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CREDIT AGREEMENT
dated as of June 30, 1997,
by and among
CABLE MICHIGAN, INC.
as Borrower,
the Lenders referred to herein,
and
FIRST UNION NATIONAL BANK,
as Administrative Agent
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS........................................-1-
SECTION 1.1 Definitions........................................-1-
SECTION 1.2 General...........................................-14-
SECTION 1.3 Other Definitions and Provisions..................-15-
ARTICLE II REVOLVING CREDIT FACILITY.........................-15-
SECTION 2.1 Revolving Credit Loans............................-15-
SECTION 2.2 Procedure for Advances of Loans...................-15-
SECTION 2.3 Repayment of Loans................................-16-
SECTION 2.4 Revolving Credit Notes............................-18-
SECTION 2.5 Permanent Reduction of the Revolving Credit
Commitment........................................-18-
SECTION 2.6 Termination of Revolving Credit Facility..........-18-
ARTICLE III TERM LOAN FACILITY................................-18-
SECTION 3.1 Term Loan.........................................-18-
SECTION 3.2 Procedure for Advance of Term Loan................-19-
SECTION 3.3 Repayment of Term Loan............................-19-
SECTION 3.4 Optional Prepayments of Term Loan.................-20-
SECTION 3.5 Mandatory Prepayments of Term Loans...............-21-
SECTION 3.6 Term Notes........................................-21-
ARTICLE IV GENERAL LOAN PROVISIONS...........................-21-
SECTION 4.1 Interest..........................................-21-
SECTION 4.2 Notice and Manner of Conversion or Continuation of
Loans.............................................-23-
SECTION 4.3 Fees..............................................-24-
SECTION 4.4 Manner of Payment.................................-24-
SECTION 4.5 Crediting of Payments and Proceeds................-25-
SECTION 4.6 Adjustments.......................................-25-
SECTION 4.7 Nature of Obligations of Lenders Regarding Loans;
Assumption by the Administrative Agent............-25-
SECTION 4.8 Changed Circumstances.............................-26-
SECTION 4.9 Indemnity.........................................-28-
SECTION 4.10 Capital Requirements..............................-29-
SECTION 4.11 Taxes.............................................-29-
SECTION 4.12 Change in Lending Office; Replacement Lenders.....-31-
ARTICLE V CLOSING; CONDITIONS OF CLOSING AND
BORROWING.........................................-32-
SECTION 5.1 Closing...........................................-32-
SECTION 5.2 Conditions to Closing and Initial Loans...........-32-
SECTION 5.3 Conditions to All Loans...........................-35-
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE
BORROWER..........................................-35-
SECTION 6.1 Representations and Warranties....................-35-
SECTION 6.2 Survival of Representations and Warranties, Etc...-43-
ARTICLE VII FINANCIAL INFORMATION AND NOTICES.................-43-
SECTION 7.1 Financial Statements and Projections..............-43-
SECTION 7.2 Officer's Compliance Certificate..................-44-
SECTION 7.3 Accountants' Certificate..........................-44-
SECTION 7.4 Other Reports.....................................-44-
SECTION 7.5 Notice of Litigation and Other Matters............-45-
SECTION 7.6 Accuracy of Information...........................-46-
ARTICLE VIII AFFIRMATIVE COVENANTS.............................-46-
SECTION 8.1 Preservation of Corporate Existence and Related
Matters...........................................-46-
SECTION 8.2 Maintenance of Property...........................-46-
SECTION 8.3 Insurance.........................................-47-
SECTION 8.4 Accounting Methods and Financial Records..........-47-
SECTION 8.5 Payment and Performance of Obligations............-47-
SECTION 8.6 Compliance With Laws and Approvals................-47-
SECTION 8.7 Environmental Laws................................-47-
SECTION 8.8 Compliance with ERISA.............................-48-
SECTION 8.9 Compliance With Agreements........................-48-
SECTION 8.10 Additional Subsidiaries; Collateral...............-48-
SECTION 8.11 Conduct of Business...............................-49-
SECTION 8.12 Visits and Inspections............................-49-
ARTICLE IX FINANCIAL COVENANTS...............................-49-
SECTION 9.1. Leverage Ratio....................................-49-
SECTION 9.2. Interest Coverage Ratio...........................-50-
SECTION 9.3. Adjusted Fixed Charge Coverage Ratio..............-50-
ARTICLE X NEGATIVE COVENANTS................................-50-
SECTION 10.1 Limitations on Debt...............................-50-
SECTION 10.2 Limitations on Liens..............................-51-
SECTION 10.3 Limitations on Loans, Advances, Investments and
Acquisitions......................................-52-
SECTION 10.4 Limitations on Mergers and Liquidation............-53-
SECTION 10.5 Limitations on Sale of Assets.....................-53-
SECTION 10.6 Limitations on Dividends and Distributions........-54-
SECTION 10.7 Limitations on Exchange and Issuance of Capital
Stock.............................................-54-
SECTION 10.8 Transactions with Affiliates......................-55-
SECTION 10.9 Certain Accounting Changes........................-55-
SECTION 10.10 Restrictive Agreements............................-55-
ARTICLE XI DEFAULT AND REMEDIES..............................-56-
SECTION 11.1 Events of Default.................................-56-
SECTION 11.2 Remedies..........................................-60-
SECTION 11.3 Rights and Remedies Cumulative; Non-Waiver; etc...-60-
ARTICLE XII THE ADMINISTRATIVE AGENT..........................-61-
SECTION 12.1 Appointment.......................................-61-
SECTION 12.2 Delegation of Duties..............................-61-
SECTION 12.3 Exculpatory Provisions............................-61-
SECTION 12.4 Reliance by the Administrative Agent..............-62-
SECTION 12.5 Notice of Default.................................-62-
SECTION 12.6 Non-Reliance on the Administrative Agent and Other
Lenders...........................................-62-
SECTION 12.7 Indemnification...................................-63-
SECTION 12.8 The Administrative Agent in Its Individual
Capacity..........................................-63-
SECTION 12.9 Resignation of the Administrative Agent; Successor
Administrative Agent..............................-64-
ARTICLE XIII MISCELLANEOUS.....................................-64-
SECTION 13.1 Notices...........................................-64-
SECTION 13.2 Expenses; Indemnity...............................-65-
SECTION 13.3 Set-off...........................................-66-
SECTION 13.4 Governing Law.....................................-66-
SECTION 13.5 Consent to Jurisdiction...........................-66-
SECTION 13.6 Binding Arbitration; Waiver of Jury Trial.........-67-
SECTION 13.7 Reversal of Payments..............................-68-
SECTION 13.8 Injunctive Relief.................................-68-
SECTION 13.9 Accounting Matters................................-68-
SECTION 13.10 Successors and Assigns; Participations............-68-
SECTION 13.11 Amendments, Waivers and Consents..................-71-
SECTION 13.12 Performance of Duties.............................-72-
SECTION 13.13 All Powers Coupled with Interest..................-72-
SECTION 13.14 Survival of Indemnities...........................-72-
SECTION 13.15 Titles and Captions...............................-72-
SECTION 13.16 Severability of Provisions........................-72-
SECTION 13.17 Counterparts......................................-72-
SECTION 13.18 Term of Agreement.................................-73-
EXHIBITS
Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Term Loan Note
Exhibit C-1 - Form of Notice of Revolving Credit Borrowing
Exhibit C-2 - Form of Notice of Term Loan Borrowing
Exhibit D - Form of Notice of Payment
Exhibit E - Form of Notice of Conversion/Continuation
Exhibit F - Form of Officer's Certificate
Exhibit G - Form of Assignment and Acceptance
Exhibit H - Form of Notice of Account Designation
Exhibit I - Form of Pledge Agreement
Exhibit J - Form of Assumption Agreement
SCHEDULES
Schedule 1.1(a) - Lenders and Commitments
Schedule 1.1(b) - Plan of Reorganization
Schedule 6.1(a) - Jurisdictions of Organization and
Qualification
Schedule 6.1(b) - Subsidiaries and Capitalization
Schedule 6.1(i) - ERISA Plans
Schedule 6.1(l) - Material Contracts
Schedule 6.1(m) - Labor and Collective Bargaining Agreements
Schedule 6.1(s) - Debt and Guaranty Obligations
Schedule 6.1(t) - Litigation
Schedule 6.1(u) - FCC Licenses, PUC Authorizations and CATV Franchises
Schedule 10.2 - Existing Liens
Schedule 10.3 - Existing Loans, Advances and Investments
CREDIT AGREEMENT, dated as of the 30th day of June, 1997, by and
among CABLE MICHIGAN, INC. (the "Borrower"), the Lenders who are or may
become a party to this Agreement, and FIRST UNION NATIONAL BANK, as
Administrative Agent for the Lenders.
STATEMENT OF PURPOSE
The Borrower has requested, and the Lenders have agreed, to extend
certain credit facilities to the Borrower on the terms and conditions of this
Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, such
parties hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. The following terms when used in this
Agreement shall have the meanings assigned to them below:
"Adjusted Operating Cash Flow" means, with respect to any Person for any
period, the total of the following for such period calculated in accordance
with GAAP: (a) Operating Cash Flow less (b) the sum of (i) cash taxes, (ii)
cash dividends and other distributions and redemptions paid with respect to
capital stock and (iii) Specified Capital Expenditures.
"Administrative Agent" means First Union in its capacity as
Administrative Agent hereunder, and any successor thereto appointed pursuant
to Section 12.9.
"Administrative Agent's Office" means the office of the Administrative
Agent specified in or determined in accordance with the provisions of Section
13.1.
"Affiliate" means, with respect to any Person, any other Person (other
than a Subsidiary) which directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control
with, such first Person or any of its Subsidiaries. The term "control" means
(a) the power to vote ten percent (10%) or more of the securities or other
equity interests of a Person having ordinary voting power, or (b) the
possession, directly or indirectly, of any other power to direct or cause the
direction of the management and policies of a Person, whether through
ownership of voting securities, by contract or otherwise.
"Aggregate Commitment" means the aggregate amount of the Lenders'
Commitments hereunder, as such amount may be reduced or modified at any time
or from time to time pursuant to the terms hereof. On the Closing Date, the
Aggregate Commitment shall be $145,000,000.
"Agreement" means this Credit Agreement, as amended, restated or
otherwise modified from time to time.
"Applicable Law" means all applicable provisions of constitutions,
statutes, laws, rules, treaties, regulations and orders of all Governmental
Authorities and all orders and decrees of all courts and arbitrators.
"Applicable Margin" shall have the meaning assigned thereto in Section
4.1(c).
"Assignment and Acceptance" shall have the meaning assigned thereto in
Section 13.10.
"Assumption Agreement" means any Assumption Agreement executed by a
Subsidiary of a Borrower pursuant to Section 8.10 in favor of the
Administrative Agent for the ratable benefit of the Administrative Agent and
Lenders and substantially in the form of Exhibit J, as amended, restated or
otherwise modified.
"Base Rate" means, at any time, the higher of (a) the Prime Rate or (b)
the Federal Funds Rate plus 1/2 of 1%; each change in the Base Rate shall take
effect simultaneously with the corresponding change or changes in the Prime
Rate or the Federal Funds Rate.
"Base Rate Loan" means any Loan bearing interest at a rate based upon
the Base Rate as provided in Section 4.1(a).
"Borrower" means CCSM in its capacity as borrower hereunder.
"Borrower Pledge Agreement" means any pledge agreement executed by the
Borrower (and any other applicable Person) in favor of the Administrative
Agent for the ratable benefit of itself and the other Lenders with respect to
the capital stock or other ownership interests of any Material Subsidiary of
CCSM, substantially in the form of Exhibit I, as amended, restated or
otherwise modified.
"Business Day" means (a) for all purposes other than as set forth in
clause (b) below, any day other than a Saturday, Sunday or legal holiday on
which banks in Charlotte, North Carolina and New York, New York, are open for
the conduct of their commercial banking business, and (b) with respect to all
notices and determinations in connection with, and payments of principal and
interest on, any LIBOR Rate Loan, any day that is a Business Day described in
clause (a) and that is also a day for trading by and between banks in Dollar
deposits in the London interbank market.
"Cable New York" means C-TEC Cable Systems of New York, Inc. and its
successors.
"Cable Systems" means C-TEC Cable Systems, Inc. and its successors.
"Cable Systems Credit Facility" means the credit agreement of even date
by and among Cable Systems, ComVideo and Cable New York, as borrowers, First
Union, as administrative agent, and the lenders party thereto, as amended,
restated or otherwise modified.
"Cable Systems Holdings" means the ultimate holding company which, as a
result of the Reorganization, holds, directly or indirectly through one or
more of its Wholly-Owned Subsidiaries, all of the outstanding shares of
capital stock of Cable Systems.
"Capital Asset" means, with respect to any Person, any asset that
should, in accordance with GAAP, be classified and accounted for as a capital
asset on a balance sheet of such Person.
"Capital Expenditures" means, with respect to any Person for any period,
the aggregate cost of all Capital Assets acquired by such Person (other than
Capital Assets acquired in accordance with the terms hereof with the proceeds
from casualty insurance or condemnations) during such period determined in
accordance with GAAP.
"Capital Lease" means, with respect to any Person, any lease of any
property that should, in accordance with GAAP, be classified and accounted for
as a capital lease on a balance sheet of such Person.
"CATV Franchise" means any franchise, easement or other authorization
granted by any Governmental Authority pursuant to which a Person has the right
or license to operate a CATV System and any Applicable Law or other document
setting forth all or part of the terms of any such franchise, easement or
other authorization.
"CATV System" means any cable distribution system which receives audio,
video, digital, other broadcast signals or information or telecommunications
by cable, optical, antennae, microwave or satellite transmission and which
amplifies and transmits such signals to Persons who receive such signals.
"CCSM" means Cable Michigan, Inc., and its successors.
"C-TEC" means C-TEC Corporation, and its successors.
"C-TEC Credit Facility" means the credit agreement of even date by and
among C-TEC, as borrower, First Union, as administrative agent, and the
lenders party thereto, as amended restated or otherwise modified.
"Change in Control" shall have the meaning assigned thereto in Section
11.1(h).
"Closing Date" means the date of this Agreement or such later Business
Day upon which each condition described in Section 5.2 shall be satisfied or
waived in all respects in a manner acceptable to the Administrative Agent, in
its sole discretion.
"Code" means the Internal Revenue Code of 1986, and the rules and
regulations thereunder, each as amended or supplemented from time to time.
"Combined" means, when used in reference to financial statements or
financial statement items of any Person, such statements or items on a
combined basis in accordance with applicable principles of combination under
GAAP.
"Commitment" means, as to any Lender, the sum of such Lender's Revolving
Credit Commitment and Term Loan Commitment.
"Commitment Percentage" means, as to any Lender at any time, the ratio
of (a) the amount of the Commitment of such Lender to (b) the Aggregate
Commitment of all of the Lenders.
"ComVideo" means ComVideo Systems, Inc. and its successors.
"Consolidated" means, when used with reference to financial statements
or financial statement items of any Person, such statements or items on a
consolidated basis in accordance with applicable principles of consolidation
under GAAP.
"Credit Facility" means the collective reference to the Revolving Credit
Facility and the Term Loan Facility.
"Debt" means, with respect to any Person at any date and without
duplication, the sum of the following calculated in accordance with GAAP: (a)
all liabilities, obligations and indebtedness for borrowed money including but
not limited to obligations evidenced by bonds, debentures, notes or other
similar instruments of any such Person, (b) all obligations to pay the
deferred purchase price of property or services of any such Person, except
trade payables arising in the ordinary course of business not more than ninety
(90) days past due, (c) all obligations of any such Person as lessee under
Capital Leases, (d) all Debt of any other Person secured by a Lien on any
asset of any such Person, (e) all Guaranty Obligations of any such Person, (f)
all obligations, contingent or otherwise, of any such person relative to the
face amount of letters of credit, whether drawn or not drawn, and banker's
acceptances issued for the account of any such person and (g) all obligations
incurred by any such Person pursuant to Hedging Agreements.
"Default" means any of the events specified in Section 11.1 which with
the passage of time, the giving of notice or both, would constitute an Event
of Default.
"Disqualified Stock" means any capital stock of a Person that by its
terms (a) has any scheduled interest or dividend payment, (b) upon the passage
of time or occurrence of any event has any redemption or similar payment due,
(c) is required to be redeemed or repurchased at the option of any holder or
otherwise or (d) is convertible into Debt or is convertible to another
security which contains any such terms.
"Dollars" or "$" means, unless otherwise qualified, dollars in lawful
currency of the United States.
"Eligible Assignee" means, with respect to any assignment of the rights,
interest and obligations of a Lender hereunder, a Person that is at the time
of such assignment (a) a commercial bank organized or licensed under the laws
of the United States or any state thereof, having combined capital and surplus
in excess of $500,000,000, (b) a finance company, insurance company or other
financial institution which in the ordinary course of business extends credit
of the type extended hereunder and that has total assets in excess of
$1,000,000,000, (c) already a Lender hereunder (whether as an original party
to this Agreement or as the assignee of another Lender), (d) the successor
(whether by transfer of assets, merger or otherwise) to all or substantially
all of the commercial lending business of the assigning Lender, or (e) any
other Person that has been approved in writing as an Eligible Assignee by
Cable Systems and the Administrative Agent.
"Employee Benefit Plan" means any employee benefit plan within the
meaning of Section 3(3) of ERISA which (a) is maintained for employees of any
Borrower or any ERISA Affiliate or (b) has at any time within the preceding
six years been maintained for the employees of any Borrower or any current or
former ERISA Affiliate.
"Environmental Laws" means any and all federal, state and local laws,
statutes, ordinances, rules, regulations, permits, licenses, approvals and
orders of courts or Governmental Authorities, relating to the protection of
human health or the environment, including, but not limited to, requirements
pertaining to the manufacture, processing, distribution, use, treatment,
storage, disposal, transportation, handling, reporting, licensing, permitting,
investigation or remediation of Hazardous Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
the rules and regulations thereunder, each as amended or modified from time to
time.
"ERISA Affiliate" means any Person who together with any Borrower is
treated as a single employer within the meaning of Section 414(b), (c), (m) or
(o) of the Code or Section 4001(b) of ERISA.
"Eurodollar Reserve Percentage" means, for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve
requirement (including without limitation any basic, supplemental or emergency
reserves) in respect of Eurocurrency liabilities or any similar category of
liabilities for any Lender.
"Event of Default" means any of the events specified in Section 11.1,
provided that any requirement for passage of time, giving of notice, or both,
has been satisfied.
"FCC" means the Federal Communications Commission or any successor
Governmental Authority.
"FCC License" means any license, permit, consent, certificate of
compliance, franchise, approval, waiver or authorization granted or issued by
the FCC.
"FDIC" means the Federal Deposit Insurance Corporation, or any successor
thereto.
"Federal Funds Rate" means the rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) representing the daily effective
federal funds rate as quoted by the Administrative Agent and confirmed in
Federal Reserve Board Statistical Release H.15 (519) or any successor or
substitute publication selected by the Administrative Agent. If, for any
reason, such rate is not available, then "Federal Funds Rate" shall mean a
daily rate which is determined, in the opinion of the Administrative Agent, to
be the rate at which federal funds are being offered for sale in the national
federal funds market at 9:00 a.m. (Charlotte time). Rates for weekends or
holidays shall be the same as the rate for the most immediate preceding
Business Day.
"$15 Million Facility" means a credit facility for up to $15,000,000 in
favor of C-TEC with a maturity of no more than two years, secured by a pledge
of the capital stock of Mercom owned by C-TEC, which facility will be assumed
by the Borrower as part of the Mercom Contribution.
"First Union" means First Union National Bank, a national banking
association, and its successors.
"Fiscal Year" means the fiscal year of the Borrower and its Subsidiaries
ending on December 31.
"Fixed Charges" means, with respect to any Person for any period, the
sum of the following for such period calculated in accordance with GAAP: (a)
Interest Expense plus (b) scheduled principal payments with respect to Debt
(regardless of whether such amounts were actually paid).
"GAAP" means generally accepted accounting principles, as recognized by
the American Institute of Certified Public Accountants and the Financial
Accounting Standards Board, consistently applied and maintained on a
consistent basis throughout the period indicated and consistent with prior
financial practice (except for changes in such practice with which the
Borrowers' independent certified public accountants have concurred).
"Governmental Approvals" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to,
all Governmental Authorities, including without limitation any FCC License,
PUC Authorization or CATV Franchise.
"Governmental Authority" means any nation, province, state or political
subdivision thereof, and any government or any Person exercising executive,
legislative, regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing, including
without limitation the FCC and any PUC.
"Guaranty Obligation" means, with respect to any Person, without
duplication, any obligation, contingent or otherwise, of any such Person
pursuant to which such Person has directly or indirectly guaranteed any Debt
of any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of any such Person
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Debt (whether arising by virtue of partnership arrangements, by
agreement to keep well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement condition or otherwise) or (b)
entered into for the purpose of assuring in any other manner the obligee of
such Debt of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided, that the term Guaranty
Obligation shall not include endorsements for collection or deposit in the
ordinary course of business.
"Hazardous Materials" means any substances or materials (a) which are or
become defined as hazardous wastes, hazardous substances, pollutants,
contaminants, chemical substances or mixtures or toxic substances under any
applicable Environmental Law, (b) which are toxic, explosive, corrosive,
flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise
harmful to human health or the environment and are or become regulated by any
applicable Environmental Law, (c) the presence of which require remediation
under any Environmental Law or common law, (d) the discharge or emission or
release of which requires a permit or license under any Environmental Law or
other Governmental Approval, (e) which are materials consisting of underground
or aboveground storage tanks, whether empty, filled or partially filled with
any substance or (f) which contain asbestos, polychlorinated biphenyls, urea
formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived
substances or waste, crude oil, nuclear fuel, natural gas or synthetic gas.
"Hedging Agreement" means any agreement with respect to an interest rate
swap, collar, cap, floor or a forward rate agreement or other agreement
regarding the hedging of interest rate risk exposure executed in connection
with hedging the interest rate exposure of the Borrower under this Agreement,
and any confirming letter executed pursuant to such hedging agreement, all as
amended, restated or otherwise modified.
"Interest Expense" means, with respect to any Person for any period, the
interest expense as determined for such period in accordance with GAAP.
"Interest Period" shall have the meaning assigned thereto in Section
4.1(b).
"Lender" means each Person executing this Agreement as a Lender set
forth on the signature pages hereto and each Person that hereafter becomes a
party to this Agreement as a Lender pursuant to Section 13.10.
"Lending Office" means, with respect to any Lender, the office of such
Lender maintaining such Lender's Commitment Percentage of the Loans.
"Leverage Ratio" means as of any date of determination, the ratio as of
such date determined in accordance with Section 9.1.
"LIBOR" means the rate for deposits in Dollars for a period equal to the
Interest Period selected which appears on the Telerate Page 3750 at
approximately 11:00 a.m. London time, two (2) Business Days prior to the
commencement of the applicable Interest Period. If, for any reason, such rate
is not available, then "LIBOR" shall mean the rate per annum at which, as
determined by the Administrative Agent, Dollars in the amount of $5,000,000
are being offered to leading banks at approximately 11:00 a.m. London time,
two (2) Business Days prior to the commencement of the applicable Interest
Period for settlement in immediately available funds by leading banks in the
London interbank market for a period equal to the Interest Period selected.
"LIBOR Rate" means a rate per annum (rounded upwards, if necessary, to
the next higher 1/100th of 1%) determined by the Administrative Agent pursuant
to the following formula:
LIBOR Rate = LIBOR
----------------------------------
1.00-Eurodollar Reserve Percentage
"LIBOR Rate Loan" means any Loan bearing interest at a rate based upon
the LIBOR Rate as provided in Section 4.1(a).
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, a Person shall be deemed to own subject to
a Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, Capital Lease or other
title retention agreement relating to such asset.
"Loan" means any loan made to any Borrower pursuant to Section 2.1 or
Section 3.1, and all such Loans collectively as the context requires.
"Loan Documents" means, collectively, this Agreement, the Notes, any
Hedging Agreement executed by any Lender, the Pledge Agreements (but only as
of and after the date a Pledge Agreement is executed and delivered as required
by this Agreement) and each other document referenced in Article V or
otherwise required to be delivered by or on behalf of the Borrower pursuant to
this Agreement, all as may be amended, restated or otherwise modified.
"Material Adverse Effect" means a material adverse effect on the
business, operations or financial condition of the Borrower and its
Subsidiaries, taken as a whole, or the ability of the Borrower to perform its
obligations under the Loan Documents to which it is a party.
"Material Contract" means any written contract or other agreement of the
Borrower or any of its Subsidiaries (other than one evidencing Debt, providing
for the acquisition or construction of Capital Assets or the making of any
Investment (including by way of merger) permitted by Section 10.3 (and, if
applicable, Section 10.4)) involving monetary liability of any such Person in
an amount in excess of $3,000,000 per annum.
"Material Subsidiary" means any Subsidiary of the Borrower that owns
assets in excess of $250,000.
"Mercom" means Mercom, Inc. and its successors.
"Mercom Credit Facility" means the Amended and Restated Term Credit
Agreement and Revolving Credit Agreement dated August 16, 1995 among Mercom
and ▇▇▇▇▇▇ Guaranty Trust Company of New York, together with any extension,
amendment, replacement, restatement, modification, renewal or refinancing
thereof (whether or not the principal amount available or outstanding
thereunder is increased).
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which any Borrower or any ERISA Affiliate is making, or
is accruing an obligation to make, contributions within the preceding six
years.
"Net Cash Proceeds" means, as applicable with respect to any Person, (a)
with respect to any sale, trade or other disposition of assets, the gross cash
proceeds received by such Person from such sale less the sum of (i) all income
taxes and other taxes assessed by a Governmental Authority as a result of such
sale and any other reasonable fees and expenses incurred in connection
therewith and (ii) the principal amount of, premium, if any, and interest on
any Debt secured by a Lien on the asset (or a portion thereof) sold, which
Debt is required to be and is repaid in connection with such sale, (b) with
respect to any issuance of Debt, the gross cash proceeds received by such
Person therefrom less all legal, underwriting and other reasonable fees and
expenses incurred in connection therewith and the amount thereof applied to
repay existing Debt permitted by Section 10.1 and (c) with respect to any
payment under an insurance policy or in connection with a condemnation
proceeding, the amount of cash proceeds received by such Person from an
insurance company or Governmental Authority net of all reasonable expenses of
collection.
"Net Income" means, with respect to any Person for any period, the net
income (or loss) of such Person for such period determined in accordance with
GAAP; provided, that there shall be excluded from net income the income of any
Person (other than a Wholly-Owned Subsidiary) in which such Person has an
ownership interest, except to the extent received in cash by such Person.
"Notes" means the Revolving Credit Notes and Term Notes.
"Notice of Account Designation" shall have the meaning assigned thereto
in Section 2.2(b).
"Notice of Conversion/Continuation" shall have the meaning assigned
thereto in Section 4.2.
"Notice of Payment" shall have the meaning assigned thereto in Section
2.3(d).
"Notice of Revolving Credit Borrowing" shall have the meaning assigned
thereto in Section 2.2(a).
"Notice of Term Loan Borrowing" shall have the meaning assigned thereto
in Section 3.2(a).
