant Defeasance...........................................................................58
Section 8.04. Conditions to Legal or Covenant Defeasance....................................................58
Section 8.05. Deposited Money and Government Securities to be Held in Trust; Other
Miscellaneous Provisions.....................................................................59
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Section 8.06. Repayment to the Issuers......................................................................60
Section 8.07. Reinstatement.................................................................................60
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes...........................................................60
Section 9.02. With Consent of Holders of Notes..............................................................61
Section 9.03. Compliance with Trust Indenture Act...........................................................62
Section 9.04. Revocation and Effect of Consents.............................................................62
Section 9.05. Notation on or Exchange of Notes..............................................................63
Section 9.06. Trustee to Sign Amendments, etc...............................................................63
ARTICLE 10.
MISCELLANEOUS
Section 10.01. Trust Indenture Act Controls..................................................................63
Section 10.02. Notices.......................................................................................63
Section 10.03. Communication by Holders of Notes with Other Holders of Notes.................................64
Section 10.04. Certificate and Opinion as to Conditions Precedent............................................64
Section 10.05. Statements Required in Certificate or Opinion.................................................65
Section 10.06. Rules by Trustee and Agents...................................................................65
Section 10.07. No Personal Liability of Directors, Officers, Employees and Stockholders......................65
Section 10.08. Governing Law.................................................................................65
Section 10.09. No Adverse Interpretation of Other Agreements.................................................66
Section 10.10. Successors....................................................................................66
Section 10.11. Severability..................................................................................66
Section 10.12. Counterpart Originals.........................................................................66
Section 10.13. Table of Contents, Headings, etc..............................................................66
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EXHIBITS
Exhibit A1 FORM OF NOTE
Exhibit A2 FORM OF REGULATION S TEMPORARY GLOBAL NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
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INDENTURE dated as of October 1, 1999 among Insight Midwest, L.P., a
Delaware limited partnership (the "Company"), Insight Capital, Inc., a Delaware
corporation ("Insight Capital" and, together with the Company, the "Issuers"),
and Harris Trust Company of New York, as trustee (the "Trustee").
The Issuers and the Trustee agree as follows for the benefit of each other
and for the equal and ratable benefit of the Holders of the 9 3/4 % Series A
Senior Notes due 2009 (the "Series A Notes") and the 9 3/4 % Series B Senior
Notes due 2009 (the "Series B Notes" and, together with the Series A Notes, the
"Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.
"144A Global Note" means a global note substantially in the form of Exhibit
A1 hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee, which Global Note will be issued in a denomination equal to the
outstanding principal amount of the Notes sold in reliance on Rule 144A.
"Acquired Debt" means, with respect to any specified Person, (1)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, whether or
not such Indebtedness is incurred in connection with, or in contemplation of,
such other Person merging with or into, or becoming a Subsidiary of, such
specified Person and (2) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.
"Additional Notes" means up to $200.0 million aggregate principal amount of
Notes (other than the Initial Notes) issued under this Indenture in accordance
with Sections 2.02 and 4.09 hereof, as part of the same series as the Initial
Notes.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided, that beneficial ownership of more than 10% of
the Voting Stock of a Person shall be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" shall have correlative meanings.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Amended Indiana Credit Facility" means that certain credit agreement, dated
as of October 30, 1998, by and among Insight Communications of Indiana, LLC, The
Bank of New York, as administrative agent, and the other lenders party thereto,
as amended by Amendment No.1 dated as of September 24, 1999, and as the same may
hereafter be further amended, supplemented or revised in accordance with its
terms and all other loan documents, including the security agreement, delivered
pursuant thereto.
"Amended Kentucky Credit Facility" means the Amended and Restated Revolving
Credit and Term Loan Agreement dated as of October 1, 1999, among Insight
Kentucky Partners I, L.P. (f/k/a
InterMedia Partners VI, L.P.), Toronto Dominion (Texas), Inc., as administrative
agent, and the other lenders party thereto.
"Applicable Procedures" means, with respect to any transfer or exchange of
or for beneficial interests in any Global Note, the rules and procedures of the
Depositary, Euroclear and Cedel that apply to such transfer or exchange.
"Asset Acquisition" means (a) an Investment by the Issuers or any Restricted
Subsidiary in any other Person pursuant to which such Person shall become a
Restricted Subsidiary or shall be consolidated or merged with or into the
Issuers or any Restricted Subsidiary or (b) any acquisition by the Issuers or
any Restricted Subsidiary of the assets of any Person that constitute
substantially all of an operating unit, a division or line of business of such
Person or that is otherwise outside of the ordinary course of business.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any assets or
rights, other than sales of inventory in the ordinary course of business;
provided that the sale, conveyance or other disposition of all or substantially
all of the assets of the Issuers and their Subsidiaries taken as a whole will be
governed by the provisions of Section 4.15 and/or Section 5.01 hereof and not by
the provisions of Section 4.10 hereof; and
(2) the issuance of Equity Interests in any of the Issuers' Restricted
Subsidiaries or the sale of Equity Interests in any of their Subsidiaries.
Notwithstanding the preceding, the following items shall not be deemed to be
Asset Sales:
(1) any single transaction or series of related transactions that
involves assets having a fair market value (as determined by the Board of
Directors and evidenced by a resolution of the Board of Directors) of less than
$5.0 million;
(2) a transfer of assets between or among the Issuers and their Wholly
Owned Restricted Subsidiaries;
(3) an issuance of Equity Interests by a Wholly Owned Restricted
Subsidiary to the Issuers or to another Wholly Owned Restricted Subsidiary;
(4) the sale or lease of equipment, inventory, accounts receivable or
other assets in the ordinary course of business;
(5) the sale or other disposition of cash or Cash Equivalents;
(6) a Restricted Payment or Permitted Investment that is permitted by
Section 4.07 hereof; and
(7) the incurrence of Permitted Liens and the disposition of assets
related to such Permitted Liens by the secured party pursuant to a foreclosure.
"Asset Swap" means an exchange of assets by the Issuers or a Restricted
Subsidiary of the Issuers for: (1) one or more Permitted Businesses; (2) a
controlling equity interest in any Person whose assets consist primarily of one
or more Permitted Businesses; and/or (3) long-term assets that are used in a
Permitted Business in a like-kind exchange pursuant to Section 1031 of the
Internal Revenue Code or any similar or successor provision of the Internal
Revenue Code.
"Attributable Debt" in respect of a sale and leaseback transaction means, at
the time of determination, the present value of the obligation of the lessee for
net rental payments during the remaining term of the lease included in such sale
and leaseback transaction including any period for which such lease has been
extended or may, at the option of the lessor, be extended. Such present value
shall be calculated using a discount rate equal to the rate of interest implicit
in such transaction, determined in accordance with GAAP.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state
law for the relief of debtors.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" shall be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" shall have a corresponding meaning.
"Board of Directors" means: (1) with respect to a corporation, the board of
directors of the corporation; (2) with respect to a partnership, the board of
directors of the general partner of the partnership; (3) with respect to the
Company at the option of the Issuers, the board of directors of Insight
Communications or the Advisory Committee of the Company; and (4) with respect to
any other Person, the board or committee of such Person serving a similar
function.
"Broker-Dealer" has the meaning set forth in the Registration Rights
Agreement.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means: (1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock; (3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and (4) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person.
"Capital Stock Sale Proceeds" means the aggregate net cash proceeds
(including the fair market value of the non-cash proceeds, as determined by an
independent appraisal firm), received by the Company after the date of the
indenture: (x) as a contribution to the common equity capital or from the issue
or sale of Equity Interests of the Company (other than Disqualified Stock); or
(y) from the issue or sale of convertible or exchangeable Disqualified Stock or
convertible or exchangeable debt securities of the Company that have been
converted into or exchanged for such Equity Interests, other than Equity
Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the
Company.
"Cash Equivalents" means (1) United States dollars; (2) securities issued or
directly and fully guaranteed or insured by the United States government or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States is pledged in support thereof) having maturities of not more
than one year from the date of acquisition; (3) certificates of deposit and
eurodollar time deposits with maturities of one year or less from the date of
acquisition, bankers' acceptances with maturities not exceeding one year and
overnight bank deposits, in each case, with any lender party to the Credit
Agreement or with any domestic commercial bank having capital and surplus in
excess of $500.0 million and a Thomson Bank Watch Rating of "B" or better; (4)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (2) and (3) above entered into with
any financial institution meeting the qualifications specified in clause (3)
above; (5) commercial paper having the highest rating obtainable from Moody's
Investors Service, Inc. or Standard & Poor's Rating Services and in each case
maturing within one year after the date of acquisition; and (6) money market
funds having assets in excess of $100.0 million, at least 90% of the assets of
which constitute Cash Equivalents of the kinds described in clauses (1) through
(5) of this definition.
"Cedel" means Cedel Bank, SA.
"Change of Control" means the occurrence of any of the following: (1) the
direct or indirect sale, transfer, conveyance or other disposition (other than
by way of merger or consolidation), in one or a series of related transactions,
of all or substantially all of the properties or assets of the Issuers and their
Restricted Subsidiaries, taken as a whole, to any "person" (as that term is used
in Section 13(d)(3) of the Exchange Act) other than a Principal or a Permitted
Holder and its Related Parties; (2) the adoption of a plan relating to the
liquidation or dissolution of the Company; (3) the consummation of any
transaction (including, without limitation, any merger or consolidation) the
result of which is that any "person" (as defined above), other than the
Principals and/or one or more of the Permitted Holders and their Related
Parties, becomes the Beneficial Owner, directly or indirectly, of more than 50%
of the Voting Stock of the Company, measured by voting power rather than number
of shares; (4) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above) other than a Permitted Holder and its Related
Parties, becomes the Beneficial Owner, directly or indirectly, of more than 50%
of the Voting Stock of Insight Communications, measured by voting power rather
than number of shares; (5) during any consecutive two-year period, the first day
on which individuals who constituted the Board of Directors of Insight
Communications as of the beginning of such two-year period (together with any
new directors who were nominated for election or elected to such Board of
Directors with the approval of a majority of the individuals who were members of
such Board of Directors, or whose nomination or election was previously so
approved at the beginning of such two-year period) cease to constitute a
majority of the Board of Directors of Insight Communications; or (6) Insight
Communications consolidates with, or merges with or into, any Person, or any
Person consolidates with, or merges with or into, Insight Communications, in any
such event pursuant to a transaction in which any of the outstanding Voting
Stock of Insight Communications or such other Person is converted into or
exchanged for cash, securities or other property, other than any such
transaction where the Voting Stock of Insight Communications outstanding
immediately prior to such transaction is converted into or exchanged for Voting
Stock (other than Disqualified Stock) of the surviving or transferee Person
constituting a majority of the outstanding shares of such Voting Stock of such
surviving or transferee Person (immediately after giving effect to such
issuance).
"Common Stock" of any Person means all Capital Stock of such Person that is
generally entitled to (1) vote in the election of directors of such Person or
(2) if such Person is not a corporation, vote or otherwise participate in the
selection of the governing body, partners, managers or others that will control
the management and policies of such Person.
"Company" means Insight Midwest, L.P., a Delaware limited partnership, and
any and all successors thereto.
"Consolidated Cash Flow" means, with respect to any specified Person for any
period, the Consolidated Net Income of such Person for such period plus: (1) an
amount equal to any extraordinary loss plus any net loss realized by such Person
or any of its Restricted Subsidiaries in connection with an Asset Sale, to the
extent such losses were deducted in computing such Consolidated Net Income; plus
(2) provision for taxes based on income or profits of such Person and its
Restricted Subsidiaries for such period, to the extent that such provision for
taxes was deducted in computing such Consolidated Net Income; plus (3)
consolidated interest expense of such Person and its Restricted Subsidiaries for
such period, whether paid or accrued and whether or not capitalized (including,
without limitation, amortization of debt issuance costs and original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings, and net of the effect of all
payments made or received pursuant to Hedging Obligations), to the extent that
any such expense was deducted in computing such Consolidated Net Income; plus
(4) depreciation, amortization (including amortization of goodwill and other
intangibles) and other non-cash expenses (excluding any such non-cash expense to
the extent that it represents an accrual of or reserve for cash expenses in any
future period) of such Person and its Restricted Subsidiaries for such period to
the extent that such depreciation, amortization and other non-cash expenses were
deducted in computing such Consolidated Net Income; minus (5) non-cash items
increasing such Consolidated Net Income (including the partial or entire
reversal of reserves taken in prior periods) for such period, other than the
accrual of revenue in the ordinary course of business, in each case, on a
consolidated basis and determined in accordance with GAAP. Notwithstanding the
preceding, the provision for taxes based on the income or profits of, and the
depreciation and amortization and other non-cash charges of, a Restricted
Subsidiary of the Issuers shall be added to Consolidated Net Income to compute
Consolidated Cash Flow of the Issuers only to the extent that a corresponding
amount would be permitted at the date of determination to be dividend to the
Issuers by such Restricted Subsidiary without prior approval (that has not been
obtained), pursuant to the terms of its charter and all agreements, instruments,
judgments, decrees, orders, statutes, rules and governmental regulations
applicable to that Subsidiary or its stockholders.
"Consolidated Indebtedness" means, with respect to any Person as of any date
of determination, the sum, without duplication, of (i) the total amount of
Indebtedness of such Person and its Restricted Subsidiaries, plus (ii) the total
amount of Indebtedness of any other Person, to the extent that such Indebtedness
has been Guaranteed by the referent Person or one or more of its Restricted
Subsidiaries, plus (iii) the aggregate liquidation value of all Disqualified
Stock of such Person and all preferred stock of Restricted Subsidiaries of such
Person, in each case, determined on a consolidated basis in accordance with
GAAP.
"Consolidated Interest Expense" means, with respect to any Person for any
period, without duplication, the sum of (i) the consolidated interest expense of
such Person and its Restricted Subsidiaries for such period, whether paid or
accrued (including, without limitation, amortization of original issue discount,
non-cash interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with Capital
Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings), all calculated after taking into
account the effect of all Hedging Obligations, and (ii) the consolidated
interest expense of such Person and its Restricted Subsidiaries that was
capitalized during such period, and (iii) any interest expense on Indebtedness
of another Person that is guaranteed by such Person or one of its Restricted
Subsidiaries or secured by a Lien on assets of such Person or one of its
Restricted Subsidiaries (whether or not such Guarantee or Lien is called upon)
and (iv) the product of (a) all dividend payments on any series of preferred
stock of such Person or any of its Restricted Subsidiaries, times (b) a
fraction, the numerator of which is one and the denominator of which is one
minus the then current combined federal, state and local statutory tax rate of
such Person, expressed as a decimal, in each case, on a consolidated basis and
in accordance with GAAP.
"Consolidated Net Income" means, with respect to any specified Person for
any period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that: (1) the Net Income (but not loss) of any Person that
is not a Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the specified Person or a Wholly Owned Restricted
Subsidiary thereof; (2) the Net Income of any Restricted Subsidiary shall be
excluded to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at the
date of determination permitted without any prior governmental approval (that
has not been obtained) or, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Subsidiary or its stockholders;
(3) the Net Income of any Person acquired in a pooling of interests transaction
for any period prior to the date of such acquisition shall be excluded; (4) the
cumulative effect of a change in accounting principles shall be excluded; and
(5) the Net Income (but not loss) of any Unrestricted Subsidiary shall be
excluded, whether or not distributed to the specified Person or one of its
Subsidiaries, except for purposes of the provisions in Section 4.07 and 4.09
hereof, in which case the Net Income of any Unrestricted Subsidiary will be
included to the extent it would otherwise be included under clause (1) of this
definition.
"Continuing Directors" means, as of any date of determination, any member of
the Board of Directors who (i) was a member of such Board of Directors on the
date of this Indenture or (ii) was nominated for election or elected to such
Board of Directors with the approval of a majority of the Continuing Directors
who were members of such Board at the time of such nomination or election.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 10.02 hereof or such other address as to which the
Trustee may give notice to the Issuers.
"Credit Facilities" means, one or more debt facilities (including, without
limitation, the Amended Kentucky Credit Facility and the Amended Indiana Credit
Facility) or commercial paper facilities, in each case with banks or other
institutional lenders providing for revolving credit loans, term loans,
receivables financing (including through the sale of receivables to such lenders
or to special purpose entities formed to borrow from such lenders against such
receivables) or letters of credit, in each case, as amended, restated, modified,
renewed, refunded, replaced or refinanced in whole or in part from time to time.
"Custodian" means the Trustee, as custodian with respect to the Notes in
global form, or any successor entity thereto.
"Debt to Cash Flow Ratio" means, as of any date of determination (the
"Determination Date"), the ratio of (a) the Consolidated Indebtedness of the
Issuers as of such Determination Date to (b) four times the Consolidated Cash
Flow of the Issuers for the most recent full fiscal quarter ending immediately
prior to such Determination Date for which internal financial statements are
available (the "Measurement Period"), determined on a pro forma basis after
giving effect to all acquisitions or dispositions of assets made by the Issuers
and their Subsidiaries from the beginning of such quarter through and including
such Determination Date (including any related financing transactions) as if
such acquisitions and dispositions had occurred at the beginning of such
quarter. For purposes of calculating Consolidated Cash Flow for the Measurement
Period immediately prior to the relevant Determination Date, (i) any Person that
is a Restricted Subsidiary on the Determination Date (or would become a
Restricted Subsidiary on such Determination Date in connection with the
transaction that requires the determination of such Consolidated Cash Flow) will
be deemed to have been a Restricted Subsidiary at all times during the
Measurement Period; (ii) any Person that is not a Restricted Subsidiary on such
Determination Date (or would cease to be a Restricted Subsidiary on such
Determination Date in connection with the transaction that requires the
determination of such Consolidated Cash Flow) will be deemed not to have been a
Restricted Subsidiary at any time during such Measurement Period; and (iii) if
the Issuers or any Restricted Subsidiary shall have in any manner (x) acquired
(including through an Asset Acquisition or the commencement of activities
constituting such operating business) or (y) disposed of (including by way of an
Asset Sale or the termination or discontinuance of activities constituting such
operating business) any operating business during such Measurement Period or
after the end of such period and on or prior to such Determination Date, such
calculation will be made on a pro forma basis in accordance with generally
accepted accounting principles consistently applied, as if, in the case of an
Asset Acquisition or the commencement of activities constituting such operating
business, all such transactions had been consummated on the first day of such
Measurement Period, and, in the case of an Asset Sale or termination or
discontinuance of activities constituting such operating business, all such
transactions had been consummated prior to the first day of such Measurement
Period.
"Default" means any event that is, or with the passage of time or the giving
of notice or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the name of the
Holder thereof and issued in accordance with Section 2.06 hereof, substantially
in the form of Exhibit A1 hereto except that such Note shall not bear the Global
Note Legend and shall not have the "Schedule of Exchanges of Interests in the
Global Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in whole or
in part in global form, the Person specified in Section 2.03 hereof as the
Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date that is 91 days after the
date on which the notes mature. Notwithstanding the preceding sentence, any
Capital Stock that would constitute Disqualified Stock solely because the
holders thereof have the right to require the Issuers to repurchase such Capital
Stock upon the occurrence of a change of control or an asset sale shall not
constitute Disqualified Stock if the terms of such Capital Stock provide that
the Issuers may not repurchase or redeem any such Capital Stock pursuant to such
provisions unless such repurchase or redemption complies with Section 4.07
hereof.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means an offering by a Person of its shares of Equity
Interests (other than Disqualified Stock) however designated and whether voting
or non-voting, and any and all rights, warrants or options to acquire such
Equity Interests (other than Disqualified Stock).
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the Notes issued in the Exchange Offer pursuant to
Section 2.06(f) hereof.
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
"Existing Indebtedness" means up to $10.0 million in aggregate principal
amount of Indebtedness of the Issuers and their Subsidiaries (other than
Indebtedness under the Amended Kentucky Credit Facility and the Amended Indiana
Credit Facility) in existence on the date hereof, until such amounts are repaid.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date of this Indenture.
"Global Notes" means, individually and collectively, each of the Restricted
Global Notes and the Unrestricted Global Notes, substantially in the form of
Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(iv),
2.06(d)(ii) or 2.06(f) hereof.
"Global Note Legend" means the legend set forth in Section 2.06(g)(ii),
which is required to be placed on all Global Notes issued under this Indenture.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person under: (1) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements; and (2) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates.
"Holder" means a Person in whose name a Note is registered.
"IAI Global Note" means the global Note substantially in the form of Exhibit
A1 hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold to Institutional Accredited Investors.
"Indebtedness" means, with respect to any specified Person, any indebtedness
of such Person, whether or not contingent, in respect of: (1) borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof); (3) banker's
acceptances; (4) representing Capital Lease Obligations of such Person and all
Attributable Debt in respect of sale and leaseback transactions entered into by
such Person; (5) the balance deferred and unpaid of the purchase price of any
property, except any such balance that constitutes an accrued expense or trade
payable; or (6) representing any Hedging Obligations, if and to the extent any
of the preceding items (other than letters of credit and Hedging Obligations)
would appear as a liability upon a balance sheet of the specified Person
prepared in accordance with GAAP. In addition, the term "Indebtedness" includes
all Indebtedness of others secured by a Lien on any asset of the specified
Person (whether or not such Indebtedness is assumed by the specified Person)
and, to the extent not otherwise included, the Guarantee by the specified Person
of any indebtedness of any other Person. The amount of any Indebtedness
outstanding as of any date shall be: (1) the accreted value thereof, in the case
of any Indebtedness issued with original issue discount; and (2) the principal
amount thereof, together with any interest thereon that is more than 30 days
past due, in the case of any other Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time to
time.
"Indirect Participant" means a Person who holds a beneficial interest in a
Global Note through a Participant.
"Initial Notes" means the first $200.0 million aggregate principal amount of
Notes issued under this Indenture on the date hereof.
"Insight Communications" means Insight Communications Company, Inc.
"Insight Indiana" means Insight Communications of Indiana, LLC.
"Insight Kentucky" means Insight Communications of Kentucky, L.P.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
"Investments" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or other obligations), advances or capital
contributions (excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP and include the
designation of a Restricted Subsidiary as an Unrestricted Subsidiary. If the
Issuers or any Restricted Subsidiary of the Issuers sells or otherwise disposes
of any Equity Interests of any direct or indirect Restricted Subsidiary of the
Issuers such that, after giving effect to any such sale or disposition, such
Person is no longer a Subsidiary of the Issuers, the Issuers shall be deemed to
have made an Investment on the date of any such sale or disposition equal to the
fair market value of the Equity Interests of such Subsidiary not sold or
disposed of in an amount determined as provided in the final paragraph of
Section 4.07 hereof. The acquisition by the Issuers or any Restricted Subsidiary
of the Issuers of a Person that holds an Investment in a third Person shall be
deemed to be an Investment by the Issuers or such Restricted Subsidiary in such
third Person in an amount equal to the fair market value of the Investment held
by the acquired Person in such third Person in an amount determined as provided
in the final paragraph of Section 4.07 hereof.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on
the next succeeding day that is not a Legal Holiday, and no interest shall
accrue on such payment for the intervening period.
"Letter of Transmittal" means the letter of transmittal to be prepared by
the Issuers and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest, hypothecation, assignment for security or encumbrance of any
kind in respect of such asset, whether or not filed, recorded or otherwise
perfected under applicable law, including any conditional sale or capital lease
or other title retention agreement, any lease in the nature thereof, any option
or other agreement to sell or give a security interest in and any filing of or
agreement to give any financing statement under the Uniform Commercial Code (or
equivalent statutes) of any jurisdiction.
"Liquidated Damages" means all liquidated damages then owing pursuant to
Section 5 of the Registration Rights Agreement.
"Management Agreements" means the management agreements between Insight
Communications Company, L.P. and each of Insight Indiana and Insight Kentucky
Partners II, L.P., as each is in effect on the date hereof.
"Net Income" means, with respect to any specified Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however: (1) any
gain (but not loss), together with any related provision for taxes on such gain
(but not loss), realized in connection with: (a) any Asset Sale; or (b) the
disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries; and (2) any extraordinary gain (but not loss),
together with any related provision for taxes on such extraordinary gain (but
not loss).
"Net Proceeds" means the aggregate cash proceeds received by the Issuers or
any of their Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of: (1) all legal, title
and recording tax expenses, commissions and other fees and expenses incurred,
and all Federal, state, provincial, foreign and local taxes required to be paid
or accrued as a liability under GAAP, as a consequence of such Asset Sale; (2)
all payments made on any indebtedness which is secured by any assets subject to
such Asset Sale, in accordance with the terms of any Lien upon or other security
arrangement of any kind with respect to such assets, or which must by its terms,
or in order to obtain a necessary consent to such Asset Sale, or by applicable
law, be repaid out of the proceeds from such Asset Sale; (3) all distributions
and other payments required to be made to minority interest holders in
Restricted Subsidiaries or joint ventures as a result of such Asset Sale; and
(4) the deduction of appropriate amounts to be provided by the seller as a
reserve, in accordance with GAAP, against any liabilities associated with the
assets disposed of in such Asset Sale and retained by the Issuers or any
Restricted Subsidiary after such Asset Sale.
