1
EXHIBIT 10.27
================================================================================
CREDIT AGREEMENT
DATED AS OF DECEMBER 19, 1997
AMONG
TVMAX TELECOMMUNICATIONS, INC.,
AS BORROWER,
OPTEL, INC.,
THE LENDERS LISTED HEREIN,
AS LENDERS,
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.,
AS ARRANGER AND SYNDICATION AGENT,
CANADIAN IMPERIAL BANK OF COMMERCE,
AS ADMINISTRATIVE AGENT
AND
GENERAL ELECTRIC CAPITAL CORPORATION,
AS DOCUMENTATION AGENT
================================================================================
2
TVMAX TELECOMMUNICATIONS, INC.
CREDIT AGREEMENT
TABLE OF CONTENTS
PAGE
----
SECTION 1.
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement . . . . . . . . . 33
1.3 Other Definitional Provisions and Rules of Construction . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS . . . . . . . . . . . . . . . . . 34
2.1 Commitments; Making of Loans; the Register; Notes . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.2 Interest on the Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
2.3 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
2.4 Repayments, Prepayments and Reductions in Revolving Loan Commitments; General Provisions
Regarding Payments; Application of Proceeds of Collateral and Payments Under Guaranties. . . . . . . 43
2.5 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
2.6 Special Provisions Governing Eurodollar Rate Loans. . . . . . . . . . . . . . . . . . . . . . . . . 52
2.7 Increased Costs; Taxes; Capital Adequacy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
2.8 Obligation of Lenders and Issuing Lender to Mitigate. . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 3.
LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . 60
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations Therein. . . . . . . . . . . . 60
3.2 Letter of Credit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
3.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit. . . . . . . . . . . . . . . . . 62
3.4 Obligations Absolute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
3.5 Indemnification; Nature of Issuing Lender's Duties . . . . . . . . . . . . . . . . . . . . . . . . . 66
3.6 Increased Costs and Taxes Relating to Letters of Credit . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 4.
CONDITIONS TO LOANS AND LETTERS OF CREDIT . . . . . . . . . . . . . . . . . 68
4.1 Conditions to AXELs and Revolving Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
4.2 Conditions to All Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
4.3 Conditions to Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
(i)
3
PAGE
----
SECTION 5.
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . 73
5.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries. . . . . . . . . . . . 73
5.2 Authorization of Borrowing, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
5.3 Financial Condition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
5.4 No Material Adverse Change; No Restricted Payments. . . . . . . . . . . . . . . . . . . . . . . . . 76
5.5 Title to Properties; Liens; Real Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
5.6 Litigation; Adverse Facts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
5.7 Payment of Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
5.8 Performance of Agreements; Materially Adverse Agreements; Material Contracts. . . . . . . . . . . . 78
5.9 Governmental Regulation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
5.10 Securities Activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
5.11 Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
5.12 Certain Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
5.13 Environmental Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
5.14 Employee Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
5.15 Solvency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
5.16 Matters Relating to Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
5.17 Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 6.
AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . 82
6.1 Financial Statements and Other Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
6.2 Corporate Existence, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
6.3 Payment of Taxes and Claims; Tax Consolidation. . . . . . . . . . . . . . . . . . . . . . . . . . . 88
6.4 Maintenance of Properties; Insurance; Application of Net Insurance/Condemnation Proceeds. . . . . . 88
6.5 Inspection Rights; Lender Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
6.6 Compliance with Laws, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
6.7 Execution of Subsidiary Guaranty and Personal Property Collateral Documents by Certain Subsid-
iaries and Future Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
6.8 Conforming Leasehold Interests; Matters Relating to Additional Real Property Collateral . . . . . . 92
6.9 Interest Rate Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
6.10 License Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
6.11 Assignment Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
SECTION 7.
NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . 95
7.1 Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
7.2 Liens and Related Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
(ii)
4
PAGE
----
7.3 Investments; Joint Ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
7.4 Contingent Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
7.5 Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
7.6 Financial Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
7.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions. . . . . . . . . . . . . . . . . . 106
7.8 Consolidated Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
7.9 Restriction on Leases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
7.10 Sale or Discount of Receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
7.11 Transactions with Shareholders and Affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
7.12 Disposal of Subsidiary Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
7.13 Conduct of Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
7.14 Amendments or Waivers of Related Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
7.15 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
7.16 AXEL Excess Proceeds Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
SECTION 8.
EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . 111
8.1 Failure to Make Payments When Due. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
8.2 Default in Other Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
8.3 Breach of Certain Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
8.4 Breach of Warranty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
8.5 Other Defaults Under Loan Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc. . . . . . . . . . . . . . . . . . . . . . . . 112
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc. . . . . . . . . . . . . . . . . . . . . . . . . 113
8.8 Judgments and Attachments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
8.9 Dissolution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
8.10 Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
8.11 Change in Control. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
8.12 Invalidity of Guaranties; Failure of Security; Repudiation of Obligations . . . . . . . . . . . . . 114
8.13 Subordinated Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
8.14 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
SECTION 9.
AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 116
9.1 Appointment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
9.2 Powers and Duties; General Immunity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
9.3 Representations and Warranties; No Responsibility For Appraisal of Creditworthiness. . . . . . . . . 119
9.4 Right to Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
9.5 Successor Administrative Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
9.6 Collateral Documents and Guaranties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
(iii)
5
PAGE
----
SECTION 10.
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 121
10.1 Assignments and Participations in Loans and Letters of Credit. . . . . . . . . . . . . . . . . . . . 121
10.2 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
10.3 Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
10.4 Set-Off; Security Interest in Deposit Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . 126
10.5 Ratable Sharing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
10.6 Amendments and Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
10.7 Independence of Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
10.8 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
10.9 Survival of Representations, Warranties and Agreements . . . . . . . . . . . . . . . . . . . . . . . 129
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative. . . . . . . . . . . . . . . . . . . . . . . . 129
10.11 Marshalling; Payments Set Aside. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
10.12 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
10.13 Obligations Several; Independent Nature of Lenders' Rights . . . . . . . . . . . . . . . . . . . . . 130
10.14 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
10.15 Applicable Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
10.16 Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
10.17 Consent to Jurisdiction and Service of Process . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
10.18 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
10.19 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
10.20 Maximum Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
10.21 Counterparts; Effectiveness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
Signature pages S-1
(iv)
6
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
IV FORM OF AXEL NOTE
V FORM OF REVOLVING NOTE
VI FORM OF CONVERTED TERM NOTE
VII FORM OF COMPLIANCE CERTIFICATE
VIII FORM OF OPINION OF COUNSEL TO LOAN PARTIES
IX FORM OF OPINION OF O'MELVENY & ▇▇▇▇▇ LLP
X FORM OF ASSIGNMENT AGREEMENT
XI FORM OF CERTIFICATE RE NON-BANK STATUS
XII FORM OF COLLATERAL ACCOUNT AGREEMENT
XIII FORM OF COMPANY PLEDGE AGREEMENT
XIV FORM OF COMPANY SECURITY AGREEMENT
XV FORM OF SUBSIDIARY GUARANTY
XVI FORM OF SUBSIDIARY PLEDGE AGREEMENT
XVII FORM OF SUBSIDIARY SECURITY AGREEMENT
XVIII FORM OF HOLDINGS GUARANTY
XIX FORM OF HOLDINGS PLEDGE AGREEMENT
XX FORM OF INTERCOMPANY NOTE
XXI FORM OF LICENSE CO. GUARANTY
XXII FORM OF LICENSE CO. SECURITY AGREEMENT
XXIII FORM OF VPC AND CDPQ AGREEMENT
XXIV FORM OF LICENSE CO. STOCKHOLDERS PLEDGE AGREEMENT
XXV FORM OF HOLDINGS SECURITY AGREEMENT
XXVI FORM OF LENDER SUBORDINATION AGREEMENT
(v)
7
SCHEDULES
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
5.1A SUBSIDIARIES OF HOLDINGS
5.1E LICENSES
5.5 REAL PROPERTY
5.6 LITIGATION
5.8 MATERIAL CONTRACTS
5.11 CERTAIN EMPLOYEE BENEFIT PLANS
5.14 EMPLOYEE MATTERS
7.1 CERTAIN EXISTING INDEBTEDNESS
7.2 CERTAIN EXISTING LIENS
7.3 CERTAIN EXISTING INVESTMENTS
7.4 CERTAIN EXISTING CONTINGENT OBLIGATIONS
(vi)
8
TVMAX TELECOMMUNICATIONS, INC.
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of December 19, 1997 and entered
into by and among TVMAX TELECOMMUNICATIONS, INC., a Delaware corporation
("COMPANY"), OPTEL, INC., a Delaware corporation ("HOLDINGS"), ▇▇▇▇▇▇▇ SACHS
CREDIT PARTNERS L.P., as arranger (in such capacity, "ARRANGER") and
syndication agent (in such capacity, "SYNDICATION AGENT"), THE FINANCIAL
INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each individually referred
to herein as a "LENDER" and collectively as "LENDERS"), CANADIAN IMPERIAL BANK
OF COMMERCE ("CIBC"), as administrative agent for Lenders (in such capacity,
"ADMINISTRATIVE AGENT"), and GENERAL ELECTRIC CAPITAL CORPORATION, as
Documentation Agent (in such capacity, "DOCUMENTATION AGENT").
R E C I T A L S
WHEREAS, Company and Holdings (this and other capitalized terms used
in these recitals without definition being used as defined in subsection 1.1)
desire that Lenders extend certain credit facilities to Company for working
capital purposes (including the payment of interest expense and "key money"
amounts for new or renewed cable and telephone service contracts) of Company
and any other Subsidiaries of Company which are Guarantors and permitted
acquisitions;
WHEREAS, Company desires to secure all of the Obligations hereunder
and under the other Loan Documents by granting to Administrative Agent, on
behalf of Lenders, a first priority Lien on substantially all of its real,
personal and mixed property, including a pledge of all of the capital stock of
each of its Subsidiaries; and
WHEREAS, Holdings and all of the Subsidiaries of Holdings (other than
Company) have agreed to guarantee the Obligations hereunder and under the other
Loan Documents and to secure their Guaranties by granting to Administrative
Agent, on behalf of Lenders, a first priority Lien on substantially all of
their respective real, personal and mixed property, including a pledge of all
of the capital stock of each of their respective Subsidiaries; and
WHEREAS, VPC and CDPQ have agreed with Lenders that they will not
pledge to any other party the Holdings Common Stock owned by them and VPC has
agreed not to pledge the Existing Holdings Convertible Notes owned by it:
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, Holdings, Lenders and
Agents agree as follows:
1
9
SECTION 1.
DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the following
meanings:
"ACQUIRED INDEBTEDNESS" means Indebtedness of a Person (i)
assumed by Holdings or any of its Subsidiaries in connection with an
asset acquisition from such Person or (ii) existing at the time such
Person becomes a Subsidiary of Holdings or any of its Subsidiaries;
provided that in each case (a) such Indebtedness was existing at the
time of such asset acquisition or acquisition of such Person and not
incurred in contemplation of such acquisition and (b) such
Indebtedness is non-recourse except to the Person or assets acquired.
"ADDITIONAL SUBORDINATED INDEBTEDNESS" means (i) additional
convertible subordinated notes issued to Videotron which are
substantially in the form of Addendum B to the Lender Subordination
Agreement and (ii) other subordinated Indebtedness issued by Holdings
to Videotron or a Strategic Equity Investor with terms substantially
identical to the convertible subordinated promissory notes attached as
Addendum B to the Lender Subordination Agreement in terms of
maturities, no cash payments prior to maturity, covenants, events of
default, and subordination provisions.
"ADJUSTED BULK CABLE CUSTOMERS" means, for any period, (i) the
total number of cable customers under Bulk Cable Contracts divided by
(ii) three.
"ADJUSTED CABLE SUBSCRIBERS" means, for any period, the sum of
(i) Adjusted Bulk Cable Customers and (ii) Retail Cable Customers.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate
Determination Date with respect to an Interest Period for a Eurodollar
Rate Loan, the rate per annum obtained by dividing (i) the offered
quotation (rounded upward to the nearest 1/16 of one percent) to first
class banks in the interbank Eurodollar market by CIBC for U.S. dollar
deposits of amounts in same day funds comparable to the principal
amount of the Eurodollar Rate Loan of CIBC for which the Adjusted
Eurodollar Rate is then being determined (which principal amount shall
be deemed to be $1,000,000 in the event CIBC is not making, converting
to or continuing such a Eurodollar Rate Loan) with maturities
comparable to such Interest Period as of approximately 10:00 a.m. (New
York time) on such Interest Rate Determination Date by (ii) a
percentage equal to 100% minus the stated maximum rate of all reserve
requirements (including any marginal, emergency, supplemental, special
or other reserves) applicable on such Interest Rate Determination Date
to any member bank of the Federal Reserve System in respect of
"Eurocurrency liabilities" as defined in Regulation D (or any
successor category of liabilities under Regulation D).
2
10
"ADMINISTRATIVE AGENT" has the meaning assigned to that term
in the introduction to this Agreement and also means and includes any
successor Administrative Agent appointed pursuant to subsection 9.5.
"AFFECTED LENDER" has the meaning assigned to that term in
subsection 2.6C.
"AFFILIATE", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common
control with, that Person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms
"controlling", "controlled by" and "under common control with"), as
applied to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting
securities or by contract or otherwise.
"AGENT" means, individually, each of Arranger, Syndication
Agent, Administrative Agent and Documentation Agent and "AGENTS" means
Arranger, Syndication Agent, Administrative Agent and Documentation
Agent, collectively.
"AGREEMENT" means this Credit Agreement dated as of December
19, 1997, as it may be amended, supplemented or otherwise modified
from time to time.
"APPLICABLE MARGIN" means, with respect to the applicable Loan
bearing interest at a rate determined by reference to the Base Rate,
2.50% per annum, or if determined by reference to the Adjusted
Eurodollar Rate, 3.50% per annum, less, in either case, the Pricing
Reduction in effect on any date of determination, if applicable.
"ARRANGER" has the meaning assigned to that term in the
introduction to this Agreement.
"ASSET SALE" means the sale by Holdings or any of its
Subsidiaries to any Person other than wholly- owned Subsidiaries of
Holdings of (i) any of the stock of any of Holdings's Subsidiaries,
(ii) substantially all of the assets of any division or line of
business of Holdings or any of its Subsidiaries, or (iii) any other
assets (whether tangible or intangible) of Holdings or any of its
Subsidiaries outside of the ordinary course of business; other than
sales of stock or assets pursuant to clauses (i), (ii) or (iii) to the
extent that the aggregate value of such stock or assets sold in any
single transaction or related series of transac- tions is equal to
$500,000 or less.
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in
substantially the form of Exhibit X annexed hereto.
"AVERAGE LIFE OF REMAINING CONTRACTS" means the (i) sum of (a)
the remaining years to expiration of each Bulk Cable Contract and
Retail Cable Contract giving effect to any renewal option which is
exercisable solely in the discretion of Holdings and its Subsidiaries
multiplied by (b) the number of units under contract under the
applicable
3
11
contract divided by (ii) the total number of units under contract;
provided, however, any cable contracts acquired in an acquisition
requiring Requisite Lender consent may be included or excluded from
such calculation at the option of Company, as set forth in the Request
for Acquisition Approval submitted by Company with respect to such
acquisition.
"AXEL" means a Loan made by a Lender to Company as an
amortization extended loan pursuant to subsection 2.1A(i), and "AXELS"
means any such Loan or Loans, collectively.
"AXEL COMMITMENT" means the commitment of a Lender to make an
AXEL to Company pursuant to subsection 2.1A(i), and "AXEL COMMITMENTS"
means such commitments of all Lenders in the aggregate.
"AXEL EXCESS PROCEEDS COLLATERAL ACCOUNT" is an account
maintained with Administrative Agent subject to the Collateral Account
Agreement into which proceeds of the AXELs made on the Closing Date
are deposited pursuant to subsection 7.16 which proceeds may be
invested in Cash Equivalents in accordance with the terms of the
Collateral Account Agreement; provided such account may be with
another financial institution reasonably acceptable to Administrative
Agent and subject to appropriate security documentation reasonably
acceptable to Administrative Agent.
"AXEL EXPOSURE" means, with respect to any Lender as of any
date of determination (i) prior to the funding of the AXELs, that
Lender's AXEL Commitment and (ii) after the funding of the AXELs, the
outstanding principal amount of the AXEL of that Lender.
"AXEL NOTES" means any promissory notes of Company issued
pursuant to subsection 2.1E(i)(a) or the last sentence of subsection
10.1B(i) in connection with assignments of the AXEL Commitments or
AXELs of any Lenders, in each case substantially in the form of
Exhibit IV annexed hereto, as they may be amended, supplemented or
otherwise modified from time to time.
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any
successor statute.
"BASE RATE" means, at any time, the higher of (i) the Prime
Rate or (ii) the rate which is 1/2 of 1% in excess of the Federal
Funds Effective Rate.
"BASE RATE LOANS" means Loans bearing interest at rates
determined by reference to the Base Rate as provided in subsection
2.2A.
"BULK CABLE CONTRACTS" means contracts between Company or any
other Subsidiaries of Holdings and an owner or manager or home owners'
association, cooperative or similar organization of a multiple dwelling
unit to provide cable services
4
12
to all or substantially all of the residents of such unit which
services are paid for by the owner of the multiple dwelling unit.
"BUSINESS DAY" means (i) for all purposes other than as
covered by clause (ii) below, any day excluding Saturday, Sunday and
any day which is a legal holiday under the laws of the State of New
York or is a day on which banking institutions located in such state
are authorized or required by law or other governmental action to
close, and (ii) with respect to all notices, determinations, fundings
and payments in connection with the Adjusted Eurodollar Rate or any
Eurodollar Rate Loans, any day that is a Business Day described in
clause (i) above and that is also a day for trading by and between
banks in Dollar deposits in the interbank Eurodollar market.
"BUY-OUT PROCEEDS" means proceeds received by Holdings or any
of its Subsidiaries upon the exercise by any counterparty to a Bulk
Cable Contract or Retail Cable Contract of any right under such
contract to buy out the remaining term of such contract from Holdings
or its Subsidiaries.
"CABLE TELEVISION SYSTEM" means each cable television system
owned and operated by Company or any other Subsidiaries of Holdings.
"CAPITAL LEASE", as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as
lessee that, in conformity with GAAP, is accounted for as a capital
lease on the balance sheet of that Person.
"CASH" means money, currency or a credit balance in a Deposit
Account.
"CASH BALANCES" means, as of any date of determination, the
aggregate Dollar amount of Cash and Cash Equivalents held by Holdings
and its Subsidiaries (excluding any amounts held in the AXEL Excess
Proceeds Account or Holdings Senior Note Escrow Account).
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally
guaranteed as to interest and principal by the United States
Government or (b) issued by any agency of the United States the
obligations of which are backed by the full faith and credit of the
United States, in each case maturing within one year after such date;
(ii) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or
any public instrumentality thereof, in each case maturing within one
year after such date and having, at the time of the acquisition
thereof, the highest rating obtainable from either Standard & Poor's
Ratings Group ("S&P") or ▇▇▇▇▇'▇ Investors Service, Inc. ("MOODY'S");
(iii) commercial paper maturing no more than one year from the date of
creation thereof and having, at the time of the acquisition thereof, a
rating of at least A-1 from S&P or at least P-1 from Moody's; (iv)
certificates of deposit or bankers' acceptances maturing within one
year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of
5
13
America or any state thereof or the District of Columbia that (a) is at
least "adequately capitalized" (as defined in the regulations of its
primary Federal banking regulator) and (b) has Tier 1 capital (as
defined in such regulations) of not less than $100,000,000; and (v)
shares of any money market mutual fund that (a) has at least 95% of its
assets invested continuously in the types of investments referred to in
clauses (i) and (ii) above, (b) has net assets of not less than
$500,000,000, and (c) has the highest rating obtainable from either S&P
or Moody's.
"CDPQ" means Capital Communications CDPQ Inc., a Quebec
corporation.
"CERTIFICATE RE NON-BANK STATUS" means a certificate
substantially in the form of Exhibit XI annexed hereto delivered by a
Lender to Administrative Agent pursuant to subsection 2.7B(iii).
"CLOSING DATE" means the date on or before December 19, 1997,
on which the AXELs are made.
"COLLATERAL" means, collectively, all of the real, personal
and mixed property (including capital stock) in which Liens are
purported to be granted pursuant to the Collateral Documents as
security for the Obligations.
"COLLATERAL ACCOUNT AGREEMENT" means the Collateral Account
Agreement executed and delivered by Company and Administrative Agent
on the Closing Date, substantially in the form of Exhibit XII annexed
hereto, as such Collateral Account Agreement may hereafter be amended,
supplemented or otherwise modified from time to time.
"COLLATERAL DOCUMENTS" means the Holdings Pledge Agreement,
the Company Pledge Agreement, Holdings Security Agreement, the Company
Security Agreement, the Collateral Account Agreement, the Subsidiary
Pledge Agreement, the Subsidiary Security Agreement, the License Co.
Security Agreement, the License Co. Stockholders Pledge Agreement, any
Mortgages and all other instruments or documents delivered by any Loan
Party pursuant to this Agreement or any of the other Loan Documents in
order to grant to Administrative Agent, on behalf of Lenders, a Lien
on any real, personal or mixed property of that Loan Party as security
for the Obligations.
"COMMITMENTS" means the commitments of Lenders to make Loans
as set forth in subsection 2.1A.
"COMMUNICATIONS ACT" means the Communications Act of 1934, as
amended (including, without limitation, the Telecommunications Act of
1996), or any successor statute or statutes thereto, and all
Regulations thereunder, in each case as from time to time in effect.
6
14
"COMMUNICATIONS REGULATORY AUTHORITY" means the FCC, any State
PUC and any future federal, state or local communications regulatory
commission, agency, department, board or authority.
"COMPANY" has the meaning assigned to that term in the
introduction to this Agreement.
"COMPANY PLEDGE AGREEMENT" means the Company Pledge Agreement
executed and delivered by Company on the Closing Date, substantially
in the form of Exhibit XIII annexed hereto, as such Company Pledge
Agreement may thereafter be amended, supplemented or otherwise
modified from time to time.
"COMPANY SECURITY AGREEMENT" means the Company Security
Agreement executed and delivered by Company on the Closing Date,
substantially in the form of Exhibit XIV annexed hereto, as such
Company Security Agreement may thereafter be amended, supplemented or
otherwise modified from time to time.
"COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of Exhibit VII annexed hereto delivered to Administrative
Agent and Lenders by Company pursuant to subsection 6.1(iv).
"CONFIDENTIAL INFORMATION MEMORANDUM" means that certain
Confidential Information Memorandum relating to the Loans dated
November 1997.
"CONSOLIDATED ADJUSTED EBITDA" means, for any period, the sum
of the amounts for such period of (i) Consolidated Net Income, (ii)
Consolidated Interest Expense, (iii) provisions for taxes based on
income, (iv) total depreciation expense, (v) total amortization
expense, and (vi) other non-cash items reducing Consolidated Net
Income less other non-cash items increasing Consolidated Net Income,
all of the foregoing as determined on a consolidated basis for
Holdings and its Subsidiaries in conformity with GAAP.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the
sum of (i) capitalized interest, (ii) costs associated with the
purchase of Licenses, (iii) the aggregate of all expenditures (whether
paid in Cash or other consideration or accrued as a liability which is
capitalized on the consolidated balance sheet of Holdings and its
Subsidiaries) by Holdings and its Subsidiaries during such period
that, in conformity with all GAAP, are included in "additions to
property, plant or equipment" or otherwise capitalized (other than
Permitted Acquisitions and the acquisition of the Phonoscope
businesses), and (iv) costs incurred in connection with entering into
contracts to provide cable or telephone services including any amounts
paid to property owners in connection with entering into such
contracts for Holdings and its Subsidiaries on a consolidated basis.
7
15
"CONSOLIDATED CASH AVAILABLE FOR FIXED CHARGES" means as of
any date of determination, the sum of (i) Consolidated Adjusted EBITDA
for the six-month period prior to the date of determination plus (ii)
the unused portion of the Revolving Loan Commitments as of the date of
determination plus (iii) Cash Balances of Holdings and its Subsidiaries
in excess of $10,000,000 as of the date of determination and plus (iv)
the net proceeds of the issuance of equity and Subordinated
Indebtedness definitively planned to be issued by Holdings in the
six-month period following the date of determination as set forth in
reasonable detail in a Compliance Certificate delivered pursuant to
subsection 6.1(iv).
"CONSOLIDATED CASH INTEREST EXPENSE" means, as of any date of
determination, Consolidated Interest Expense excluding, however, (i)
any interest expense not payable in Cash (including amortization of
discount, amortization of debt issuance costs and capitalized
interest), and (ii) interest on the Existing Holdings Senior Notes
payable from amounts on deposit in the Holdings Senior Note Escrow
Account.
"CONSOLIDATED CURRENT ASSETS" means, as at any date of
determination, the total assets of Holdings and its Subsidiaries on a
consolidated basis which may properly be classified as current assets
in conformity with GAAP, excluding Cash and Cash Equivalents.
"CONSOLIDATED CURRENT LIABILITIES" means, as at any date of
determination, the total liabilities of Holdings and its Subsidiaries
on a consolidated basis which may properly be classified as current
liabilities in conformity with GAAP.
"CONSOLIDATED EXCESS CASH FLOW" means, for any period, an
amount (if positive) equal to (i) the sum, without duplication, of the
amounts for such period of (a) Consolidated Adjusted EBITDA and (b)
the Consolidated Working Capital Adjustment minus (ii) the sum,
without duplication, of the amounts for such period of (a) voluntary
and scheduled repayments of Consolidated Total Debt (excluding
repayments of Revolving Loans except to the extent the Revolving Loan
Commitments are permanently reduced in connection with such
repayments), (b) Consolidated Capital Expenditures, (c) Consolidated
Cash Interest Expense, and (d) the provision for current taxes based
on income of Holdings and its Subsidiaries and payable in cash with
respect to such period.
"CONSOLIDATED FIXED CHARGES" means as of any date of
determination, the sum (without duplication) of the amounts of (i)
Consolidated Cash Interest Expense projected by Company for the
six-month period following the date of determination, (ii) taxes based
on income projected by Company to be paid in Cash during the six-
month period following the date of determination, (iii) scheduled
repayments of Consolidated Total Debt re- quired to be made during the
six-month period following the date of determination (excluding
repayments of Revolving Loans except to the extent the Revolving Loan
Commitments are permanently reduced in connection with such
repayments), and (iv) Consolidated Capital Expenditures projected by
Company to be made during the six- month period following the date of
determination.
8
16
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total
interest expense (including that portion attributable to Capital Leases
in accordance with GAAP and capitalized interest) of Holdings and its
Subsidiaries on a consolidated basis with respect to all outstanding
Indebtedness of Holdings and its Subsidiaries, including all
commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing and net costs under
Interest Rate Agreements, but excluding, however, any amounts referred
to in subsection 2.3 payable to Agents and Lenders on or before the
Closing Date.
"CONSOLIDATED NET CABLE REVENUE" means, for any period, total
cable revenue plus revenues from ancillary services (net of related
costs and excluding any revenue from services included in the
calculation of Consolidated Net Telephony Revenue) minus programming
costs of Holdings and its Subsidiaries on a consolidated basis for
such period.
"CONSOLIDATED NET INCOME" means, for any period, the net
income (or loss) of Holdings and its Subsidiaries on a consolidated
basis for such period taken as a single accounting period determined
in conformity with GAAP; provided that there shall be excluded (i) the
income (or loss) of any Person (other than a Subsidiary of Holdings)
in which any other Person (other than Holdings or any of its
Subsidiaries) has a joint interest, except to the extent of the amount
of dividends or other distributions actually paid to Holdings or any
of its Subsidiaries by such Person during such period, (ii) the income
(or loss) of any Person accrued prior to the date it becomes a
Subsidiary of Holdings or is merged into or consolidated with Holdings
or any of its Subsidiaries or that Person's assets are acquired by
Holdings or any of its Subsidiaries, (iii) the income of any
Subsidiary of Holdings to the extent that the declaration or payment
of dividends or similar distributions by that Subsidiary of that
income is not at the time permitted by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that
Subsidiary, other than any such restrictions under this Agreement,
(iv) any after-tax gains or losses attributable to Asset Sales or
returned surplus assets of any Pension Plan, and (v) (to the extent
not included in clauses (i) through (iv) above) any net extraordinary
gains or net non-cash extraordinary loss- es.
"CONSOLIDATED NET TELEPHONY REVENUE" means, for any period,
total consolidated revenue from internet and telecommunications
products and services of Holdings and its Subsidiaries for such period
minus payments made to other providers of telephony services for use
of their networks incurred by Holdings and its Subsidiaries during
such period.
"CONSOLIDATED RENTAL PAYMENTS" means, for any period, the
aggregate amount of all rents paid or payable by Holdings and its
Subsidiaries on a consolidated basis during that period under all
Operating Leases to which Holdings or any of its Subsidiaries is a
party as lessee.
9
17
"CONSOLIDATED TOTAL DEBT" means, as at any date of
determination, the aggregate stated amount of all Indebtedness of
Holdings and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP.
"CONSOLIDATED TOTAL REVENUE" means, as at any date of
determination, the aggregate stated income statement amount of revenue
of Holdings and its Subsidiaries for the applicable period, determined
on a consolidated basis in accordance with GAAP.
"CONSOLIDATED WORKING CAPITAL" means, as at any date of
determination, the excess of Consolidated Current Assets over
Consolidated Current Liabilities.
"CONSOLIDATED WORKING CAPITAL ADJUSTMENT" means, for any
period on a consolidated basis, the amount (which may be a negative
number) by which Consolidated Working Capital as of the beginning of
such period exceeds (or is less than) Consolidated Working Capital as
of the end of such period.
"CONTINGENT OBLIGATION", as applied to any Person, means any
direct or indirect liability, contingent or otherwise, of that Person
(i) with respect to any Indebtedness, lease, dividend or other
obligation of another if the primary purpose or intent thereof by the
Person incurring the Contingent Obligation is to provide assurance to
the obligee of such obligation of another that such obligation of
another will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in respect
thereof, (ii) with respect to any letter of credit issued for the
account of that Person or as to which that Person is otherwise liable
for reimbursement of drawings, or (iii) under Hedge Agreements.
Contingent Obligations shall include (a) the direct or indirect
guaranty, endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or
sale with recourse by such Person of the obligation of another, (b)
the obligation to make take-or-pay or similar payments if required
regardless of non-performance by any other party or parties to an
agreement, and (c) any liability of such Person for the obligation of
another through any agreement (contingent or otherwise) (1) to
purchase, repurchase or otherwise acquire such obligation or any
security therefor, or to provide funds for the payment or discharge of
such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise) or (2) to maintain the
solvency or any balance sheet item, level of income or financial
condition of another if, in the case of any agreement described under
subclauses (1) or (2) of this sentence, the primary purpose or intent
thereof is as described in the preceding sentence. The amount of any
Contingent Obligation shall be equal to the amount of the obligation
so guaranteed or otherwise supported or, if less, the amount to which
such Contingent Obligation is specifically limited.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any
provision of any Security issued by that Person or of any material
indenture, mortgage, deed of trust, contract, undertaking, agreement
or other instrument to which that Person is a party or by which it or
any of its properties is bound or to which it or any of its properties
is subject.
10
18
"CONVERTED TERM LOAN" means a Loan made by a Lender to Company
pursuant to subsection 2.1A(iii) and "Converted Term Loans" means any
such Loan or Loans, collectively.
"CONVERTED TERM LOAN EXPOSURE" means with respect to any
Lender as of any date of determination (i) prior to the Revolving Loan
Conversion Date, $0 and (ii) after the Revolving Loan Conversion Date,
the outstanding principal amount of the Converted Term Loan of that
Lender.
"CURRENCY AGREEMENT" means any foreign exchange contract,
currency swap agreement, futures contract, option contract, synthetic
cap or other similar agreement or arrangement to which Holdings or any
of its Subsidiaries is a party.
"DEFAULTED CONTRACTS" means contracts between Holdings or its
Subsidiaries and property owners to provide cable or telephone
services which have been cancelled or terminated by such property
owner or under which such property owner has defaulted in making the
payments under such contract.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or
like account with a bank, savings and loan association, credit union
or like organization, other than an account evidenced by a negotiable
certificate of deposit.
"DOCUMENTATION AGENT" has the meaning assigned to that term in
the introduction to this Agreement and also means and includes any
successor Documentation Agent.
"DOLLARS" and the sign "$" mean the lawful money of the United
States of America.
"ELIGIBLE ASSIGNEE" means (i) (a) a commercial bank organized
under the laws of the United States or any state thereof; (b) a
savings and loan association or savings bank organized under the laws
of the United States or any state thereof; (c) a commercial bank
organized under the laws of any other country or a political
subdivision thereof; provided that (1) such bank is acting through a
branch or agency located in the United States or (2) such bank is
organized under the laws of a country that is a member of the
Organization for Economic Cooperation and Development or a political
subdivision of such country; and (d) any other entity which is an
"accredited investor" (as defined in Regulation D under the Securities
Act) which extends credit or buys loans as one of its businesses
including insurance companies, mutual funds and lease financing
companies; and (ii) any Lender, any Affiliate of any Lender and, with
respect to any Lender that is an investment fund that invests in
commercial loans, any other related fund (a "RELATED FUND") that
invests in commercial loans and that is managed or advised by the same
investment advisor as such Lender of by an Affiliate of such
investment advisor; provided that no Affiliate of Holdings or any
Person who is a competitor of Holdings and its Subsidiaries shall be
an Eligible Assignee.
11
19
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is or was maintained or
contributed to by Holdings, any of its Subsidiaries or any of their
respective ERISA Affiliates.
"ENVIRONMENTAL CLAIM" means any investigation, notice, notice
of violation, claim, action, suit, proceeding, demand, abatement order
or other order or directive (conditional or otherwise), by any
governmental authority or any other Person, arising (i) pursuant to or
in connection with any actual or alleged violation of any
Environmental Law, (ii) in connection with any Hazardous Materials or
any actual or alleged Hazardous Materials Activity, or (iii) in
connection with any actual or alleged damage, injury, threat or harm
to health, safety, natural resources or the environment.
"ENVIRONMENTAL LAWS" means any and all current or future
statutes, ordinances, orders, rules, regulations, guidance documents,
judgments, Governmental Authorizations, or any other requirements of
governmental authorities relating to (i) environmental matters,
including those relating to any Hazardous Materials Activity, (ii) the
generation, use, storage, transportation or disposal of Hazardous
Materials, or (iii) occupational safety and health, industrial
hygiene, land use or the protection of human, plant or animal health
or welfare, in any manner applicable to Holdings or any of its
Subsidiaries or any Facility, including the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C.