"Obligations" means, in each case, whether now in existence or hereafter
arising: (a) the principal of and interest on (including interest accruing
after the filing of any bankruptcy or similar petition) the Revolving Credit
Loans, (b) the principal and interest on (including interest accruing after
the filing of any bankruptcy or similar petition) the Term Loans and (c) all
other fees and commissions (including attorney's fees), charges, indebtedness,
loans, liabilities, financial accommodations, obligations, covenants and
duties owing by the Borrower to the Lenders or the Administrative Agent, of
every kind, nature and description, direct or indirect, absolute or
contingent, due or to become due, contractual or tortious, liquidated or
unliquidated, and whether or not evidenced by any note, and whether or not for
the payment of money under or in respect of this Agreement, any Note, any
Hedging Agreement with a Lender or Affiliate thereof or any of the other Loan
Documents.
"Officer's Compliance Certificate" shall have the meaning assigned
thereto in Section 7.2.
"Operating Cash Flow" means, with respect to any Person for any period,
the following, calculated without duplication for such period in accordance
with GAAP: (a) Net Income, plus (b) to the extent deducted in determining Net
Income, (i) income and franchise taxes, (ii) Interest Expense and (iii)
depreciation, amortization (including amortization of goodwill and other
intangibles) and other non-cash charges, minus (c) to the extent included in
determining Net Income, any items of extraordinary, unusual or non-recurring
gain or loss (together with any related provision for taxes on such gain).
For any acquisition or sale by such Person during any period of calculation,
the definition of Operating Cash Flow shall be adjusted on a pro forma basis
in a manner reasonably satisfactory to the Administrative Agent to give effect
to such acquisition or sale as if such acquisition or sale occurred on the
first day of such period.
"Other Taxes" shall have the meaning assigned thereto in Section 4.11(c).
"Parent Pledge Agreement" means the pledge agreement executed by each
Person that owns any capital stock or other ownership interests of the
Borrower in accordance with Section 8.10(b) in favor of the Administrative
Agent for the ratable benefit of itself and the other Lenders, substantially
in the form of Exhibit I, as amended, restated or otherwise modified.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
agency.
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to the provisions of Title IV of ERISA or
Section 412 of the Code and which (a) is maintained for employees of any
Borrower or any ERISA Affiliates or (b) has at any time within the preceding
six years been maintained for the employees of any Borrower or any of their
current or former ERISA Affiliates.
"Person" means an individual, corporation, partnership, limited
liability company, limited liability partnership, association, trust, business
trust, joint venture, joint stock company, pool, syndicate, sole
proprietorship, unincorporated organization, Governmental Authority or any
other form of entity or group thereof.
"Pledge Agreements" means the Borrower Pledge Agreement and the Parent
Pledge Agreement.
"Prime Rate" means, at any time, the rate of interest per annum publicly
announced from time to time by First Union as its prime rate. Each change in
the Prime Rate shall be effective as of the opening of business on the day
such change in the Prime Rate occurs. The parties hereto acknowledge that the
rate announced publicly by First Union as its Prime Rate is an index or base
rate and shall not necessarily be its lowest or best rate charged to its
customers or other banks.
"PUC" means any state regulatory agency or body that exercises
jurisdiction over the rates or services or the acquisition, construction or
operation of any CATV System or any person who owns, constructs or operates
any CATV System, in each case by reason of the nature or type of the business
subject to regulation and not pursuant to laws and regulations of general
applicability to Persons conducting business in said state.
"PUC Authorization" means any license, permit, consent, certificate of
compliance, franchise, approval, waiver or authorization granted or issued by
a PUC.
"Rebuild Capital Expenditures" means, with respect to any Person for any
period, Capital Expenditures used to replace, add or retool components
necessary to consolidate facilities, to increase bandwidth or channel
capacity, to provision new services, to improve existing services, or to test
and measure services, networks or bandwidth.
"Register" shall have the meaning assigned thereto in Section 13.10(d).
"Reorganization" means the reorganization described in Schedule 1.1(b),
as such Schedule may be supplemented or otherwise amended with the prior
written approval of the Required Lenders.
"Required Lenders" means, at any date, any combination of holders of at
least fifty-one percent (51%) of the aggregate unpaid principal amount of the
Notes, or if no amounts are outstanding under the Notes, any combination of
Lenders whose Commitment Percentages aggregate at least fifty-one percent
(51%).
"Revolving Credit Commitment" means (a) as to any Lender, the obligation
of such Lender to make the Revolving Credit Loans to the account of the
Borrower hereunder in an aggregate principal amount not to exceed the amount
set forth opposite such Lender's name on Schedule 1.1(a), as such amounts may
be reduced or modified at any time or from time to time pursuant to the terms
hereof and (b) as to all Lenders, the aggregate commitment of all Lenders to
make Revolving Credit Loans. The Revolving Credit Commitment of all Lenders
as of the Closing Date shall be Forty-Five Million Dollars ($45,000,000).
"Revolving Credit Facility" means the revolving credit facility
established pursuant to Article II hereof.
"Revolving Credit Loans" means each of the revolving credit loans to be
made to the Borrower pursuant to Section 2.1.
"Revolving Credit Notes" means the revolving credit notes made by the
Borrower payable to the order of each Lender, substantially in the form of
Exhibit A, evidencing the Debt incurred by the Borrower pursuant to the
Revolving Credit Facility, and any amendments and modifications thereto, any
substitutes therefor, and any replacements, restatements, renewals or
extension thereof, in whole or in part.
"Revolving Credit Termination Date" means the earliest of the dates
referred to in Section 2.6.
"Security Documents" means the collective reference to the Pledge
Agreements and each other agreement or writing pursuant to which the Borrower
or any of its Subsidiaries pledges or grants a security interest in any
property or assets securing the Obligations or any such Person guaranties the
payment and/or performance of the Obligations.
"Solvent" means, as to the Borrower and its Subsidiaries on a particular
date, that such Persons, taken as a whole, (a) have capital sufficient to
carry on their business and transactions and all business and transactions in
which they are about to engage and are able to pay their debts as they mature,
(b) own property having a value, both at fair valuation and at present fair
saleable value, greater than the amount required to pay their probable
liabilities (including contingencies), and (c) do not believe that they will
incur debts or liabilities beyond their ability to pay such debts or
liabilities as they mature.
"Specified Capital Expenditures" means, with respect to any Person for
any period, all Capital Expenditures less all Rebuild Capital Expenditures (if
any) in an amount not to exceed the following, in each case for such Person
for such period:
Period Rebuild Capital Expenditures
------ ----------------------------
Each fiscal quarter in Fiscal Year 1997 $4,250,000 per quarter
Each fiscal quarter in Fiscal Year 1998 $4,500,000 per quarter
Each fiscal quarter in Fiscal Year 1999 $4,250,000 per quarter
Each fiscal quarter in Fiscal Year 2000 $2,500,000 per quarter
Each fiscal quarter in Fiscal Year 2001 $1,250,000 per quarter
;provided, that the maximum amount of Rebuild Capital Expenditures permitted
to be made by such Person in the first fiscal quarter in any Fiscal Year as
set forth in the above table shall be increased by the amount of Rebuild
Capital Expenditures that such Person was permitted to make in the immediately
preceding Fiscal Year and did not expend in such Fiscal Year (without giving
affect to any carry-over amounts from any prior Fiscal Year); provided,
further, that such permitted carry-over amount shall not exceed twenty percent
(20%) of the maximum Rebuild Capital Expenditures for such immediately
preceding Fiscal Year as set forth in the above table.
"Subsidiary" means as to any Person, any corporation, partnership or
other entity of which more than fifty percent (50%) of the outstanding capital
stock or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other managers of such corporation,
partnership or other entity is at the time, directly or indirectly, owned by or
the management is otherwise controlled by such Person (irrespective of
whether, at the time, capital stock of any other class or classes of such
corporation shall have or might have voting power by reason of the happening
of any contingency); provided, that until such time as the Mercom Transaction
is completed or the Borrower otherwise acquires one hundred percent (100%) of
the outstanding capital stock of Mercom, Mercom shall not be treated as a
Subsidiary of the Borrower under this Agreement. Unless otherwise qualified,
references to "Subsidiary" or "Subsidiaries" herein shall refer to those of
the Borrower.
"Taxes" shall have the meaning assigned thereto in Section 4.11(a).
"Termination Event" means: (a) a "Reportable Event" described in
Section 4043 of ERISA (as to which the thirty (30) day notice requirement has
not been waived by the PBGC), or (b) the withdrawal of any Borrower or any
ERISA Affiliate from a Pension Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA, or (c) the
filing of a notice of intent to terminate a Pension Plan under Section 4041(c)
of ERISA, or (d) the institution of proceedings under Section 4042 of ERISA to
terminate, or the appointment of a trustee with respect to, any Pension Plan
by the PBGC, or (e) any other event or condition which would reasonably
constitute grounds under Section 4042(a) of ERISA for the termination of, or
the appointment of a trustee to administer, any Pension Plan, or (f) the
partial or complete withdrawal of any Borrower or any ERISA Affiliate from a
Multiemployer Plan, or (g) the imposition of a Lien pursuant to Section 412 of
the Code or Section 302 of ERISA, or (h) any event or condition which results
in the reorganization or insolvency of a Multiemployer Plan under Sections
4241 or 4245 of ERISA, or (i) any event or condition which results in the
termination of a Multiemployer Plan under Section 4041A of ERISA or the
institution by PBGC of proceedings to terminate a Multiemployer Plan under
Section 4042 of ERISA.
"Term Loan" means the term loan to be made to the Borrower pursuant to
Section 3.1.
"Term Loan Commitment" means (a) as to any Lender, the obligation of
such Lender to make the Term Loan to the account of the Borrower hereunder in
an aggregate principal amount not to exceed the amount set forth opposite such
Lender's name on Schedule 1.1(a), as such amount may be reduced or modified at
any time or from time to time pursuant to the terms hereof and (b) as to all
Lenders, the aggregate commitment of all Lenders to make the Term Loan. The
Term Loan Commitment of all Lenders as of the Closing Date shall be One Hundred
Million Dollars ($100,000,000).
"Term Loan Facility" means the term loan facility established pursuant
to Article III hereof.
"Term Loan Maturity Date" means June 30, 2005.
"Term Notes" means the Term Notes made by the Borrower payable to the
order of each of the Lenders, substantially in the form of Exhibit B hereto,
evidencing the Debt incurred by the Borrower pursuant to the Term Loan
Facility, and any amendments, modifications and supplements thereto, any
substitutes therefor, and any replacements, restatements, renewals or
extensions thereof, in whole or in part.
"Total Debt" means, with respect to any Person at any date and without
duplication, the sum of the following calculated in accordance with GAAP: (a)
all liabilities, obligations and indebtedness for borrowed money including but
not limited to obligations evidenced by bonds, debentures, notes or other
similar instruments of any such Person, (b) all obligations to pay the
deferred purchase price of property or services of any such Person, except
trade payables arising in the ordinary course of business not more than ninety
(90) days past due, (c) all obligations of any such Person as lessee under
Capital Leases and (d) all Guaranty Obligations of any such Person.
"United States" means the United States of America.
"Wholly-Owned" means, with respect to a Subsidiary, a Subsidiary all of
the shares of capital stock or other ownership interests of which are,
directly or indirectly, owned or controlled by any Person and/or one or more
of its Wholly-Owned Subsidiaries.
SECTION 1.2 General. Unless otherwise specified, a reference in
this Agreement to a particular section, subsection, Schedule or Exhibit is a
reference to that section, subsection, Schedule or Exhibit of this Agreement.
Wherever from the context it appears appropriate, each term stated in either
the singular or plural shall include the singular and plural, and pronouns
stated in the masculine, feminine or neuter gender shall include the
masculine, the feminine and the neuter. Any reference herein to "Charlotte
time" shall refer to the applicable time of day in Charlotte, North Carolina.
Unless expressly specified otherwise, any references to the "transactions
contemplated by this Agreement" or the "transactions contemplated hereby" (or
similar references) shall not be a reference to the Reorganization. Unless
expressly specified otherwise, capitalized terms defined in Schedule 1.1(b)
are used herein with the meanings assigned to such terms in such Schedule.
SECTION 1.3 Other Definitions and Provisions.
(a) Use of Capitalized Terms. Unless otherwise defined therein, all
capitalized terms defined in this Agreement shall have the defined meanings
when used in this Agreement, the Notes and the other Loan Documents or any
certificate, report or other document made or delivered pursuant to this
Agreement.
(b) Miscellaneous. The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
ARTICLE II
REVOLVING CREDIT FACILITY
SECTION 2.1 Revolving Credit Loans. Subject to the terms and
conditions of this Agreement, each Lender severally agrees to make Revolving
Credit Loans to the Borrower from time to time from the Closing Date through
the Revolving Credit Termination Date as requested by the Borrower in
accordance with the terms of Section 2.2; provided, that (a) the aggregate
principal amount of all outstanding Revolving Credit Loans (after giving
effect to any amount requested) shall not exceed the Revolving Credit
Commitment of all Lenders and (b) the principal amount of outstanding
Revolving Credit Loans from any Lender to the Borrower shall not at any time
exceed such Lender's Revolving Credit Commitment. Each Loan by a Lender shall
be in a principal amount equal to such Lender's Commitment Percentage of the
aggregate principal amount of Revolving Credit Loans requested on such
occasion. Subject to the terms and conditions hereof, the Borrower may
borrow, repay and reborrow Revolving Credit Loans hereunder until the
Revolving Credit Termination Date.
SECTION 2.2 Procedure for Advances of Loans.
(a) Requests for Borrowing. The Borrower shall give the
Administrative Agent irrevocable prior written notice in the form attached
hereto as Exhibit C-1 (a "Notice of Revolving Credit Borrowing") not later
than 11:00 a.m. (Charlotte time) (i) on the same Business Day as each Base
Rate Loan and (ii) at least three (3) Business Days before each LIBOR Rate
Loan, of its intention to borrow, specifying (A) the date of such borrowing,
which shall be a Business Day, (B) the amount of such borrowing, which shall
be in an aggregate principal amount of $2,000,000 or a whole multiple of
$500,000 in excess thereof, (C) whether the Loans are to be LIBOR Rate Loans
or Base Rate Loans (provided that LIBOR Rate Loans shall not be available
until three (3) Business Days after the Closing Date) and (D) in the case of a
LIBOR Rate Loan, the duration of the initial Interest Period applicable
thereto. Notices received after 11:00 a.m. (Charlotte time) shall be deemed
received on the next Business Day. The Administrative Agent shall promptly
notify the Lenders of each Notice of Borrowing.
(b) Disbursement of Loans. Not later than 2:00 p.m. (Charlotte time)
on the proposed borrowing date, each Lender will make available to the
Administrative Agent, for the account of the Borrower, at the office of the
Administrative Agent in funds immediately available to the Administrative
Agent, such Lender's Commitment Percentage of the Revolving Credit Loans to be
made on such borrowing date. The Borrower hereby irrevocably authorizes the
Administrative Agent to disburse the proceeds of the borrowing requested
pursuant to this Section 2.2 in immediately available funds by crediting or
wiring such proceeds to the deposit account of the Borrower identified in the
most recent Notice of Account Designation substantially in the form of Exhibit
H (a "Notice of Account Designation") delivered by the Borrower to the
Administrative Agent or as may be otherwise agreed upon by the Borrower and
the Administrative Agent from time to time. Subject to Section 4.7 hereof,
the Administrative Agent shall not be obligated to disburse the portion of the
proceeds of any Revolving Credit Loan requested pursuant to this Section 2.2
to the extent that any Lender has not made available to the Administrative
Agent its Commitment Percentage of such Revolving Credit Loan.
SECTION 2.3 Repayment of Loans.
(a) Repayment on Revolving Credit Termination Date. The Borrower
shall repay the outstanding principal amount of all Revolving Credit Loans in
full, together with all accrued but unpaid interest thereon, on the Revolving
Credit Termination Date.
(b) Mandatory Repayment of Excess Revolving Credit Loans. If at any
time the outstanding principal amount of all Revolving Credit Loans exceeds
the Revolving Credit Commitment, the Borrower shall repay immediately upon
notice from the Administrative Agent, by payment to the Administrative Agent
for the account of the Lenders, the Revolving Credit Loans in an amount equal
to such excess.
(c) Other Mandatory Repayments.
(i) Sale of Assets. The Borrower shall make mandatory principal
payments of the Revolving Credit Loans in amounts equal to 100% of the
aggregate Net Cash Proceeds in excess of $2,000,000 received after the date
hereof by the Borrower or any of its Subsidiaries from any sale, trade or
other disposition of assets permitted by Section 10.5(e); provided, that (A)
such payment shall be made only at such time as such Net Cash Proceeds
required to be paid but not previously applied equal $250,000 or any whole
multiple thereof (at which time the entire unapplied amount shall be paid) and
(B) unless (1) any Default in the payment of any interest or fees under this
Agreement or any Event of Default has occurred and is continuing at the time
of such sale, trade or disposition or (2) such Net Cash Proceeds result from a
sale of capital stock or other equity interest of a Subsidiary of the
Borrower, no such payment shall be required if and to the extent such Net Cash
Proceeds are reinvested in the business of the Borrower and its Subsidiaries
within one hundred eighty (180) days after such sale, trade or disposition.
(ii) Insurance. The Borrower shall make mandatory principal
payments of the Revolving Credit Loans in amounts equal to 100% of the Net
Cash Proceeds received by the Borrower or any of its Subsidiaries from any
insurance policy if such Net Cash Proceeds (i) exceed $500,000 in the
aggregate for any loss or series of related losses and (ii) are not reinvested
in the business of the Borrower and its Subsidiaries within one hundred eighty
(180) days of receipt; provided, that if any Default in the payment of any
interest or fees under this Agreement or any Event of Default has occurred and
is continuing at the time of such receipt, the Borrower shall not have the
option to make any such reinvestment and shall make such mandatory payment in
accordance with paragraph (iv) of this Section 2.3(c).
(iii) Issuance of Debt. The Borrower shall make mandatory
principal payments of the Revolving Credit Loans in amounts equal to 100% of
the Net Cash Proceeds from the issuance of any Debt of the Borrower or any of
its Subsidiaries incurred after the Closing Date (other than any Loans
hereunder or Debt of the character described in Section 10.1(e)), if after the
issuance of such Debt, the Leverage Ratio exceeds 3.5 to 1.0. (For purposes
of determining the Leverage Ratio with respect to this Section 2.3(c)(iii),
Total Debt of the Borrower and its Subsidiaries shall be calculated on each
date the Borrower or any of its Subsidiaries receives any such Net Cash
Proceeds.)
(iv) Notice; Manner of Payments. Upon the occurrence of any
event triggering the repayment requirement under this Section 2.3(c), the
Borrower shall give prompt written notice of such event and the amount of the
corresponding prepayment to the Administrative Agent and upon receipt of such
notice, the Administrative Agent shall promptly so notify the Lenders. Each
mandatory prepayment required under Section 2.3(c) shall be made within three
(3) Business Days of such event and shall be applied as follows: (i) first,
to repay the outstanding principal amount of Revolving Credit Loans and (ii)
second, if any Net Cash Proceeds remain after the repayment specified in the
preceding clause, to prepay the Term Loan in accordance with Section 3.3.
(d) Optional Repayments. The Borrower may at any time and from time
to time repay the Revolving Credit Loans, in whole or in part, upon at least
three (3) Business Days' irrevocable notice to the Administrative Agent with
respect to LIBOR Rate Loans and one (1) Business Day irrevocable notice with
respect to Base Rate Loans, in the form attached hereto as Exhibit D (a
"Notice of Payment") specifying the date and amount of repayment and whether
the repayment is of LIBOR Rate Loans, Base Rate Loans, or a combination
thereof, and, if of a combination thereof, the amount allocable to each. Upon
receipt of such notice, the Administrative Agent shall promptly notify each
Lender. If any such notice is given, the amount specified in such notice
shall be due and payable on the date set forth in such notice. Partial
repayments shall be in an aggregate amount of $2,000,000 or a whole multiple
of $500,000 in excess thereof with respect to Base Rate Loans, and $2,000,000
or a whole multiple of $500,000 in excess thereof with respect to LIBOR Rate
Loans. All optional prepayments under this Section shall first be applied to
the outstanding principal balance of the Revolving Credit Loans, then, to the
extent of any excess, to the Term Loans in accordance with Section 3.5.
(e) Limitation on Repayment of LIBOR Rate Loans. Any repayment of any
LIBOR Rate Loan under this Section 2.3 on any day other than on the last day
of the Interest Period applicable thereto shall be accompanied by any amount
required to be paid pursuant to Section 4.9.
SECTION 2.4 Revolving Credit Notes. Each Lender's Revolving
Credit Loans and the obligation of the Borrower to repay such Revolving Credit
Loans shall be evidenced by a Revolving Credit Note payable to the order of
such Lender. Each Revolving Credit Note shall bear interest on the unpaid
principal amount thereof at the applicable interest rate per annum specified
in Section 4.1.
SECTION 2.5 Permanent Reduction of the Revolving Credit
Commitment.
(a) The Borrower shall have the right at any time and from time to
time, upon at least five (5) Business Days prior written notice to the
Administrative Agent, to permanently reduce, in whole at any time or in part
from time to time, without premium or penalty, the Revolving Credit Commitment
in an aggregate principal amount not less than $2,000,000 or any whole
multiple of $500,000 in excess thereof.
(b) Each permanent reduction permitted pursuant to this Section 2.5
shall be accompanied by a payment of principal sufficient to reduce the
aggregate principal amount of Revolving Credit Loans to the Revolving Credit
Commitment as so reduced. Any reduction of the Aggregate Commitment to zero
shall be accompanied by payment of all outstanding Obligations payable with
respect to the Revolving Credit Facility and, if such reduction is permanent,
termination of the Revolving Credit Commitment and Revolving Credit Facility.
If the reduction of the Revolving Credit Commitment requires the repayment of
any LIBOR Rate Loan, such reduction may be made only on the last day of the
then current Interest Period applicable thereto unless such repayment is
accompanied by any amount required to be paid pursuant to Section 4.9 hereof.
SECTION 2.6 Termination of Revolving Credit Facility. The
Revolving Credit Facility shall terminate on the earliest of (a) June 30,
2002, (b) the date of termination of the Commitments in whole by the Borrower
pursuant to Section 2.5(a), and (c) the date of termination of the Commitments
in whole by the Administrative Agent on behalf of the Lenders pursuant to
Section 11.2(a).
SECTION 2.7 $15 Million Facility. (a) For so long as any amount
remains outstanding under the $15 Million Facility, the Borrower shall not
give a Notice of Revolving Credit Borrowing if, after giving effect thereto
and any concurrent transactions (including a concurrent repayment of the $15
Million Facility with the proceeds of such a borrowing) the aggregate
principal amount of the Revolving Credit Loans would exceed (i) the Revolving
Credit Commitment of all Lenders minus (ii) the outstanding principal amount
of the $15 Million Facility; provided, that, notwithstanding the foregoing,
the Borrower may give a Notice of Revolving Credit Borrowing for the sole
purpose of paying a dividend pursuant to Section 10.6(c) (which shall be
treated as having been given pursuant to Section 2.7(b).
(b) The Borrower agrees that, after it has assumed all of the
obligations under the $15 Million Facility, if
(i) the Distributions do not take place by December 31,
1997;
(ii) the $15 Million Facility matures and is not repaid
from other funds; or
(iii) an event of default under the $15 Million Facility
occurs,
it will give a Notice of Revolving Credit Borrowing solely for the
purpose of obtaining moneys to be applied, and which shall be applied solely,
to the payment of all outstanding obligations under the $15 Million Facility,
provided, that such Notice of Revolving Credit Borrowing (and any
representations and warranties deemed made in connection therewith or with the
related borrowing) may be qualified to the extent the Borrower is unable to
make the statements required therein without such qualification. Such Notice
of Revolving Credit Borrowing shall equal the amount of the outstanding
obligations under the $15 Million Facility without regard to the minimum
increments set forth in Section 2.2(a) and shall be given notwithstanding the
existence or creation of any Default or Event of Default. The obligation of
the Lenders to fund a Revolving Credit Loan pursuant to a Notice of Revolving
Credit Borrowing given pursuant to this Section 2.7(b) is absolute and
unconditional and shall not be affected by the existence of any Default or
Event of Default or any other circumstance whatsoever; provided, that if prior
to the funding of a Revolving Credit Loan pursuant to Notice of Revolving
Credit Borrowing given pursuant to this Section 2.7(b), one of the events
described in Section 11.1(i) or (j) shall have occurred and all of the
obligations under the $15 Million Facility have been assumed by the Borrower,
each such Lender will, on the date the applicable Revolving Credit Loan would
have been made, purchase an undivided participating interest in the $15
Million Facility in an amount equal to its Commitment Percentage of the
aggregate amount outstanding under the $15 Million Facility.
ARTICLE III
TERM LOAN FACILITY
SECTION 3.1 Term Loan. Subject to the terms and conditions of
this Agreement, each Lender severally agrees to make a Term Loan to the
Borrower on or within ninety (90) days after the Closing Date. The Term Loan
shall be funded by the Lenders in no more than two single advances during such
ninety (90) day period and each such advance shall be funded by each Lender in
a principal amount equal to such Lender's Commitment Percentage of the
aggregate principal amount of the advance requested by the Borrower. The
aggregate principal amount of the Term Loan requested by the Borrower during
such ninety (90) day period shall not exceed the total Term Loan Commitment.
The Term Loan Commitment shall expire on the 90th day after the Closing Date
if not funded on or prior to such date in accordance with its terms.
SECTION 3.2 Procedure for Advance of Term Loan.
(a) Requests for Borrowing. In connection with each advance of the
Term Loan pursuant to Section 3.1, the Borrower shall give the Administrative
Agent irrevocable prior written notice in the form attached hereto as Exhibit
C-2 (a "Notice of Term Loan Borrowing") not later than 11:00 a.m. (Charlotte
time) (i) on the same Business Day as a Base Rate Loan and (ii) at least three
(3) Business Days before a LIBOR Rate Loan, of its intention to borrow,
specifying (A) the date of such borrowing, which shall be a Business Day, (B)
the amount of such borrowing, (C) whether the Loan is to be a LIBOR Rate Loan
or Base Rate Loan or a combination thereof (provided that LIBOR Rate Loans
shall not be available until three (3) Business Days after the Closing Date)
and the amounts allocable to each (which amounts shall correspond to the
minimum amounts set forth in Section 2.2(a)), and (D) in the case of a LIBOR
Rate Loan, the duration of the initial Interest Period applicable thereto.
Notices received after 11:00 a.m. (Charlotte time) shall be deemed received on
the next Business Day. The Administrative Agent shall promptly notify the
Lenders of receipt of the Notice of Term Loan of Borrowing.