"Non-Recourse Debt" means Indebtedness: (1) as to which neither the Issuers
nor any of their Restricted Subsidiaries (a) provides credit support of any kind
(including any undertaking, agreement or instrument that would constitute
Indebtedness), (b) is directly or indirectly liable as a guarantor or otherwise,
or (c) constitutes the lender; (2) no default with respect to which (including
any rights that the holders thereof may have to take enforcement action against
an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any
holder of any other Indebtedness (other than the Notes) of the Issuers or any of
their Restricted Subsidiaries to declare a default on such other Indebtedness or
cause the payment thereof to be accelerated or payable prior to its stated
maturity; and (3) as to which the lenders have been notified in writing that
they will not have any recourse to the stock or assets of the Issuers or any of
their Restricted Subsidiaries.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Notes" has the meaning assigned to it in the preamble to this Indenture.
The Initial Notes and the Additional Notes shall be treated as a single class
for all purposes under this Indenture.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officer" means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of each Issuer
by the principal executive officer, the principal financial officer, the
treasurer or the principal accounting officer of each Issuer, that meets the
requirements of Section 10.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Section 10.05 hereof.
The counsel may be an employee of or counsel to the Issuers, any Subsidiary of
the Issuers or the Trustee.
"Participant" means, with respect to the Depositary, Euroclear or Cedel, a
Person who has an account with the Depositary, Euroclear or Cedel, respectively
(and, with respect to DTC, shall include Euroclear and Cedel).
"Partnership Agreement" means the limited partnership agreement of Insight
Midwest, L.P., dated October 1, 1999.
"Permitted Business" means a cable television, media and communications,
entertainment, telecommunications or data transmission business, businesses
ancillary, complementary or reasonably related thereto and reasonable extensions
thereof.
"Permitted Holders" means Sidney R. Knafel, Michael S. Willner and Kim D.
Kelly.
"Permitted Investments" means: (1) any Investment in the Issuers or in a
Restricted Subsidiary of an Issuer; (2) any Investment in Cash Equivalents; (3)
any Investment by the Issuers or any Subsidiary of an Issuer in a Person, if as
a result of such Investment: (a) such Person becomes a Restricted Subsidiary of
an Issuer; or (b) such Person is merged, consolidated or amalgamated with or
into, or transfers or conveys substantially all of its assets to, or is
liquidated into, an Issuer or a Restricted Subsidiary of an Issuer; provided
that such Person's primary business is a Permitted Business; (4) any Investment
made as a result of the receipt of non-cash consideration from an Asset Sale
that was made pursuant to and in compliance Section 4.10 hereof; (5) any
Investment in prepaid expenses, negotiable instruments held for collection and
lease, utility and workers' compensation, performance and other similar
deposits; (6) Investments made out of the net cash proceeds of the issue and
sale (other than to a Subsidiary of the Company) of Equity Interests (other than
Disqualified Stock) of the Company, to the extent that: (a) such net cash
proceeds have not been applied to make a Restricted Payment or to effect other
transactions pursuant to Section 4.07 hereof; or (b) such net cash proceeds have
not been used to incur Indebtedness pursuant to clause (8) of Section 4.09
hereof; (7) the extension of credit to vendors, suppliers and customers in the
ordinary course of business; (8) any Investment existing as of the date hereof,
and any amendment, modification, extension or renewal thereof to the extent such
amendment, modification, extension or renewal does not require an Issuer or any
Restricted Subsidiary to make any additional cash or non-cash payments or
provide additional services in connection therewith; (9) any acquisition of
assets solely in exchange for the issuance of Equity Interests (other than
Disqualified Stock) of an Issuer; (10) Hedging Obligations; (11) loans and
advances to officers, directors and employees of the Issuers and the Restricted
Subsidiaries for business-related travel expenses, moving expenses and other
similar expenses in each case incurred in the ordinary course of business not to
exceed $1.0 million outstanding at any time; and (12) other Investments in any
Person, other than Insight Communications or an Affiliate of Insight
Communications that is not also a Subsidiary of an Issuer, having an aggregate
fair market value (measured on the date each such Investment was made and
without giving effect to subsequent changes in value), when taken together with
all other Investments made pursuant to this clause (12) since the date of the
indenture not to exceed $50.0 million.
"Permitted Lien" means: (1) Liens securing Indebtedness and other
Obligations under Credit Facilities that was permitted by the terms of this
Indenture to be incurred; (2) Liens in favor of the Issuers or a Restricted
Subsidiary; (3) Liens on property or assets, or any shares of Capital Stock or
secured indebtedness of a Person existing at the time such Person is merged with
or into or consolidated with an Issuer or any Restricted Subsidiary of an
Issuer; provided that such Liens were in existence prior to the contemplation of
such merger or consolidation and do not extend to any assets other than those of
the Person merged into or consolidated with the Issuer or the Restricted
Subsidiary; (4) Liens on property existing at the time of acquisition thereof by
the Issuers or any Restricted Subsidiary of an Issuer, provided that such Liens
were in existence prior to the contemplation of such acquisition; (5) Liens to
secure the performance of statutory obligations, surety or appeal bonds,
performance bonds or other obligations of a like nature incurred in the ordinary
course of business; (6) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by clause (4) of the second paragraph of Section 4.09
hereof covering only the assets acquired with such Indebtedness; (7) Liens
existing on the date hereof; (8) Liens for taxes, assessments or governmental
charges or claims that are not yet delinquent or that are being contested in
good faith by appropriate proceedings promptly instituted and diligently
concluded, provided that any reserve or other appropriate provision as shall be
required in conformity with GAAP shall have been made therefor; (9) Liens
securing Permitted Refinancing Indebtedness; provided that any such Lien does
not extend to or cover any property, Capital Stock or Indebtedness other than
the property, shares or debt securing the Indebtedness so refunded, refinanced
or extended; (10) statutory liens or landlords', carriers', warehouseman's,
mechanics', suppliers', materialmen's, repairmen's or other like Liens arising
in the ordinary course of business which do not secure any Indebtedness and with
respect to amounts not yet delinquent or being contested in good faith by
appropriate proceedings, if a reserve or other appropriate provision, if any, as
shall be required in conformity with GAAP shall have been made therefor; (11)
easements, rights-of-way, zoning restrictions and other similar charges or
encumbrances in respect of real property not interfering in any material respect
with the ordinary conduct of the business of the Issuers or any of their
Restricted Subsidiaries; (12) attachment or judgment Liens not giving rise to a
Default or an Event of Default; (13) Liens incurred or deposits made in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security; (14) Liens incurred
or deposits made to secure the performance of tenders, bids, leases, statutory
or regulatory obligations, bankers' acceptance, surety and appeal bonds,
government contracts, performance and return-of-money bonds and other
obligations of a similar nature incurred in the ordinary course of business,
exclusive of obligations for the payment of borrowed money; (15) Liens of
franchisors or other regulatory bodies arising in the ordinary course of
business; (16) Liens arising from filing Uniform Commercial Code financing
statements regarding leases or other Uniform Commercial Code financing
statements for precautionary purposes relating to arrangements not constituting
Indebtedness; (17) Liens securing reimbursement obligations with respect to
letters of credit that encumber documents and other property relating to such
letters of credit and the products and proceeds thereof; (18) Liens encumbering
customary initial deposits and margin deposits, and other Liens that are within
the general parameters customary in the industry and incurred in the ordinary
course of business, in each case, securing Indebtedness under Hedging
Obligations and forward contracts, options, future contracts, future options or
similar agreements or arrangements designed solely to protect the Issuers or any
of their Restricted Subsidiaries from fluctuations in interest rates, currencies
or the price of commodities; (19) Liens consisting of any interest or title of a
licensor in the property subject to a license; (20) Liens on the Capital Stock
of Unrestricted Subsidiaries; (21) Liens arising from sales or other transfers
of accounts receivable which are past due or otherwise doubtful of collection in
the ordinary course of business; (22) any extensions, substitutions,
replacements or renewals of the foregoing; and (23) Liens incurred in the
ordinary course of business of the Issuers or any Restricted Subsidiary with
respect to obligations that do not exceed $20.0 million at any one time
outstanding.
"Permitted Refinancing Indebtedness" means any Indebtedness of the Issuers
or any of their Subsidiaries issued in exchange for, or the net proceeds of
which are used to extend, refinance, renew, replace, defease or refund other
Indebtedness of the Issuers or any of its Subsidiaries (other than intercompany
Indebtedness); provided that: (1) the principal amount (or accreted value, if
applicable) of such Permitted Refinancing Indebtedness does not exceed the
principal amount (or accreted value, if applicable) of the Indebtedness so
extended, refinanced, renewed, replaced, defeased or refunded (plus all accrued
interest thereon and the amount of all expenses and premiums incurred in
connection therewith); (2) such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and has a Weighted Average
Life to Maturity equal to or greater than the Weighted Average Life to Maturity
of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; (3) if the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated in right of payment to the Notes, such
Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and is subordinated in right of payment to, the Notes on
terms at least as favorable to the holders of Notes as those contained in the
documentation governing the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; and (4) such Indebtedness is incurred either by
the Issuers or by the Subsidiary who is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"Principals" means Tele-Communications, Inc. and Insight Communications.
"Private Placement Legend" means the legend set forth in Section 2.06(g)(i)
to be placed on all Notes issued under this Indenture except where otherwise
permitted by the provisions of this Indenture.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of the date hereof by and among the Issuers and the other parties named
on the signature pages thereof, as such agreement may be amended, modified or
supplemented from time to time and, with respect to any Additional Notes, one or
more registration rights agreements among the Issuers and the other parties
thereto, as such agreement(s) may be amended, modified or supplemented from time
to time, relating to rights given by the Issuers to the purchasers of Additional
Notes to register such Additional Notes under the Securities Act.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means the Regulation S Temporary Global Note or
the Regulation S Permanent Global Note, as appropriate.
"Regulation S Permanent Global Note" means a permanent global Note in the
form of Exhibit A1 hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of and registered in the name
of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Regulation S Temporary Global Note upon
expiration of the Restricted Period.
"Regulation S Temporary Global Note" means a temporary global Note in the
form of Exhibit A2 hereto bearing the Private Placement Legend and deposited
with or on behalf of and registered in the name of the Depositary or its
nominee, issued in a denomination equal to the outstanding principal amount of
the Notes initially sold in reliance on Rule 903 of Regulation S.
"Related Party" means, with respect to any Person: (1) any controlling
stockholder, 80% (or more) owned Subsidiary, or immediate family member (in the
case of an individual) of such Person; or (2) any trust, corporation,
partnership or other entity, the beneficiaries, stockholders, partners, owners
or Persons beneficially holding an 80% or more controlling interest of which
consist of any one or more such Persons and/or such other Persons referred to in
the immediately preceding clause (1).
"Responsible Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Definitive Note" means a Definitive Note bearing the Private
Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private Placement
Legend.
"Restricted Investment" means any Investment other than a Permitted
Investment.
"Restricted Period" means the 40-day restricted period as defined in
Regulation S.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Shelf Registration Statement" means the Shelf Registration Statement as
defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date of
this Indenture.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any specified Person: (1) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of that Person (or a
combination thereof); and (2) any partnership (a) the sole general partner or
the managing general partner of which is such Person or a Subsidiary of such
Person or (b) the only general partners of which are such Person or one or more
Subsidiaries of such Person (or any combination thereof).
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss. 77aaa-77bbbb)
as in effect on the date on which this Indenture is qualified under the TIA.
"Trustee" means the party named as such above until a successor replaces it
in accordance with the applicable provisions of this Indenture and thereafter
means the successor serving hereunder.
"Unrestricted Definitive Note" means one or more Definitive Notes that do
not bear and are not required to bear the Private Placement Legend.
"Unrestricted Global Note" means a permanent global Note substantially in
the form of Exhibit A1 attached hereto that bears the Global Note Legend and
that has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depositary, representing a series of Notes that do not bear the Private
Placement Legend.
"Unrestricted Subsidiary" means any Subsidiary of an Issuer (or any
successor to any of them) that is designated by the Board of Directors as an
Unrestricted Subsidiary pursuant to a Board Resolution, but only to the extent
that such Subsidiary: (1) has no Indebtedness other than Non-Recourse Debt; (2)
is not party to any agreement, contract, arrangement or understanding with an
Issuer or any Restricted Subsidiary of an Issuer unless the terms of any such
agreement, contract, arrangement or understanding are no less favorable to such
Issuer or such Restricted Subsidiary than those that might be obtained at the
time from Persons who are not Affiliates of the Issuers; and (3) is a Person
with respect to which neither the Issuers nor any of their Restricted
Subsidiaries has any direct or indirect obligation (a) to subscribe for
additional Equity Interests or (b) to maintain or preserve such Person's
financial condition or to cause such Person to achieve any specified levels of
operating results. Any designation of a Subsidiary of an Issuer as an
Unrestricted Subsidiary shall be evidenced to the trustee by filing with the
trustee a certified copy of the Board Resolution giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the preceding conditions and was permitted by Section 4.07 hereof.
If, at any time, any Unrestricted Subsidiary would fail to meet the preceding
requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an
Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of
such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of an
Issuer as of such date and, if such Indebtedness is not permitted to be incurred
as of such date under Section 4.09 hereof, the Issuers shall be in default of
such covenant. The Boards of Directors of the Issuers may at any time designate
any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of an Issuer of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if (1) such Indebtedness
is permitted pursuant to Section 4.09 hereof, calculated on a pro forma
basis as if such designation had occurred at the beginning of the four-quarter
reference period; and (2) no Default or Event of Default would be in existence
following such designation.
"U.S. Person" means a U.S. person as defined in Rule 902(o) under the
Securities Act.
"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (a) the sum of the
products obtained by multiplying (x) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (y) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (b) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any specified Person means a
Restricted Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of which (other than directors' qualifying shares)
shall at the time be owned by such Person or by one or more Wholly Owned
Restricted Subsidiaries of such Person and one or more Wholly Owned Restricted
Subsidiaries of such Person.
Section 1.02. Other Definitions.
Defined in
Term Section
---- ----------
"Affiliate Transaction"................................... 4.11
"Asset Sale Offer"........................................ 3.09
"Authentication Order".................................... 2.02
"Bankruptcy Law".......................................... 4.01
"Change of Control Offer"................................. 4.15
"Change of Control Payment"............................... 4.15
"Change of Control Payment Date".......................... 4.15
"Covenant Defeasance"..................................... 8.03
"Event of Default"........................................ 6.01
"Excess Proceeds"......................................... 4.10
"incur"................................................... 4.09
"Legal Defeasance"........................................ 8.02
"Offer Amount"............................................ 3.09
"Offer Period"............................................ 3.09
"Paying Agent"............................................ 2.03
"Payment Default" ........................................ 6.01
"Permitted Debt".......................................... 4.09
"Purchase Date"........................................... 3.09
"Registrar"............................................... 2.03
"Restricted Payments"..................................... 4.07
|
Section 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes means the Issuers and any successor obligor upon the
Notes.
All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA have
the meanings so assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to it
in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the plural include the
singular;
(e) provisions apply to successive events and transactions; and
(f) references to sections of or rules under the Securities Act shall be
deemed to include substitute, replacement of successor sections or rules adopted
by the SEC from time to time.
ARTICLE 2.
THE NOTES
Section 2.01. Form and Dating.
(a) General. The Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The Notes shall
be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall constitute, and are
hereby expressly made, a part of this Indenture and the Issuers and the Trustee,
by their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby. However, to the extent any provision of
any Note conflicts with the express provisions of this Indenture, the provisions
of this Indenture shall govern and be controlling.
(b) Global Notes. Notes issued in global form shall be substantially in the
form of Exhibits A1 or A2 attached hereto (including the Global Note Legend
thereon and the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Notes issued in definitive form shall be substantially in the form of
Exhibit A1 attached hereto (but without the Global Note Legend thereon and
without the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Each Global Note shall represent such of the outstanding Notes as
shall be specified therein and each shall provide that it shall represent the
aggregate principal amount of outstanding Notes from time to time endorsed
thereon and that the aggregate principal amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and redemptions. Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the aggregate principal amount of
outstanding Notes represented thereby shall be made by the Trustee or the
Custodian, at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.06 hereof.
(c) Temporary Global Notes. Notes offered and sold in reliance on
Regulation S shall be issued initially in the form of the Regulation S Temporary
Global Note, which shall be deposited on behalf of the purchasers of the Notes
represented thereby with the Trustee, at its New York office, as custodian for
the Depositary, and registered in the name of the Depositary or the nominee of
the Depositary for the accounts of designated agents holding on behalf of
Euroclear or Cedel Bank, duly executed by the Issuers and authenticated by the
Trustee as hereinafter provided. The Restricted Period shall be terminated upon
the receipt by the Trustee of (i) a written certificate from the Depositary,
together with copies of certificates from Euroclear and Cedel Bank certifying
that they have received certification of non-United States beneficial ownership
of 100% of the aggregate principal amount of the Regulation S Temporary Global
Note (except to the extent of any beneficial owners thereof who acquired an
interest therein during the Restricted Period pursuant to another exemption from
registration under the Securities Act and who will take delivery of a beneficial
ownership interest in a 144A Global Note or an IAI Global Note bearing a Private
Placement Legend, all as contemplated by Section 2.06(a)(ii) hereof), and (ii)
an Officers' Certificate from the Issuers. Following the termination of the
Restricted Period, beneficial interests in the Regulation S Temporary Global
Note shall be exchanged for beneficial interests in Regulation S Permanent
Global Notes pursuant to the Applicable Procedures. Simultaneously with the
authentication of Regulation S Permanent Global Notes, the Trustee shall cancel
the Regulation S Temporary Global Note. The aggregate principal amount of the
Regulation S Temporary Global Note and the Regulation S Permanent Global Notes
may from time to time be increased or decreased by adjustments made on the
records of the Trustee and the Depositary or its nominee, as the case may be, in
connection with transfers of interest as hereinafter provided.
(d) Euroclear and Cedel Procedures Applicable. The provisions of the
"Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Cedel Bank"
and "Customer Handbook" of Cedel Bank shall be applicable to transfers of
beneficial interests in the Regulation S Temporary Global Note and the
Regulation S Permanent Global Notes that are held by Participants through
Euroclear or Cedel Bank.
Section 2.02. Execution and Authentication.
Two Officers shall sign the Notes for each of the Issuers by manual or
facsimile signature.
If an Officer whose signature is on a Note no longer holds that office at
the time a Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature of the
Trustee. The signature shall be conclusive evidence that the Note has been
authenticated under this Indenture.
The Trustee shall, upon a written order of the Issuers signed by an Officer
of each of the Issuers (an "Authentication Order"), authenticate Notes for
original issue up to the aggregate principal amount stated in paragraph 4 of the
Notes. The aggregate principal amount of Notes outstanding at any time may not
exceed such amount except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the Issuers to
authenticate Notes. An authenticating agent may authenticate Notes whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with Holders or an Affiliate of the Issuers.
Section 2.03. Registrar and Paying Agent.
The Issuers shall maintain an office or agency where Notes may be presented
for registration of transfer or for exchange ("Registrar") and an office or
agency where Notes may be presented for payment ("Paying Agent"). The Registrar
shall keep a register of the Notes and of their transfer and exchange. The
Issuers may appoint one or more co-registrars and one or more additional paying
agents. The term "Registrar" includes any co-registrar and the term "Paying
Agent" includes any additional paying agent. The Issuers may change any Paying
Agent or Registrar without notice to any Holder. The Issuers shall notify the
Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Issuers fail to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Issuers or any of
their Subsidiaries may act as Paying Agent or Registrar.
The Issuers initially appoint The Depository Trust Company ("DTC") to act as
Depositary with respect to the Global Notes.
The Issuers initially appoint the Trustee to act as the Registrar and Paying
Agent and to act as Custodian with respect to the Global Notes.
Section 2.04. Paying Agent to Hold Money in Trust.
The Issuers shall require each Paying Agent other than the Trustee to agree
in writing that the Paying Agent will hold in trust for the benefit of Holders
or the Trustee all money held by the Paying Agent for the payment of principal,
premium or Liquidated Damages, if any, or interest on the Notes, and will notify
the Trustee of any default by the Issuers in making any such payment. While any
such default continues, the Trustee may require a Paying Agent to pay all money
held by it to the Trustee. The Issuers at any time may require a Paying Agent to
pay all money held by it to the Trustee. Upon payment over to the Trustee, the
Paying Agent (if other than the Issuers or a Subsidiary) shall have no further
liability for the money. If the Issuers or a Subsidiary acts as Paying Agent, it
shall segregate and hold in a separate trust fund for the benefit of the Holders
all money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Issuers, the Trustee shall serve as Paying Agent for
the Notes.
Section 2.05. Holder Lists.
The Trustee shall preserve in as current a form as is reasonably practicable
the most recent list available to it of the names and addresses of all Holders
and shall otherwise comply with TIA ss. 312(a). If the Trustee is not the
Registrar, the Issuers shall furnish to the Trustee at least seven Business Days
before each interest payment date and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of the Holders of Notes and the
Issuers shall otherwise comply with TIA ss. 312(a).
Section 2.06. Transfer and Exchange
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Issuers for Definitive Notes if (i) the Issuers deliver to the Trustee
notice from the Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under the
Exchange Act and, in either case, a successor Depositary is not appointed by the
Issuers within 120 days after the date of such notice from the Depositary or
(ii) the Issuers in their sole discretion determine that the Global Notes (in
whole but not in part) should be exchanged for Definitive Notes and deliver a
written notice to such effect to the Trustee; provided that in no event shall
the Regulation S Temporary Global Note be exchanged by the Issuers for
Definitive Notes prior to (x) the expiration of the Restricted Period and (y)
the receipt by the Registrar of any certificates required pursuant to Rule
903(c)(3)(ii)(B) under the Securities Act. Upon the occurrence of either of the
preceding events in (i) or (ii) above, Definitive Notes shall be issued in such
names as the Depositary shall instruct the Trustee. Global Notes also may be
exchanged or replaced, in whole or in part, as provided in Sections 2.07 and
2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu
of, a Global Note or any portion thereof, pursuant to this Section 2.06 or
Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form
of, and shall be, a Global Note. A Global Note may not be exchanged for another
Note other than as provided in this Section 2.06(a), however, beneficial
interests in a Global Note may be transferred and exchanged as provided in
Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Notes. The
transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes shall be subject to restrictions on transfer comparable to those
set forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in the Global Notes also shall require compliance with
either subparagraph (i) or (ii) below, as applicable, as well as one or more of
the other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer restrictions
set forth in the Private Placement Legend; provided, however, that prior to
the expiration of the Restricted Period, transfers of beneficial interests
in the Temporary Regulation S Global Note may not be made to a U.S. Person
or for the account or benefit of a U.S. Person (other than an Initial
Purchaser). Beneficial interests in any Unrestricted Global Note may be
transferred to Persons who take delivery thereof in the form of a beneficial
interest in an Unrestricted Global Note. No written orders or instructions
shall be required to be delivered to the Registrar to effect the transfers
described in this Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of beneficial
interests that are not subject to Section 2.06(b)(i) above, the transferor
of such beneficial interest must deliver to the Registrar either (A) (1) a
written order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the
Depositary to credit or cause to be credited a beneficial interest in
another Global Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given in accordance with the
Applicable Procedures containing information regarding the Participant
account to be credited with such increase or (B) (1) a written order from a
Participant or an Indirect Participant given to the Depositary in accordance
with the Applicable Procedures directing the Depositary to cause to be
issued a Definitive Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given by the Depositary to the
Registrar containing information regarding the Person in whose name such
Definitive Note shall be registered to effect the transfer or exchange
referred to in (1) above; provided that in no event shall Definitive Notes
be issued upon the transfer or exchange of beneficial interests in the
Regulation S Temporary Global Note prior to (x) the expiration of the
Restricted Period and (y) the receipt by the Registrar of any certificates
required pursuant to Rule 903 under the Securities Act. Upon consummation of
an Exchange Offer by the Issuers in accordance with Section 2.06(f) hereof,
the requirements of this Section 2.06(b)(ii) shall be deemed to have been
satisfied upon receipt by the Registrar of the instructions contained in the
Letter of Transmittal delivered by the Holder of such beneficial interests
in the Restricted Global Notes. Upon satisfaction of all of the requirements
for transfer or exchange of beneficial interests in Global Notes contained
in this Indenture and the Notes or otherwise applicable under the Securities
Act, the Trustee shall adjust the principal amount of the relevant Global
Note(s) pursuant to Section 2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted Global
Note. A beneficial interest in any Restricted Global Note may be transferred
to a Person who takes delivery thereof in the form of a beneficial interest
in another Restricted Global Note if the transfer complies with the
requirements of Section 2.06(b)(ii) above and the Registrar receives the
following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Temporary Global Note or the
Regulation S Global Note, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form of a
beneficial interest in the IAI Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications and certificates and Opinion of Counsel required by item
(3) thereof, if applicable.