Section 9601 et seq.), the Hazardous Materials Transportation Act (49
U.S.C. Section 1801 et seq.), the Resource Conservation and Recovery
Act (42 U.S.C. Section 6901 et seq.), the Federal Water Pollution
Control Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act (42
U.S.C. Section 7401 et seq.), the Toxic Substances Control Act (15
U.S.C. Section 2601 et seq.), the Federal Insecticide, Fungicide and
Rodenticide Act (7 U.S.C. Section 136 et seq.), the Occupational
Safety and Health Act (29 U.S.C. Section 651 et seq.), the Oil
Pollution Act (33 U.S.C. Section 2701 et seq.) and the Emergency
Planning and Community Right-to-Know Act (42 U.S.C. Section 11001 et
seq.), each as amended or supplemented, any analogous present or
future state or local statutes or laws, and any regulations
promulgated pursuant to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor thereto.
"ERISA AFFILIATE" means, as applied to any Person, (i) any
corporation which is a member of a controlled group of corporations
within the meaning of Section 414(b) of the Internal Revenue Code of
which that Person is a member; (ii) any trade or business (whether or
not incorporated) which is a member of a group of trades or businesses
under common control within the meaning of Section 414(c) of the
Internal Revenue Code of which that Person is a member; and (iii) any
member of an affiliated service group within the meaning of Section
414(m) or (o) of the Internal Revenue Code of which that Person, any
corporation described in clause (i) above or any trade or business
described in clause (ii) above is a member. Any former ERISA
Affiliate of Holdings or any of its Subsidiaries shall continue to be
considered an ERISA Affiliate of Holdings or such Subsidiary within
the meaning of this definition with respect to the
12
20
period such entity was an ERISA Affiliate of Holdings or such
Subsidiary and with respect to liabilities arising after such period
for which Holdings or such Subsidiary could be liable under the
Internal Revenue Code or ERISA.
"ERISA EVENT" means (i) a "reportable event" within the
meaning of Section 4043 of ERISA and the regulations issued thereunder
with respect to any Pension Plan (excluding those for which the
provision for 30-day notice to the PBGC has been waived by
regulation); (ii) the failure to meet the minimum funding standard of
Section 412 of the Internal Revenue Code with respect to any Pension
Plan (whether or not waived in accordance with Section 412(d) of the
Internal Revenue Code) or the failure to make by its due date a
required installment under Section 412(m) of the Internal Revenue Code
with respect to any Pension Plan or the failure to make any required
contribution to a Multiemployer Plan; (iii) the provision by the
administrator of any Pension Plan pursuant to Section 4041(a)(2) of
ERISA of a notice of intent to terminate such plan in a distress
termination described in Section 4041(c) of ERISA; (iv) the withdrawal
by Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates from any Pension Plan with two or more contributing
sponsors or the termination of any such Pension Plan resulting in
liability pursuant to Section 4063 or 4064 of ERISA; (v) the
institution by the PBGC of proceedings to terminate any Pension Plan,
or the occurrence of any event or condition which might constitute
grounds under ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan; (vi) the imposition of
liability on Holdings, any of its Subsidiaries or any of their
respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of
ERISA or by reason of the application of Section 4212(c) of ERISA;
(vii) the withdrawal of Holdings, any of its Subsidiaries or any of
their respective ERISA Affiliates in a complete or partial withdrawal
(within the meaning of Sections 4203 and 4205 of ERISA) from any
Multiemployer Plan if there is any potential liability therefor, or
the receipt by Holdings, any of its Subsidiaries or any of their
respective ERISA Affiliates of notice from any Multiemployer Plan that
it is in reorganization or insolvency pursuant to Section 4241 or 4245
of ERISA, or that it intends to terminate or has terminated under
Section 4041A or 4042 of ERISA; (viii) the occurrence of an act or
omission which could give rise to the imposition on Holdings, any of
its Subsidiaries or any of their respective ERISA Affiliates of fines,
penalties, taxes or related charges under Chapter 43 of the Internal
Revenue Code or under Section 409, Section 502(c), (i) or (l), or
Section 4071 of ERISA in respect of any Employee Benefit Plan; (ix)
the assertion of a material claim (other than routine claims for
benefits) against any Employee Benefit Plan other than a Multiemployer
Plan or the assets thereof, or against Holdings, any of its
Subsidiaries or any of their respective ERISA Affiliates in connection
with any Employee Benefit Plan; (x) receipt from the Internal Revenue
Service of notice of the failure of any Pension Plan (or any other
Employee Benefit Plan intended to be qualified under Section 401(a) of
the Internal Revenue Code) to qualify under Section 401(a) of the
Internal Revenue Code, or the failure of any trust forming part of any
Pension Plan to qualify for exemption from taxation under Section
501(a) of the Internal Revenue Code; or (xi) the imposition of a Lien
pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code
or pursuant to ERISA with respect to any Pension Plan.
13
21
"EURODOLLAR RATE LOANS" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.
"EVENT OF DEFAULT" means each of the events set forth in
Section 8.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"EXISTING HOLDINGS CONVERTIBLE NOTE AGREEMENT" means the
agreement, dated February 7, 1997, among Vanguard Communications,
L.P., Vanguard Communications, Inc., Pacific Capital Group, Inc., VPC
Corporation, Company, and Videotron, governing the terms of the
Existing Holdings Convertible Notes as such agreement may be amended
from time to time to the extent permitted under subsection 7.14.
"EXISTING HOLDINGS CONVERTIBLE NOTES" means Holdings' 15%
convertible subordinated notes in an aggregate initial outstanding
principal amount of $131,400,000.
"EXISTING HOLDINGS SENIOR NOTE INDENTURE" means the indenture
pursuant to which the Existing Holdings Senior Notes were issued,
dated February 14, 1997, as such indenture may be amended from time to
time to the extent permitted under subsection 7.16.
"EXISTING HOLDINGS SENIOR NOTES" means Holdings' 13% Senior
Notes due 2005 and 13% Senior Notes Due 2005, Series B in initial
aggregate principal amount of $225,000,000.
"EXISTING RESTRICTED INDEBTEDNESS" means, collectively, the
Existing Holdings Convertible Notes and the Existing Holdings Senior
Notes.
"FACILITIES" means any and all real property (including all
buildings, fixtures or other improvements located thereon) now,
hereafter or heretofore owned, leased, operated or used by Holdings or
any of its Subsidiaries or any of their respective predecessors or
Affiliates.
"FCC" means the Federal Communications Commission and any
successor or substitute governmental commission, agency, department,
board or authority performing functions similar to those performed by
the Federal Communications Commission on the date hereof.
"FCC REGULATIONS" means all rules, regulations, written
policies, orders and decisions of the FCC under the Communications
Act.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a
fluctuating interest rate equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System
14
22
arranged by Federal funds brokers, as published for such day (or, if
such day is not a Business Day, for the next preceding Business Day) by
the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by Administrative
Agent from three Federal funds brokers of recognized standing selected
by Administrative Agent.
"FINANCIAL PLAN" has the meaning assigned to that term in
subsection 6.1(xiii).
"FIRST PRIORITY" means, with respect to any Lien purported to
be created in any Collateral pursuant to any Collateral Document, that
(i) such Lien has priority over any other Lien on such Collateral and
(ii) such Lien is the only Lien (other than Permitted Encumbrances and
Liens permitted pursuant to subsection 7.2) to which such Collateral
is subject.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of Holdings and its
Subsidiaries ending on August 31 of each calendar year or such other
date as may be consented to by Requisite Lenders, such consent not to
be unreasonably withheld or delayed.
"FRANCHISE" means any franchise or other authorization to
operate a Cable Television System granted by any federal, state or
local governmental authority or agency.
"FLOOD HAZARD PROPERTY" means a Mortgaged Property located in
an area designated by the Federal Emergency Management Agency as
having special flood or mud slide hazards.
"FUNDING AND PAYMENT OFFICE" means (i) the office of
Administrative Agent located at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ or (ii) such other office of Administrative Agent and as
may from time to time hereafter be designated as such in a written
notice delivered by Administrative Agent to Company and each Lender.
"FUNDING DATE" means the Closing Date with respect to the
AXELs and the date of the funding of any Revolving Loan, with respect
to Revolving Loans.
"GAAP" means, subject to the limitations on the application
thereof set forth in subsection 1.2, generally accepted accounting
principles set forth in opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other
entity as may be approved by a significant segment of the accounting
profession, in each case as the same are applicable to the
circumstances as of the date of determination.
15
23
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, plan, directive, consent order or consent decree of or
from any federal, state or local governmental authority, agency or
court.
"GSCP" has the meaning assigned to that term in the
introduction to this Agreement.
"GUARANTIES" means, collectively, the Holdings Guaranty, the
Subsidiary Guaranty and the License Co. Guaranty.
"GUARANTORS" means, collectively, Holdings, the Subsidiary
Guarantors and License Co.
"HAZARDOUS MATERIALS" means (i) any chemical, material or
substance at any time defined as or included in the definition of
"hazardous substances", "hazardous wastes", "hazardous materials",
"extremely hazardous waste", "acutely hazardous waste", "radioactive
waste", "biohazardous waste", "pollutant", "toxic pollutant",
"contaminant", "restricted hazardous waste", "infectious waste",
"toxic substances", or any other term or expression intended to
define, list or classify substances by reason of properties harmful to
health, safety or the indoor or outdoor environment (including harmful
properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity, "TCLP toxicity" or
"EP toxicity" or words of similar import under any applicable
Environmental Laws); (ii) any oil, petroleum, petroleum fraction or
petroleum derived substance; (iii) any drilling fluids, produced
waters and other wastes associated with the exploration, development
or production of crude oil, natural gas or geothermal resources; (iv)
any flammable substances or explosives; (v) any radioactive materials;
(vi) any asbestos-containing materials; (vii) urea formaldehyde foam
insulation; (viii) electrical equipment which contains any oil or
dielectric fluid containing polychlorinated biphenyls; (ix)
pesticides; and (x) any other chemical, material or substance,
exposure to which is prohibited, limited or regulated by any
governmental authority or which may or could pose a hazard to the
health and safety of the owners, occupants or any Persons in the
vicinity of any Facility or to the indoor or outdoor environment.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current,
proposed or threatened activity, event or occurrence involving any
Hazardous Materials, including the use, manufacture, possession,
storage, holding, presence, existence, location, Release, threatened
Release, discharge, placement, generation, transportation, processing,
construction, treatment, abatement, removal, remediation, disposal,
disposition or handling of any Hazardous Materials, and any corrective
action or response action with respect to any of the foregoing.
"HEDGE AGREEMENT" means an Interest Rate Agreement or a
Currency Agreement designed to hedge against fluctuations in interest
rates or currency values, respectively.
16
24
"HOLDINGS" means OpTel, Inc., a Delaware corporation.
"HOLDINGS COMMON STOCK" means the common stock of Holdings,
par value $0.01 per share.
"HOLDINGS GUARANTY" means the Holdings Guaranty executed and
delivered by Holdings on the Closing Date, substantially in the form
of Exhibit XVIII annexed hereto, as such Holdings Guaranty may
thereafter be amended, supplemented or otherwise modified from time to
time.
"HOLDINGS PLEDGE AGREEMENT" means the Holdings Pledge
Agreement executed and delivered by Holdings on the Closing Date,
substantially in the form of Exhibit XIX annexed hereto, as such
Holdings Pledge Agreement may thereafter be amended, supplemented or
otherwise modified from time to time.
"HOLDINGS SECURITY AGREEMENT" means the Holdings Security
Agreement executed and delivered by Holdings on the Closing Date,
substantially in the form of Exhibit XXV annexed hereto, as such
Holdings Security Agree- ment may thereafter be amended, supplemented
or otherwise modified from time to time.
"HOLDINGS SENIOR NOTE ESCROW ACCOUNT" means the "ESCROW
ACCOUNT" as defined in the Existing Holdings Senior Note Indenture.
"INDEBTEDNESS", as applied to any Person, means (i) all
indebtedness for borrowed money, (ii) that portion of obligations with
respect to Capital Leases that is properly classified as a liability
on a balance sheet in conformity with GAAP, (iii) notes payable and
drafts accepted representing extensions of credit whether or not
representing obligations for borrowed money, (iv) any obligation owed
for all or any part of the deferred purchase price of property or
services (excluding any such obligations incurred under ERISA), which
purchase price is (a) due more than six months from the date of
incurrence of the obligation in respect thereof or (b) evidenced by a
note or similar written instrument, and (v) all indebtedness secured
by any Lien on any property or asset owned or held by that Person
regardless of whether the indebtedness secured thereby shall have been
assumed by that Person or is nonrecourse to the credit of that Person.
Obligations under Interest Rate Agreements and Currency Agreements
constitute (1) in the case of Hedge Agreements, Contingent
Obligations, and (2) in all other cases, Investments, and in neither
case constitute Indebtedness.
"INDEMNITEE" has the meaning assigned to that term in
subsection 10.3.
"INTELLECTUAL PROPERTY" means all patents, trademarks,
tradenames, copyrights, technology, know-how and processes used in or
necessary for the conduct of the business of Holdings and its
Subsidiaries as currently conducted that are material to the condition
(financial or otherwise), business or operations of Holdings and its
Subsidiaries, taken as a whole.
17
25
"INTERCOMPANY NOTE" means a promissory note executed by a Loan
Party or any of its Subsidiaries or a Permitted Joint Venture
evidencing intercompany Indebtedness substantially in the form of
Exhibit XX annexed hereto.
"INTERCONNECTION AGREEMENT" means an agreement entered into
with an incumbent provider of local exchange telephone service in
accord with Sections 251 and 252 of the Communications Act.
"INTEREST PAYMENT DATE" means (i) with respect to any Base
Rate Loan, each February 28, May 31, August 31 and November 30 of each
year, commencing on the first such date to occur after the Closing
Date, and (ii) with respect to any Eurodollar Rate Loan, the last day
of each Interest Period applicable to such Loan; provided that in the
case of each Interest Period of longer than three months "Interest
Payment Date" shall also include each date that is three months, or an
integral multiple thereof, after the commencement of such Interest
Period.
"INTEREST PERIOD" has the meaning assigned to that term in
subsection 2.2B.
"INTEREST RATE AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement
or other similar agreement or arrangement to which Holdings or any of
its Subsidiaries is a party.
"INTEREST RATE DETERMINATION DATE" means, with respect to any
Interest Period, the second Business Day prior to the first day of
such Interest Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter,
and any successor statute.
"INVESTMENT" means (i) any direct or indirect purchase or
other acquisition by Holdings or any of its Subsidiaries of, or of a
beneficial interest in, any Securities of any other Person (including
any Subsidiary of Holdings) (ii) any direct or indirect loan, advance
(other than advances to employees for moving, entertainment and travel
expenses, drawing accounts and similar expenditures in the ordinary
course of business) or capital contribution by Holdings or any of its
Subsidiaries to any other Person, including all indebtedness and
accounts receivable from that other Person that are not current assets
or did not arise from sales to that other Person in the ordinary
course of business, or (iii) Interest Rate Agreements or Currency
Agreements not constituting Hedge Agreements. The amount of any
Investment shall be the original cost of such Investment plus the cost
of all additions thereto, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment.
"ISSUING LENDER" means CIBC, or any Person serving as
successor Administrative Agent hereunder, in its capacity as Issuing
Lender.
18
26
"JOINT VENTURE" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal
form; provided that in no event shall any corporate Subsidiary of any
Person be considered to be a Joint Venture to which such Person is a
party.
"LANDLORD CONSENT AND ESTOPPEL" means, with respect to any
Leasehold Property, a Landlord Consent and Estoppel in form and
substance approved by Administrative Agent executed by the lessor in
favor of the Administrative Agent.
"LEASEHOLD PROPERTY" means any leasehold interest of any Loan
Party as lessee under any lease of real property.
"LENDER" and "LENDERS" means the persons identified as
"Lenders" and listed on the signature pages of this Agreement,
together with their successors and permitted assigns pursuant to
subsection 10.1; provided that the term "Lenders", when used in the
context of a particular Commitment, shall mean Lenders having that
Commitment.
"LENDER SUBORDINATION AGREEMENT" means the Lender
Subordination Agreement executed and delivered by OpTel, VPC and
Videotron on the Closing Date in substantially the form of Exhibit
XXVI annexed hereto, as such agreement may be amended, supplemented or
otherwise modified from time to time.
"LETTER OF CREDIT" or "LETTERS OF CREDIT" means Standby
Letters of Credit issued or to be issued by Issuing Lenders for the
account of Company pursuant to subsection 3.1.
"LETTER OF CREDIT COLLATERAL ACCOUNT" has the meaning assigned
to that term in the Collateral Account Agreement.
"LETTER OF CREDIT USAGE" means, as at any date of
determination, the sum of (i) the maximum aggregate amount which is or
at any time thereafter may become available for drawing under all
Letters of Credit then outstanding plus (ii) the aggregate amount of
all drawings under Letters of Credit honored by Issuing Lenders and
not theretofore reimbursed by Company (including any such
reimbursement out of the proceeds of Revolving Loans pursuant to
subsection 3.3B).
"LICENSE CO." means Transmission Holdings, Inc., a Delaware
corporation
"LICENSE CO. DOCUMENTS" means collectively, (i) the Assignment
Agreement, dated as of February 14, 1997, among Company, Sunshine
Television Entertainment, Inc., Richie Pacific Cablevision, Inc. and
IRPC Arizona, Inc., as assignors, and License Co., as assignee, (ii)
the Equipment License and Services Agreement, dated as of February 14,
1997, between Company and License Co., (iii) the Promissory Note,
dated February 14, 1997, executed by License Co. in favor of Company,
(iv) the Option Agreement, dated as of February 14, 1997, between
Company and License Co., (v) each
19
27
of the Shareholder Option Agreements dated February 14, 1997, between
Company and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, respectively and the
Shareholder Option Agreement, dated as of September 17, 1997, between
Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇, (vi) the Subscription and Shareholders
Agreement, dated as of February 14, 1997, among ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, and ▇▇▇▇▇▇ ▇▇▇▇▇▇ and License Co. and (vii) any other
agreement identical to the foregoing in all material respects and
entered into for the same purposes that the Company or Holdings or any
of its Subsidiaries may enter into in the future, as each of the
foregoing documents referred to in clauses (i) through (vii) may be
amended, modified or supplemented in accordance with subsection 7.16.
"LICENSE CO. GUARANTY" means the License Co. Guaranty executed
and delivered by License Co. on the Closing Date substantially in the
form of Exhibit XXI annexed hereto, as such License Co. Guaranty may
here- after be amended, supplemented or otherwise modified from time
to time.
"LICENSE CO. SECURITY AGREEMENT" means the License Co.
Security Agreement executed and delivered by License Co. on the
Closing Date, substantially in the form of Exhibit XXII annexed
hereto, as such License Co. Security Agreement may be amended,
supplemented or otherwise modified from time to time.
"LICENSE CO. STOCKHOLDERS PLEDGE AGREEMENT" means the License
Co. Stockholder Pledge Agreement executed and delivered by the
stockholders of License Co. on the Closing Date, substantially in the
form of Exhibit XIV annexed hereto, as such License Co. Stockholders
Pledge Agreement may be amended, supplemented or otherwise modified
from time to time.
"LICENSE SUBSIDIARY" means License Co. or a Subsidiary of
Holdings in each case (i) the sole purpose of which is to hold
Licenses, (ii) which shall guarantee all of the Obligations, (iii) the
stock of which shall be pledged to Administrative Agent for the
benefit of Lenders to secure the Obligations, (iv) which shall not
engage in any business other than holding the Licenses and performing
its obligations related thereto, and in the case of License Co.,
performing its obligations under the License Co. Documents, (v) which
shall not incur any material liabilities, and (vi) which shall not
create, grant or permit to exist any Lien or other encumbrance on any
of its assets (other than pursuant to the Collateral Documents) or
transfer or dispose of any of the Licenses.
"LICENSES" means all licenses, authorizations, certifications,
waivers and permits required from any Communications Regulatory
Authority acting under the Communications Act or State Law.
"LIEN" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional
sale or other title retention agreement, any lease in the nature
thereof, and any agreement to give any security interest) and any
option, trust or other preferential arrangement having the practical
effect of any of the foregoing.
20
28
"LIMITED INVESTMENT JOINT VENTURES" means one or more
Permitted Joint Ventures in which the aggregate amount of Investments
made by Holdings and its Subsidiaries does not exceed $10,000,000.
"LOAN" or "LOANS" means one or more of the AXELs, Converted
Term Loans or Revolving Loans or any combination thereof.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Letters
of Credit (and any applications for, or reimbursement agreements or
other documents or certificates executed by Company in favor of an
Issuing Lender relating to, the Letters of Credit), the Holdings
Guaranty, the Subsidiary Guaranty, the License Co. Guaranty, the
Videotron and CDPQ Agreement, the Lender Subordination Agreement, and
the Collateral Documents.
"LOAN PARTY" means each of Company, Holdings, License Co. and
Holdings' Subsidiaries from time to time executing a Loan Document,
and "LOAN PARTIES" means all such Persons, collectively.
"MARGIN STOCK" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System
as in effect from time to time.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect
upon the business, operations, properties, assets, condition
(financial or otherwise) or prospects of Holdings and its
Subsidiaries, taken as a whole (which shall include, without
limitation, any termination or reduction or other occurrence or event
(other than pursuant to a transaction permitted under this Agreement
or consented to by Requisite Lenders) which results in a reduction in
the total number of Adjusted Cable Subscribers by 10% or more) or (ii)
the impairment of the ability of any Loan Party to perform, or of
Administrative Agent or Lenders to enforce, the Obligations.
"MATERIAL CONTRACT" means any contract or other arrangement to
which Holdings or any of its Subsidiaries is a party (other than the
Loan Documents) for which breach, nonperformance, cancellation or
failure to renew could have a Material Adverse Effect.
"MATERIAL FEE PROPERTY" means any fee interest in real
property determined by Administrative Agent to be of material value as
Collateral or of material importance to the operations of Holdings and
its Subsidiaries.
"MATERIAL LEASEHOLD PROPERTY" means any Leasehold Property
determined by Administrative Agent to be of material value as
Collateral or of material importance to the operations of Holdings and
its Subsidiaries.
"MORTGAGE" means (i) a security instrument (whether designated
as a deed of trust or a mortgage or by any similar title) executed and
delivered by any Loan Party,
21
29
in form and substance approved by Administrative Agent in its sole
discretion, in each case with such changes thereto as may be
recommended by Administrative Agent's local counsel based on local laws
or customary local mortgage or deed of trust practices, or (ii) at
Administrative Agent's option, an amendment to an existing Mortgage, in
form satisfactory to Administrative Agent, adding such Mortgaged
Property to the Real Property Assets encumbered by such existing
Mortgage, in either case as such security instrument or amendment may
be amended, supplemented or otherwise modified from time to time.
"MORTGAGES" means all such instruments.
"MORTGAGED PROPERTY" means a Mortgaged Property (as defined in
subsection 6.9).
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is
a "multiemployer plan" as defined in Section 3(37) of ERISA.
"NET ASSET SALE PROCEEDS" means, with respect to any Asset
Sale, Cash payments (including any Cash received by way of deferred
payment pursuant to, or by monetization of, a note receivable or
otherwise, but only as and when so received) received from such Asset
Sale, net of any bona fide direct costs incurred in connection with
such Asset Sale, including (i) provisions for income taxes reasonably
estimated to become payable within two years of the date of such Asset
Sale as a result of any gain recognized in connection with such Asset
Sale and (ii) payment of the outstanding principal amount of, premium
or penalty, if any, and interest on any Indebtedness (other than the
Loans) that is secured by a Lien on the stock or assets in question
and that is required to be repaid under the terms thereof as a result
of such Asset Sale.
"NET INSURANCE/CONDEMNATION PROCEEDS" means any Cash payments
or proceeds received by Holdings or any of its Subsidiaries (i) under
any business interruption or casualty insurance policy in respect of a
covered loss thereunder or (ii) as a result of the taking of any
assets of Holdings or any of its Subsidiaries by any Person pursuant
to the power of eminent domain, condemnation or otherwise, or pursuant
to a sale of any such assets to a purchaser with such power under
threat of such a taking, in each case net of any actual and reasonable
documented costs incurred by Holdings or any of its Subsidiaries in
connection with the adjustment or settlement of any claims of Holdings
or such Subsidiary in respect thereof.
"NOTES" means one or more of the Term Loan Notes or Revolving
Notes or any combination thereof.
"NOTICE OF BORROWING" means a notice substantially in the form
of Exhibit I annexed hereto delivered by Company to Administrative
Agent pursuant to subsection 2.1B with respect to a proposed
borrowing.
"NOTICE OF CONVERSION/CONTINUATION" means a notice
substantially in the form of Exhibit II annexed hereto delivered by
Company to Administrative Agent pursuant to
22
30
subsection 2.2D with respect to a proposed conversion or continuation
of the applicable basis for determining the interest rate with respect
to the Loans specified therein.
"NOTICE OF ISSUANCE OF LETTER OF CREDIT" means a notice
substantially in the form of Exhibit III annexed hereto delivered by
Company to Administrative Agent pursuant to subsection 3.1B(i) with
respect to the proposed issuance of a Letter of Credit.
"OBLIGATIONS" means all obligations of every nature of each
Loan Party from time to time owed to Agents, Lenders or their
respective Affiliates or any of them under the Loan Documents, whether
for principal, interest, reimbursement of amounts drawn under Letters
of Credit, fees, expenses, indemnification or otherwise.
"OFFICERS' CERTIFICATE" means, as applied to any corporation,
a certificate executed on behalf of such corporation by its president
or one of its vice presidents and by its chief financial officer or
its treasurer or assistant treasurer; provided that every Officers'
Certificate with respect to the compliance with a condition precedent
to the making of any Loans hereunder shall include (i) a statement
that the officer or officers making or giving such Officers'
Certificate have read such condition and any definitions or other
provisions contained in this Agreement relating thereto, (ii) a
statement that, in the opinion of the signers, they have made or have
caused to be made such examination or investigation as is necessary to
enable them to express an informed opinion as to whether or not such
condition has been complied with, and (iii) a statement as to whether,
in the opinion of the signers, such condition has been complied with.
"OPERATING LEASE" means, as applied to any Person, any lease
(including leases that may be terminated by the lessee at any time) of
any property (whether real, personal or mixed) that is not a Capital
Lease other than any such lease under which that Person is the lessor.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal
Revenue Code or Section 302 of ERISA.
"PERMITTED ACQUISITION" has the meaning assigned to that term
in subsection 7.7(vi).
"PERMITTED ENCUMBRANCES" means the following types of Liens
(excluding any such Lien imposed pursuant to Section 401(a)(29) or
412(n) of the Internal Revenue Code or by ERISA, any such Lien
relating to or imposed in connection with any Environmental Claim, and
any such Lien expressly prohibited by any applicable terms of any of
the Collateral Documents):
23
31
(i) Liens for taxes, assessments or governmental
charges or claims the payment of which is not, at the time,
required by subsection 6.3;
(ii) statutory Liens of landlords, statutory Liens
of banks and rights of set-off, statutory Liens of carriers,
warehousemen, mechanics, repairmen, workmen and materialmen,
and other Liens imposed by law, in each case incurred in the
ordinary course of business (a) for amounts not yet overdue or
(b) for amounts that are overdue and that (in the case of any
such amounts overdue for a period in excess of 5 days) are
being contested in good faith by appropriate proceedings, so
long as (1) such reserves or other appropriate provisions, if
any, as shall be required by GAAP shall have been made for any
such contested amounts, and (2) in the case of a Lien with
respect to any portion of the Collateral, such contest
proceedings conclusively operate to stay the sale of any
portion of the Collateral on account of such Lien;
(iii) Liens incurred or deposits made in the
ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government
contracts, trade contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations
for the payment of borrowed money), so long as no foreclosure,
sale or similar proceedings have been commenced with respect
to any portion of the Collateral on account thereof;
(iv) any attachment or judgment Lien not
constituting an Event of Default under subsection 8.8;
(v) leases or subleases granted to third parties
in accordance with any applicable terms of the Collateral
Documents and not interfering in any material respect with the
ordinary conduct of the business of Holdings or any of its
Subsidiaries or resulting in a material diminution in the
value of any Collateral as security for the Obligations;
(vi) easements, rights-of-way, restrictions,
encroachments, and other minor defects or irregularities in
title, in each case which do not and will not interfere in any
material respect with the ordinary conduct of the business of
Holdings or any of its Subsidiaries or result in a material
diminution in the value of any Collateral as security for the
Obligations;
(vii) any (a) interest or title of a lessor or
sublessor under any lease permitted by subsection 7.9, (b)
restriction or encumbrance that the interest or title of such
lessor or sublessor may be subject to, or (c) subordination of
the interest of the lessee or sublessee under such lease to
any restriction or encumbrance referred to in the preceding
clause (b), so long as the holder of such restriction or
encumbrance agrees to recognize the rights of such lessee or
sublessee under such lease;
24
32
(viii) Liens arising from filing UCC financing
statements relating solely to leases permitted by this
Agreement;
(ix) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of
customs duties in connection with the importation of goods;
(x) any zoning or similar law or right reserved
to or vested in any governmental office or agency to control
or regulate the use of any real property; and
(xi) Liens securing obligations (other than
obligations representing Indebtedness for borrowed money)
under operating, reciprocal easement or similar agreements
entered into in the ordinary course of business of Holdings
and its Subsidiaries.
"PERMITTED JOINT VENTURE" means a Joint Venture to which
Holdings or a Subsidiary of Holdings is a party; provided that (i)
Holdings or such Subsidiary of Holdings controls the management of
such Joint Venture, (ii) such Joint Venture, in the case of any Joint
Venture other than Limited Investment Joint Ventures, has no
Indebtedness other than Indebtedness to a Subsidiary of Holdings which
is evidenced by an Intercompany Note which is pledged to secure the
Obligations hereunder pursuant to the Company Pledge Agreement or
Subsidiary Pledge Agreement, as applicable, (iii) such Joint Venture,
in the case of a Limited Investment Joint Venture, has no Indebtedness
other than (a) Indebtedness to a Subsidiary of Holdings which is
evidenced by an Intercompany Note which is pledged to secure the
Obligations hereunder pursuant to the Company Pledge Agreement or
Subsidiary Pledge Agreement, as applicable and (b) Purchase Money
Indebtedness, and (iv) all of the ownership interests in such Joint
Venture held by Holdings or such Subsidiary of Holdings are pledged to
secure the Obligations hereunder pursuant to the Holdings Pledge
Agreement, Company Pledge Agreement or Subsidiary Pledge Agreement, as
applicable.
"PERMITTED PREFERRED STOCK" means preferred stock issued by
Holdings to Videotron or a Strategic Investor which either (i) has no
cash payments being required earlier than the maturity of the
promissory notes attached as Addendum B to the Lender Subordination
Agreement and does not contain any terms, covenants or conditions
which are more restrictive or burdensome to Holdings and its
Subsidiaries than the terms contained in the promissory notes attached
as Addendum B to the Lender Subordination Agreement or (ii) has been
approved by Requisite Lenders, such approval not to be unreasonably
withheld or delayed.
25
33
"PERSON" means and includes natural persons, corporations,
limited partnerships, general partnerships, limited liability
companies, limited liability partnerships, joint stock companies,
Joint Ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations,
whether or not legal entities, and governments (whether federal, state
or local, domestic or foreign, and including political subdivisions
thereof) and agencies or other administrative or regulatory bodies
thereof.
"PLEDGED COLLATERAL" means, collectively, the "Pledged
Collateral" as defined in the Holdings Pledge Agreement, the Company
Pledge Agreement and the Subsidiary Pledge Agreements.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that,
after notice or lapse of time or both, would constitute an Event of
Default.
"PRICING REDUCTION" means, if at any time after the end of the
eighteenth month after the Closing Date, as of the end of any Fiscal
Quarter, the ratio of (i) the aggregate amount of Loans outstanding
under this Agreement to (ii) Consolidated Adjusted EBITDA for such
Fiscal Quarter multiplied by four is less than or equal to 7:1, a
pricing reduction equal to 0.25%. The Pricing Reduction shall be
determined by reference to the Consolidated Adjusted EBITDA set forth
in the most recent Compliance Certificate delivered by Company
pursuant to clause (iv) of subsection 6.1 (accompanied by financial
statements delivered by Company to Administrative Agent and Lenders
pursuant to clauses (ii) or (iii) of subsection 6.1). Any changes in
the Pricing Reduction shall become effective on the day following
delivery of the relevant Compliance Certificate to Administrative
Agent and Lenders and shall remain in effect through the next
scheduled date for delivery of a Compliance Certificate.
Notwithstanding anything herein to the contrary, (i) from the Closing
Date to and including the date eighteen months after the Closing Date,
the Pricing Reduction shall be zero and (ii) at any time an Event of
Default shall have occurred and be continuing, the Pricing Reduction
shall be zero.
"PRIME RATE" means the rate that CIBC announces from time to
time as its prime lending rate, as in effect from time to time. The
Prime Rate is a reference rate and does not necessarily represent the
lowest or best rate actually charged to any customer. CIBC or any
other Lender may make commercial loans or other loans at rates of
interest at, above or below the Prime Rate.
"PRO RATA SHARE" means (i) with respect to all payments,
computations and other matters relating to the AXEL Commitment or the
AXEL of any Lender, the percentage obtained by dividing (a) the AXEL
Exposure of that Lender by (b) the aggregate AXEL Exposure of all
Lenders, (ii) with respect to all payments, computations and other
matters relating to the Revolving Loan Commitment or the Revolving
Loans of any Lender or any Letters of Credit issued or participations
therein purchased by any Lender, the percentage obtained by dividing
(a) the Revolving Loan Exposure of that Lender by (b) the aggregate
Revolving Loan Exposure of all Lenders, (iii) with respect to all
payments, computations and other matters relating to the Converted
Term Loan of
26
34
any Lender, the percentage obtained by dividing (a) the Converted Term
Loan Exposure of that Lender by (b) the aggregate Converted Term Loan
Exposure of all Lenders, and (iv) for all other purposes with respect
to each Lender, the percentage obtained by dividing (a) the sum of the
AXEL Exposure of that Lender plus the Converted Term Loan Exposure of
that Lender plus the Revolving Loan Exposure of that Lender by (b) the
sum of the aggregate AXEL Exposure of all Lenders plus the aggregate
Converted Term Loan Exposure of all Lenders plus the aggregate
Revolving Loan Exposure of all Lenders, in any such case as the
applicable percentage may be adjusted by assignments permitted pursuant
to subsection 10.1. The initial Pro Rata Share of each Lender for
purposes of each of clauses (i), (ii), (iii) and (iv) of the preceding
sentence is set forth opposite the name of that Lender in Schedule 2.1
annexed hereto.