(b) Disbursement of Loans. Not later than 2:00 p.m. (Charlotte time)
on the proposed borrowing date, each Lender will make available to the
Administrative Agent, for the account of the Borrower, at the office of the
Administrative Agent in funds immediately available to the Administrative
Agent, such Lender's Commitment Percentage of the Term Loan requested pursuant
to Section 3.2(a). The Borrower hereby irrevocably authorizes the
Administrative Agent to disburse the proceeds of the borrowing requested
pursuant to Section 3.2(a) in immediately available funds by crediting or
wiring such proceeds to the deposit account of the Borrower identified in the
most recent Notice of Account Designation delivered by the Borrower to the
Administrative Agent or as may be otherwise agreed upon by the Borrower and
the Administrative Agent from time to time. Subject to Section 4.7 hereof,
the Administrative Agent shall not be obligated to disburse the portion of the
proceeds of the Term Loans requested pursuant to Section 3.2(a) to the extent
that any Lender has not made available to the Administrative Agent its
Commitment Percentage of such Term Loan.
SECTION 3.3 Repayment of Term Loan. The Borrower shall repay the
aggregate outstanding principal amount of the Term Loan in consecutive
quarterly installments on the last day of each March, June, September and
December commencing September 30, 1999, in an amount equal to the product of
(a) the principal balance of the Term Loan outstanding on the earlier of (i)
the date when the outstanding Term Loan equals the total Term Loan Commitment
and (ii) the date ninety (90) days after the Closing Date times (b) the
applicable percentage set forth below:
Payment Date Principal Installment
------------ ---------------------
September 30, 1999 2.500%
December 31, 1999 2.500%
March 31, 2000 2.500%
June 30, 2000 2.500%
September 30, 2000 3.125%
December 31, 2000 3.125%
March 31, 2001 3.125%
June 30, 2001 3.125%
September 30, 2001 3.750%
December 31, 2001 3.750%
March 31, 2002 3.750%
June 30, 2002 3.750%
September 30, 2002 4.375%
December 31, 2002 4.375%
March 31, 2003 4.375%
June 30, 2003 4.375%
September 30, 2003 5.625%
December 31, 2003 5.625%
March 31, 2004 5.625%
June 30, 2004 5.625%
September 30, 2004 5.625%
December 31, 2004 5.625%
March 31, 2005 5.625%
June 30, 2005 5.625%
If not sooner paid, the Term Loan shall be paid in full, together with accrued
interest thereon and all other outstanding Obligations, on the Term Loan
Maturity Date.
SECTION 3.4 Optional Prepayments of Term Loan. The Borrower shall
have the right at any time and from time to time, upon at least three (3)
Business Days prior written notice to the Administrative Agent, to prepay the
Term Loan in whole or in part without premium or penalty except as provided
below; provided that any such prepayments shall first be applied to repay the
outstanding principal balance of the Revolving Credit Loans prior to any
prepayments of the Term Loan. Each optional prepayment of the Term Loan
hereunder shall be in an aggregate principal amount of at least $2,000,000 or
any whole multiple of $500,000 in excess thereof, shall be applied to the
outstanding principal installments of the Term Loan on a pro rata basis and be
accompanied by any payment required under Section 4.9.
SECTION 3.5 Mandatory Prepayments of Term Loans. If at any time
(a) no Revolving Credit Loans are then outstanding and any event requiring
mandatory repayment specified in Section 2.3(c) shall occur or (b) any amounts
remain after any repayment of Revolving Credit Loans pursuant to Section
2.3(c), then such amount not required to repay the Revolving Credit Loans will
be used to reduce on a pro rata basis the remaining scheduled principal
installments of the Term Loans and shall be accompanied by any amount required
under Section 4.9.
SECTION 3.6 Term Notes. Each Lender's Term Loan and the
obligation of the Borrower to repay such Term Loan shall be evidenced by a
Term Note payable to the order of such Lender. Each Term Note shall bear
interest on the unpaid principal amount thereof at the applicable interest
rate per annum specified in Section 4.1.
ARTICLE IV
GENERAL LOAN PROVISIONS
SECTION 4.1 Interest.
(a) Interest Rate Options. Subject to the provisions of this Section
4.1, at the election of the Borrower, the aggregate principal balance of the
Loans or any portion thereof shall bear interest at the Base Rate or the LIBOR
Rate plus, in each case, the Applicable Margin as set forth below (provided
that the LIBOR Rate shall not be available until three (3) Business Days after
the Closing Date). The Borrower shall select the rate of interest and
Interest Period, if any, applicable to any Loan at the time a Notice of
Revolving Credit Borrowing is given pursuant to Section 2.2 or Notice of Term
Loan Borrowing is given pursuant to Section 3.2 or at the time a Notice of
Conversion/Continuation is given pursuant to Section 4.2. Each Loan or
portion thereof bearing interest based on the Base Rate shall be a "Base Rate
Loan" and each Loan or portion thereof bearing interest based on the LIBOR
Rate shall be a "LIBOR Rate Loan". Any Loan or any portion thereof as to
which the Borrower have not duly specified an interest rate as provided herein
shall be deemed a Base Rate Loan.
(b) Interest Periods. In connection with each LIBOR Rate Loan, the
Borrower, by giving notice at the times described in Section 4.1(a), shall
elect an interest period (each, an "Interest Period") to be applicable to such
Loan, which Interest Period shall be a period of one (1), two (2), three (3),
or six (6) months with respect to each LIBOR Rate Loan; provided that:
(i) the Interest Period shall commence on the date of
advance of or conversion to any LIBOR Rate Loan and, in the case of
immediately successive Interest Periods, each successive Interest Period shall
commence on the date on which the next preceding Interest Period expires;
(ii) if any Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided, that if any Interest Period with respect to
a LIBOR Rate Loan would otherwise expire on a day that is not a Business Day
but is a day of the month after which no further Business Day occurs in such
month, such Interest Period shall expire on the next preceding Business Day;
(iii) any Interest Period with respect to a LIBOR Rate Loan
that begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month at the
end of such Interest Period) shall end on the last Business Day of the
relevant calendar month at the end of such Interest Period;
(iv) no Interest Period shall extend beyond the Revolving
Credit Termination Date or the Term Loan Maturity Date, as applicable, and no
interest period shall be selected by the Borrower which would result in the
repayment of any LIBOR Rate Loan pursuant to Section 3.3 prior to the end of
an Interest Period; and
(v) there shall be no more than ten (10) Interest Periods
outstanding at any time.
(c) Applicable Margin. The Applicable Margin provided for in Section
4.1(a) with respect to the Loans (the "Applicable Margin") shall (i) on the
Closing Date equal the percentages set forth in the certificate delivered
pursuant to Section 5.2(d)(iv) and (ii) for each fiscal quarter thereafter be
determined by reference to the Leverage Ratio as of the end of the fiscal
quarter immediately preceding the delivery of the applicable Officer's
Compliance Certificate as follows:
Applicable Margin Per Annum
Leverage Ratio Base Rate + LIBOR Rate +
-------------- ---------------------------
>4.75x .125% 1.375%
>4.25 < 4.75x 0.00% 1.125%
-
>3.50 < 4.25x 0.00% .875%
-
< 3.50x 0.00% .625%
-
Adjustments, if any, in the Applicable Margin shall be made by the
Administrative Agent on the fifth (5th) Business Day after receipt by the
Administrative Agent of quarterly financial statements for the Borrower and
its Subsidiaries and the accompanying Officer's Compliance Certificate setting
forth the Leverage Ratio of the Borrower and its Subsidiaries as of the most
recent fiscal quarter end. Subject to Section 4.1(d), in the event the
Borrower fails to deliver such financial statements and certificate within the
time required by Section 7.2 hereof, the Applicable Margin shall be the
highest Applicable Margin set forth above until the delivery of such financial
statements and certificate.
(d) Default Rate. Upon the occurrence and during the continuance of
an Event of Default, (i) the Borrower shall no longer have the option to
request LIBOR Rate Loans, (ii) all outstanding LIBOR Rate Loans which are past
due shall bear interest at a rate per annum two percent (2%) in excess of the
rate then applicable to LIBOR Rate Loans until the end of the applicable
Interest Period and thereafter at a rate equal to two percent (2%) in excess
of the rate then applicable to Base Rate Loans, and (iii) all outstanding Base
Rate Loans which are past due shall bear interest at a rate per annum equal to
two percent (2%) in excess of the rate then applicable to Base Rate Loans.
(e) Interest Payment and Computation. Interest on each Base Rate Loan
shall be payable in arrears on the last Business Day of each calendar quarter
commencing September 30, 1997; and interest on each LIBOR Rate Loan shall be
payable on the last day of each Interest Period applicable thereto, and if
such Interest Period extends over three (3) months, at the end of each three
(3) month interval during such Interest Period. Interest for all Base Rate
Loans provided hereunder and all fees shall be computed on the basis of a
365-day year or 366-day year, as applicable, and assessed for the actual
number of days elapsed. All interest for LIBOR Rate Loans provided hereunder
shall be computed on the basis of a 360-day year and assessed for the actual
number of days elapsed.
(f) Maximum Rate. In no contingency or event whatsoever shall the
aggregate of all amounts deemed interest hereunder or under any of the Notes
charged or collected pursuant to the terms of this Agreement or pursuant to
any of the Notes exceed the highest rate permissible under any Applicable Law
which a court of competent jurisdiction shall, in a final determination, deem
applicable hereto. In the event that such a court determines that the Lenders
have charged or received interest hereunder in excess of the highest
applicable rate, the rate in effect hereunder shall automatically be reduced
to the maximum rate permitted by Applicable Law and the Lenders shall at the
Administrative Agent's option promptly refund to the Borrower any interest
received by the Lenders in excess of the maximum lawful rate or shall apply
such excess to the principal balance of the Obligations. It is the intent
hereof that the Borrower not pay or contract to pay, and that neither the
Administrative Agent nor any Lender receive or contract to receive, directly
or indirectly in any manner whatsoever, interest in excess of that which may
be paid by the Borrower under Applicable Law.
SECTION 4.2 Notice and Manner of Conversion or Continuation of
Loans. Provided that no Event of Default has occurred and is then continuing,
the Borrower shall have the option to (a) convert at any time all or any
portion of its outstanding Base Rate Loans in a principal amount equal to
$2,000,000 or any whole multiple of $500,000 in excess thereof into one or
more LIBOR Rate Loans or (b) upon the expiration of any Interest Period, (i)
convert all or any part of its outstanding LIBOR Rate Loans in a principal
amount equal to $2,000,000 or a whole multiple of $500,000 in excess thereof
into Base Rate Loans or (ii) continue such LIBOR Rate Loans as LIBOR Rate
Loans. Whenever the Borrower desires to convert or continue Loans as provided
above, the Borrower shall give the Administrative Agent irrevocable prior
written notice in the form attached as Exhibit E (a "Notice of Conversion/
Continuation") not later than 11:00 a.m. (Charlotte time) three (3) Business
Days before the day on which a proposed conversion or continuation of such
Loan is to be effective specifying (A) the Loans to be converted or continued,
and, in the case of any LIBOR Rate Loan to be converted or continued, the last
day of the Interest Period therefor, (B) the effective date of such conversion
or continuation (which shall be a Business Day), (C) the principal amount of
such Loans to be converted or continued, and (D) the Interest Period to be
applicable to such converted or continued LIBOR Rate Loan. The Administrative
Agent shall promptly notify the Lenders of such Notice of
Conversion/Continuation.
SECTION 4.3 Fees.
(a) Revolving Credit Commitment Fee. Commencing on the Closing Date,
the Borrower shall pay to the Administrative Agent, for the account of the
Lenders, a non-refundable commitment fee at a rate per annum equal to .20% on
the average daily unused portion of the Revolving Credit Commitment. The
commitment fee shall be payable in arrears on the last Business Day of each
calendar quarter during the term of this Agreement commencing September 30,
1997, and on the Revolving Credit Termination Date. Such commitment fee shall
be distributed by the Administrative Agent to the Lenders pro rata in
accordance with the Lenders' respective Commitment Percentages.
(b) Term Loan Commitment Fee. The Borrower shall pay to the
Administrative Agent, for the account of the Lenders, a non-refundable
commitment fee at a rate per annum equal to .20% of the average daily unused
portion of the Term Loan Commitment for the period commencing on the
forty-sixth day after the Closing Date through the earlier of (i) the date when
the outstanding Term Loan equals the total Term Loan Commitment and (ii) the
date ninety (90) days after the Closing Date. Such commitment fee shall be
due and payable on the date ninety (90) days after the Closing Date and shall
be distributed by the Administrative Agent to the Lenders pro rata in
accordance with the Lenders' respective Commitment Percentages.
(c) Administrative Agent's and Other Fees. In order to compensate the
Administrative Agent for structuring and syndicating the Loans and for its
obligations hereunder, the Borrower agrees to pay to the Administrative Agent,
for its account, the fees set forth in the separate fee letter agreement
executed by the Borrower and the Administrative Agent dated April 18, 1997.
SECTION 4.4 Manner of Payment. Each payment by the Borrower on
account of the principal of or interest on the Loans or of any fee, commission
or other amounts payable to the Lenders under this Agreement or any Note shall
be made not later than 1:00 p.m. (Charlotte time) on the date specified for
payment under this Agreement to the Administrative Agent at the Administrative
Agent's Office for the account of the Lenders (other than as set forth below)
pro rata in accordance with their respective Commitment Percentages, in
Dollars, in immediately available funds and shall be made without any set-off,
counterclaim or deduction whatsoever. Any payment received after such time
but before 2:00 p.m. (Charlotte time) on such day shall be deemed a payment on
such date for the purposes of Section 11.1, but for all other purposes shall
be deemed to have been made on the next succeeding Business Day. Any payment
received after 2:00 p.m. (Charlotte time) shall be deemed to have been made on
the next succeeding Business Day for all purposes. Upon receipt by the
Administrative Agent of each such payment, the Administrative Agent shall
distribute to each Lender at its address for notices set forth herein its pro
rata share of such payment in accordance with such Lender's Commitment
Percentage and shall wire advice of the amount of such credit to each Lender.
Each payment to the Administrative Agent of Administrative Agent's fees or
expenses shall be made for the account of the Administrative Agent and any
amount payable to any Lender under Sections 4.8, 4.9, 4.10, 4.11 or 13.2 shall
be paid to the Administrative Agent for the account of the applicable Lender.
SECTION 4.5 Crediting of Payments and Proceeds. In the event that
the Borrower shall fail to pay any of the Obligations when due and the
Obligations have been accelerated pursuant to Section 11.2, all payments
received by the Lenders upon the Notes and the other Obligations and all net
proceeds from the enforcement of the Obligations shall be applied first to all
expenses then due and payable by the Borrower hereunder, then to all indemnity
obligations then due and payable by the Borrower hereunder, then to all
Administrative Agent's fees then due and payable, then to all commitment and
other fees and commissions then due and payable, then to accrued and unpaid
interest on the Notes (pro rata in accordance with all such amounts due) and
then to the principal amount of the Notes, in that order.
SECTION 4.6 Adjustments. If any Lender (a "Benefitted Lender")
shall at any time receive any payment of all or part of its Loans, or interest
thereon, or if any Lender shall at any time receive any collateral in respect
to its Loans (whether voluntarily or involuntarily, by set-off or otherwise)
in a greater proportion than any such payment to and collateral received by
any other Lender, if any, in respect of such other Lender's Loans, or interest
thereon, such Benefitted Lender shall purchase for cash from the other Lenders
such portion of each such other Lender's Loans, or shall provide such other
Lenders with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such Benefitted Lender to share the excess payment
or benefits of such collateral or proceeds ratably with each of the Lenders;
provided, that if all or any portion of such excess payment or benefits is
thereafter recovered from such Benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned to the extent of such
recovery, but without interest. The Borrower agrees that, to the fullest
extent allowed by law, each Lender so purchasing a portion of another Lender's
Loans may exercise all rights of payment (including, without limitation,
rights of set-off) with respect to such portion as fully as if such Lender
were the direct holder of such portion.
SECTION 4.7 Nature of Obligations of Lenders Regarding Loans;
Assumption by the Administrative Agent. The obligations of the Lenders under
this Agreement to make the Loans are several and are not joint or joint and
several. Unless the Administrative Agent shall have received notice from a
Lender prior to a proposed borrowing date that such Lender will not make
available to the Administrative Agent such Lender's ratable portion of the
amount to be borrowed on such date (which notice shall not release such Lender
of its obligations hereunder), the Administrative Agent may assume that such
Lender has made such portion available to the Administrative Agent on the
proposed borrowing date in accordance with Section 2.2(b) and 3.2(b) and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If such amount is made
available to the Administrative Agent on a date after such borrowing date,
such Lender shall pay to the Administrative Agent on demand an amount, until
paid, equal to the product of (a) the amount of such Lender's Commitment
Percentage of such borrowing, times (b) the daily average Federal Funds Rate
during such period as determined by the Administrative Agent, times (c) a
fraction the numerator of which is the number of days that elapse from and
including such borrowing date to the date on which such Lender's Commitment
Percentage of such borrowing shall have become immediately available to the
Administrative Agent and the denominator of which is 360. A certificate of
the Administrative Agent with respect to any amounts owing under this Section
shall be conclusive, absent manifest error. If such Lender's Commitment
Percentage of such borrowing is not made available to the Administrative Agent
by such Lender within three (3) Business Days of such borrowing date, the
Administrative Agent shall be entitled to recover such amount made available
by the Administrative Agent with interest thereon at the rate per annum
applicable to Base Rate Loans hereunder, on demand, from the Borrower. The
failure of any Lender to make its Commitment Percentage of any Loan available
shall not relieve it or any other Lender of its obligation, if any, hereunder
to make its Commitment Percentage of such Loan available on such borrowing
date, but no Lender shall be responsible for the failure of any other Lender
to make its Commitment Percentage of such Loan available on the borrowing date.
SECTION 4.8 Changed Circumstances.
(a) Circumstances Affecting LIBOR Rate Availability. If with respect
to any Interest Period:
(i) at least three (3) Lenders (or in any event the Required
lenders) advise the Administrative Agent that, by reason of
circumstances affecting the foreign exchange and interbank markets
generally, deposits in eurodollars, in the applicable amounts are not
being quoted via Telerate Page 3750 or offered to such Lenders for such
Interest Period, or
(ii) at least three (3) Lenders (or in any event the Required
Lenders) advise the Administrative Agent that the LIBOR Rate as
determined by the Administrative Agent will not adequately and fairly
reflect the cost to such Lenders of funding their LIBOR Rate Loans for
such Interest Period,
then the Administrative Agent shall forthwith give prompt written notice
thereof to the Borrower and the Lenders. Thereafter, until the Administrative
Agent notifies the Borrower that such circumstances no longer exist, the
obligation of the Lenders to make LIBOR Rate Loans and the right of the
Borrower to convert any Loan to or continue any Loan as a LIBOR Rate Loan shall
be suspended, and the Borrower shall repay in full (or cause to be repaid in
full) the then outstanding principal amount of each such LIBOR Rate Loans
together with accrued interest thereon, on the last day of the then current
Interest Period applicable to such LIBOR Rate Loan or convert the then
outstanding principal amount of each such LIBOR Rate Loan to a Base Rate Loan
as of the last day of such Interest Period. Unless the Borrower notifies the
Administrative Agent at least two Business Days before the date of any
affected borrowing or conversion or continuation specified in any applicable
Notice of Revolving Credit Borrowing, Notice of Term Loan Borrowing or Notice
of Conversion/Continuation that they elect not to borrow or convert or
continue Loans on the date specified therein, the Lenders shall make, convert
or continue the Loans in the amount specified by the Borrower in the
applicable notice, but such Loans shall be made, converted or continued as
Base Rate Loans instead of LIBOR Rate Loans.
(b) Laws Affecting LIBOR Rate Availability. If, after the date
hereof, the introduction of, or any change in, any Applicable Law or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation
or administration thereof, or compliance by any Lender (or any of their
respective Lending Offices) with any request or directive (whether or not
having the force of law) of any such Authority, central bank or comparable
agency, shall make it unlawful or impossible for any of the Lenders (or any of
their respective Lending Offices) to honor its obligations hereunder to make
or maintain any LIBOR Rate Loan, such Lender shall promptly give notice
thereof to the Administrative Agent and the Administrative Agent shall
promptly give notice to the Borrower and the other Lenders. Thereafter, until
such Lender notifies the Administrative Agent and the Borrower that such
circumstances no longer exist, (i) the obligation of such Lender to make LIBOR
Rate Loans, convert Base Rate Loans into LIBOR Rate Loans or continue LIBOR
Rate Loans as LIBOR Rate Loans shall be suspended, and (ii) each LIBOR Rate
Loan of such Lender then outstanding shall be converted to a Base Rate Loan
either (A) on the last day of the then current Interest Period if such Lender
may lawfully continue to maintain and fund such Loan as a LIBOR Rate Loan to
such day or (B) immediately if such Lender shall determine that it may not
lawfully continue to maintain and fund such Loan as a LIBOR Rate Loan to such
day.
(c) Increased Costs. If, after the date hereof, the introduction of,
or any change in, any Applicable Law, or in the interpretation or
administration thereof by any Governmental Authority, central bank or
comparable agency charged with the interpretation or administration thereof,
or compliance by any of the Lenders (or any of their respective Lending
Offices) with any request or directive (whether or not having the force of
law) of such Authority, central bank or comparable agency:
(i) shall subject any of the Lenders (or any of their
respective Lending Offices) to any tax, duty or other charge with respect to
any Note or shall change the basis of taxation of payments to any of the
Lenders (or any of their respective Lending Offices) of the principal of or
interest on any Note or any other amounts due under this Agreement in respect
thereof (except for changes in the rate of tax on the overall net income of
any of the Lenders or any of their respective Lending Offices imposed by the
jurisdiction in which such Lender is organized or is or should be qualified to
do business or such Lending Office is located); or
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors of the
Federal Reserve System), special deposit, insurance or capital or similar
requirement against assets of, deposits with or for the account of, or credit
extended by any of the Lenders (or any of their respective Lending Offices),
other than any such amount included in the calculation of Eurodollar Reserve
Percentage, or shall impose on any of the Lenders (or any of their respective
Lending Offices) or the foreign exchange and interbank markets any other
condition affecting any Note;
and the result of any of the foregoing is to increase the costs to any of the
Lenders of maintaining any LIBOR Rate Loan or to reduce the yield or amount of
any sum received or receivable by any of the Lenders under this Agreement or
under the Notes in respect of a LIBOR Rate Loan, then such Lender shall
promptly notify the Administrative Agent, and the Administrative Agent shall
promptly notify the Borrower of such fact and demand compensation therefor
and, within fifteen (15) days after such notice by the Administrative Agent,
the Borrower shall pay to such Lender such additional amount or amounts as
will compensate such Lender or Lenders for such increased cost or reduction.
Each Lender will promptly notify the Administrative Agent of any event of
which it has knowledge which will entitle such Lender to compensation pursuant
to this Section 4.8(c) and after receipt of such notice, the Administrative
Agent will promptly notify the Borrower of such event; provided, that neither
any Lender nor the Administrative Agent shall incur any liability whatsoever
to any other Lender or the Borrower in the event it fails to do so. The
amount of such compensation shall be determined, in the applicable Lender's
sole discretion, based upon the assumption that such Lender funded its
Commitment Percentage of the LIBOR Rate Loans in the London interbank market,
as applicable, and using any reasonable attribution or averaging methods which
such Lender deems appropriate and practical. A certificate of such Lender
setting forth the basis for determining such amount or amounts necessary to
compensate such Lender shall be forwarded to the Borrower through the
Administrative Agent and shall be conclusively presumed to be correct save for
clearly demonstrable error.
(d) The Borrower shall not be required to compensate a Lender for any
increased costs pursuant to this Section 4.8 incurred by such Lender more than
90 days prior to its request to the Administrative Agent for such compensation.
SECTION 4.9 Indemnity. The Borrower hereby indemnifies each of
the Lenders against any reasonable loss or expense (excluding any loss of
margin over the LIBOR Rate for the period after any such payment or conversion
or failure to borrow, prepay or convert) which may arise or be attributable to
each Lender's obtaining, liquidating or employing deposits or other funds
acquired to effect, fund or maintain any Loan (a) as a consequence of any
failure by the Borrower to make any payment when due of any amount due
hereunder in connection with a LIBOR Rate Loan, (b) due to any failure of the
Borrower to borrow on a date specified therefor in a Notice of Borrowing or
Notice of Continuation/Conversion or (c) due to any payment, prepayment or
conversion of any LIBOR Rate Loan on a date other than the last day of the
Interest Period therefor. The amount of such loss or expense shall be
determined, in good faith but otherwise in the applicable Lender's sole
discretion, based upon the assumption that such Lender funded its Commitment
Percentage of the LIBOR Rate Loans in the London interbank market, and using
any reasonable attribution or averaging methods which such Lender deems
appropriate and practical. A certificate of such Lender setting forth the
basis for determining such amount or amounts necessary to compensate such
Lender shall be forwarded to the Borrower through the Administrative Agent and
shall be conclusively presumed to be correct save for clearly demonstrable
error.
SECTION 4.10 Capital Requirements. If, after the date hereof,
either (a) the introduction of, or any change in, or in the interpretation of,
any Applicable Law or (b) compliance with any guideline or request from any
central bank or comparable agency or other Governmental Authority (whether or
not having the force of law), has or would have the effect of reducing the
rate of return on the capital of, or has affected or would affect the amount of
capital required to be maintained by, any Lender or any corporation
controlling such Lender as a consequence of, or with reference to the
Commitments and other commitments of this type, below the rate which the
Lender or such other corporation could have achieved but for such
introduction, change or compliance, then within five (5) Business Days after
written demand by any such Lender, the Borrower shall pay to such Lender from
time to time as specified in a reasonably detailed calculation by such Lender
additional amounts sufficient to compensate such Lender or other corporation
for such reduction. A certificate as to such amounts submitted to the
Borrower and the Administrative Agent by such Lender, shall, in the absence of
clearly demonstrable error, be presumed to be correct and binding for all
purposes. The Borrower will not be required to compensate a Lender for any
increased amounts to this Section 4.10 incurred by such Lender more than 90
days prior to its request to the Borrower for such compensation.
SECTION 4.11 Taxes.
(a) Payments Free and Clear. Any and all payments by the Borrower
hereunder or under the Notes shall be made free and clear of and without
deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholding, and all liabilities with respect thereto
excluding (i) taxes imposed on or measured by the overall net income of any
Lender or its Lending Office or the Administrative Agent or the Administrative
Agent's Office, as the case may be, and all franchise or similar taxes
measured by capital or net worth of such Lender or its Lending Office or the
Administrative Agent or the Administrative Agent's Office, as the case may be,
in each case imposed: (A) by the jurisdiction under the laws of which such
Lender or the Administrative Agent, as the case may be, is organized, or in
which its principal executive office is located, (B) by the jurisdiction in
which the Lending Office of such Lender or the Administrative Agent's Office,
as applicable, is located or (C) solely by reason of such Lender or the
Administrative Agent, as the case may be, doing business in the jurisdiction
imposing such tax, other than as a result of this Agreement or any Note or any
transaction contemplated hereby and (ii) in the case of each Lender, any
United States withholding tax imposed on such payments but only to the extent
that such Lender is subject to United States withholding tax at the time such
Lender first becomes a party to this Agreement (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required by law
to deduct any Taxes from or in respect of any sum payable hereunder or under
any Note or to any Lender or the Administrative Agent, (A) the sum payable
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 4.11) such Lender or the Administrative Agent (as the case may
be) receives an amount equal to the amount such party would have received had
no such deductions been made, (B) the Borrower shall make such deductions, (C)
the Borrower shall pay the full amount deducted to the relevant taxing
authority or other authority in accordance with applicable law, and (D) the
Borrower shall deliver to the Administrative Agent evidence of such payment to
the relevant taxing authority or other authority in the manner provided in
Section 4.11(e).