(iv) Transfer and Exchange of Beneficial Interests in a Restricted
Global Note for Beneficial Interests in the Unrestricted Global Note. A
beneficial interest in any Restricted Global Note may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of Section 2.06(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement and
the holder of the beneficial interest to be transferred, in the case of
an exchange, or the transferee, in the case of a transfer, certifies in
the applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in Rule
144) of the Issuers;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a beneficial interest in an Unrestricted Global
Note, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(a) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained
herein and in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D) above
at a time when an Unrestricted Global Note has not yet been issued, the Issuers
shall issue and, upon receipt of an Authentication Order in accordance with
Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate principal amount equal to the aggregate principal
amount of beneficial interests transferred pursuant to subparagraph (B) or (D)
above.
Beneficial interests in an Unrestricted Global Note cannot be exchanged for,
or transferred to Persons who take delivery thereof in the form of, a beneficial
interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
(i) Beneficial Interests in Restricted Global Notes to Restricted
Definitive Notes. If any holder of a beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a Restricted
Definitive Note or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of a Restricted Definitive Note, then,
upon receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note, a certificate from such holder in the
form of Exhibit C hereto, including the certifications in item
(2)(a) thereof;
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule
903 or Rule 904 under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications
in item (2) thereof;
(D) if such beneficial interest is being transferred pursuant to
an exemption from the registration requirements of the Securities
Act in accordance with Rule 144
under the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(a)
thereof;
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption from
the registration requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a certificate to the
effect set forth in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof, if
applicable;
(F) if such beneficial interest is being transferred to the
Issuers or any of their Subsidiaries, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in item
(3)(b) thereof; or
(G) if such beneficial interest is being transferred pursuant to
an effective registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the
Issuers shall execute and the Trustee shall authenticate and deliver to the
Person designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes to the
Persons in whose names such Notes are so registered. Any Definitive Note issued
in exchange for a beneficial interest in a Restricted Global Note pursuant to
this Section 2.06(c)(i) shall bear the Private Placement Legend and shall be
subject to all restrictions on transfer contained therein.
(ii) Beneficial Interests in Regulation S Temporary Global Note to
Definitive Notes. Notwithstanding Sections 2.06(c)(i)(A) and (C) hereof, a
beneficial interest in the Regulation S Temporary Global Note may not be
exchanged for a Definitive Note or transferred to a Person who takes delivery
thereof in the form of a Definitive Note prior to (x) the expiration of the
Restricted Period and (y) the receipt by the Registrar of any certificates
required pursuant to Rule 903(c)(3)(ii)(B) under the Securities Act, except in
the case of a transfer pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 903 or Rule 904.
(iii) Beneficial Interests in Restricted Global Notes to Unrestricted
Definitive Notes. A holder of a beneficial interest in a Restricted Global Note
may exchange such beneficial interest for an Unrestricted Definitive Note or may
transfer such beneficial interest to a Person who takes delivery thereof in the
form of an Unrestricted Definitive Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of such beneficial interest, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in
the applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in
Rule 144) of the Issuers;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in the form of
Exhibit C hereto, including the certifications in item (1)(b)
thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of a Definitive Note that does not bear the Private Placement
Legend, a certificate from such holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained
herein and in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.
(iv) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. If any holder of a beneficial interest in
an Unrestricted Global Note proposes to exchange such beneficial
interest for a Definitive Note or to transfer such beneficial interest
to a Person who takes delivery thereof in the form of a Definitive Note,
then, upon satisfaction of the conditions set forth in Section
2.06(b)(ii) hereof, the Trustee shall cause the aggregate principal
amount of the applicable Global Note to be reduced accordingly pursuant
to Section 2.06(h) hereof, and the Issuers shall execute and the Trustee
shall authenticate and deliver to the Person designated in the
instructions a Definitive Note in the appropriate principal amount. Any
Definitive Note issued in exchange for a beneficial interest pursuant to
this Section 2.06(c)(iv) shall be registered in such name or names and
in such authorized denomination or denominations as the holder of such
beneficial interest shall instruct the Registrar through instructions
from the Depositary and the Participant or Indirect Participant. The
Trustee shall deliver such Definitive Notes to the Persons in whose
names such Notes are so registered. Any Definitive Note issued in
exchange for a beneficial interest pursuant to this Section 2.06(c)(iv)
shall not bear the Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
(i) Restricted Definitive Notes to Beneficial Interests in
Restricted Global Notes. If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a Restricted
Global Note or to transfer such Restricted Definitive Note to a Person
who takes delivery thereof in the form of a beneficial interest in a
Restricted Global Note, then, upon receipt by the Registrar of the
following documentation:
(A) if the Holder of such Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global
Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred to a
QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule
903 or Rule 904 under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications
in item (2) thereof;
(D) if such Restricted Definitive Note is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144 under the Securities Act,
a certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred to
an Institutional Accredited Investor in reliance on an exemption
from the registration requirements of the Securities Act other than
those listed in subparagraphs (B) through (D) above, a certificate
to the effect set forth in Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item
(3) thereof, if applicable;
(F) if such Restricted Definitive Note is being transferred to
the Issuers or any of their Subsidiaries, a certificate to the
effect set forth in Exhibit B hereto, including the certifications
in item (3)(b) thereof; or
(G) if such Restricted Definitive Note is being transferred
pursuant to an effective registration statement under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(c) thereof,
the Trustee shall cancel the Restricted Definitive Note, increase or cause
to be increased the aggregate principal amount of, in the case of clause (A)
above, the appropriate Restricted Global Note, in the case of clause (B)
above, the 144A Global Note, in the case of clause (C) above, the Regulation
S Global Note, and in all other cases, the IAI Global Note.
(ii) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Restricted Definitive Note to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global Note
only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a
Person who is an affiliate (as defined in Rule 144) of the Issuers;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes proposes to
exchange such Notes for a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item
(1)(c) thereof; or
(2) if the Holder of such Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery thereof
in the form of a beneficial interest in the Unrestricted Global
Note, a certificate from such Holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained
herein and in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in
this Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes
and increase or cause to be increased the aggregate principal amount of
the Unrestricted Global Note.
(iii) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note
may exchange such Note for a beneficial interest in an Unrestricted
Global Note or transfer such Definitive Notes to a Person who takes
delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note at any time. Upon receipt of a request for such an exchange
or transfer, the Trustee shall cancel the applicable Unrestricted
Definitive Note and increase or cause to be increased the aggregate
principal amount of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B),
(ii)(D) or (iii) above at a time when an Unrestricted Global Note has
not yet been issued, the Issuers shall issue and, upon receipt of an
Authentication Order in accordance with Section 2.02 hereof, the Trustee
shall authenticate one or more Unrestricted Global Notes in an aggregate
principal amount equal to the principal amount of Definitive Notes so
transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon
request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of
transfer or exchange, the requesting Holder shall present or surrender to
the Registrar the Definitive Notes duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Registrar duly executed
by such Holder or by its attorney, duly authorized in writing. In addition,
the requesting Holder shall provide any additional certifications, documents
and information, as applicable, required pursuant to the following
provisions of this Section 2.06(e).
(i) Restricted Definitive Notes to Restricted Definitive Notes. Any
Restricted Definitive Note may be transferred to and registered in the
name of Persons who take delivery thereof in the form of a Restricted
Definitive Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A under the
Securities Act, then the transferor must deliver a certificate in
the form of Exhibit B hereto, including the certifications in item
(1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule
904, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2) thereof;
and
(C) if the transfer will be made pursuant to any other exemption
from the registration requirements of the Securities Act, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications, certificates and Opinion of
Counsel required by item (3) thereof, if applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive Notes.
Any Restricted Definitive Note may be exchanged by the Holder thereof
for an Unrestricted Definitive Note or transferred to a Person or
Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a
Person who is an affiliate (as defined in Rule 144) of the Issuers;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Notes
proposes to exchange such Notes for an Unrestricted Definitive
Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(d) thereof; or
(2) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take
delivery thereof in the form of an Unrestricted Definitive Note,
a certificate from such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests, an Opinion of Counsel in form reasonably
acceptable to the Issuers to the effect that such exchange or
transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive
Notes. A Holder of Unrestricted Definitive Notes may transfer such Notes
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note. Upon receipt of a request to register such a transfer,
the Registrar shall register the Unrestricted Definitive Notes pursuant
to the instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Issuers shall issue
and, upon receipt of an Authentication Order in accordance with Section 2.02
hereof, the Trustee shall authenticate (i) one or more Unrestricted Global
Notes in an aggregate principal amount equal to the principal amount of the
beneficial interests in the Restricted Global Notes tendered for acceptance
by Persons that certify in the applicable Letters of Transmittal that (x)
they are not broker-dealers, (y) they are not participating in a
distribution of the Exchange Notes and (z) they are not affiliates (as
defined in Rule 144) of the Issuers, and accepted for exchange in the
Exchange Offer and (ii) Definitive Notes in an aggregate principal amount
equal to the principal amount of the Restricted Definitive Notes accepted
for exchange in the Exchange Offer. Concurrently with the issuance of such
Notes, the Trustee shall cause the aggregate principal amount of the
applicable Restricted Global Notes to be reduced accordingly, and the
Issuers shall execute and the Trustee shall authenticate and deliver to the
Persons designated by the Holders of Definitive Notes so accepted Definitive
Notes in the appropriate principal amount.
(g) Legends. The following legends shall appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this
Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each Global
Note and each Definitive Note (and all Notes issued in exchange
therefor or substitution thereof) shall bear the legend in
substantially the following form:
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES
OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN
THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN,
THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT HAS ACQUIRED THIS
NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a) (1), (2), (3) OR (7) OR REGULATION D UNDER THE
SECURITIES ACT (AN "IAI");
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT
(A) TO INSIGHT MIDWEST, L.P., INSIGHT CAPITAL, INC. OR ANY OF THEIR
RESPECTIVE SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE
TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 UNDER THE SECURITIES
ACT, (D) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (E) TO AN IAI THAT, PRIOR
TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE (THE
FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN
RESPECT OF A TOTAL PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION
OF COUNSEL ACCEPTABLE TO INSIGHT MIDWEST, L.P. AND INSIGHT CAPITAL, INC.
THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (F) IN
ACCORDANCE WITH ANOTHER EXEMPTION FORM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO INSIGHT
MIDWEST, L.P. AND INSIGHT CAPITAL, INC.) OR (G) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION; AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN
INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND."
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE
THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION 902 OF REGULATION S UNDER
THE SECURITIES ACT OF 1933. THE INDENTURE CONTAINS A PROVISION REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE
FOREGOING.
(B) Notwithstanding the foregoing, any Global Note or Definitive
Note issued pursuant to subparagraphs (b)(iv), (c)(iii), (c)(iv),
(d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) of this Section 2.06 (and
all Notes issued in exchange therefor or substitution thereof) shall not
bear the Private Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF INSIGHT MIDWEST, L.P.
AND INSIGHT CAPITAL, INC."
(iii) Regulation S Temporary Global Note Legend. The Regulation S
Temporary Global Note shall bear a legend in substantially the following
form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER
NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE
ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON."
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note shall be increased accordingly
and an endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Issuers
shall execute and the Trustee shall authenticate Global Notes and Definitive
Notes upon the Issuers' order or at the Registrar's request.
(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Issuers may require payment of
a sum sufficient to cover any transfer tax or similar governmental charge
payable in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchange or transfer pursuant to
Sections 2.10, 3.06, 3.09, 4.10, 4.15 and 9.05 hereof).
(iii) The Registrar shall not be required to register the transfer of or
exchange any Note selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any registration
of transfer or exchange of Global Notes or Definitive Notes shall be the
valid obligations of the Issuers, evidencing the same debt, and entitled to
the same benefits under this Indenture, as the Global Notes or Definitive
Notes surrendered upon such registration of transfer or exchange.
(v) The Issuers shall not be required (A) to issue, to register the
transfer of or to exchange any Notes during a period beginning at the
opening of business 15 days before the day of any selection of Notes for
redemption under Section 3.02 hereof and ending at the close of business on
the day of selection, (B) to register the transfer of or to exchange any
Note so selected for redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part or (C) to register the transfer
of or to exchange a Note between a record date and the next succeeding
Interest Payment Date.
(vi) Prior to due presentment for the registration of a transfer of any
Note, the Trustee, any Agent and the Issuers may deem and treat the Person
in whose name any Note is registered as the absolute owner of such Note for
the purpose of receiving payment of principal of and interest and Liquidated
Damages, if any, on such Notes and for all other purposes, and none of the
Trustee, any Agent or the Issuers shall be affected by notice to the
contrary.
(vii) The Trustee shall authenticate Global Notes and Definitive Notes
in accordance with the provisions of Section 2.02 hereof.
(viii) All certifications, certificates and Opinions of Counsel required
to be submitted to the Registrar pursuant to this Section 2.06 to effect a
registration of transfer or exchange may be submitted by facsimile.
Section 2.07. Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Issuers and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, the Issuers shall issue and the Trustee, upon receipt of an
Authentication Order, shall authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Issuers, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Issuers to protect the Issuers, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Issuers may charge for their expenses in replacing a Note.
Every replacement Note is an additional obligation of the Issuers and shall
be entitled to all of the benefits of this Indenture equally and proportionately
with all other Notes duly issued hereunder.
Section 2.08. Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation,
those reductions in the interest in a Global Note effected by the Trustee in
accordance with the provisions hereof, and those described in this Section 2.08
as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not
cease to be outstanding because the Issuers or an Affiliate of the Issuers holds
the Note; however, Notes held by the Issuers or a Subsidiary of the Issuers
shall not be deemed to be outstanding for purposes of Section 3.07(b) hereof.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a protected purchaser.
If the principal amount of any Note is considered paid under Section 4.01
hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than either Issuer, a Subsidiary or an Affiliate
of any thereof) holds, on a redemption date or maturity date, money sufficient
to pay Notes payable on that date, then on and after that date such Notes shall
be deemed to be no longer outstanding and shall cease to accrue interest.
Section 2.09. Treasury Notes.
In determining whether the Holders of the required principal amount of Notes
have concurred in any direction, waiver or consent, Notes owned by the Issuers,
or by any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Issuers, shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes that the Trustee knows are so owned shall be so disregarded.
Section 2.10. Temporary Notes.
Until certificates representing Notes are ready for delivery, the Issuers
may prepare and the Trustee, upon receipt of an Authentication Order, shall
authenticate temporary Notes. Temporary Notes shall be substantially in the form
of certificated Notes but may have variations that the Issuers consider
appropriate for temporary Notes and as shall be reasonably acceptable to the
Trustee. Without unreasonable delay, the Issuers shall prepare and the Trustee
shall authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of this
Indenture.
Section 2.11. Cancellation.
The Issuers at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
canceled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all canceled Notes shall be delivered
to the Issuers. The Issuers may not issue new Notes to replace Notes that they
have paid or that have been delivered to the Trustee for cancellation.
Section 2.12. Defaulted Interest.
If the Issuers default in a payment of interest on the Notes, they shall pay
the defaulted interest in any lawful manner plus, to the extent lawful, interest
payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Issuers shall notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Issuers shall fix or cause to be fixed each such
special record date and payment date, provided that no such special record date
shall be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Issuers (or, upon
the written request of the Issuers, the Trustee in the name and at the expense
of the Issuers) shall mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee.
If the Issuers elect to redeem Notes pursuant to the optional redemption
provisions of Section 3.07 hereof, it shall furnish to the Trustee, at least 30
days but not more than 60 days before a redemption date, an Officers'
Certificate setting forth (i) the clause of this Indenture pursuant to which the
redemption shall occur, (ii) the redemption date, (iii) the principal amount of
Notes to be redeemed and (iv) the redemption price.
Section 3.02. Selection of Notes to Be Redeemed.
If less than all of the Notes are to be redeemed or purchased in an offer to
purchase at any time in accordance with the terms hereof, the Trustee shall
select the Notes to be redeemed or purchased among the Holders of the Notes in
compliance with the requirements of the principal national securities exchange,
if any, on which the Notes are listed or, if the Notes are not so listed, on a
pro rata basis, by lot
or in accordance with any other method the Trustee considers fair and
appropriate. In the event of partial redemption by lot, the particular Notes to
be redeemed shall be selected, unless otherwise provided herein, not less than
30 nor more than 60 days prior to the redemption date by the Trustee from the
outstanding Notes not previously called for redemption.
The Trustee shall promptly notify the Issuers in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
Section 3.03. Notice of Redemption.
Subject to the provisions of Section 3.09 hereof, at least 30 days but not
more than 60 days before a redemption date, the Issuers shall mail or cause to
be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the principal
amount of such Note to be redeemed and that, after the redemption date upon
surrender of such Note, a new Note or Notes in principal amount equal to the
unredeemed portion shall be issued upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying Agent
to collect the redemption price;
(f) that, unless the Issuers default in making such redemption payment,
interest on Notes called for redemption shall cease to accrue on and after the
redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture pursuant to
which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy of the
CUSIP number, if any, listed in such notice or printed on the Notes.
At the Issuers' request, the Trustee shall give the notice of redemption in
the Issuers' name and at their expense; provided, however, that the Issuers
shall have delivered to the Trustee, at least 45 days prior to the redemption
date, an Officers' Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
preceding paragraph.
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03 hereof,
Notes called for redemption become irrevocably due and payable on the redemption
date at the redemption price. A notice of redemption may not be conditional.
Section 3.05. Deposit of Redemption Price.
One Business Day prior to the redemption date, the Issuers shall deposit
with the Trustee or with the Paying Agent money sufficient to pay the redemption
price of and accrued interest on all Notes to be redeemed on that date. The
Trustee or the Paying Agent shall promptly return to the Issuers any money
deposited with the Trustee or the Paying Agent by the Issuers in excess of the
amounts necessary to pay the redemption price of, and accrued interest on, all
Notes to be redeemed.
If the Issuers comply with the provisions of the preceding paragraph, on and
after the redemption date, interest shall cease to accrue on the Notes or the
portions of Notes called for redemption. If a Note is redeemed on or after an
interest record date but on or prior to the related interest payment date, then
any accrued and unpaid interest shall be paid to the Person in whose name such
Note was registered at the close of business on such record date. If any Note
called for redemption shall not be so paid upon surrender for redemption because
of the failure of the Issuers to comply with the preceding paragraph, interest
shall be paid on the unpaid principal, from the redemption date until such
principal is paid, and to the extent lawful on any interest not paid on such
unpaid principal, in each case at the rate provided in the Notes and in Section
4.01 hereof.
Section 3.06. Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Issuers shall issue
and, upon the Issuers' written request, the Trustee shall authenticate for the
Holder at the expense of the Issuers a new Note equal in principal amount to the
unredeemed portion of the Note surrendered.
Section 3.07. Optional Redemption.
(a) Except as set forth in clause (b) of this Section 3.07, the Issuers
shall not have the option to redeem the Notes pursuant to this Section 3.07
prior to October 1, 2004. Thereafter, the Issuers shall have the option to
redeem the Notes, in whole or in part, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
interest and Liquidated Damages thereon, if any, to the applicable redemption
date, if redeemed during the twelve-month period beginning on October 1 of the
years indicated below:
Year Percentage
---- ----------
2004................................................ 104.875%
2005................................................ 103.250%
2006................................................ 101.625%
2007 and thereafter................................. 100.000%
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(b) Notwithstanding the provisions of clause (a) of this Section 3.07, at
any time prior to October 1, 2002, the Issuers may on one or more occasions
redeem Notes with the net proceeds of one or more Equity Offerings at a
redemption price equal to 109.75% of the aggregate principal amount thereof plus
accrued and unpaid Liquidated Damages thereon, if any, to the redemption date,
provided that at least 65% in aggregate principal amount of the Notes issued
under this Indenture remains outstanding immediately after the occurrence of any
such redemption (excluding Notes held by the Issuers and their
Subsidiaries) and that such redemption occurs within 90 days of the date of the
closing of any such Equity Offering.
(c) Any redemption pursuant to this Section 3.07 shall be made pursuant to
the provisions of Section 3.01 through 3.06 hereof.
Section 3.08. Mandatory Redemption.
The Issuers shall not be required to make mandatory redemption payments with
respect to the Notes.
Section 3.09. Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.10 hereof, the Issuers shall be
required to commence an offer to all Holders to purchase Notes (an "Asset Sale
Offer"), it shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by applicable law (the "Offer Period"). No later than five
Business Days after the termination of the Offer Period (the "Purchase Date"),
the Issuers shall purchase the principal amount of Notes required to be
purchased pursuant to Section 4.10 hereof (the "Offer Amount") or, if less than
the Offer Amount has been tendered, all Notes tendered in response to the Asset
Sale Offer. Payment for any Notes so purchased shall be made in the same manner
as interest payments are made.
If the Purchase Date is on or after an interest record date and on or before
the related interest payment date, any accrued and unpaid interest shall be paid
to the Person in whose name a Note is registered at the close of business on
such record date, and no additional interest shall be payable to Holders who
tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Issuers shall send, by
first class mail, a notice to the Trustee and each of the Holders, with a copy
to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Asset Sale
Offer. The Asset Sale Offer shall be made to all Holders. The notice, which
shall govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section 3.09
and Section 4.10 hereof and the length of time the Asset Sale Offer shall remain
open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall continue to
accrue interest;
(d) that, unless the Issuers default in making such payment, any Note
accepted for payment pursuant to the Asset Sale Offer shall cease to accrue
interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to an Asset Sale
Offer may elect to have Notes purchased in integral multiples of $1,000 only;
(f) that Holders electing to have a Note purchased pursuant to any Asset
Sale Offer shall be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse
of the Note completed, or transfer by book-entry transfer, to the Issuers, a
depositary, if appointed by the Issuers, or a Paying Agent at the address
specified in the notice at least three days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if the
Issuers, the depositary or the Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the Note
the Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered by Holders
exceeds the Offer Amount, the Issuers shall select the Notes to be purchased on
a pro rata basis (with such adjustments as may be deemed appropriate by the
Issuers so that only Notes in denominations of $1,000, or integral multiples
thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part shall be issued new
Notes equal in principal amount to the unpurchased portion of the Notes
surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Issuers shall, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Offer Amount has been tendered, all Notes tendered, and
shall deliver to the Trustee an Officers' Certificate stating that such Notes or
portions thereof were accepted for payment by the Issuers in accordance with the
terms of this Section 3.09. The Issuers, the Depositary or the Paying Agent, as
the case may be, shall promptly (but in any case not later than five days after
the Purchase Date) mail or deliver to each tendering Holder an amount equal to
the purchase price of the Notes tendered by such Holder and accepted by the
Issuers for purchase, and the Issuers shall promptly issue a new Note, and the
Trustee, upon written request from the Issuers shall authenticate and mail or
deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the Issuers to the Holder thereof. The Issuers
shall publicly announce the results of the Asset Sale Offer on the Purchase
Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
ARTICLE 4.
COVENANTS
Section 4.01. Payment of Notes.
The Issuers shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than an Issuer or a Subsidiary thereof,
holds as of 10:00 a.m. Eastern Time on the due date money deposited by the
Issuers in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due. The Issuers shall pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement.
The Issuers shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; they shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace period) at the same
rate to the extent lawful.
Section 4.02. Maintenance of Office or Agency.
The Issuers shall maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Issuers in respect of the Notes and this Indenture may be served. The
Issuers shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Issuers
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee.
The Issuers may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided, however,
that no such designation or rescission shall in any manner relieve the Issuers
of their obligation to maintain an office or agency in the Borough of Manhattan,
the City of New York for such purposes. The Issuers shall give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.
The Issuers hereby designate the Corporate Trust Office of the Trustee as
one such office or agency of the Issuers in accordance with Section 2.03 hereof.
Section 4.03. Reports.
(a) Whether or not required by the rules and regulations of the SEC, so long
as any Notes are outstanding, the Issuers shall furnish to the Holders of Notes:
(i) all quarterly and annual financial information that would be required to be
contained in a filing with the SEC on Forms 10-Q and 10-K if the Issuers were
required to file such forms, including a "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and, with respect to the
annual information only, a report thereon by the Issuers' certified independent
accountants; and (ii) all current reports that would be required to be filed
with the SEC on Form 8-K if the Issuers were required to file such reports, in
each case, within the time periods specified in the SEC's rules and regulations.
In addition, following consummation of the Exchange Offer, whether or not
required by the rules and regulations of the SEC, the Issuers shall file a copy
of all such information and reports with the SEC for public availability within
the time periods specified in the SEC's rules and regulations (unless the SEC
will not accept such a filing) and make such information available to securities
analysts and prospective investors upon request. The Issuers shall at all times
comply with TIA ss. 314(a).
(b) For so long as any Notes remain outstanding, the Issuers shall furnish
to the Holders and to securities analysts and prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.
(c) If the Issuers have designated any of their Subsidiaries as Unrestricted
Subsidiaries, then the quarterly and annual financial information required by
the preceding paragraph shall include a reasonably detailed presentation, either
on the face of the financial statements or in the footnotes thereto, and in
Management's Discussion and Analysis of Financial Condition and Results of
Operations, of the financial condition and results of operations of the Issuers
and their Restricted Subsidiaries separate from the financial condition and
results of operations of the Unrestricted Subsidiaries of the Issuers.
Section 4.04. Compliance Certificate.