"PURCHASE MONEY INDEBTEDNESS" means Indebtedness, the proceeds
of which are used within 90 days of the incurrence thereof to purchase
assets in the ordinary course of business; provided that (i) the assets
purchased with the proceeds of such Indebtedness are equipment or other
assets relating to the business of Holdings and its Subsidiaries, (ii)
at least 75% of the purchase price of such assets is provided by the
proceeds of such Indebtedness, and (iii) such Indebtedness is secured
only by the equipment or other assets purchased with the proceeds
thereof.
"RECORDED LEASEHOLD INTEREST" means a Leasehold Property with
respect to which a Record Document (as hereinafter defined) has been
recorded in all places necessary or desirable, in Administrative
Agent's reasonable judgment, to give constructive notice of such
Leasehold Property to third-party purchasers and encumbrancers of the
affected real property. For purposes of this definition, the term
"RECORD DOCUMENT" means, with respect to any Leasehold Property, (a)
the lease evidencing such Leasehold Property or a memorandum thereof,
executed and acknowledged by the owner of the affected real property,
as lessor, or (b) if such Leasehold Property was acquired or subleased
from the holder of a Recorded Leasehold Interest, the applicable
assignment or sublease document, executed and acknowledged by such
holder, in each case in form sufficient to give such constructive
notice upon recordation and otherwise in form reasonably satisfactory
to Administrative Agent.
"REAL PROPERTY ASSET" means, at any time of determination, any
interest then owned by any Loan Party in any real property.
"REGISTER" has the meaning assigned to that term in subsection
2.1D.
"REGULATION D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"REGULATIONS" means all FCC Regulations, all State Regulations
and all rules, regulations, written policies, orders and decisions of
any local governmental authority.
27
35
"REIMBURSEMENT DATE" has the meaning assigned to that term in
subsection 3.3B.
"RELATED AGREEMENTS" means the Existing Holdings Senior Note
Indenture, the Existing Senior Notes, the Existing Holdings
Convertible Note Agreement, the Existing Holdings Convertible Notes,
that certain Stockholders Agreement, dated as of August 15, 1997,
among VPC Corporation, Capital Communications CDPQ Inc. and Company,
and the License Co. Documents.
"RELEASE" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge,
dispersal, dumping, leaching or migration of Hazardous Materials into
the indoor or outdoor environment (including the abandonment or
disposal of any barrels, containers or other closed receptacles
containing any Hazardous Materials), including the movement of any
Hazardous Materials through the air, soil, surface water or
groundwater.
"REMAINING TIME TO MATURITY OF THE LOANS" means, as of any
date of determination, the remaining time between such date of
determination and May 31, 2004.
"REQUEST FOR ACQUISITION APPROVAL" means an Officers'
Certificate delivered to Administrative Agent requesting that
Requisite Lenders consent to an acquisition, which Officers'
Certificate shall describe the proposed acquisition in reasonable
detail, including without limitation, (i) the Person or assets to be
acquired, (ii) the aggregate consideration to be paid for such
acquisition, (iii) the amount and terms of any Acquired Indebtedness
to be acquired or assumed in such acquisition, (iv) a description of
the nature and amount of any earn-out payments to be paid in
connection with such acquisition, (v) whether Company elects to have
the Retail Cable Contracts acquired in such acquisition included or
excluded from the calculation of Retail Cable Subscriber Penetration
and (vi) whether Company elects to have the Bulk Cable Contracts and
Retail Cable Contracts acquired in such acquisition included or
excluded in the calculation of Average Life of Remaining Contracts.
The elections made by Company pursuant to clauses (v) and (vi) of this
definition shall be one time elections and shall be irrevocable.
Lenders shall not unreasonably withhold or delay approval of any
Request for Acquisition Approval.
"REQUISITE LENDERS" means Lenders having or holding more than
50% of the sum of the aggregate AXEL Exposure of all Lenders plus the
aggregate Revolving Loan Exposure of all Lenders plus the aggregate
Converted Term Loan Exposure of all Lenders.
"RESTRICTED PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any
class of stock of Company or Holdings now or hereafter outstanding,
except a dividend payable solely in shares of that class of stock to
the holders of that class, (ii) any redemption, retirement, sinking
fund or similar payment, purchase or other acquisition for value,
direct or indirect, of any shares of any
28
36
class of stock of Company or Holdings now or hereafter outstanding,
(iii) any payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any
class of stock of Company or Holdings now or hereafter outstanding, and
(iv) any payment or prepayment of principal of, premium, if any, or
interest on, or redemption, purchase, retirement, defeasance (including
in-substance or legal defeasance), sinking fund or similar payment with
respect to, Subordinated Indebtedness.
"RETAIL CABLE CONTRACTS" means retail cable contracts between
Holdings or its Subsidiaries with an owner or manager or home owners'
association, cooperative or similar organization of a multiple
dwelling unit pursuant to which each resident within the multiple
dwelling unit must individually enroll with Holdings or its
Subsidiaries in order to obtain cable services and must pay for such
services directly to Holdings or its Subsidiaries on a monthly basis.
"RETAIL CABLE CUSTOMERS" means, for any period, the total
number of cable customers under Retail Cable Contracts.
"RETAIL CABLE SUBSCRIBER PENETRATION" means, for any period,
the total number of cable subscribers under Retail Cable Contracts of
Holdings and its Subsidiaries divided by the number of residential
units for which Holdings and its Subsidiaries are capable of providing
cable service under such Retail Cable Contracts; provided, however,
any Retail Cable Contracts acquired in an acquisition requiring
Requisite Lender consent may be included or excluded from such
calculation, at the option of Company as set forth in the Request for
Acquisition Approval submitted by Company with respect such
acquisition.
"REVOLVING LOAN COMMITMENT" means the commitment of a Lender
to make Revolving Loans to Company pursuant to subsection 2.1A(ii),
and "REVOLVING LOAN COMMITMENTS" means such commitments of all Lenders
in the aggregate.
"REVOLVING LOAN CONVERSION DATE" means November 30, 2000.
"REVOLVING LOAN EXPOSURE" means, with respect to any Lender as
of any date of determination (i) prior to the termination of the
Revolving Loan Commitments, that Lender's Revolving Loan Commitment
and (ii) after the termination of the Revolving Loan Commitments, the
sum of (a) the aggregate outstanding principal amount of the Revolving
Loans of that Lender plus (b) in the event that Lender is an Issuing
Lender, the aggregate Letter of Credit Usage in respect of all Letters
of Credit issued by that Lender (in each case net of any
participations purchased by other Lenders in such Letters of Credit or
any unreimbursed drawings thereunder) plus(c) the aggregate amount of
all participations purchased by that Lender in any outstanding Letters
of Credit or any unreimbursed drawings under any Letters of Credit.
"REVOLVING LOANS" means the Loans made by Lenders to Company
pursuant to subsection 2.1A(ii).
29
37
"REVOLVING NOTES" means any promissory notes issued by Company
pursuant to subsection 2.1E(i)(b) or the last sentence of subsection
10.1B(i) in connection with assignments of the Revolving Loan
Commitments and Revolving Loans of any Lenders, in each case
substantially in the form of Exhibit V annexed hereto, as they may be
amended, supplemented or otherwise modified from time to time.
"SECURITIES" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation
in any profit-sharing agreement or arrangement, options, warrants,
bonds, debentures, notes, or other evidences of indebtedness, secured
or unsecured, convertible, subordinated or otherwise, or in general
any instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to
subscribe to, purchase or acquire, any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"SOLVENT" means, with respect to any Person, that as of the
date of determination both (i) (a) the then fair saleable value of the
property (including intangible assets) of such Person is (1) greater
than the total amount of liabilities (including the amount of
contingent liabilities) of such Person and (2) not less than the
amount that will be required to pay the probable liabilities on such
Person's then existing debts as they become absolute and matured
considering all financing alternatives and potential asset sales
reasonably available to such Person; (b) such Person's capital is not
unreasonably small in relation to its business or any contemplated or
undertaken transaction; and (c) such Person does not intend to incur,
or believe (nor should it reasonably believe) that it will incur,
debts beyond its ability to pay such debts as they become due; and
(ii) such Person is "solvent" within the meaning given that term and
similar terms under applicable laws relating to fraudulent transfers
and conveyances. For purposes of this definition, the amount of any
contingent liability at any time shall be computed as the amount that,
in light of all of the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an
actual or matured liability.
"STANDBY LETTER OF CREDIT" means any standby letter of credit
or similar instrument issued for the purpose of supporting (i)
Indebtedness of Company or any of its Subsidiaries in respect of
industrial revenue or development bonds or financings, (ii) workers'
compensation liabilities of Company or any of its Subsidiaries, (iii)
the obligations of third party insurers of Company or any of its
Subsidiaries arising by virtue of the laws of any jurisdiction
requiring third party insurers, (iv) obligations with respect to
Capital Leases or Operating Leases of Company or any of its
Subsidiaries, and (v) performance, payment, deposit or surety
obligations of Company or any of its Subsidiaries, in any case if
required by law or governmental rule or regulation or in accordance
with custom and practice in the industry; provided that Standby
Letters of Credit may not be issued for the purpose of supporting (a)
trade payables or (b) any
30
38
Indebtedness constituting "antecedent debt" (as that term is used in
Section 547 of the Bankruptcy Code).
"STATE LAW" means any state law pertaining to or regulating
intrastate and local telecommunications services, or any successor
statute or statutes thereto, and all State Regulations pursuant to
such State Law, in each case as from time to time in effect.
"STATE PUC" means any state public utility commission or any
other state commission, agency, department, board or authority with
responsibility for regulating intrastate and local telecommunications
services.
"STATE REGULATIONS" means all rules, regulations, written
policies, orders and decisions of any State PUC.
"STRATEGIC EQUITY INVESTOR" means any Person (other than
Videotron) which (i) is (a) CDPQ or (b) is engaged principally in the
cable/telecommunications business or is a public utility and has a
rating from ▇▇▇▇▇'▇ of Baa3 (or the equivalent thereof) or higher or
from S&P of BBB- (or the equivalent thereof) or higher and (ii)
invests, and after such investment continues to maintain an investment
of, not less than $20,000,000 in the common equity of Holdings.
"SUBORDINATED INDEBTEDNESS" means (i) the Indebtedness of
Holdings evidenced by the Existing Holdings Convertible Notes, (ii)
Additional Subordinated Indebtedness and (iii) any other Indebtedness
of Holdings (a) as to which no Subsidiary of Holdings provides credit
support of any kind (including any undertaking, agreement or
instrument that would constitute Indebtedness) or is directly or
indirectly liable (as a guarantor or otherwise) or (b) which is
subordinated in right of payment to the Obligations pursuant to
documentation containing maturities, amortization schedules,
covenants, defaults, remedies, subordination provisions and other
material terms in form and substance satisfactory to Administrative
Agent and Requisite Lenders.
"SUBSIDIARY" means, (i) with respect to any Person, any
corporation, partnership, limited liability company, association,
joint venture or other business entity of which more than 50% of the
total voting power of shares of stock or other ownership interests
entitled (without regard to the occurrence of any contingency) to vote
in the election of the Person or Persons (whether directors, managers,
trustees or other Persons performing similar functions) having the
power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by
that Person or one or more of the other Subsidiaries of that Person or
a combination thereof and (ii) for purposes of this Agreement any
Permitted Joint Venture irrespective of whether it meets the
requirements of clause (i) of this definition. Notwithstanding the
fact that License Co. is not an Affiliate of Holdings and its
Subsidiaries, License Co. shall be deemed a Subsidiary of Holdings
for purposes of this Agreement.
31
39
"SUBSIDIARY GUARANTOR" means any Subsidiary of Holdings that
executes and delivers a counterpart of the Subsidiary Guaranty on the
Closing Date or from time to time thereafter pursuant to subsection
6.8.
"SUBSIDIARY GUARANTY" means the Subsidiary Guaranty executed
and delivered by each existing Subsidiary Guarantor on the Closing
Date and to be executed and delivered by additional Subsidiaries of
Holdings from time to time thereafter in accordance with subsection
6.8, substantially in the form of Exhibit XV annexed hereto, as such
Subsidiary Guaranty may hereafter be amended, supplemented or
otherwise modified from time to time.
"SUBSIDIARY PLEDGE AGREEMENT" means the Subsidiary Pledge
Agreement executed and delivered by each existing Subsidiary Guarantor
on the Closing Date and to be executed and delivered by any additional
Subsidiary Guarantor from time to time thereafter in accordance with
subsection 6.8, substantially in the form of Exhibit XVI annexed
hereto, as such Subsidiary Pledge Agreement may be amended,
supplemented or otherwise modified from time to time.
"SUBSIDIARY SECURITY AGREEMENT" means the Subsidiary Security
Agreement executed and delivered by each existing Subsidiary Guarantor
on the Closing Date and to be executed and delivered by any additional
Subsidiary Guarantor from time to time thereafter in accordance with
subsection 6.8, substantially in the form of Exhibit XVII annexed
hereto, as such Subsidiary Security Agreement may be amended,
supplemented or otherwise modified from time to time.
"SUPPLEMENTAL COLLATERAL AGENT" has the meaning assigned to
that term in subsection 9.1B.
"SWAP" means an Asset Sale by Holdings or its Subsidiaries in
which the consideration received in exchange for the assets sold is
other equipment or productive assets to be used in the conduct of the
business of Holdings and its Subsidiaries or the stock of a Person
which following the consummation of such acquisition shall be an
operating Subsidiary of Holdings.
"SYNDICATION AGENT" has the meaning assigned to that term in
the introduction to this Agreement.
"TAX" or "TAXES" means any present or future tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature and
whatever called, by whomsoever, on whomsoever and wherever imposed,
levied, collected, withheld or assessed; provided that "TAX ON THE
OVERALL NET INCOME" of a Person shall be construed as a reference to a
tax imposed by the jurisdiction in which that Person is organized or
in which that Person's principal office (and/or, in the case of a
Lender, its lending office) is located or in which that Person
(and/or, in the case of a Lender, its lending office) is deemed to be
doing business on all or part of the net income, profits or gains
(whether
32
40
worldwide, or only insofar as such income, profits or gains are
considered to arise in or to relate to a particular jurisdiction, or
otherwise) of that Person (and/or, in the case of a Lender, its lending
office).
"TERM LOAN" or "TERM LOANS" means one or more of the AXELs or
Converted Term Loans or any combination thereof.
"TERM LOAN NOTES" means any promissory notes of Company issued
pursuant to subsection 2.1E(i)(a) or 2.1E(i)(c) or the last sentence
of subsection 10.1B(i) in connection with assignments of the AXEL
Commitments or Converted Term Loans of any Lenders, in each case
substantially in the form of Exhibit IV or Exhibit VI, as applicable,
annexed hereto, as they may be amended, supplemented or otherwise
modified from time to time.
"TITLE COMPANY" means a title insurance company reasonably
satisfactory to Administrative Agent.
"TOTAL UTILIZATION OF REVOLVING LOAN COMMITMENTS" means, as at
any date of determination, the sum of (i) the aggregate principal
amount of all outstanding Revolving Loans (other than Revolving Loans
made for the purpose of reimbursing the applicable Issuing Lender for
any amount drawn under any Letter of Credit but not yet so applied)
plus (ii) the Letter of Credit Usage.
"UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.
"VIDEOTRON" means le Groupe Videotron Ltee., a Quebec
corporation.
"VPC" means VPC Corporation, a Delaware corporation.
"VPC AND CDPQ AGREEMENT" means the agreement executed and
delivered by VPC, Videotron and Caisse de Depot on the Closing Date in
substantially the form of Exhibit XXIII annexed hereto, as such
agreement may be amended, supplemented or otherwise modified from time
to time.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS
UNDER AGREEMENT.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company to Lenders pursuant to clauses (i), (ii),
(iii) and (xiii) of subsection 6.1 shall be prepared in accordance with GAAP as
in effect at the time of such preparation (and delivered together with the
reconciliation statements provided for in subsection 6.1(v)). Calculations in
connection with the definitions,
33
41
covenants and other provisions of this Agreement shall utilize accounting
principles and policies in conformity with those used to prepare the financial
statements referred to in subsection 5.3. Notwithstanding the fact that License
Co. is not consolidated with Holdings and its Subsidiaries under GAAP since it
is not an Affiliate, during any Fiscal Quarter in which Holdings and its
Subsidiaries have made Cash payments to License Co. or License Co. has made Cash
payments to Holdings and its Subsidiaries (excluding any amounts paid by
offsetting amounts due from one party to the other), License Co. shall be deemed
a consolidated Subsidiary of Holdings for purposes of this Agreement and shall
be included in calculating numbers to be calculated on a consolidated basis.
1.3 OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION.
Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.
References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided. The use herein of the word "include" or "including", when following
any general statement, term or matter, shall not be construed to limit such
statement, term or matter to the specific items or matters set forth
immediately following such word or to similar items or matters, whether or not
nonlimiting language (such as "without limitation" or "but not limited to" or
words of similar import) is used with reference thereto, but rather shall be
deemed to refer to all other items or matters that fall within the broadest
possible scope of such general statement, term or matter.
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENTS; MAKING OF LOANS; THE REGISTER; NOTES.
A. COMMITMENTS. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Company
herein set forth, each Lender hereby severally agrees to make the Loans
described in subsections 2.1A(i), 2.1A(ii) and 2.1A(iii).
(i) AXELs. Each Lender severally agrees to lend to
Company on the Closing Date an amount not exceeding its Pro Rata Share
of the aggregate amount of the AXEL Commitments to be used for the
purposes identified in subsection 2.5A. The amount of each Lender's
AXEL Commitment is set forth opposite its name on Schedule 2.1 annexed
hereto and the aggregate amount of the AXEL Commitments is
$125,000,000; provided that the AXEL Commitments of Lenders shall be
adjusted to give effect to any assignments of the AXEL Commitments
pursuant to subsection 10.1B. Each Lender's AXEL Commitment shall
expire immediately and without further action at 11:59 P.M. (New York
City time) on December 22, 1997 if the AXELs are not made on or before
that date. Company may make only one borrowing under the AXEL
Commitments.
34
42
Amounts borrowed under this subsection 2.1A(i) and subsequently repaid
or prepaid may not be reborrowed.
(ii) Revolving Loans. Each Lender severally agrees,
subject to the limitations set forth below with respect to the maximum
amount of Revolving Loans permitted to be outstanding from time to
time, to lend to Company from time to time during the period from the
Closing Date to but excluding the Revolving Loan Conversion Date an
aggregate amount not exceeding its Pro Rata Share of the aggregate
amount of the Revolving Loan Commitments to be used for the purposes
identified in subsection 2.5A. The original amount of each Lender's
Revolving Loan Commitment is set forth opposite its name on Schedule
2.1 annexed hereto and the aggregate original amount of the Revolving
Loan Commitments is $25,000,000; provided that the Revolving Loan
Commitments of Lenders shall be adjusted to give effect to any
assignments of the Revolving Loan Commitments pursuant to subsection
10.1B; and provided, further that the amount of the Revolving Loan
Commitments shall be reduced from time to time by the amount of any
reductions thereto made pursuant to subsections 2.4B(ii) and
2.4B(iii). Each Lender's Revolving Loan Commitment shall convert on
the Revolving Loan Conversion Date and all Revolving Loans shall be
converted to a Converted Term Loan; provided that each Lender's
Revolving Loan Com- mitment shall expire immediately and without
further action at 11:59 P.M. (New York City time) on December 22, 1997
if the AXELs are not made on or before that date. Amounts borrowed
under this subsection 2.1A(ii) may be repaid and reborrowed to but
excluding the Revolving Loan Conversion Date.
Anything contained in this Agreement to the contrary
notwithstanding, the Revolving Loans and the Revolving Loan
Commitments shall be subject to the limitation that in no event shall
the Total Utilization of Revolving Loan Commitments at any time exceed
the Revolving Loan Commitments then in effect.
(iii) Revolving Loan Conversion. On the Revolving Loan
Conversion Date, without further action by Company, Administrative
Agent or Lenders, all outstanding Revolving Loans shall be converted
to Converted Term Loans and all such Converted Term Loans shall be
allocated among Lenders in accordance with their respective Pro Rata
Shares.
(iv) Issuance of Notes Upon Revolving Loan Conversion. On
or as soon as practicable after the Revolving Loan Conversion Date,
(a) each Lender shall deliver any Revolving Notes issued to it
hereunder, marked to show their exchange, to Company, and (b) Company
shall execute and deliver to each Lender (or to Administrative Agent
for such Lender) a Term Note substantially in the form of Exhibit VI
annexed hereto to evidence that Lender's Converted Term Loans, in the
principal amount of that Lender's Converted Term Loan.
B. BORROWING MECHANICS. AXELs or Revolving Loans made on any
Funding Date (other than Revolving Loans made pursuant to subsection 3.3B for
the purpose of reimbursing
35
43
any Issuing Lender for the amount of a drawing under a Letter of Credit issued
by it) shall be in an aggregate minimum amount of $1,000,000 and integral
multiples of $500,000 in excess of that amount; provided that AXELs or Revolving
Loans made on any Funding Date as Eurodollar Rate Loans with a particular
Interest Period shall be in an aggregate minimum amount of $5,000,000 and
integral multiples of $1,000,000 in excess of that amount. On the Closing Date,
with respect to AXELs and whenever Company desires that Lenders make Revolving
Loans it shall deliver to Administrative Agent a Notice of Borrowing no later
than 11:00 A.M. (New York City time) at least three Business Days in advance of
the proposed Funding Date (in the case of a Eurodollar Rate Loan) or at least
one Business Day in advance of the proposed Funding Date (in the case of a Base
Rate Loan). The Notice of Borrowing shall specify (i) the proposed Funding Date
(which shall be a Business Day), (ii) the amount and type of Loans requested,
(iii) whether such Loans shall be Base Rate Loans or Eurodollar Rate Loans, and
(iv) in the case of any Loans requested to be made as Eurodollar Rate Loans, the
initial Interest Period requested therefor. AXELs and Revolving Loans may be
continued as or converted into Base Rate Loans and Eurodollar Rate Loans in the
manner provided in subsection 2.2D. In lieu of delivering the above-described
Notice of Borrowing, Company may give Administrative Agent telephonic notice by
the required time of any proposed borrowing under this subsection 2.1B; provided
that such notice shall be promptly confirmed in writing by delivery of a Notice
of Borrowing to Administrative Agent on or before the applicable Funding Date.
Neither Administrative Agent nor any Lender shall incur any liability
to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of Company or
for otherwise acting in good faith under this subsection 2.1B, and upon funding
of Loans by Lenders in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected Loans hereunder.
Company shall notify Administrative Agent prior to the funding of any
Loans in the event that any of the matters to which Company is required to
certify in the applicable Notice of Borrowing is no longer true and correct as
of the applicable Funding Date, and the acceptance by Company of the proceeds
of any Loans shall constitute a re- certification by Company, as of the
applicable Funding Date, as to the matters to which Company is required to
certify in the applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu
thereof) shall be irrevocable on and after the related Interest Rate
Determination Date, and Company shall be bound to make a borrowing in
accordance therewith.
C. DISBURSEMENT OF FUNDS. All AXELs and Revolving Loans under
this Agreement shall be made by Lenders simultaneously and proportionately to
their respective Pro Rata Shares, it being understood that no Lender shall be
responsible for any default by any other Lender in that other Lender's
obligation to make a Loan requested hereunder nor shall the Commitment of any
Lender to make the particular type of Loan requested be increased or decreased
as a
36
44
result of a default by any other Lender in that other Lender's obligation
to make a Loan requested hereunder. Promptly after receipt by Administrative
Agent of a Notice of Borrowing pursuant to subsection 2.1B (or telephonic
notice in lieu thereof), Administrative Agent shall notify each Lender of the
proposed borrowing. Each Lender shall make the amount of its Loan available to
Administrative Agent not later than 12:00 Noon (New York City time) on the
applicable Funding Date in same day funds in Dollars, at the Funding and
Payment Office. Except as provided in subsection 3.3B with respect to
Revolving Loans used to reimburse any Issuing Lender for the amount of a
drawing under a Letter of Credit issued by it, upon satisfaction or waiver of
the conditions precedent specified in subsections 4.1 (in the case of Loans
made on the Closing Date) and 4.2 (in the case of all Loans), Administrative
Agent shall make the proceeds of such Loans available to Company on the
applicable Funding Date by causing an amount of same day funds in Dollars equal
to the proceeds of all such Loans received by Administrative Agent from Lenders
to be credited to the account of Company at the Funding and Payment Office.
Unless Administrative Agent shall have been notified by any Lender
prior to the Funding Date for any Loans that such Lender does not intend to
make available to Administrative Agent the amount of such Lender's Loan
requested on such Funding Date, Administrative Agent may assume that such
Lender has made such amount available to Administrative Agent on such Funding
Date and Administrative Agent may, in its sole discretion, but shall not be
obligated to, make available to Company a corresponding amount on such Funding
Date. If such corresponding amount is not in fact made available to
Administrative Agent by such Lender, Administrative Agent shall be entitled to
recover such corresponding amount on demand from such Lender together with
interest thereon, for each day from such Funding Date until the date such
amount is paid to Administrative Agent, at the customary rate set by
Administrative Agent for the correction of errors among banks for three Business
Days and thereafter at the Base Rate. If such Lender does not pay such
corresponding amount forthwith upon Administrative Agent's demand therefor,
Administrative Agent shall promptly notify Company and Company shall immediately
pay such corresponding amount to Administrative Agent together with interest
thereon, for each day from such Funding Date until the date such amount is paid
to Administrative Agent, at the rate payable under this Agreement for Base Rate
Loans. Nothing in this subsection 2.1C shall be deemed to relieve any Lender
from its obligation to fulfill its Commitments hereunder or to prejudice any
rights that Company may have against any Lender as a result of any default by
such Lender hereunder.
D. THE REGISTER.
(i) Administrative Agent shall maintain, at its address
referred to in subsection 10.8, a register for the recordation of the
names and addresses of Lenders and the Commitments and Loans of each
Lender from time to time (the "REGISTER"). The Register shall be
available for inspection by Company or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(ii) Administrative Agent shall record in the Register the
AXEL Commitment and Revolving Loan Commitment and the AXEL, Revolving
Loans and Converted Term Loans from time to time of each Lender, and
each repayment or prepayment in respect of the principal amount of the
AXEL, Revolving Loans or Converted Term
37
45
Loans of each Lender. Any such recordation shall be conclusive and
binding on Company and each Lender, absent manifest error; provided
that failure to make any such recordation, or any error in such
recordation, shall not affect any Lender's Commitments or Company's
Obligations in respect of any applicable Loans.
(iii) Each Lender shall record on its internal records
(including any Notes held by such Lender) the amount of the AXEL, each
Revolving Loan and the Converted Term Loan made by it and each payment
in respect thereof. Any such recordation shall be conclusive and
binding on Company, absent manifest error; provided that failure to
make any such recordation, or any error in such recordation, shall not
affect any Lender's Commitments or Company's Obligations in respect of
any applicable Loans; and provided, further that in the event of any
inconsistency between the Register and any Lender's records, the
recordations in the Register shall govern.
(iv) Company, Administrative Agent and Lenders shall deem
and treat the Persons listed as Lenders in the Register as the holders
and owners of the corresponding Commitments and Loans listed therein
for all purposes hereof, and no assignment or transfer of any such
Commitment or Loan shall be effective, in each case unless and until
an Assignment Agreement effecting the assignment or transfer thereof
shall have been accepted by Administrative Agent and recorded in the
Register as provided in subsection 10.1B(ii). Prior to such
recordation, all amounts owed with respect to the applicable Commitment
or Loan shall be owed to the Lender listed in the Register as the owner
thereof, and any request, authority or consent of any Person who, at
the time of making such request or giving such authority or consent, is
listed in the Register as a Lender shall be conclusive and binding on
any subsequent holder, assignee or transferee of the corresponding
Commitments or Loans.
(v) Company hereby designates CIBC to serve as Company's
agent solely for purposes of maintaining the Register as provided in
this subsection 2.1D, and Company hereby agrees that, to the extent
CIBC serves in such capacity, CIBC and its officers, directors,
employees, agents and affiliates shall constitute Indemnitees for all
purposes under subsection 10.3.
E. NOTES. Upon request of any Lender, Company shall execute and
deliver (i) to each Lender (or to Administrative Agent for that Lender) (a) an
AXEL Note substantially in the form of Exhibit IV annexed hereto to evidence
that Lender's AXEL, in the principal amount of that Lender's AXEL and with
other appropriate insertions, (b) a Revolving Note substantially in the form of
Exhibit V annexed hereto to evidence that Lender's Revolving Loans, in the
principal amount of that Lender's Revolving Loan Commitment and with other
appropriate insertions, and (c) a Converted Term Loan Note substantially in the
form of Exhibit VI annexed hereto to evidence that Lender's Converted Term
Loan, in the principal amount of that Lender's Converted Term Loan.
38
46
2.2 INTEREST ON THE LOANS.
A. RATE OF INTEREST. Subject to the provisions of subsections
2.6 and 2.7, each AXEL, each Revolving Loan and each Converted Term Loan shall
bear interest on the unpaid principal amount thereof from the date made through
maturity (whether by acceleration or otherwise) at a rate determined by
reference to the Base Rate or the Adjusted Eurodollar Rate. The applicable
basis for determining the rate of interest with respect to any Term Loan or any
Revolving Loan shall be selected by Company initially at the time a Notice of
Borrowing is given with respect to such Loan pursuant to subsection 2.1B. The
basis for determining the interest rate with respect to any Term Loan or any
Revolving Loan may be changed from time to time pursuant to subsection 2.2D.
If on any day a Term Loan or Revolving Loan is outstanding with respect to
which notice has not been delivered to Administrative Agent in accordance with
the terms of this Agreement specifying the applicable basis for determining the
rate of interest, then for that day that Loan shall bear interest determined by
reference to the Base Rate.
Subject to the provisions of subsections 2.2E and 2.7, the
Term Loans, and the Revolving Loans shall bear interest through
maturity as follows:
(a) if a Base Rate Loan, then at the sum of the
Base Rate in effect from time to time plus the Applicable
Margin; or
(b) if a Eurodollar Rate Loan, then at the sum of
the Adjusted Eurodollar Rate in effect from time to time plus
the Applicable Margin during the applicable Interest Period.
B. INTEREST PERIODS. In connection with each Eurodollar Rate
Loan, Company may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"INTEREST PERIOD") to be applicable to such Loan, which Interest Period shall
be, at Company's option, either a one-, two-, three- or six-month period;
provided that:
(i) the initial Interest Period for any Eurodollar Rate
Loan shall commence on the Funding Date in respect of such Loan, in
the case of a Loan initially made as a Eurodollar Rate Loan, or on the
date specified in the applicable Notice of Conversion/Continuation, in
the case of a Loan converted to a Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest
Periods applicable to a Eurodollar Rate Loan continued as such
pursuant to a Notice of Conversion/Continuation, each successive
Interest Period shall commence on the day on which the next preceding
Interest Period expires;
(iii) if an 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
would otherwise expire on a day that is not a Business Day
39
47
but is a day of the month after which no further Business Day occurs in
such month, such Interest Period shall expire on the next preceding
Business Day;
(iv) any Interest Period 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, subject to clause (v) of this subsection 2.2B, end on
the last Business Day of a calendar month;
(v) no Interest Period with respect to any portion of the
Term Loans shall extend beyond May 31, 2004, and no Interest Period
with respect to any portion of the Revolving Loans shall extend beyond
the Revolving Loan Commitment Conversion Date unless no scheduled
payment of principal on the such Revolving Loans after they have been
converted to Converted Term Loans is due during such Interest Period;
(vi) no Interest Period with respect to any portion of the
Term Loans shall extend beyond a date on which Company is required to
make a scheduled payment of principal of the Term Loans unless the sum
of (a) the aggregate principal amount of Term Loans that are Base Rate
Loans plus (b) the aggregate principal amount of Term Loans that are
Eurodollar Rate Loans with Interest Periods expiring on or before such
date equals or exceeds the principal amount required to be paid on the
Term Loans on such date;
(vii) there shall be no more than 10 Interest Periods
outstanding at any time; and
(viii) in the event Company fails to specify an Interest
Period for any Eurodollar Rate Loan in the applicable Notice of
Borrowing or Notice of Conversion/Continuation, Company shall be
deemed to have selected an Interest Period of one month.
C. INTEREST PAYMENTS. Subject to the provisions of subsection
2.2E, interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity).
D. CONVERSION OR CONTINUATION. Subject to the provisions of
subsection 2.6, Company shall have the option (i) to convert at any time all or
any part of its outstanding Term Loans or Revolving Loans equal to $1,000,000
and integral multiples of $500,000 in excess of that amount from Loans bearing
interest at a rate determined by reference to one basis to Loans bearing
interest at a rate determined by reference to an alternative basis or (ii) upon
the expiration of any Interest Period applicable to a Eurodollar Rate Loan, to
continue all or any portion of such Loan equal to $5,000,000 and integral
multiples of $1,000,000 in excess of that amount as a Eurodollar Rate Loan;
provided, however, that a Eurodollar Rate Loan may only be converted into a
Base Rate Loan on the expiration date of an Interest Period applicable thereto.
40
48
Company shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 11:00 A.M. (New York City time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). A Notice of Conversion/Continuation
shall specify (i) the proposed conversion/continuation date (which shall be a
Business Day), (ii) the amount and type of the Loan to be converted/continued,
(iii) the nature of the proposed conversion/continuation, (iv) in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan, the requested
Interest Period, and (v) in the case of a conversion to, or a continuation of,
a Eurodollar Rate Loan, that no Potential Event of Default or Event of Default
has occurred and is continuing. In lieu of delivering the above-described
Notice of Conversion/Continuation, Company may give Administrative Agent
telephonic notice by the required time of any proposed conversion/continuation
under this subsection 2.2D; provided that such notice shall be promptly
confirmed in writing by delivery of a Notice of Conversion/ Continuation to
Administrative Agent on or before the proposed conversion/continuation date.
Upon receipt of written or telephonic notice of any proposed
conversion/continuation under this subsection 2.2D, Administrative Agent shall
promptly transmit such notice by telefacsimile or telephone to each Lender.