(b) Refunds. If the Borrower pays any additional amount under Section
4.11 (a "Tax Payment") and any Lender or Affiliate thereof effectively obtains
a refund of tax or credit against tax by reason of the Tax Payment (a "Tax
Credit") and such Tax Credit is, in the reasonable judgement of such Lender or
Affiliate, attributable to such Tax Payment, then such Lender, after actual
receipt of such Tax Credit or actual receipt of the benefits thereof, shall
promptly reimburse the Borrower for such amount as such Lender shall
reasonably determine to be the proportion of the Tax Credit as would leave the
Borrower (after that reimbursement) in no better or worse position than it
would have been if the Tax Payment had not been required; provided, that no
Lender shall be required to make any reimbursement if it reasonably believes
the making of such reimbursement would cause it to lose the benefit of the Tax
Credit or would adversely affect in any other respect its tax position.
Subject to the other terms hereof, any claim by a Lender for a Tax Credit
shall be made in a manner, order and amount as such Lender determines in its
sole and absolute discretion. Except to the extent necessary to evaluate any
Tax Credit, no Lender shall be obligated to disclose information regarding its
tax affairs or computations to the Borrower, it being understood and agreed
that in no event shall any Lender be required to disclose information
regarding its tax position that it deems to be confidential (other than with
respect to the Tax Credit).
(c) Stamp and Other Taxes. In addition to the Taxes described in
Section 4.11(a), the Borrower shall pay any present or future stamp,
registration, recordation or documentary taxes or any other similar fees or
charges or excise or property taxes, levies of the United States or any state
or political subdivision thereof or any applicable foreign jurisdiction which
arise from any payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement, the Loans, the
other Loan Documents, or the perfection of any rights or security interest in
respect thereto (hereinafter referred to as "Other Taxes").
(d) Indemnity. The Borrower shall indemnify each Lender and the
Administrative Agent for the full amount of Taxes and Other Taxes (including,
without limitation, any Taxes and Other Taxes imposed by any jurisdiction on
amounts payable under this Section 4.11) paid by such Lender or the
Administrative Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto.
Such indemnification shall be made within thirty (30) days from the date such
Lender or the Administrative Agent (as the case may be) makes written demand
therefor.
(e) Evidence of Payment. Within thirty (30) days after the date of
any payment of Taxes or Other Taxes, the Borrower shall furnish to the
Administrative Agent, at its address referred to in Section 13.1, the original
or a certified copy of a receipt evidencing payment thereof or other evidence
of payment satisfactory to the Administrative Agent.
(f) Delivery of Tax Forms. Each Lender organized under the laws of a
jurisdiction other than the United States or any state thereof shall deliver
to the Borrower, with a copy to the Administrative Agent, on the Closing Date
or concurrently with the delivery of the relevant Assignment and Acceptance,
as applicable, (i) two United States Internal Revenue Service Forms 4224 or
Forms 1001, as applicable (or successor forms) properly completed and
certifying in each case that such Lender is entitled to a complete exemption
from withholding or deduction for or on account of any United States federal
income taxes, and (ii) an Internal Revenue Service Form W-8 or W-9 or
successor applicable form, as the case may be, to establish an exemption from
United States backup withholding taxes. Each such Lender further agrees to
deliver to the Borrower, with a copy to the Administrative Agent, a Form 1001
or 4224 and Form W-8 or W-9, or successor applicable forms or manner of
certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form previously delivered by it to the Borrower,
certifying in the case of a Form 1001 or 4224 that such Lender is entitled to
receive payments under this Agreement without deduction or withholding of any
United States federal income taxes (unless in any such case an event
(including without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders such forms inapplicable or the exemption to which such
forms relate unavailable and such Lender notifies the Borrower and the
Administrative Agent that it is not entitled to receive payments without
deduction or withholding of United States federal income taxes) and, in the
case of a Form W-8 or W-9, establishing an exemption from United States backup
withholding tax.
(g) Survival. Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 4.11 shall survive the payment in full of
the Obligations and the termination of the Commitments.
SECTION 4.12 Change of Lending Office; Replacement Lenders. (a)
Each Lender agrees that on the occurrence of any event giving rise to the
operation of Sections 4.8(b), 4.8(c), 4.10, 4.11(a) or 4.11(c) with respect to
such Lender, it will, if requested by the Borrower, use reasonable efforts
(subject to overall policy considerations of such Lender) to designate another
Lending Office for any Loans affected by such event; provided, that such
designation is made on such terms that such Lender and its Lending Office
suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of such
Section. Nothing in this Section 4.12(a) shall affect or postpone any of the
obligations of the Borrower or the rights of any Lender provided in Sections
4.8, 4.10 or 4.11.
(b) At any time within one hundred eighty (180) days after any payment
by the Borrower of any amount pursuant to or by reason of the operation of
Sections 4.8(b), 4.8(c), 4.10, 4.11(a) or 4.11(c), the Borrower, by writing
addressed to the Administrative Agent and each Lender that requested the
payment of such amount, may nominate or propose an Eligible Assignee that is
willing to become the assignee of the Commitment and other obligations of such
Lender (a "Replacement Lender") pursuant to Section 13.10(b), and within
fifteen (15) Business Days after receipt of such proposal from the Borrower,
each such Lender shall execute and deliver to the Administrative Agent an
Assignment and Acceptance of its entire Commitment in favor of the proposed
Replacement Lender in accordance with Section 13.10(b) unless, prior to the
expiration of such period, the Administrative Agent shall have notified the
Borrower and such Lender that the proposed Replacement Lender is not
reasonably acceptable to the Administrative Agent; provided, that in no event
will (i) any Lender be required to enter into an Assignment and Acceptance at
a price less than par plus accrued interest and prorated fees and other costs
due hereunder to the effective date thereof, (ii) either of the Administrative
Agent or Lenders be obligated to assist the Borrower in identifying any
Eligible Assignees that are willing to become such a Replacement Lender or
(iii) any such assignment be required if consummation conflicts with any
Applicable Law. The assignment fee payable to the Administrative Agent in
connection with any such assignment pursuant to Section 13.10(b) shall be for
the account of the Borrower.
SECTION 4.13 Use of Proceeds. The Borrower shall use the proceeds
of the Loans (a) to repay in full all Debt of the Borrower not otherwise
permitted under this Agreement, (b) to make the Michigan Intercompany
Repayment, (c) to finance acquisitions by the Borrower permitted by this
Agreement and (d) for Capital Expenditures, working capital and general
corporate purposes of the Borrower.
ARTICLE V
CLOSING; CONDITIONS OF CLOSING AND BORROWING
SECTION 5.1 Closing. The closing shall take place at the
offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P. at 10:00 a.m. on June
30, 1997, or at such other place or on such other date as the Administrative
Agent and the Borrower shall mutually agree.
SECTION 5.2 Conditions to Closing and Initial Loans. The
obligation of the Lenders to close this Agreement and to make the initial
Loans is subject to the satisfaction of each of the following conditions:
(a) Executed Loan Documents. This Agreement, the Notes and the other
Loan Documents shall have been duly authorized, executed and delivered to the
Administrative Agent by the parties thereto, shall be in full force and effect
and no Default or Event of Default shall exist, and the Borrower shall have
delivered original counterparts thereof to the Administrative Agent.
(b) Closing Certificates; etc.
(i) Officers's Certificate. The Administrative Agent
shall have received a certificate from the chief executive officer or chief
financial officer of the Borrower in form and substance satisfactory to the
Administrative Agent, to the effect that all representations and warranties of
the Borrower contained in this Agreement and the other Loan Documents are
true, correct and complete; that the Borrower is not in violation of any of the
covenants contained in this Agreement and the other Loan Documents; that,
after giving effect to the transactions contemplated by this Agreement, no
Default or Event of Default has occurred and is continuing; and that the
Borrower has satisfied each of the closing conditions.
(ii) Certificate of Secretary. The Administrative Agent
shall have received a certificate of the secretary or assistant secretary of
the Borrower certifying that attached thereto is a true and complete copy of
the articles of incorporation of the Borrower and all amendments thereto,
certified as of a recent date by the appropriate Governmental Authority in the
applicable jurisdiction; that attached thereto is a true and complete copy of
the bylaws of the Borrower, as in effect on the date of such certification;
that attached thereto is a true and complete copy of resolutions duly adopted
by the Board of Directors of the Borrower authorizing the borrowings
contemplated hereunder and the execution, delivery and performance of this
Agreement and the other Loan Documents to which the Borrower is a party; and
as to the incumbency and genuineness of the signature of each officer of the
Borrower executing Loan Documents to which it is a party.
(iii) Certificates of Good Standing. The Administrative
Agent shall have received long-form certificates as of a recent date of the
good standing of the Borrower under the laws of its jurisdiction of
organization and a certificate of the relevant taxing authorities of such
jurisdiction certifying that the Borrower has filed required tax returns with
respect to any franchise taxes and owes no delinquent franchise taxes.
(iv) Opinions of Counsel. The Administrative Agent shall
have received favorable opinions of counsel to the Borrower addressed to the
Administrative Agent and the Lenders (A) with respect to the Borrower, the
Loan Documents and such other matters as the Lenders shall request and (B)
with respect to FCC and other regulatory matters, each in form and substance
satisfactory to the Administrative Agent.
(v) Insurance. The Administrative Agent shall have
received a certificate of insurance in form and substance satisfactory to the
Administrative Agent.
(c) Collateral; Lien Search. The Borrower shall have delivered the
results of a Lien search against the Borrower under the Uniform Commercial
Code as in effect in the Secretary of State's office in each state where their
chief executive offices are located, indicating that their assets are free and
clear of any Lien except for the Liens permitted by Section 10.2.
(d) Consents; Defaults.
(i) Governmental and Third Party Approvals. All necessary
approvals, authorizations and consents, if any be required, of any Person and
of all Governmental Authorities and courts having jurisdiction with respect to
the transactions contemplated by this Agreement and the other Loan Documents
shall have been obtained.
(ii) No Injunction, Etc. No action, proceeding,
investigation, regulation or legislation shall have been instituted,
threatened or proposed before any Governmental Authority to enjoin, restrain,
or prohibit, or to obtain substantial damages in respect of, or which is
related to or arises out of this Agreement or the other Loan Documents or the
consummation of the transactions contemplated hereby or thereby, or which in
the Administrative Agent's good faith determination could reasonably be
expected to have a Material Adverse Effect.
(e) Financial Matters.
(i) Financial Statements. The Administrative Agent shall
have received the financial statements described in Section 6.1(n).
(ii) Financial Condition Certificate. The Borrower shall
have delivered to the Administrative Agent a certificate, in form and
substance satisfactory to the Administrative Agent, and certified as accurate
by the chief executive officer or chief financial officer of the Borrower,
that (A) the Borrower and its Subsidiaries, taken as a whole, are Solvent, (B)
the Borrower's payables are current and not past due, (C) attached thereto is
a pro forma balance sheet of the Borrower and its Subsidiaries setting forth
on a pro forma basis the financial condition of the Borrower and its
Subsidiaries on a Consolidated basis as of that date, reflecting a pro forma
basis the effect of the transactions contemplated herein, including all fees
and expenses in connection therewith, and evidencing compliance on a pro forma
basis with the covenants contained in Article IX hereof, (D) attached thereto
are the financial projections (including without limitation pro forma budgets
for Capital Expenditures) previously delivered to the Administrative Agent
representing the good faith opinions of the Borrower and senior management
thereof as to the projected results contained therein and (E) attached thereto
is a calculation of the Applicable Margin pursuant to Section 4.1(c).
(iii) Payment at Closing; Fee Letters. There shall have
been paid by the Borrower to the Administrative Agent and the Lenders the fees
set forth or referenced in Section 4.3 and any other accrued and unpaid fees
or commissions due hereunder (including, without limitation, legal fees and
expenses), and to any other Person such amount as may be due thereto in
connection with the transactions contemplated hereby, including all taxes,
fees and other charges in connection with the execution, delivery, recording,
filing and registration of any of the Loan Documents.
(f) Miscellaneous.
(i) Notices of Borrowing. The Administrative Agent shall
have received a Notice of Revolving Credit Borrowing and Notice of Term Loan
Borrowing from the Borrower in accordance with Section 2.2(a) and Section 3.2
with respect to any Loans to be made on the Closing Date, and a Notice of
Account Designation specifying the account or accounts to which the proceeds
of any loans made after the Closing Date are to be disbursed.
(ii) Proceedings and Documents. All opinions, certificates
and other instruments and all proceedings in connection with the transactions
contemplated by this Agreement shall be satisfactory in form and substance to
the Lenders. The Lenders shall have received copies of all other instruments
and other evidence as the Administrative Agent may reasonably request, in form
and substance satisfactory to the Lenders, with respect to the transactions
contemplated by this Agreement and the taking of all actions in connection
therewith.
(iii) Due Diligence and Other Documents. The Borrower shall
have delivered to the Administrative Agent such other documents, certificates
and opinions as the Administrative Agent reasonably requests certified by a
secretary or assistant secretary of the Borrower as a true and correct copy
thereof.
SECTION 5.3 Conditions to All Loans. The obligations of the
Lenders to make any Loan is subject to the satisfaction of the following
conditions precedent on the relevant borrowing date:
(a) Continuation of Representations and Warranties. The
representations and warranties contained in Article VI shall be true and
correct on and as of such borrowing date with the same effect as if made on
and as of such date (except where such representation or warranty is
specifically made as of an earlier date in which case it shall remain true and
correct as of such earlier date); provided, that the Borrower may qualify any
representation and warranty made in connection with any Notice of Revolving
Credit Borrowing given pursuant to Section 2.7(b).
(b) No Existing Default. No Default or Event of Default shall
have occurred and be continuing hereunder on the borrowing date with respect
to such Loan or after giving effect to the Loans to be made on such date,
provided, that this Section 5.3(b) shall not apply with respect to any Loan
refunding and terminating the $15 Million Facility.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
SECTION 6.1 Representations and Warranties. To induce the
Administrative Agent to enter into this Agreement and the Lenders to make the
Loans, the Borrower hereby represents and warrants to the Administrative Agent
and Lenders that:
(a) Organization; Power; Qualification. Each of the Borrower and its
Subsidiaries is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or formation, has the power
and authority to own its properties and to carry on its business as now being
and hereafter proposed to be conducted and is duly qualified and authorized to
do business in each jurisdiction in which the character of its properties or
the nature of its business requires such qualification and authorization,
except where the failure to obtain such qualification and authorization could
not reasonably be expected to have a Material Adverse Effect. The
jurisdictions in which the Borrower and its Subsidiaries are organized and
qualified to do business on the date hereof are described on Schedule 6.1(a).
(b) Ownership. Each Subsidiary of the Borrower on the date hereof is
listed on Schedule 6.1(b). The capitalization of the Borrower and its
Subsidiaries on the date hereof consists of the number of shares, authorized,
issued and outstanding, of such classes and series, with or without par value,
described on Schedule 6.1(b). All outstanding shares have been duly
authorized and validly issued and are fully paid and nonassessable. The
shareholders of the Subsidiaries and the number of shares owned by each on the
date hereof are described on Schedule 6.1(b). As of the date hereof, there
are no outstanding stock purchase warrants, subscriptions, options,
securities, instruments or other rights of any type or nature whatsoever,
which are convertible into, exchangeable for or otherwise provide for or
permit the issuance of capital stock of the Borrower or its Subsidiaries,
except as described on Schedule 6.1(b).
(c) Authorization of Agreement, Loan Documents and Borrowing. Each of
the Borrower and its Subsidiaries has the right, power and authority and has
taken all necessary corporate and other action to authorize the execution,
delivery and performance of this Agreement and each of the other Loan
Documents to which it is a party in accordance with their respective terms.
This Agreement and each of the other Loan Documents have been duly executed
and delivered by the duly authorized officers of the Borrower and each of its
Subsidiaries party thereto, and each such document constitutes the legal,
valid and binding obligation of the Borrower and its Subsidiaries party
thereto, enforceable in accordance with its terms, except as such enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar state or federal laws from time to time in effect which affect the
enforcement of creditors' rights in general and the availability of equitable
remedies.
(d) Compliance of Agreement, Loan Documents and Borrowing with Laws,
Etc. The execution, delivery and performance by the Borrower and its
Subsidiaries of the Loan Documents to which each such Person is a party, in
accordance with their respective terms, the borrowings hereunder and the
transactions contemplated hereby do not and will not, by the passage of time,
the giving of notice or otherwise, (i) require any Governmental Approval or
violate any Applicable Law relating to the Borrower or any of its Subsidiaries
(except as contemplated with respect to Section 19 of each Pledge Agreement),
(ii) conflict with, result in a breach of or constitute a default under the
articles of incorporation, bylaws or other organizational documents of the
Borrower or any of its Subsidiaries or any indenture, agreement or other
instrument to which such Person is a party or by which any of its properties
may be bound or any Governmental Approval relating to such Person, or (iii)
result in or require the creation or imposition of any Lien upon or with
respect to any property now owned or hereafter acquired by such Person other
than Liens arising under the Loan Documents.
(e) Compliance with Law; Governmental Approvals. Each of the Borrower
and its Subsidiaries (i) has all Governmental Approvals required by any
Applicable Law for it to conduct its business, each of which is in full force
and effect, is final and not subject to review on appeal and is not the
subject of any pending or, to the best of its knowledge, threatened attack by
direct or collateral proceeding, and (ii) is in compliance with each
Governmental Approval applicable to it and in compliance with all other
Applicable Laws relating to it or any of its respective properties, except in
each case with respect to subclauses (i) and (ii) where the failure to do so
could not reasonably be expected to have a Material Adverse Effect.
(f) Tax Returns and Payments. Each of the Borrower and its
Subsidiaries has duly filed or caused to be filed all federal, state, local
and other tax returns required by Applicable Law to be filed, and has paid, or
made adequate provision for the payment of, all federal, state, local and
other taxes, assessments and governmental charges or levies upon it and its
property, income, profits and assets which are due and payable, except where
the failure to so file or cause to be filed such return or pay such taxes
could not reasonably be expected to have a Material Adverse Effect. No
Governmental Authority has asserted any Lien or other claim against the
Borrower or any of its Subsidiaries with respect to unpaid taxes which has not
been discharged or resolved; provided, that the Borrower or such Subsidiary
may contest such Lien or other claim in good faith so long as adequate
reserves are maintained in accordance with GAAP. The charges, accruals and
reserves on the books of the Borrower and any of its Subsidiaries in respect
of federal, state, local and other taxes for all Fiscal Years and portions
thereof since the organization of the Borrower and any of its Subsidiaries are
in the judgment of the Borrower adequate.
(g) Intellectual Property Matters. Except where the failure to own or
possess such intellectual property rights could not reasonably be expected to
have a Material Adverse Effect, each of the Borrower and its Subsidiaries owns
or possesses rights to use all franchises, licenses, copyrights, copyright
applications, patents, patent rights or licenses, patent applications,
trademarks, trademark rights, trade names, trade name rights, copyrights and
rights with respect to the foregoing which are required to conduct its
business. Except to the extent any revocation, termination or infringement
could not reasonably be expected to have a Material Adverse Effect, no event
has occurred which permits, or after notice or lapse of time or both would
permit, the revocation or termination of any such rights, and neither the
Borrower nor any of its Subsidiaries is liable to any Person for infringement
under Applicable Law with respect to any such rights as a result of its
business operations.
(h) Environmental Matters. Except for matters that could not
reasonably be expected to have a Material Adverse Effect:
(i) The properties and operations of the Borrower and its
Subsidiaries are in compliance, and to the best of their knowledge have been
in compliance, with all applicable Environmental Laws;
(ii) Neither the Borrower nor any of its Subsidiaries has
received any notice of violation, alleged violation, non-compliance, liability
or potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of their properties or the operations
conducted in connection therewith, nor does the Borrower or any of its
Subsidiaries have knowledge or reason to believe that any such notice will be
received or is being threatened;
(iii) Hazardous Materials have not been transported or
disposed by the Borrower and its Subsidiaries in violation of, or in a manner
or to a location which could reasonably be expected to give rise to liability
under, Environmental Laws, nor have any Hazardous Materials been generated,
treated, stored or disposed of at, on or under any of such properties in
violation of, or in a manner that could reasonably be expected to give rise to
liability under, any applicable Environmental Laws;
(iv) No judicial proceedings or governmental or
administrative action is pending, or, to the knowledge of the Borrower,
threatened, under any Environmental Law to which the Borrower or any of its
Subsidiaries is named as a party with respect to such properties or operations
conducted in connection therewith, nor are there any consent decrees or other
decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental
Law with respect to such properties or such operations; and
(v) None of the Borrower or its Subsidiaries have
released, and to the best of the Borrower's knowledge, there is no threat of
release by the Borrower or any of its Subsidiaries, of Hazardous Materials at
or from such properties, in violation of or in amounts or in a manner that
could reasonably be expected to give rise to liability under Environmental
Laws.
(i) ERISA.
(i) As of the date hereof, neither the Borrower nor any
ERISA Affiliate maintains or contributes to, or has any obligation under, any
Employee Benefit Plans other than those identified on Schedule 6.1(i);
(ii) The Borrower and each ERISA Affiliate are in
compliance with all applicable provisions of ERISA and the regulations and
published interpretations thereunder with respect to all Employee Benefit
Plans except for any required amendments for which the remedial amendment
period as defined in Section 401(b) of the Code has not yet expired. Each
Employee Benefit Plan that is intended to be qualified under Section 401(a) of
the Code has been determined by the Internal Revenue Service to be so
qualified, and each trust related to such plan has been determined to be
exempt under Section 501(a) of the Code. No liability has been incurred by
the Borrower or any ERISA Affiliate which remains unsatisfied for any taxes or
penalties with respect to any Employee Benefit Plan or any Multiemployer Plan;
(iii) No Pension Plan has been terminated under Sections
4041(e) or 4042 of ERISA, nor has any accumulated funding deficiency (as
defined in Section 412 of the Code) been incurred (without regard to any
waiver granted under Section 412 of the Code), nor has any funding waiver from
the Internal Revenue Service been received or requested with respect to any
Pension Plan, nor has the Borrower or any ERISA Affiliate failed to make any
contributions or to pay any amounts due and owing as required by Section 412
of the Code, Section 302 of ERISA or the terms of any Pension Plan prior to
the due dates of such contributions under Section 412 of the Code or Section
302 of ERISA, nor has there been any event requiring any disclosure under
Section 4041(c)(3)(C) or 4063(a) of ERISA with respect to any Pension Plan;
(iv) Neither the Borrower nor any ERISA Affiliate has: (A)
engaged in a nonexempt prohibited transaction described in Section 406 of the
ERISA or Section 4975 of the Code, (B) incurred any liability to the PBGC
which remains outstanding other than the payment of premiums and there are no
premium payments which are due and unpaid, (C) failed to make a required
contribution or payment to a Multiemployer Plan, or (D) failed to make a
required installment or other required payment under Section 412 of the Code;
(v) No Termination Event has occurred or is reasonably
expected to occur; and
(vi) No proceeding, claim, lawsuit and/or investigation is
existing or, to the best knowledge of the Borrower after due inquiry,
threatened concerning or involving any (A) employee welfare benefit plan (as
defined in Section 3(1) of ERISA) currently maintained or contributed to by
the Borrower or any ERISA Affiliate, (B) Pension Plan or (C) Multiemployer
Plan.
(j) Margin Stock. Neither the Borrower nor any of its Subsidiaries is
engaged principally or as one of its activities in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin stock" (as
each such term is defined or used in Regulations G and U of the Board of
Governors of the Federal Reserve System). No part of the proceeds of any of
the Loans or Letters of Credit will be used for purchasing or carrying margin
stock or for any purpose which violates, or which would be inconsistent with,
the provisions of Regulation G, T, U or X of such Board of Governors.
(k) Government Regulation. Neither the Borrower nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company" (as each such term is defined or used in the Investment
Company Act of 1940, as amended) and neither the Borrower nor any of its
Subsidiaries is, or after giving effect to any Loan will be, subject to
regulation under the Public Utility Holding Company Act of 1935 or the
Interstate Commerce Act, each as amended.
(l) Material Contracts. Schedule 6.1(l) sets forth a complete and
accurate list of all Material Contracts of the Borrower and its Subsidiaries
in effect as of the Closing Date not listed on any other Schedule hereto;
other than as set forth in Schedule 6.1(l), each such Material Contract is, as
of the date hereof, in full force and effect in accordance with the terms
thereof. the Borrower and its Subsidiaries have delivered to the
Administrative Agent a true and complete copy of each Material Contract
requested thereby and required to be listed on Schedule 6.1(l).
(m) Employee Relations. As of the date hereof, each of the Borrower
and any of its Subsidiaries has a stable work force in place and is not,
except as set forth on Schedule 6.1(m), party to any collective bargaining
agreement nor has any labor union been recognized as the representative of its
employees. As of the date hereof, the Borrower knows of no pending,
threatened or contemplated strikes, work stoppage or other collective labor
disputes involving its employees or those of its Subsidiaries.
(n) Financial Statements. The (i) unaudited Consolidated balance
sheet of the Borrower and its Subsidiaries as of March 31, 1997 and the
related statements of income and retained earnings and cash flows for the
fiscal period then ended and (ii) audited Consolidated balance sheet of the
Borrower and its Subsidiaries as of December 31, 1996 and related statements
of revenue and retained earnings, copies of which have been furnished to the
Administrative Agent and each Lender, are in all material respects complete
and correct and fairly present the assets, liabilities and financial position
of the Borrower and its Subsidiaries as at such dates, and the results of the
operations and changes of financial position for the periods then ended. All
such financial statements, including the related schedules and notes thereto,
have been prepared in accordance with GAAP (except that such unaudited
statements may not contain notes required by GAAP). The Borrower and its
Subsidiaries have no Debt, obligation or other unusual forward or long-term
commitment which is not fairly reflected in the foregoing financial statements
or in the notes thereto.
(o) No Material Adverse Change. Since December 31, 1996, there has
been no material adverse change in the properties, business, operations, or
financial condition of the Borrower and its Subsidiaries and no event has
occurred or condition arisen that could reasonably be expected to have a
Material Adverse Effect; provided, that the consummation of the Reorganization
shall not constitute such a material adverse change or Material Adverse
Effect.
(p) Solvency. As of the Closing Date and after giving effect to each
Loan made hereunder, the Borrower and its Subsidiaries, taken as a whole, will
be Solvent.
(q) Titles to Properties. Each of the Borrower and its Subsidiaries
has such title to the real property owned by it as is necessary or desirable
to the conduct of its business and valid and legal title to all of its
personal property and assets, including, but not limited to, those reflected
on the balance sheets of the Borrower and its Subsidiaries delivered pursuant
to Section 6.1(o), except those which have been disposed of by the Borrower
and its Subsidiaries subsequent to such date which dispositions have been in
the ordinary course of business or as otherwise expressly permitted hereunder,
and except where the failure to obtain such titles could not reasonably be
expected to have a Material Adverse Effect.