(a) The Issuers shall deliver to the Trustee, within 90 days after the end
of each fiscal year, an Officers' Certificate stating that a review of the
activities of the Issuers and their Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Issuers have kept, observed, performed and fulfilled
their obligations under this Indenture, and further stating, as to each such
Officer signing such certificate, that to the best of his or her knowledge the
Issuers have kept, observed, performed and fulfilled each and every covenant
contained in this Indenture and are not in default in the performance or
observance of any of the terms, provisions and conditions of this Indenture (or,
if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he or she may have knowledge and what
action the Issuers are taking or propose to take with respect thereto) and that
to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Notes is prohibited or if such event has occurred, a
description of the event and what action the Issuers are taking or propose to
take with respect thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Issuers' independent public accountants (who shall be a
firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Issuers have violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) The Issuers shall, so long as any of the Notes are outstanding, deliver
to the Trustee, forthwith upon any Officer becoming aware of any Default or
Event of Default, an Officers' Certificate specifying such Default or Event of
Default and what action the Issuers are taking or propose to take with respect
thereto.
Section 4.05. Taxes.
The Issuers shall pay, and shall cause each of their Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.
Section 4.06. Stay, Extension and Usury Laws.
The Issuers covenant (to the extent that they may lawfully do so) that they
shall not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the covenants or
the performance of this Indenture; and the Issuers (to the extent that they may
lawfully do so) hereby expressly waive all benefit or advantage of any such law,
and covenant that they shall not, by resort to any such law, hinder, delay or
impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law has
been enacted.
Section 4.07. Restricted Payments.
The Issuers shall not, and shall not permit any of their Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make
any other payment or distribution on account of the Issuers' or any of their
Restricted Subsidiaries' Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation involving the Issuers or
any of their Restricted Subsidiaries) or to the direct or indirect holders of
the Issuers' or any of their Restricted Subsidiaries' Equity Interests in their
capacity as such (other than dividends or distributions payable in Equity
Interests (other than Disqualified Stock) of the Issuers or to the Issuers or a
Restricted Subsidiary of the Issuers); (ii) purchase, redeem or otherwise
acquire or retire for value (including, without limitation, in connection with
any merger or consolidation involving the Issuers) any Equity Interests of the
Issuers or any direct or indirect parent of the Issuers; (iii) make any payment
on or with respect to, or purchase, redeem, defease or otherwise acquire or
retire for value any Indebtedness that is subordinated to the Notes, except a
payment of interest or principal at the Stated Maturity thereof; or (iv) make
any Restricted Investment (all such payments and other actions set forth in
clauses (i) through (iv) above being collectively referred to as "Restricted
Payments"), unless, at the time of and after giving effect to such Restricted
Payment:
(a) no Default or Event of Default shall have occurred and be continuing
or would occur as a consequence thereof; and
(b) the Issuers would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made
at the beginning of the applicable fiscal quarter, have been permitted to
incur at least $1.00 of additional Indebtedness (other than Permitted Debt)
pursuant to the Debt to Cash Flow Ratio test set forth in the first
paragraph of Section 4.09 hereof; and
(c) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments declared or made after the date of this Indenture
(excluding Restricted Payments made pursuant to clauses (ii), (iii) and (iv)
of the next succeeding paragraph) shall not exceed, at the date of
determination, the sum, without duplication, of: (i) an amount equal to the
Issuers' Consolidated Cash Flow from the date of this Indenture to the end
of the Issuers' most recently ended full fiscal quarter for which internal
financial statements are available, taken as a single accounting period,
less the product of 1.2 times the Issuers' Consolidated Interest Expense
from the date of the indenture to the end of the Issuers' most recently
ended full fiscal quarter for which internal financial statements are
available, taken as a single accounting period; plus (ii) an amount equal to
100% of Capital Stock Sale Proceeds less any such Capital Stock Sale
Proceeds used in connection with: (1) an Investment made pursuant to clause
(6) of the definition of "Permitted Investments;" or (2) an incurrence of
Indebtedness pursuant to clause (8) of Section 4.09 hereof; plus (3) to the
extent that any Restricted Investment that was made after the date of this
Indenture is sold for cash or otherwise liquidated or repaid for cash, the
lesser of: (A) the cash return of capital with respect to such Restricted
Investment (less the cost of disposition, if any) and (B) the initial amount
of such Restricted Investment; plus (4) to the extent that the Board of
Directors designates any Unrestricted Subsidiary that was designated as such
after the date of this Indenture as a Restricted Subsidiary, the lesser of
(A) the aggregate fair market value of all Investments owned by the Issuers
and their Restricted Subsidiaries in such Subsidiary at the time such
Subsidiary was designated as an Unrestricted Subsidiary and (B) the then
aggregate fair market value of all Investments owned by the Issuers and
their Restricted Subsidiaries in such Unrestricted Subsidiary.
So long as no Default has occurred and is continuing or would be caused
thereby, the preceding provisions shall not prohibit: (i) the payment of any
dividend within 60 days after the date of declaration
thereof, if at said date of declaration such payment would have complied with
the provisions of this Indenture; (ii) the redemption, repurchase, retirement,
defeasance or other acquisition of any subordinated Indebtedness of the Issuers
or of any Equity Interests of the Issuers in exchange for, or out of the net
cash proceeds of the substantially concurrent sale (other than to a Subsidiary
of the Issuers or an employee stock ownership plan or to a trust established by
the Issuers or any Subsidiary of the Issuers for the benefit of its employees)
of, Equity Interests of the Issuers (other than Disqualified Stock); provided
that the amount of any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement, defeasance or other acquisition will be
excluded from clause (3)(b) of the preceding paragraph; (iii) the defeasance,
redemption, repurchase or other acquisition of subordinated Indebtedness of the
Issuers or any Restricted Subsidiary with the net cash proceeds from an
incurrence of Permitted Refinancing Indebtedness; (iv) regardless of whether any
Default then exists, the payment of any dividend by a Restricted Subsidiary of
an Issuer to the holders of its Equity Interests on a pro rata basis; (v) the
payment of any dividend or distribution to Insight Communications for the
repurchase, redemption or other acquisition or retirement for value by Insight
Communications of any Equity Interests of Insight Communications held by any
member of Insight Communications' (or any of its Subsidiaries') management
pursuant to any management equity subscription agreement or stock option
agreement in effect as of the date of this Indenture; provided that the
aggregate price paid for all such repurchased, redeemed, acquired or retired
Equity Interests shall not exceed $1.0 million in any twelve-month period; (vi)
regardless of whether any Default then exists, the payment of any dividend or
distribution to the extent necessary to permit direct or indirect beneficial
owners of Capital Stock of the Company to pay federal, state or local income tax
liabilities that would arise solely from income of the Company or any of its
Restricted Subsidiaries, as the case may be, for the relevant taxable period and
attributable to them solely as a result of the Company (and any intermediate
entity through which the holder owns such Capital Stock) or any of its
Restricted Subsidiaries being a limited liability company, partnership or
similar entity for federal income tax purposes; (vii) the retirement, redemption
or repurchase of Equity Interests of an Issuer pursuant to clauses (ii) or (iii)
of Section 10.1(b) of the Partnership Agreement as a result of the occurrence of
a Formal Determination (as defined in the Partnership Agreement) and which
relates to Federal Communications Commission or other regulatory violations
described in the Partnership Agreement; and (viii) other Restricted Payments in
an aggregate amount not to exceed $25.0 million.
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Issuers or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any assets or securities that are required to be valued pursuant
to this Section 4.07 shall be determined by the Board of Directors whose
resolution with respect thereto shall be delivered to the Trustee. The Board of
Directors' determination must be based upon an opinion or appraisal issued by an
accounting, appraisal or investment banking firm of national standing if the
fair market value exceeds $20.0 million. Not later than the date of making any
Restricted Payment, the Issuers shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by this Section 4.07 were
computed, together with a copy of any fairness opinion or appraisal required by
this Indenture.
Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries.
The Issuers shall not, and shall not permit any of their Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to: (a) pay dividends or make any other distributions on
its Equity Interests to the Issuers or any of their Restricted Subsidiaries, or
with respect to any other interest or participation in, or measured by, its
profits, or pay any indebtedness owed to the Issuers or any of their Restricted
Subsidiaries; (b) make loans or advances or guarantee any such loans or advances
to the Issuers
or any of their Restricted Subsidiaries; or (c) transfer any of its properties
or assets to the Issuers or any of their Restricted Subsidiaries; except for
such encumbrances or restrictions existing under or by reasons of (i) Existing
Indebtedness as in effect on the date hereof and any amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings thereof, provided that such amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacement or
refinancings are no more restrictive, taken as a whole, with respect to such
dividend and other payment restrictions than those contained in such Existing
Indebtedness, as in effect on the date hereof, (ii) this Indenture and the
Notes, (iii) applicable law, (iv) any instrument governing Indebtedness or
Capital Stock of a Person acquired by the Issuers or any of their Subsidiaries
as in effect at the time of such acquisition (except to the extent such
Indebtedness or Capital Stock was incurred in connection with or in anticipation
of such acquisition), which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, provided that in the case of
Indebtedness, such Indebtedness was permitted by the terms of this Indenture to
be incurred, (v) customary non-assignment provisions in leases entered into in
the ordinary course of business and consistent with past practices, (vi)
purchase money obligations for property acquired in the ordinary course of
business that impose restrictions of the nature described in clause (c) above on
the property so acquired, (vii) any agreement for the sale or other disposition
of a Restricted Subsidiary that restricts distributions by that Restricted
Subsidiary pending its sale or other disposition, (viii) Permitted Refinancing
Indebtedness, provided that the restrictions contained in the agreements
governing such Permitted Refinancing Indebtedness are no more restrictive, taken
as a whole, than those contained in the agreements governing the Indebtedness
being refinanced, (ix) Liens securing Indebtedness that limit the right of the
debtor to dispose of the assets subject to such Lien; (x) provisions with
respect to the disposition or distribution of assets or property in joint
venture agreements, asset sale agreements, stock sale agreements and other
similar agreements entered into in the ordinary course of business; (xi)
restrictions on cash or other deposits or net worth imposed by customers under
contracts entered into in the ordinary course of business; (xii) restrictions
contained in the terms of Indebtedness permitted to be incurred under Section
4.09 hereof; provided that such restrictions are no more restrictive than the
terms contained in the Amended Kentucky Credit Facility and the Amended Indiana
Credit Facility; and (xiii) restrictions that are not materially more
restrictive than customary provisions in comparable financings and the
management of the Issuers determines that such restrictions will not materially
impair the Issuers' ability to make payments as required under this Indenture
and the Notes.
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock.
The Issuers shall not, and shall not permit any of their Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness (including Acquired Debt) and the
Issuers shall not issue any Disqualified Stock and shall not permit any of their
Subsidiaries to issue any shares of preferred stock; provided, however, that the
Issuers may incur Indebtedness (including Acquired Debt) or issue shares of
Disqualified Stock, and Restricted Subsidiaries of the Issuers may incur
Indebtedness or issue preferred stock, if the Issuers' Debt to Cash Flow Ratio
at the time of incurrence of such Indebtedness or the issuance of such
Disqualified Stock or preferred stock, after giving pro forma effect to such
incurrence or issuance as of such date and to the use of proceeds therefrom as
if the same had occurred at the beginning of the most recently ended fiscal
quarter of the Issuers for which internal financial statements are available,
would have been no greater than 8.0 to 1.
The provisions of the first paragraph of this Section 4.09 shall not apply
to the incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"):
(i) the incurrence by the Issuers and their Restricted Subsidiaries of
additional Indebtedness and letters of credit under Credit Facilities in an
aggregate principal amount at any
one time outstanding under this clause (i) (with letters of credit being
deemed to have a principal amount equal to the maximum potential liability
of the Issuers and their Restricted Subsidiaries thereunder) not to exceed
$1.225 billion;
(ii) the incurrence by the Issuers and their Restricted Subsidiaries of
the Existing Indebtedness;
(iii) the incurrence by the Issuers of Indebtedness represented by the
Notes to be issued on the date of this Indenture and the Exchange Notes to
be issued pursuant to the Registration Rights Agreement;
(iv) the incurrence by the Issuers or any of their Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case, incurred
for the purpose of financing all or any part of the purchase price or cost
of construction or improvement of property, plant or equipment used in the
business of the Issuers or such Restricted Subsidiary, in an aggregate
principal amount, including all Permitted Refinancing Indebtedness incurred
to refund, refinance or replace any Indebtedness incurred pursuant to this
clause (iv), not to exceed $25.0 million at any time outstanding;
(v) the incurrence by the Issuers or any of their Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
net proceeds of which are used to refund, refinance or replace Indebtedness
(other than intercompany Indebtedness) that was permitted by this Indenture
to be incurred under the first paragraph of this Section 4.09 or clauses
(ii), (iii) or (iv) of this paragraph;
(vi) the incurrence by the Issuers or any of their Restricted
Subsidiaries of intercompany Indebtedness between or among the Issuers and
any of their Restricted Subsidiaries; provided, however, that: (a) if any of
the Issuers is the obligor on such Indebtedness, such Indebtedness must be
expressly subordinated to the prior payment in full in cash of all
Obligations with respect to the Notes, and (b)(1) any subsequent issuance or
transfer of Equity Interests that results in any such Indebtedness being
held by a Person other than the Issuers or a Restricted Subsidiary thereof
and (2) any sale or other transfer of any such Indebtedness to a Person that
is not either the Issuers or a Restricted Subsidiary of the Issuers shall be
deemed, in each case, to constitute an incurrence of such Indebtedness by
the Issuers or such Restricted Subsidiary, as the case may be, that was not
permitted by this clause (vi);
(vii) the incurrence by the Issuers or any of their Restricted
Subsidiaries of Hedging Obligations that are incurred for the purpose of
fixing or hedging interest rate risk with respect to any floating rate
Indebtedness that is permitted by the terms of this Indenture to be
outstanding;
(viii) the incurrence by the Issuers or any Restricted Subsidiary of
additional Indebtedness in an aggregate principal amount at any time
outstanding not to exceed 200% of the net cash proceeds received by the
Company from the sale of its Equity Interests, (other than Disqualified
Stock), after the date of this Indenture to the extent such net cash
proceeds have not been applied to make Restricted Payments or to effect
other transactions pursuant to Section 4.07 hereof or to make Permitted
Investments pursuant to clause (6) of the definition thereof;
(ix) the guarantee by the Issuers of Indebtedness of the Issuers or a
Restricted Subsidiary of the Issuers that was permitted to be incurred by
another provision of this Section 4.09;
(x) the accrual of interest, the accretion or amortization of original
issue discount, the payment of interest on any Indebtedness in the form of
additional Indebtedness with the same terms, and the payment of dividends on
Disqualified Stock in the form of additional shares of the same class of
Disqualified Stock will not be deemed to be an incurrence of Indebtedness or
an issuance of Disqualified Stock for purposes of this Section 4.09;
(xi) the incurrence by the Issuers or any of their Restricted
Subsidiaries of additional Indebtedness in an aggregate principal amount (or
accreted value, as applicable) at any time outstanding, including all
Permitted Refinancing Indebtedness incurred to refund, refinance or replace
any Indebtedness incurred pursuant to this clause (xi), not to exceed $50.0
million;
(xii) the incurrence by the Issuers or any Restricted Subsidiary of
Indebtedness represented by Notes issued to Affiliates in respect of, and
amounts equal to, advances made by such Affiliates to enable the Issuers or
any Restricted Subsidiary to make payments in connection with the Notes or
the Amended Kentucky Credit Facility; and
(xiii) the incurrence by the Issuers' Unrestricted Subsidiaries of
Non-Recourse Debt, provided, however, that if any such Indebtedness ceases
to be Non-Recourse Debt of an Unrestricted Subsidiary, that event will be
deemed to constitute an incurrence of Indebtedness by a Restricted
Subsidiary of the Issuers that was not permitted by this clause (xiii).
The Issuers shall not, and shall not permit any of their Restricted
Subsidiaries to, incur any Indebtedness (including Permitted Debt) that is
contractually subordinated in right of payment to any other Indebtedness of the
Issuers or such Restricted Subsidiary, as applicable, unless such Indebtedness
is also contractually subordinated in right of payment to the Notes on
substantially identical terms; provided, however, that no Indebtedness of the
Issuers or a Restricted Subsidiary shall be deemed to be contractually
subordinated in right of payment to any other Indebtedness of the Issuers or
such Restricted Subsidiary solely by virtue of being unsecured.
For purposes of determining compliance with this Section 4.09, in the event
that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (xiii) above or is
entitled to be incurred pursuant to the first paragraph of this Section 4.09,
the Issuers shall, in their sole discretion, classify such item of Indebtedness
in any manner that complies with this Section 4.09 and such item of Indebtedness
shall be treated as having been incurred pursuant to only one of such clauses or
pursuant to the first paragraph of this Section 4.09. Accrual of interest shall
not be deemed to be an incurrence of Indebtedness for purposes of this Section
4.09. Indebtedness under Credit Facilities outstanding on the date on which
Notes are first issued and authenticated under this Indenture shall be deemed to
have been incurred on such date in reliance on the exception provided by clause
(i) of the definition of Permitted Debt.
Section 4.10. Asset Sales.
The Issuers shall not, and shall not permit any of their Restricted
Subsidiaries to, consummate an Asset Sale, unless (x) the Issuers (or the
Restricted Subsidiary, as the case may be) receive consideration at the time of
such Asset Sale at least equal to the fair market value of the assets or Equity
Interests issued or sold or otherwise disposed of; (y) such fair market value is
determined by the Issuers' Boards of Directors and evidenced by a resolution of
the Boards of Directors set forth in an Officers' Certificate delivered to the
Trustee; and (y) at least 75% of the consideration received therefor by the
Issuers or such Restricted Subsidiary is in the form of cash or Cash
Equivalents; provided, however, that each of the following shall be deemed to be
cash for purposes of this provision: (A) any Indebtedness or other liabilities,
as shown on the Issuers' or such Restricted Subsidiary's most recent balance
sheet, of the
Issuers or any Restricted Subsidiary (other than contingent liabilities and
Indebtedness that is by its terms subordinated to the Notes) that are assumed by
the transferee of any such assets pursuant to an agreement that releases the
Issuers or such Restricted Subsidiary from further liability; and (B) any
securities, Notes or other obligations received by the Issuers or any such
Restricted Subsidiary from such transferee that are converted within 45 days of
the applicable Asset Sale by the Issuers or such Restricted Subsidiary into
cash, to the extent of the cash received in that conversion.
Notwithstanding the foregoing, the Issuers and their Restricted Subsidiaries
may engage in Asset Swaps; provided that, (i) immediately after giving effect to
such Asset Swap, the Issuers would be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Debt to Cash Flow Ratio test set forth
in the first paragraph of Section 4.09 hereof; and (ii) the Issuers' or the
Restricted Subsidiary's Board of Directors, as the case may be, determines that
such Asset Swap is fair to the Issuers or such Restricted Subsidiary, as the
case may be, from a financial point of view and such determination is evidenced
by a resolution of such Board of Directors set forth in an Officers' Certificate
delivered to the Trustee.
Within 365 days after the receipt of any Net Proceeds from an Asset Sale,
the Issuers may apply those Net Proceeds at their option: (a) to a permanent
repayment or reduction of Indebtedness (other than subordinated Indebtedness) of
the Issuers or a Restricted Subsidiary and, if the Indebtedness repaid is
revolving credit Indebtedness, to correspondingly reduce commitments with
respect thereto; (b) to acquire all or substantially all of the assets of a
Permitted Business; (c) to acquire Voting Stock of a Permitted Business from a
Person that is not a Subsidiary of the Issuers; provided, that (1) after giving
effect thereto, the Issuers and their Restricted Subsidiaries collectively own a
majority of such Voting Stock and (2) such acquisition is otherwise made in
accordance with this Indenture, including, without limitation Section 4.07
hereof; (d) to make capital expenditures; or (e) to acquire other long-term
tangible assets that are used or useful in a Permitted Business.
Pending the final application of any Net Proceeds, the Issuers may
temporarily reduce revolving credit borrowings or otherwise invest the Net
Proceeds in any manner that is not prohibited by this Indenture. Any Net
Proceeds from Asset Sales that are not applied or invested as provided in the
first sentence of the immediately preceding paragraph will be deemed to
constitute "Excess Proceeds." Within five days of each date on which the
aggregate amount of Excess Proceeds exceeds $20.0 million, the Issuers will make
an Asset Sale Offer to all Holders of Notes and all holders of other
Indebtedness that is pari passu with the Notes containing provisions similar to
those set forth in this Indenture relating to the Notes with respect to offers
to purchase or redeem with the proceeds of sales of assets to purchase the
maximum principal amount of Notes and such other pari passu Indebtedness that
may be purchased out of the Excess Proceeds. The offer price in any Asset Sale
Offer will be equal to 100% of principal amount plus accrued and unpaid interest
and Liquidated Damages, if any, to the date of purchase, and will be payable in
cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer,
the Issuers may use such Excess Proceeds for any purpose not otherwise
prohibited by this Indenture. If the aggregate principal amount of Notes and
such other pari passu Indebtedness tendered into such Asset Sale Offer exceeds
the amount of Excess Proceeds, the Trustee will select the Notes and such other
pari passu Indebtedness to be purchased on a pro rata basis based on the
principal amount of notes and such other pari passu Indebtedness tendered. Upon
completion of each Asset Sale Offer, the amount of Excess Proceeds will be reset
at zero.
The Issuers shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sales
provisions of the indenture, the Issuers shall comply with the applicable
securities laws and regulations and shall not be deemed to
have breached their obligations under the Asset Sale provisions of this
Indenture by virtue of such conflict.
Section 4.11. Transactions with Affiliates.
The Issuers shall not, and will not permit any of their Restricted
Subsidiaries to, directly or indirectly, make any payment to, or sell, lease,
transfer, exchange or otherwise dispose of any of their properties or assets to,
or purchase any property or assets from, or enter into or make or amend any
transaction or series of transactions, contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any Affiliate, officer or
director of the Issuers (each, an "Affiliate Transaction"), unless: (a) such
Affiliate Transaction is on terms that are no less favorable to the Issuers or
the relevant Restricted Subsidiary than those that would have been obtained in a
comparable transaction by the Issuers or such Restricted Subsidiary with an
unrelated Person (as determined by the Board of Directors and evidenced by a
resolution of the Board of Directors); and (b) the Issuers deliver to the
Trustee (i) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of $10.0,
million, a resolution of the Board of Directors set forth in an Officers'
Certificate certifying that such Affiliate Transaction complies with clause (a)
above and that such Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors; and (ii) with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $20.0 million, an opinion as to the
fairness to the Issuers of such Affiliate Transaction from a financial point of
view issued by an accounting, appraisal or investment banking firm of national
standing; provided, however, that this clause (ii) shall not apply to any
transaction between or among the Company, Insight Communications,
Tele-Communications, Inc. and their respective Subsidiaries; provided, however,
that the following items shall not be deemed to be Affiliate Transactions and,
therefore, will not be subject to the provisions of this Section 4.11: (i) any
employment agreement entered into by the Issuers or any of their Restricted
Subsidiaries in the ordinary course of business and consistent with the past
practice of the Issuers or such Restricted Subsidiary, (ii) transactions between
or among the Issuers and/or their Restricted Subsidiaries, (iii) transactions
with a Person that is an Affiliate of the Issuers solely because an Issuer owns
an Equity Interest in such Person, (iv) payment of reasonable directors fees to
Persons who are not otherwise Affiliates of the Issuers, (v) sales of Equity
Interests (other than Disqualified Stock) to Affiliates of the Issuers, (vi)
Restricted Payments that are permitted under Section 4.07 hereof; (vii) payment
of management fees to Insight Communications Company, L.P. pursuant to the
Management Agreements, (viii) any transactions or arrangements entered into, or
payments made, pursuant to the terms of the Amended Kentucky Credit Facility or
the Amended Indiana Credit Facility, (ix) Permitted Investments, (x) any
transactions or arrangements in existence on the date hereof; and (xi) any
arrangement with affiliates of Source Media, Inc. for the distribution of cable
television services or programming.
Section 4.12. Liens.
The Issuers shall not, and shall not permit any of their Restricted
Subsidiaries to, directly or indirectly create, incur, assume or suffer to exist
any Lien of any kind on any asset now owned or hereafter acquired, or any income
or profits therefrom or assign or convey any right to receive income therefrom,
except Permitted Liens.
Section 4.13. Designation of Restricted and Unrestricted Subsidiaries
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if that designation would not cause a Default. If a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate
fair market value of all outstanding Investments owned by the Issuers and their
Restricted Subsidiaries in the Subsidiary so designated shall be deemed to be an
Investment made as of
the time of such designation and shall either reduce the amount available for
Restricted Payments under the first paragraph of Section 4.07 hereof or reduce
the amount available for future Investments under one or more clauses of the
definition of Permitted Investments, as the Issuers shall determine. That
designation shall only be permitted if such Investment would be permitted at
that time and if such Restricted Subsidiary otherwise meets the definition of an
Unrestricted Subsidiary. The Board of Directors may redesignate any Unrestricted
Subsidiary to be a Restricted Subsidiary if the redesignation would not cause a
Default.