Neither Administrative Agent nor any Lender shall incur any liability
to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Company or
for otherwise acting in good faith under this subsection 2.2D, and upon
conversion or continuation of the applicable basis for determining the interest
rate with respect to any Loans in accordance with this Agreement pursuant to
any such telephonic notice Company shall have effect- ed a conversion or
continuation, as the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Conversion/Continuation for conversion to, or continuation of, a
Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be
irrevocable on and after the related Interest Rate Determination Date, and
Company shall be bound to effect a conversion or continuation in accordance
therewith.
E. DEFAULT RATE. Upon the occurrence and during the continuation
of any Event of Default, the outstanding principal amount of all Loans and, to
the extent permitted by applicable law, any interest payments thereon not paid
when due and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post- petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable upon
demand at a rate that is 2% per annum in excess of the interest rate otherwise
payable under this Agreement with respect to the applicable Loans (or, in the
case of any such fees and other amounts, at a rate which is 2% per annum in
excess of the interest rate otherwise payable under this Agreement for Base
Rate Loans); provided that, in the case of Eurodollar Rate Loans, upon the
expiration of the Interest Period in effect at the time any such increase in
interest rate is effective such Eurodollar Rate Loans shall thereupon become
Base Rate Loans and shall thereafter bear interest payable upon demand at a
rate which is 2% per annum in excess of the
41
49
interest rate otherwise payable under this Agreement for Base Rate Loans.
Payment or acceptance of the increased rates of interest provided for in this
subsection 2.2E is not a permitted alternative to timely payment and shall not
constitute a waiver of any Event of Default or otherwise prejudice or limit any
rights or remedies of Administrative Agent or any Lender. Notwithstanding
anything in this subsection 2.2E to the contrary, the 2% default rate specified
in this subsection 2.2E shall not apply to any outstanding Loans the proceeds of
which are deposited in the AXEL Excess Process Account (but not the Letter of
Credit Collateral Account) unless an Event of Default under subsection 8.1 shall
have occurred and be continuing.
F. COMPUTATION OF INTEREST. Interest on the Loans shall be
computed on the basis of a 360-day year, in each case for the actual number of
days elapsed in the period during which it accrues. In computing interest on
any Loan, the date of the making of such Loan or the first day of an Interest
Period applicable to such Loan or, with respect to a Base Rate Loan being
converted from a Eurodollar Rate Loan, the date of conversion of such
Eurodollar Rate Loan to such Base Rate Loan, as the case may be, shall be
included, and the date of payment of such Loan or the expiration date of an
Interest Period applicable to such Loan or, with respect to a Base Rate Loan
being converted to a Eurodollar Rate Loan, the date of conversion of such Base
Rate Loan to such Eurodollar Rate Loan, as the case may be, shall be excluded;
provided that if a Loan is repaid on the same day on which it is made, one
day's interest shall be paid on that Loan.
2.3 FEES.
A. COMMITMENT FEES. Company agrees to pay to Administrative
Agent, for distribution to each Lender in proportion to that Lender's Pro Rata
Share, commitment fees for the period from and including the Closing Date to
and excluding the Revolving Loan Commitment Conversion Date equal to the
average of the daily excess of the Revolving Loan Commitments over the sum of
(i) the aggregate principal amount of outstanding Revolving Loans plus (ii) the
Letter of Credit Usage multiplied by 0.50 of 1% per annum, such commitment fees
to be calculated on the basis of a 360-day year and the actual number of days
elapsed and to be payable quarterly in arrears on February 28, May 31, August 31
and November 30 of each year, commencing on the first such date to occur after
the Closing Date, and on the Revolving Loan Commitment Termination Date.
B. OTHER FEES. Company agrees to pay to Arranger and
Administrative Agent such other fees in the amounts and at the times separately
agreed upon between Company, Arranger and Administrative Agent.
42
50
2.4 REPAYMENTS, PREPAYMENTS AND REDUCTIONS IN REVOLVING LOAN COMMITMENTS;
GENERAL PROVISIONS REGARDING PAYMENTS; APPLICATION OF PROCEEDS OF
COLLATERAL AND PAYMENTS UNDER GUARANTIES.
A. SCHEDULED PAYMENTS OF TERM LOANS.
(i) Scheduled Payments of AXELs. Company shall make
principal payments on the AXELs in installments on the dates and in
the amounts set forth below:
================================================================================
SCHEDULED REPAYMENT
DATE OF AXELS
--------------------------------------------------------------------------------
February 28, 2001 2.5% of principal outstanding on the
Closing Date
--------------------------------------------------------------------------------
May 31, 2001 2.5% of principal outstanding on the
Closing Date
--------------------------------------------------------------------------------
August 31, 2001 2.5% of principal outstanding on the
Closing Date
--------------------------------------------------------------------------------
November 30, 2001 2.5% of principal outstanding on the
Closing Date
--------------------------------------------------------------------------------
February 28, 2002 3.75% of principal outstanding on the
Closing Date
--------------------------------------------------------------------------------
May 31, 2002 3.75% of principal outstanding on the
Closing Date
--------------------------------------------------------------------------------
August 31, 2002 3.75% of principal outstanding on the
Closing Date
--------------------------------------------------------------------------------
November 30, 2002 3.75% of principal outstanding on the
Closing Date
--------------------------------------------------------------------------------
February 28, 2003 5% of principal outstanding on the
Closing Date
--------------------------------------------------------------------------------
May 31, 2003 5% of principal outstanding on the
Closing Date
--------------------------------------------------------------------------------
August 31, 2003 5% of principal outstanding on the
Closing Date
--------------------------------------------------------------------------------
November 30, 2003 5% of principal outstanding on the
Closing Date
--------------------------------------------------------------------------------
February 29, 2004 6.25% of principal outstanding on the
Closing Date
--------------------------------------------------------------------------------
May 31, 2004 48.75% of principal outstanding on th
Closing Date
================================================================================
43
51
; provided that the scheduled installments of principal of the AXELs
set forth above shall be reduced in connection with any voluntary or
mandatory prepayments of the AXELs in accordance with subsection
2.4B(iv); and provided, further that the AXELs and all other amounts
owed hereunder with respect to the AXELs shall be paid in full no
later than May 31, 2004, and the final installment payable by Company
in respect of the AXELs on such date shall be in an amount, if such
amount is different from that specified above, sufficient to repay all
amounts owing by Company under this Agreement with respect to the
AXELs.
(ii) Scheduled Payments of Converted Term Loans. Company
shall make principal payments on the Converted Term Loans in
installments on the dates and in the amounts set forth below:
================================================================================
SCHEDULED REPAYMENT
DATE OF CONVERTED TERM LOANS
--------------------------------------------------------------------------------
February 28, 2001 2.5% of principal outstanding on the
Revolving Loan Conversion Date
--------------------------------------------------------------------------------
May 31, 2001 2.5% of principal outstanding on the
Revolving Loan Conversion Date
--------------------------------------------------------------------------------
August 31, 2001 2.5% of principal outstanding on the
Revolving Loan Conversion Date
--------------------------------------------------------------------------------
November 30, 2001 2.5% of principal outstanding on the
Revolving Loan Conversion Date
--------------------------------------------------------------------------------
February 28, 2002 3.75% of principal outstanding on the
Revolving Loan Conversion Date
--------------------------------------------------------------------------------
May 31, 2002 3.75% of principal outstanding on the
Revolving Loan Conversion Date
--------------------------------------------------------------------------------
August 31, 2002 3.75% of principal outstanding on the
Revolving Loan Conversion Date
--------------------------------------------------------------------------------
November 30, 2002 3.75% of principal outstanding on the
Revolving Loan Conversion Date
================================================================================
44
52
================================================================================
SCHEDULED REPAYMENT
DATE OF CONVERTED TERM LOANS
--------------------------------------------------------------------------------
February 28, 2003 5% of principal outstanding on the Re-
volving Loan Conversion Date
--------------------------------------------------------------------------------
May 31, 2003 5% of principal outstanding on the Re-
volving Loan Conversion Date
--------------------------------------------------------------------------------
August 31, 2003 5% of principal outstanding on the Re-
volving Loan Conversion Date
--------------------------------------------------------------------------------
November 30, 2003 5% of principal outstanding on the Re-
volving Loan Conversion Date
--------------------------------------------------------------------------------
February 29, 2004 6.25% of principal outstanding on the
Revolving Loan Conversion Date
--------------------------------------------------------------------------------
May 31, 2004 48.75% of principal outstanding on the
Revolving Loan Conversion Date
================================================================================
; provided that the scheduled installments of principal of the
Converted Term Loans set forth above shall be reduced in connection
with any voluntary or mandatory prepayments of the Converted Term
Loans in accordance with subsection 2.4B(iv); and provided, further
that the Converted Term Loans and all other amounts owed hereunder
with respect to the Converted Term Loans shall be paid in full no
later than May 31, 2004, and the final installment payable by Company
in respect of the Converted Term Loans on such date shall be in an
amount, if such amount is different from that specified above,
sufficient to repay all amounts owing by Company under this Agreement
with respect to the Converted Term Loans.
B. PREPAYMENTS, LOANS AND REDUCTIONS IN REVOLVING LOAN
COMMITMENTS.
(i) Voluntary Prepayments.
(a) Notice of Prepayment. Company may, upon not
less than three Business Days' prior written or telephonic
notice given to Administrative Agent by 12:00 Noon (New York
City time) on the date required and, if given by telephone,
promptly confirmed in writing to Administrative Agent (which
original written or telephonic notice Administrative Agent
will promptly transmit by telefacsimile or telephone to each
Lender), at any time and from time to time
45
53
prepay any AXELs, Converted Term Loans or Revolving Loans on
any Business Day in whole or in part in an aggregate minimum
amount of $1,000,000 (or such lesser amount as shall
constitute the aggregate amount of Loans outstanding) and
integral multiples of $500,000 in excess of that amount;
provided, however, that with respect to any Eurodollar Rate
Loan prepaid prior to the expiration of the Interest Period
applicable thereto, Company shall pay all amounts payable
pursuant to subsection 2.6D. Notice of prepayment having been
given as aforesaid, the principal amount of the Loans
specified in such notice shall become due and payable on the
prepayment date specified therein. Any such voluntary
prepayment shall be applied as specified in subsection
2.4B(iv).
(b) Prepayment Fees. If any portion of the AXELs
is prepaid (except to the extent that such portion is prepaid
from a foreclosure on any funds in the AXEL Excess Proceeds
Account) (1) pursuant to subsection 2.4B or (2) pursuant to an
acceleration under Section 8, in each case on or prior to the
first anniversary of the Closing Date, Company shall pay to
Administrative Agent, for distribution to Lenders having AXELs
so prepaid in accordance with their Pro Rata Shares, a fee
equal to 1% of the principal amount of AXELs so prepaid.
(ii) Voluntary Reductions of Revolving Loan Commitments.
Company may, upon not less than three Business Days' prior written or
telephonic notice confirmed in writing to Administrative Agent (which
original written or telephonic notice Administrative Agent will
promptly transmit by telefacsimile or telephone to each Lender), at
any time and from time to time terminate in whole or permanently
reduce in part, without premium or penalty, the Revolving Loan
Commitments in an amount up to the amount by which the Revolving Loan
Commitments exceed the Total Utilization of Revolving Loan Commitments
at the time of such proposed termination or reduction; provided that
any such partial reduction of the Revolving Loan Commitments shall be
in an aggregate minimum amount of $1,000,000 and integral multiples of
$500,000 in excess of that amount. Company's notice to Administrative
Agent shall designate the date (which shall be a Business Day) of such
termination or reduction and the amount of any partial reduction, and
such termination or reduction of the Revolving Loan Commitments shall
be effective on the date specified in Company's notice and shall
reduce the Revolving Loan Commitment of each Lender proportionately to
its Pro Rata Share. Any such voluntary reduction of the Revolving
Loan Commitments shall be applied as specified in subsection 2.4B(iv).
(iii) Mandatory Prepayments of Loans and Mandatory
Reductions of Revolving Loan Commitments. The Loans shall be prepaid
and/or the Revolving Loan Commitments shall be permanently reduced in
the amounts and under the circumstances set forth below, all such
prepayments and/or reductions to be applied as set forth below or as
more specifically provided in subsection 2.4B(iv):
(a) Prepayments and Reductions From Net Asset
Sale Proceeds. No later than the first Business Day following
the date of receipt by Holdings or any
46
54
of its Subsidiaries of any Net Asset Sale Proceeds in respect
of any Asset Sale, Company shall prepay the Loans and/or the
Revolving Loan Commitments shall be permanently reduced in an
aggregate amount equal to such Net Asset Sale Proceeds.
Notwithstanding the foregoing, as long as no Event of Default
or Potential Event of Default shall have occurred and be
continuing, Company shall not be required to make any
mandatory prepayment pursuant to this subsection 2.4B(iii)(a)
to the extent the Net Asset Sale Proceeds are reinvested in
equipment or other productive assets (including stock of a
corporation that owns equipment or other productive assets to
the extent the acquisition of such stock is otherwise
permitted under this Agreement) used by Company and its
Subsidiaries in the conduct of its business within 180 days
from the date of receipt thereof; provided, however, that the
total Net Asset Sale Pro- ceeds which may be so reinvested
shall not exceed $20,000,000 in the aggregate. If upon any
Asset Sale, Company elects to reinvest the Net Asset Sale
Proceeds as permitted under this subsection 2.4B(iii)(a), (1)
no later than the first Business Day following the
consummation of such Asset Sale, Company shall deliver an
Officers' Certificate to Administrative Agent demonstrating
the derivation of the Net Asset Sale Proceeds of such Asset
Sale from the gross sales prices thereof and certifying the
portion of such proceeds which Company elects to reinvest in
equipment or other productive assets (including stock of a
corporation that owns equipment or other productive assets to
the extent the acquisition of such stock is otherwise
permitted under this Agreement) and certifying that no Event
of Default or Potential Event of Default shall have occurred
and be continuing and (2) upon the expiration of 180 days
after the date of receipt of the Net Asset Sale Proceeds
certified as being scheduled for reinvestment, Company shall
deliver to Administrative Agent an Officers' Certificate
indicating the amount of Net Asset Sale Proceeds reinvested as
of such date, the assets in which such Net Asset Sale Proceeds
have been reinvested, and the amount of any remaining Net
Asset Sale Proceeds which shall be applied to prepay the Loans
and/or reduce the Commitments as set forth in this Subsection
2.4B(iii)(a).
(b) Prepayments and Reductions from Net
Insurance/Condemnation Proceeds. No later than the first
Business Day following the date of receipt by Administrative
Agent or by Holdings or any of its Subsidiaries of any Net
Insurance/Condemnation Proceeds that are required to be
applied to prepay the Loans and/or reduce the Revolving Loan
Commitments pursuant to the provisions of subsection 6.4C,
Company shall prepay the Loans and/or the Revolving Loan
Commitments shall be permanently reduced in an aggregate
amount equal to the amount of such Net Insurance/Condemnation
Proceeds.
(c) Prepayments and Reductions Due to Reversion
of Surplus Assets of Pension Plans. On the date of return to
Holdings or any of its Subsidiaries of any surplus assets of
any pension plan of Holdings or any of its Subsidiaries,
Company shall prepay the Loans and/or the Revolving Loan
Commitments shall be permanently reduced in an aggregate
amount (such amount being the
47
55
"NET PENSION PROCEEDS") equal to 100% of such returned surplus
assets, net of transaction costs and expenses incurred in
obtaining such return, including incremental taxes payable as
a result thereof, in excess of $500,000 of aggregate Net
Pension Proceeds during the term of this Agreement.
(d) Prepayments and Reductions from Consolidated
Excess Cash Flow. In the event that there shall be
Consolidated Excess Cash Flow for any Fiscal Year (commencing
with Fiscal Year 2000), Company shall, no later than 100 days
after the end of such Fiscal Year, prepay the Loans and/or the
Revolving Loan Commitments shall be permanently reduced in an
aggregate amount equal to 75% of such Consolidated Excess Cash
Flow.
(e) Prepayments and Reductions from Buy-Out
Proceeds. If at any time Holdings and its Subsidiaries
receives Buy-Out Proceeds in a single transaction or series of
transactions in an aggregate amount in excess of $3,000,000
("EXCESS BUY-OUT PROCEEDS"), Company shall deliver to
Administrative Agent and Lenders, an Officers' Certificate
setting forth in reasonable detail the amount of Excess
Buy-Out Proceeds received and the purposes for which Holdings
and its Subsidiaries intend to use such Excess Buy-Out
Proceeds, and Requisite Lenders may require Company within
45-days thereafter, to prepay the Loans and/or permanently
reduce the Revolving Loan Commitments in an aggregate amount
equal to Excess Buy-Out Proceeds within two Business Days'
after receipt by Company of notice of such election from
Administrative Agent. If Requisite Lenders shall not have
elected to require a prepayment pursuant to this subsection
2.4B(iii)(e) within 45 days of receipt of the Officers'
Certificate specifying the amount of the Excess Buy-Out
Proceeds, Holdings and its Subsidiaries may use the Excess
Buy-Out Proceeds for the purposes specified in such Officers'
Certificate.
(f) Calculations of Net Proceeds Amounts;
Additional Prepayments and Reductions Based on Subsequent
Calculations. Concurrently with any prepayment of the Loans
and/or reduction of the Revolving Loan Commitments pursuant to
subsections 2.4B(iii)(a)-(e), Company shall deliver to Admin-
istrative Agent an Officers' Certificate demonstrating the
calculation of the amount (the "NET PROCEEDS AMOUNT") of the
applicable Net Asset Sale Proceeds or Net
Insurance/Condemnation Proceeds or the applicable Net Pension
Proceeds (as such term is defined in subsections 2.4B(iii)(c))
or the applicable Consolidated Excess Cash Flow or Excess
Buy-Out Proceeds, as the case may be, that gave rise to such
prepayment and/or reduction. In the event that Company shall
subsequently determine that the actual Net Proceeds Amount was
greater than the amount set forth in such Officers'
Certificate, Company shall promptly make an additional
prepayment of the Loans (and/or, if applicable, the Revolving
Loan Commitments shall be permanently reduced) in an amount
equal to the amount of such excess, and Company shall
concurrently therewith deliver to
48
56
Administrative Agent an Officers' Certificate demonstrating
the derivation of the additional Net Proceeds Amount resulting
in such excess.
(iv) Application of Prepayments of Loans and Unscheduled
Reductions of Revolving Loan Commitments.
(a) Application of Voluntary Prepayments by Type
of Loans and Order of Maturity. Any voluntary prepayments
pursuant to subsection 2.4B(i) shall be applied as specified
by Company in the applicable notice of prepayment; provided
that in the event Company fails to specify the Loans to which
any such prepayment shall be applied, such prepayment shall be
applied first to repay outstanding Revolving Loans to the full
extent thereof, and second to repay outstanding Term Loans to
the full extent thereof. Any voluntary prepayments of the
Term Loans pursuant to subsection 2.4B(i) shall be applied to
prepay the AXELs and the Converted Term Loans on a pro rata
basis (in accordance with the respective outstanding principal
amounts thereof) and to reduce on a pro rata basis the
scheduled installments of principal of the AXELs and Converted
Term Loans set forth in subsections 2.4A(i) and 2.4A(ii) that
is unpaid at the time of such payment.
(b) Application of Mandatory Prepayments by Type
of Loans. Any amount (the "APPLIED AMOUNT") required to be
applied as a mandatory prepayment of the Loans and/or a
reduction of the Revolving Loan Commitments pursuant to
subsections 2.4B(iii)(a)-(e) shall be applied first to prepay
the Term Loans to the full extent thereof, second, to the
extent of any remaining portion of the Applied Amount, to
prepay the Revolving Loans to the full extent thereof and to
further permanently reduce the Revolving Loan Commitments by
the amount of such prepayment, and third, to the extent of any
remaining portion of the Applied Amount, to further
permanently reduce the Revolving Loan Commitments to the full
extent thereof.
(c) Application of Mandatory Prepayments of AXELs
to AXELs and Converted Term Loans and the Scheduled
Installments of Principal Thereof. Any mandatory prepayments
of the Term Loans pursuant to subsection 2.4B(iii) shall be
applied to prepay the AXELs and the Converted Term Loans on a
pro rata basis (in accordance with the respective outstanding
principal amounts thereof) and shall be applied to reduce the
scheduled installments of principal of the AXELs or the
Converted Term Loans, as the case may be, set forth in
subsection 2.4A(i) or 2.4A(ii), respectively, in inverse order
of maturity.
(d) Application of Prepayments to Base Rate Loans
and Eurodollar Rate Loans. Considering AXELs, Converted Term
Loans and Revolving Loans being prepaid separately, any
prepayment thereof shall be applied first to Base Rate Loans
to the full extent thereof before application to Eurodollar
Rate Loans,
49
57
in each case in a manner which minimizes the amount of any
payments required to be made by Company pursuant to subsection
2.6D.
C. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) Manner and Time of Payment. All payments by Company
of principal, interest, fees and other Obligations hereunder and under
the Notes shall be made in Dollars in same day funds, without defense,
setoff or counterclaim, free of any restriction or condition, and
delivered to Administrative Agent not later than 12:00 (Noon) (New
York City time) on the date due at the Funding and Payment Office for
the account of Lenders; funds received by Administrative Agent after
that time on such due date shall be deemed to have been paid by
Company on the next succeeding Business Day. Company hereby
authorizes Administrative Agent to charge its accounts with
Administrative Agent in order to cause timely payment to be made to
Administrative Agent of all principal, interest, fees and expenses due
hereunder (subject to sufficient funds being available in its accounts
for that purpose).
(ii) Application of Payments to Principal and Interest.
Except as provided in subsection 2.2C, all payments in respect of the
principal amount of any Loan shall include payment of accrued interest
on the principal amount being repaid or prepaid, and all such payments
(and, in any event, any payments in respect of any Loan on a date when
interest is due and payable with respect to such Loan) shall be
applied to the payment of interest before application to principal.
(iii) Apportionment of Payments. Aggregate principal and
interest payments in respect of Term Loans and Revolving Loans shall
be apportioned among all outstanding Loans to which such payments
relate, in each case proportionately to Lenders' respective Pro Rata
Shares. Administrative Agent shall promptly distribute to each
Lender, at its primary address set forth below its name on the
appropriate signature page hereof or at such other address as such
Lender may request, its Pro Rata Share of all such payments received
by Administrative Agent and the commitment fees of such Lender when
received by Administrative Agent pursuant to subsection 2.3.
Notwithstanding the foregoing provisions of this subsection 2.4C(iii),
if, pursuant to the provisions of subsection 2.6C, any Notice of
Conversion/Continuation is withdrawn as to any Affected Lender or if
any Affected Lender makes Base Rate Loans in lieu of its Pro Rata
Share of any Eurodollar Rate Loans, Administrative Agent shall give
effect thereto in apportioning payments received thereafter.
(iv) Payments on Business Days. Whenever any payment to
be made hereunder shall be stated to be due on a day that is not a
Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder or of the commitment
fees hereunder, as the case may be.
50
58
(v) Notation of Payment. Each Lender agrees that before
disposing of any Note held by it, or any part thereof (other than by
granting participations therein), that Lender will make a notation
thereon of all Loans evidenced by that Note and all principal payments
previously made thereon and of the date to which interest thereon has
been paid; provided that the failure to make (or any error in the
making of) a notation of any Loan made under such Note shall not limit
or otherwise affect the obligations of Company hereunder or under such
Note with respect to any Loan or any payments of principal or interest
on such Note.
D. APPLICATION OF PROCEEDS OF COLLATERAL AND PAYMENTS UNDER
GUARANTIES.
(i) Application of Proceeds of Collateral. Except as
provided in subsection 2.4B(iii)(a) with respect to prepayments from
Net Asset Sale Proceeds, all proceeds received by Administrative Agent
in respect of any sale of, collection from, or other realization upon
all or any part of the Collateral under any Collateral Document may,
in the discretion of Administrative Agent, be held by Administrative
Agent as Collateral for, and/or (then or at any time thereafter)
applied in full or in part by Administrative Agent against, the
applicable Secured Obligations (as defined in such Collateral
Document) in the following order of priority:
(a) To the payment of all costs and expenses of
such sale, collection or other realization, including
reasonable compensation to Administrative Agent and its agents
and counsel, and all other expenses, liabilities and advances
made or incurred by Administrative Agent in connection
therewith, and all amounts for which Administrative Agent is
entitled to indemnification under such Collateral Document and
all advances made by Administrative Agent thereunder for the
account of the applicable Loan Party, and to the payment of
all costs and expenses paid or incurred by Administrative
Agent in connection with the exercise of any right or remedy
under such Collateral Document, all in accordance with the
terms of this Agreement and such Collateral Document;
(b) thereafter, to the extent of any excess such
proceeds, to the payment of all other such Secured Obligations
for the ratable benefit of the holders thereof; and
(c) thereafter, to the extent of any excess such
proceeds, to the payment to or upon the order of such Loan
Party or to whosoever may be lawfully entitled to receive the
same or as a court of competent jurisdiction may direct.
(ii) Application of Payments Under Guaranties. All
payments received by Administrative Agent under either Guaranty shall
be applied promptly from time to time by Administrative Agent in the
following order of priority:
51
59
(a) To the payment of the costs and expenses of
any collection or other realization under such Guaranty,
including reasonable compensation to Administrative Agent and
its agents and counsel, and all expenses, liabilities and
advances made or incurred by Administrative Agent in
connection therewith, all in accordance with the terms of this
Agreement and such Guaranty;
(b) thereafter, to the extent of any excess such
payments, to the payment of all other Guarantied Obligations
(as defined in such Guaranty) for the ratable benefit of the
holders thereof; and
(c) thereafter, to the extent of any excess such
payments, to the payment to Holdings or the applicable
Subsidiary Guarantor or to whosoever may be lawfully entitled
to receive the same or as a court of competent jurisdiction
may direct.
2.5 USE OF PROCEEDS.
A. LOANS. The proceeds of the Loans shall be applied by Company
to finance capital expenditures and Permitted Acquisitions, to provide working
capital and for other general corporate purposes. The proceeds of the AXELs
made on the Closing Date shall be deposited in the AXEL Excess Proceeds Account
pending use in the business of Holdings and its Subsidiaries as set forth in
the preceding sentence and may be withdrawn from the AXEL Excess Proceeds
Account in accordance with subsection 7.16. The proceeds withdrawn from the
AXEL Excess Proceeds Account may also be used to repay outstanding AXELs.
B. MARGIN REGULATIONS. No portion of the proceeds of any
borrowing under this Agreement shall be used by Company or any of its
Subsidiaries in any manner that might cause the borrowing or the application of
such proceeds to violate Regulation G, Regulation U, Regulation T or Regulation
X of the Board of Governors of the Federal Reserve System or any other
regulation of such Board or to violate the Exchange Act, in each case as in
effect on the date or dates of such borrowing and such use of proceeds.
2.6 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.
Notwithstanding any other provision of this Agreement to the contrary,
the following provisions shall govern with respect to Eurodollar Rate Loans as
to the matters covered:
A. DETERMINATION OF APPLICABLE INTEREST RATE. As soon as
practicable after 11:00 A.M. (New York City time) on each Interest Rate
Determination Date, Administrative Agent shall determine (which determination
shall, absent manifest error, be final, conclusive and binding upon all
parties) the interest rate that shall apply to the Eurodollar Rate Loans for
which an interest rate is then being determined for the applicable Interest
Period and shall promptly give notice thereof (in writing or by telephone
confirmed in writing) to Company and each Lender.
52
60
B. INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the event
that Administrative Agent shall have determined (which determination shall be
final and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the interbank Eurodollar market adequate and fair means
do not exist for ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of Adjusted Eurodollar Rate,
Administrative Agent shall on such date give notice (by telefacsimile or by
telephone confirmed in writing) to Company and each Lender of such
determination, whereupon (i) no Loans may be made as, or converted to,
Eurodollar Rate Loans until such time as Administrative Agent notifies Company
and Lenders that the circumstances giving rise to such notice no longer exist
and (ii) any Notice of Borrowing or Notice of Conversion/Continuation given by
Company with respect to the Loans in respect of which such determination was
made shall be deemed to be rescinded by Company.
C. ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR RATE LOANS. In
the event that on any date any Lender shall have determined (which
determination shall be final and conclusive and binding upon all parties hereto
but shall be made only after consultation with Company and Administrative
Agent) that the making, maintaining or continuation of its Eurodollar Rate
Loans (i) has become unlawful as a result of compliance by such Lender in good
faith with any law, treaty, governmental rule, regulation, guideline or order
(or would conflict with any such treaty, governmental rule, regulation,
guideline or order not having the force of law even though the failure to
comply therewith would not be unlawful) or (ii) has become impracticable, or
would cause such Lender material hardship, as a result of contingencies
occurring after the date of this Agreement which materially and adversely
affect the interbank Eurodollar market or the position of such Lender in that
market, then, and in any such event, such Lender shall be an "AFFECTED LENDER"
and it shall on that day give notice (by telefacsimile or by telephone
confirmed in writing) to Company and Administrative Agent of such determination
(which notice Administrative Agent shall promptly transmit to each other
Lender). Thereafter (a) the obligation of the Affected Lender to make Loans
as, or to convert Loans to, Eurodollar Rate Loans shall be suspended until such
notice shall be withdrawn by the Affected Lender, (b) to the extent such
determination by the Affected Lender relates to a Eurodollar Rate Loan then
being requested by Company pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, the Affected Lender shall make such Loan as (or
convert such Loan to, as the case may be) a Base Rate Loan, (c) the Affected
Lender's obligation to maintain its outstanding Eurodollar Rate Loans (the
"AFFECTED LOANS") shall be terminated at the earlier to occur of the expiration
of the Interest Period then in effect with respect to the Affected Loans or
when required by law, and (d) the Affected Loans shall automatically convert
into Base Rate Loans on the date of such termination. Notwithstanding the
foregoing, to the extent a determination by an Affected Lender as described
above relates to a Eurodollar Rate Loan then being requested by Company
pursuant to a Notice of Borrowing or a Notice of Conversion/Continuation,
Company shall have the option, subject to the provisions of subsection 2.6D, to
rescind such Notice of Borrowing or Notice of Conversion/Continuation as to all
Lenders by giving notice (by telefacsimile or by telephone confirmed in
writing) to Administrative Agent of such rescission on the date on which the
Affected Lender gives notice of its determination as described above (which
notice of rescission Administrative Agent shall promptly transmit to each other
Lender). Except as provided in the immediately preceding sentence, nothing in
this
53
61
subsection 2.6C shall affect the obligation of any Lender other than an
Affected Lender to make or maintain Loans as, or to convert Loans to,
Eurodollar Rate Loans in accordance with the terms of this Agreement.
D. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST
PERIODS. Company shall compensate each Lender, upon written request by that
Lender (which request shall set forth the basis for requesting such amounts),
for all reasonable losses, expenses and liabilities (including any interest
paid by that Lender to lenders of funds borrowed by it to make or carry its
Eurodollar Rate Loans and any loss, expense or liability sustained by that
Lender in connection with the liquidation or re-employment of such funds) which
that Lender may sustain: (i) if for any reason (other than a default by that
Lender) a borrowing of any Eurodollar Rate Loan does not occur on a date
specified therefor in a Notice of Borrowing or a telephonic request for
borrowing, or a conversion to or continuation of any Eurodollar Rate Loan does
not occur on a date specified therefor in a Notice of Conversion/Continuation
or a telephonic request for conversion or continuation, (ii) if any prepayment
(including any prepayment pursuant to subsection 2.4B(i)) or other principal
payment or any conversion of any of its Eurodollar Rate Loans occurs on a date
prior to the last day of an Interest Period applicable to that Loan, (iii) if
any prepayment of any of its Eurodollar Rate Loans is not made on any date
specified in a notice of prepayment given by Company, or (iv) as a consequence
of any other default by Company in the repayment of its Eurodollar Rate Loans
when required by the terms of this Agreement.
E. BOOKING OF EURODOLLAR RATE LOANS. Any Lender may make, carry
or transfer Eurodollar Rate Loans at, to, or for the account of any of its
branch offices or the office of an Affiliate of that Lender.
F. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS.
Calculation of all amounts payable to a Lender under this subsection 2.6 and
under subsection 2.7A shall be made as though that Lender had actually funded
each of its relevant Eurodollar Rate Loans through the purchase of a Eurodollar
deposit bearing interest at the rate obtained pursuant to clause (i) of the
definition of Adjusted Eurodollar Rate in an amount equal to the amount of such
Eurodollar Rate Loan and having a maturity comparable to the relevant Interest
Period and through the transfer of such Eurodollar deposit from an offshore
office of that Lender to a domestic office of that Lender in the United States
of America; provided, however, that each Lender may fund each of its Eurodollar
Rate Loans in any manner it sees fit and the foregoing assumptions shall be
utilized only for the purposes of calculating amounts payable under this
subsection 2.6 and under subsection 2.7A.
G. EURODOLLAR RATE LOANS AFTER DEFAULT. After the occurrence of
and during the continuation of a Potential Event of Default or an Event of
Default, (i) Company may not elect to have a Loan be made or maintained as, or
converted to, a Eurodollar Rate Loan after the expiration of any Interest
Period then in effect for that Loan and (ii) subject to the provisions of
subsection 2.6D, any Notice of Borrowing or Notice of Conversion/Continuation
given by Company with respect to a requested borrowing or
conversion/continuation that has not yet occurred shall be deemed to be
rescinded by Company.
54
62
2.7 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
A. COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the
provisions of subsection 2.7B (which shall be controlling with respect to the
matters covered thereby), in the event that any Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the date
hereof, or compliance by such Lender with any guideline, request or directive
issued or made after the date hereof by any central bank or other governmental
or quasi-governmental authority (whether or not having the force of law):
(i) subjects such Lender (or its applicable lending
office) to any additional Tax (other than any Tax on the overall net
income of such Lender) with respect to this Agreement or any of its
obligations hereunder or any payments to such Lender (or its
applicable lending office) of principal, interest, fees or any other
amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve
(including any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, FDIC insurance or similar
requirement against assets held by, or deposits or other liabilities
in or for the account of, or advances or loans by, or other credit
extended by, or any other acquisition of funds by, any office of such
Lender (other than any such reserve or other requirements with respect
to Eurodollar Rate Loans that are reflected in the definition of
Adjusted Eurodollar Rate); or
(iii) imposes any other condition (other than with respect
to a Tax matter) on or affecting such Lender (or its applicable
lending office) or its obligations hereunder or the interbank
Eurodollar market;
and the result of any of the foregoing is to increase the cost to such Lender
of agreeing to make, making or maintaining Loans hereunder or to reduce any
amount received or receivable by such Lender (or its applicable lending office)
with respect thereto; then, in any such case, Company shall promptly pay to
such Lender, upon receipt of the statement referred to in the next sentence,
such additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to Company (with a copy to Administrative
Agent) a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Lender under this subsection
2.7A, which statement shall be conclusive and binding upon all parties hereto
absent manifest error.