(r) Liens. None of the properties and assets of the Borrower or any
of its Subsidiaries is subject to any Lien, except Liens permitted pursuant to
Section 10.2.
(s) Debt and Guaranty Obligations. Schedule 6.1(s) is a complete and
correct listing of all Debt of the Borrower and its Subsidiaries in excess of
$1,000,000, as of the date hereof.
(t) Litigation. Except as set forth on Schedule 6.1(t), there are no
actions, suits or proceedings pending nor, to the knowledge of the Borrower,
threatened against or in any other way relating adversely to or affecting the
Borrower or any of its Subsidiaries or any of their respective properties in
any court or before any arbitrator of any kind or before or by any
Governmental Authority that could reasonably be expected to have a Material
Adverse Effect.
(u) FCC and PUC Regulatory Matters.
(i) Schedule 6.1(u) hereto sets forth, as of the date hereof, a
true and complete list of the following information for each FCC License, PUC
Authorization and CATV Franchise issued to the Borrower or any of its
Subsidiaries: (A) for all FCC Licenses and PUC Authorizations, the name of
the licensee, the type of service and the expiration dates; and (B) for each
CATV Franchise, the geographic area covered by such CATV Franchise, the
services that may be provided thereunder and the expiration date, if any.
Such FCC Licenses, PUC Authorizations and CATV Franchises constitute all of
the Governmental Approvals required to be issued by the FCC and any PUC under
Applicable Law for the Borrower and its Subsidiaries to own and operate their
respective CATV Systems and other business operations, as of the date hereof.
(ii) Compliance. Except for matters that could not reasonably be
expected to have a Material Adverse Effect, (A) neither the Borrower nor any
of its Subsidiaries is in material violation of any duty or obligation
required by the Communications Act of 1934, as amended, or any FCC or PUC law,
rule or regulation applicable to the operation of any portion of any of its
business operations or CATV Systems; (B) the FCC Licenses, PUC Authorizations
and CATV Franchises specified on Schedule 6.1(u) hereto are valid and in full
force and effect without conditions except for such conditions as are
generally applicable to holders of such Governmental Approvals; (C) no event
has occurred and is continuing which could reasonably be expected to (1)
result in the imposition of a material forfeiture or the revocation,
termination or adverse modification of any FCC License, PUC Authorization or
CATV Franchise of the Borrower or any of its Subsidiaries, (2) materially and
adversely affect any rights of the Borrower or any of its Subsidiaries
thereunder or (3) cause a material disruption of the Borrower's or any
Subsidiary's ownership or operation of its CATV Systems; and (D) the Borrower
has no reason to believe and has no knowledge that the FCC Licenses, PUC
Authorizations or any CATV Franchise thereof or of its Subsidiaries will not
be renewed in the ordinary course.
(iii) Condition of Systems. Except for matters that could not
reasonably be expected to have a Material Adverse Effect, (A) all of the CATV
Systems owned, leased, managed or operated by the Borrower and its
Subsidiaries are in good repair, working order and condition and are and will
be in compliance with all terms and conditions of the FCC Licenses, PUC
Authorizations and CATV Franchises thereof and all standards or rules imposed
by Applicable Law and any Governmental Authority or as imposed under any
agreements with telephone companies and customers; and (B) there is not issued
or outstanding or, to the best knowledge of the Borrower, threatened, any
notice of any hearing, violation or complaint against the Borrower or any of
its Subsidiaries with respect to the operation of any portion of its CATV
Systems or other business operations.
(iv) Fees. Except where the failure to pay such fees and charges
could not reasonably be expected to have a Material Adverse Effect, the
Borrower and each of its Subsidiaries has paid all franchise, license or other
fees and charges which have become due pursuant to any Governmental Approval
in respect of its CATV Systems and business operations and has made
appropriate provision as is required by GAAP for any such fees and charges
which have accrued.
(v) Absence of Defaults. No event has occurred or is continuing which
constitutes a Default or an Event of Default, or which constitutes, or which
with the passage of time or giving of notice or both would constitute, a
default by the Borrower or any of its Subsidiaries under any Material Contract
or judgment, decree or order (except where such default could not reasonably
be expected to have a Material Adverse Effect) by which the Borrower or any of
its Subsidiaries or any of their respective properties may be bound; provided,
that the representation and warranty in this clause (v) shall not be incorrect
solely on account of any such event relating to a Material Contract if the
Borrower or any of its Subsidiaries is contesting the claimed default in good
faith so long as adequate reserves are maintained in accordance with GAAP.
(w) Accuracy and Completeness of Information. All written
information, reports and other papers and data produced by or on behalf of the
Borrower or any of its Subsidiaries and furnished to the Lenders (other than
any projections) were, at the time the same were so furnished, complete and
correct in all respects to the extent necessary to give the recipient a true
and accurate knowledge of the subject matter. No document furnished or
written statement made to the Administrative Agent or the Lenders by the
Borrower or any of its Subsidiaries in connection with the negotiation,
preparation or execution of this Agreement or any of the Loan Documents
contains or will contain any untrue statement of a fact material to the
credit-worthiness of the Borrower or any of its Subsidiaries or omits or will
omit to state a fact necessary in order to make the statements contained
therein not misleading. All projections provided by or on behalf of the
Borrower to the Administrative Agent and Lenders hereunder constitute good
faith estimates based on reasonable assumptions of senior management of the
Borrower as of the date delivered. The Borrower is not aware of any facts
which they have not disclosed in writing to the Administrative Agent having a
Material Adverse Effect, or insofar as the Borrower can now foresee, could
reasonably be expected to have a Material Adverse Effect.
SECTION 6.2 Survival of Representations and Warranties, Etc. All
representations and warranties set forth in this Article VI and all
representations and warranties contained in any certificate, or any of the
Loan Documents (including but not limited to any such representation or
warranty made in or in connection with any amendment thereto) shall constitute
representations and warranties made under this Agreement. All representations
and warranties made under this Agreement shall survive the Closing Date and
shall not be waived by the execution and delivery of this Agreement, any
investigation made by or on behalf of the Lenders or any borrowing hereunder.
ARTICLE VII
FINANCIAL INFORMATION AND NOTICES
Until all principal and interest on the Loans and all fees hereunder
have been paid in full and the Commitments terminated, unless consent has been
obtained in the manner set forth in Section 13.11 hereof, the Borrower will
furnish or cause to be furnished to the Administrative Agent and to the
Lenders at their respective addresses as set forth on Schedule 1.1(a), or such
other office as may be designated by the Administrative Agent and Lenders from
time to time:
SECTION 7.1 Financial Statements and Projections.
(a) Quarterly Financial Statements. As soon as practicable and in any
event within forty-five (45) days after the end of each fiscal quarter, an
unaudited Consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries as of the close of such fiscal quarter and unaudited Consolidated
and consolidating statements of income, retained earnings and cash flows for
the fiscal quarter then ended and that portion of the Fiscal Year then ended,
all in reasonable detail setting forth in comparative form the corresponding
figures for the preceding Fiscal Year and prepared by the Borrower in
accordance with GAAP and, if applicable, containing disclosure of the effect
on the financial position or results of operations of any change in the
application of accounting principles and practices during the period, and
certified by the chief financial officer of the Borrower to present fairly in
all material respects the financial condition of the Borrower and its
Subsidiaries as of their respective dates and the results of operations of the
Borrower and its Subsidiaries for the respective periods then ended, subject
to normal year end adjustments.
(b) Annual Financial Statements. As soon as practicable and in any
event within ninety (90) days after the end of each Fiscal Year, an audited
Consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries as of the close of such Fiscal Year and audited Consolidated and
consolidating statements of income, retained earnings and cash flows for the
Fiscal Year then ended, including the notes thereto, all in reasonable detail
setting forth in comparative form the corresponding figures for the preceding
Fiscal Year and prepared by an independent certified public accounting firm of
recognized national standing in accordance with GAAP and accompanied by a
report thereon by such certified public accountants that is not qualified with
respect to scope limitations imposed by the Borrower or any of its Subsidiaries
or with respect to accounting principles followed by the Borrower or any of
its Subsidiaries not in accordance with GAAP.
(c) Annual Budget. As soon as practicable and in any event within
forty-five (45) days after the beginning of each Fiscal Year, a budget of the
Borrower and its Subsidiaries for such Fiscal Year, as approved by the board
of directors of the Borrower and substantially similar in form and scope as
the budget for the 1997 Fiscal Year delivered to the Administrative Agent
prior to closing.
SECTION 7.2 Officer's Compliance Certificate. At each time
financial statements are delivered pursuant to Sections 7.1 (a) or (b), a
certificate of the chief financial officer or the treasurer of the Borrower in
the form of Exhibit E attached hereto (an "Officer's Compliance Certificate").
SECTION 7.3 Accountants' Certificate. At each time financial
statements are delivered pursuant to Section 7.1(b), a certificate of the
independent public accountants certifying such financial statements addressed
to the Administrative Agent for the benefit of the Lenders:
(a) stating that in making the examination necessary for the
certification of such financial statements, they obtained no knowledge of any
Default or Event of Default or, if such is not the case, specifying such
Default or Event of Default and its nature and period of existence; and
(b) confirming the calculations of the Borrower and its Subsidiaries
required to establish whether or not such Persons are in compliance with the
financial covenants set forth in Article IX hereof as at the end of each
respective period.
SECTION 7.4 Other Reports.
(a) Promptly upon receipt thereof, copies of all reports, if any,
submitted to any Borrower or its Board of Directors by its independent public
accountants in connection with their auditing function, including, without
limitation, any management report and any management responses thereto;
(b) As soon as available and in any event within forty-five (45) days
after the end of the Fiscal Year of the Borrower, an updated Schedule 6.1(u)
accompanied by a report identifying any FCC License, PUC Authorization or CATV
Franchise lost, surrendered or canceled during such period, and within ten
(10) Business Days after the receipt by the Borrower or any of its
Subsidiaries of notice that any FCC License, PUC Authorization or CATV
Franchise has been lost or canceled, copies of any such notice accompanied by
a report describing the measures undertaken by either the Borrower or any of
its Subsidiaries to prevent such loss or cancellation (and the anticipated
impact, if any, that such loss or cancellation will have upon the business of
either the Borrower or any of its Subsidiaries); and
(c) Such other information regarding the operations, business affairs
and financial condition of the Borrower or any of its Subsidiaries as the
Administrative Agent, at the request of any Lender, may reasonably request.
SECTION 7.5 Notice of Litigation and Other Matters. Prompt (but
in no event later than ten (10) days after an officer of the Borrower obtains
knowledge thereof) telephonic and written notice of:
(a) the commencement of all proceedings and investigations by or
before any Governmental Authority and all actions and proceedings in any court
or before any arbitrator against or involving the Borrower or any of its
Subsidiaries or any of their respective properties, assets or businesses which
in such case could reasonably be expected to have a Material Adverse Effect;
(b) any notice of any violation received by the Borrower or any of its
Subsidiaries from any Governmental Authority including, without limitation,
any notice of violation of Environmental Laws which in any such case could
reasonably be expected to have a Material Adverse Effect;
(c) any labor controversy that has resulted in, or threatens to result
in, a strike or other work action against the Borrower or any of its
Subsidiaries, where such labor controversy could reasonably be expected to
have a Material Adverse Effect;
(d) any attachment, judgment, lien, levy or order exceeding $250,000
that may be assessed against or threatened against the Borrower or any of its
Subsidiaries;
(e) any Default or Event of Default, or any event which constitutes or
which with the passage of time or giving of notice or both would constitute a
default under any Material Contract unless such default could not reasonably
be expected to have a Material Adverse Effect; provided, that the failure to
give notice with respect to any such event relating to a Material Contract
shall not constitute a Default or Event of Default hereunder if the Borrower
or any of its Subsidiaries is contesting the claimed default in good faith so
long as adequate reserves are maintained in accordance with GAAP; and
(f) (i) any unfavorable determination letter from the Internal Revenue
Service regarding the qualification of an Employee Benefit Plan under Section
401(a) of the Code (along with a copy thereof), (ii) all notices received by
any Borrower or any ERISA Affiliate of the PBGC's intent to terminate any
Pension Plan or to have a trustee appointed to administer any Pension Plan,
(iii) all notices received by any Borrower or any ERISA Affiliate from a
Multiemployer Plan sponsor concerning the imposition or amount of withdrawal
liability pursuant to Section 4202 of ERISA and (iv) the Borrower obtaining
knowledge or reason to know that any Borrower or any ERISA Affiliate has filed
or intends to file a notice of intent to terminate any Pension Plan under a
distress termination within the meaning of Section 4041(c) of ERISA.
SECTION 7.6 Accuracy of Information. All written information,
reports, statements and other papers and data furnished by or on behalf of the
Borrower to the Administrative Agent or any Lender whether pursuant to this
Article VII or any other provision of this Agreement, or any of the Security
Documents, shall, at the time the same is so furnished, comply with Section
6.1(w).
ARTICLE VIII
AFFIRMATIVE COVENANTS
Until all of the principal and interest on the Loans and all fees
hereunder have been paid in full and the Commitments terminated, unless
consent has been obtained in the manner provided for in Section 13.11, the
Borrower will, and will cause each of its Subsidiaries to:
SECTION 8.1 Preservation of Corporate Existence and Related
Matters. Except as permitted by Section 10.4, preserve and maintain its
separate corporate existence and all rights, franchises, licenses and
privileges necessary to the conduct of its business, and qualify and remain
qualified as a foreign corporation and authorized to do business in each
jurisdiction, except where the failure to qualify and remain qualified as a
foreign corporation could not reasonably be expected to have a Material
Adverse Effect.
SECTION 8.2 Maintenance of Property. Protect and preserve all
properties useful in and material to its business, including copyrights,
patents, trade names and trademarks; maintain in good working order and
condition all buildings, equipment and other tangible real and personal
property; and from time to time make or cause to be made all renewals,
replacements and additions to such property necessary for the conduct of its
business, so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, that the
consummation of the Reorganization shall not constitute a violation of this
Section.
SECTION 8.3 Insurance. Maintain insurance with financially sound
and reputable insurance companies against such risks and in such amounts as
are customarily maintained by similar businesses and as may be required by
Applicable Law, and on the Closing Date and from time to time thereafter
deliver to the Administrative Agent upon its request a detailed list of the
insurance then in effect, stating the names of the insurance companies, the
amounts and rates of the insurance, the dates of the expiration thereof and
the properties and risks covered thereby.
SECTION 8.4 Accounting Methods and Financial Records. Maintain a
system of accounting, and keep such books, records and accounts (which shall
be true and complete in all material respects) as may be required or as may be
necessary to permit the preparation of financial statements in accordance with
GAAP and in compliance with the regulations of any Governmental Authority
having jurisdiction over it or any of its properties.
SECTION 8.5 Payment and Performance of Obligations. Pay and
perform all Obligations under this Agreement and the other Loan Documents, and
pay or perform (a) all taxes, assessments and other governmental charges that
may be levied or assessed upon it or any of its property, and (b) all other
indebtedness, obligations and liabilities in accordance with customary trade
practices, except, in each case, when any failure to pay or perform could not
reasonably be expected to have a Material Adverse Effect; provided, that the
Borrower or any of its Subsidiaries may contest any item described in this
Section 8.5 in good faith so long as adequate reserves are maintained with
respect thereto in accordance with GAAP.
SECTION 8.6 Compliance With Laws and Approvals. Observe and
remain in compliance with all Applicable Laws and maintain in full force and
effect all Governmental Approvals, in each case applicable to the conduct of
its business, except where failure to comply with Applicable Laws or maintain
Government Approvals could not reasonably be expected to have a Material
Adverse Effect.
SECTION 8.7 Environmental Laws. In addition to and without
limiting the generality of Section 8.6, (a) comply with, and ensure such
compliance by all tenants and subtenants, if any, with, all applicable
Environmental Laws and obtain and comply with and maintain, and ensure that
all tenants and subtenants obtain and comply with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws, (b) conduct and complete all investigations,
studies, sampling and testing, and all remedial, removal and other actions
required under Environmental Laws, and promptly comply with all lawful orders
and directives of any Governmental Authority regarding Environmental Laws,
except where failure to so comply, obtain, maintain, conduct or complete such
actions under such clauses (a) and (b) could not reasonably be expected to
have a Material Adverse Effect, and (c) defend, indemnify and hold harmless
the Administrative Agent and the Lenders, and their respective parents,
Subsidiaries, Affiliates, employees, agents, officers and directors, from and
against any claims, demands, penalties, fines, liabilities, settlements,
damages, costs and expenses of whatever kind or nature known or unknown,
contingent or otherwise, arising out of, or in any way relating to the
violation of, noncompliance with or liability under any Environmental Laws
applicable to the operations of the Borrower or its Subsidiaries, or any
orders, requirements or demands of Governmental Authorities related thereto,
including, without limitation, reasonable attorney's and consultant's fees,
investigation and laboratory fees, response costs, court costs and litigation
expenses, except to the extent that any of the foregoing directly result from
the gross negligence or willful misconduct of the party seeking
indemnification therefor.
SECTION 8.8 Compliance with ERISA. In addition to and without
limiting the generality of Section 8.6, (a) comply with all applicable
material provisions of ERISA and the regulations and published interpretations
thereunder with respect to all Employee Benefit Plans, (b) not take any action
or fail to take action the result of which could be a liability to the PBGC
or to a Multiemployer Plan, (c) not participate in any prohibited transaction
that could result in any material civil penalty under ERISA or tax under the
Code, (d) operate each Employee Benefit Plan in such a manner that will not
incur any material tax liability under Section 4980B of the Code or any
material liability to any qualified beneficiary as defined in Section 4980B of
the Code and (e) furnish to the Administrative Agent upon the Administrative
Agent's request such additional information about any Employee Benefit Plan as
may be reasonably requested by the Administrative Agent.
SECTION 8.9 Compliance With Agreements. Comply in all respects
with each term, condition and provision of all leases, agreements and other
instruments entered into in the conduct of its business including, without
limitation, any Material Contract, except where failure to so comply could not
reasonably be expected to have a Material Adverse Effect; provided, that no
such failure relating to a Material Contract or other lease, agreement or
instrument shall constitute a Default or Event of Default hereunder if the
Borrower or any of its Subsidiaries is contesting the claimed default in good
faith so long as adequate reserves are maintained in accordance with GAAP.
SECTION 8.10 Additional Subsidiaries; Collateral. (a) Prior to
such time as any Subsidiary of the Borrower created or acquired after the
Closing Date (other than Mercom) becomes a Material Subsidiary, cause to be
executed and delivered to the Administrative Agent (i) a duly executed
Borrower Pledge Agreement or supplement thereto substantially in the form
attached as Exhibit A to the Borrower Pledge Agreement, with such changes as
the Administrative Agent shall reasonably request, such that all of the
capital stock or other equity interests of such Subsidiary owned by the
Borrower is pledged to the Administrative Agent for the ratable benefit of
itself and the Lenders and (ii) favorable legal opinions addressed to the
Administrative Agent and Lenders in form and substance reasonably satisfactory
thereto with respect to such Security Document and such other documents and
closing certificates as may be reasonably requested by the Administrative
Agent consistent with the terms of Article V in order to confirm that such
Material Subsidiary's stock or equity interest has been pledged under a Pledge
Agreement.
(b) If in connection with the Reorganization or otherwise at any
time after the Spinoff Date (as defined in Section 10.1(h)) the Borrower or
its outstanding shares of capital stock are the subject of a transaction to
create a holding company (the "Parent") for the Borrower, whereby the holders
of the existing shares of capital stock of the Borrower become stockholders of
the Parent and the Parent becomes the holder of greater than fifty percent
(50%) of the outstanding shares of capital stock of the Borrower, cause to be
executed and delivered to the Administrative Agent (i) a Parent Pledge
Agreement duly executed by the Parent, and (ii) favorable legal opinions
addressed to the Administrative Agent and Lenders in form and substance
reasonably satisfactory thereto with respect to such Pledge Agreement and such
other documents and closing certificates as may be reasonably requested by the
Administrative Agent consistent with the terms of Article V in order to
confirm that all of the Borrower's capital stock owned by the Parent has been
pledged under such Pledge Agreement.
SECTION 8.11 Conduct of Business. Engage only in the operation of
its CATV Systems and any other businesses conducted on the Closing Date and in
lines of business directly related thereto.
SECTION 8.12 Visits and Inspections. Permit representatives of the
Administrative Agent or any Lender, from time to time and, upon reasonable
notice during normal business hours, at its own expense (except the Borrower
shall pay all such expenses when an Event of Default shall have occurred and
be continuing), to visit and inspect its properties; inspect, audit and make
extracts from its books, records and files, including, but not limited to,
management letters prepared by independent accountants; and discuss with its
principal officers, and its independent accountants, its business, assets,
liabilities, financial condition, results of operations and business prospects.
ARTICLE IX
FINANCIAL COVENANTS
Until all of the principal and interest on the Loans and fees hereunder
have been paid in full and the Commitments terminated, unless consent has been
obtained in the manner set forth in Section 13.11 hereof, the Borrower and its
Subsidiaries on a Consolidated basis will not:
SECTION 9.1. Leverage Ratio. As of the end of each fiscal quarter
during the applicable period set forth below, permit the ratio (the "Leverage
Ratio") of (a) Total Debt of the Borrower and its Subsidiaries as of such
fiscal quarter end to (b) Operating Cash Flow of the Borrower and its
Subsidiaries for the four fiscal quarter period ending on such fiscal quarter
end, to exceed the corresponding ratio set forth below:
Period Ratio
------ -----
Closing to 9/30/98 5.00 to 1.00
10/01/98 to 9/30/99 4.50 to 1.00
10/01/99 to 3/31/00 4.25 to 1.00
4/01/00 and thereafter 4.00 to 1.00
SECTION 9.2. Interest Coverage Ratio. As of the end of each fiscal
quarter during the applicable period set forth below, permit the ratio of (a)
Operating Cash Flow of the Borrower and its Subsidiaries for the four
fiscal quarter period ending on such fiscal quarter end to (b) Interest
Expense of the Borrower and its Subsidiaries for the four fiscal quarter
period ending on such fiscal quarter end, to be less than the corresponding
ratio set forth below:
Period Ratio
------ -----
Closing Date - 6/30/00 2.75 to 1.00
7/1/00 and thereafter 3.00 to 1.00
SECTION 9.3. Adjusted Fixed Charge Coverage Ratio. As of the end of
each fiscal quarter ending on and after December 31, 1997, permit the ratio of
(a) Adjusted Operating Cash Flow for the Borrower and its Subsidiaries for the
four fiscal quarter period ending on such fiscal quarter end to (b) Fixed
Charges of the Borrower and its Subsidiaries for the four fiscal quarter
period ending on such fiscal quarter end, to be less than 1.05 to 1.00.
ARTICLE X
NEGATIVE COVENANTS
Until all of the principal and interest on the Loans and all fees
hereunder have been paid in full and the Commitments terminated, unless
consent has been obtained in the manner set forth in Section 13.11 hereof, the
Borrower will not and will not permit any of its Subsidiaries to:
SECTION 10.1 Limitations on Debt. Create, incur, assume or suffer
to exist any Debt except:
(a) the Obligations;
(b) Debt incurred in connection with a Hedging Agreement (a copy of
which shall be delivered to the Administrative Agent by the Borrower promptly
after execution thereof);
(c) Debt existing on the Closing Date, as set forth on Schedule 6.1(s)
in the case of Debt in excess of $1,000,000, and any Debt secured by an asset
which asset is transferred to the Borrower or any Designated Subsidiary as
part of the Intergroup Asset Transfers and the renewal and refinancing (but
not the increase) of any of the foregoing;
(d) Debt of the Borrower and its Subsidiaries incurred in connection
with Capital Leases, purchase money Debt of the Borrower and its Subsidiaries
and other Debt in an aggregate amount not to exceed $15,000,000 on any date of
determination (which may be secured to the extent permitted by Sections
10.2(g) and 10.2(h));
(e) Debt of a Subsidiary payable solely to the Borrower and Debt of
the Borrower payable solely to a Subsidiary;
(f) the Mercom Credit Facility, at any time that Mercom is a
Subsidiary under this Agreement; and
(g) after the assumption thereof by the Borrower, Debt under the $15
Million Facility.
SECTION 10.2 Limitations on Liens. Create, incur, assume or suffer
to exist, any Lien on or with respect to any of its assets or properties
(including without limitation shares of capital stock or other ownership
interests), real or personal, whether now owned or hereafter acquired, except:
(a) Liens for taxes, assessments and other governmental charges or
levies (excluding any Lien imposed pursuant to any of the provisions of ERISA
or Environmental Laws) not yet due or as to which the period of grace (not to
exceed thirty (30) days), if any, related thereto has not expired;
(b) the claims of materialmen, mechanics, carriers, warehousemen,
processors or landlords for labor, materials, supplies or rentals incurred in
the ordinary course of business, (i) which are not overdue for a period of
more than thirty (30) days or (ii) which are being contested in good faith and
by appropriate proceedings;
(c) Liens consisting of deposits or pledges made in the ordinary
course of business in connection with, or to secure payment of, obligations
under workers' compensation, unemployment insurance or similar legislation;
(d) Liens constituting encumbrances in the nature of zoning
restrictions, easements and rights or restrictions of record on the use of
real property, which in the aggregate are not substantial in amount and which
do not, in any case, detract from the value of such property or impair the use
thereof in the ordinary conduct of business;
(e) Liens of the Administrative Agent for the benefit of the
Administrative Agent and the Lenders;
(f) Liens not otherwise permitted by this Section 10.2 and in
existence on the Closing Date and described on Schedule 10.2, any Liens with
respect to Debt permitted by Section 10.1(c) which Liens encumber assets
transferred to the Borrower or any of its Subsidiaries as part of the
Intergroup Asset Transfers and any Liens on any refinanced Debt permitted by
Section 10.1(c);
(g) (i) Liens evidencing the interest of the lessor under any Capital
Lease permitted by Section 10.1(d); and (ii) Liens securing purchase money
Debt permitted under Section 10.1(d); provided, that (A) such Liens shall be
within ninety (90) days after the acquisition of the related asset, (B) such
Liens do not at any time encumber any property other than the property
financed by such Debt, (C) the amount of Debt secured thereby is not increased
and (iv) the principal amount of Debt secured by any such Lien shall at no
time exceed seventy percent (70%) of the original purchase price of such
property at the time it was acquired;
(h) other Liens securing Debt otherwise permitted under Section 10.1,
the principal amount of which outstanding at any one time in the aggregate
does not exceed $500,000;
(i) Liens securing the Mercom Credit Facility, at any time that Mercom
is a Subsidiary under this Agreement; and
(j) after the assumption of such Debt by the Borrower, Liens securing
Debt under the $15 Million Facility.