Section 4.14. Corporate Existence.
Subject to Article 5 hereof, the Issuers shall do or cause to be done all
things necessary to preserve and keep in full force and effect (i) their
corporate and limited liability company existence, as applicable, and the
corporate, limited liability company, partnership or other existence of each of
their Subsidiaries, in accordance with the respective organizational documents
(as the same may be amended from time to time) of the Issuers or any such
Subsidiary and (ii) the rights (charter and statutory), licenses and franchises
of the Issuers and their Subsidiaries; provided, however, that the Issuers shall
not be required to preserve any such right, license or franchise, or the
corporate, limited liability company, partnership or other existence of any of
their Subsidiaries, if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Issuers and their Subsidiaries, taken as a whole, and that the loss thereof
is not adverse in any material respect to the Holders of the Notes.
Section 4.15. Offer to Repurchase Upon Change of Control.
(a) Upon the occurrence of a Change of Control, the Issuers shall make an
offer (a "Change of Control Offer") to each Holder to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of each Holder's Notes at a
purchase price equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Liquidated Damages thereon, if any, to the date
of purchase (the "Change of Control Payment"). Within 30 days following any
Change of Control, the Issuers shall mail a notice to each Holder stating: (i)
that the Change of Control Offer is being made pursuant to this Section 4.15 and
that all Notes tendered will be accepted for payment; (ii) the purchase price
and the purchase date, which shall be no earlier than 30 and no later than 60
days from the date such notice is mailed (the "Change of Control Payment Date");
(iii) that any Note not tendered will continue to accrue interest; (iv) that,
unless the Issuers default in the payment of the Change of Control Payment, all
Notes accepted for payment pursuant to the Change of Control Offer shall cease
to accrue interest after the Change of Control Payment Date; (v) that Holders
electing to have any Notes purchased pursuant to a Change of Control Offer will
be required to surrender the Notes, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Notes completed, to the Paying Agent at
the address specified in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date; (vi) that Holders
will be entitled to withdraw their election if the Paying Agent receives, not
later than the close of business on the second Business Day preceding the Change
of Control Payment Date, a facsimile transmission or letter setting forth the
name of the Holder, the principal amount of Notes delivered for purchase, and a
statement that such Holder is withdrawing his election to have the Notes
purchased; and (vii) that Holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered, which unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple thereof. The Issuers shall comply with
the requirements of Rule 14e-1 under the Exchange Act and any other securities
laws and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of Notes in connection with a
Change of Control.
(b) On the Change of Control Payment Date, the Issuers shall, to the extent
lawful, (1) accept for payment all Notes or portions thereof properly tendered
pursuant to the Change of Control Offer, (2) deposit with the Paying Agent an
amount equal to the Change of Control Payment in respect of all Notes or
portions thereof so tendered and (3) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof being purchased by the
Issuers. The Paying Agent shall promptly mail to each Holder of Notes so
tendered payment in an amount equal to the purchase price for the Notes, and the
Trustee shall promptly authenticate and mail (or cause to be transferred by book
entry) to each Holder a new Note equal in principal amount to any unpurchased
portion of the Notes surrendered by such Holder, if any; provided, that each
such new Note shall be in a principal amount of $1,000 or an integral multiple
thereof. The Issuers shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment
Date.
(c) Notwithstanding anything to the contrary in this Section 4.15, the
Issuers shall not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in this
Section 4.15 and Section 3.09 hereof and all other provisions of this Indenture
applicable to a Change of Control Offer made by the Issuers and purchases all
Notes validly tendered and not withdrawn under such Change of Control Offer.
Section 4.16. Limitation on Sale and Leaseback Transactions.
The Issuers shall not, and shall not permit any of their Restricted
Subsidiaries to, enter into any sale and leaseback transaction; provided that
the Issuers or any Restricted Subsidiary may enter into a sale and leaseback
transaction if: (i) the Issuers or that Restricted Subsidiary, as applicable,
could have (a) incurred Indebtedness in an amount equal to the Attributable Debt
relating to such sale and leaseback transaction under the Debt to Cash Flow
Ratio test in the first paragraph of Section 4.09 hereof and (b) created a Lien
on such property securing Attributable Debt pursuant to the provisions of
Section 4.12 hereof; (ii) the net cash proceeds of that sale and leaseback
transaction are at least equal to the fair market value, as determined in good
faith by the Board of Directors and set forth in an Officers' Certificate
delivered to the Trustee, of the property that is the subject of that sale and
leaseback transaction; and (iii) the transfer of assets in that sale and
leaseback transaction is permitted by, and the Issuers or that Restricted
Subsidiary applies the proceeds of such transaction in compliance with, Section
4.10 hereof.
Section 4.17. Payments for Consent.
The Issuers shall not, and shall not permit any of their Subsidiaries to,
directly or indirectly, pay or cause to be paid any consideration to or for the
benefit of any Holder for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Indenture or the Notes
unless such consideration is offered to be paid and is paid to all Holders that
consent, waive or agree to amend in the time frame set forth in the solicitation
documents relating to such consent, waiver or agreement.
Section 4.18. Restrictions on Activities of Insight Capital.
Insight Capital shall not hold any material assets, become liable for any
material obligations other than the Notes, or engage in any significant business
activities; provided that Insight Capital may be a co-obligor with respect to
Indebtedness if the Company is a primary obligor of such Indebtedness and the
net proceeds of such Indebtedness are received by the Company or one or more of
the Company's Restricted Subsidiaries other than Insight Capital.
ARTICLE 5.
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.
No Issuer shall, directly or indirectly, consolidate or merge with or
into (whether or not such Issuer is the surviving entity), or sell, assign,
transfer, convey or otherwise dispose of all or substantially all of the
properties or assets of the Issuers and their Restricted Subsidiaries, taken as
a whole, in one or more related transactions to, another Person unless: (i)
either: (a) such Issuer is the surviving corporation; or (b) the Person formed
by or surviving any such consolidation or merger (if other than such Issuer) or
to which such sale, assignment, transfer, conveyance or other disposition shall
have been made is a corporation, limited liability company or limited
partnership organized or existing under the laws of the United States, any state
thereof or the District of Columbia; (ii) the Person formed by or surviving any
such consolidation or merger (if other than such Issuer) or the Person to which
such sale, assignment, transfer, conveyance or other disposition shall have been
made assumes all the obligations of the Issuers under the Notes, this Indenture
and the Registration Rights Agreement pursuant to agreements reasonably
satisfactory to the Trustee; (iii) immediately after such transaction no Default
or Event of Default exists; and (iv) the Issuers or the Person formed by or
surviving any such consolidation or merger (if other than the Issuers), or to
which such sale, assignment, transfer, conveyance or other disposition shall
have been made shall, on the date of such transaction after giving pro forma
effect thereto and any related financing transactions as if the same had
occurred at the beginning of the applicable fiscal quarter, be permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Debt to Cash
Flow Ratio test set forth in the first paragraph of Section 4.09 hereof. In
addition, the Issuers may not, directly or indirectly, lease all or
substantially all of their properties or assets, in one or more related
transactions, to any other Person. The provisions of this Section 5.01 shall not
apply to a sale, assignment, transfer, conveyance or other disposition of assets
between or among the Issuers and any of their Restricted Subsidiaries.
Section 5.02. Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the assets of the
Issuers in accordance with Section 5.01 hereof, the successor corporation formed
by such consolidation or into or with which an Issuer is merged or to which such
sale, assignment, transfer, lease, conveyance or other disposition is made shall
succeed to, and be substituted for (so that from and after the date of such
consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Issuers" shall refer instead to
the successor corporation and not to the applicable Issuer), and may exercise
every right and power of the Issuers under this Indenture with the same effect
as if such successor Person had been named as an Issuer herein; provided,
however, that the predecessor Issuers shall not be relieved from the obligation
to pay the principal of and interest on the Notes except in the case of a sale,
assignment, transfer, conveyance or other disposition of all of an Issuer's
assets that meets the requirements of Section 5.01 hereof.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
An "Event of Default" occurs if:
(a) the Issuers default in the payment when due of interest on, or
Liquidated Damages with respect to, the Notes and such default continues for a
period of 30 days;
(b) the Issuers default in the payment when due of principal of or premium,
if any, on the Notes when the same becomes due and payable at maturity, upon
redemption (including in connection with an offer to purchase) or otherwise;
(c) the Issuers fail to comply with any of the provisions of Section 3.09,
4.10, 4.15 or 5.01 hereof;
(d) the Issuers or any of their Restricted Subsidiaries fail to comply with
any other covenant, representation, warranty or other agreement in this
Indenture for 30 days after written notice to the Issuers by the Trustee or to
the Issuers and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Notes (including Additional Notes, if any) then
outstanding voting as a single class;
(e) a default occurs under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Issuers or any of their Restricted
Subsidiaries (or the payment of which is guaranteed by the Issuers or any of
their Restricted Subsidiaries), whether such Indebtedness or guarantee now
exists, or is created after the date of this Indenture, which default: (1) is
caused by a failure to pay principal of, or interest or premium, if any, on such
Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "Payment Default"); or (2) results
in the acceleration of such Indebtedness prior to its express maturity and, in
each case, the principal amount of such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$25.0 million or more;
(f) the Issuers or any of their Restricted Subsidiaries fail to pay final
judgments which are non-appealable aggregating in excess of $25.0 million, (net
of applicable insurance which has not been denied in writing by the insurer),
which judgments are not paid, discharged or stayed for a period of 60 days;
(g) the Issuers or any of their Significant Subsidiaries or any group of
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary
pursuant to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an
involuntary case,
(iii) consents to the appointment of a custodian of it or for all or
substantially all of its property,
(iv) makes a general assignment for the benefit of its creditors, or
(v) generally is not paying its debts as they become due; or
(h) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(i) is for relief against the Issuers or any of their Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary in an involuntary case;
(ii) appoints a custodian of the Issuers or any of their Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary or for all or substantially all of the
property of the Issuers or any of their Significant Subsidiaries or any
group of Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary; or
(iii) orders the liquidation of the Issuers or any of their Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive days.
Section 6.02. Acceleration.
If any Event of Default (other than an Event of Default specified in clause
(g) or (h) of Section 6.01 hereof with respect to the Issuers, any Significant
Subsidiary or any group of Significant Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary) occurs and is continuing, the Trustee
or the Holders of at least 25% in principal amount of the then outstanding Notes
may declare all the Notes to be due and payable immediately. Notwithstanding the
foregoing, if an Event of Default specified in clause (g) or (h) of Section 6.01
hereof occurs with respect to the Issuers, any of their Significant Subsidiaries
or any group of Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary, all outstanding Notes shall be due and payable
immediately without further action or notice. The Holders of a majority in
aggregate principal amount of the then outstanding Notes by written notice to
the Trustee may on behalf of all of the Holders rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default (except nonpayment of principal, interest
or Liquidated Damages, if any, that has become due solely because of the
acceleration, and with respect to any provision of this Indenture that cannot be
modified or amended without the consent of the Holder of each note affected
thereby) have been cured or waived.
If an Event of Default occurs on or after October 1, 2004 by reason of any
willful action (or inaction) taken (or not taken) by or on behalf of the Issuers
with the intention of avoiding payment of the premium that the Issuers would
have had to pay if the Issuers then had elected to redeem the Notes pursuant to
Section 3.07 hereof, then, upon acceleration of the Notes, an equivalent premium
shall also become and be immediately due and payable, to the extent permitted by
law, anything in this Indenture or in the Notes to the contrary notwithstanding.
If an Event of Default occurs prior to October 1, 2004 by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Issuers with
the intention of avoiding the prohibition on redemption of the Notes prior to
such date, then, upon acceleration of the Notes, an additional premium shall
also become and be immediately due and payable in an amount, for each of the
years beginning on October 1 of the years set forth below, as set forth below
(expressed as a percentage of the principal amount of the Notes on the date of
payment that would otherwise be due but for the provisions of this sentence):
YEAR PERCENTAGE
---- ----------
1999..................................................... 109.750%
2000..................................................... 108.775%
2001..................................................... 107.800%
2002..................................................... 106.825%
2003..................................................... 105.850%
|
Section 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal, premium, if any, and
interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of the
Notes or does not produce any of them in the proceeding. A delay or omission by
the Trustee or any Holder of a Note in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. All remedies are cumulative
to the extent permitted by law.
Section 6.04. Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount of the
then outstanding Notes by notice to the Trustee may on behalf of the Holders of
all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of, premium and Liquidated Damages, if any, or interest
on, the Notes (including in connection with an offer to purchase); provided,
however, that the Holders of a majority in aggregate principal amount of the
then outstanding Notes may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration. Upon
any such waiver, such Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
Section 6.05. Control by Majority.
Holders of a majority in principal amount of the then outstanding Notes may
direct the time, method and place of conducting any proceeding for exercising
any remedy available to the Trustee or exercising any trust or power conferred
on it. However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture that the Trustee determines may be unduly prejudicial
to the rights of other Holders of Notes or that may involve the Trustee in
personal liability.
Section 6.06. Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this Indenture or the
Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a continuing
Event of Default;
(b) the Holders of at least 25% in principal amount of the then outstanding
Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal amount
of the then outstanding Notes do not give the Trustee a direction inconsistent
with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of
another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
Section 6.07. Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(a) or (b) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
trustee of an express trust against the Issuers for the whole amount of
principal of, premium and Liquidated Damages, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
Section 6.09. Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Issuers
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article, it shall pay out
the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs
and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes for
principal, premium and Liquidated Damages, if any, and interest, ratably,
without preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium and Liquidated Damages, if any
and interest, respectively; and
Third: to the Issuers or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as a
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section does
not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to
Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount
of the then outstanding Notes.
ARTICLE 7.
TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the express
provisions of this Indenture and the Trustee need perform only those duties
that are specifically set forth in this Indenture and no others, and no
implied covenants or obligations shall be read into this Indenture against
the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine whether
or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction received
by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money received by it
except as the Trustee may agree in writing with the Issuers. Money held in trust
by the Trustee need not be segregated from other funds except to the extent
required by law.
Section 7.02. Rights of Trustee.
(a) The Trustee may conclusively rely upon any document believed by it to be
genuine and to have been signed or presented by the proper Person. The Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits to take
in good faith that it believes to be authorized or within the rights or powers
conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Issuers shall be sufficient if signed by
an Officer of an Issuer.
(f) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Issuers or any Affiliate of the
Issuers with the same rights it would have if it were not Trustee. However, in
the event that the Trustee acquires any conflicting interest it must
eliminate such conflict within 90 days, apply to the SEC for permission to
continue as trustee or resign. Any Agent may do the same with like rights and
duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
Section 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Issuers' use of the proceeds from the Notes or any money
paid to the Issuers or upon the Issuers' direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
Section 7.05. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is known
to the Trustee, the Trustee shall mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium, if any, or
interest or Liquidated Damages, if any, on any Note, the Trustee may withhold
the notice if and so long as a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interests of the Holders
of the Notes.
Section 7.06. Reports by Trustee to Holders of the Notes.
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, and for so long as Notes remain outstanding, the Trustee
shall mail to the Holders of the Notes a brief report dated as of such reporting
date that complies with TIA ss. 313(a) (but if no event described in TIA ss.
313(a) has occurred within the twelve months preceding the reporting date, no
report need be transmitted). The Trustee also shall comply with TIA ss.
313(b)(2). The Trustee shall also transmit by mail all reports as required by
TIA ss. 313(c).
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Issuers and filed with the SEC and each stock exchange on
which the Notes are listed in accordance with TIA ss. 313(d). The Issuers shall
promptly notify the Trustee when the Notes are listed on any stock exchange.
Section 7.07. Compensation and Indemnity.
The Issuers shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Issuers shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
The Issuers shall indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture, including the
costs and expenses of enforcing this Indenture against the Issuers (including
this Section 7.07) and defending itself against any claim (whether asserted by
the Issuers or any Holder or any other person) or liability in connection with
the exercise or performance of any of its powers or duties
hereunder, except to the extent any such loss, liability or expense may be
attributable to its negligence or bad faith. The Trustee shall notify the
Issuers promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Issuers shall not relieve the Issuers of their
obligations hereunder. The Issuers shall defend the claim and the Trustee shall
cooperate in the defense. The Trustee may have separate counsel and the Issuers
shall pay the reasonable fees and expenses of such counsel. The Issuers need not
pay for any settlement made without their consent, which consent shall not be
unreasonably withheld.
The obligations of the Issuers under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture.
To secure the Issuers' payment obligations in this Section, the Trustee
shall have a Lien prior to the Notes on all money or property held or collected
by the Trustee, except that held in trust to pay principal and interest on
particular Notes. Such Lien shall survive the satisfaction and discharge of this
Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(g) or (h) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA ss. 313(b)(2) to the
extent applicable.
Section 7.08. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Issuers. The Holders of a majority in
principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Issuers in writing. The Issuers may remove the
Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office of
Trustee for any reason, the Issuers shall promptly appoint a successor Trustee.
Within one year after the successor Trustee takes office, the Holders of a
majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Issuers.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuers, or
the Holders of at least 10% in principal amount of the then outstanding Notes
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee, after written request by any Holder who has been a Holder
for at least six months, fails to comply with Section 7.10, such Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment to
the retiring Trustee and to the Issuers. Thereupon, the resignation or removal
of the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to Holders. The retiring
Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee, provided all sums owing to the Trustee hereunder have been
paid and subject to the Lien provided for in Section 7.07 hereof.
Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the
Issuers' obligations under Section 7.07 hereof shall continue for the benefit of
the retiring Trustee.
Section 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Trustee.
Section 7.10. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has, or is a direct or indirect wholly-owned subsidiary of
a bank holding company that has, a combined capital and surplus of at least $100
million as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the requirements of
TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA ss. 310(b).
Section 7.11. Preferential Collection of Claims Against the Issuers.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.
The Issuers may, at the option of their Boards of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article Eight.
Section 8.02. Legal Defeasance and Discharge.
Upon the Issuers' exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Issuers shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from their obligations with respect to all outstanding Notes on the
date the
conditions set forth below are satisfied (hereinafter, "Legal Defeasance"). For
this purpose, Legal Defeasance means that the Issuers shall be deemed to have
paid and discharged the entire Indebtedness represented by the outstanding
Notes, which shall thereafter be deemed to be "outstanding" only for the
purposes of Section 8.05 hereof and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all their other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Issuers, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in Section
8.04 hereof, and as more fully set forth in such Section, payments in respect of
the principal of, premium and Liquidated Damages, if any, and interest on such
Notes when such payments are due, (b) the Issuers' obligations with respect to
such Notes under Article 2 and Section 4.02 hereof, (c) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and the Issuers'
obligations in connection therewith and (d) this Article Eight. Subject to
compliance with this Article Eight, the Issuers may exercise their option under
this Section 8.02 notwithstanding the prior exercise of its option under Section
8.03 hereof.
Section 8.03. Covenant Defeasance.
Upon the Issuers' exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Issuers shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from their
obligations under the covenants contained in Sections 4.07, 4.08, 4.09, 4.10,
4.11, 4.12, 4.13, 4.15, 4.16, 4.17 and 4.18 hereof and clause (iv) of Section
5.01 hereof with respect to the outstanding Notes on and after the date the
conditions set forth in Section 8.04 are satisfied (hereinafter, "Covenant
Defeasance"), and the Notes shall thereafter be deemed not "outstanding" for the
purposes of any direction, waiver, consent or declaration or act of Holders (and
the consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Notes shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding Notes, the Issuers may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section 6.01
hereof, but, except as specified above, the remainder of this Indenture and such
Notes shall be unaffected thereby. In addition, upon the Issuers' exercise under
Section 8.01 hereof of the option applicable to this Section 8.03 hereof,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
Sections 6.01(c) through 6.01(f) hereof shall not constitute Events of Default.
Section 8.04. Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either Section
8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Issuers must irrevocably deposit with the Trustee, in trust, for the
benefit of the Holders, cash in United States dollars, non-callable Government
Securities, or a combination thereof, in such amounts as will be sufficient, in
the opinion of a nationally recognized firm of independent public accountants,
to pay the principal of, premium and Liquidated Damages, if any, and interest on
the outstanding Notes on the stated maturity or on the applicable redemption
date, as the case may be and the Issuers must specify whether the Notes are
being defeased to maturity or to a particular redemption date;
(b) in the case of an election under Section 8.02 hereof, the Issuers shall
have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that (A) the Issuers have
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date of this Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the Issuers shall
have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be continuing
either: (a) on the date of such deposit (other than a Default or Event of
Default resulting from the borrowing of funds to be applied to such deposit) or
(b) insofar as Sections 6.01(g) or 6.01(h) hereof are concerned, at any time in
the period ending on the 91st day after the date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any material agreement or
instrument (other than this Indenture) to which the Issuers or any of their
Subsidiaries is a party or by which the Issuers or any of their Subsidiaries is
bound;
(f) the Issuers shall have delivered to the Trustee an Opinion of Counsel to
the effect that, assuming no intervening bankruptcy of the Issuers between the
date of deposit and the 91st day following the deposit and assuming that no
Holder is an "insider" of the Issuers under applicable bankruptcy law, after the
91st day following the deposit, the trust funds will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally;
(g) the Issuers shall deliver to the Trustee an Officers' Certificate
stating that the deposit was not made by the Issuers with the intent of
preferring the Holders over any other creditors of the Issuers or with the
intent of defeating, hindering, delaying or defrauding any other creditors of
the Issuers or others; and
(h) the Issuers shall deliver to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent relating to the
Legal Defeasance or the Covenant Defeasance have been complied with.
Section 8.05. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including either Issuer acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become
due thereon in respect of principal, premium, if any, and interest, but such
money need not be segregated from other funds except to the extent required by
law.
The Issuers shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article Eight to the contrary notwithstanding, the Trustee
shall deliver or pay to the Issuers from time to time upon the request of the
Issuers any money or non-callable Government Securities held by it as provided
in Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(a) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06. Repayment to the Issuers.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Issuers, in trust for the payment of the principal of, premium, if any, or
interest or Liquidated Damages, if any, on any Note and remaining unclaimed for
two years after such principal, and premium, if any, or interest has become due
and payable shall be paid to the Issuers on their request or (if then held by
the Issuers) shall be discharged from such trust; and the Holder of such Note
shall thereafter look only to the Issuers for payment thereof, and all liability
of the Trustee or such Paying Agent with respect to such trust money, and all
liability of either Issuer as trustee thereof, shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such repayment, may at the expense of the Issuers cause to be published
once, in the New York Times and The Wall Street Journal (national edition),
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such notification
or publication, any unclaimed balance of such money then remaining will be
repaid to the Issuers.
Section 8.07. Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States dollars
or non-callable Government Securities in accordance with Section 8.02 or 8.03
hereof, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Issuers' obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.02 or 8.03
hereof, as the case may be; provided, however, that, if the Issuers make any
payment of principal of, premium, if any, or interest on any Note following the
reinstatement of their obligations, the Issuers shall be subrogated to the
rights of the Holders of such Notes to receive such payment from the money held
by the Trustee or Paying Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Issuers and the Trustee
may amend or supplement this Indenture or the Notes without the consent of any
Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes or to alter the provisions of Article 2 hereof (including the
related definitions) in a manner that does not materially adversely affect any
Holder;
(c) to provide for the assumption of the Issuers' obligations to the Holders
of the Notes by a successor to the Issuers pursuant to Article 5 hereof;
(d) to make any change that would provide any additional rights or benefits
to the Holders of the Notes or that does not adversely affect the legal rights
hereunder of any Holder of the Note;
(e) to comply with requirements of the SEC in order to effect or maintain
the qualification of this Indenture under the TIA; or
(f) to provide for the issuance of Additional Notes in accordance with the
limitations set forth in this Indenture as of the date hereof.
Upon the request of the Issuers accompanied by a resolution of their Boards
of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee shall join with the Issuers in the execution of any
amended or supplemental Indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations that
may be therein contained, but the Trustee shall not be obligated to enter into
such amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
Section 9.02. With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Issuers and the Trustee
may amend or supplement this Indenture (including Section 3.09, 4.10 and 4.15
hereof) and the Notes with the consent of the Holders of at least a majority in
principal amount of the Notes (including Additional Notes, if any) then
outstanding voting as a single class (including consents obtained in connection
with a tender offer or exchange offer for, or purchase of, the Notes), and,
subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of
Default (other than a Default or Event of Default in the payment of the
principal of, premium, if any, or interest or Liquidated Damages, if any, on the
Notes, except a payment default resulting from an acceleration that has been
rescinded) or compliance with any provision of this Indenture or the Notes may
be waived with the consent of the Holders of a majority in principal amount of
the then outstanding Notes (including Additional Notes, if any) voting as a
single class (including consents obtained in connection with a tender offer or
exchange offer for, or purchase of, the Notes). Section 2.08 hereof shall
determine which Notes are considered to be "outstanding" for purposes of this
Section 9.02.