55
63
B. WITHHOLDING OF TAXES.
(i) Payments to Be Free and Clear. All sums payable by
Company under this Agreement and the other Loan Documents shall
(except to the extent required by law) be paid free and clear of, and
without any deduction or withholding on account of, any Tax (other
than a Tax on the overall net income of any Lender) imposed, levied,
collected, withheld or assessed by or within the United States of
America or any political subdivision in or of the United States of
America or any other jurisdiction from or to which a payment is made
by or on behalf of Company or by any federation or organization of
which the United States of America or any such jurisdiction is a
member at the time of payment.
(ii) Grossing-up of Payments. If Company or any other
Person is required by law to make any deduction or withholding on
account of any such Tax from any sum paid or payable by Company to
Administrative Agent or any Lender under any of the Loan Documents:
(a) Company or such other Person shall notify
Administrative Agent of any such requirement or any change in
any such requirement as soon as Company or such other Person
becomes aware of it;
(b) Company shall pay any such Tax before the
date on which penalties attach thereto, such payment to be
made (if the liability to pay is imposed on Company) for its
own account or (if that liability is imposed on Administrative
Agent or such Lender, as the case may be) on behalf of and in
the name of Administrative Agent or such Lender;
(c) the sum payable by Company in respect of
which the relevant deduction, withholding or payment is
required shall be increased to the extent necessary to ensure
that, after the making of that deduction, withholding or
payment, Administrative Agent or such Lender, as the case may
be, receives on the due date a net sum equal to what it would
have received had no such deduction, withholding or payment
been required or made; and
(d) within 30 days after paying any sum from
which it is required by law to make any deduction or
withholding, and within 30 days after the due date of payment
of any Tax which it is required by clause (b) above to pay,
Company shall deliver to Administrative Agent evidence
satisfactory to the other affected parties of such deduction,
withholding or payment and of the remittance thereof to the
relevant taxing or other authority;
provided that no such additional amount shall be required to be paid
to any Lender under clause (c) above except to the extent that any
change after the date hereof (in the case of each Lender listed on the
signature pages hereof) or after the date of the Assignment Agreement
pursuant to which such Lender became a Lender (in the case of each
other
56
64
Lender) in any such requirement for a deduction, withholding or
payment as is mentioned therein shall result in an increase in the
rate of such deduction, withholding or payment from that in effect at
the date of this Agreement or at the date of such Assignment
Agreement, as the case may be, in respect of payments to such Lender.
(iii) Evidence of Exemption from U.S. Withholding Tax.
(a) Each Lender that is organized under the laws
of any jurisdiction other than the United States or any state
or other political subdivision thereof (for purposes of this
subsection 2.7B(iii), a "NON-US LENDER") shall deliver to
Administrative Agent for transmission to Company, on or prior
to the Closing Date (in the case of each Lender listed on the
signature pages hereof) or on or prior to the date of the
Assignment Agreement pursuant to which it becomes a Lender (in
the case of each other Lender), and at such other times as may
be necessary in the determination of Company or Administrative
Agent (each in the reasonable exercise of its discretion), (1)
two original copies of Internal Revenue Service Form 1001 or
4224 (or any successor forms), properly completed and duly
executed by such Lender, together with any other certificate
or statement of exemption required under the Internal Revenue
Code or the regulations issued thereunder to establish that
such Lender is not subject to deduction or withholding of
United States federal income tax with respect to any payments
to such Lender of principal, interest, fees or other amounts
payable under any of the Loan Documents or (2) if such Lender
is not a "bank" or other Person described in Section 881(c)(3)
of the Internal Revenue Code and cannot deliver either
Internal Revenue Service Form 1001 or 4224 pursuant to clause
(1) above, a Certificate re Non-Bank Status together with two
original copies of Internal Revenue Service Form W-8 (or any
successor form), properly completed and duly executed by such
Lender, together with any other certificate or statement of
exemption required under the Internal Revenue Code or the
regulations issued thereunder to establish that such Lender is
not subject to deduction or withholding of United States
federal income tax with respect to any payments to such Lender
of interest payable under any of the Loan Documents.
(b) Each Lender required to deliver any forms,
certificates or other evidence with respect to United States
federal income tax withholding matters pursuant to subsection
2.7B(iii)(a) hereby agrees, from time to time after the
initial delivery by such Lender of such forms, certificates or
other evidence, whenever a lapse in time or change in
circumstances renders such forms, certificates or other
evidence obsolete or inaccurate in any material respect, that
such Lender shall promptly (1) deliver to Administrative Agent
for transmission to Company two new original copies of
Internal Revenue Service Form 1001 or 4224, or a Certificate
re Non-Bank Status and two original copies of Internal Revenue
Service Form W-8, as the case may be, properly completed and
duly executed by such Lender, together with any other
certificate or statement of exemption required in order to
confirm or establish that such Lender is not
57
65
subject to deduction or withholding of United States federal
income tax with respect to payments to such Lender under the
Loan Documents or (2) notify Administrative Agent and Company
of its inability to deliver any such forms, certificates or
other evidence.
(c) Company shall not be required to pay any
additional amount to any Non-US Lender under subsection
2.7B(i) and clause (c) of subsection 2.7B(ii) if such Lender
shall have failed to satisfy the requirements of clause (a) or
(b)(1) of this subsection 2.7B(iii); provided that if such
Lender shall have satisfied the requirements of subsection
2.7B(iii)(a) on the Closing Date (in the case of each Lender
listed on the signature pages hereof) or on the date of the
Assignment Agreement pursuant to which it became a Lender (in
the case of each other Lender), nothing in this subsection
2.7B(iii)(c) shall relieve Company of its obligation to pay
any additional amounts pursuant to clause (c) of subsection
2.7B(ii) in the event that, as a result of any change in any
applicable law, treaty or governmental rule, regulation or
order, or any change in the interpretation, administration or
application thereof, such Lender is no longer properly
entitled to deliver forms, certificates or other evidence at a
subsequent date establishing the fact that such Lender is not
subject to withholding as described in subsection
2.7B(iii)(a).
C. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have
determined that the adoption, effectiveness, phase-in or applicability after
the date hereof of any law, rule or regulation (or any provision thereof)
regarding capital adequacy, or any change therein or in the interpretation or
administration thereof by any governmental authority, central bank, the
National Association of Insurance Commissioners, or comparable agency charged
with the interpretation or administration thereof, or compliance by any Lender
(or its applicable lending office) with any guideline, request or directive
regarding capital adequacy (whether or not having the force of law) of any such
governmental authority, central bank, the National Association of Insurance
Commissioners or comparable agency, has or would have the effect of reducing
the rate of return on the capital of such Lender or any corporation controlling
such Lender as a consequence of, or with reference to, such Lender's Loans or
Commitments or Letters of Credit or participations therein or other obligations
hereunder with respect to the Loans or the Letters of Credit to a level below
that which such Lender or such controlling corporation could have achieved but
for such adoption, effectiveness, phase-in, applicability, change or compliance
(taking into consideration the policies of such Lender or such controlling
corporation with regard to capital adequacy), then from time to time, within
five Business Days after receipt by Company from such Lender of the statement
referred to in the next sentence, Company shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such controlling
corporation on an after-tax basis for such reduction. Such Lender shall deliver
to Company (with a copy to Administrative Agent) a written statement, setting
forth in reasonable detail the basis of the calculation of such additional
amounts, which statement shall be conclusive and binding upon all parties
hereto absent manifest error.
58
66
D. SUBSTITUTE LENDERS. In the event Company is required under
the provisions of this subsection 2.7 or subsection 3.6 to make payments in a
material amount to any Lender or in the event any Lender fails to lend to
Company in accordance with this Agreement, Company may, so long as no Event of
Default or Potential Event of Default shall have occurred and be continuing,
elect to terminate such Lender as a party to this Agreement; provided that,
concurrently with such termination, (i) Company shall pay that Lender all
principal, interest and fees and other amounts (including without limitation,
amounts, if any, owed under this subsection 2.7 or subsection 3.6) owed to such
Lender through such date of termination, (ii) another financial institution
satisfactory to Administrative Agent (or if Administrative Agent is also the
Lender to be terminated, the successor Administrative Agent) shall agree, as of
such date, to become a Lender for all purposes under this Agreement (whether by
assignment or amendment) and to assume all obligations of the Lender to be
terminated as of such date, and (iii) all documents and supporting materials
necessary, in the judgment of Administrative Agent (or if Administrative Agent
is also the Lender to be terminated, the successor Administrative Agent), to
evidence the substitution of such Lender shall have been received and approved
by Adminis- trative Agent as of such date.
2.8 OBLIGATION OF LENDERS AND ISSUING LENDER TO MITIGATE.
Each Lender and Issuing Lender agrees that, as promptly as practicable
after the officer of such Lender or Issuing Lender responsible for
administering the Loans or Letters of Credit of such Lender or Issuing Lender,
as the case may be, becomes aware of the occurrence of an event or the
existence of a condition that would cause such Lender to become an Affected
Lender or that would entitle such Lender or Issuing Lender to receive payments
under subsection 2.7 or subsection 3.6, it will, to the extent not inconsistent
with the internal policies of such Lender or Issuing Lender and any applicable
legal or regulatory restrictions, use reasonable efforts (i) to make, issue,
fund or maintain the Commitments of such Lender or the affected Loans or
Letters of Credit of such Lender or Issuing Lender through another lending or
letter of credit office of such Lender or Issuing Lender, or (ii) take such
other measures as such Lender or Issuing Lender may deem reasonable, if as a
result thereof the circumstances which would cause such Lender to be an
Affected Lender would cease to exist or the additional amounts which would
otherwise be required to be paid to such Lender or Issuing Lender pursuant to
subsection 2.7 or subsection 3.6 would be materially reduced and if, as
determined by such Lender or Issuing Lender in its sole discretion, the making,
issuing, funding or maintaining of such Commitments or Loans or Letters of
Credit through such other lending or letter of credit office or in accordance
with such other measures, as the case may be, would not otherwise materially
adversely affect such Commitments or Loans or Letters of Credit or the
interests of such Lender or Issuing Lender; provided that such Lender or
Issuing Lender will not be obligated to utilize such other lending or letter of
credit office pursuant to this subsection 2.8 unless Company agrees to pay all
incremental expenses incurred by such Lender or Issuing Lender as a result of
utilizing such other lending or letter of credit office as described in clause
(i) above. A certificate as to the amount of any such expenses payable by
Company pursuant to this subsection 2.8 (setting forth in reasonable detail the
basis for requesting such amount) submitted by such Lender or Issuing Lender to
Company (with a copy to Administrative Agent) shall be conclusive absent
manifest error.
59
67
SECTION 3.
LETTERS OF CREDIT
3.1 ISSUANCE OF LETTERS OF CREDIT AND LENDERS' PURCHASE OF PARTICIPATIONS
THEREIN.
A. LETTERS OF CREDIT. In addition to Company requesting that
Lenders make Revolving Loans pursuant to subsection 2.1A(ii), Company may
request, in accordance with the provisions of this subsection 3.1, from time to
time during the period from the Closing Date to but excluding the Revolving
Loan Commitment Conversion Date, that Issuing Lender issue Letters of Credit
for the account of Company for the purposes specified in the definition of
Standby Letters of Credit. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Company
herein set forth, Issuing Lender shall issue such Letters of Credit in
accordance with the provisions of this subsection 3.1; provided that Company
shall not request that Issuing Lender issue and Issuing Lender shall not issue:
(i) any Letter of Credit if, after giving effect to such
issuance, the Total Utilization of Revolving Loan Commitments would
exceed the Revolving Loan Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to such
issuance, the Letter of Credit Usage would exceed $10,000,000;
(iii) any Standby Letter of Credit having an expiration
date later than the earlier of (a) the Revolving Loan Conversion Date
and (b) the date which is one year from the date of issuance of such
Standby Letter of Credit; provided that the immediately preceding
clause (b) shall not prevent Issuing Lender from agreeing that a
Standby Letter of Credit will automatically be extended for one or
more successive periods not to exceed one year each unless Issuing
Lender elects not to extend for any such additional period; and
provided, further that Issuing Lender shall elect not to extend such
Standby Letter of Credit if it has received a notice from
Administrative Agent or Company or any Lender that an Event of Default
has occurred and is continuing (and such Event of Default has not been
waived in accordance with subsection 10.6) at the time Issuing Lender
must elect whether or not to allow such extension; or
(iv) any Letter of Credit denominated in a currency other
than Dollars.
B. MECHANICS OF ISSUANCE.
(i) Notice of Issuance. Whenever Company desires the
issuance of a Letter of Credit, it shall deliver to Issuing Lender a
Notice of Issuance of Letter of Credit substantially in the form of
Exhibit III annexed hereto no later than 12:00 Noon (New York City
time) at least three Business Days, or such shorter period as may be
agreed to by Issuing Lender in any particular instance, in advance of
the proposed date of issuance. The Notice of Issuance of Letter of
Credit shall specify (a) the proposed date
60
68
of issuance (which shall be a Business Day), (b) the face amount of
the Letter of Credit, (c) the expiration date of the Letter of Credit,
(d) the name and address of the beneficiary, and (e) either the
verbatim text of the proposed Letter of Credit or the proposed terms
and conditions thereof, including a precise description of any
documents to be presented by the beneficiary which, if presented by
the beneficiary prior to the expiration date of the Letter of Credit,
would require Issuing Lender to make payment under the Letter of
Credit; provided that Issuing Lender, in its reasonable discretion,
may require changes in the text of the proposed Letter of Credit or
any such documents; and provided, further that no Letter of Credit
shall require payment against a conforming draft to be made thereunder
on the same business day (under the laws of the jurisdiction in which
the office of Issuing Lender to which such draft is required to be
presented is located) that such draft is presented if such
presentation is made after 10:00 A.M. (in the time zone of such office
of Issuing Lender) on such business day.
Company shall notify Issuing Lender (and Administrative Agent,
if Administrative Agent is not Issuing Lender) prior to the issuance
of any Letter of Credit in the event that any of the matters to which
Company is required to certify in the applicable Notice of Issuance of
Letter of Credit is no longer true and correct as of the proposed date
of issuance of such Letter of Credit, and upon the issuance of any
Letter of Credit Company shall be deemed to have re-certified, as of
the date of such issuance, as to the matters to which Company is
required to certify in the applicable Notice of Issuance of Letter of
Credit.
(ii) Issuance of Letter of Credit. Upon satisfaction or
waiver (in accordance with subsection 10.6) of the conditions set
forth in subsection 4.3, Issuing Lender shall issue the requested
Letter of Credit in accordance with Issuing Lender's standard
operating procedures.
(iii) Notification to Lenders. Upon the issuance of any
Letter of Credit Issuing Lender shall promptly notify Administrative
Agent (if Administrative Agent is not Issuing Lender) and each other
Lender of such issuance, which notice shall be accompanied by a copy
of such Letter of Credit. Promptly after receipt of such notice (or,
if Administrative Agent is Issuing Lender, together with such notice),
Administrative Agent shall notify each Lender of the amount of such
Lender's respective participation in such Letter of Credit, determined
in accordance with subsection 3.1C.
(iv) Reports to Lenders. After the end of each calendar
quarter ending after the Closing Date, so long as any Letter of Credit
shall have been outstanding during such calendar quarter, Issuing
Lender shall, upon request of any Lender, deliver to such Lender as
soon as practicable following such request a report setting forth for
such calendar quarter the daily aggregate amount available to be drawn
under the Letters of Credit issued by such Issuing Lender that were
outstanding during such calendar quarter.
C. LENDERS' PURCHASE OF PARTICIPATIONS IN LETTERS OF CREDIT.
Immediately upon the issuance of each Letter of Credit, each Lender having a
Revolving Loan Commitment shall
61
69
be deemed to, and hereby agrees to, have irrevocably purchased from Issuing
Lender a participation in such Letter of Credit and any drawings honored
thereunder in an amount equal to such Lender's Pro Rata Share (with respect to
the Revolving Loan Commitments) of the maximum amount which is or at any time
may become available to be drawn thereunder.
3.2 LETTER OF CREDIT FEES.
Company agrees to pay the following amounts with respect to Letters of
Credit issued hereunder:
(i) with respect to each Letter of Credit, (a) a fronting
fee, payable directly to Issuing Lender for its own account, equal to
0.25% per annum of the daily amount available to be drawn under such
Standby Letter of Credit and (b) a letter of credit fee, payable to
Administrative Agent for the account of Lenders, equal to the product
of (x) the Applicable Margin with respect to Revolving Loans that are
Eurodollar Rate Loans and (y) the daily amount available to be drawn
under such Standby Letter of Credit, each such fronting fee or letter
of credit fee to be payable in arrears on and to (but excluding) each
February 28, May 31, August 31 and November 30 of each year and
computed on the basis of a 360-day year for the actual number of days
elapsed; and
(ii) with respect to the issuance, amendment or transfer
of each Letter of Credit and each payment of a drawing made thereunder
(without duplication of the fees payable under clause (i) above),
documentary and processing charges payable directly to Issuing Lender
for its own account in accordance with Issuing Lender's standard
schedule for such charges in effect at the time of such issuance,
amendment, transfer or payment, as the case may be.
For purposes of calculating any fees payable under clause (i) of this
subsection 3.2, the daily amount available to be drawn under any Letter of
Credit shall be determined as of the close of business on any date of
determination Promptly upon receipt by Administrative Agent of any amount
described in clause (i)(b) of this subsection 3.2, Administrative Agent shall
distribute to each Lender its Pro Rata Share of such amount.
3.3 DRAWINGS AND REIMBURSEMENT OF AMOUNTS PAID UNDER LETTERS OF CREDIT.
A. RESPONSIBILITY OF ISSUING LENDER WITH RESPECT TO DRAWINGS. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, Issuing Lender shall be responsible only to examine the
documents delivered under such Letter of Credit with reasonable care so as to
ascertain whether they appear on their face to be in accordance with the terms
and conditions of such Letter of Credit.
B. REIMBURSEMENT BY COMPANY OF AMOUNTS PAID UNDER LETTERS OF
CREDIT. In the event Issuing Lender has determined to honor a drawing under a
Letter of Credit issued by it, Issuing Lender shall immediately notify Company
and Administrative Agent, and Company shall reimburse Issuing Lender on or
before the Business Day immediately following the date
62
70
on which such drawing is honored (the "REIMBURSEMENT DATE") in an amount in
Dollars and in same day funds equal to the amount of such honored drawing;
provided that, anything contained in this Agreement to the contrary
notwithstanding, (i) unless Company shall have notified Administrative Agent
and Issuing Lender prior to 11:00 A.M. (New York City time) on the date such
drawing is honored that Company intends to reimburse Issuing Lender for the
amount of such honored drawing with funds other than the proceeds of Revolving
Loans, Company shall be deemed to have given a timely Notice of Borrowing to
Administrative Agent requesting Lenders to make Revolving Loans that are Base
Rate Loans on the Reimbursement Date in an amount in Dollars equal to the
amount of such honored drawing and (ii) subject to satisfaction or waiver of
the conditions specified in subsection 4.2B, Lenders shall, on the
Reimbursement Date, make Revolving Loans that are Base Rate Loans in the amount
of such honored drawing, the proceeds of which shall be applied directly by
Administrative Agent to reimburse Issuing Lender for the amount of such honored
drawing; and provided, further that if for any reason proceeds of Revolving
Loans are not received by Issuing Lender on the Reimbursement Date in an amount
equal to the amount of such honored drawing, Company shall reimburse Issuing
Lender, on demand, in an amount in same day funds equal to the excess of the
amount of such honored drawing over the aggregate amount of such Revolving
Loans, if any, which are so received. Nothing in this subsection 3.3B shall be
deemed to relieve any Lender from its obligation to make Revolving Loans on the
terms and conditions set forth in this Agreement, and Company shall retain any
and all rights it may have against any Lender resulting from the failure of
such Lender to make such Revolving Loans under this subsection 3.3B.
C. PAYMENT BY LENDERS OF UNREIMBURSED AMOUNTS PAID UNDER LETTERS
OF CREDIT.
(i) Payment by Lenders. In the event that Company shall
fail for any reason to reimburse Issuing Lender as provided in
subsection 3.3B in an amount equal to the amount of any drawing
honored by Issuing Lender under a Letter of Credit issued by it,
Issuing Lender shall promptly notify each other Lender of the
unreimbursed amount of such honored drawing and of such other Lender's
respective participation therein based on such Lender's Pro Rata Share
of the Revolving Loan Commitments. Each Lender shall make available
to Issuing Lender an amount equal to its respective participation, in
Dollars and in same day funds, at the office of such Issuing Lender
specified in such notice, not later than 12:00 Noon (New York City
time) on the first business day (under the laws of the jurisdiction in
which such office of Issuing Lender is located) after the date
notified by Issuing Lender. In the event that any Lender fails to
make available to Issuing Lender on such business day the amount of
such Lender's participation in such Letter of Credit as provided in
this subsection 3.3C, Issuing Lender shall be entitled to recover such
amount on demand from such Lender together with interest thereon at
the rate customarily used by Issuing Lender for the correction of
errors among banks for three Business Days and thereafter at the Base
Rate. Nothing in this subsection 3.3C shall be deemed to prejudice
the right of any Lender to recover from Issuing Lender any amounts
made available by such Lender to Issuing Lender pursuant to this
subsection 3.3C in the event that it is determined by the final
judgment of a court of competent jurisdiction that the payment with
respect to a Letter of Credit by Issuing Lender in
63
71
respect of which payment was made by such Lender constituted gross
negligence or willful misconduct on the part of Issuing Lender.
(ii) Distribution to Lenders of Reimbursements Received
From Company. In the event Issuing Lender shall have been reimbursed
by other Lenders pursuant to subsection 3.3C(i) for all or any portion
of any drawing honored by Issuing Lender under a Letter of Credit
issued by it, Issuing Lender shall distribute to each other Lender
which has paid all amounts payable by it under subsection 3.3C(i) with
respect to such honored drawing such other Lender's Pro Rata Share of
all payments subsequently received by Issuing Lender from Company in
reimbursement of such honored drawing when such payments are received.
Any such distribution shall be made to a Lender at its primary address
set forth below its name on the appropriate signature page hereof or
at such other address as such Lender may request.
D. INTEREST ON AMOUNTS PAID UNDER LETTERS OF CREDIT.
(i) Payment of Interest by Company. Company agrees to
pay to Issuing Lender, with respect to drawings honored under any
Letters of Credit issued by it, interest on the amount paid by Issuing
Lender in respect of each such honored drawing from the date such
drawing is honored to but excluding the date such amount is reimbursed
by Company (including any such reimbursement out of the proceeds of
Revolving Loans pursuant to subsection 3.3B) at a rate equal to (a)
for the period from the date such drawing is honored to but excluding
the Reimbursement Date, the Base Rate plus the Applicable Margin with
respect to Revolving Loans that are Base Rate Loans and (b)
thereafter, a rate which is 2% per annum in excess of the rate of
interest otherwise payable under this Agreement with respect to
Revolving Loans that are Base Rate Loans. Interest payable pursuant
to this subsection 3.3D(i) shall be computed on the basis of a 360-day
year for the actual number of days elapsed in the period during which
it accrues and shall be payable on demand or, if no demand is made, on
the date on which the related drawing under a Letter of Credit is
reimbursed in full.
(ii) Distribution of Interest Payments by Issuing Lender.
Promptly upon receipt by Issuing Lender of any payment of interest
pursuant to subsection 3.3D(i) with respect to a drawing honored under
a Letter of Credit issued by it, (a) Issuing Lender shall distribute
to each other Lender, out of the interest received by Issuing Lender
in respect of the period from the date such drawing is honored to but
excluding the date on which Issuing Lender is reimbursed for the
amount of such drawing (including any such reimbursement out of the
proceeds of Revolving Loans pursuant to subsection 3.3B), the amount
that such other Lender would have been entitled to receive in respect
of the letter of credit fee that would have been payable in respect of
such Letter of Credit for such period pursuant to subsection 3.2 if no
drawing had been honored under such Letter of Credit, and (b) in the
event Issuing Lender shall have been reimbursed by other Lenders
pursuant to subsection 3.3C(i) for all or any portion of such honored
drawing, Issuing Lender shall distribute to each other Lender which
has paid all amounts payable by it under subsection 3.3C(i) with
respect to such honored drawing such other Lender's Pro
64
72
Rata Share of any interest received by Issuing Lender in respect of
that portion of such honored drawing so reimbursed by other Lenders
for the period from the date on which Issuing Lender was so reimbursed
by other Lenders to but excluding the date on which such portion of
such honored drawing is reimbursed by Company. Any such distribution
shall be made to a Lender at its primary address set forth below its
name on the appropriate signature page hereof or at such other address
as such Lender may request.
3.4 OBLIGATIONS ABSOLUTE.
The obligation of Company to reimburse Issuing Lender for drawings
honored under the Letters of Credit issued by it and to repay any Revolving
Loans made by Lenders pursuant to subsection 3.3B and the obligations of
Lenders under subsection 3.3C(i) shall be unconditional and irrevocable and
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances including any of the following circumstances:
(i) any lack of validity or enforceability of any Letter
of Credit;
(ii) the existence of any claim, set-off, defense or other
right which Company or any Lender may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any Persons
for whom any such transferee may be acting), Issuing Lender or other
Lender or any other Person or, in the case of a Lender, against
Company, whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction (including any
underlying transaction between Company or one of its Subsidiaries and
the beneficiary for which any Letter of Credit was procured);
(iii) any draft or other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) payment by Issuing Lender under any Letter of Credit
against presentation of a draft or other document which does not
substantially comply with the terms of such Letter of Credit;
(v) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of
Company or any of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan
Document by any party thereto;
(vii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential
Event of Default shall have occurred and be continuing;
65
73
provided, in each case, that payment by Issuing Lender under the applicable
Letter of Credit shall not have constituted gross negligence or willful
misconduct of Issuing Lender under the circumstances in question (as determined
by a final judgment of a court of competent jurisdiction).
3.5 INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES.
A. INDEMNIFICATION. In addition to amounts payable as provided
in subsection 3.6, Company hereby agrees to protect, indemnify, pay and save
harmless Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel) which Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit by Issuing
Lender, other than as a result of (a) the gross negligence or willful
misconduct of Issuing Lender as determined by a final judgment of a court of
competent jurisdiction or (b) subject to the following clause (ii), the
wrongful dishonor by Issuing Lender of a proper demand for payment made under
any Letter of Credit issued by it or (ii) the failure of Issuing Lender to
honor a drawing under any such Letter of Credit as a result of any act or
omission, whether rightful or wrongful, of any present or future de jure or de
facto government or governmental authority (all such acts or omissions herein
called "GOVERNMENTAL ACTS").
B. NATURE OF ISSUING LENDER'S DUTIES. As between Company and
Issuing Lender, Company assumes all risks of the acts and omissions of, or
misuse of the Letters of Credit issued by Issuing Lender by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation
of the foregoing, Issuing Lender shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason; (iii) failure of the beneficiary
of any such Letter of Credit to comply fully with any conditions required in
order to draw upon such Letter of Credit; (iv) errors, omissions, interruptions
or delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission
or otherwise of any document required in order to make a drawing under any such
Letter of Credit or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any drawing under
such Letter of Credit; or (viii) any consequences arising from causes beyond
the control of Issuing Lender, including any Governmental Acts, and none of the
above shall affect or impair, or prevent the vesting of, any of Issuing
Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 3.5B, any action
taken or omitted by Issuing Lender under or in connection with the Letters of
Credit issued by it or any documents and certificates
66
74
delivered thereunder, if taken or omitted in good faith, shall not put Issuing
Lender under any resulting liability to Company.
Notwithstanding anything to the contrary contained in this subsection
3.5, Company shall retain any and all rights it may have against Issuing Lender
for any liability arising solely out of the gross negligence or willful
misconduct of Issuing Lender, as determined by a final judgment of a court of
competent jurisdiction.
3.6 INCREASED COSTS AND TAXES RELATING TO LETTERS OF CREDIT.
Subject to the provisions of subsection 2.7B (which shall be
controlling with respect to the matters covered thereby), in the event that
Issuing Lender or any Lender shall determine (which determination shall, absent
manifest error, be final and conclusive and binding upon all parties hereto)
that any law, treaty or governmental rule, regulation or order, or any change
therein or in the interpretation, administration or application thereof
(including the introduction of any new law, treaty or governmental rule,
regulation or order), or any determination of a court or governmental
authority, in each case that becomes effective after the date hereof, or
compliance by Issuing Lender or any Lender with any guideline, request or
directive issued or made after the date hereof by any central bank or other
governmental or quasi-governmental authority (whether or not having the force
of law):
(i) subjects Issuing Lender or such Lender (or its
applicable lending or letter of credit office) to any additional Tax
(other than any Tax on the overall net income of Issuing Lender or
such Lender) with respect to the issuing or maintaining of any Letters
of Credit or the purchasing or maintaining of any participations
therein or any other obligations under this Section 3, whether
directly or by such being imposed on or suffered by Issuing Lender;
(ii) imposes, modifies or holds applicable any reserve
(including any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, FDIC insurance or similar
requirement in respect of any Letters of Credit issued by Issuing
Lender or participations therein purchased by such Lender; or
(iii) imposes any other condition (other than with respect
to a Tax matter) on or affecting Issuing Lender or such Lender (or its
applicable lending or letter of credit office) regarding this Section
3 or any Letter of Credit or any participation therein;
and the result of any of the foregoing is to increase the cost to Issuing
Lender or such Lender of agreeing to issue, issuing or maintaining any Letter
of Credit or agreeing to purchase, purchasing or maintaining any participation
therein or to reduce any amount received or receivable by such Issuing Lender
or such Lender (or its applicable lending or letter of credit office) with
respect thereto; then, in any case, Company shall promptly pay to Issuing
Lender or such Lender, upon receipt of the statement referred to in the next
sentence, such additional amount or amounts as may be necessary to compensate
Issuing Lender or such Lender for any such increased cost or reduction in
amounts received or receivable hereunder. Issuing Lender
67
75
or such Lender shall deliver to Company a written statement, setting forth in
reasonable detail the basis for calculating the additional amounts owed to
Issuing Lender or such Lender under this subsection 3.6, which statement shall
be conclusive and binding upon all parties hereto absent manifest error.
SECTION 4.
CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Loans and of Issuing Lender to
issue Letters of Credit hereunder are subject to the satisfaction of the
following conditions.
4.1 CONDITIONS TO AXELS AND REVOLVING LOANS.
The obligations of Lenders to make the AXELs and any Revolving Loans
to be made on the Closing Date are, in addition to the conditions precedent
specified in subsection 4.2, subject to prior or concurrent satisfaction of the
following conditions:
A. LOAN PARTY DOCUMENTS. On or before the Closing Date, Company
shall, and shall cause each other Loan Party to, deliver to Lenders (or to
Administrative Agent for Lenders with sufficient originally executed copies,
where appropriate, for each Lender and its counsel) the following with respect
to Company or such Loan Party, as the case may be, each, unless otherwise
noted, dated the Closing Date:
(i) Certified copies of the Certificate or Articles of
Incorporation of such Person, together with a good standing
certificate from the Secretary of State of its jurisdiction of
incorporation and each other state in which such Person is qualified
as a foreign corporation to do business and, to the extent generally
available, a certificate or other evidence of good standing as to
payment of any applicable franchise or similar taxes from the
appropriate taxing authority of each of such jurisdictions, each dated
a recent date prior to the Closing Date;
(ii) Copies of the Bylaws of such Person, certified as of
the Closing Date by such Person's corporate secretary or an assistant
secretary;
(iii) Resolutions of the Board of Directors of such Person
approving and authorizing the execution, delivery and performance of
the Loan Documents, certified as of the Closing Date by the corporate
secretary or an assistant secretary of such Person as being in full
force and effect without modification or amendment;
(iv) Signature and incumbency certificates of the officers
of such Person executing the Loan Documents to which it is a party;
(v) Executed originals of the Loan Documents to which
such Person is a party; and
68
76
(vi) Such other documents as Arranger or Administrative
Agent may reasonably request.
B. MINIMUM BORROWING. On the Closing Date, Company shall borrow
AXELs totalling not less than $125,000,000.
C. MATTERS RELATING TO EXISTING RESTRICTED INDEBTEDNESS. On or
prior to the Closing Date, Holdings shall have delivered to Administrative
Agent (i) a fully executed or conformed copy of the Existing Holdings Senior
Note Indenture and the Existing Holdings Convertible Note Agreement, (ii) the
terms of the Existing Holdings Convertible Note Agreement shall be satisfactory
to Arranger and Administrative Agent and (iii) evidence satisfactory to
Administrative Agent and Arranger that the Loans made on the Closing Date are
permitted under the Existing Holdings Senior Note Indenture.
D. SECURITY INTERESTS IN PERSONAL AND MIXED PROPERTY. Each of
Arranger and Administrative Agent shall have received evidence satisfactory to
it that Holdings, Company and Subsidiary Guarantors shall have taken or caused
to be taken all such actions, executed and delivered or caused to be executed
and delivered all such agreements, documents and instruments, and made or
caused to be made all such filings and recordings (other than the filing or
recording of items described in clauses (iii) and (iv) below) that may be
necessary or, in the opinion of Arranger and Administrative Agent, desirable in
order to create in favor of Administrative Agent, for the benefit of Lenders, a
valid and (upon such filing and recording) perfected First Priority security
interest in the entire personal and mixed property Collateral. Such actions
shall include the following:
(i) Schedules to Collateral Documents. Delivery to
Administrative Agent of accurate and complete schedules to all of the
applicable Collateral Documents.
(ii) Stock Certificates and Instruments. Delivery to
Administrative Agent of (a) certificates (which certificates shall be
accompanied by irrevocable undated stock powers, duly endorsed in
blank and otherwise satisfactory in form and substance to
Administrative Agent) representing all capital stock pledged pursuant
to the Holdings Pledge Agreement, the Company Pledge Agreement, the
Subsidiary Pledge Agreements and the License Co. Stockholders Pledge
Agreement and (b) all promissory notes or other instruments (duly
endorsed, where appropriate, in a manner satisfactory to
Administrative Agent) evidencing any Collateral;
(iii) Lien Searches and UCC Termination Statements.