SECTION 10.3 Limitations on Loans, Advances, Investments and
Acquisitions. Purchase, own, invest in or otherwise acquire, directly or
indirectly, any capital stock, interests in any partnership or joint venture
(including without limitation the creation or capitalization of any
Subsidiaries), evidence of Debt or other obligation or security, substantially
all or a portion of the business or assets of any other Person or any other
investment or interest whatsoever in any other Person, or make or permit to
exist, directly or indirectly, any loans, advances or extensions of credit to,
or any investment in cash or by delivery of property in, any Person, or enter
into, directly or indirectly, any commitment or option in respect of the
foregoing except:
(a) (i) investments existing on the Closing Date in Subsidiaries of
the Borrower existing on the Closing Date, (ii) the other existing loans,
advances and investments described on Schedule 10.3, (iii) investments after
the Closing Date in any Subsidiary (and after giving effect to the applicable
investment and any concurrent investment made by the Borrower and its
Subsidiaries pursuant to Section 10.3(e)) in an aggregate amount not to exceed
(A) $15,000,000 less (B) the aggregate amount of the investments made by the
Borrower and its Subsidiaries pursuant to Section 10.3(e); and (iv) the Mercom
Transaction and any acquisition of capital stock of Mercom by the Borrower;
provided, that the Borrower may pay a portion of the consideration in the
Mercom Acquisition in cash but such portion shall be treated as an acquisition
made pursuant to Section 10.3(d);
(b) investments in (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency
thereof maturing within 120 days from the date of acquisition thereof, (ii)
commercial paper maturing no more than 120 days from the date of creation
thereof and at the time of purchase having the highest rating obtainable from
either Standard & Poor's Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc. or ▇▇▇▇▇'▇ Investors Service, Inc., (iii) certificates of
deposit maturing no more than 120 days from the date of creation thereof
issued by commercial banks incorporated under the laws of the United States of
America or any state thereof, or branches of any foreign bank registered and
licensed under the applicable laws of the United States of America or any
state thereof, each having combined capital, surplus and undivided profits of
not less than $500,000,000 and having a rating of "A" or better by a
nationally recognized rating agency, (iv) time deposits maturing no more than
30 days from the date of creation thereof with commercial banks or savings
banks or savings and loan associations each having membership either in the
FDIC or the deposits of which are insured by the FDIC and in amounts not
exceeding the maximum amounts of insurance thereunder, or (v) money market
mutual funds;
(c) investments by the Borrower or any of its Subsidiaries in the form
of acquisitions of all or substantially all of the business or line of
business (whether by the acquisition of capital stock, assets or any
combination of both) of any other Person using the capital stock of the
Borrower as consideration for such acquisition; provided that the Borrower or
any of its Subsidiaries may not use Disqualified Stock as consideration;
(d) investments not otherwise permitted by Section 10.3(c) by the
Borrower or any of its Subsidiaries in the form of acquisitions for cash or
property of all or substantially all of the business or a line of business
(whether by the acquisition of capital stock, assets or any combination
thereof) of any other Person, in an amount not to exceed $15,000,000
individually for any such acquisition and $25,000,000 in the aggregate during
the term of this Agreement; and
(e) the purchase of or other investment in the capital stock or other
equity interests of any other Person which investment shall not result in such
Person being a Subsidiary hereunder, in an aggregate amount (after giving
effect to such investment and any concurrent investment made by the Borrower
and its Subsidiaries pursuant to Section 10.3(a)(iii)) not to exceed (A)
$15,000,000 less (B) the aggregate amount of the investments made by the
Borrower and its Subsidiaries pursuant to Section 10.3(a)(iii).
SECTION 10.4 Limitations on Mergers and Liquidation. Merge,
consolidate or enter into any similar combination with any other Person or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution) except:
(a) any Wholly-Owned Subsidiary of the Borrower may merge with any
other Wholly-Owned Subsidiary of the Borrower;
(b) any Wholly-Owned Subsidiary of the Borrower may merge into the
Person such Wholly-Owned Subsidiary of the Borrower was formed to acquire in
connection with an acquisition permitted by Section 10.3(c);
(c) any Wholly-Owned Subsidiary of the Borrower may wind-up into the
Borrower or any other Wholly-Owned Subsidiary of the Borrower;
(d) the Borrower may merge or consolidate with any Person (other than
Mercom); provided, that the Borrower is the surviving Person and the Borrower
is in compliance after such merger or consolidation with all terms and
covenants contained in this Agreement and the other Loan Documents; and
(e) the Borrower may merge or consolidate with Mercom; provided, that
if Mercom is the surviving Person, it will become the Borrower under this
Agreement by executing an Assumption Agreement substantially in the form of
Exhibit J.
SECTION 10.5 Limitations on Sale of Assets. Convey, sell, lease,
assign, transfer or otherwise dispose of any of its property, business or
assets (including, without limitation, the sale of any receivables and
leasehold interests and any sale-leaseback or similar transaction), whether
now owned or hereafter acquired except:
(a) the sale of inventory in the ordinary course of business;
(b) the sale of assets no longer used or usable in the business of the
Borrower or any of its Subsidiaries;
(c) the transfer of assets to the Borrower or any other Wholly-Owned
Subsidiary pursuant to Section 10.4(c);
(d) the sale or discount of accounts receivable arising in the
ordinary course of business in connection with the compromise or collection
thereof;
(e) the sale of assets that for the four fiscal quarters ending
immediately prior to such sale generated less than ten percent (10%) of the
Operating Cash Flow of the Borrower and its Subsidiaries for such four fiscal
quarter period; provided, that during the term of the Credit Facility,
aggregate sales of assets under this subsection may not exceed twenty percent
(20%) of Operating Cash Flow accumulated from the Closing Date to the date of
the most recent sale of assets without the written consent of the Required
Lenders; and provided further that the Borrower and its Subsidiaries will
comply with Section 2.3(c) with respect to the proceeds of any sale under this
Section 10.5(e); and
(f) the Intergroup Asset Transfers.
SECTION 10.6 Limitations on Dividends and Distributions. Declare
or pay any dividends upon any of its capital stock; purchase, redeem, retire
or otherwise acquire, directly or indirectly, any shares of its capital stock,
or make any distribution of cash, property or assets among the holders of
shares of its capital stock, or make any change in its capital structure;
provided that:
(a) the Borrower may pay dividends in shares of its own capital stock;
(b) any Subsidiary may pay cash dividends to the Borrower;
(c) prior to the Internal Michigan Cable Distribution, the Borrower
may pay a cash dividend to Cable Systems for purposes of funding payment by
Cable Systems of a dividend to C-TEC to provide funds for C-TEC to repay in
full and terminate the $15 Million Facility (or to reimburse C-TEC for making
such payment and terminating such facility), and after the Internal Michigan
Cable Distribution but prior to the assumption of the $15 Million Facility by
the Borrower, the Borrower may pay a cash dividend to C-TEC to provide funds
for C-TEC to repay in full and terminate the $15 Million Facility (or to
reimburse C-TEC for making such payment and terminating such facility); and
(d) the Borrower may pay cash dividends with respect to its capital
stock in any fiscal quarter so long as the Borrower and its Subsidiaries,
after giving effect to such cash dividend and any other cash dividends made
during such fiscal quarter, would be in compliance with Section 9.3 as of the
immediately preceding fiscal quarter end if all such cash dividends had been
made on the last day of such fiscal quarter.
SECTION 10.7 Limitations on Exchange and Issuance of Capital Stock.
Issue, sell or otherwise dispose of any class or series of capital stock of it
that, by its terms or by the terms of any security into which it is
convertible or exchangeable, is, or upon the happening of an event or passage
of time would be, (a) convertible or exchangeable into Debt or (b) required to
be redeemed or repurchased, including at the option of the holder, in whole or
in part, or has, or upon the happening of an event or passage of time would
have, a redemption or similar payment due (other than in any case by the
giving of an optional notice of redemption by the issuer thereof).
SECTION 10.8 Transactions with Affiliates. Directly or indirectly:
(a) make any loan or advance to, or purchase or assume any note or other
obligation to or from, any of its officers, directors, shareholders or other
Affiliates, or to or from any member of the immediate family of any of its
officers, directors, shareholders or other Affiliates, or subcontract any
operations to any of its Affiliates, or (b) enter into, or be a party to, any
transaction with any of its Affiliates (an "Affiliate Transaction"), except
pursuant to the reasonable requirements of its business and upon fair and
reasonable terms that are no less favorable to it than it would obtain in a
comparable arm's length transaction with a Person not its Affiliate; provided,
that the foregoing provisions of this Section shall not prohibit: (i)
agreements with or for the benefit of employees of the Borrower or any of its
Subsidiaries regarding bridge home loans and other loans necessitated by the
relocation of such employee, or regarding short-term hardship advances or
routine advances for business expenses in the ordinary course of business;
(ii) any transaction solely among the Borrower and its Wholly Owned
Subsidiaries; (iii) the Borrower making any dividend or distribution permitted
by Section 10.6; (iv) any borrowing or payment of principal or interest on any
Debt permitted by Section 10.1; (v) any Affiliate Transaction pursuant to
agreements or other arrangements in effect on the date hereof or otherwise
consistent with past practice (and any renewal, replacement or modification of
any such agreement or arrangement on terms that are not materially more
adverse to the Borrower in question); (vi) the consummation of the
Reorganization; (vii) any Affiliate Transaction entered into in connection
with the Reorganization and described in the information statement, included
in the related registration statement on SEC Form 10, made available to the
shareholders of C-TEC in connection with the distribution to them of shares of
stock of the Borrower (and any renewal, replacement or modification of the
terms of any such Affiliate Transaction on terms that are not materially more
adverse to the Borrower); or (vii) any Affiliate Transaction in which the
amount involved does not exceed $100,000; provided further, that in any fiscal
year the aggregate amount paid by the Borrower and its Subsidiaries to C-TEC,
to other Subsidiaries of C-TEC, to Cable Systems Holdings and to other
Subsidiaries of Cable Systems Holdings for the provision of administrative and
management services of substantially the same nature, scope and timing as
those provided prior to the date of the Distributions shall not exceed six
percent (6%) of the Consolidated gross revenues of the Borrower and its
Subsidiaries for such Fiscal Year.
SECTION 10.9 Certain Accounting Changes. Change its Fiscal Year
end, or make any change in its accounting practices except as required or
permitted by GAAP and in accordance with Section 13.9.
SECTION 10.10 Restrictive Agreements. Other than the Mercom Credit
Facility and the $15 Million Facility, enter into any Debt which contains any
negative pledge on assets or which restricts, limits or otherwise encumbers
(a) its ability to incur Liens on or with respect to any of its assets or
properties other than the assets or properties securing such Debt or (b) the
ability of any Subsidiary to make any payment to the Borrower (in the form of
dividends, intercompany advances or otherwise); provided, that any Debt
permitted to be refinanced pursuant to Section 10.1(c) may, after any such
refinancing, include terms that are not materially more restrictive than the
terms in existence on the Closing Date with respect to such Debt.
ARTICLE XI
DEFAULT AND REMEDIES
SECTION 11.1 Events of Default. Each of the following shall
constitute an Event of Default, whatever the reason for such event and whether
it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment or order of any court or any order, rule or
regulation of any Governmental Authority or otherwise:
(a) Default in Payment of Principal of Loans. The Borrower shall
default in any payment of principal of any Loan or Note when and as due
(whether at maturity, by reason of acceleration or otherwise).
(b) Other Payment Default. The Borrower shall default in the payment
when and as due (whether at maturity, by reason of acceleration or otherwise)
of interest on any Loan or Note or any fees hereunder, and such default shall
continue unremedied for five (5) Business Days.
(c) Misrepresentation. Any representation or warranty made or deemed
to be made by the Borrower or any of its Subsidiaries under this Agreement,
any Loan Document or any amendment hereto or thereto, shall at any time prove
to have been incorrect or misleading in any material respect when made or
deemed made.
(d) Default in Performance of Certain Covenants. The Borrower shall
default in the performance or observance of any covenant or agreement
contained in Section 7.5(e) or Articles IX or X (other than Sections 10.8 and
10.9) of this Agreement.
(e) Default in Performance of Other Covenants and Conditions. The
Borrower or any of its Subsidiaries shall default in the performance or
observance of any term, covenant, condition or agreement contained in this
Agreement (other than as specifically provided for in this Section 11.1) or
any other Loan Document and such default shall continue for a period of thirty
(30) days after written notice thereof has been given to the Borrower by the
Administrative Agent.
(f) Hedging Agreement. Any termination payment shall be due by the
Borrower under any Hedging Agreement and such amount is not paid within five
(5) Business Days of the due date thereof.
(g) Debt Cross-Default. The Borrower or any of its Subsidiaries shall
(i) default in the payment of any Debt (other than the Notes) the aggregate
outstanding amount of which Debt is in excess of $1,000,000 beyond the period
of grace if any, provided in the instrument or agreement under which such Debt
was created, or (ii) default in the observance or performance of any other
agreement or condition relating to any Debt (other than the Notes) the
aggregate outstanding amount of which Debt is in excess of $1,000,000 or
contained in any instrument or agreement evidencing, securing or relating
thereto or any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the holder or
holders of such Debt (or a trustee or agent on behalf of such holder or
holders) to cause, with the giving of notice if required, any such Debt to
become due prior to its stated maturity (any applicable grace period having
expired).
(h) Change in Control. (i) Prior to the Spinoff Date, (A) PKS shall
cease to hold, either directly or indirectly through one or more PKS Entities,
(1) C-TEC Shares constituting at least thirty percent (30%) of the number of
the Pro Forma Outstanding C-TEC Shares or (2) C-TEC Voting Shares constituting
at least thirty percent (30%) of the voting power represented by the Pro Forma
Outstanding C-TEC Voting Shares, (B) any person (other than PKS or a PKS
Entity) or group of persons (within the meaning of Section 13(d) (other than
any group comprised principally of PKS and PKS Entities)) shall have acquired
in one or more series of transactions beneficial ownership (within the meaning
of Section 13(d)) of (1) more than fifty-one percent (51%) of the outstanding
C-TEC Shares or (2) C-TEC Voting Shares constituting more than fifty-one
percent (51%) of the voting power represented by the outstanding C-TEC Voting
Shares or (C) C-TEC shall cease to hold, directly or indirectly, all of the
outstanding shares of capital stock of the Borrower; or
(ii) After the Spinoff Date, (A) PKS shall cease to hold, either
directly or indirectly through one or more PKS Entities, (1) CCSM Shares
constituting at least thirty percent (30%) of the number of the Pro Forma
Outstanding CCSM Shares or (2) CCSM Voting Shares constituting at least thirty
percent (30%) of the voting power represented by the Pro Forma Outstanding
CCSM Voting Shares or (B) any person (other than PKS or a PKS Entity) or group
of persons (within the meaning of Section 13(d) (other than any group
comprised principally of PKS and PKS Entities)) shall have acquired in one or
more series of transactions beneficial ownership (within the meaning of
Section 13(d)) of (1) more than fifty-one percent (51%) of the outstanding
CCSM Shares or (2) CCSM Voting Shares constituting more than fifty-one percent
(51%) of the voting power represented by the outstanding CCSM Voting Shares.
(iii) As used in Sections 11.1(h)(i) and 11.1(h)(ii):
(A) "comprised principally" means, with respect to determining
whether any group of persons (within the meaning of Section 13(d)) is
comprised principally of PKS and PKS Entities, that PKS and PKS Entities
that are members of such group beneficially own (within the meaning of
Section 13(d)) in the aggregate at least 51% of the relevant shares
beneficially owned (within the meaning of Section 13(d)) by all members
of such group (calculated in each case, however, without giving effect
to any provisions of Section 13(d) that attribute to each member of such
group ownership of such shares beneficially owned by other members of
such group on account of having shared voting power);
(B) "CCSM Shares" means shares of common stock (of any class, if
there are two or more classes of common stock) of the Borrower (or, if
the transaction described in Section 8.10(b) occurs, of the Parent);
(C) "CCSM Voting Shares" means any CCSM Shares and any other shares
of capital stock of the Borrower (or the Parent, as the case may be)
having ordinary power to vote for the election of directors of the
Borrower (or the Parent, as the case may be);
(D) "C-TEC Shares" means shares of C-TEC Common Stock, par value
$1.00 per share, and shares of C-TEC Class B Common Stock, par value
$1.00 per share;
(E) "C-TEC Voting Shares" means any C-TEC Shares and any other
shares of capital stock of C-TEC having ordinary power to vote for the
election of directors of C-TEC.
(F) "PKS" means ▇▇▇▇▇ ▇▇▇▇▇▇ Sons' Inc. and its successors;
(G) "PKS Entity" means (i) any corporation of which securities
having ordinary voting power to elect a majority of the board of
directors of such corporation are held of record or through a nominee by
PKS or another PKS Entity (or some combination thereof), (ii) any
partnership if at least a majority of the value of its general
partnership interests are held of record or through a nominee by PKS or
another PKS Entity (or some combination thereof) and (iii) any limited
liability or similar company if securities or other equity interests
having ordinary voting power to elect or appoint a majority of the
managing members of such company are held of record or through a nominee
by PKS or another PKS Entity (or some combination thereof);
(H) "Pro Forma Outstanding" means as of any date of determination:
(1) with reference to C-TEC Shares and C-TEC Voting Shares,
(a) the number of such Shares outstanding on such date less (b) the
number of Shares issued after the date hereof (i) for cash, (ii) in
consideration for the acquisition of any investment (including by way of
merger) or property or the provision of services, (iii) upon the
exercise of any warrant, option, convertible security or similar
instrument issued after the date hereof for any consideration described
in the foregoing clauses (i) and (ii) or (iv) in connection with the
establishment or operation of any employee stock option plan or similar
employee benefit arrangement hereafter adopted by C-TEC or any of its
Wholly-Owned Subsidiaries; and
(2) with reference to CCSM Shares and CCSM Voting Shares, (a)
the number of such Shares outstanding on such date less (b) the number
of Shares issued after the Spinoff Date (i) for cash, (ii) in
consideration for the acquisition of any investment (including by way of
merger) or property or the provision of services, (iii) upon the
exercise of any warrant, option, convertible security or similar
instrument issued after the Spinoff Date for any consideration described
in the foregoing clauses (i) and (ii) or (iv) in connection with the
establishment or operation of any employee stock option plan or similar
employee benefit arrangement adopted after the Spinoff Date by the
Borrower or any of its Wholly-Owned Subsidiaries;
(I) "Section 13(d)" means Section 13(d) of the Securities Exchange
Act of 1934, as amended, and the rules and regulations relating to such
section promulgated by the Securities and Exchange Commission; and
(J) "Spinoff Date" means the date during the consummation of the
Reorganization when the Borrower ceases to be, directly or indirectly, a
Wholly-Owned Subsidiary of C-TEC.
(i) Voluntary Bankruptcy Proceeding. The Borrower or any of its
Subsidiaries shall (i) commence a voluntary case under the federal bankruptcy
laws (as now or hereafter in effect), (ii) file a petition seeking to take
advantage of any other laws, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, winding up or composition for adjustment of debts,
(iii) consent to or fail to contest in a timely and appropriate manner any
petition filed against it in an involuntary case under such bankruptcy laws or
other laws, (iv) apply for or consent to, or fail to contest in a timely and
appropriate manner, the appointment of, or the taking of possession by, a
receiver, custodian, trustee, or liquidator of itself or of a substantial part
of its property, domestic or foreign, (v) admit in writing its inability to
pay its debts as they become due, (vi) make a general assignment for the
benefit of creditors, or (vii) take any corporate action for the purpose of
authorizing any of the foregoing.
(j) Involuntary Bankruptcy Proceeding. A case or other proceeding
shall be commenced against the Borrower or any of its Subsidiaries in any
court of competent jurisdiction seeking (i) relief under the federal
bankruptcy laws (as now or hereafter in effect) or under any other laws,
domestic or foreign, relating to bankruptcy, insolvency, reorganization,
winding up or adjustment of debts, or (ii) the appointment of a trustee,
receiver, custodian, liquidator or the like for the Borrower or any of its
Subsidiaries or for all or any substantial part of their respective assets,
domestic or foreign, and such case or proceeding shall continue undismissed
or unstayed for a period of sixty (60) consecutive days, or an order granting
the relief requested in such case or proceeding (including, but not limited
to, an order for relief under such federal bankruptcy laws) shall be entered.
(k) Failure of Agreements. Any provision of this Agreement or of any
other Loan Document with respect to any material (in the reasonable judgement
thereof) rights and remedies of the Administrative Agent and Lenders hereunder
or thereunder shall for any reason cease to be valid and binding on the
Borrower or any of its Subsidiaries party thereto or any such Person shall so
state in writing, or this Agreement or any other Security Document shall for
any reason cease to create a valid and perfected first priority Lien on, or
security interest in, any of the collateral purported to be covered thereby,
in each case other than in accordance with the express terms hereof or thereof.
(l) Termination Event. The occurrence of any of the following events:
(i) any Borrower or any ERISA Affiliate fails to make full payment when due of
all amounts which, under the provisions of any Pension Plan or Section 412 of
the Code, the Borrower or any ERISA Affiliate is required to pay as
contributions thereto, (ii) an accumulated funding deficiency in excess of
$1,000,000 occurs or exists, whether or not waived, with respect to any
Pension Plan, (iii) a Termination Event or (iv) any Borrower or any ERISA
Affiliate as employers under one or more Multiemployer Plan makes a complete
or partial withdrawal from any such Multiemployer Plan and the plan sponsor of
such Multiemployer Plans notifies such withdrawing employer that such employer
has incurred a withdrawal liability requiring payments in an amount exceeding
$1,000,000.
(m) Judgment. A judgment or order for the payment of money which
causes the aggregate amount of all such judgments to exceed $500,000 in any
Fiscal Year shall be entered against the Borrower or any of its Subsidiaries
by any court and such judgment or order shall continue undischarged or
unstayed for a period of thirty (30) days.
(n) Related Financings. Either the C-TEC Credit Facility or the Cable
Systems Credit Facility does not close within sixty (60) days of the Closing
Date.
SECTION 11.2 Remedies. Upon the occurrence of an Event of Default,
with the consent of the Required Lenders, the Administrative Agent may, or
upon the request of the Required Lenders, the Administrative Agent shall, by
notice to the Borrower:
(a) Acceleration; Termination of Facilities. Declare the principal of
and interest on the Loans and the Notes at the time outstanding, and all other
amounts owed to the Lenders and to the Administrative Agent under this
Agreement or any of the other Loan Documents and all other Obligations, to be
forthwith due and payable, whereupon the same shall immediately become due and
payable without presentment, demand, protest or other notice of any kind, all
of which are expressly waived, anything in this Agreement or the other Loan
Documents to the contrary notwithstanding, and terminate the Credit Facility
and any right of the Borrower to request borrowings thereunder; provided, that
upon the occurrence of an Event of Default specified in Section 11.1(i) or
(j), the Credit Facility shall be automatically terminated and all Obligations
shall automatically become due and payable.
(b) Rights of Collection. Exercise on behalf of the Lenders all of
its other rights and remedies under this Agreement, the other Loan Documents
and Applicable Law, in order to satisfy all of the Borrower's Obligations.
SECTION 11.3 Rights and Remedies Cumulative; Non-Waiver; etc. The
enumeration of the rights and remedies of the Administrative Agent and the
Lenders set forth in this Agreement is not intended to be exhaustive and the
exercise by the Administrative Agent and the Lenders of any right or remedy
shall not preclude the exercise of any other rights or remedies, all of which
shall be cumulative, and shall be in addition to any other right or remedy
given hereunder or under the Loan Documents or that may now or hereafter exist
in law or in equity or by suit or otherwise. No delay or failure to take
action on the part of the Administrative Agent or any Lender in exercising any
right, power or privilege shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power or privilege preclude
other or further exercise thereof or the exercise of any other right, power or
privilege or shall be construed to be a waiver of any Event of Default. No
course of dealing between the Borrower, the Administrative Agent and the
Lenders or their respective agents or employees shall be effective to change,
modify or discharge any provision of this Agreement or any of the other Loan
Documents or to constitute a waiver of any Event of Default.
ARTICLE XII
THE ADMINISTRATIVE AGENT
SECTION 12.1 Appointment. Each of the Lenders hereby irrevocably
designates and appoints First Union as Administrative Agent of such Lender
under this Agreement and the other Loan Documents and each such Lender
irrevocably authorizes First Union as Administrative Agent for such Lender, to
take such action on its behalf under the provisions of this Agreement and the
other Loan Documents and to exercise such powers and perform such duties as
are expressly delegated to the Administrative Agent by the terms of this
Agreement and such other Loan Documents, together with such other powers as
are reasonably incidental thereto. Notwithstanding any provision to the
contrary elsewhere in this Agreement or such other Loan Documents, the
Administrative Agent shall not have any duties or responsibilities, except
those expressly set forth herein and therein, or any fiduciary relationship
with any Lender, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this Agreement or the
other Loan Documents or otherwise exist against the Administrative Agent.
SECTION 12.2 Delegation of Duties. The Administrative Agent may
execute any of its respective duties under this Agreement and the other Loan
Documents by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by the Administrative Agent with
reasonable care.
SECTION 12.3 Exculpatory Provisions. Neither the Administrative
Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact, Subsidiaries or Affiliates shall be (a) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement or the other Loan Documents (except for actions
occasioned solely by its or such Person's own gross negligence or willful
misconduct), or (b) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the Borrower or
any of its Subsidiaries or any officer thereof contained in this Agreement or
the other Loan Documents or in any certificate, report, statement or other
document referred to or provided for in, or received by the Administrative
Agent under or in connection with, this Agreement or the other Loan Documents
or for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or the other Loan Documents or for any failure
of the Borrower or any of its Subsidiaries to perform its obligations
hereunder or thereunder. The Administrative Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement, or to inspect the properties, books or records of the Borrower or
any of its Subsidiaries.
SECTION 12.4 Reliance by the Administrative Agent. The
Administrative Agent shall be entitled to rely, and shall be fully protected
in relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrower), independent accountants and other
experts selected by the Administrative Agent. The Administrative Agent may
deem and treat the payee of any Note as the owner thereof for all purposes
unless such Note shall have been transferred in accordance with Section 13.10
hereof. The Administrative Agent shall be fully justified in failing or
refusing to take any action under this Agreement and the other Loan Documents
unless it shall first receive such advice or concurrence of the Required
Lenders (or, when expressly required hereby or by the relevant other Loan
Document, all the Lenders) as it deems appropriate or it shall first 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 except for its own gross negligence or willful
misconduct. The Administrative Agent shall in all cases be fully protected
in acting, or in refraining from acting, under this Agreement and the Notes in
accordance with a request of the Required Lenders (or, when expressly required
hereby, all the Lenders), and such request and any action taken or failure to
act pursuant thereto shall be binding upon all the Lenders and all future
holders of the Notes.
SECTION 12.5 Notice of Default. The Administrative Agent shall not
be deemed to have knowledge or notice of the occurrence of any Default or
Event of Default hereunder unless it has received notice from a Lender or the
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event
that the Administrative Agent receives such a notice, it shall promptly give
notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders; provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it
shall deem advisable in the best interests of the Lenders.
SECTION 12.6 Non-Reliance on the Administrative Agent and Other
Lenders. Each Lender expressly acknowledges that neither the Administrative
Agent nor any of its respective officers, directors, employees, agents,
attorneys-in-fact, Subsidiaries or Affiliates has made any representations or
warranties to it and that no act by the Administrative Agent hereinafter
taken, including any review of the affairs of the Borrower or any of its
Subsidiaries, shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower and its Subsidiaries and made
its own decision to make its Loans hereunder and enter into this Agreement.