Upon the request of the Issuers accompanied by a resolution of their Boards
of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee shall
join with the Issuers in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture directly affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may in its discretion, but shall not be obligated to, enter into
such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes under this
Section 9.02 to approve the particular form of any proposed amendment or waiver,
but it shall be sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Issuers shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Issuers to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the Notes (including Additional Notes,
if any) then outstanding voting as a single class may waive compliance in a
particular instance by the Issuers with any provision of this Indenture or the
Notes. However, without the consent of each Holder affected, an amendment or
waiver under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must consent to an
amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note or
alter or waive any of the provisions with respect to the redemption of the Notes
except as provided above with respect to Sections 3.09, 4.10 and 4.15 hereof;
(c) reduce the rate of or change the time for payment of interest, including
default interest, on any Note;
(d) waive a Default or Event of Default in the payment of principal of or
premium or Liquidated Damages, if any, or interest on the Notes (except a
rescission of acceleration of the Notes by the Holders of at least a majority in
aggregate principal amount of the then outstanding Notes (including Additional
Notes, if any) and a waiver of the payment default that resulted from such
acceleration);
(e) make any Note payable in money other than that stated in the Notes;
(f) make any change in the provisions of this Indenture relating to waivers
of past Defaults or the rights of Holders of Notes to receive payments of
principal of or interest or Liquidated Damages, if any, on the Notes; or
(g) make any change in Section 6.04 or 6.07 hereof or in the foregoing
amendment and waiver provisions.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes shall be set
forth in a amended or supplemental Indenture that complies with the TIA as then
in effect.
Section 9.04. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to it
by a Holder of a Note is a continuing consent by the Holder of a Note and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note, even if notation of the consent is not made on any
Note. However, any such Holder of a Note or subsequent Holder of a Note may
revoke the consent as to its Note if the Trustee receives written notice of
revocation before the date the waiver,
supplement or amendment becomes effective. An amendment, supplement or waiver
becomes effective in accordance with its terms and thereafter binds every
Holder.
Section 9.05. Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment, supplement
or waiver on any Note thereafter authenticated. The Issuers in exchange for all
Notes may issue and the Trustee shall, upon receipt of an Authentication Order,
authenticate new Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
Section 9.06. Trustee to Sign Amendments, etc.
The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Issuers
may not sign an amendment or supplemental Indenture until the Boards of
Directors approve it. In executing any amended or supplemental indenture, the
Trustee shall be entitled to receive and (subject to Section 7.01 hereof) shall
be fully protected in relying upon, in addition to the documents required by
Section 10.04 hereof, an Officers' Certificate and an Opinion of Counsel stating
that the execution of such amended or supplemental indenture is authorized or
permitted by this Indenture.
ARTICLE 10.
MISCELLANEOUS
Section 10.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA ss.318(c), the imposed duties shall control.
Section 10.02. Notices.
Any notice or communication by the Issuers or the Trustee to the others is
duly given if in writing and delivered in Person or mailed by first class mail
(registered or certified, return receipt requested), telecopier or overnight air
courier guaranteeing next day delivery, to the others' address:
If to the Issuers:
Insight Midwest, L.P.
Insight Capital, Inc.
126 East 56th Street
Telecopier No.: (212)371-1549
Attention: Ms. Colleen Quinn
With a copy to:
Cooperman Levitt Winikoff Lester & Newman, P.C,
800 Third Avenue
30th Floor
New York, NY 10022
Fax No.: (212)755-2839
Attention: Elliot Brecher, Esq.
If to the Trustee:
Harris Trust Company of New York
Wall Street Plaza
88 Pine Street
New York, NY 10005
Fax No.: (212) 701-7698
Attention: Amy Roberts
The Issuers or the Trustee, by notice to the others may designate additional
or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when receipt acknowledged, if faxed; and the next Business
Day after timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class mail,
certified or registered, return receipt requested, or by overnight air courier
guaranteeing next day delivery to its address shown on the register kept by the
Registrar. Any notice or communication shall also be so mailed to any Person
described in TIA ss. 313(c), to the extent required by the TIA. Failure to mail
a notice or communication to a Holder or any defect in it shall not affect its
sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Issuers mail a notice or communication to Holders, it shall mail a
copy to the Trustee and each Agent at the same time.
Section 10.03. Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders with
respect to their rights under this Indenture or the Notes. The Issuers, the
Trustee, the Registrar and anyone else shall have the protection of TIA ss.
312(c).
Section 10.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Issuers to the Trustee to take any
action under this Indenture, the Issuers shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in Section 10.05
hereof) stating that, in the opinion of the
signers, all conditions precedent and covenants, if any, provided for in this
Indenture relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory to
the Trustee (which shall include the statements set forth in Section 10.05
hereof) stating that, in the opinion of such counsel, all such conditions
precedent and covenants have been satisfied.
Section 10.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA ss. 314(a)(4)) shall comply with the provisions of TIA ss.
314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has read
such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and
(d) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been satisfied.
Section 10.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 10.07. No Personal Liability of Directors, Officers, Employees and
Stockholders.
No past, present or future director, officer, employee, incorporator or
stockholder of the Issuers as such, shall have any liability for any obligations
of the Issuers under the Notes, this Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes.
Section 10.08. Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Section 10.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Issuers or their Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 10.10. Successors.
All agreements of the Issuers in this Indenture and the Notes shall bind
their successors. All agreements of the Trustee in this Indenture shall bind its
successors.
Section 10.11. Severability.
In case any provision in this Indenture or in the Notes shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
Section 10.12. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
Section 10.13. Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part of this Indenture and shall in no way
modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
SIGNATURES
INSIGHT MIDWEST, L.P.
By its General Partner,
INSIGHT COMMUNICATIONS COMPANY, L.P.
By its General
Partner, INSIGHT COMMUNICATIONS COMPANY, INC.
By:_______________________________
Name:
Title:
INSIGHT CAPITAL, INC.
By:_______________________________
Name:
Title:
HARRIS TRUST COMPANY OF NEW YORK
By:_______________________________
Name:
Title:
EXHIBIT A1
[Face of Note]
CUSIP ____________
9 3/4% [Series A] [Series B] Senior Notes due 2009
No. ___ $____________
INSIGHT MIDWEST, L.P.
INSIGHT CAPITAL, INC.
promise to pay to Cede & Co. or registered assigns,
the principal sum of ____________________________Dollars on October 1, 2009.
Interest Payment Dates: April 1 and October 1 Record Dates: March 15 and September 15
|
Dated: October 1, 1999
INSIGHT MIDWEST, L.P.
By its General Partner:
INSIGHT COMMUNICATIONS COMPANY, L.P.
By its General Partner:
INSIGHT COMMUNICATIONS COMPANY, INC.
By:_________________________________
Name:
Title:
INSIGHT CAPITAL, INC.
By:_________________________________
Name:
Title:
This is one of the Notes referred to
in the within-mentioned Indenture:
HARRIS TRUST COMPANY OF NEW YORK,
as Trustee
By:____________________________________
(Authorized Signature)
[Back of Note]
9 3/4% [Series A] [Series B] Senior Notes due 2009
[Insert the Global Note Legend, if applicable pursuant to the provisions of the
Indenture]
[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Indenture]
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. INTEREST. Insight Midwest, L.P., a Delaware limited partnership (the
"Company"), and Insight Capital, Inc., a Delaware corporation (together with the
Company, the "Issuers"), promise to pay interest on the principal amount of this
Note at 9 3/4% per annum from October 1, 1999 until maturity and shall pay the
Liquidated Damages payable pursuant to, and to the extent required by, Section 5
of the Registration Rights Agreement referred to below. The Issuers will pay
interest and Liquidated Damages semi-annually in arrears on April 1 and October
1 of each year, or if any such day is not a Business Day, on the next succeeding
Business Day (each an "Interest Payment Date"). Interest on the Notes will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of issuance; provided that if there is no
existing Default in the payment of interest, and if this Note is authenticated
between a record date referred to on the face hereof and the next succeeding
Interest Payment Date, interest shall accrue from such next succeeding Interest
Payment Date; provided, further, that the first Interest Payment Date shall be
April 1, 2000. The Issuers shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue principal and premium, if
any, from time to time on demand at a rate that is 1% per annum in excess of the
rate then in effect; they shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue installments of interest
and Liquidated Damages (without regard to any applicable grace periods) from
time to time on demand at the same rate to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Issuers will pay interest on the Notes (except
defaulted interest) and Liquidated Damages to the Persons who are registered
Holders of Notes at the close of business on the March 15 or September 15 next
preceding the Interest Payment Date, even if such Notes are canceled after such
record date and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Indenture with respect to defaulted interest. The Notes will
be payable as to principal, premium and Liquidated Damages, if any, and interest
at the office or agency of the Issuers maintained for such purpose within or
without the City and State of New York, or, at the option of the Issuers,
payment of interest and Liquidated Damages may be made by check mailed to the
Holders at their addresses set forth in the register of Holders, and provided
that payment by wire transfer of immediately available funds will be required
with respect to principal of and interest, premium and Liquidated Damages on,
all Global Notes and all other Notes the Holders of which shall have provided
wire transfer instructions to the Issuers or the Paying Agent. Such payment
shall be in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, Harris Trust Company of New York,
the Trustee under the Indenture, will act as Paying Agent and Registrar. The
Issuers may change any Paying Agent or Registrar without notice to any Holder.
The Issuers or any of their Subsidiaries may act in any such capacity.
4. INDENTURE. The Issuers issued the Notes under an Indenture dated as of
October 1, 1999 ("Indenture") among the Issuers and the Trustee. The terms of
the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code ss.ss. 77aaa-77bbbb). The Notes
are subject to all such terms, and Holders are referred to the Indenture and
such Act for a statement of such terms. To the extent any provision of this Note
conflicts with the express provisions of the Indenture, the provisions of the
Indenture shall govern and be controlling. The Notes are obligations of the
Issuers limited to $400.0 million in aggregate principal amount.
5. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph 5, the Issuers
shall not have the option to redeem the Notes prior to October 1, 2004.
Thereafter, the Issuers shall have the option to redeem the Notes, in whole or
in part, upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest and Liquidated Damages thereon, if any, to the
applicable redemption date, if redeemed during the twelve-month period beginning
on October 1 of the years indicated below:
Year Percentage
---- ----------
2004................................................... 104.875%
2005................................................... 103.250%
2006................................................... 101.625%
2007 and thereafter.................................... 100.000%
|
(b) Notwithstanding the provisions of subparagraph (a) of this Paragraph 5,
at any time prior to October 1, 2002, the Issuers may redeem Notes with the net
proceeds of one or more Equity Offerings at a redemption price equal to 109.75%
of the aggregate principal amount thereof; provided that at least 65% in
aggregate principal amount of the Notes issued under the Indenture remain
outstanding immediately after the occurrence of any such redemption and that
such redemption occurs within 90 days of the date of the closing of any such
Equity Offering.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Issuers shall not be required
to make mandatory redemption payments with respect to the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Issuers shall be required to make
an offer (a "Change of Control Offer") to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of each Holder's Notes at a purchase
price equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of purchase
(the "Change of Control Payment"). Within 30 days following any Change of
Control, the Issuers shall mail a notice to each Holder setting forth the
procedures governing the Change of Control Offer as required by the Indenture.
(b) If the Issuers or any Restricted Subsidiary consummates any Asset Sales,
within five days of each date on which the aggregate amount of Excess Proceeds
exceeds $20.0 million, the Issuers shall commence an offer to all Holders of
Notes (an "Asset Sale Offer") pursuant to Section 3.09 of the Indenture to
purchase the maximum principal amount of Notes and pari passu indebtedness that
may be purchased out of the Excess Proceeds at an offer price in cash in an
amount equal to 100% of the principal amount thereof plus accrued and unpaid
interest and Liquidated Damages thereon, if any, to the date fixed for the
closing of such offer in accordance with the procedures set forth in the
Indenture. To the extent
that the aggregate amount of Notes (including any Additional Notes) tendered
pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Issuers
(or such Restricted Subsidiary) may use such deficiency for any purpose not
otherwise prohibited by the Indenture. If the aggregate principal amount of
Notes and other such pari passu indebtedness surrendered by Holders thereof
exceeds the amount of Excess Proceeds, the Trustee shall select the Notes to be
purchased on a pro rata basis. Holders of Notes that are the subject of an offer
to purchase will receive an Asset Sale Offer from the Issuers prior to any
related purchase date and may elect to have such Notes purchased by completing
the form entitled "Option of Holder to Elect Purchase" on the reverse of the
Notes.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Issuers may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Issuers need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Issuers
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as
its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the then outstanding Notes
and Additional Notes, if any, voting as a single class, and any existing default
or compliance with any provision of the Indenture or the Notes may be waived
with the consent of the Holders of a majority in principal amount of the then
outstanding Notes and Additional Notes, if any, voting as a single class.
Without the consent of any Holder of a Note, the Indenture or the Notes may be
amended or supplemented to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Notes in addition to or in place of certificated
Notes, to provide for the assumption of the Issuers' obligations to Holders of
the Notes in case of a merger or consolidation, to make any change that would
provide any additional rights or benefits to the Holders of the Notes or that
does not adversely affect the legal rights under the Indenture of any such
Holder, to comply with the requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act and to
provide for the issuance of Additional Notes in accordance with the limitations
set forth in the Indenture.
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30
days in the payment when due of interest or Liquidated Damages on the Notes;
(ii) default in payment when due of principal of or premium, if any, on the
Notes when the same becomes due and payable at maturity, upon redemption
(including in connection with an offer to purchase) or otherwise, (iii) failure
by the Company to comply with Sections 3.09, 4.10, 4.15 or 5.01 of the
Indenture; (iv) failure by the Issuers for 30 days after notice to the Issuers
by the Trustee or to the Issuers and the Trustee by the Holders of at least 25%
in principal amount of the Notes (including Additional Notes, if any) then
outstanding voting as a single class to comply with certain other agreements in
the Indenture or the Notes; (v) default under certain other agreements relating
to Indebtedness of the Issuers or their Restricted Subsidiaries which default
results in the acceleration of such Indebtedness prior to its express maturity;
(vi) certain final judgments for the payment of money that remain undischarged
for a period of 60 days; and (vii) certain events of bankruptcy or insolvency
with respect to the Issuers or any of their Significant Subsidiaries. If any
Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the then outstanding Notes may declare all the
Notes to be due and payable. Notwithstanding the foregoing, in the case of an
Event of Default arising from certain events of bankruptcy or insolvency, all
outstanding Notes will become due and payable without further action or notice.
Holders may not enforce the Indenture or the Notes except as provided in the
Indenture. Subject to certain limitations, Holders of a majority in principal
amount of the then outstanding Notes may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders of the Notes notice of
any continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest. The Holders of a majority in aggregate
principal amount of the Notes then outstanding by notice to the Trustee may on
behalf of the Holders of all of the Notes waive any existing Default or Event of
Default and its consequences under the Indenture except a continuing Default or
Event of Default in the payment of premium, principal, interest or Liquidated
Damages on the Notes. The Issuers are required to deliver to the Trustee
annually a statement regarding compliance with the Indenture, and the Issuers
are required upon becoming aware of any Default or Event of Default, to deliver
to the Trustee a statement specifying such Default or Event of Default.
13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Issuers or their Affiliates, and may otherwise deal with the Issuers or
their Affiliates, as if it were not the Trustee.
14. NO RECOURSE AGAINST OTHERS. A director, officer, employee, incorporator
or stockholder, of the Issuers, as such, shall not have any liability for any
obligations of the Issuers under the Notes or the Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the Notes.
15. AUTHENTICATION. This Note shall not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND RESTRICTED
DEFINITIVE NOTES. In addition to the rights provided to Holders of Notes under
the Indenture, Holders of Restricted Global Notes and Restricted Definitive
Notes shall have all the rights set forth in the Registration Rights Agreement
dated as of October 1, 1999 among the Issuers and the parties named on the
signature pages thereof or, in the case of Additional Notes, Holders of
Restricted Global Notes and Restricted Definitive Notes shall have the rights
set forth in one or more registration rights agreements, if any, between the
Company and the other parties thereto, relating to rights given by the Company
to the purchasers of any Additional Notes (collectively, the "Registration
Rights Agreement").
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee
on Uniform Security Identification Procedures, the Issuers have caused CUSIP
numbers to be printed on the Notes and the Trustee may use CUSIP numbers in
notices of redemption as a convenience to Holders. No representation is made as
to the accuracy of such numbers either as printed on the Notes or as contained
in any notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.
The Issuers will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Insight Midwest, L.P.
Insight Capital, Inc.
126 East 56th Street
New York, NY 10022
Fax No.: (212) 371-1549
Attention: Ms. Colleen Quinn
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to:___________________________________
(Insert assignee's legal name)
(Insert assignee's soc. sec. or tax I.D. no.)
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Issuers. The agent may substitute
another to act for him.
Date: _______________
Your Signature:
(Sign exactly as your name
appears on the face of this Note)
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuers pursuant to
Section 4.10 or 4.15 of the Indenture, check the appropriate box below:
-- Section 4.10 -- Section 4.15
If you want to elect to have only part of the Note purchased by the Issuers
pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you
elect to have purchased:
$_______________
Date: _______________
Your Signature:___________________________________________________________
(Sign exactly as your name appears on the face of this Note)
Tax Identification No.:___________________________________________________
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been
made:
Principal Amount
Amount of decrease Amount of increase in of this Global Note Signature of authorized
in Principal Amount Principal Amount following such officer of Trustee or
Date of Exchange of this Global Note of this Global Note decrease (or increase) Note Custodian
---------------- ------------------- ---------------------- ---------------------- -----------------------
|
EXHIBIT A2
[Face of Regulation S Temporary Global Note]
CUSIP U45714AA7
9 3/4% [Series A][Series B] Senior Notes due 2009
No. ___ $__________
INSIGHT MIDWEST, L.P.
INSIGHT CAPITAL, INC.
promise to pay to Cede & Co. or registered assigns,
the principal sum of ____________________________Dollars on October 1, 2009.
Interest Payment Dates: April 1 and October 1 Record Dates: March 15 and September 15
|
Dated: October 1, 1999
INSIGHT MIDWEST, L.P.
By its General Partner:
INSIGHT COMMUNICATIONS COMPANY, L.P.
By its General Partner:
INSIGHT COMMUNICATIONS COMPANY, INC.
By:_________________________________________
Name:
Title:
INSIGHT CAPITAL, INC.
By:___________________________________________
Name:
Title:
This is one of the Notes referred
to in the within-mentioned Indenture:
HARRIS TRUST COMPANY OF NEW YORK,
as Trustee
By:____________________________________
(Authorized Signature)
[Back of Regulation S Temporary Global Note]
9 3/4% [Series A] [Series B] Senior Notes due 2009
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE ISSUERS OR THEIR
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE NOTE
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION PROVIDED BY RULE 144A UNDER THE SECURITIES ACT. THE
HOLDER OF THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUERS THAT
(A) SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (a) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN OF RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT
OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUERS SO
REQUEST), (2) TO THE ISSUERS OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B)
THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
OF THE NOTE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (1) ABOVE.
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. INTEREST. Insight Midwest, L.P., a Delaware limited partnership (the
"Company"), and Insight Capital, Inc., a Delaware corporation (together with the
Company, the "Issuers"), promise to pay interest on the principal amount of this
Note at 9 3/4% per annum from October 1, 1999 until maturity and shall pay the
Liquidated Damages payable pursuant to, and to the extent required by, Section 5
of the Registration Rights Agreement referred to below. The Issuers will pay
interest and Liquidated Damages semi-annually on April 1 and October 1 of each
year, or if any such day is not a Business Day, on the next succeeding Business
Day (each an "Interest Payment Date"). Interest on the Notes will accrue from
the most recent date to which interest has been paid or, if no interest has been
paid, from the date of issuance; provided that if there is no existing Default
in the payment of interest, and if this Note is authenticated between a record
date referred to on the face hereof and the next succeeding Interest Payment
Date, interest shall accrue from such next succeeding Interest Payment Date;
provided, further, that the first Interest Payment Date shall be April 1, 2000.
The Issuers shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if any,
from time to time on demand at a rate that is 1% per annum in excess of the rate
then in effect; they shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace periods) from time to
time on demand at the same rate to the extent lawful. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.
Until this Regulation S Temporary Global Note is exchanged for one or more
Regulation S Permanent Global Notes, the Holder hereof shall not be entitled to
receive payments of interest hereon; until so exchanged in full, this Regulation
S Temporary Global Note shall in all other respects be entitled to the same
benefits as other Senior Notes under the Indenture.
2. METHOD OF PAYMENT. The Issuers will pay interest on the Notes (except
defaulted interest) and Liquidated Damages to the Persons who are registered
Holders of Notes at the close of business on the March 15 or September 15 next
preceding the Interest Payment Date, even if such Notes are canceled after such
record date and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Indenture with respect to defaulted interest. The Notes will
be payable as to principal, premium, interest and Liquidated Damages at the
office or agency of the Issuers maintained for such purpose within or without
the City and State of New York, or, at the option of the Issuers, payment of
interest and Liquidated Damages may be made by check mailed to the Holders at
their addresses set forth in the register of Holders, and provided that payment
by wire transfer of immediately available funds will be required with respect to
principal of and interest, premium and Liquidated Damages on, all Global Notes
and all other Notes the Holders of which shall have provided wire transfer
instructions to the Issuers or the Paying Agent. Such payment shall be in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, Harris Trust Company of New York,
the Trustee under the Indenture, will act as Paying Agent and Registrar. The
Issuers may change any Paying Agent or Registrar without notice to any Holder.
The Issuers or any of their Subsidiaries may act in any such capacity.
19. INDENTURE. The Issuers issued the Notes under an Indenture dated as of
October 1, 1999 ("Indenture") among the Issuers and the Trustee. The terms of
the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S.
Code ss.ss. 77aaa-77bbbb). The Notes are subject to all such terms, and Holders
are referred to the Indenture and such Act for a statement of such terms. To the
extent any provision of this
Note conflicts with the express provisions of the Indenture, the provisions of
the Indenture shall govern and be controlling. The Notes are obligations of the
Issuers limited to $400.0 million in aggregate principal amount.
4. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph 5, the Issuers
shall not have the option to redeem the Notes prior to October 1, 2004.
Thereafter, the Issuers shall have the option to redeem the Notes, in whole or
in part, upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest and Liquidated Damages thereon, if any, to the
applicable redemption date, if redeemed during the twelve-month period beginning
on October 1 of the years indicated below:
Year Percentage
---- ----------
2004.................................................... 104.875%
2005.................................................... 103.250%
2006.................................................... 101.625%
2007 and thereafter..................................... 100.000%
|
(b) Notwithstanding the provisions of subparagraph (a) of this Paragraph 5,
at any time prior to October 1, 2002, the Issuers may redeem Notes with the net
proceeds of one or more Equity Offerings at a redemption price equal to 109.75%
of the aggregate principal amount thereof; provided that at least 65% in
aggregate principal amount any of the Notes issued under the Indenture remain
outstanding immediately after the occurrence of any such redemption and that
such redemption occurs within 90 days of the date of the closing of any such
Equity Offering.
5. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Issuers shall not be required
to make mandatory redemption payments with respect to the Notes.
6. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Issuers shall be required to make
an offer (a "Change of Control Offer") to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of each Holder's Notes at a purchase
price equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest, if any, to the date of purchase the "Change of Control
Payment"). Within 30 days following any Change of Control, the Issuers shall
mail a notice to each Holder setting forth the procedures governing the Change
of Control Offer as required by the Indenture.
(b) If the Issuers or any Restricted Subsidiary consummates any Asset Sales,
within five days of each date on which the aggregate amount of Excess Proceeds
exceeds $20.0 million, the Issuers shall commence an offer to all Holders of
Notes (an "Asset Sale Offer") pursuant to Section 3.09 of the Indenture to
purchase the maximum principal amount of Notes and pari passu indebtedness that
may be purchased out of the Excess Proceeds at an offer price in cash in an
amount equal to 100% of the principal amount thereof plus accrued and unpaid
interest and Liquidated Damages, if any, to the date fixed for the closing of
such offer in accordance with the procedures set forth in the Indenture. To the
extent that the aggregate amount of Notes tendered pursuant to an Asset Sale
Offer is less than the Excess Proceeds, the Issuers (or such Restricted
Subsidiary) may use such deficiency for any purpose not otherwise prohibited by
the Indenture. If the aggregate principal amount of Notes and other such pari
passu indebtedness
surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes to be purchased on a pro rata basis. Holders of
Notes that are the subject of an offer to purchase will receive an Asset Sale
Offer from the Issuers prior to any related purchase date and may elect to have
such Notes purchased by completing the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Notes.
7. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.
8. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Issuers may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Issuers need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Issuers
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.
This Regulation S Temporary Global Note is exchangeable in whole or in part
for one or more Global Notes only (i) on or after the termination of the 40-day
restricted period (as defined in Regulation S) and (ii) upon presentation of
certificates (accompanied by an Opinion of Counsel, if applicable) required by
Article 2 of the Indenture. Upon exchange of this Regulation S Temporary Global
Note for one or more Global Notes, the Trustee shall cancel this Regulation S
Temporary Global Note.
9. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as
its owner for all purposes.
10. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the then outstanding
Notes, and any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Issuers' obligations to Holders of the Notes
in case of a merger or consolidation, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, or to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act.
11. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30
days in the payment when due of interest or Liquidated Damages on the Notes;
(ii) default in payment when due of principal of or premium, if any, on the
Notes when the same becomes due and payable at maturity, upon redemption
(including in connection with an offer to purchase) or otherwise, (iii) failure
by the Issuers to comply with Sections 3.09, 4.10, 4.15 or 5.01 of the
Indenture; (iv) failure by the Issuers for 30 days after notice to the Issuers
by the Trustee or to the Issuers and the Trustee by the Holders of at least 25%
in principal amount of the Notes then outstanding to comply with certain other
agreements in the Indenture or the Notes; (v) default under certain other
agreements relating to Indebtedness of the Issuers or their
Restricted Subsidiaries which default results in the acceleration of such
Indebtedness prior to its express maturity; (vi) certain final judgments for the
payment of money that remain undischarged for a period of 60 days; and (vii)
certain events of bankruptcy or insolvency with respect to the Issuers or any of
their Significant Subsidiaries. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare all the Notes to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes will become
due and payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default or Event of Default and its consequences
under the Indenture except a continuing Default or Event of Default in the
payment of principal, premuim, interest or Liquidated Damages on the Notes. The
Issuers are, required to deliver to the Trustee annually a statement regarding
compliance with the Indenture, and the Issuers are, required upon becoming aware
of any Default or Event of Default, to deliver to the Trustee a statement
specifying such Default or Event of Default.
12. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Issuers or their Affiliates, and may otherwise deal with the Issuers or
their Affiliates, as if it were not the Trustee.
13. NO RECOURSE AGAINST OTHERS. A director, officer, employee, incorporator
or stockholder, of the Issuers, as such, shall not have any liability for any
obligations of the Issuers under the Notes or the Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the Notes.
14. AUTHENTICATION. This Note shall not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent.
15. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
16. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND RESTRICTED
DEFINITIVE NOTES. In addition to the rights provided to Holders of Notes under
the Indenture, Holders of Restricted Global Notes and Restricted Definitive
Notes shall have all the rights set forth in the Registration Rights Agreement
dated as of October 1, 1999 among the Issuers and the parties named on the
signature pages thereof or, in the case of Additional Notes, Holders of
Restricted Global Notes and Restricted Definitive Notes shall have the rights
set forth in one or more registration rights agreements, if any, between the
Company and the other parties thereto, relating to rights given by the Company
to the purchasers of any Additional Notes (collectively, the "Registration
Rights Agreement").
17. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee
on Uniform Security Identification Procedures, the Issuers have caused CUSIP
numbers to be printed on the Notes and the Trustee may use CUSIP numbers in
notices of redemption as a convenience to Holders. No representation is made as
to the accuracy of such numbers either as printed on the Notes or as contained
in any notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.
The Issuers will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Insight Midwest, L.P.
Insight Capital, Inc.
126 East 56th Street
New York, NY 10022
Fax No: (212) 371-1549
Attention: Ms. Colleen Quinn
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to:___________________________________
(Insert assignee's legal name)
(Insert assignee's soc. sec. or tax I.D. no.)
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Issuers. The agent may substitute
another to act for him.
Date: _______________
Your Signature:
(Sign exactly as your name
appears on the face of this Note)
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuers pursuant to
Section 4.10 or 4.15 of the Indenture, check the appropriate box below:
-- Section 4.10 -- Section 4.15
If you want to elect to have only part of the Note purchased by the Issuers
pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you
elect to have purchased:
$_______________
Date: _______________
Your Signature:___________________________________________________________
(Sign exactly as your name appears on the face of this Note)
Tax Identification No.:___________________________________________________
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been
made:
Principal Amount
Amount of decrease Amount of increase in of this Global Note Signature of authorized
in Principal Amount Principal Amount following such officer of Trustee or
Date of Exchange of this Global Note of this Global Note decrease (or increase) Note Custodian
---------------- ------------------- ---------------------- ---------------------- -----------------------
|
FORM OF CERTIFICATE OF TRANSFER
Insight Midwest, L.P.
Insight Capital, Inc.
126 East 56th Street
New York, NY 10022
Harris Trust Company of New York
Re: 9 3/4% Senior Notes due 2009
Reference is hereby made to the Indenture, dated as of October 1, 1999 (the
"Indenture"), among Insight Midwest, L.P., a Delaware limited partnership, (the
"Company"), Insight Capital, Inc., a Delaware corporation (together with the
Company, the "Issuers"), and Harris Trust Company of New York, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
___________________, (the "Transferor") owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to ___________________________ (the "Transferee"), as further specified in Annex
A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1.___ CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer
is being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.
2. ___ CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE TEMPORARY REGULATION S GLOBAL NOTE, THE REGULATION S GLOBAL NOTE OR A
DEFINITIVE NOTE PURSUANT TO REGULATION S. The Transfer is being effected
pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act
and, accordingly, the Transferor hereby further certifies that (i) the Transfer
is not being made to a person in the United States and (x) at the time the buy
order was originated, the Transferee was outside the United States or such
Transferor and any Person acting on its behalf reasonably believed and believes
that the Transferee was outside the United States or (y) the transaction was
executed in, on or through the facilities of a designated offshore securities
market and neither such Transferor nor any Person acting on its behalf knows
that the transaction was prearranged with a buyer in the United States, (ii) no
directed selling efforts have been made in contravention of the requirements of
Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act (iii) the
transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act and (iv) if the proposed transfer is being
made prior to the expiration of the Restricted Period, the transfer is not being
made to a
U.S. Person or for the account or benefit of a U.S. Person (other than an
Initial Purchaser). Upon consummation of the proposed transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will be subject to the restrictions on Transfer enumerated in
the Private Placement Legend printed on the Regulation S Global Note, the
Temporary Regulation S Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.
3. ___ CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE IAI GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO ANY PROVISION
OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The Transfer is
being effected in compliance with the transfer restrictions applicable to
beneficial interests in Restricted Global Notes and Restricted Definitive Notes
and pursuant to and in accordance with the Securities Act and any applicable
blue sky securities laws of any state of the United States, and accordingly the
Transferor hereby further certifies that (check one):
(a) ___ such Transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act;
or
(b) ___ such Transfer is being effected to the Company or a subsidiary
thereof;
or
(c) ___ such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;
or
(d) ___ such Transfer is being effected to an Institutional Accredited
Investor and pursuant to an exemption from the registration requirements of
the Securities Act other than Rule 144A, Rule 144 or Rule 904, and the
Transferor hereby further certifies that it has not engaged in any general
solicitation within the meaning of Regulation D under the Securities Act and
the Transfer complies with the transfer restrictions applicable to
beneficial interests in a Restricted Global Note or Restricted Definitive
Notes and the requirements of the exemption claimed, which certification is
supported by (1) a certificate executed by the Transferee in the form of
Exhibit D to the Indenture and (2) if such Transfer is in respect of a
principal amount of Notes at the time of transfer of less than $250,000, an
Opinion of Counsel provided by the Transferor or the Transferee (a copy of
which the Transferor has attached to this certification), to the effect that
such Transfer is in compliance with the Securities Act. Upon consummation of
the proposed transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed
on the IAI Global Note and/or the Definitive Notes and in the Indenture and
the Securities Act.
4. ___ CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a) ___ CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws
of any state of the United States and (ii) the restrictions on transfer
contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities
Act. Upon consummation of the proposed Transfer in accordance with the terms
of the Indenture, the transferred beneficial interest or Definitive Note
will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes, on
Restricted Definitive Notes and in the Indenture.
(b) ___ CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer
is being effected pursuant to and in accordance with Rule 903 or Rule 904
under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of
any state of the United States and (ii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required
in order to maintain compliance with the Securities Act. Upon consummation
of the proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will no longer be subject
to the restrictions on transfer enumerated in the Private Placement Legend
printed on the Restricted Global Notes, on Restricted Definitive Notes and
in the Indenture.
(c) ___ CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The
Transfer is being effected pursuant to and in compliance with an exemption
from the registration requirements of the Securities Act other than Rule
144, Rule 903 or Rule 904 and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of
any State of the United States and (ii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required
in order to maintain compliance with the Securities Act. Upon consummation
of the proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will not be subject to
the restrictions on transfer enumerated in the Private Placement Legend
printed on the Restricted Global Notes or Restricted Definitive Notes and in
the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
[Insert Name of Transferor]
By:___________________________________
Name:
Title:
Dated: _______________________
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) ___ a beneficial interest in the:
(i) ___ 144A Global Note (CUSIP 45768YAAO), or
(ii) ___ Regulation S Global Note (CUSIP U45714AA7), or
(iii) ___ IAI Global Note (CUSIP 45768YAB6); or
(b) a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) ___ a beneficial interest in the:
(i) ___ 144A Global Note (CUSIP 45768YAAO), or
(ii) ___ Regulation S Global Note (CUSIP U45714AA7), or
(iii) ___ IAI Global Note (CUSIP 45768YAB6); or
(iv) ___ Unrestricted Global Note (CUSIP 45768YAC6); or
(b) ___ a Restricted Definitive Note; or
(c) ___ an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
FORM OF CERTIFICATE OF EXCHANGE
Insight Midwest, L.P.
Insight Capital, Inc.
126 East 56th Street
New York, NY 10022
Harris Trust Company of New York
Re: 9 3/4% Senior Notes due 2009
(CUSIP ____________)
Reference is hereby made to the Indenture, dated as of October 1, 1999 (the
"Indenture"), among Insight Midwest, L.P., a Delaware limited partnership, (the
"Company"), Insight Capital, Inc., a Delaware corporation (together with the
Company, the "Issuers"), and Harris Trust Company of New York, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
__________________________, (the "Owner") owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal amount of
$____________ in such Note[s] or interests (the "Exchange"). In connection with
the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN AN UNRESTRICTED GLOBAL NOTE
(a) ___ CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the United States Securities Act of
1933, as amended (the "Securities Act"), (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the beneficial
interest in an Unrestricted Global Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.
(b) ___ CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.
(c) ___ CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL
INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the Owner's Exchange
of a Restricted Definitive Note for
a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies
(i) the beneficial interest is being acquired for the Owner's own account
without transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to Restricted Definitive Notes and pursuant to
and in accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the beneficial
interest is being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.
(d) ___ CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES
(a) ___ CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b) ___ CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL
INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange of the
Owner's Restricted Definitive Note for a beneficial interest in the [CHECK ONE]
144A Global Note, Regulation S Global Note, IAI Global Note with an equal
principal amount, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner's own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, and in compliance with any applicable blue sky securities
laws of any state of the United States. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the beneficial interest
issued will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the relevant Restricted Global Note and in the
Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
[Insert Name of Transferor]
By:________________________
Name:
Title:
Dated: ______________________
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Insight Midwest, L.P.
Insight Capital, Inc.
126 East 56th Street
New York, NY 10022
Harris Trust Company of New York
Re: 9 3/4% Senior Notes due 2009
Reference is hereby made to the Indenture, dated as of October 1, 1999
(the "Indenture"), among Insight Midwest, L.P., a Delaware limited partnership,
(the "Company"), Insight Capital, Inc., a Delaware corporation (together with
the Company, the "Issuers") and Harris Trust Company of New York, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of:
(a) ___ a beneficial interest in a Global Note, or
(b) ___ a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and, if such transfer is in respect of
a principal amount of Notes, at the time of transfer of less than $250,000, an
Opinion of Counsel in form reasonably acceptable to the Company to the effect
that such transfer is in compliance with the Securities Act, (D) outside the
United States in accordance with Rule 904 of Regulation S under the Securities
Act, (E) pursuant to the provisions of Rule 144(k) under the Securities Act or
(F) pursuant to an effective registration statement under the Securities Act,
and we further agree to provide to any person purchasing the Definitive Note or
beneficial interest in a Global Note from us in a transaction meeting the
requirements of clauses (A) through (E) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes or beneficial interest therein purchased
by us for our own account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
[Insert Name of Accredited Investor]
By:_______________________________________
Name:
Title:
Dated: _______________________
EXHIBIT 10.25
AMENDED AND RESTATED
CONSULTING AGREEMENT
THIS AMENDED AND RESTATED CONSULTING AGREEMENT (this "Agreement") is made
as of this 17th day of March, 2000, by and between InterMedia Partners
Southeast, a California general partnership ("Company"), and Insight
Communications Company, L.P., a Delaware limited partnership ("Consultant").
RECITALS
A. The Company is the owner of cable television systems that operate in and
around Columbus, Connersville, Crawfordsville, Peru, Logansport, Monticello,
Frankfort, and Warsaw, Indiana (the "Indiana Systems") and Shelbyville, Kentucky
(the "Kentucky System") (as the Indiana Systems and the Kentucky System are
described in more detail on Exhibit A, the "Systems"). The Company and
Consultant desire that Consultant provide services to the Systems in accordance
with the terms and provisions of this Agreement.
B. This Agreement amends and restates in its entirety, the Consulting
Agreement with respect to the Systems dated as of December 29, 1999 between the
Company and Consultant.
AGREEMENT
THEREFORE, it is agreed as follows:
1. Appointment. The Company hereby appoints Consultant to supervise and manage
the day-to-day operations of the Systems on the terms and conditions set forth
herein.
2. Term. The term of this Agreement shall commence as of October 1, 1999 with
respect to the Kentucky System and, with respect to the Indiana Systems, as of
the later to occur of May 1, 2000 and the 30th day following the closing date of
the sale of the Columbus, Indiana System to the Company (provided that if such
30th day is not the first day of a calendar month, the commencement date with
respect to the Indiana Systems shall be the first day of the immediately
succeeding calendar month) or such other date as may be agreed to by the parties
(the "Applicable Effective Date") and continue for a period of two years after
the latest Applicable Effective Date, unless terminated earlier pursuant to the
terms of this Agreement.
3. Duties of Consultant. During the term of this Agreement, but subject to the
limitations set forth in this Agreement, Consultant is hereby granted and agrees
to exercise all requisite authority to manage the day-to-day operations of the
Systems on behalf of the Company. Subject to the terms and conditions of this
Agreement, Consultant will provide the Company with such services as may, from
time to time, be appropriate or reasonably required for the proper and efficient
operation and conduct of the Systems in accordance with sound business
principles and practices customary in the cable television industry. Without
limiting the foregoing, but subject to the
limitations of the budget then in effect (as described in Section 11) and any
other limitations expressly set forth in this Agreement, Consultant agrees:
(a) to be responsible for the negotiation of any and all agreements,
leases, contracts, documents and other instruments necessary or convenient for
the management and operation of the Systems including, without limitation,
franchises; provided that (i) except as specified in Section 8, Consultant may
not negotiate or enter into agreements for the carriage of cable television
programming by the Systems, (ii) the Company will have the sole authority to
consummate franchise agreements and (iii) Consultant shall obtain the consent of
the Company prior to consummating any other agreement that involves the payment
of $50,000 or more annually or is not terminable without penalty upon 60 or
fewer days' notice;
(b) to act on behalf of the Company with respect to customer service
matters, franchise renewals, and refunds; provided that the Company has the
right to review and approve any amendment to the franchises, renewals of
franchises or other such commitments;
(c) to evaluate new equipment, materials and techniques for the Systems and
make recommendations regarding the same to the Company;
(d) to establish and direct the implementation of general technical
standards and procedures for the Systems and to establish and monitor programs
for preventive maintenance for the Systems;
(e) to supervise the purchasing of property, real, personal or mixed, and
all materials and supplies, if any, necessary to complete any construction and
development arising out of or related to the Systems;
(f) to formulate and supervise all advertising, marketing and sales
programs and engagement for the Systems and appointment on behalf of the Company
of advertising, marketing and public relations agencies and consultants for the
Systems for such purposes;
(g) to supervise the collection of income and other amounts due to the
Company and the payment on behalf of the Company of expenses (including, but not
limited, to franchise and copyright fees) relating to the Systems in conformity
with the budgets then in effect pursuant to Section 11;
(h) to be responsible for all personnel matters, and to hire, employ,
manage and adequately train all employees and other personnel necessary to
operate the Systems, who will be employees of Consultant or an affiliate of
Consultant (provided that Consultant will be reimbursed for employee expenses
pursuant to Section 13);
(i) to prepare with the assistance of any necessary accountants, annual tax
reports necessary for the operation of the Systems in the ordinary course of
business (other than
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federal, state and local income tax returns of the Company), to prepare, as
necessary, any reports and other documents required to be filed with
governmental and regulatory agencies (other than with respect to income tax
matters), and act as liaison with federal, state and local governmental and
regulatory officials with respect thereto, and to provide the Company on a
timely basis all information relating to the Systems and necessary to prepare
its federal, state and local income tax returns;
(j) to pay on behalf of the Company, in conformity with the budget
described in Section 11, all expenditures incurred by Consultant (provided that
they are "System Level Expenses" as defined in Section 13.4) or the Company in
the ordinary course of operating the Systems and other expenses of the Systems,
including all levies and assessments of any kind or nature imposed by any
governmental authority, including all sales, use, ad valorem, value added,
franchise, severance, net or gross proceeds, withholding, payroll, employment,
or excise taxes and levies or assessments related to unclaimed property,
together with any interest thereon and any penalties, additions to tax or
additional amounts applicable thereto ("Taxes"), other than federal, state and
local income taxes;
(k) to make on behalf of the Company all capital expenditures in conformity
with the budget described in Section 11 and to supervise all approved
construction and development for the Systems, including the selection and
appointment of subcontractors, equipment, suppliers and vendors;
(l) to manage and operate the Systems in compliance with applicable law,
including, but not limited to, the Communications Act of 1934, as amended, and
all rules and regulations promulgated by the FCC thereunder (including making
any necessary modifications to, or renewals of, the Systems' FCC licenses and
making any other filings required under FCC rules and regulations), and the
terms and provisions of the franchises and all other agreements relating to the
Systems;
(m) to provide the Company with any information with respect to the Systems
as the Company may reasonably request or of which, in Consultant's reasonable
discretion, the Company should be aware; and
(n) to use commercially reasonable efforts to ensure at the Company's
expense (including but not limited to all capital expenditures and travel
expenses) that the Systems are "Year 2000" compliant by December 31, 1999.
4. Ownership of Systems. Notwithstanding anything in this Agreement to the
contrary, the Company will continue to own the Systems and to exercise the
rights of an owner with respect thereto. Without limiting the foregoing, the
Company will continue to be the franchisee, licensee and permittee, as
applicable, of all authorizations of any nature whatsoever issued by any
governmental authority or third party in connection with the operation of the
Systems and will
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continue to exercise ultimate control over all tax matters, franchise and other
regulatory matters and extraordinary transactions with respect to the Systems.
5. Limitations on the Authority of Consultant.
5.1 The Company will be entitled to control any tax investigation or audit
relating in any way to the Systems to the extent it could affect any Taxes
payable by the Company.
5.2 Consultant has no authority to take any action that would constitute
(or fail to take any action the effect of which failure would be to cause): (a)
an impermissible transfer or change in control under the franchises of the
Systems or (b) an impermissible transfer of a Federal Communications Commission
("FCC") license; provided, however, that the parties agree that the execution,
delivery and performance of this Agreement by Consultant or its affiliates does
not constitute an impermissible transfer or change in control of any franchise
or FCC license held by the Company in connection with the operation of the
Systems.
5.3 Consultant will not, without prior written authorization of the
Company, take any action that is not in the ordinary course of business for the
Systems. Without limiting the foregoing, Consultant agrees that it will not:
(a) sell or hypothecate any of the assets of the Systems other than
the sale or abandonment of worn out or obsolete materials, supplies and
equipment, any proceeds of which will be the property of the Company;
(b) cause the Company to acquire any cable television systems or
related businesses or any other company;
(c) cause the Company to merge, consolidate, dissolve or wind up;
(d) cause the Company to borrow from banks or other lending
institutions for any purpose of the Company;
(e) cause the Company to issue any notes, debentures or other debt
instruments or grant any mortgage, pledge, encumbrance or hypothecation of
Company assets to secure repayment of borrowed sums or replace, modify,
extend or consolidate any mortgage, pledge, encumbrance or hypothecation;
(f) institute, defend or settle litigation or other legal action in
the name of the Company or apply for injunctive relief or give releases and
discharges with respect to any of the foregoing, except that Consultant
shall institute collection proceedings, and legal actions incident to such
collection proceedings, in the name of and at the expense of the Company in
accordance with the Company's customary practices, to enforce the
collection of payments due from customers of the Systems;
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(g) employ on behalf of the Company or cause the Company to employ any
brokers or finders;
(h) cause the Company to enter into any contract with Consultant or
any affiliate of Consultant; it being agreed that the Company hereby
consents to the offering of Source Suite LLC's "LocalSource" product
through the Systems; provided that the agreement or arrangement between
Source Suite LLC and Consultant is on arms-length, third party terms, and
provided that the offering of such product does not conflict with, or
constitute a breach or default under, any agreement of the Company);
(i) make any expenditures or commitment to make expenditures on behalf
of the Company except in accordance with the Budget then in effect; or
(j) cause the Systems to offer or have the Company enter into any
agreement for the Systems to offer or to provide capacity of the Systems
for a third person to offer any communications services other than
traditional cable television service. For example, Consultant may not cause
the Systems to offer telephony or internet access services without the
prior written consent of the Company, it being agreed that the Company
consents to the offering of Insight@Home Internet access service through
the Systems and except as provided in Section 5(h) above.
6. Acquisition of Systems. The Systems are being acquired by the Company
pursuant to the Asset Exchange Agreement dated as of April 20, 1999 (the
"Exchange Agreement") among the Company, on the one hand, and Charter
Communications, LLC, Charter Communications Properties, LLC and Marcus Cable
Associates, L.L.C., on the other hand (the "Charter Parties"). Consultant agrees
that it will take, at the Company's expense, such actions as may be required in
order for the Company to fulfill its post-closing obligations under the Exchange
Agreement with respect to the Systems, including, without limitation, its
obligations under Section 7.17 of the Exchange Agreement with respect to
cooperation on rate proceedings.
7. Headends.
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7.1 The Company agrees that Consultant, at Consultant's expense, may
connect the Company's headends listed on the attached Exhibit C as the "Charter
Headends" (defined herein as the "Satellite Headends") to the headends listed on
Exhibit C as the "Insight Headends," which are owned by Consultant or its
affiliate (the "Master Headends"). Notwithstanding the foregoing, Consultant
will not dismantle or dispose of the Satellite Headends and if requested to do
so by the Company will, at Consultant's expense, render the Satellite Headends
operational upon termination of this Agreement. Without limiting the foregoing,
Consultant agrees to not terminate and to renew in the ordinary course, any
leases or other rights to use real property associated with the Satellite
Headends and to use commercially reasonable efforts to keep them in full force
and effect during the term of this Agreement. In lieu of restoring the Satellite
Headends, and if requested to do so by the Company, Consultant will arrange for
the Systems to continue to receive programming from the Master Headends
following termination of this Agreement on reasonable terms and conditions.
7.2 If the Company's copyright liability with respect to the subscribers
served by the Satellite Headends or contiguous headends is higher as a result of
such Satellite Headends being collapsed into Master Headends, Consultant will be
responsible for the payment of any increased copyright fees.
8. [Intentionally Omitted.]
9. Insurance; Books and Records.
9.1 During the term of this Agreement, Consultant is responsible at the
Company's expense for maintaining liability and all other insurance for the
Systems at such levels as are consistent with industry practice and are approved
by the Company, including, without limitation, worker's compensation insurance
for System Employees.
9.2 During the term of this Agreement, Consultant will keep books and
records for the Systems and will prepare reports in accordance with this Section
9.2.
(a) Consultant will cause to be maintained all necessary books and
records for the Systems, which shall be open to the inspection and
examination of the Company or its representatives during normal business
hours and upon reasonable notice. The books of account shall be kept on an
accrual basis in accordance with generally accepted accounting principles
consistently applied. Notwithstanding the foregoing, and as an exception to
each provision of this Section 9.2 that requires compliance with generally
accepted accounting principles or Regulation S-X, personnel, operating and
SG&A expenses of the Systems will be allocated in accordance with the
methodologies described on Exhibit B. The Company agrees that the income
statements and statements of assets and liabilities required to be
delivered by Consultant pursuant to this Section 9.2 will be in the form
set forth on Exhibit B.
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(b) Within forty-five days after the close of each fiscal year,
Consultant shall prepare and deliver to the Company (i) a preliminary
unaudited income statement of the Systems for such fiscal year, and (ii) a
preliminary unaudited statement of assets and liabilities of the Systems as
of the end of such fiscal year.
(c) As soon as practicable after the close of each fiscal year, and,
in any event, by March 15 of the year following the close of such fiscal
year, Consultant shall prepare and deliver to the Company (i) a final
unaudited income statement of the Systems for such fiscal year, and (ii) a
final unaudited statement of assets and liabilities of the Systems as of
the end of such fiscal year, all of which shall be prepared in accordance
with Regulation S-X and generally accepted accounting principles
consistently applied.