Delivery to Arranger and Administrative Agent of (a) the results of a
recent search, by a Person satisfactory to Arranger and Administrative
Agent, of all effective UCC financing statements and fixture filings
and all judgment and tax lien filings which may have been made with
respect to any personal or mixed property of any Loan Party, together
with copies of all such filings disclosed by such search, and (b) UCC
termination statements duly executed by all applicable Persons for
filing in all applicable jurisdictions as may be necessary to
terminate any effective UCC financing statements or fixture filings
disclosed in such
69
77
search (other than any such financing statements or fixture filings in
respect of Liens permitted to remain outstanding pursuant to the terms
of this Agreement); and
(iv) UCC Financing Statements and Fixture Filings.
Delivery to Administrative Agent of UCC financing statements and,
where appropriate, fixture filings, duly executed by each applicable
Loan Party with respect to all personal and mixed property Collateral
of such Loan Party, for filing in all jurisdictions as may be
necessary or, in the opinion of Arranger and Administrative Agent,
desirable to perfect the security interests created in such Collateral
pursuant to the Collateral Documents.
E. LICENSES; COMPLIANCE WITH COMMUNICATIONS ACT; OTHER NECESSARY
GOVERNMENTAL AUTHORIZATIONS AND CONSENTS; FRANCHISES.
(i) Licenses. Each License with respect to the business
of Holdings and its Subsidiaries shall be in full force and effect
except to the extent the failure to be in full force and effect would
not individually or in the aggregate have a Material Adverse Effect.
(ii) Compliance with Communications Act. Arranging Agent
and Administrative Agent shall be satisfied that Holdings and its
Subsidiaries are in compliance with the Communications Act and State
Law except to the extent the failure to be in compliance would not
individually or in the aggregate have a Material Adverse Effect.
(iii) Other Necessary Governmental Authorizations and
Consents. Holdings shall have obtained all other Governmental
Authorizations and all consents of other Persons, in each case that
are necessary or advisable in connection with transactions
contemplated by the Loan Documents and the continued operation of the
business conducted by Holdings and its Subsidiaries, and each of the
foregoing shall be in full force and effect, in each case other than
those the failure to obtain or maintain which, either individually or
in the aggregate, would not reasonably be expected to have a Material
Adverse Effect.
F. EVIDENCE OF INSURANCE. Arranger and Administrative Agent
shall have received a certificate from Company's insurance broker or other
evidence satisfactory to it that all insurance required to be maintained
pursuant to subsection 6.4 is in full force and effect and that Administrative
Agent on behalf of Lenders has been named as additional insured and/or loss
payee thereunder to the extent required under subsection 6.4.
G. OPINIONS OF COUNSEL TO LOAN PARTIES. Lenders and their
respective counsel shall have received (i) originally executed copies of one or
more favorable written opinions of (i) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Esq., Vice
President and General Counsel of Holdings, (ii) Kronish, Lieb, Weiner & ▇▇▇▇▇▇▇
LLP and (ii) Goldberg, Godles, Weiner & ▇▇▇▇▇▇, counsel for Loan Parties, in
form and substance reasonably satisfactory to Administrative Agent and Arranger
and its counsel, dated as of the Closing Date and setting forth substantially
the matters in the opinions designated in Exhibit VIII annexed hereto and as to
such other matters as
70
78
Administrative Agent or Arranger and acting on behalf of Lenders may reasonably
request and (ii) evidence satisfactory to Arranger and Administrative Agent
that Company has requested such counsel to deliver such opinions to Lenders.
H. OPINIONS OF ADMINISTRATIVE AGENT'S COUNSEL. Lenders shall
have received originally executed copies of one or more favorable written
opinions of O'Melveny & ▇▇▇▇▇ LLP, counsel to Arranger, dated as of the Closing
Date, substantially in the form of Exhibit IX annexed hereto and as to such
other matters as Arranger may reasonably request.
I. LENDER SUBORDINATION AGREEMENT AND VPC AND CPDQ AGREEMENT.
Administrative Agent shall have received fully executed copies of the Lender
Subordination Agreement and VPC and CPDQ Agreement.
J. FEES. Company shall have paid to Arranger and Administrative
Agent, for distribution (as appropriate) to Arranger, Administrative Agent and
Lenders, the fees payable on the Closing Date referred to in subsection 2.3.
K. COMPLETION OF PROCEEDINGS. All corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Administrative Agent, acting on behalf of Lenders, or Arranger
and its counsel shall be satisfactory in form and substance to Administrative
Agent and Arranger and such counsel, and Administrative Agent, Arranger and
such counsel shall have received all such counterpart originals or certified
copies of such documents as Administrative Agent or Arranger may reasonably
request.
4.2 CONDITIONS TO ALL LOANS.
The obligations of Lenders to make Loans on each Funding Date are
subject to the following further conditions precedent:
A. Administrative Agent shall have received before that Funding
Date, in accordance with the provisions of subsection 2.1B, an originally
executed Notice of Borrowing, in each case signed by the chief executive
officer, the chief financial officer or the treasurer of Company or by any
executive officer of Company designated by any of the above-described officers
on behalf of Company in a writing delivered to Administrative Agent.
B. As of that Funding Date:
(i) The representations and warranties contained herein
and in the other Loan Documents shall be true, correct and complete in
all material respects on and as of that Funding Date to the same
extent as though made on and as of that date, except to the extent
such representations and warranties specifically relate to an earlier
date, in which case such representations and warranties shall have
been true, correct and complete in all material respects on and as of
such earlier date;
71
79
(ii) No event shall have occurred and be continuing or
would result from the consummation of the borrowing contemplated by
such Notice of Borrowing that would constitute an Event of Default or
a Potential Event of Default;
(iii) Each Loan Party shall have performed in all material
respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by it on or before
that Funding Date;
(iv) No order, judgment or decree of any court, arbitrator
or governmental authority shall purport to enjoin or restrain any
Lender from making the Loans to be made by it on that Funding Date;
(v) The making of the Loans requested on such Funding
Date shall not violate any law including Regulation G, Regulation T,
Regulation U or Regulation X of the Board of Governors of the Federal
Reserve System; and
(vi) There shall not be pending or, to the knowledge of
Company, threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting Holdings or any of
its Subsidiaries or any property of Holdings or any of its
Subsidiaries that has not been disclosed by Company in writing
pursuant to subsection 5.6 or 6.1(x) prior to the making of the last
preceding Loans (or, in the case of the initial Loans, prior to the
execution of this Agreement), and there shall have occurred no
development not so disclosed in any such action, suit, proceeding,
governmental investigation or arbitration so disclosed, that, in
either event, in the opinion of Administrative Agent or of Requisite
Lenders, would be expected to have a Material Adverse Effect.
4.3 CONDITIONS TO LETTERS OF CREDIT.
The issuance of any Letter of Credit hereunder (whether or not the
applicable Issuing Lender is obligated to issue such Letter of Credit) is
subject to the following conditions precedent:
A. On or before the date of issuance of the initial
Letter of Credit pursuant to this Agreement, the initial Loans shall
have been made.
B. On or before the date of issuance of such Letter of
Credit, Administrative Agent shall have received, in accordance with
the provisions of subsection 3.1B(i), an originally executed Notice of
Issuance of Letter of Credit, in each case signed by the chief
executive officer, the chief financial officer or the treasurer of
Company or by any executive officer of Company designated by any of
the above-described officers on behalf of Company in a writing
delivered to Administrative Agent, together with all other information
specified in subsection 3.1B(i) and such other documents or
information as the applicable Issuing Lender may reasonably require in
connection with the issuance of such Letter of Credit.
72
80
C. On the date of issuance of such Letter of Credit, all
conditions precedent described in subsection 4.2B shall be satisfied
to the same extent as if the issuance of such Letter of Credit were
the making of a Loan and the date of issuance of such Letter of Credit
were a Funding Date.
SECTION 5.
REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make
the Loans, to induce Issuing Lender to issue Letters of Credit and to induce
other Lenders to purchase participations therein, Holdings and Company
represent and warrant to each Lender, on the date of this Agreement, on each
Funding Date and on the date of issuance of each Letter of Credit, that the
following statements are true, correct and complete:
5.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
SUBSIDIARIES.
A. ORGANIZATION AND POWERS. Each Loan Party is a corporation or
partnership duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation as specified in Schedule 5.1A annexed
hereto. Each Loan Party has all requisite corporate or partnership power and
authority to own and operate its properties, to carry on its business as now
conducted and as proposed to be conducted, to enter into the Loan Documents to
which it is a party and to carry out the transactions contemplated thereby.
B. QUALIFICATION AND GOOD STANDING. Each Loan Party is qualified
to do business and in good standing in every jurisdiction where its assets are
located and wherever necessary to carry out its business and operations, except
in jurisdictions where the failure to be so qualified or in good standing has
not had and will not have a Material Adverse Effect.
C. CONDUCT OF BUSINESS. Loan Parties are engaged only in the
businesses permitted to be engaged in pursuant to subsection 7.13.
D. SUBSIDIARIES. All of the Subsidiaries of Holdings as of the
Closing Date are identified in Schedule 5.1A annexed hereto, as said Schedule
5.1A may be supplemented from time to time pursuant to the provisions of
subsection 6.1(xvi). The capital stock of each of the Subsidiaries of Holdings
identified in Schedule 5.1A annexed hereto (as so supplemented) is duly
authorized, validly issued, fully paid and nonassessable and none of such
capital stock constitutes Margin Stock. Each of the Subsidiaries of Holdings
identified in Schedule 5.1A annexed hereto (as so supplemented) is a
corporation or partnership duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation set
forth therein, has all requisite corporate or partnership power and authority
to own and operate its properties and to carry on its business as now conducted
and as proposed to be conducted, and is qualified to do business and in good
standing in every jurisdiction where its assets are located and wherever
necessary to carry out its business and operations, in each case except where
failure to be so qualified or in good standing or a lack of such corporate
power and authority has not had and
73
81
will not have a Material Adverse Effect. Schedule 5.1A annexed hereto (as so
supplemented) correctly sets forth the ownership interest of Holdings and each
of its Subsidiaries in each of the Subsidiaries of Holdings identified therein.
E. REGULATORY AUTHORIZATIONS.
(i) Licenses. Except as set forth in Part I of Schedule
5.1E annexed hereto, each of the Loan Parties has obtained all
licenses, permits, certifications or other authorizations required by
the Communications Regulatory Authorities under the Communications
Act, State Law and local law in order to carry out its business and
operations as presently conducted and as proposed to be conducted,
including the provision of the telecommunications services set forth
in any Licenses except to the extent the failure to obtain
such licenses, permits, certifications or other authorizations would
not individually or in the aggregate have a Material Adverse Effect.
Part II of Schedule 5.1E annexed hereto accurately lists all Licenses,
including their expiration dates, held by each of the Loan Parties as
of the date of this Agreement. Each such License was duly and validly
issued by the FCC, the appropriate State PUC or local governmental
authority pursuant to procedures which materially comply with all
requirements of all applicable federal, state or local laws and is in
full force and effect except to the extent the failure to be in full
force and effect would not individually or in the aggregate have a
Material Adverse Effect. None of the Loan Parties has any knowledge
of the occurrence of any event or the existence of any circumstance
which, in the reasonable judgment of such Loan Party, is likely to
lead to the revocation, suspension, non-renewal or adverse
modification of any material Licenses.
(ii) Compliance with Licenses and Applicable Laws. The
Loan Parties are in compliance with the terms of all Licenses and with
all applicable Regulations except to the extent noncompliance would
not individually or in the aggregate have a Material Adverse Effect.
Each of the Loan Parties has duly filed in a timely manner all
filings, including tariff filings, required by the FCC, any State PUC
or any local governmental authority to be filed by such Loan Party as
a precondition to the provision of the video programming
telecommunications or other communications services which it offers
except to the extent failure to do so would not individually or in the
aggregate have a Material Adverse Effect. None of the Loan Parties is
a party to, or is aware of any overt threat of, any litigation,
proceeding, action, notice of violation or apparent liability, order
to show cause, order of forfeiture, formal or informal complaint,
inquiry or investigation by or before the FCC, any State PUC or any
local governmental authority with jurisdiction over the services which
it offers which would individually or in the aggregate if adversely
determined have a Material Adverse Effect.
(iii) Compliance with Certain Cable, Copyright and Other
Laws. The Loan Parties have duly filed in a timely manner all
material cable television registration statements and all other
material filings which are required to be filed by such Loan Parties
under the Communications Act except to the extent the failure to do so
would not individually or in the aggregate have a Material Adverse
Effect. The Loan Parties are
74
82
in compliance with the Communications Act, including, without
limitation, the FCC Regulations relating to the carriage of television
signals and rules and regulations related to syndicated exclusivity
except to the extent noncompliance would not individually or in the
aggregate have a Material Adverse Effect. Except as set forth in
Schedule 5.1E(iii) annexed hereto, the Loan Parties have submitted all
requisite notices (if any are required) under Section 111 of the
United State Copyright Act of 1976 and the rules and regulations of
the United States Copyright Office for the carriage of all broadcast
stations as currently carried except to the extent failure to do so
would not individually or in the aggregate have a Material Adverse
Effect. Except as set forth in Schedule 5.1E(iii) and except as would
not individually or in the aggregate have a Material Adverse Effect,
the Loan Parties have filed with the United States Copyright Office
all required documents, instruments and statements of account, have
remitted payments of all required royalty fees and have obtained the
compulsory licenses provided for in Section 111 of the United States
Copyright Act of 1976 for the carriage of broadcast signals, which
licenses are currently valid and in full force and effect. No Loan
Party is liable to any Person for copyright infringement under the
Copyright Act as a result of its business operations except as would
not individually or in the aggregate have a Material Adverse Effect.
5.2 AUTHORIZATION OF BORROWING, ETC.
A. AUTHORIZATION OF BORROWING. The execution, delivery and
performance of the Loan Documents have been duly authorized by all necessary
corporate action on the part of each Loan Party that is a party thereto.
B. NO CONFLICT. The execution, delivery and performance by Loan
Parties of the Loan Documents to which they are parties and the consummation of
the transactions contemplated by the Loan Documents do not and will not (i)
violate any provision of any law or any governmental rule or regulation
applicable to any Loan Party or any of its Subsidiaries, the Certificate or
Articles of Incorporation or Bylaws or other organizational documents of any
Loan Party or any of its Subsidiaries or any order, judgment or decree of any
court or other agency of government binding on any Loan Party or any of its
Subsidiaries, (ii) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any Contractual Obligation of
any Loan Party or any of its Subsidiaries except to the extent any such breach
or default would not individually or in the aggregate have a Material Adverse
Effect, (iii) result in or require the creation or imposition of any Lien upon
any of the properties or assets of any Loan Party or any of its Subsidiaries
(other than any Liens created under any of the Loan Documents in favor of
Administrative Agent on behalf of Lenders), or (iv) require any approval of
stockholders or any approval or consent of any Person under any Contractual
Obligation of any Loan Party or any of its Subsidiaries, except for such
approvals or consents which will be obtained on or before the Closing Date and
disclosed in writing to Lenders and except to the extent, with respect to any
consents required under any Contractual Obligations, the failure to obtain such
consents would not individually or in the aggregate have a Material Adverse
Effect.
75
83
C. GOVERNMENTAL CONSENTS. The execution, delivery and
performance by Loan Parties of the Loan Documents to which they are parties and
the consummation of the transactions contemplated by the Loan Documents do not
and will not require any registration with, consent or approval of, or notice
to, or other action to, with or by, any federal, state or other governmental
authority or regulatory body (other than filings required in connection with
the perfection of security interests granted pursuant to the Collateral
Documents and routine and customary filings, or consents or approvals of, or
notices to, governmental or regulatory bodies required in connection with the
conduct of the business of Holdings and its Subsidiaries or the absence of
which would not individually or in the aggregate have a Material Adverse
Effect.
D. BINDING OBLIGATION. Each of the Loan Documents has been duly
executed and delivered by each Loan Party that is a party thereto and is the
legally valid and binding obligation of such Loan Party, enforceable against
such Loan Party in accordance with its respective terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability.
5.3 FINANCIAL CONDITION.
Company has heretofore delivered to Lenders, at Lenders' request, the
following financial statements and information: (i) the audited consolidated
and consolidating balance sheets of Holdings and its Subsidiaries as at August
31, 1997 and the related consolidated and consolidating statements of income,
stockholders' equity and cash flows of Holdings and its Subsidiaries for the
Fiscal Year then ended and (ii) the unaudited consolidated and consolidating
balance sheets of Holdings and its Subsidiaries as at October 31, 1997 and the
related unaudited consolidated and consolidating statements of income,
stockholders' equity and cash flows of Holdings and its Subsidiaries for the
two months then ended. All such statements were prepared in conformity with
GAAP and fairly present, in all material respects, the financial position (on
a consolidated basis) of the entities described in such financial statements as
at the respective dates thereof and the results of operations and cash flows
(on a consolidated basis) of the entities described therein for each of the
periods then ended, subject, in the case of any such unaudited financial
statements, to changes resulting from audit and normal year-end adjustments.
Holdings does not (and will not following the funding of the initial Loans)
have any Contingent Obligation, contingent liability or liability for taxes,
long-term lease or unusual forward or long-term commitment that is not
reflected in the foregoing financial statements or the notes thereto and which
in any such case is material in relation to the business, operations,
properties, assets, condition (financial or otherwise) or prospects of Holdings
and its Subsidiaries, taken as a whole.
5.4 NO MATERIAL ADVERSE CHANGE; NO RESTRICTED PAYMENTS.
Since August 31, 1997, no event or change has occurred that has caused
or evidences, either in any case or in the aggregate, a Material Adverse
Effect. Neither Holdings nor any of its Subsidiaries has directly or
indirectly declared, ordered, paid or made, or set apart any sum
76
84
or property for, any Restricted Payment or agreed to do so except as permitted
by subsection 7.5.
5.5 TITLE TO PROPERTIES; LIENS; REAL PROPERTY.
A. TITLE TO PROPERTIES; LIENS. Loan Parties have (i) good,
sufficient and legal title to (in the case of fee interests in real property),
(ii) valid leasehold interests in (in the case of leasehold interests in real
or personal property), or (iii) good title to (in the case of all other
personal property), all of their respective properties and assets reflected in
the financial statements referred to in subsection 5.3 or in the most recent
financial statements delivered pursuant to subsection 6.1, in each case except
for Permitted Encumbrances and assets disposed of since the date of such
financial statements in the ordinary course of business or as otherwise
permitted under subsection 7.7 and except as would not individually or in the
aggregate have a Material Adverse Effect. Except as permitted by this
Agreement, all such properties and assets are free and clear of Liens.
B. REAL PROPERTY. As of the Closing Date, Schedule 5.5 annexed
hereto contains a true, accurate and complete list of (i) all Fee Properties
and (ii) all leases, subleases or assignments of leases (together with all
amendments, modifications, supplements, renewals or extensions of any thereof)
affecting each Real Property Asset of any Loan Party, regardless of whether
such Loan Party is the landlord or tenant (whether directly or as an assignee
or successor in interest) under such lease, sublease or assignment. Except as
specified in Schedule 5.5 annexed hereto or as would not individually or in the
aggregate have a Material Adverse Effect, each agreement listed in clause (ii)
of the immediately preceding sentence is in full force and effect and Company
does not have knowledge of any default that has occurred and is continuing
thereunder, and each such agreement constitutes the legally valid and binding
obligation of each applicable Loan Party, enforceable against such Loan Party
in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles.
5.6 LITIGATION; ADVERSE FACTS.
Except as set forth in Schedule 5.6 annexed hereto, there are no
actions, suits, proceedings, arbitrations or governmental investigations
(whether or not purportedly on behalf of any Loan Party or any of its
Subsidiaries) at law or in equity, or before or by any federal, state,
municipal or other governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign (including any Environmental Claims)
that are pending or, to the knowledge of Holdings or Company, threatened
against or affecting any Loan Party or any of its Subsidiaries or any property
of any Loan Party or any of its Subsidiaries and that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
No Loan Party nor any of its Subsidiaries (i) is in violation of any applicable
laws (including Environmental Laws) that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect, or (ii) is
subject to or in default with respect to any final judgments, writs,
injunctions, decrees, rules or regulations of any court or any federal,
77
85
state, municipal or other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
5.7 PAYMENT OF TAXES.
Except to the extent permitted by subsection 6.3, all material tax
returns and reports of Holdings and its Subsidiaries required to be filed by
any of them have been timely filed, and all material taxes shown on such tax
returns to be due and payable and all assessments, fees and other governmental
charges upon Holdings and its Subsidiaries and upon their respective
properties, assets, income, businesses and franchises which are due and payable
have been paid when due and payable. No Loan Party knows of any proposed
material tax assessment against any Loan Party or any of its Subsidiaries which
is not being actively contested by such Loan Party or such Subsidiary in good
faith and by appropriate proceedings; provided that such reserves or other
appropriate provisions, if any, as shall be required in conformity with GAAP
shall have been made or provided therefor.
5.8 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS; MATERIAL
CONTRACTS.
A. No Loan Party nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect,
of such default or defaults, if any, would not have a Material Adverse Effect.
B. To the best knowledge of Holdings and Company, no Loan Party
nor any of its Subsidiaries is a party to or is otherwise subject to any
agreements or instruments or any charter or other internal restrictions which,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.
C. Schedule 5.8 contains a true, correct and complete list of all
the Material Contracts in effect on the Closing Date. Except as described on
Schedule 5.8, all such Material Contracts are in full force and effect and no
material defaults by Holdings or any of its Subsidiaries, or to the knowledge
of Holdings and Company, any other party thereto, currently exist thereunder.
5.9 GOVERNMENTAL REGULATION.
No Loan Party nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act,
the Interstate Commerce Act or the Investment Company Act of 1940 or under any
other federal or state statute or regulation which may limit its ability to
incur Indebtedness or which may otherwise render all or any portion of the
Obligations unenforceable.
78
86
5.10 SECURITIES ACTIVITIES.
A. No Loan Party nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each Loan, not more
than 25% of the value of the assets (either Company only or of Holdings and its
Subsidiaries on a consolidated basis) subject to the provisions of subsection
7.2 or 7.7 or subject to any restriction contained in any agreement or
instrument, between Company and any Lender or any Affiliate of any Lender,
relating to Indebtedness and within the scope of subsection 8.2, will be Margin
Stock.
5.11 EMPLOYEE BENEFIT PLANS.
A. Each Loan Party and each of their respective ERISA Affiliates
are in compliance with all applicable provisions and requirements of ERISA and
the regulations and published interpretations thereunder with respect to each
Employee Benefit Plan, and have performed all their obligations under each
Employee Benefit Plan. Each Employee Benefit Plan which is intended to qualify
under Section 401(a) of the Internal Revenue Code is so qualified.
B. No ERISA Event has occurred or is reasonably expected to
occur.
C. Except to the extent required under Section 4980B of the
Internal Revenue Code or except as set forth in Schedule 5.11 annexed hereto,
no Employee Benefit Plan provides health or welfare benefits (through the
purchase of insurance or otherwise) for any retired or former employee of any
Loan Party or any of their respective ERISA Affiliates.
D. As of the most recent valuation date for any Pension Plan,
there is no amount of unfunded benefit liabilities (as defined in Section
4001(a)(18) of ERISA), individually or in the aggregate for all Pension Plans
(excluding for purposes of such computation any Pension Plans with respect to
which assets exceed benefit liabilities).
E. The Loan Parties have no liability or potential liability
under any Multiemployer Plan.
5.12 CERTAIN FEES.
No broker's or finder's fee or commission will be payable with respect
to this Agreement or any of the transactions contemplated hereby, and Holdings
hereby indemnifies Lenders against, and agrees that it will hold Lenders
harmless from, any claim, demand or liability for any such broker's or finder's
fees alleged to have been incurred in connection herewith or therewith and any
expenses (including reasonable fees, expenses and disbursements of counsel)
arising in connection with any such claim, demand or liability.
79
87
5.13 ENVIRONMENTAL PROTECTION.
(i) No Loan Party nor any of its Subsidiaries nor any of
their respective Facilities or operations are subject to any
outstanding written order, consent decree or settlement agreement with
any Person relating to (a) any Environmental Law, (b) any
Environmental Claim, or (c) any Hazardous Materials Activity that,
individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect;
(ii) No Loan Party nor any of its Subsidiaries has
received any letter or request for information under Section 104 of
the Comprehensive Environmental Response, Compensation, and Liability
Act (42 U.S.C. Section 9604) or any comparable state law;
(iii) There are and, to Company's knowledge, have been no
conditions, occurrences, or Hazardous Materials Activities which could
reasonably be expected to form the basis of an Environmental Claim
against any Loan Party or any of its Subsidiaries that, individually
or in the aggregate, could reasonably be expected to have a Material
Adverse Effect;
(iv) No Loan Party nor any of its Subsidiaries nor, to
Company's knowledge, any predecessor of Company or any of its
Subsidiaries has filed any notice under any Environmental Law
indicating past or present treatment of Hazardous Materials at any
Facility, and no Loan Party or any of its Subsidiaries' operations
involves the generation, transportation, treatment, storage or
disposal of hazardous waste, as defined under 40 C.F.R. Parts 260-270
or any state equivalent; and
(v) Compliance with all current or reasonably foreseeable
future requirements pursuant to or under Environmental Laws could not,
individually or in the aggregate, be reasonably expected to give rise
to a Material Adverse Effect.
Notwithstanding anything in this subsection 5.13 to the contrary, no
event or condition has occurred or is occurring with respect to any Loan Party
or any of its Subsidiaries relating to any Environmental Law, any Release of
Hazardous Materials, or any Hazardous Materials Activity which individually or
in the aggregate has had or could reasonably be expected to have a Material
Adverse Effect.
5.14 EMPLOYEE MATTERS.
Except as set forth in Schedule 5.14 annexed hereto, no Loan Party or
any of its Subsidiaries is a party to any collective bargaining agreement and,
to the knowledge of any Loan Party, no union representation question exists
with respect to the employees of any Loan Party or any of its Subsidiaries.
There is no strike, work stoppage, slowdown, lockout or any other labor dispute
pending, or to the knowledge of Holdings, threatened, involving any Loan Party
or any of its Subsidiaries that individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect.
80
88
5.15 SOLVENCY.
Each Loan Party is and, upon the incurrence of any Obligations by such
Loan Party on any date on which this representation is made, will be, Solvent.
5.16 MATTERS RELATING TO COLLATERAL.
A. CREATION, PERFECTION AND PRIORITY OF LIENS. The execution and
delivery of the Collateral Documents by Loan Parties, together with (i) the
actions taken on or prior to the date hereof pursuant to subsections 4.1D, 6.8
and 6.9 and (ii) the delivery to Administrative Agent of any Pledged Collateral
not delivered to Administrative Agent at the time of execution and delivery of
the applicable Collateral Document (all of which Pledged Collateral has been so
delivered) are effective to create in favor of Administrative Agent for the
benefit of Lenders, as security for the respective Secured Obligations (as
defined in the applicable Collateral Document in respect of any Collateral), a
valid and perfected First Priority Lien on all of the Collateral, and all
filings and other actions necessary or desirable to perfect and maintain the
perfection and First Priority status of such Liens have been duly made or taken
and remain in full force and effect, other than the filing of any UCC financing
statements delivered to Administrative Agent for filing (but not yet filed) and
the periodic filing of UCC continuation statements in respect of UCC financing
statements filed by or on behalf of Administrative Agent.
B. GOVERNMENTAL AUTHORIZATIONS. No authorization, approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (i) the pledge or grant by any Loan
Party of the Liens purported to be created in favor of Administrative Agent
pursuant to any of the Collateral Documents or (ii) the exercise by
Administrative Agent of any rights or remedies in respect of any Collateral
(whether specifically granted or created pursuant to any of the Collateral
Documents or created or provided for by applicable law), except for filings or
recordings contemplated by subsection 5.16A and except as may be required, in
connection with the disposition of any Pledged Collateral, by laws generally
affecting the offering and sale of securities or by the FCC or any State PUC.
C. ABSENCE OF THIRD-PARTY FILINGS. Except such as may have been
filed in favor of Administrative Agent as contemplated by subsection 5.16A and
in respect of Liens permitted under subsection 7.2A, (i) no effective UCC
financing statement, fixture filing or other instrument similar in effect
covering all or any part of the Collateral is on file in any filing or
recording office and (ii) no effective filing covering all or any part of the
intellectual property Collateral is on file in the Patent and Trademark Office.
D. MARGIN REGULATIONS. The pledge of the Pledged Collateral
pursuant to the Collateral Documents does not violate Regulation G, T, U or X
of the Board of Governors of the Federal Reserve System.
E. INFORMATION REGARDING COLLATERAL. All information supplied to
Administrative Agent by or on behalf of any Loan Party with respect to any of
the Collateral (in each case taken
81
89
as a whole with respect to any particular Collateral) is accurate and complete
in all material respects.
5.17 DISCLOSURE.
No representation or warranty of any Loan Party or any of its
Subsidiaries contained in the Confidential Information Memorandum or in any
Loan Document or in any Officers' Certificate or Compliance Certificate
furnished to Lenders by or on behalf of any Loan Party or any of its
Subsidiaries for use in connection with the transactions contemplated by this
Agreement contains any untrue statement of a material fact or omits to state a
material fact (known to Holdings or Company, in the case of any document not
furnished by it) necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances in which the same were
made. Any projections and pro forma financial information contained in such
materials are based upon good faith estimates and assumptions believed by
Holdings or Company to be reasonable at the time made, it being recognized by
Lenders that such projections as to future events are not to be viewed as facts
and that actual results during the period or periods covered by any such
projections may differ from the projected results. There are no facts known
(or which should upon the reasonable exercise of diligence be known) to
Holdings or Company (other than matters of a general economic nature or
competitive conditions in the telecommunications and cable television
industries applicable generally) that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect and that have not
been disclosed herein or in such other documents, certificates and statements
furnished to Lenders for use in connection with the transactions contemplated
hereby.
SECTION 6.
AFFIRMATIVE COVENANTS
Each of Holdings and Company covenants and agrees that, so long as any
of the Commitments hereunder shall remain in effect and until payment in full
of all of the Loans and other Obligations and the cancellation or expiration of
all Letters of Credit, unless Requisite Lenders shall otherwise give prior
written consent, each of Holdings and Company shall perform, and shall cause
each of its Subsidiaries to perform, all covenants in this Section 6.