Each Lender also represents that it will, independently and without reliance
upon the Administrative Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and its Subsidiaries. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder or by the other Loan Documents, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business,
operations, property, financial and other condition or creditworthiness of the
Borrower or any of its Subsidiaries which may come into the possession of the
Administrative Agent or any of its respective officers, directors, employees,
agents, attorneys-in-fact, Subsidiaries or Affiliates.
SECTION 12.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such and (to the extent not reimbursed
by the Borrower and without limiting the obligation of the Borrower to do so),
ratably according to the respective amounts of their Commitment Percentages,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever which may at any time (including, without limitation, at any
time following the payment of the Notes or any Reimbursement Obligation) be
imposed on, incurred by or asserted against the Administrative Agent in any
way relating to or arising out of this Agreement or the other Loan Documents,
or any documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken or omitted by
the Administrative Agent under or in connection with any of the foregoing;
provided that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting solely from the
Administrative Agent's bad faith, gross negligence or willful misconduct. The
agreements in this Section 12.7 shall survive the payment of the Notes, any
Reimbursement Obligation and all other amounts payable hereunder and the
termination of this Agreement.
SECTION 12.8 The Administrative Agent in Its Individual Capacity.
The Administrative Agent and its respective Subsidiaries and Affiliates may
make loans to, accept deposits from and generally engage in any kind of
business with the Borrower as though the Administrative Agent were not an
Administrative Agent hereunder. With respect to any Loans made or renewed by
it and any Note issued to it and with respect to any issued by it or
participated in by it, the Administrative Agent shall have the same rights and
powers under this Agreement and the other Loan Documents as any Lender and may
exercise the same as though it were not an Administrative Agent, and the terms
"Lender" and "Lenders" shall include the Administrative Agent in its
individual capacity.
SECTION 12.9 Resignation of the Administrative Agent; Successor
Administrative Agent. Subject to the appointment and acceptance of a
successor 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, the Required Lenders shall have the right to appoint a successor
Administrative Agent, which successor shall have minimum capital and surplus
of at least $500,000,000. If no successor Administrative Agent shall have
been so appointed by the Required Lenders and shall have accepted such
appointment within thirty (30) days after the Administrative Agent's giving of
notice of resignation, then the Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent, which successor shall have
minimum capital and surplus of at least $500,000,000. Upon the acceptance of
any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all 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 any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this Section 12.9 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 Administrative Agent.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Notices.
(a) Method of Communication. Except as otherwise provided in this
Agreement, all notices and communications hereunder shall be in writing, or by
telephone subsequently confirmed in writing. Any notice shall be effective if
delivered by hand delivery or sent via telecopy, recognized overnight courier
service or certified mail, return receipt requested, and shall be presumed to
be received by a party hereto (i) on the date of delivery if delivered by hand
or sent by telecopy, (ii) on the next Business Day if sent by recognized
overnight courier service and (iii) on the third Business Day following the
date sent by certified mail, return receipt requested. A telephonic notice to
the Administrative Agent as understood by the Administrative Agent will be
deemed to be the controlling and proper notice in the event of a discrepancy
with or failure to receive a confirming written notice.
(b) Addresses for Notices. Notices to any party shall be sent to it
at the following addresses, or any other address as to which all the other
parties are notified in writing.
If to the Borrower: C-TEC Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
With copies to: ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇, Esq.
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
If to First Union as First Union National Bank
Administrative Agent: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Syndication Agency Services
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Lender: To the Address set forth on Schedule 1.1(a) hereto
(c) Administrative Agent's Office. The Administrative Agent hereby
designates its office located at the address set forth above, or any
subsequent office which shall have been specified for such purpose by written
notice to the Borrower and Lenders, as the Administrative Agent's Office
referred to herein, to which payments due are to be made and at which Loans
will be disbursed.
SECTION 13.2 Expenses; Indemnity. The Borrower will (a) pay all
reasonable out-of-pocket expenses of the Administrative Agent in connection
with: (i) the preparation, execution and delivery of this Agreement and each
other Loan Document, whenever the same shall be executed and delivered,
including without limitation all out-of-pocket syndication and due diligence
expenses and reasonable fees and disbursements of counsel (not to exceed
$60,000) for the Administrative Agent, and (ii) the preparation, execution and
delivery of any waiver, amendment or consent by the Administrative Agent or
the Lenders relating to this Agreement or any other Loan Document, including
without limitation reasonable fees and disbursements of counsel for the
Administrative Agent, (b) at any time when a Default has occurred and is
continuing (or at any time thereafter with respect to any of the following
undertaken during the existence of a Default), pay all reasonable out-of
pocket expenses of the Administrative Agent (and of the Lenders, but only if
such Default is an Event of Default) in connection with the enforcement of any
rights and remedies of the Administrative Agent and Lenders under the Credit
Facility, including consulting with appraisers, accountants, engineers,
attorneys and other Persons concerning the nature, scope or value of any right
or remedy of the Administrative Agent or any Lender hereunder or under any
other Loan Document or any factual matters in connection therewith, which
expenses shall include without limitation the reasonable fees and
disbursements of such Persons, and (c) defend, indemnify and hold harmless the
Administrative Agent and the Lenders, and their respective parents,
Subsidiaries, Affiliates, employees, agents, officers and directors, from and
against any losses, penalties, fines, liabilities, settlements, damages, costs
and expenses, suffered by any such Person in connection with any claim,
investigation, litigation or other proceeding (whether or not the
Administrative Agent or any Lender is a party thereto) and the prosecution and
defense thereof, arising out of or in any way connected with the Agreement,
any other Loan Document or the Loans, including without limitation reasonable
attorney's and consultant's fees, except to the extent that any of the
foregoing directly result from the gross negligence or willful misconduct of
the party seeking indemnification therefor.
SECTION 13.3 Set-off. In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
upon and after the occurrence of any Event of Default and during the
continuance thereof, the Lenders and any assignee or participant of a Lender
in accordance with Section 13.10 are hereby authorized by the Borrower at any
time or from time to time, without notice to the Borrower or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all deposits (general or special, time or
demand, including, but not limited to, indebtedness evidenced by certificates
of deposit, whether matured or unmatured) and any other indebtedness at any
time held or owing by the Lenders, or any such assignee or participant to or
for the credit or the account of the Borrower against and on account of the
Obligations irrespective of whether or not (a) the Lenders shall have made any
demand under this Agreement or any of the other Loan Documents or (b) the
Administrative Agent shall have declared any or all of the Obligations to be
due and payable as permitted by Section 11.2 and although such Obligations
shall be contingent or unmatured.
SECTION 13.4 Governing Law. This Agreement, the Notes and the
other Loan Documents, unless otherwise expressly set forth therein, shall be
governed by, construed and enforced in accordance with the laws of the State
of North Carolina, without reference to the conflicts or choice of law
principles thereof.
SECTION 13.5 Consent to Jurisdiction. The Borrower hereby
irrevocably consents to the personal jurisdiction of the state and federal
courts located in Mecklenburg County, North Carolina, in any action, claim or
other proceeding arising out of any dispute in connection with this Agreement,
the Notes and the other Loan Documents, any rights or obligations hereunder
or thereunder, or the performance of such rights and obligations. The
Borrower hereby irrevocably consents to the service of a summons and complaint
and other process in any action, claim or proceeding brought by the
Administrative Agent or any Lender in connection with this Agreement, the
Notes or the other Loan Documents, any rights or obligations hereunder or
thereunder, or the performance of such rights and obligations, on behalf of
itself or its property, in the manner specified in Section 13.1. Nothing in
this Section 13.5 shall affect the right of the Administrative Agent or any
Lender to serve legal process in any other manner permitted by Applicable Law
or affect the right of the Administrative Agent or any Lender to bring any
action or proceeding against the Borrower or its properties in the courts of
any other jurisdictions.
SECTION 13.6 Binding Arbitration; Waiver of Jury Trial.
(a) Binding Arbitration. Upon demand of any party, whether made
before or after institution of any judicial proceeding, any dispute, claim or
controversy arising out of, connected with or relating to the Notes or any
other Loan Documents ("Disputes"), between or among parties to the Notes or
any other Loan Document shall be resolved by binding arbitration as provided
herein. Institution of a judicial proceeding by a party does not waive the
right of that party to demand arbitration hereunder. Disputes may include,
without limitation, tort claims, counterclaims, claims brought as class
actions, claims arising from Loan Documents executed in the future, or claims
concerning any aspect of the past, present or future relationships arising out
of or connected with the Loan Documents. Arbitration shall be conducted under
and governed by the Commercial Financial Disputes Arbitration Rules (the
"Arbitration Rules") of the American Arbitration Association and Title 9 of
the U.S. Code. All arbitration hearings shall be conducted in Charlotte,
North Carolina. The expedited procedures set forth in Rule 51, et seq. of the
Arbitration Rules shall be applicable to claims of less than $500,000. All
applicable statutes of limitation shall apply to any Dispute. A judgment upon
the award may be entered in any court having jurisdiction. The panel from
which all arbitrators are selected shall be comprised of licensed attorneys.
The single arbitrator selected for expedited procedure shall be a retired
judge from the highest court of general jurisdiction, state or federal, of the
state where the hearing will be conducted. Notwithstanding the foregoing,
this paragraph shall not apply to any Hedging Agreement that is a Loan
Document.
(b) Jury Trial. TO THE EXTENT PERMITTED BY LAW, THE ADMINISTRATIVE
AGENT, EACH LENDER AND THE BORROWER HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING
ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR THE
OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR
THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.
(c) Preservation of Certain Remedies. Notwithstanding the preceding
binding arbitration provisions, the parties hereto and the other Loan
Documents preserve, without diminution, certain remedies that such Persons may
employ or exercise freely, either alone, in conjunction with or during a
Dispute. Each such Person shall have and hereby reserves the right to proceed
in any court of proper jurisdiction or by self help to exercise or prosecute
the following remedies: (i) all rights to foreclose against any real or
personal property or other security by exercising a power of sale granted in
the Loan Documents or under applicable law or by judicial foreclosure and
sale, (ii) all rights of self help including peaceful occupation of property
and collection of rents, set off, and peaceful possession of property, (iii)
obtaining provisional or ancillary remedies including injunctive relief,
sequestration, garnishment, attachment, appointment of receiver and in filing
an involuntary bankruptcy proceeding, and (iv) when applicable, a judgment by
confession of judgment. Preservation of these remedies does not limit the
power of an arbitrator to grant similar remedies that may be requested by a
party in a Dispute.
SECTION 13.7 Reversal of Payments. To the extent the Borrower
makes a payment or payments to the Administrative Agent for the ratable
benefit of the Lenders or the Administrative Agent receives any payment or
proceeds of the collateral which payments or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under
any bankruptcy law, state or federal law, common law or equitable cause, then,
to the extent of such payment or proceeds repaid, the Obligations or part
thereof intended to be satisfied shall be revived and continued in full force
and effect as if such payment or proceeds had not been received by the
Administrative Agent.
SECTION 13.8 Injunctive Relief; Punitive Damages.
(a) The Borrower recognizes that, in the event the Borrower fails to
perform, observe or discharge any of its obligations or liabilities under this
Agreement, any remedy of law may prove to be inadequate relief to the Lenders.
Therefore, the Borrower agrees that the Lenders, at the Lenders' option, shall
be entitled to temporary and permanent injunctive relief in any such case
without the necessity of proving actual damages.
(b) The Administrative Agent, Lenders and Borrower hereby agree that
no such Person shall have a remedy of punitive or exemplary damages against
any other party to a Loan Document and each such Person hereby waives any
right or claim to punitive or exemplary damages that they may now have or may
arise in the future in connection with any Dispute, whether such Dispute is
resolved through arbitration or judicially.
SECTION 13.9 Accounting Matters. All financial and accounting
calculations, measurements and computations made for any purpose relating to
this Agreement, including, without limitation, all computations utilized by
the Borrower or any its Subsidiaries to determine compliance with any covenant
contained herein, shall, except as otherwise expressly contemplated hereby or
unless there is an express written direction by the Administrative Agent to
the contrary agreed to by the Borrower, be performed in accordance with GAAP
as in effect from time to time.
SECTION 13.10 Successors and Assigns; Participations.
(a) Benefit of Agreement. This Agreement shall be binding upon and
inure to the benefit of the Borrower, the Administrative Agent and the
Lenders, all future holders of the Notes, and their respective successors and
assigns, except that the Borrower shall not assign or transfer any of its
rights or obligations under this Agreement without the prior written consent
of each Lender.
(b) Assignment by Lenders. Each Lender may, with the consent of the
Administrative Agent and the Borrower, which consents shall not be
unreasonably withheld (and which consent of the Borrower shall not be required
during the continuance of an Event of Default), assign to one or more Eligible
Assignees all or a portion of its interests, rights and obligations under this
Agreement (including, without limitation, all or a portion of the Loans at the
time owing to it and the Notes held by it); provided that:
(i) each such assignment shall be of a constant, and not a
varying, percentage of all the assigning Lender's rights and obligations under
this Agreement;
(ii) if less than all of the assigning Lender's Commitment
is to be assigned, the Commitment so assigned shall not be less than
$5,000,000;
(iii) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance in the form of Exhibit G attached
hereto (an "Assignment and Acceptance"), together with any Note or Notes
subject to such assignment;
(iv) such assignment shall not, without the consent of the
Borrower, require the Borrower to file a registration statement with the
Securities and Exchange Commission or apply to or qualify the Loans or the
Notes under the blue sky laws of any state; and
(v) the assigning Lender shall pay to the Administrative
Agent an assignment fee of $3,000 upon the execution by such Lender of the
Assignment and Acceptance; provided that no such fee shall be payable upon any
assignment by a Lender to an Affiliate thereof.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective
date shall be at least five (5) Business Days after the execution thereof, (A)
the assignee thereunder shall be a party hereto and, to the extent provided in
such Assignment and Acceptance, have the rights and obligations of a Lender
hereby and (B) the Lender thereunder shall, to the extent provided in such
assignment, be released from its obligations under this Agreement.
(c) Rights and Duties Upon Assignment. By executing and delivering an
Assignment and Acceptance, the assigning Lender thereunder and the assignee
thereunder confirm to and agree with each other and the other parties hereto
as set forth in such Assignment and Acceptance.
(d) Register. The Administrative Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register for the recordation
of the names and addresses of the Lenders and the amount of the Loans with
respect to each Lender from time to time (the "Register"). The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Administrative Agent and the Lenders may treat each person whose
name is recorded in the Register as a Lender hereunder for all purposes of
this Agreement. The Register shall be available for inspection by the
Borrower or Lender at any reasonable time and from time to time upon
reasonable prior notice.
(e) Issuance of New Notes. Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and an Eligible Assignee together
with any Note or Notes subject to such assignment and the written consent to
such assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is substantially in the form of Exhibit G:
(i) accept such Assignment and Acceptance;
(ii) record the information contained therein in the
Register;
(iii) give prompt notice thereof to the Lenders and the
Borrower; and
(iv) promptly deliver a copy of such Assignment and
Acceptance to the Borrower.
Within five (5) Business Days after receipt of notice, the Borrower shall
execute and deliver to the Administrative Agent, in exchange for the
surrendered Note or Notes, a new Note or Notes to the order of such Eligible
Assignee in amounts equal to the Commitment assumed by it pursuant to such
Assignment and Acceptance and a new Note or Notes to the order of the
assigning Lender in an amount equal to the Commitment retained by it
hereunder. Such new Note or Notes shall be in an aggregate principal amount
equal to the aggregate principal amount of such surrendered Note or Notes,
shall be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of the assigned Notes delivered to the
assigning Lender. Each surrendered Note or Notes shall be canceled and
returned to the Borrower.
(f) Participations. Each Lender may sell participations to one or
more banks or other entities in all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Loans and the Notes held by it); provided that:
(i) such Lender's obligations under this Agreement
(including, without limitation, its Commitment) shall remain unchanged;
(ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations;
(iii) such Lender shall remain the holder of the Notes held
by it for all purposes of this Agreement;
(iv) the Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement;
(v) such Lender shall not permit such participant the
right to approve any waivers, amendments or other modifications to this
Agreement or any other Loan Document other than waivers, amendments or
modifications which would reduce the principal of or the interest rate on any
Loan or Reimbursement Obligation, extend the term or increase the amount of
the Commitment, reduce the amount of any fees to which such participant is
entitled, extend any scheduled payment date for principal of any Loan or,
except as expressly contemplated hereby or thereby, release substantially all
of the Collateral; and
(vi) any such disposition shall not, without the consent of
the Borrower, require the Borrower to file a registration statement with the
Securities and Exchange Commission to apply to qualify the Loans or the Notes
under the blue sky law of any state.
(g) Disclosure of Information; Confidentiality. The Administrative
Agent and the Lenders shall hold all non-public information with respect to
the Borrower obtained pursuant to the Loan Documents on a need-to-know basis
for making and administering the credit basis in accordance with their
customary procedures for handling confidential information; provided, that the
Administrative Agent may disclose information relating to this Agreement to
Gold Sheets and other similar bank trade publications, such information to
consist of deal terms and other information customarily found in such
publications. Any Lender may, in connection with any assignment, proposed
assignment, participation or proposed participation pursuant to this Section
13.10, disclose to the assignee, participant, proposed assignee or proposed
participant, any information relating to the Borrower furnished to such Lender
by or on behalf of the Borrower; provided, that prior to any such disclosure,
each such assignee, proposed assignee, participant or proposed participant
shall agree with the Borrower or such Lender to preserve the confidentiality
of any confidential information relating to the Borrower received from such
Lender.
(h) Certain Pledges or Assignments. Nothing herein shall prohibit any
Lender from pledging or assigning any Note to any Federal Reserve Bank in
accordance with Applicable Law.
SECTION 13.11 Amendments, Waivers and Consents. Except as set forth
below, any term, covenant, agreement or condition of this Agreement or any of
the other Loan Documents may be amended or waived by the Lenders, and any
consent given by the Lenders, if, but only if, such amendment, waiver or
consent is in writing signed by the Required Lenders (or by the Administrative
Agent with the consent of the Required Lenders) and delivered to the
Administrative Agent and, in the case of an amendment, signed by the Borrower;
provided, that no amendment, waiver or consent shall (a) increase the amount
or extend the time of the obligation of the Lenders to make Loans (including
without limitation pursuant to Section 2.6), (b) extend the originally
scheduled time or times of payment of the principal of any Loan or the time or
times of payment of interest on any Loan, (c) reduce the rate of interest or
fees payable on any Loan, (d) permit any subordination of the principal or
interest on any Loan, (e) release any Security Document (other than as
specifically permitted in this Agreement or the applicable Security Document),
(f) amend the provisions of this Section 13.11 or the definition of Required
Lenders, (g) amend the provisions of Section 4.4 providing that all payments
to the Lenders shall be pro rata in accordance with their respective
Commitment Percentages or (h) amend the several nature of the obligations of
the Lenders under this Agreement, without the prior written consent of each
Lender. In addition, no amendment, waiver or consent to the provisions of
Article XII shall be made without the written consent of the Administrative
Agent.
SECTION 13.12 Performance of Duties. The Borrower's obligations
under this Agreement and each of the Loan Documents shall be performed by the
Borrower at its sole cost and expense.
SECTION 13.13 All Powers Coupled with Interest. All powers of
attorney and other authorizations granted to the Lenders, the Administrative
Agent and any Persons designated by the Administrative Agent or any Lender
pursuant to any provisions of this Agreement or any of the other Loan
Documents shall be deemed coupled with an interest and shall be irrevocable so
long as any of the Obligations remain unpaid or unsatisfied or the Credit
Facility has not been terminated.
SECTION 13.14 Survival of Indemnities. Notwithstanding any
termination of this Agreement, the indemnities to which the Administrative
Agent and the Lenders are entitled under the provisions of this Article XIII
and any other provision of this Agreement and the Loan Documents shall
continue in full force and effect and shall protect the Administrative Agent
and the Lenders against events arising after such termination as well as
before.
SECTION 13.15 Titles and Captions. Titles and captions of Articles,
Sections and subsections in this Agreement are for convenience only, and
neither limit nor amplify the provisions of this Agreement.
SECTION 13.16 Severability of Provisions. Any provision of this
Agreement or any other Loan Document which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective only to the
extent of such prohibition or unenforceability without invalidating the
remainder of such provision or the remaining provisions hereof or thereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 13.17 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and shall be binding upon all parties, their successors and assigns, and all
of which taken together shall constitute one and the same agreement.
SECTION 13.18 Term of Agreement. This Agreement shall remain in
effect from the Closing Date through and including the date upon which all
Obligations shall have been indefeasibly and irrevocably paid and satisfied in
full. No termination of this Agreement shall affect the rights and
obligations of the parties hereto arising prior to such termination.
[Signature pages to follow]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers, all as of the day and year first
written above.
[CORPORATE SEAL] CABLE MICHIGAN, INC.
By:
--------------------------------
Name:
--------------------------
Title:
--------------------------
FIRST UNION NATIONAL BANK, as
Administrative Agent and Lender
By:
--------------------------------
Name:
--------------------------
Title:
--------------------------
SCHEDULE 1.1(a): LENDERS AND COMMITMENTS
COMMITMENT
AND COMMITMENT
LENDER PERCENTAGE
First Union National Bank $18,796,296.30
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇ 12.9629629620%
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Syndication Agency Services
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fleet National Bank $15,574,074.07
One Federal Street 10.7407407400%
MA OF D0030
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
CoreStates Bank, N.A. $15,574,074.07
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 10.7407407400%
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
PNC Bank, National Association $15,574,074.07
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇-▇▇▇▇-▇▇-▇ 10.7407407400%
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
CIBC Wood Gundy Securities Corp. $15,574,074.07
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 10.7407407400%
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Summit Bank $14,500,000.00
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ 10.0000000000%
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
ABN AMRO Bank N.V., New York Branch
$14,500,000.00
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇.▇▇▇▇▇▇▇▇▇▇%
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Banque Nationale de Paris $13,425,925.94
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇.▇▇▇▇▇▇▇▇▇▇%
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
The Bank of New York $10,740,740.74
▇ ▇▇▇▇ ▇▇▇▇▇▇ 7.4074074070%
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Bank of Montreal, Chicago Branch
$10,740,740.74
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ 7.4074074070%
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
EXHIBIT I
to
Credit Agreement dated as of June __, 1997,
by and among
Cable Michigan, Inc.
as the Borrower,
the Lenders party thereto,
and
First Union National Bank,
as Administrative Agent
PLEDGE AGREEMENT
----------------
THIS PLEDGE AGREEMENT (as amended, restated or otherwise modified, the
"Pledge Agreement"), dated as of ___________, 1997 is made by
___________________, a corporation (the "Pledgor"), in favor of
First Union National Bank, a national banking association ("First Union"), as
Administrative Agent for the ratable benefit of itself and the Lenders
delivered pursuant to the Credit Agreement dated as of June 30, 1997 (as
amended, restated or otherwise modified, the "Credit Agreement") by and among
Cable Michigan, Inc., the Lenders who are or may become party thereto (the
"Lenders") and First Union National Bank, as Administrative Agent (the
"Administrative Agent").
STATEMENT OF PURPOSE
--------------------
Pursuant to the terms of the Credit Agreement, the Lenders have agreed
to extend certain credit facilities to the Borrowers in the aggregate amount
of up to the Aggregate Commitment under the Credit Agreement.
The Pledgor is the legal and beneficial owner of the shares of Pledged
Stock (as hereinafter defined) issued by _____________ (the "Issuer").
In connection with the transactions contemplated by the Credit
Agreement, the Lenders have requested, and the Pledgor has agreed to execute
and deliver this Pledge Agreement and the Pledged Stock (in accordance with
the terms hereof) to the Administrative Agent for the ratable benefit of the
itself and the Lenders.
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into and make available Loans
pursuant to the Credit Agreement, the Pledgor hereby agrees with the
Administrative Agent for the ratable benefit of itself and the Lenders as
follows:
1. Defined Terms. Unless otherwise defined herein, terms which are
defined in the Credit Agreement and used herein are so used as so defined, and
the following terms shall have the following meanings:
"Code" means the Uniform Commercial Code from time to time in
effect in the State of North Carolina.
"Collateral" means the Pledged Stock and all Proceeds.
"Pledge Agreement" means this Pledge Agreement, as amended,
restated or otherwise modified.
"Pledged Stock" means the shares of capital stock of the Issuer
listed on Schedule I hereto, together with all stock certificates,
options or rights of any nature whatsoever that may be issued or granted
by the Issuer to the Pledgor while this Pledge Agreement is in effect.
"Proceeds" means all "proceeds" as such term is defined in Section
9-306(1) of the Code on the date hereof and, in any event, shall
include, without limitation, all dividends or other income from the
Pledged Stock, collections thereon, proceeds of sale thereof or
distributions with respect thereto.
2. Pledge and Grant of Security Interest. The Pledgor hereby delivers
to the Administrative Agent, for the ratable benefit of itself and the
Lenders, all the Pledged Stock and hereby grants to Administrative Agent, for
the ratable benefit of itself and the Lenders, a first priority security
interest in the Collateral, as collateral security for the prompt and complete
payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations.
3. Stock Powers. Concurrently with the delivery to the Administrative
Agent of each certificate representing one or more shares of Pledged Stock,
the Pledgor shall deliver an undated stock power covering such certificate,
duly executed in blank by the Pledgor.
4. Representations and Warranties. To induce the Administrative Agent
and Lenders to execute the Credit Agreement and make any Loans and to accept
the security contemplated hereby, the Pledgor hereby represents and warrants
that:
(a) the Pledgor has the corporate power, authority and legal
right to execute and deliver, to perform its obligations under, and to
grant the Lien on the Collateral pursuant to, this Pledge Agreement and
has taken all necessary corporate action to authorize its execution,
delivery and performance of, and grant of the Lien on the Collateral
pursuant to, this Pledge Agreement;
(b) this Pledge Agreement constitutes a legal, valid and binding
obligation of the Pledgor enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by the availability of equitable
remedies;
(c) except as contemplated by Section 19 hereof, the execution,
delivery and performance of this Pledge Agreement will not violate any
provision of any Applicable Law or contractual obligation of the Pledgor
and will not result in the creation or imposition of any Lien on any of
the properties or revenues of the Pledgor pursuant to any Applicable Law
or contractual obligation, except as contemplated hereby;
(d) except as contemplated by Section 19 hereof, no consent or
authorization of, filing with, or other act by or in respect of, any
arbitrator or Governmental Authority and no consent of any other Person
(including, without limitation, any stockholder or creditor of the
Pledgor or any Issuer), is required in connection with the execution,
delivery, performance, validity or enforceability of this Pledge
Agreement, except that certain routine notification filings with the
FCC, any applicable PUC and any other Governmental Authority that grants
CATV Franchises with respect to the Loan Documents may be required after
the Closing Date;
(e) no litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the knowledge of
the Pledgor, threatened by or against the Pledgor or against any of its
properties or revenues with respect to this Pledge Agreement or any of
the transactions contemplated hereby;
(f) the shares of Pledged Stock listed on Schedule I constitute
all the issued and outstanding shares of all classes of the capital
stock of the Issuer;
(g) all the shares of the Pledged Stock have been duly and
validly issued and are fully paid and nonassessable;
(h) the Pledgor is the record and beneficial owner of, and has
good and marketable title to, the Pledged Stock listed on Schedule I,
free of any and all Liens or options in favor of, or claims of, any
other Person, except the Lien created by this Pledge Agreement; and
(i) upon (i) filing of UCC-1 financing statements with the
jurisdictions set forth on Schedule II hereto and (ii) delivery to the
Administrative Agent of the stock certificates evidencing the Pledged
Stock, the Lien granted pursuant to this Pledge Agreement will
constitute a valid, perfected first priority Lien on the Collateral (to
the extent that such a security interest in such collateral can be
perfected under the Code by taking such action (and subject to the
requirements of Section 9-306 of the Code with respect to any proceeds
of Collateral and to the further requirement that additional steps
described in Section 5(a) hereof may be necessary to perfect a security
interest in dividends or other distributions in kind)) enforceable as
such against all creditors of the Pledgor and any Persons purporting to
purchase any Collateral from the Pledgor.