(d) Within twenty days after the close of each of the first three
quarterly accounting periods in each fiscal year, Consultant shall prepare
and deliver to the Company (i) a preliminary unaudited income statement of
the Systems for such year to date period, and (ii) a preliminary unaudited
statement of assets and liabilities of the Systems as of the end of such
quarterly period, all prepared in accordance with generally accepted
accounting principles consistently applied. Within 15 days thereafter,
Consultant shall provide any material adjustments to the above referenced
preliminary financial statements.
(e) Within twenty days after the close of each calendar month,
Consultant shall prepare and deliver to the Company (i) an unaudited income
statement and statement of assets and liabilities of the Systems for such
calendar month complete with year-to-date comparisons to budget and,
commencing with the statement delivered with respect to the first full
month following the first anniversary of the Closing, the corresponding
period of the prior year, and (ii) an unaudited report of actual capital
expenditures of the Systems for the month and year-to-date, as compared to
budgeted capital expenditures.
(f) Within twenty days after the close of each calendar month,
Consultant shall prepare and deliver to the Company a report setting forth
for such calendar month with respect to the Systems the following
information: (i) the cumulative number of households having access to such
Systems, (ii) the number of equivalent basic subscribers and equivalent
expanded basic subscribers to such Systems, (iii) the number of subscribers
to each pay television service, (iv) the number of plant miles, (v) the
number of digital subscribers of each System, (vi) the number of telephony
subscribers of each System and (vii) such other operating statistics as may
be reasonably requested by the Company.
10. Employees.
10.1 All employees involved in the operations of the Systems that are hired
by Consultant will be employees of Consultant or an affiliate of Consultant
("System Employees"; provided, that the term "System Employees" does not include
regional, division or corporate employees of Consultant engaged by it to perform
its obligations under this Agreement).
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10.2 Consultant agrees not to solicit for employment, without the written
consent of the Company, any employee listed on Schedule 7.3 to the Exchange
Agreement or any other employee of the Charter Parties whose position is System
manager or higher.
10.3 If the Charter Parties determine that the transactions contemplated by
the Exchange Agreement will not permit a distribution to be made to a Hired
Employee (as defined below) from the tax qualified plan of the Charter Parties
in accordance with Section 401(k)(10) of the Code, then Consultant may accept a
plan-to-plan transfer of Hired Employees' plan benefits to its own tax qualified
plan. If there is no plan-to-plan transfer, in order to permit the Charter
Parties or their affiliates, to make distributions to any former employee of the
Charter Parties who becomes a Hired Employee of the balance of such employee's
401(k) account in the Charter Parties' or their affiliate's tax qualified plan,
if any, as soon as legally permitted, Consultant shall notify the Company and
the Charter Parties of the date of termination of such employee's employment
with Consultant for any reason.
10.4 Notwithstanding anything to the contrary herein, Consultant shall:
(a) credit each employee of the Systems prior to the Applicable
Effective Date who is offered employment by Consultant and becomes an
employee of Consultant or an affiliate of Consultant (a "Hired Employee")
the amount of vacation time (to a maximum of four weeks) and sick time (to
a maximum of 10 days) accrued by him or her as an employee of the Charter
Parties through and including the Applicable Effective Date, to the extent
the Company is required to so credit such employees pursuant to the
Exchange Agreement;
(b) permit each Hired Employee to participate in Consultant's employee
benefit plans to the same extent as similarly situated employees of
Consultant and their dependents are permitted to participate;
(c) give each Hired Employee credit for such employee's past service
with the Charter Parties and their affiliates as of the Applicable
Effective Date (including past service with any prior owner or operator of
the Systems) for purposes of eligibility and vesting under Consultant's
employee benefit and other plans to the same extent as other similarly
situated employees of Consultant, to the extent the Company is required to
so credit such employees pursuant to the Exchange Agreement;
(d) to the extent provided in the Exchange Agreement not subject any
Hired Employee to any waiting periods or limitations on benefits for
pre-existing conditions under Consultant's employee benefit plans,
including any group health and disability plans, except to the extent such
employees were subject to such limitations under the employee benefit plans
of the Charter Parties or any affiliate of the Charter Parties; and
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(e) credit each Hired Employee under any group health plan for any
deductible amount previously met by such Hired Employee as of the
Applicable Effective Date under any of the group health plans of the
Charter Parties or any of their affiliates, to the extent the Company is
required to so credit such employees pursuant to the Exchange Agreement.
10.5 Consultant will not terminate the employment of any Hired Employee
other than "for cause" during the 120 days following the Applicable Effective
Date for such Hired Employee without the prior written consent of the Company;
provided, that if Consultant breaches this Section 10.5, Consultant shall be
responsible for any severance that the Company is required to pay to any such
employee. For purposes of this Section 10.5, "cause" shall have the meaning set
forth in the Company's employment policies, procedures or agreements that would
be applicable to the discharged Hired Employee if such person were an employee
of the Company.
11. Operating Budgets.
11.1 On or before June 30, 2000, Consultant will prepare and submit to the
Company for its approval a proposed operating budget ("Operating Budget") and a
proposed capital budget ("Capital Budget" and, together with the Operating
Budget, the "Budgets")) for calendar year 2000 for the Kentucky System and the
Indiana Systems, each in a format reasonably acceptable to the Company, setting
forth the proposed expenditures for the operation, repair, maintenance or
expansion of the Systems for such fiscal year and including the programming
line-up for the Systems and which budgets will be subject to the approval of the
Company. Consultant and Company will negotiate in good faith to reach agreement
on the fiscal year 2000 Budgets for the Systems as promptly as practicable
following the Company's receipt of such Budgets from Consultant. From and after
the Applicable Effective Date for the Kentucky System and the Indiana Systems
until agreement has been reached on the fiscal year 2000 Budgets, Consultant
agrees to operate the Systems in the ordinary course of business consistent with
past practice.
11.2 Beginning with fiscal year 2001, at least 30 days prior to the
beginning of each fiscal year of the Company during the term of this Agreement,
Consultant will prepare and submit to the Company a proposed Operating Budget
and a proposed Capital Budget for the Kentucky System and the Indiana Systems,
each in a format reasonably acceptable to the Company, setting forth the
proposed expenditures for the operation, repair, maintenance or expansion of the
Systems for such fiscal year and including the programming line-up for the
Systems. If the Company does not approve the proposed budgets in writing within
20 days after the Company's receipt of the proposed budgets, the Company and
Consultant will negotiate in good faith to resolve any disputes between
Consultant and the Company with respect to the proposed budgets prior to the
commencement of the fiscal year to which the proposed budgets relate. If the
Company and Consultant cannot agree as to the proposed budgets within that time
period, Consultant will operate the Systems pursuant to the prior fiscal year's
budgets, with an adjustment for inflation equal to the percentage increase in
the Consumers Price Index for the United States as published by the United
States Department of Labor, Bureau of Labor Statistics.
- 9 -
11.3 To the extent that Consultant reasonably believes that expenditures in
excess of the budgets then in effect are or will be in the reasonably
foreseeable future necessary for the proper operation of the Systems, Consultant
may submit a written notice to the Company. Such written notice will state the
reasons why such excess expenditures are believed to be necessary, the amount by
which the expenditures are expected to exceed the budgeted line item amounts and
the time frame within which the excess expenditures are reasonably expected to
become necessary. The Company may reject or accept Consultant's recommendations
in whole or in part in its sole discretion by written notice to Consultant. If
the Company does not approve the recommendations within 30 days by written
notice to Consultant, the Company will be deemed to have rejected the
recommendation. To the extent that the Company accepts Consultant's recommended
changes, the budgets then in effect will be deemed to be amended to reflect such
changes.
12. Systems and Operating Account.
12.1 Consultant will create and maintain on behalf of the Company separate
and apart from any account kept and maintained by it for any other purpose a
bank account at a bank approved by the Company (the "Systems Account"). Any and
all receipts of whatever nature and from whatever source derived from the
operation of the Systems will be promptly deposited in the Systems Account. All
funds in the Systems Account from time to time will be the property of the
Company, but the funds will be disbursed from the Systems Account by Consultant
on the Company's behalf in accordance with the provisions of this Agreement. At
Consultant's option, one or more additional operating bank accounts (the
"Operating Account") may be created and maintained on behalf of the Company in
such commercial bank or banks as Consultant may select with the approval of the
Company for the purpose of making funds available to the operating personnel of
the Systems for the conduct of day-to-day business. Only such person or persons
as Consultant may designate from time to time will be authorized to draw or
issue checks or drafts upon or make withdrawals from the Systems Account or the
Operating Account. At the request and expense of the Company, any persons having
authority to draw checks or drafts upon or make withdrawals from the Systems
Account or the Operating Account will be bonded in such amount as the Company
will direct. Unless approved in writing by the Company, no more than $250,000
will be maintained in the Operating Account at any one time.
12.2 Consultant will make or cause to be made from the Systems Account
and/or the Operating Account all payments of costs, expenses, fees, and charges
payable with respect to the Systems in conformity with the budget then in effect
pursuant to Section 11 or as otherwise provided in this Agreement. Consultant
agrees to provide the Company with any documentation as may be requested by the
Company to substantiate the amount of such costs, expenses, fees and charges
payable with respect to the Systems. In the event that at any time there are
insufficient funds in the Systems Account and/or the Operating Account with
which to make any payment provided for in this Agreement, then, upon the request
of Consultant, the Company will immediately deposit in such account a sufficient
sum as reasonably determined by the Company and Consultant to make all then due
payments and in no event will Consultant be responsible for
- 10 -
any such payments out of its own funds. Periodically, but not less often than
quarterly, Consultant will pay to the Company the balance of the Systems Account
after reserving such amount as in its reasonable discretion is necessary to
provide for amounts currently necessary to pay all costs, expenses, fees and
charges payable with respect to the System in conformity with the budget then in
effect pursuant to Section 11 during the following 60 days and provided that
Consultant may also reserve a reasonable amount for contingencies.
13. Compensation of Consultant; Expenses.
13.1 As compensation for services rendered under this Agreement, Consultant
shall be paid an annual consulting fee, payable on a quarterly basis, equal to
Gross Operating Revenues multiplied by three percent (3.0%) (the "Consulting
Fee"). The term "Gross Operating Revenues" means all revenues arising out of or
in connection with the operation of the Systems, but exclusive of proceeds from
the sale of assets or from other extraordinary or non-recurring items, and
exclusive of all interest, dividends, royalties and other similar types of
investment income.
13.2 Within 30 days after the end of each fiscal quarter, Consultant will
submit to the Company a quarterly and a cumulative year-to-date statement
detailing the amount of Gross Operating Revenues and indicating the quarterly
Consulting Fee payable and the cumulative year-to-date Consulting Fee payable to
Consultant together with appropriate supporting documentation. Each quarterly
Consultant Fee payable hereunder shall be adjusted to reflect any cumulative
year-to-date adjustments in Gross Operating Revenues. The Consulting Fee will be
payable each quarter within 10 days after the Consulting Fee statement for such
quarter has been received by the Company.
13.3 Within 90 days after the end of each fiscal year, the Company shall
cause its independent public accountants to determine Gross Operating Revenues
for that year and the amount of the Consulting Fee payable to Consultant for
that year and deliver a copy to Consultant. Consultant shall have the right to
consult with the accountants regarding the determination of Gross Operating
Revenues prior to the final determination thereof by the accountants. The
accountants' determination shall be final and binding on the Company and
Consultant.
13.4 The Consulting Fee described above shall be exclusive of reimbursement
by the Company to Consultant for direct out-of-pocket expenses incurred by
Consultant that are directly related to the operation of the Systems (including
System Employee expenses and travel expenses of Consultant, "System Level
Expenses"). Consultant shall act in good faith and in a reasonable manner in
making determinations of reimbursement. To the extent reimbursable expenses
incurred by Consultant are applicable both to the Systems and to other systems
managed or owned by Consultant, such expenses will be allocated among the
Systems and such other systems in a manner mutually agreed to by the Company and
Consultant. It is understood and agreed that the intent of the expense
reimbursement provisions contained in this Section 13.4 is to reimburse
Consultant only for System Level Expenses and not to reimburse Consultant for
any corporate
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overhead (including bonuses and health, welfare, retirement and other benefits
and overhead expenses, including salaries, of its division, regional or
corporate office management, and its development, internal accounting and
finance management personnel), which shall be paid out of the Consulting Fee.
Payment of expense reimbursement shall be made monthly by the Company to
Consultant within five days after receipt by the Company of a statement (the
"Monthly Expense Statement") of Consultant's estimated reimbursable expenses for
the preceding month; provided, that Company may elect to direct Consultant to
obtain reimbursement from the System Account. The Monthly Expense Statement
shall include an adjustment to reflect the amount by which actual reimbursable
expenses incurred during the month immediately preceding the month of payment
exceeded, or were exceeded by, Consultant's estimated reimbursable expenses with
respect to such month.
14. Indemnification.
14.1 By the Company. The Company shall indemnify, defend and hold harmless
Consultant, its affiliates and all direct and indirect partners, stockholders,
owners, officers, directors, agents and employees of Consultant and its
affiliates from and against any pending or threatened claims, losses,
liabilities and demands of every kind and nature whatsoever, including, without
limitation, the costs as and when incurred of investigating and defending any
such claims, liabilities and demands, including, without limitation, attorneys',
accountants' and experts' fees and disbursements therefor, arising in connection
with Consultant's authorized activities set forth herein, regardless of whether
this Agreement continues to be in effect or such indemnitee continues to be an
affiliate or direct or indirect partner, stockholder, member, owner, officer,
director, agent or employee of Consultant or its affiliates at the time of the
claim, losses, liabilities or demands; provided, however, that the Company shall
not be required to indemnify or hold harmless Consultant from any claims,
losses, liabilities or demands which arise from actions (or failures to act)
which are performed in bad faith or which arise out of willful misconduct, gross
negligence or fraud by Consultant, or any of its owners, agents or employees.
14.2 By the Consultant. Consultant shall indemnify, defend and hold
harmless the Company, its affiliates and all direct and indirect partners,
stockholders, owners, officers, directors, agents and employees of the Company
and its affiliates from and against any pending or threatened claims, losses,
liabilities and demands of every kind and nature whatsoever, including, without
limitation, the costs as and when incurred of defending any such claims,
liabilities and demands, including, without limitation, attorneys', accountants'
and experts' fees and disbursements therefore, arising in connection with
Consultant's actions (or failure to act) which are performed in bad faith or
which arise out of willful misconduct, gross negligence or fraud by Consultant,
or any of its owners, agents or employees regardless of whether this Agreement
continues to be in effect or such indemnitee continues to be an affiliate or
direct or indirect partner, stockholder, member, owner, officer, director, agent
or employee of the Company or its affiliates at the time of the claim, losses,
liabilities or demands. The Consultant will use reasonable commercial efforts in
managing the Systems, provided that notwithstanding anything herein or
applicable law to the contrary, neither the Consultant nor any of its direct or
indirect
- 12 -
partners, shareholders, members, owners, officers, directors, affiliates,
employees or agents shall have any liability, express or implied, for any action
taken or omitted to be taken by Consultant or for any failure or delay in
performing or exercising any obligation, duty, right, power or authority
possessed by Consultant under this Agreement, or any other document related
hereto, except for actual losses, if any, suffered by the Company that are
proximately caused either by Consultant's bad faith, willful misconduct, gross
negligence or fraud.
15. Events of Termination. This Agreement may be terminated as follows (each, an
"Event of Termination"):
(a) by either party for convenience upon six month's prior written
notice to the other party;
(b) by the Company if Consultant breaches any material term of this
Agreement (subject to the right of Consultant to cure within 60 days after
notice of such breach is received by Consultant from the Company);
(c) by the Company if Consultant commits any act constituting bad
faith, gross negligence, willful misconduct or fraud; or
(d) by the Company upon the bankruptcy or dissolution of Consultant;
or
(e) by Consultant upon dissolution of the Company or upon the sale or
other disposition of all or substantially all of the assets related to the
Systems.
16. Termination. This Agreement will be terminated upon the first to occur of
any of the following events: (a) the expiration of the term specified in Section
2; (b) the written consent to terminate of all parties to this Agreement; or (c)
an Event of Termination if the applicable party exercises its option to
terminate upon such Event of Termination. In the event this Agreement is
terminated pursuant to this Section 16, the Company shall be relieved from any
further obligation to pay Consultant compensation hereunder, other than
compensation and reimbursable expenses accrued up to the date of such
termination which shall be paid within 30 days of such termination. The
provisions of Section 14 shall survive any termination hereof.
17. Miscellaneous.
17.1 All notices and communications hereunder shall be in writing and shall
be deemed to have been duly given to a party hereunder when delivered in person,
via messenger service or by telecopy to such party, or three (3) business days
after being deposited in the U.S. Mail, registered or certified, with postage
prepaid, addressed as follows (or such other address as the parties may
designate in writing):
- 13 -
If to Consultant: Insight Communications Company, L.P.
126 East 56th Street
New York, NY 10022
Attn: Elliot Brecher, General Counsel
Telecopy: 212-371-1549
with a copy to: Dow, Lohnes & Albertson, PLLC
1200 New Hampshire Avenue, N.W., Suite 800
Washington, D.C. 20036
Attn: Leonard J. Baxt, Esq.
Telecopy: 202-776-2222
If to the Company: c/o AT&T Broadband and Internet Services
9197 South Peoria Street
Englewood, CO 80112
Attn: Carol O'Keeffe
Telecopy: 720-875-5396
with a copy to: the same address
Attn: Legal Department
|
17.2 No party hereto shall have the right to assign this Agreement without
the written consent of the other party; provided, that Consultant may assign its
rights and duties under this Agreement without the consent of the Company to the
parent or any wholly-owned subsidiary of Consultant.
17.3 This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns and no
other third party will be entitled to any of the benefits conferred by this
Agreement.
17.4 This Agreement may not be modified, altered or amended in any manner
except by an agreement in writing, duly executed by all parties hereto.
17.5 Consultant and the Company shall not, by virtue of this Agreement, be
deemed partners, joint venturers or co-employers, nor shall Consultant be deemed
to be the agent or employee of the Company. Consultant shall not, by entering
into and performing this Agreement, incur any liability for any of the existing
obligations, liabilities or debts of the Company, and Consultant shall not, by
acting hereunder assume or become liable for any of the future obligations,
debts, or liabilities of the Company.
- 14 -
17.6 All matters affecting the interpretation of this Agreement and the
rights of the parties hereto shall be governed by the laws of the State of
Delaware, without regard to its conflict of law principles.
17.7 Each of the respective rights and obligations of the parties hereunder
shall be deemed independent and may be enforced independently irrespective of
any of the other rights and obligations set forth herein. No waivers, express or
implied, by either party of any breach of any of the covenants, agreements or
duties hereunder of the other party shall be deemed to be a waiver of any other
breach thereof or the waiver of any other covenant, agreement or duty.
17.8 This Agreement contains the entire understanding of the parties with
respect to the subject matter hereof, and the parties hereto hereby acknowledge
that there have not been and are no representations, warranties, covenants or
understandings other than those expressly set forth herein and therein which
relate to the subject matter hereof.
17.9 Nothing herein shall limit the right of Consultant to engage in any
other business or to devote its time and attention to the management or other
aspects of any other business or to render services of any kind. The Company
acknowledges that Consultant and its affiliates own, manage or operate cable
television systems throughout the United States.
- 15 -
IN WITNESS WHEREOF, the parties hereto have executed this Consulting
Agreement as of the date first written above.
CONSULTANT:
INSIGHT COMMUNICATIONS COMPANY, L.P.
By: Insight Communications Company, Inc.,
its general partner
By: ___________________________
Name: Kim D. Kelly
Title: Executive Vice President
COMPANY:
INTERMEDIA PARTNERS SOUTHEAST
By: TCI Spartanburg IP-IV, LLC,
its managing general partner
By: _______________________________
Name: _____________________________
Title: ____________________________
- 16 -
EXHIBIT A
Systems
Headend Communities
Indiana
-------
Columbus Bartholomew County
Elizabethtown
Clifford
Columbus
Sunnybrook Trailer Park
Seymour Jennings County
Vernon
North Vernon
Jackson County
Seymour
Westport Decatur County
Westport
Elizabethtown Bartholomew County
(Apollo) Elizabethtown
Jonesville
Jennings County
Hartsville
Jackson County
Tippecanoe Tippecanoe County
Woods Edge Mobile Village
Lake Cicott Lake Cicott
Silver Lake Silver Lake
Akron Akron
Fulton County
Liberty Liberty
Union County
|
A-1
Rushville Rush County
Rushville
Frankfort Jefferson
Antioch
Clinton
Frankfort
Monticello Burnettsville
Buffalo
Reynolds
Carrol County
White County
Monticello
Batesville Oldenberg
Batesville
Franklin County
Wolcott White
Jasper
Monon
Wolcott
Chalmers
Brookston
Remington
Veedersburg Veedersburg
Connersville Fayette County
Connersville
Brookville Brookville
Covington Fountain County
Covington
Flora Clinton
Rockfield
Camden
Burlington
Rossville
Flora
|
A-2
Delphi
Montpelier Montpelier
Warsaw Burket
Etna Green
Atwood
Winona Lake
Warsaw
Kosciusko County
Logansport Cass County
Denver
Bunker Hill
Wabash
Miami County
Grissom Air Force
Logansport
Wabash
Peru
New Albany Harrison County
Lanesville
Palmyra
Greenville
Georgetown
Floyd County
New Albany
Corydon
Crawfordsville Montgomery County
Crawfordsville
Kentucky
--------
Shelbyville Shelbyville
Eminence
Henry County
New Castle
Pleasureville
Shelby County
Simpsonville
|
A-3
EXHIBIT 21.1
SUBSIDIARIES OF REGISTRANT
Name Jurisdiction of Incorporation or Organization
---- ---------------------------------------------
ICI Holdings, LLC Delaware
Insight Communications Company, L.P. Delaware
Insight Midwest, L.P. Delaware
Insight Capital, Inc. Delaware
Insight Communications of Indiana, LLC Delaware
Insight Communications of Kentucky, L.P. Delaware
Insight Kentucky Partners I, L.P. Delaware
Insight Kentucky Partners II, L.P. Delaware
Insight Kentucky Capital, LLC Delaware
Insight Holdings of Ohio, LLC Delaware
Insight Communications of Central Ohio, LLC Delaware
Insight Interactive, LLC Delaware
|
|
ARTICLE 5
|
|
This schedule contains summary information extracted from the Registrant Company
Consolidated Balance Sheets for December 31, 1999 and 1998 and Consolidated
Statements of Operations for the years ended December 31, 1999 and 1998 and is
qualified in its entirety by reference to such financial statements.
|
|
CIK: 0001084421
|
|
NAME: INSIGHT COMMUNICATIONS COMPANY, INC.
|
|
MULTIPLIER: 1,000
|
|
|
|
PERIOD TYPE
|
12 MOS
|
12 MOS
|
|
FISCAL YEAR END
|
DEC 31 1998
|
DEC 31 1999
|
|
PERIOD START
|
JAN 01 1998
|
JAN 01 1999
|
|
PERIOD END
|
DEC 31 1998
|
DEC 31 1999
|
|
CASH
|
19,902
|
113,511
|
|
SECURITIES
|
0
|
21,650
|
|
RECEIVABLES
|
8,397
|
12,868
|
|
ALLOWANCES
|
409
|
764
|
|
INVENTORY
|
0
|
0
|
|
CURRENT ASSETS
|
31,606
|
165,956
|
|
PP&E
|
195,479
|
747,995
|
|
DEPRECIATION
|
40,067
|
104,857
|
|
TOTAL ASSETS
|
660,916
|
1,989,470
|
|
CURRENT LIABILITIES
|
37,186
|
116,749
|
|
BONDS
|
573,663
|
1,233,000
|
|
PREFERRED MANDATORY
|
51,319
|
0
|
|
PREFERRED
|
0
|
0
|
|
COMMON
|
0
|
594
|
|
OTHER SE
|
(7,928)
|
587,466
|
|
TOTAL LIABILITY AND EQUITY
|
660,916
|
1,989,470
|
|
SALES
|
112,902
|
242,693
|
|
TOTAL REVENUES
|
112,902
|
242,693
|
|
CGS
|
98,696
|
277,747
|
|
TOTAL COSTS
|
98,696
|
277,747
|
|
OTHER EXPENSES
|
0
|
0
|
|
LOSS PROVISION
|
0
|
0
|
|
INTEREST EXPENSE
|
28,106
|
50,398
|
|
INCOME PRETAX
|
141,873
|
(52,622)
|
|
INCOME TAX
|
0
|
31,586
|
|
INCOME CONTINUING
|
141,873
|
(84,208)
|
|
DISCONTINUED
|
0
|
0
|
|
EXTRAORDINARY
|
(3,267)
|
0
|
|
CHANGES
|
0
|
0
|
|
NET INCOME
|
138,606
|
(84,208)
|
|
EPS BASIC
|
6.55
|
(2.58)
|
|
EPS DILUTED
|
4.61
|
(2.58)
|
|
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