6.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
Holdings will maintain, and cause each of its Subsidiaries to
maintain, a system of accounting established and administered in accordance
with sound business practices to permit preparation of financial statements in
conformity with GAAP. Company will deliver to Administrative Agent and
Lenders:
(i) Monthly Financials: as soon as available and in any
event within 20 days after the end of each month ending after the
Closing Date, (a) the consolidated balance sheet of Holdings and its
Subsidiaries as at the end of such month and the related consolidated
statement of income, stockholders' equity and cash flows of Holdings
and
82
90
its Subsidiaries for such month and for the period from the beginning
of the then current Fiscal Year to the end of such month, setting
forth in each case in comparative form the corresponding figures for
the corresponding periods of the previous Fiscal Year and the
corresponding figures from the Financial Plan for the current Fiscal
Year, to the extent prepared on a monthly basis, all in reasonable
detail and certified by the chief financial officer of Company that
they fairly present, in all material respects, the financial condition
of Company and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods
indicated, subject to changes resulting from audit and normal year-end
adjustments, and (b) a narrative report describing the operations of
Holdings and its Subsidiaries in the form prepared for presentation to
senior management for such month and for the period from the beginning
of the then current Fiscal Year to the end of such month;
(ii) Quarterly Financials: as soon as available and in
any event within 45 days after the end of each Fiscal Quarter, (a) the
consolidated balance sheet of Holdings and its Subsidiaries as at the
end of such Fiscal Quarter and the related consolidated statement of
income, stockholders' equity and cash flows of Holdings and its
Subsidiaries for such Fiscal Quarter and for the period from the
beginning of the then current Fiscal Year to the end of such Fiscal
Quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the previous
Fiscal Year and the corresponding figures from the Financial Plan for
the current Fiscal Year, all in reasonable detail and certified by the
chief financial officer of Holdings that they fairly present, in all
material respects, the financial condition of Holdings and its
Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, subject to
changes resulting from audit and normal year-end adjustments, and (b)
a narrative report describing the operations of Holdings and its
Subsidiaries in the form prepared for presentation to senior
management for such Fiscal Quarter and for the period from the
beginning of the then current Fiscal Year to the end of such Fiscal
Quarter;
(iii) Year-End Financials: as soon as available and in any
event within 90 days after the end of each Fiscal Year, (a) the
consolidated balance sheet of Holdings and its Subsidiaries as at the
end of such Fiscal Year and the related consolidated statement of
income, stockholders' equity and cash flows of Holdings and its
Subsidiaries for such Fiscal Year, setting forth in each case in
comparative form the corresponding figures for the previous Fiscal
Year and the corresponding figures from the Financial Plan for the
Fiscal Year covered by such financial statements, all in reasonable
detail and certified by the chief financial officer of Holdings that
they fairly present, in all material respects, the financial condition
of Holdings and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods
indicated, (b) a narrative report describing the operations of
Holdings and its Subsidiaries in the form prepared for presentation to
senior management for such Fiscal Year, (c) in the case of such
consolidated financial statements, a report thereon of Deloitte &
Touche or other independent certified public accountants of recognized
national standing selected by Holdings and reasonably satisfactory to
Administrative Agent, which report shall be
83
91
unqualified, shall express no doubts about the ability of Holdings and
its Subsidiaries to continue as a going concern, and shall state that
such consolidated financial statements fairly present, in all material
respects, the consolidated financial position of Holdings and its
Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years
(except as otherwise disclosed in such financial statements) and that
the examination by such accountants in connection with such
consolidated financial statements has been made in accordance with
generally accepted auditing standards and (d) copies of any management
letters provided to Holdings or its Subsidiaries delivered by such
accountants for such period;
(iv) Officers' and Compliance Certificates: together with
each delivery of financial statements of Holdings and its Subsidiaries
pursuant to subdivisions (ii) and (iii) above, (a) an Officers'
Certificate of Holdings stating that the signers have reviewed the
terms of this Agreement and have made, or caused to be made under
their supervision, a review in reasonable detail of the transactions
and condition of Holdings and its Subsidiaries during the accounting
period covered by such financial statements and that such review has
not disclosed the existence during or at the end of such accounting
period, and that the signers do not have knowledge of the existence as
at the date of such Officers' Certificate, of any condition or event
that constitutes an Event of Default or Potential Event of Default,
or, if any such condition or event existed or exists, specifying the
nature and period of existence thereof and what action Holdings has
taken, is taking and proposes to take with respect thereto; and (b) a
Compliance Certificate demonstrating in reasonable detail compliance
during and at the end of the applicable accounting periods with the
restrictions contained in Section 7;
(v) Reconciliation Statements: if, as a result of any
change in accounting principles and policies from those used in the
preparation of the audited financial statements referred to in
subsection 5.3, the consolidated financial statements of Holdings and
its Subsidiaries delivered pursuant to subdivisions (i), (ii), (iii)
or (xiii) of this subsection 6.1 will differ in any material respect
from the consolidated financial statements that would have been
delivered pursuant to such subdivisions had no such change in
accounting principles and policies been made, then (a) together with
the first delivery of financial statements pursuant to subdivision
(i), (ii), (iii) or (xiii) of this subsection 6.1 following such
change, consolidated financial statements of Holdings and its
Subsidiaries for (1) the current Fiscal Year to the effective date of
such change and (2) the two full Fiscal Years immediately preceding
the Fiscal Year in which such change is made, in each case prepared on
a pro forma basis as if such change had been in effect during such
periods, and (b) together with each delivery of financial statements
pursuant to subdivision (i), (ii), (iii) or (xiii) of this subsection
6.1 following such change, a written statement of the chief accounting
officer or chief financial officer of Holdings setting forth the
differences (including any differences that would affect any
calculations relating to the financial covenants set forth in
subsection 7.6) which would have resulted if such financial statements
had been prepared without giving effect to such change;
84
92
(vi) Accountants' Certification: together with each
delivery of consolidated financial statements of Holdings and its
Subsidiaries pursuant to subdivision (iii) above, a written statement
by the independent certified public accountants giving the report
thereon stating that based on their audit examination nothing has come
to their attention that causes them to believe either or both that the
information contained in the certificates delivered therewith pursuant
to subdivision (iv) above is not correct or that the matters set forth
in the Compliance Certificates delivered therewith pursuant to clause
(b) of subdivision (iv) above for the applicable Fiscal Year are not
stated in accordance with the terms of this Agreement as they relate
to financial and accounting matters;
(vii) Accountants' Reports: promptly upon receipt thereof
(unless restricted by applicable professional standards), copies of
all written reports submitted to Holdings by independent certified
public accountants in connection with each annual, interim or special
audit of the financial statements of Holdings and its Subsidiaries
made by such accountants, including any comment letter submitted by
such accountants to management in connection with their annual audit;
(viii) SEC Filings and Press Releases: promptly upon their
becoming available, copies of (a) all financial statements, reports,
notices and proxy statements sent or made available generally by
Holdings to its security holders or by any Subsidiary of Holdings to
its security holders other than Holdings or another Subsidiary of
Holdings, (b) all regular and periodic reports and all registration
statements (other than on Form S-8 or a similar form) and
prospectuses, if any, filed by Holdings or any of its Subsidiaries
with any securities exchange or with the Securities and Exchange
Commission or any governmental or private regulatory authority, and
(c) all press releases and other statements made available generally
by Holdings or any of its Subsidiaries to the public concerning
material developments in the business of Holdings or any of its
Subsidiaries;
(ix) Events of Default, etc.: promptly upon any officer
of Holdings or Company obtaining knowledge (a) of any condition or
event that constitutes an Event of Default or Potential Event of
Default, or becoming aware that any Lender has given any notice (other
than to Administrative Agent) or taken any other action with respect
to a claimed Event of Default or Potential Event of Default, (b) that
any Person has given any notice to Holdings or any of its Subsidiaries
or taken any other action with respect to a claimed default or event
or condition of the type referred to in subsection 8.2, (c) of any
condition or event that would be required to be disclosed in a current
report filed by Company with the Securities and Exchange Commission on
Form 8-K (Items 1, 2, 4, 5 and 6 of such Form as in effect on the date
hereof) if Company were required to file such reports under the
Exchange Act, or (d) of the occurrence of any event or change that has
caused or evidences, either in any case or in the aggregate, a
Material Adverse Effect, an Officers' Certificate specifying the
nature and period of existence of such condition, event or change, or
specifying the notice given or action taken by any such Person and the
nature of such claimed Event of Default, Potential Event of Default,
default, event or condition, and what action Company has taken, is
taking and proposes to take with respect thereto;
85
93
(x) Litigation or Other Proceedings: promptly upon any
officer of Holdings or Company obtaining knowledge of (a) the
institution of, or non-frivolous threat of, any action, suit,
proceeding (whether administrative, judicial or otherwise),
governmental investigation or arbitration against or affecting any
Loan Party or any of its Subsidiaries or any property of any Loan
Party or any of its Subsidiaries (collectively, "PROCEEDINGS") not
previously disclosed in writing by Company to Lenders or (b) any
material development in any Proceeding that, in the case of (a) or
(b):
(1) if adversely determined, has a reasonable
possibility of giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as
a result of, the transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Company to enable Lenders and their counsel to
evaluate such matters;
(xi) ERISA Events: promptly upon becoming aware of the
occurrence of or forthcoming occurrence of any ERISA Event, a written
notice specifying the nature thereof, what action Loan Parties or any
of their respective ERISA Affiliates has taken, is taking or proposes
to take with respect thereto and, when known, any action taken or
threatened by the Internal Revenue Service, the Department of Labor or
the PBGC with respect thereto;
(xii) ERISA Notices: with reasonable promptness, copies of
(a) each Schedule B (Actuarial Information) to the annual report (Form
5500 Series) filed by Loan Parties or any of their respective ERISA
Affiliates with the Internal Revenue Service with respect to each
Pension Plan; (b) all notices received by Loan Parties or any of their
respective ERISA Affiliates from a Multiemployer Plan sponsor
concerning an ERISA Event; and (c) copies of such other documents or
governmental reports or filings relating to any Employee Benefit Plan
as Administrative Agent shall reasonably request;
(xiii) Financial Plans: as soon as practicable and in any
event not later than 90 days after the end of each Fiscal Year, a
consolidated plan and financial forecast for the then current Fiscal
Year and each succeeding Fiscal Year through May 31, 2004 (the
"FINANCIAL PLAN" for such Fiscal Years), including (a) forecasted
consolidated balance sheets and forecasted consolidated statements of
income and cash flows of Holdings and its Subsidiaries for each such
Fiscal Year, together with pro forma Compliance Certificates for each
such Fiscal Year and an explanation of the assumptions on which such
forecasts are based, (b) forecasted consolidated statements of income
and cash flows of Holdings and its Subsidiaries for each month of such
Fiscal Year, together with an explanation of the assumptions on which
such forecasts are based, (c) forecasted plans for raising debt and
equity capital and how the proceeds of such issuances will be applied
86
94
to meet Holdings' Financial Plan, and (d) such other information and
projections as any Lender may reasonably request;
(xiv) Insurance: as soon as practicable and in any event
by the last day of each Fiscal Year, a report in form and substance
satisfactory to Administrative Agent outlining all material insurance
coverage maintained as of the date of such report by Holdings and its
Subsidiaries and all material insurance coverage planned to be
maintained by Holdings and its Subsidiaries in the immediately
succeeding Fiscal Year;
(xv) Board of Directors: with reasonable promptness,
written notice of any change in the Board of Directors of Holdings or
Company;
(xvi) New Subsidiaries: promptly upon any Person becoming
a Subsidiary of Holdings or any Subsidiary of Holdings, a written
notice setting forth with respect to such Person (a) the date on which
such Person became a Subsidiary of Holdings and (b) all of the data
required to be set forth in Schedule 5.1 annexed hereto with respect
to all Subsidiaries of Holdings (it being understood that such written
notice shall be deemed to supplement Schedule 5.1 annexed hereto for
all purposes of this Agreement);
(xvii) Licenses, Regulations, etc.: promptly (a) upon
receipt of notice of (1) any forfeiture, non- renewal, cancellation,
termination, revocation, suspension, material impairment or material
modification of any material License used by Holdings or any of its
Subsidiaries, or any notice of default or forfeiture with respect to
any such License, or (2) any refusal by any Communications Regulatory
Authority to renew or extend any material License, an Officers'
Certificate specifying the nature of such event, the period of
existence thereof, and what action Holdings or its Subsidiaries are
taking and propose to take with respect thereto, (b) any acquisition,
a written notice setting forth with respect to the business acquired
all of the data required to be set forth in Schedule 5.1E under
subsection 5.1E with respect to such business and the Licenses
required in connection with the operation of such business (it being
understood that such written notice shall be deemed to supplement
Schedule 5.1E annexed hereto for all purposes of this Agreement) and
(c) becoming aware of any material change in the federal, state or
local regulations which govern the business of Holdings and its
Subsidiaries which could reasonably be expected to have a Material
Adverse Effect, a written notice setting forth a description of such
change and the expected impact on Holdings and its Subsidiaries;
(xviii) UCC Search Report: As promptly as practicable after
the date of delivery to Administrative Agent of any UCC financing
statement executed by any Loan Party pursuant to subsection 4.1D(iv)
or 6.8A, copies of completed UCC searches evidencing the proper
filing, recording and indexing of all such UCC financing statement and
listing all other effective financing statements that name such Loan
Party as debtor, together with copies of all such other financing
statements not previously delivered to Administrative Agent by or on
behalf of Holdings or such Loan Party;
87
95
(xix) promptly upon the sale of any Loan Party or upon any
Loan Party ceasing to exist, written notice of such sale or
dissolution; and
(xx) Other Information: with reasonable promptness, such
other information and data with respect to Holdings or any of its
Subsidiaries as from time to time may be reasonably requested by any
Lender.
6.2 CORPORATE EXISTENCE, ETC.
Except as permitted under subsection 7.7, Holdings will, and will
cause each of its Subsidiaries to, at all times preserve and keep in full force
and effect its corporate existence and all rights and franchises (including the
Licenses) material to its business; provided, however that neither Holdings nor
any of its Subsidiaries shall be required to preserve any such right or
franchise if the Board of Directors of Holdings or such Subsidiary shall
determine that the preservation thereof is no longer desirable in the conduct
of the business of Holdings or such Subsidiary, as the case may be, and that
the loss thereof is not disadvantageous in any material respect to Holdings,
such Subsidiary or Lenders.
6.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
A. Holdings will, and will cause each of its Subsidiaries to, pay
all taxes, assessments and other governmental charges imposed upon it or any of
its properties or assets or in respect of any of its income, businesses or
franchises before any penalty accrues thereon, and all claims (including claims
for labor, services, materials and supplies) for sums that have become due and
payable and that by law have or may become a Lien upon any of its properties or
assets, prior to the time when any penalty or fine shall be incurred with
respect thereto; provided that no such charge or claim need be paid if it is
being contested in good faith by appropriate proceedings promptly instituted
and diligently conducted, so long as (1) such reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have been
made therefor and (2) in the case of a charge or claim which has or may become
a Lien against any of the Collateral, such contest proceedings conclusively
operate to stay the sale of any portion of the Collateral to satisfy such
charge or claim.
B. Holdings will not, nor will it permit any of its Subsidiaries
to, file or consent to the filing of any consolidated income tax return with
any Person (other than Holdings or any of its Subsidiaries).
6.4 MAINTENANCE OF PROPERTIES; INSURANCE; APPLICATION OF NET
INSURANCE/CONDEMNATION PROCEEDS.
A. MAINTENANCE OF PROPERTIES. Holdings will, and will cause each
of its Subsidiaries to, maintain or cause to be maintained in good repair,
working order and condition, ordinary wear and tear excepted, all material
properties used or useful in the business of Holdings and its Subsidiaries
(including all Intellectual Property) and from time to time will make or cause
to be made all appropriate repairs, renewals and replacements thereof
88
96
except to the extent the failure to make such repairs, renewals or replacements
would not individually or in the aggregate have a Material Adverse Effect.
B. INSURANCE. Holdings will maintain or cause to be maintained,
with financially sound and reputable insurers, such public liability insurance,
third party property damage insurance, business interruption insurance and
casualty insurance with respect to liabilities, losses or damage in respect of
the assets, properties and businesses of Holdings and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by
corporations of established reputation engaged in similar businesses, in each
case in such amounts (giving effect to self-insurance), with such deductibles,
covering such risks and otherwise on such terms and conditions as shall be
customary for corporations similarly situated in the industry. Without
limiting the generality of the foregoing, Holdings will maintain or cause to be
maintained (i) in the case of any property subject to a Mortgage, flood
insurance with respect to each Flood Hazard Property that is located in a
community that participates in the National Flood Insurance Program, in each
case in compliance with any applicable regulations of the Board of Governors of
the Federal Reserve System, and (ii) replacement value casualty insurance on
the Collateral under such policies of insurance, with such insurance companies,
in such amounts, with such deductibles, and covering such risks as are at all
times satisfactory to Administrative Agent in its commercially reasonable
judgment. Each such policy of insurance shall (a) name Administrative Agent for
the benefit of Lenders as an additional insured thereunder as its interests may
appear and (b) in the case of each business interruption and casualty insurance
policy, contain a loss payable clause or endorsement, satisfactory in form and
substance to Administrative Agent, that names Administrative Agent for the
benefit of Lenders as the loss payee thereunder and provides for at least 30
days prior written notice to Administrative Agent of any modification or
cancellation of such policy.
C. APPLICATION OF NET INSURANCE/CONDEMNATION PROCEEDS.
(i) Business Interruption Insurance. Upon receipt by
Holdings or any of its Subsidiaries of any business interruption
insurance proceeds constituting Net Insurance/Condemnation Proceeds,
(a) so long as no Event of Default or Potential Event of Default shall
have occurred and be continuing, Holdings or such Subsidiary may
retain and apply such Net Insurance/Condemnation Proceeds for working
capital purposes, and (b) if an Event of Default or Potential Event of
Default shall have occurred and be continuing, Holdings shall apply an
amount equal to such Net Insurance/Condemnation Proceeds to prepay the
Loans (and/or the Revolving Loan Commitments shall be reduced) as
provided in subsection 2.4B(ii)(b);
(ii) Casualty Insurance/Condemnation Proceeds. Upon
receipt by Holdings or any of its Subsidiaries of any Net
Insurance/Condemnation Proceeds other than from business interruption
insurance, (a) so long as no Event of Default or Potential Event of
Default shall have occurred and be continuing, Company may deliver to
Administrative Agent an Officers' Certificate setting forth the amount
of the Net Insurance/Condemnation Proceeds received and that Holdings
or such Subsidiary intends to use such Net Insurance/Condemnation
Proceeds within 180 days of such date of
89
97
receipt to pay or reimburse the cost of repairing, restoring or
replacing the assets in respect of which such Net
Insurance/Condemnation Proceeds were received or to reinvest in
equipment or other assets useful in the conduct of the business.
Holdings shall, or shall cause one or more of its Subsidiaries to,
promptly and diligently apply such Net Insurance/Condemnation Proceeds
to pay or reimburse the costs of repairing, restoring or replacing the
assets in respect of which such Net Insurance/Condemnation Proceeds
were received or, to the extent not so applied, to prepay the Loans
(and/or the Revolving Loan Commitments shall be reduced) as provided
in subsection 2.4B(ii)(b), and (b) if an Event of Default or Potential
Event of Default shall have occurred and be continuing, Holdings shall
apply an amount equal to such Net Insurance/Condemnation Proceeds to
prepay the Loans (and/or the Revolving Loan Commitments shall be
reduced) as provided in subsection 2.4B(ii)(b).
(iii) Net Insurance/Condemnation Proceeds Received by
Administrative Agent. Upon receipt by Administrative Agent of any Net
Insurance/Condemnation Proceeds as loss payee, (a) if and to the
extent Holdings would have been required to apply such Net
Insurance/Condemnation Proceeds (if it had received them directly) to
prepay the Loans and/or reduce the Revolving Loan Commitments,
Administrative Agent shall, and Company hereby authorizes
Administrative Agent to, apply such Net Insurance/Condemnation
Proceeds to prepay the Loans (and/or the Revolving Loan Commitments
shall be reduced) as provided in subsection 2.4B(ii)(b), and (b) to
the extent the foregoing clause (a) does not apply, Administrative
Agent shall deliver such Net Insurance/Condemnation Proceeds to
Company, and Company shall, or shall cause one or more of its
Subsidiaries to, promptly and diligently apply such Net
Insurance/Condemnation Proceeds to the cost of repairing, restoring or
replacing the assets in respect of which such Net
Insurance/Condemnation Proceeds were received and/or reinvest such Net
Insurance/Condemnation Proceeds in equipment or other productive
assets used in the business of the Company.
6.5 INSPECTION RIGHTS; LENDER MEETING.
A. INSPECTION RIGHTS. Holdings shall, and shall cause each of its
Subsidiaries to, permit any authorized representatives designated by any Lender
to visit and inspect any of the properties of Holdings or of any of its
Subsidiaries, to inspect, copy and take extracts from its and their financial
and accounting records, and to discuss its and their affairs, finances and
accounts with its and their officers and independent public accountants
(provided that Holdings and Company may, if it so chooses, be present at or
participate in any such discussion), all upon reasonable notice and at such
reasonable times during normal business hours and as often as may reasonably be
requested; provided that Lenders will make reasonable efforts to coordinate any
such inspections in order to minimize the number of inspections.
B. LENDER MEETING. Holdings and Company will, upon the request
of Arranger, Administrative Agent or Requisite Lenders, participate in a
meeting of Administrative Agent and Lenders once during each Fiscal Year to be
held at Holdings's corporate offices (or at such other
90
98
location as may be agreed to by Holdings and Administrative Agent) at such time
as may be agreed to by Holdings and Administrative Agent.
6.6 COMPLIANCE WITH LAWS, ETC.
Holdings shall comply, and shall cause each of its Subsidiaries and
all other Persons on or occupying any Facilities to comply, with the
requirements of all applicable laws, rules, regulations and orders (including
all Environmental Laws, the Communications Act, all State Laws and all
Regulations) of any governmental authority (including any Communications
Regulatory Authority) and the terms and conditions of all Interconnection
Agreements, noncompliance with which could reasonably be expected to cause,
individually or in the aggregate, a Material Adverse Effect.
6.7 EXECUTION OF SUBSIDIARY GUARANTY AND PERSONAL PROPERTY COLLATERAL
DOCUMENTS BY CERTAIN SUBSIDIARIES AND FUTURE SUBSIDIARIES.
A. EXECUTION OF SUBSIDIARY GUARANTY AND PERSONAL PROPERTY
COLLATERAL DOCUMENTS. In the event that any Person becomes a Subsidiary of
Holdings (other than a Permitted Joint Venture) after the date hereof, Company
will promptly notify Administrative Agent of that fact and cause such
Subsidiary to execute and deliver to Administrative Agent a counterpart of the
Subsidiary Guaranty and a Subsidiary Pledge Agreement and a Subsidiary Security
Agreement (or in the case of a License Subsidiary, a guaranty and security
agreement substantially in the forms of the License Co. Guaranty and License
Co. Security Agreement, respectively) and to take all such further actions and
execute all such further documents and instruments (including actions,
documents and instruments comparable to those described in subsection 4.1D) as
may be necessary or, in the opinion of Administrative Agent, desirable to
create in favor of Administrative Agent, for the benefit of Lenders, a valid
and perfected First Priority Lien on all of the personal and mixed property
assets of such Subsidiary described in the applicable forms of Collateral
Documents.
B. SUBSIDIARY CHARTER DOCUMENTS, LEGAL OPINIONS, ETC. Company
shall deliver to Administrative Agent, together with such Loan Documents, (i)
certified copies of such Subsidiary's Certificate or Articles of Incorporation,
together with a good standing certificate from the Secretary of State of the
jurisdiction of its incorporation and each other state in which such Person is
qualified as a foreign corporation to do business and, to the extent generally
available, a certificate or other evidence of good standing as to payment of
any applicable franchise or similar taxes from the appropriate taxing authority
of each of such jurisdictions, each to be dated a recent date prior to their
delivery to Administrative Agent, (ii) a copy of such Subsidiary's Bylaws,
certified by its corporate secretary or an assistant secretary as of a recent
date prior to their delivery to Administrative Agent, (iii) a certificate
executed by the secretary or an assistant secretary of such Subsidiary as to
(a) the fact that the attached resolutions of the Board of Directors of such
Subsidiary approving and authorizing the execution, delivery and performance of
such Loan Documents are in full force and effect and have not been modified or
amended and (b) the incumbency and signatures of the officers of such
Subsidiary executing such Loan Documents, and (iv) a favorable opinion of
counsel to such Subsidiary, in form and
91
99
substance satisfactory to Administrative Agent and its counsel, as to (a) the
due organization and good standing of such Subsidiary, (b) the due
authorization, execution and delivery by such Subsidiary of such Loan
Documents, (c) the enforceability of such Loan Documents against such
Subsidiary, (d) such other matters (including matters relating to the creation
and perfection of Liens in any Collateral pursuant to such Loan Documents) as
Administrative Agent may reasonably request, all of the foregoing to be
satisfactory in form and substance to Administrative Agent and its counsel.
6.8 CONFORMING LEASEHOLD INTERESTS; MATTERS RELATING TO ADDITIONAL REAL
PROPERTY COLLATERAL.
A. MORTGAGES, ETC. From and after the Closing Date, in the event
that (i) Holdings, Company or any Subsidiary Guarantor acquires any Material
Fee Property or any Material Leasehold Property or (ii) at the time any Person
becomes a Subsidiary Guarantor, such Person owns or holds any Material Fee
Property or any Material Leasehold Property, in either case excluding any such
Real Property Asset the encumbrancing of which requires the consent of any
applicable lessor or (in the case of clause (ii) above) then-existing senior
lienholder, where Holdings, Company and its Subsidiaries are unable to obtain
such lessor's or senior lienholder's consent (any such non-excluded Real
Property Asset described in the foregoing clause (i) or (ii) being a "MORTGAGED
PROPERTY"), Holdings, Company or such Subsidiary Guarantor shall deliver to
Administrative Agent, as soon as practicable after receiving a written notice
from Administrative Agent requesting such action and after such Person acquires
such Mortgaged Property or becomes a Subsidiary Guarantor, as the case may be,
the following:
(i) Mortgage. A fully executed and notarized Mortgage,
in proper form for recording in all appropriate places in all
applicable jurisdictions, encumbering the interest of such Loan Party
in such Mortgaged Property;
(ii) Opinions of Counsel. (a) A favorable opinion of
counsel to such Loan Party, in form and substance satisfactory to
Administrative Agent and its counsel, as to the due authorization,
execution and delivery by such Loan Party of such Mortgage and such
other matters as Administrative Agent may reasonably request, and (b)
if required by Administrative Agent, an opinion of counsel (which
counsel shall be reasonably satisfactory to Administrative Agent) in
the state in which such Mortgaged Property is located with respect to
the enforceability of such Mortgage and such other matters (including
any matters governed by the laws of such state regarding personal
property security interests in respect of any Collateral) as
Administrative Agent may reasonably request, in each case in form and
substance reasonably satisfactory to Administrative Agent;
(iii) Landlord Consent and Estoppel; Recorded Leasehold
Interest. In the case of a Mortgaged Property consisting of a
Leasehold Property, (a) a Landlord Consent and Estoppel and (b)
evidence that such Leasehold Property is a Recorded Leasehold
Interest;
92
100
(iv) Title Insurance. (a) If required by Administrative
Agent, an ALTA mortgagee title insurance policy or an unconditional
commitment therefor (a "MORTGAGE POLICY") issued by the Title Company
with respect to such Mortgaged Property, in an amount satisfactory to
Administrative Agent, insuring fee simple title to, or a valid
leasehold interest in, such Mortgaged Property vested in such Loan
Party and assuring Administrative Agent that such Mortgage creates a
valid and enforceable First Priority mortgage Lien on such Mortgaged
Property, subject only to a standard survey exception, which Mortgage
Policy (1) shall include an endorsement for mechanics' liens, for
future advances under this Agreement and for any other matters
reasonably requested by Administrative Agent and (2) shall provide for
affirmative insurance and such reinsurance as Administrative Agent may
reasonably request, all of the foregoing in form and substance
reasonably satisfactory to Administrative Agent; and (b) evidence
satisfactory to Administrative Agent that such Loan Party has (i)
delivered to the Title Company all certificates and affidavits
required by the Title Company in connection with the issuance of the
Mortgage Policy and (ii) paid to the Title Company or to the
appropriate governmental authorities all expenses and premiums of the
Title Company in connection with the issuance of the Mortgage Policy
and all recording and stamp taxes (including mortgage recording and
intangible taxes) payable in connection with recording the Mortgage in
the appropriate real estate records;
(v) Title Report. If no Mortgage Policy is required with
respect to such Mortgaged Property, a title report issued by the Title
Company with respect thereto, dated not more than 30 days prior to the
date such Mortgage is to be recorded and satisfactory in form and
substance to Administrative Agent;
(vi) Copies of Documents Relating to Title Exceptions.
Copies of all recorded documents listed as exceptions to title or
otherwise referred to in the Mortgage Policy or title report delivered
pursuant to clause (v) or (vi) above;
(vii) Matters Relating to Flood Hazard Properties. (a)
Evidence, which may be in the form of a letter from an insurance
broker or a municipal engineer, as to (1) whether such Mortgaged
Property is a Flood Hazard Property and (2) if so, whether the
community in which such Flood Hazard Property is located is
participating in the National Flood Insurance Program, (b) if such
Mortgaged Property is a Flood Hazard Property, such Loan Party's
written acknowledgement of receipt of written notification from
Administrative Agent (1) that such Mortgaged Property is a Flood
Hazard Property and (2) as to whether the community in which such
Flood Hazard Property is located is participating in the National
Flood Insurance Program, and (c) in the event such Mortgaged Property
is a Flood Hazard Property that is located in a community that
participates in the National Flood Insurance Program, evidence that
Company has obtained flood insurance in respect of such Flood Hazard
Property to the extent required under the applicable regulations of
the Board of Governors of the Federal Reserve System; and
93
101
(viii) Environmental Audit. If required by Administrative
Agent, reports and other information, in form, scope and substance
reasonably satisfactory to Administrative Agent and prepared by
environmental consultants satisfactory to Administrative Agent,
concerning any environmental hazards or liabilities to which Company
or any of its Subsidiaries may be subject with respect to such
Mortgaged Property.
B. REAL ESTATE APPRAISALS. Company shall, and shall cause each
of its Subsidiaries to, permit an independent real estate appraiser
satisfactory to Administrative Agent, upon reasonable notice, to visit and
inspect any Mortgaged Property for the purpose of preparing an appraisal of
such Mortgaged Property satisfying the requirements of any applicable laws and
regulations (in each case to the extent required under such laws and
regulations as determined by Administrative Agent in its discretion).
6.9 INTEREST RATE PROTECTION.
At all times after the date which is 90 days after the Closing Date,
Company shall maintain in effect one or more Interest Rate Agreements with
respect to the Loans, in an aggregate notional principal amount of not less
than 50% of the aggregate principal amount of the Loans outstanding from time
to time, each such Interest Rate Agreement to be in form and substance
satisfactory to Administrative Agent and with a term of not less than two
years; provided that Company shall use its best efforts to obtain such
protection for a period of three years.
6.10 LICENSE COMPANY.
All Licenses of Holdings and its Subsidiaries shall be held in one or
more License Subsidiaries. Notwithstanding anything in this Agreement to the
contrary: (i) if a License is required by law or applicable regulations to
held in a specific jurisdiction or in a specific entity conducting business
related to such License, then such License shall not be required to held in a
License Subsidiary; provided that Company has given Administrative Agent
written notice specifying the nature of the License and legal or regulatory
requirements preventing such License from being held in a License Subsidiary
and (ii) Company may at any time acquire all of the outstanding capital stock
of License Co. and upon License Co. becoming a wholly owned Subsidiary of
Company, Company may terminate the License Co. Documents; provided that
Company shall give Administrative Agent written notice of such acquisition and
termination and shall pledge all of the outstanding stock of License Co. to
secure the Obligations hereunder pursuant to the Company Pledge Agreement.
6.11 ASSIGNMENT PROVISIONS.
Holdings and Company shall, and shall cause each of its respective
Subsidiaries to, use its commercially reasonable efforts to include in each of
its exclusive right of entry contracts with property owners a provision which
specifically permits the applicable Subsidiary of Holdings to pledge and assign
such contract to lenders to such Subsidiary to secure indebtedness incurred by
such Subsidiary and specifically states that such pledge and assignment for the
94
102
benefit of the Lenders or to otherwise secure indebtedness of such Subsidiary
is made with the consent of the property owner and does not violate any
anti-assignment provisions in such contract.
SECTION 7.
NEGATIVE COVENANTS
Each of Holdings and Company covenants and agrees that, so long as any
of the Commitments hereunder shall remain in effect and until payment in full
of all of the Loans and other Obligations and the cancellation or expiration of
all Letters of Credit, unless Requisite Lenders shall otherwise give prior
written consent, each of Holdings and Company shall perform, and shall cause
each of its Subsidiaries to perform, all covenants in this Section 7.
7.1 INDEBTEDNESS.
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:
(i) Company may become and remain liable with respect to
the Obligations;
(ii) Holdings and its Subsidiaries may become and remain
liable with respect to Contingent Obligations permitted by subsection
7.4 and, upon any matured obligations actually arising pursuant
thereto, the Indebtedness corresponding to the Contingent Obligations
so extinguished;
(iii) Company may become and remain liable with respect to
Indebtedness to any wholly-owned Subsidiaries of Holdings, and any
wholly-owned Subsidiary of Holdings or Permitted Joint Venture may
become and remain liable with respect to Indebtedness to Company or
any other wholly owned Subsidiary of Holdings; provided that (a) all
such intercompany Indebtedness shall be evidenced by Intercompany
Notes, (b) all such intercompany Indebtedness owed by Company to any
of its Subsidiaries shall be subordinated in right of payment to the
payment in full of the Obligations pursuant to the terms of the
applicable Intercompany Notes agreement, and (c) any payment by any
Guarantor Subsidiary under any guaranty of the Obligations shall
result in a pro tanto reduction of the amount of any intercompany
Indebtedness owed by such Subsidiary to Company or to any Subsidiaries
of Holdings for whose benefit such payment is made;
(iv) Holdings and its Subsidiaries, as applicable, may
remain liable with respect to Indebtedness outstanding on the Closing
Date and described in Schedule 7.1 annexed hereto;
95
103
(v) Holdings may remain liable with respect to
Indebtedness evidenced by the Existing Holdings Senior Notes in an
aggregate principal amount not to exceed $225,000,000;
(vi) Holdings may remain liable with respect to
Indebtedness evidenced by the Existing Holdings Con- vertible Notes;
(vii) (a) Company and Subsidiaries of Holdings (other than
Permitted Joint Ventures except as set forth in clause (b)) may become
and remain liable with respect to Purchase Money Indebtedness in an
aggregate principal amount not to exceed $15,000,000 and (b) Limited
Investment Joint Ventures may incur and remain liable for Purchase
Money Indebtedness and the amount of such Indebtedness incurred by
Limited Investment Joint Ventures shall not be included in the
calculation of the maximum amount of Purchase Money Indebtedness
permitted under clause (a) of this subsection 7.1(vii);
(viii) Holdings may become liable with respect to
Indebtedness representing earn-out payments (a) in the ordinary course
of business in an amount not to exceed $10,000,000 at any time or (b)
approved by Requisite Lenders in connection with the approval of an
acquisition pursuant to a Request for Acquisition Approval, in which
case the amount of such earn-outs shall not be included for purposes
of determining compliance with the $10,000,000 limitation set forth in
clause (a) of this subsection 7.1(viii);
(ix) Holdings may become liable with respect to
Indebtedness evidenced by additional notes in an aggregate amount not
to exceed $150,000,000 (plus an additional amount equal to any
proceeds thereof put in escrow to make interest payments on such
notes) during the term of this Agreement; provided that such
Indebtedness shall (a) be unsecured; (b) have terms no less favorable
to Holdings than the Existing Holdings Senior Notes, including,
without limitation, that no interest payments shall be made for the
first three years after issuance except out of escrowed proceeds; and
(c) have no mandatory payments due until November 30, 2005;
(x) Subsidiaries of Holdings (other than any Permitted
Joint Venture) may become liable for any Acquired Indebtedness
acquired in a Permitted Acquisition or consented to by Requisite
Lenders pursuant to a Request for Acquisition Approval;
(xi) Holdings may become and remain liable with respect to
Additional Subordinated Indebtedness in an aggregate principal amount
not to exceed $100,000,000; and
(xii) Holdings may become and remain liable with respect to
other Indebtedness approved by Requisite Lenders.
96
104
7.2 LIENS AND RELATED MATTERS.
A. PROHIBITION ON LIENS. Holdings shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, create, incur,
assume or permit to exist any Lien on or with respect to any property or asset
of any kind (including any document or instrument in respect of goods or
accounts receivable) of Holdings or any of its Subsidiaries, whether now owned
or hereafter acquired, or any income or profits therefrom, or file or permit
the filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the Uniform Commercial Code of any State or under any similar
recording or notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the Collateral Documents;
(iii) Liens existing on the Closing Date and described in
Schedule 7.2 annexed hereto; and
(iv) Liens securing Indebtedness permitted pursuant to
subsection 7.1(vii) and 7.1(x); provided that such Liens relate solely
to the assets financed with such Indebtedness or acquired assets
acquired in the case of subsection 7.1(x).
B. EQUITABLE LIEN IN FAVOR OF LENDERS. If Holdings or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 7.2A, it shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured; provided that, notwithstanding the foregoing,
this covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not permitted by the provisions of
subsection 7.2A.
C. NO FURTHER NEGATIVE PLEDGES. Except with respect to specific
property encumbered to secure payment of particular Indebtedness or to be sold
pursuant to an executed agreement with respect to an Asset Sale, neither
Holdings nor any of its Subsidiaries shall enter into any agreement prohibiting
the creation or assumption of any Lien upon any of its properties or assets,
whether now owned or hereafter acquired.
D. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO HOLDINGS OR
OTHER SUBSIDIARIES. Except as provided herein, Holdings will not, and will not
permit any of its Subsidiaries to, create or otherwise cause or suffer to exist
or become effective any consensual encumbrance or restriction of any kind on
the ability of any such Subsidiary to (i) pay dividends or make any other
distributions on any of such Subsidiary's capital stock owned by Holdings or
any other Subsidiary of Holdings, (ii) repay or prepay any Indebtedness owed by
such Subsidiary to Holdings or any other Subsidiary of Holdings, (iii) make
loans or advances to Holdings or any
97
105
other Subsidiary of Holdings, or (iv) transfer any of its property or assets to
Holdings or any other Subsidiary of Holdings.