5. Certain Covenants. The Pledgor covenants and agrees with the
Administrative Agent for the ratable benefit of the Administrative Agent and
the Lenders that, from and after the date of this Pledge Agreement until the
Obligations are paid in full and the Commitments are terminated:
(a) If the Pledgor shall, as a result of its ownership of the
Pledged Stock, become entitled to receive or shall receive any stock
certificate (including, without limitation, any certificate representing
a stock dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate
issued in connection with any reorganization), option or rights, whether
in addition to, in substitution of, as a conversion of, or in exchange
for any shares of the Pledged Stock, or otherwise in respect thereof,
the Pledgor shall accept the same as the agent of the Administrative
Agent, hold the same in trust for the Administrative Agent and deliver
the same forthwith to the Administrative Agent in the exact form
received, duly indorsed by the Pledgor to the Administrative Agent, if
required, together with an undated stock power covering such certificate
duly executed in blank by the Pledgor, to be held by the Administrative
Agent, subject to the terms hereof, as additional collateral security
for the Obligations. In addition, any sums paid upon or in respect of
the Pledged Stock upon the liquidation or dissolution of the Issuer
shall be paid over to the Administrative Agent to be held by it
hereunder as additional collateral security for the Obligations, and in
case any distribution of capital shall be made on or in respect of the
Pledged Stock or any property shall be distributed upon or with respect
to the Pledged Stock pursuant to the recapitalization or
reclassification of the capital of the Issuer or pursuant to the
reorganization thereof, the property so distributed shall be delivered
to the Administrative Agent to be held by it hereunder as additional
collateral security for the Obligations. If any sums of money or
property so paid or distributed in respect of the Pledged Stock shall be
received by the Pledgor, the Pledgor shall, until such money or property
is paid or delivered to the Administrative Agent, hold such money or
property in trust for the Administrative Agent, segregated from other
funds of the Pledgor, as additional collateral security for the
Obligations.
(b) Without the prior written consent of the Administrative
Agent, the Pledgor will not (i) vote to enable, or take any other action
to permit, the Issuer to issue any stock or other equity securities of
any nature or to issue any other securities convertible into or granting
the right to purchase or exchange for any stock or other equity
securities of any nature of the Issuer, (ii) sell, assign, transfer,
exchange, or otherwise dispose of, or grant any option with respect to,
the Collateral, or (iii) create, incur or permit to exist any Lien or
option in favor of, or any claim of any Person with respect to, any of
the Collateral, or any interest therein, except for the Lien provided
for by this Pledge Agreement. The Pledgor will defend the right, title
and interest of the Administrative Agent in and to the Collateral
against the claims and demands of all Persons whomsoever.
(c) At any time and from time to time, upon the written request
of the Administrative Agent, and at the sole expense of the Pledgor, the
Pledgor will promptly and duly execute and deliver such further
instruments and documents and take such further actions as the
Administrative Agent may reasonably request for the purposes of
obtaining or preserving the full benefits of this Pledge Agreement and
of the rights and powers herein granted provided, that unless an Event
of Default shall have occurred and be continuing, the Pledgor shall not
be obligated to make any filing with, or to seek or obtain any consent
or authorization of, any Governmental Authority of the nature described
in Section 19 hereof. If any amount payable under or in connection with
any of the Collateral shall be or become evidenced by any promissory
note, other instrument or chattel paper, such note, instrument or
chattel paper shall be immediately delivered to the Administrative
Agent, duly endorsed in a manner satisfactory to the Administrative
Agent, to be held as Collateral pursuant to this Pledge Agreement.
(d) The Pledgor agrees to pay, and to save the Administrative
Agent and the Lenders harmless from, any and all liabilities with
respect to, or resulting from any delay in paying, any and all stamp,
excise, sales or other taxes which may be payable or determined to be
payable with respect to any of the Collateral or in connection with any
of the transactions contemplated by this Pledge Agreement.
6. Cash Dividends; Voting Rights. Unless an Event of Default shall
have occurred and be continuing and the Administrative Agent shall have given
notice to the Pledgor of the Administrative's Agent intent to exercise its
rights pursuant to Section 7 below, the Pledgor shall be permitted to receive
all dividends or other payments or distributions made upon or with respect to
the Pledged Stock in cash paid in accordance with the terms of the Credit
Agreement in respect of the Pledged Stock and to exercise all voting and
corporate rights with respect to the Pledged Stock; provided, that no vote
shall be cast or corporate right exercised or other action taken which, in the
Administrative Agent's judgment, exercised in a reasonable manner, would
impair the Collateral or which would be inconsistent with or result in any
violation of any provision of the Credit Agreement, the Notes, any other Loan
Documents or this Pledge Agreement.
7. Rights of the Administrative Agent.
(a) If an Event of Default shall occur and be continuing on or after the
Borrowing Date and the Administrative Agent shall give notice of its intent to
exercise such rights to the Pledgor, (i) the Administrative Agent shall have
the right to receive any and all cash dividends paid in respect of the Pledged
Stock and make application thereof to the Obligations in the order set forth
in the Credit Agreement and (ii) all shares of the Pledged Stock shall be
registered in the name of the Administrative Agent or its nominee, and the
Administrative Agent or its nominee may thereafter exercise, in a commercially
reasonable manner but otherwise in its discretion, (A) all voting, corporate
and other rights pertaining to such shares of the Pledged Stock at any meeting
of shareholders of the Issuer or otherwise and (B) any and all rights of
conversion, exchange, subscription and any other rights, privileges or options
pertaining to such shares of the Pledged Stock (including, without limitation,
the right to exchange any and all of the Pledged Stock upon the merger,
consolidation, reorganization, recapitalization or other fundamental change in
the corporate structure of the Issuer, or upon the exercise by the Pledgor or
the Administrative Agent of any right, privilege or option pertaining to such
shares of the Pledged Stock, and in connection therewith, the right to deposit
and deliver any and all of the Pledged Stock with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as it may determine), all without liability except to account for
property actually received by it, but the Administrative Agent shall have no
duty to the Pledgor to exercise any such right, privilege or option and shall
not be responsible for any failure to do so or delay in so doing.
(b) The rights of the Administrative Agent and the Lenders hereunder
shall not be conditioned or contingent upon the pursuit by the Administrative
Agent or any Lender of any right or remedy against the Borrower or against any
other Person which may be or become liable in respect of all or any part of
the Obligations or against any collateral security therefor, guarantee
therefor or right of offset with respect thereto. Neither the Administrative
Agent nor any Lender shall be liable for any failure to demand, collect or
realize upon all or any part of the Collateral or for any delay in doing so,
nor shall the Administrative Agent be under any obligation to sell or
otherwise dispose of any Collateral upon the request of the Pledgor or any
other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof.
8. Remedies. If an Event of Default shall occur and be continuing,
with the consent of the Required Lenders, the Administrative Agent may, and
upon the request of the Required Lenders, the Administrative Agent shall,
exercise on behalf of itself and the Lenders, all rights and remedies granted
in this Pledge Agreement and in any other instrument or agreement securing,
evidencing or relating to the Obligations, and in addition thereto, all rights
and remedies of a secured party under the Code. Without limiting the
generality of the foregoing with regard to the scope of the Administrative
Agent's remedies, the Administrative Agent, without demand of performance or
other demand, presentment, protest, advertisement or notice of any kind
(except any notice required by law referred to below) to or upon the Pledgor,
the Issuer or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or
any part thereof, and/or may forthwith sell, assign, give option or options to
purchase or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, in the over-the-counter market, at any
exchange, broker's board or office of the Administrative Agent or any Lender
or elsewhere upon such terms and conditions as it may deem advisable and at
such prices as it may deem best, for cash or on credit or for future delivery
without assumption of any credit risk. The Administrative Agent or any Lender
shall have the right upon any such public sale or sales, and, to the extent
permitted by law, upon any such private sale or sales, to purchase the whole
or any part of the Collateral so sold, free of any right or equity of
redemption in the Pledgor, which right or equity is hereby waived or released.
The Administrative Agent shall apply any Proceeds from time to time held by it
and the net proceeds of any such collection, recovery, receipt, appropriation,
realization or sale, after deducting all reasonable costs and expenses of
every kind incurred in respect thereof or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the Collateral
or the rights of the Administrative Agent and the Lenders hereunder,
including, without limitation, reasonable attorneys' fees and disbursements of
counsel thereto, to the payment in whole or in part of the Obligations, in the
order set forth in the Credit Agreement, and only after such application and
after the payment by the Administrative Agent of any other amount required by
any provision of law, including, without limitation, Section 9-504(1)(c) of
the Code, need the Administrative Agent account for the surplus, if any, to
the Pledgor. To the extent permitted by applicable law, the Pledgor waives
all claims, damages and demands it may acquire against the Administrative
Agent or any Lender arising out of the exercise by them of any rights
hereunder. If any notice of a proposed sale or other disposition of
Collateral shall be required by law, such notice shall be deemed reasonable
and proper if given at least 10 days before such sale or other disposition.
The Pledgor further waives and agrees not to assert any rights or privileges
which it may acquire under Section 9-112 of the Code.
9. Private Sales.
(a) The Pledgor recognizes that the Administrative Agent may be unable
to effect a public sale of any or all the Pledged Stock, by reason of certain
prohibitions contained in the Securities Act and applicable state securities
laws or otherwise, and may be compelled to resort to one or more private sales
thereof to a restricted group of purchasers which will be obliged to agree,
among other things, to acquire such securities for their own account for
investment and not with a view to the distribution or resale thereof. The
Pledgor acknowledges and agrees that any such private sale may result in
prices and other terms less favorable than if such sale were a public sale
and, notwithstanding such circumstances, agrees that any such private sale
shall be deemed to have been made in a commercially reasonable manner. The
Administrative Agent shall be under no obligation to delay a sale of any of
the Pledged Stock for the period of time necessary to permit the Issuer to
register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if the Issuer would agree to do so.
(b) The Pledgor further agrees to use its best efforts to do or cause to
be done all such other acts as may be necessary to make such sale or sales of
all or any portion of the Pledged Stock pursuant to this Section 9 valid and
binding and in compliance with any and all other Applicable Laws. The Pledgor
further agrees that a breach of any of the covenants contained in this Section
9 will cause irreparable injury to the Administrative Agent and the Lenders not
compensable in damages, that the Administrative Agent and the Lenders have no
adequate remedy at law in respect of such breach and, as a consequence, that
to the greatest extent permitted by law each and every covenant contained in
this Section 9 shall be specifically enforceable against the Pledgor, and to
the greatest extent permitted by law the Pledgor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred under the
Credit Agreement.
10. No Subrogation. Notwithstanding any payment or payments made by
the Pledgor hereunder, or any setoff or application of funds of the Pledgor by
the Administrative Agent or Lender, or the receipt of any amounts by the
Administrative Agent or any Lender with respect to any of the Collateral, the
Pledgor shall not be entitled to be subrogated to any of the rights of the
Administrative Agent or any Lender against the Borrower or against any other
collateral security held by the Administrative Agent or any Lender for the
payment of the Obligations, nor shall the Pledgor seek any reimbursement from
the Borrower in respect of payments made by the Pledgor in connection with the
Collateral, or amounts realized by the Administrative Agent or any Lender in
connection with the Collateral, until all amounts owing to the Agents and
Lenders on account of the Obligations are paid in full and the Commitments are
terminated. If any amount shall be paid to the Pledgor on account of such
subrogation rights at any time when all of the Obligations shall not have been
paid in full, such amount shall be held by the Pledgor in trust for the
Administrative Agent, segregated from other funds of the Pledgor, and shall,
forthwith upon receipt by the Pledgor, be turned over to the Administrative
Agent in the exact form received by the Pledgor (duly indorsed by the Pledgor
to the Administrative Agent, if required) to be applied against the
Obligations, whether matured or unmatured, in such order as set forth in the
Credit Agreement.
11. Amendments, etc. With Respect to the Obligations. The Pledgor
shall remain obligated hereunder, and the Collateral shall remain subject to
the Lien granted hereby, notwithstanding that, without any reservation of
rights against the Pledgor, and without notice to or further assent by the
Pledgor, any demand for payment of any of the Obligations made by the
Administrative Agent or any Lender may be rescinded by the Administrative
Agent or such Lender, and any of the Obligations continued, and the
Obligations, or the liability of the Borrower or any other Person upon or for
any part thereof, or any collateral security or guarantee therefor or right of
offset with respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified accelerated, compromised, waived,
surrendered, or released by the Administrative Agent or any Lender, and the
Credit Agreement, the Notes, any other Loan Documents and any other documents
executed and delivered in connection therewith may be amended, modified,
supplemented or terminated, in whole or part, as the Lenders (or the Required
Lenders, as the case may be) may deem advisable from time to time, and any
guarantee, right of offset or other collateral security at any time held by the
Administrative Agent or any Lender for the payment of the Obligations may be
sold, exchanged, waived, surrendered or released. Neither the Administrative
Agent nor any Lender shall have any obligation to protect, secure, perfect or
insure any other Lien at any time held by it as security for the Obligations
or any property subject thereto. The Pledgor waives any and all notice of the
creation, renewal, extension or accrual of any of the Obligations and notice
of or proof of reliance by the Administrative Agent or any Lender upon this
Pledge Agreement; the Obligations, and any of them, shall conclusively be
deemed to have been created, contracted or incurred in reliance upon this
Pledge Agreement; and all dealings between the Borrower and the Pledgor, on
the one hand, and the Administrative Agent and the Lenders, on the other, shall
likewise be conclusively presumed to have been had or consummated in reliance
upon this Pledge Agreement. The Pledgor waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon the
Borrower or the Pledgor with respect to the Obligations.
12. Regulatory Approval. The Pledgor will, at its expense, promptly
execute and deliver, or cause the execution and delivery of, all applications,
certificates, instruments, registration statements and all other documents and
papers the Administrative Agent may, to the extent commercially reasonable,
request or as may be required by law in connection with the obtaining of any
consent, approval, registration, qualification or authorization of any
Governmental Authority or of any other Person necessary or appropriate for the
effective exercise of any rights under this Pledge Agreement, provided, that
unless an Event of Default shall have occurred and be continuing, the Pledgor
shall not be obligated to make any filing with, or to seek or obtain any
consent or authorization of, any Governmental Authority of the nature
described in Section 19 hereof. Without limiting the generality of the
foregoing, if an Event of Default shall have occurred and be continuing, the
Pledgor shall take any action which the Administrative Agent may, to the
extent commercially reasonable, request in order to transfer and assign to the
Administrative Agent, or to such one or more third parties as the
Administrative Agent may designate, or to a combination of the foregoing, each
FCC License, PUC Authorization and CATV Franchise. To enforce the provisions
of this Section, the Administrative Agent is, at any time when an Event of
Default has occurred and is continuing, empowered to request the appointment
of a receiver from any court of competent jurisdiction. Such receiver shall
be instructed to seek from the applicable Governmental Authority an
involuntary transfer of control of each such FCC License, PUC Authorization
and CATV Franchise for the purpose of seeking a bona fide purchaser to whom
control will ultimately be transferred. The Pledgor hereby agrees, so long as
such Event of Default is continuing, to authorize such an involuntary transfer
of control upon the request of the receiver so appointed and, if the Pledgor
shall refuse to authorize the transfer, its approval may be required by the
court. Upon the occurrence and continuance of an Event of Default, the
Pledgor shall further use its best efforts to assist in obtaining approval of
the applicable Governmental Authority, if required, for any action or
transactions contemplated by this Pledge Agreement including, without
limitation, the preparation, execution and filing with the applicable
Governmental Authority of the assignor's or transferor's portion of any
application or applications for consent to the assignment of any FCC License,
PUC Authorization or CATV Franchise or transfer of control necessary or
appropriate under the rules and regulations of the applicable Governmental
Authority for the approval of the transfer or assignment of any portion of the
Collateral, together with any FCC License, PUC Authorization and CATV
Franchise. The Pledgor acknowledges that the assignment or transfer of each
FCC License, PUC Authorization and CATV Franchise is integral to the
Administrative Agent's and Lenders' realization of the value of the Collateral,
that there is no adequate remedy at law for failure by the Pledgor to comply
with the provisions of this Section and that such failure would cause
irreparable injury not adequately compensable in damages, and therefore agrees
that to the greatest extent permitted by law each and every covenant contained
in this Section may be specifically enforced, and to the greatest extent
permitted by law the Pledgor hereby waives and agrees not to assert any
defenses against an action for specific performance of such covenants.
13. Limitation on Duties Regarding Collateral. The Administrative
Agent's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under Section 9-207 of the
Code or otherwise, shall be to deal with it in the same manner as the
Administrative Agent deals with similar securities and property for its own
account. Neither the Administrative Agent, any Lender nor any of their
respective directors, officers, employees or agents shall be liable for
failure to demand, collect or realize upon any of the Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise
dispose of any Collateral upon the request of the Pledgor or otherwise.
14. Powers Coupled with an Interest. All authorizations and agencies
herein contained with respect to the Collateral constitute irrevocable powers
coupled with an interest.
15. Severability. Any provision of this Pledge Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
16. Paragraph Headings. The paragraph headings used in this Pledge
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation
hereof.
17. No Waiver; Cumulative Remedies. Neither the Administrative Agent
nor any Lender shall by any act (except by a written instrument pursuant to
Section 18 hereof) be deemed to have waived any right or remedy hereunder or
to have acquiesced in any Default or Event of Default or in any breach of any
of the terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent or any Lender, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Administrative Agent or any Lender of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Administrative Agent or such Lender would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of
any other rights or remedies provided by law.
18. Waivers and Amendments; Successors and Assigns; Governing Law.
None of the terms or provisions of this Pledge Agreement may be amended,
supplemented or otherwise modified except by a written instrument executed by
the Pledgor and Administrative Agent; provided that (i) any provision of this
Pledge Agreement may be waived by the Administrative Agent in a letter or
agreement executed by the Administrative Agent or by telex or facsimile
transmission from the Administrative Agent and (ii) any consent by the
Administrative Agent to any amendment, supplement or modification hereto shall
be subject to approval thereof by the Lenders or Required Lenders, as
applicable, in accordance with Section 13.11 of the Credit Agreement. This
Pledge Agreement shall be binding upon the successors and assigns of the
Pledgor and shall inure to the benefit of the Administrative Agent and the
Lenders and their respective successors and assigns. This Pledge Agreement
shall be governed by, and construed and interpreted in accordance with, the
laws of the State of North Carolina.
19. Regulatory Concerns. Notwithstanding any other provision to the
contrary contained in this Agreement, the ability of the Administrative Agent
to (i) transfer record ownership of the
Pledged Stock into the name of the Administrative Agent or its nominee
pursuant to Section 7 hereof, (ii) vote and give consents, ratifications and
waivers with respect to the Pledged Stock pursuant to Section 7 hereof and
(iii) sell the Pledged Stock pursuant to Section 8 or 9 hereof is subject to
the Administrative Agent or its nominee (a) obtaining, to the extent necessary
under applicable laws and regulations, the prior approval of the FCC, any PUC
or any other Governmental Authority having jurisdiction with respect to any
Issuer and its Subsidiaries and (b) making any additional filings, reports or
notifications required with respect to the exercise by the Administrative
Agent of the powers specified in clauses (i), (ii) and (iii) of this section.
20. Notices. All notices and communications hereunder shall be given
to the addresses and otherwise in accordance with Section 13.1 of the Credit
Agreement.
21. Irrevocable Authorization and Instruction to Issuer. The Pledgor
hereby authorizes and instructs the Issuer to comply with any instruction
received by it from the Administrative Agent in writing that (a) states that
an Event of Default has occurred and (b) is otherwise in accordance with the
terms of this Pledge Agreement, without any other or further instructions from
the Pledgor, and the Pledgor agrees that the Issuer shall be fully protected
in so complying.
22. Authority of Administrative Agent. The Pledgor acknowledges that
the rights and responsibilities of the Administrative Agent under this Pledge
Agreement with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, voting
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Pledge Agreement shall, as between the
Administrative Agent and the Lenders, be governed by the Credit Agreement and
by such other agreements with respect thereto as may exist from time to time
among them, but, as between the Administrative Agent and the Pledgor, the
Administrative Agent shall be conclusively presumed to be acting as agent for
itself and the Lenders with full and valid authority so to act or refrain from
acting, and neither the Pledgor nor any Issuer shall be under any obligation,
or entitlement, to make any inquiry respecting such authority.
23. Consent to Jurisdiction. The Pledgor hereby irrevocably consents
to the personal jurisdiction of the state and federal courts located in
Mecklenburg County, North Carolina, in any action, claim or other proceeding
arising out of any dispute in connection with this Pledge Agreement, the other
Loan Documents, any rights or obligations hereunder or thereunder, or the
performance of such rights and obligations. The Pledgor hereby irrevocably
consents to the service of a summons and complaint and other process in any
action, claim or proceeding brought by the Administrative Agent or any Lender
in connection with this Pledge Agreement, the other Loan Documents, any rights
or obligations hereunder or thereunder, or the performance of such rights and
obligations, on behalf of itself or its property, in the manner specified in
Section 20. Nothing in this Section 23 shall affect the right of the
Administrative Agent or any Lender to serve legal process in any other manner
permitted by Applicable Law or affect the right of the Administrative Agent or
any Lender to bring any action or proceeding against the Pledgors or their
properties, individually or collectively, in the courts of any other
jurisdictions.
24. Binding Arbitration; Waiver of Jury Trial.
(a) Jury Trial. TO THE EXTENT PERMITTED BY LAW, THE ADMINISTRATIVE
AGENT, EACH LENDER AND THE PLEDGOR HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING
ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS PLEDGE AGREEMENT OR
THEREUNDER, THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER, OR
THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.
(b) Binding Arbitration. Upon demand of any party, whether made before
or after institution of any judicial proceeding, any dispute, claim or
controversy arising out of, connected with or relating to this Pledge
Agreement or any other Loan Documents ("Disputes"), between or among parties
to this Agreement or any other Loan Document shall be resolved by binding
arbitration as provided herein. Institution of a judicial proceeding by a
party does not waive the right of that party to demand arbitration hereunder.
Disputes may include, without limitation, tort claims, counterclaims, claims
brought as class actions, claims arising from Loan Documents executed in the
future, or claims concerning any aspect of the past, present or future
relationships arising out or connected with the Loan Documents. Arbitration
shall be conducted under and governed by the Commercial Financial Disputes
Arbitration Rules (the "Arbitration Rules") of the American Arbitration
Association (the "AAA") and Title 9 of the U.S. Code. All arbitration
hearings shall be conducted in Charlotte, North Carolina. The expedited
procedures set forth in Rule 51, et seq. of the Arbitration Rules shall be
applicable to claims of less than $500,000. All applicable statutes of
limitation shall apply to any Dispute. A judgment upon the award may be
entered in any court having jurisdiction. The panel from which all
arbitrators are selected shall be comprised of licensed attorneys. The single
arbitrator selected for expedited procedure shall be a retired judge from the
highest court of general jurisdiction, state or federal, of the state where
the hearing will be conducted. Notwithstanding the foregoing, this paragraph
shall not apply to any Hedging Agreement that is a Loan Document.
(c) Preservation of Certain Remedies. Notwithstanding the preceding
binding arbitration provisions, the parties hereto and the other Loan
Documents preserve, without diminution, certain remedies that such Persons may
employ or exercise freely, either alone, in conjunction with or during a
Dispute. Each such Person shall have and hereby reserves the right to proceed
in any court of proper jurisdiction or by self help to exercise or prosecute
the following remedies: (i) all rights to foreclose against any real or
personal property or other security by exercising a power of sale granted in
the Loan Documents or under applicable law or by judicial foreclosure and
sale, (ii) all rights of self help including peaceful occupation of property
and collection of rents, set off, and peaceful possession of property, (iii)
obtaining provisional or ancillary remedies including injunctive relief,
sequestration, garnishment, attachment, appointment of receiver and in filing
an involuntary bankruptcy proceeding, and (iv) when applicable, a judgment by
confession of judgment. Preservation of these remedies does not limit the
power of an arbitrator to grant similar remedies that may be requested by a
party in a Dispute.
25. Reorganization. Notwithstanding anything to the contrary contained
in this Agreement, no action required to be taken by the Pledgor or the Issuer
pursuant to the Reorganization shall be deemed to constitute an Event of
Default arising out of a breach of the terms of this Agreement; provided, that
if any such action conflicts with or otherwise results in any breach of any
provision of this Agreement, the Pledgor and the Issuer, or their successors
or assignees shall execute such amendments thereto and take all the actions
reasonably requested by the Administrative Agent in order that this Agreement
shall remain enforceable in accordance with its terms against such Persons
after the Reorganization.
26. Termination of Pledge Agreement. This Pledge Agreement shall
terminate upon the date when the obligations have been paid in full and the
Commitments terminated. Upon the termination of this Pledge Agreement, the
Administrative Agent will, at the expense of the Pledgor, deliver any
certificate evidencing the Pledged Stock and any other Collateral held by it
to the Pledgor and execute and deliver to the Pledgor such documents as the
Pledgor shall reasonably request to evidence the termination of the Lien
created hereby on the Collateral.
IN WITNESS WHEREOF, the undersigned has caused this Pledge Agreement to
be executed under seal by its duly authorized officers as of the date first
above written.
[CORPORATE SEAL] [INSERT PLEDGOR]
By:______________________________
Name:_________________________
Title:________________________
ACKNOWLEDGEMENT AND CONSENT
The Issuer referred to in the foregoing Pledge Agreement hereby
acknowledges receipt of a copy thereof and agrees to be bound thereby and to
comply with the terms thereof insofar as such terms are applicable to it. The
Issuer agrees to notify the Administrative Agent promptly in writing of the
occurrence of any of the events described in Section 5(a) of the Pledge
Agreement with respect to its shares.
[CORPORATE SEAL] [INSERT ISSUER]
ATTEST: By:_____________________________
Name:________________________
_____________________ Title:_______________________
______________Secretary
SCHEDULE 1
To Pledge
Agreement
---------
DESCRIPTION OF PLEDGED STOCK
Class of Stock No. of
Issuer Stock Certificate No. Shares
------ -------- --------------- -------
SCHEDULE II
To Pledge
Agreement
-----------
UCC INFORMATION
Debtor Filing Jurisdiction
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