7.3 INVESTMENTS; JOINT VENTURES.
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, make or own any Investment in any Person, including any
Joint Venture, except:
(i) Holdings and its Subsidiaries may make and own
Investments in Cash Equivalents;
(ii) Holdings and its Subsidiaries may continue to own the
Investments owned by them as of the Closing Date in any Subsidiaries
of Holdings and Investments in newly formed, wholly owned Subsidiaries
provided by the provisions of subsection 6.7 have been complied with;
(iii) Holdings and its Subsidiaries may make intercompany
loans to the extent permitted under subsection 7.1(iv);
(iv) Holdings and its Subsidiaries may make Consolidated
Capital Expenditures permitted by subsection 7.8;
(v) Holdings and its Subsidiaries may make Permitted
Acquisitions;
(vi) Holdings and its Subsidiaries may continue to own the
Investments owned by them as of the Closing Date and described in
Schedule 7.3 annexed hereto;
(vii) Holdings and its Subsidiaries may make and own
Investments consisting of notes received in connection with Assets
Sales limited to 20% of the gross consideration for such assets in any
Asset Sale;
(viii) Holdings and its Subsidiaries may make and own
Investments in Permitted Joint Ventures to the extent the aggregate
amount of such Investments does not exceed $25,000,000; and
(ix) Holdings and its Subsidiaries may make and own other
Investments in an aggregate amount not to exceed at any time
$5,000,000.
7.4 CONTINGENT OBLIGATIONS.
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:
(i) Holdings, the Subsidiary Guarantors and License Co.
may become and remain liable with respect to Contingent Obligations in
respect of the Guaranties;
98
106
(ii) Company may become and remain liable with respect to
Contingent Obligations in respect of Letters of Credit;
(iii) Company may become and remain liable with respect to
Contingent Obligations under Hedge Agreements required under
subsection 6.9 (or, at Company's option, up to the total amount of the
Loans);
(iv) Holdings and its Subsidiaries may become and remain
liable with respect to Contingent Obligations in respect of customary
indemnification and purchase price adjustment obligations incurred in
connection with Asset Sales or other sales of assets and earn-out
payments permitted pursuant to subsection 7.1(viii);
(v) Holdings and its Subsidiaries, as applicable, may
remain liable with respect to Contingent Obligations existing on the
Closing Date and described in Schedule 7.4 annexed hereto; and
(vi) Holdings and its Subsidiaries (other than Permitted
Joint Ventures) may become and remain liable with respect to other
Contingent Obligations; provided that the maximum aggregate liability,
contingent or otherwise, of Holdings and its Subsidiaries in respect
of all such Contingent Obligations shall at no time exceed $5,000,000.
7.5 RESTRICTED PAYMENTS.
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, declare, order, pay, make or set apart any sum for any
Restricted Payment; provided that so long as no Potential Event of Default or
Event of Default shall have occurred and be continuing (i) Company may make
Restricted Payments to Holdings to the extent necessary to permit Holdings to
make cash interest and principal payments to the holders of the Existing
Holdings Senior Notes and any other Indebtedness of Holdings permitted under
subsection 7.1, in accordance with the terms of, and only to the extent
required under the Existing Holdings Senior Note Indenture or the instrument
governing such other permitted Indebtedness, so long as Holdings applies the
amount of any such Restricted Payment for such purpose, (ii) Holdings may make
scheduled payments of principal and interest in respect of the Existing
Holdings Senior Notes and any other Indebtedness of Holdings permitted under
subsection 7.1, in accordance with the terms of, and only to the extent
required by, the Existing Holdings Senior Notes and the Existing Holdings
Senior Note Indenture or the instrument governing such other permitted
Indebtedness, (iii) to the extent Holdings makes any issuance of equity
securities, Holdings may use the net cash proceeds from such equity issuance to
make payments of principal and interest on or to redeem or repurchase
Indebtedness of Holdings and its Subsidiaries other than Subordinated Indebted-
ness; (iv) Holdings may purchase or redeem capital stock (including cash
settlement of stock options) held by employees, officers and directors upon or
following termination of their employment with Holdings or one of its
Subsidiaries; provided that the aggregate amount of Restricted Payments made
pursuant to this clause (iv) shall not exceed $1,000,000 in the aggregate in
any Fiscal Year and (v) Company and other Subsidiaries of
99
107
Holdings may make Restricted Payments to Holdings to the extent necessary to
permit Holdings to make Restricted Payments permitted by the foregoing clause
(iv).
7.6 FINANCIAL COVENANTS.
A. MINIMUM CONSOLIDATED NET CABLE REVENUE. Holdings shall not
permit Consolidated Net Cable Revenue as of the last day of any Fiscal Quarter
for the four-Fiscal Quarter period then ended during any period set forth below
to be less than the correlative amount indicated:
==========================================
MINIMUM
CONSOLIDATED NET
PERIOD CABLE REVENUE
------------------------------------------
02/28/98 $ 26,580,000
------------------------------------------
05/31/98 30,830,000
------------------------------------------
08/31/98 36,060,000
------------------------------------------
11/30/98 39,240,000
------------------------------------------
02/28/99 42,790,000
------------------------------------------
05/31/99 46,140,000
------------------------------------------
08/31/99 49,600,000
------------------------------------------
11/30/99 54,400,000
------------------------------------------
02/28/00 59,430,000
------------------------------------------
05/31/00 64,700,000
------------------------------------------
08/31/00 70,210,000
------------------------------------------
11/30/00 73,420,000
------------------------------------------
02/28/01 78,240,000
------------------------------------------
05/31/01 82,660,000
------------------------------------------
08/31/01 86,580,000
------------------------------------------
11/30/01 90,510,000
------------------------------------------
02/28/02 94,590,000
------------------------------------------
05/31/02 98,820,000
------------------------------------------
08/31/02 103,220,000
==========================================
100
108
==========================================
MINIMUM
CONSOLIDATED NET
PERIOD CABLE REVENUE
==========================================
11/30/02 104,450,000
------------------------------------------
02/28/03 108,500,000
------------------------------------------
05/31/03 112,400,000
------------------------------------------
08/31/03 116,130,000
------------------------------------------
11/30/03 119,870,000
------------------------------------------
02/28/04 123,610,000
------------------------------------------
05/30/04 127,340,000
==========================================
B. MINIMUM FIXED CHARGE COVERAGE RATIO. Holdings shall not
permit the ratio of (i) Consolidated Cash Available for Fixed Changes to (ii)
Consolidated Fixed Charges as of the last day of any Fiscal Quarter to be less
than 1:1.00.
C. MAXIMUM SENIOR BANK DEBT LEVERAGE RATIO.
(i) Prior to the Fiscal Year ending August 31, 2000,
Holdings shall not permit the ratio of (i) the aggregate amount of
Loans outstanding under this Agreement to (ii) Adjusted Cable
Subscribers at any time during any of the periods set forth below to
exceed the correlative ratio indicated:
==========================================
MAXIMUM
SENIOR BANK DEBT
PERIOD LEVERAGE RATIO
==========================================
02/28/98 $ 965.38
------------------------------------------
05/31/98 894.54
------------------------------------------
08/31/98 836.16
------------------------------------------
11/30/98 808.23
------------------------------------------
02/28/99 808.26
------------------------------------------
05/31/99 800.61
------------------------------------------
08/31/99 803.77
------------------------------------------
11/30/99 751.72
==========================================
101
109
==========================================
MAXIMUM
SENIOR BANK DEBT
PERIOD LEVERAGE RATIO
==========================================
02/28/00 701.99
------------------------------------------
05/31/00 655.53
------------------------------------------
08/31/00 611.79
==========================================
(ii) From and after the Fiscal Year ending August 31,
2000, Holdings shall not permit the ratio of (i) the aggregate amount
of Loans outstanding under this Agreement to (ii) Consolidated
Adjusted EBITDA for the four Fiscal Quarter period then ended, as of
the last day of any Fiscal Quarter ending during any of the periods
set forth below to exceed the correlative ratio indicated:
==========================================
MAXIMUM
SENIOR BANK DEBT
PERIOD LEVERAGE RATIO
==========================================
11/30/00 3.15:1
------------------------------------------
02/28/01 2.61:1
------------------------------------------
05/31/01 2.18:1
------------------------------------------
08/31/01 1.84:1
------------------------------------------
11/30/01 1.58:1
------------------------------------------
02/28/02 1.37:1
------------------------------------------
05/31/02 1.18:1
------------------------------------------
08/31/02 1.03:1
------------------------------------------
11/30/02 0.90:1
------------------------------------------
02/28/03 0.90:1
------------------------------------------
05/31/03 0.90:1
------------------------------------------
08/31/03 0.90:1
------------------------------------------
11/30/03 0.90:1
------------------------------------------
02/28/04 0.90:1
------------------------------------------
05/30/04 0.90:1
==========================================
102
110
D. MINIMUM CONSOLIDATED ADJUSTED EBITDA. Holdings shall not
permit Consolidated Adjusted EBITDA as of the last day of any Fiscal Quarter
for the four Fiscal Quarter period then ended during any period set forth below
to be less than the correlative amount indicated:
==========================================
MINIMUM
CONSOLIDATED ADJUSTED
PERIOD EBITDA
==========================================
02/28/98 $ (7,170,000)
------------------------------------------
05/31/98 (3,500,000)
------------------------------------------
08/31/98 660,000
------------------------------------------
11/30/98 4,580,000
------------------------------------------
02/28/99 7,990,000
------------------------------------------
05/31/99 10,920,000
------------------------------------------
08/31/99 13,490,000
------------------------------------------
11/30/99 19,340,000
------------------------------------------
02/28/00 25,460,000
------------------------------------------
05/31/00 32,330,000
------------------------------------------
08/31/00 39,920,000
------------------------------------------
11/30/00 46,390,000
------------------------------------------
02/28/01 54,550,000
------------------------------------------
05/31/01 63,500,000
------------------------------------------
08/31/01 73,320,000
------------------------------------------
11/30/01 81,690,000
------------------------------------------
02/28/02 90,560,000
------------------------------------------
05/31/02 99,900,000
------------------------------------------
08/31/02 109,620,000
------------------------------------------
11/30/02 117,250,000
------------------------------------------
02/28/03 126,830,000
==========================================
103
111
==========================================
MINIMUM
CONSOLIDATED ADJUSTED
PERIOD EBITDA
==========================================
05/31/03 136,970,000
------------------------------------------
08/31/03 147,710,000
------------------------------------------
11/30/03 156,930,000
------------------------------------------
02/28/04 166,910,000
------------------------------------------
05/30/04 177,260,000
==========================================
E. MINIMUM RETAIL CABLE SUBSCRIBER PENETRATION. Holdings shall
not permit Retail Cable Subscribers Penetration as of the last day of any
Fiscal Quarter ended during any of the periods set forth below to be less than
the correlative amount indicated:
==========================================
MINIMUM
RETAIL CABLE
PERIOD SUBSCRIBER PENETRATION
==========================================
02/28/98 42.0%
------------------------------------------
05/31/98 42.0%
------------------------------------------
08/31/98 42.0%
------------------------------------------
11/30/98 42.5%
------------------------------------------
02/28/99 43.0%
------------------------------------------
05/31/99 43.5%
------------------------------------------
08/31/99 44.0%
------------------------------------------
11/30/99 44.8%
------------------------------------------
02/28/00 45.5%
------------------------------------------
05/31/00 46.3%
------------------------------------------
08/31/00 47.0%
------------------------------------------
11/30/00 47.5%
------------------------------------------
02/28/01 48.0%
------------------------------------------
05/31/01 48.5%
==========================================
104
112
==========================================
MINIMUM
RETAIL CABLE
PERIOD SUBSCRIBER PENETRATION
==========================================
08/31/01 49.0%
------------------------------------------
11/30/01 49.5%
------------------------------------------
02/28/02 50.0%
------------------------------------------
05/31/02 50.5%
------------------------------------------
08/31/02 51.0%
------------------------------------------
11/30/02 51.0%
------------------------------------------
02/28/03 51.0%
------------------------------------------
05/31/03 51.0%
------------------------------------------
08/31/03 51.0%
------------------------------------------
11/30/03 51.0%
------------------------------------------
02/28/04 51.0%
------------------------------------------
05/30/04 51.0%
==========================================
F. MINIMUM CONSOLIDATED NET TELEPHONY REVENUE. Holdings shall
not permit Consolidated Net Telephony Revenue as of the last day of any Fiscal
Quarter for the four-Fiscal Quarter period then ended during any of the periods
set forth below to be less than the correlative amount indicated:
==========================================
MINIMUM
CONSOLIDATED NET
PERIOD TELEPHONY REVENUE
==========================================
02/28/98 $ (800,000)
------------------------------------------
05/31/98 (40,000)
------------------------------------------
08/31/98 680,000
------------------------------------------
11/30/98 2,730,000
------------------------------------------
02/28/99 5,010,000
------------------------------------------
05/31/99 8,450,000
------------------------------------------
08/31/99 13,070,000
==========================================
105
113
==========================================
MINIMUM
CONSOLIDATED NET
PERIOD TELEPHONY REVENUE
==========================================
11/30/99 19,020,000
------------------------------------------
02/28/00 25,320,000
------------------------------------------
05/31/00 31,720,000
------------------------------------------
08/31/00 37,730,000
------------------------------------------
11/30/00 44,650,000
------------------------------------------
02/28/01 52,470,000
------------------------------------------
05/31/01 61,310,000
------------------------------------------
08/31/01 71,270,000
------------------------------------------
11/30/01 80,670,000
------------------------------------------
02/28/02 89,960,000
------------------------------------------
05/31/02 98,990,000
------------------------------------------
08/31/02 107,670,000
------------------------------------------
11/30/02 116,510,000
------------------------------------------
02/28/03 125,720,000
------------------------------------------
05/31/03 135,300,000
------------------------------------------
08/31/03 145,180,000
------------------------------------------
11/30/03 154,960,000
------------------------------------------
02/28/04 164,750,000
------------------------------------------
05/30/04 174,510,000
==========================================
G. MINIMUM AVERAGE LIFE OF REMAINING CONTRACTS. Holdings shall
not permit the Average Life of Remaining Contracts to be less than the
Remaining Time to Maturity of the Loans, as of the last day of any Fiscal
Quarter.
7.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND ACQUISITIONS.
Holdings shall not, and shall not permit any of its Subsidiaries to,
alter the corporate, capital or legal structure of Holdings or any of its
Subsidiaries, or enter into any transaction of merger or consolidation, or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
106
114
dissolution), or convey, sell, lease or sub-lease (as lessor or sublessor),
transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any part of its business, property or assets, whether now
owned or hereafter acquired, or acquire by purchase or otherwise all or
substantially all the business, property or fixed assets of, or stock or other
evidence of beneficial ownership of, any Person or any division or line of
business of any Person, except:
(i) any Subsidiary of Holdings may be merged with or into
Company or any wholly-owned Subsidiary Guarantor, or be liquidated,
wound up or dissolved, or all or any part of its business, property or
assets may be conveyed, sold, leased, transferred or otherwise
disposed of, in one transaction or a series of transactions, to
Company or any wholly-owned Subsidiary Guarantor; provided that, in
the case of such a merger, Company or such wholly-owned Subsidiary
Guarantor shall be the continuing or surviving corporation;
(ii) Holdings and its Subsidiaries may make Consolidated
Capital Expenditures permitted under subsection 7.8;
(iii) Holdings and its Subsidiaries may dispose of
obsolete, worn out or surplus property in the ordinary course of
business;
(iv) Holdings and its Subsidiaries may sell or otherwise
dispose of assets in transactions that do not constitute Asset Sales;
provided that the consideration received for such assets shall be in
an amount at least equal to the fair market value thereof;
(v) subject to subsection 7.13, Holdings and its
Subsidiaries may make Asset Sales (including Swaps) of assets having a
fair market value not in excess of an aggregate of (a) $25,000,000
during the eighteenth-month period following the Closing Date and
(b) $35,000,000 (including the $25,000,000 permitted pursuant to
clause (a)) during the term of this Agreement; provided that (1) the
consideration received for such assets shall be in an amount at least
equal to the fair market value thereof; (2) in the case of any Asset
Sale other than a Swap, the gross consideration received shall be at
least 80% Cash and the balance as promissory notes payable to a Loan
Party; and (3) the Cash proceeds of such Asset Sales shall be applied
as required by subsection 2.4B(iii)(a);
(vi) Holdings and its Subsidiaries may make acquisitions
(each a "PERMITTED ACQUISITION"); provided that (a) the Person or
business so acquired shall be in the line of business described in
subsection 7.13; (b) Company shall deliver to Administrative Agent a
Compliance Certificate demonstrating that, after giving effect to the
acquisition, Holdings and its Subsidiaries, taken as a whole, shall be
in pro forma compliance with the covenants in Section 7; (c) such
acquired Person shall become a Guarantor under and shall comply with
the provisions of subsection 6.7; and (d) the aggregate consideration
for such acquisitions (including any Acquired Indebtedness acquired or
assumed in connection with such acquisition) shall not exceed
$10,000,000 for any single acquisition and $25,000,000 for all such
acquisitions, without the consent of Requisite Lenders; provided
further that the amount of the consideration paid for any acquisition
consented
107
115
to by Requisite Lenders (either before or after the date of
consummation of such acquisition) in accordance with this clause (d)
shall not be included in any determination as to the maximum amount of
expenditures permitted by this clause (d); and
(vii) Holdings may issue (a) Holdings Common Stock in one
or more classes and (b) Permitted Preferred Stock.
To the extent Company receives proceeds from an equity offering and desires to
apply such proceeds to make an acquisition or to make capital expenditures not
otherwise permitted by this Agreement, upon request of Company that Requisite
Lenders consent to such use of such proceeds, Lenders will give reasonable
consideration to such request, taking into account all relevant factors at the
time of such request.
7.8 CONSOLIDATED CAPITAL EXPENDITURES.
Holdings shall not, and shall not permit its Subsidiaries to, make or
incur Consolidated Capital Expenditures, in any Fiscal Year indicated below, in
an aggregate amount in excess of the corresponding amount (the "MAXIMUM
CONSOLIDATED CAPITAL EXPENDITURES AMOUNT") set forth below opposite such Fiscal
Year; provided that the Maximum Consolidated Capital Expenditures Amount for
any Fiscal Year shall be increased by an amount equal to 25% of the excess, if
any, of the Maximum Consolidated Capital Expenditures Amount for the previous
Fiscal Year over the actual amount of Consolidated Capital Expenditures for
such previous Fiscal Year:
============================================
FISCAL YEAR MAXIMUM CONSOLIDATED
ENDING CAPITAL EXPENDITURES
============================================
08/31/98 $113,600,000
--------------------------------------------
08/31/99 121,100,000
--------------------------------------------
08/31/00 144,600,000
--------------------------------------------
08/31/01 132,000,000
--------------------------------------------
08/31/02 103,100,000
--------------------------------------------
08/31/03 83,100,000
--------------------------------------------
08/31/04 52,000,000
============================================
7.9 RESTRICTION ON LEASES.
Holdings shall not, and shall not permit any of its Subsidiaries to,
become liable in any way, whether directly or by assignment or as a guarantor
or other surety, for the obligations of the lessee under any Operating Lease
(other than intercompany leases between wholly owned Subsidiaries of Holdings),
unless, immediately after giving effect to the incurrence of liability
108
116
with respect to such lease, the Consolidated Rental Payments in effect during
the then current Fiscal Year shall not exceed $10,000,000.
7.10 SALE OR DISCOUNT OF RECEIVABLES.
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, sell with recourse, or discount or otherwise sell for
less than the face value thereof, any of its notes or accounts receivable.
7.11 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction
(including the purchase, sale, lease or exchange of any property or the
rendering of any service) with any holder of 5% or more of any class of equity
Securities of Holdings or with any Affiliate of Holdings or of any such holder,
on terms that are less favorable to Holdings or that Subsidiary, as the case
may be, than those that might be obtained at the time from Persons who are not
such a holder or Affiliate; provided that the foregoing restriction shall not
apply to (i) any transaction between Holdings and any of its wholly-owned
Subsidiaries or between any of its wholly-owned Subsidiaries or (ii) reasonable
and customary fees paid to members of the Boards of Directors of Holdings and
its Subsidiaries.
7.12 DISPOSAL OF SUBSIDIARY STOCK.
Holdings shall not:
(i) directly or indirectly sell, assign, pledge or
otherwise encumber or dispose of any shares of capital stock or other
equity Securities of any of its Subsidiaries, except issuances of
capital stock to qualify directors if required by applicable law; or
(ii) permit any of its Subsidiaries directly or indirectly
to sell, assign, pledge or otherwise encumber or dispose of any shares
of capital stock or other equity Securities of any of its Subsidiaries
(including such Subsidiary), except to Holdings, another Subsidiary of
Holdings, or issuances of capital stock to qualify directors if
required by applicable law.
7.13 CONDUCT OF BUSINESS.
(i) From and after the Closing Date, Subsidiaries of
Holdings shall not engage in any business other than providing cable
television services and telecommunications services and related
products and services to residents of multiple dwelling unit
developments in the United States and similar or related businesses
and such other lines of business as may be consented to by Requisite
Lenders.
(ii) Holdings shall engage in no business and have no
assets or liabilities other than (a) owning the stock of its
Subsidiaries, (b) the performance of its obligations under
109
117
the Loan Documents, (c) liabilities associated with the maintenance of
its corporate existence and with respect to consolidated tax
liabilities of Holdings and its Subsidiaries, (d) receipt of Cash
Dividends or Cash distributions from Company in accordance with the
provisions of Subsection 7.5, (e) activities related to the
maintenance and performance of its obligations under the Existing
Holdings Senior Notes and Existing Holdings Senior Note Indenture and
the Existing Holdings Convertible Notes and under any agreements
governing Additional Subordinated Indebtedness or other indebtedness
permitted to be incurred by Holdings under this Agreement.
7.14 AMENDMENTS OR WAIVERS OF RELATED AGREEMENTS.
Neither Holdings nor any of its Subsidiaries will agree to any
amendment to, or request any waiver of (other than a waiver for which no fee is
paid and no other concessions or considerations are granted by Holdings or
Company), or waive any of their respective rights under, any of the Related
Agreements (other than any amendment or waiver described in the next succeeding
sentence) without in each case obtaining the prior written consent of
Administrative Agent and Requisite Lenders to such amendment, request or waiver
and giving notice to Arranging Agent. Notwithstanding the foregoing, (i)
Holdings may agree to amend or waive any provisions of the Existing Holdings
Senior Note Indenture (a) to cure any ambiguity, to correct or supplement any
provision therein which may be defective or inconsistent with any other
provision therein, or (b) to comply with the Trust Indenture Act of 1939, as
amended, or (c) to make modifications of a technical or clarifying nature or
which are no less favorable to the Lenders, in the reasonable opinion of
Administrative Agent and Requisite Lenders, than the provisions of the Existing
Holdings Senior Note Indenture as in effect on the Closing Date (for the
purposes of this subsection 7.14, any amendment, modification or change which
would extend the maturity or reduce the amount of any payment of principal on
the Existing Holdings Senior Notes or which would reduce the rate or extend the
date for payment of interest thereon, provided that no fee is payable in
connection therewith, shall be deemed to be an amendment, modification or
change that is no less favorable to the Lenders) and (ii) the License Co.
Documents may be terminated as set forth in subsection 6.10.
7.15 FISCAL YEAR
Holdings shall not change its Fiscal Year-end from August 31 without
the prior written consent of Requisite Lenders which shall not be unreasonably
withheld or delayed.
7.16 AXEL EXCESS PROCEEDS ACCOUNT
A. Company shall deposit any proceeds from AXELs made on the
Closing Date which are not to be immediately used to pay current expenses, make
Capital Expenditures or otherwise applied in the business of Holdings and its
Subsidiaries into the AXEL Excess Proceeds Account and shall maintain such
funds in the AXEL Excess Proceeds Account pending application of such funds in
the business of Holdings and its Subsidiaries; provided that at any time the
Cash Balances of Holdings and its Subsidiaries are less that $20,000,000,
Company may, subject to compliance with this subsection 7.16, withdraw funds
from the AXEL Excess
110
118
Proceeds Account in an amount equal to the amount by which $20,000,000 exceeds
the then current Cash Balances of Holdings and its Subsidiaries. Except as
provided in subsection 7.16B below following a Blockage Expiration or a
Blockage Waiver, Company shall not withdraw any funds on deposit in the AXEL
Excess Proceeds Account (including funds withdrawn to replenish Cash Balances)
unless and until Company has delivered to Administrative Agent an Officers'
Certificate stating that, to the best knowledge of Company, no Event of Default
has occurred or is continuing (it being understood that for purposes of
determining compliance with the financial covenants set forth in subsection
7.6, compliance shall be determined on the basis of the most recent Compliance
Certificate delivered pursuant to subsection 6.1(iv)).
B. If an Event of Default shall have occurred and be continuing,
then for the period commencing on the date of receipt by Administrative Agent
of notice of such Event of Default from Company pursuant to subsection 6.1(ix)
or upon delivery by Administrative Agent of notice of such Event of Default to
Company and continuing for a period of 45 days thereafter (the "BLOCKAGE
PERIOD"), Company shall not be entitled to withdraw funds from the AXEL Excess
Proceeds Account (such prohibition on the ability of Company to withdraw funds
from the AXEL Excess Proceeds Account being a "BLOCKAGE"). Requisite Lenders
may agree in writing to waive a Blockage (a "BLOCKAGE WAIVER"); provided that
any such Blockage Waiver shall not be deemed to be a waiver of any existing
Event of Default unless such Blockage Waiver expressly so states. A Blockage
Waiver shall become effective upon receipt by Administrative Agent of written
notice of such Blockage Waiver. If Requisite Lenders do not agree to a
Blockage Waiver and the Blockage Period expires (a "BLOCKAGE EXPIRATION"),
Company shall be entitled to withdraw funds from the AXEL Excess Proceeds
Account. Notwithstanding anything herein to the contrary, the AXEL Excess
Proceeds Account shall not be subject to a Blockage for more than an aggregate
of 45 days (it being understood that only days during which the account is
actually blocked shall be counted) in any consecutive 120-day period. In no
event shall Company be entitled to withdraw funds from the AXEL Excess Proceeds
Account following an acceleration of the Obligations pursuant to Section 8
unless and until such acceleration shall have been rescinded. Company may at
any time upon written notice to Administrative Agent direct that funds on
deposit in the AXEL Excess Proceeds Account be applied to repay outstanding
AXELs in accordance with this Agreement.
SECTION 8.
EVENTS OF DEFAULT
If any of the following conditions or events ("EVENTS OF DEFAULT")
shall occur:
8.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
Failure by Company to pay any installment of principal of any Loan
when due, whether at stated maturity, by acceleration, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; failure by Company to pay
when due any amount payable to Issuing Lender in reimbursement of any drawing
under a Letter of Credit; or failure by Company to pay any
111
119
interest on any Loan or any fee or any other amount due under this Agreement
within five days after the date due; or
8.2 DEFAULT IN OTHER AGREEMENTS.
(i) Failure of Holdings or any of its Subsidiaries to pay when due any
principal of or interest on or any other amount payable in respect of one or
more items of Indebtedness (other than Indebtedness referred to in subsection
8.1) or Contingent Obligations in an individual principal amount of $2,500,000
or more or with an aggregate principal amount of $5,000,000 or more, in each
case beyond the end of any grace period provided therefor; or (ii) breach or
default by Holdings or any of its Subsidiaries with respect to any other
material term of (a) one or more items of Indebtedness or Contingent
Obligations in the individual or aggregate principal amounts referred to in
clause (i) above or (b) any loan agreement, mortgage, indenture or other
agreement relating to such item(s) of Indebtedness or Contingent Obligation(s),
if the effect of such breach or default is to cause, or to permit the holder or
holders of that Indebtedness or Contin- gent Obligation(s) (or a trustee on
behalf of such holder or holders) to cause, that Indebtedness or Contingent
Obligation(s) to become or be declared due and payable prior to its stated
maturity or the stated maturity of any underlying obligation, as the case may
be (upon the giving or receiving of notice, lapse of time, both, or otherwise);
or
8.3 BREACH OF CERTAIN COVENANTS.
Failure of Holdings or Company to perform or comply with any term or
condition contained in subsection 2.5 or 6.2 or Section 7 of this Agreement; or
8.4 BREACH OF WARRANTY.
Any representation, warranty, certification or other statement made by
any Loan Party in any Loan Document or in any statement or certificate at any
time given by any Loan Party in writing pursuant hereto or thereto or in
connection herewith or therewith shall be false in any material respect on the
date as of which made; or
8.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS.
Any Loan Party shall default in the performance of or compliance with
any term contained in this Agreement or any of the other Loan Documents, other
than any such term referred to in any other subsection of this Section 8, and
such default shall not have been remedied or waived within 30 days after the
earlier of (i) an officer of Holdings or Company or such Loan Party becoming
aware of such default or (ii) receipt by Company and such Loan Party of notice
from Administrative Agent or any Lender of such default; or
8.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) A court having jurisdiction in the premises shall enter a decree
or order for relief in respect of any Loan Party in an involuntary case under
the Bankruptcy Code or under any other
112
120
applicable bankruptcy, insolvency or similar law now or hereafter in effect,
which decree or order is not stayed; or any other similar relief shall be
granted under any applicable federal or state law; or (ii) an involuntary case
shall be commenced against any Loan Party under the Bankruptcy Code or under
any other applicable bankruptcy, insolvency or similar law now or hereafter in
effect; or a decree or order of a court having jurisdiction in the premises for
the appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over any Loan Party, or over all or a
substantial part of its property, shall have been entered; or there shall have
occurred the involuntary appointment of an interim receiver, trustee or other
custodian of any Loan Party for all or a substantial part of its property; or a
warrant of attachment, execution or similar process shall have been issued
against any substantial part of the property of any Loan Party, and any such
event described in this clause (ii) shall continue for 60 days unless
dismissed, bonded or discharged; or
8.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) Any Loan Party shall have an order for relief entered with respect
to it or commence a voluntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect, or
shall consent to the entry of an order for relief in an involuntary case, or to
the conversion of an involuntary case to a voluntary case, under any such law,
or shall consent to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its property; or
any Loan Party shall make any assignment for the benefit of creditors; or (ii)
any Loan Party shall be unable, or shall fail generally, or shall admit in
writing its inability, to pay its debts as such debts become due; or the Board
of Directors of any Loan Party (or any committee thereof) shall adopt any
resolution or otherwise authorize any action to approve any of the actions
referred to in clause (i) above or this clause (ii); or
8.8 JUDGMENTS AND ATTACHMENTS.
Any money judgment, writ or warrant of attachment or similar process
involving (i) in any individual case an amount in excess of $2,500,000 or (ii)
in the aggregate at any time an amount in excess of $5,000,000 (in either case
not adequately covered by insurance as to which a solvent and unaffiliated
insurance company has acknowledged coverage) shall be entered or filed against
any Loan Party or any of their respective assets and shall remain undischarged,
unvacated, unbonded or unstayed for a period of 60 days (or in any event later
than five days prior to the date of any proposed sale thereunder); or
8.9 DISSOLUTION.
Any order, judgment or decree shall be entered against any Loan Party
decreeing the dissolution or split up of any Loan Party and such order shall
remain undischarged or unstayed for a period in excess of 60 days; or
113
121
8.10 EMPLOYEE BENEFIT PLANS.
There shall occur one or more ERISA Events which individually or in
the aggregate results in or might reasonably be expected to result in liability
of Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates in excess of $5,000,000 during the term of this Agreement; or there
shall exist an amount of unfunded benefit liabilities (as defined in Section
4001(a)(18) of ERISA), individually or in the aggregate for all Pension Plans
(excluding for purposes of such computation any Pension Plans with respect to
which assets exceed benefit liabilities), which exceeds $5,000,000; or
8.11 CHANGE IN CONTROL.
(i) Holdings shall cease to own 100% of the outstanding capital stock
of Company; or (ii) a "Change of Control" under the Existing Holdings Senior
Note Indenture shall occur; or (iii) Videotron shall cease to directly or
indirectly beneficially own and control at least 51% of the issued and
outstanding shares of capital stock of Holdings entitled (without regard to the
occurrence of any contingency) to vote for the election of members of the Board
of Directors of Holdings or (iv) (a) or any wholly owned Subsidiary of
Videotron shall sell or pledge (1) any of the shares of the issued and
outstanding shares of capital stock of Holdings held by it to a Person other
than Videotron or a wholly owned Subsidiary of Videotron or (2) any of the
Existing Holdings Convertible Notes held by it to a Person other than Videotron
or a wholly owned Subsidiary of Videotron, or (b) CDPQ or any of its
Subsidiaries shall pledge any of its shares of the issued and outstanding
shares of capital stock of Holdings, in the case of each of clauses (a) and
(b), unless such sales or pledges shall have been approved by Requisite
Lenders; provided that notwithstanding the foregoing it shall not be an Event
of Default if Holdings Common Stock and Existing Holdings Convertible Notes
constitute all or substantially all of the assets of a wholly owned Subsidiary
of Videotron and such wholly owned Subsidiary ceases to be wholly owned by
Videotron as a result of the issuance of equity securities by it to another
Person, the proceeds of which issuance are contributed to Holdings pursuant to
documentation in form and substance satisfactory to Administrative Agent (such
Subsidiary after ceasing to be a wholly owned Subsidiary of Videotron being a
"CONDUIT FINANCING SUBSIDIARY"); or (v) Videotron shall sell or pledge any of
its equity interests in any Conduit Financing Subsidiary; or
8.12 INVALIDITY OF GUARANTIES; FAILURE OF SECURITY; REPUDIATION OF
OBLIGATIONS.
At any time after the execution and delivery thereof, (i) any Guaranty
for any reason, other than the satisfaction in full of all Obligations, shall
cease to be in full force and effect (other than in accordance with its terms)
or shall be declared to be null and void, (ii) any Collateral Document shall
cease to be in full force and effect (other than by reason of a release of
Collateral thereunder in accordance with the terms hereof or thereof, the
satisfaction in full of the Obligations or any other termination of such
Collateral Document in accordance with the terms hereof or thereof) or shall be
declared null and void, or Administrative Agent shall not have or shall cease
to have a valid and perfected First Priority Lien in any Collateral purported
to be covered thereby (other than Collateral having a fair market value,
individually or in the
114
122
aggregate, not in excess of $2,000,000), in each case for any reason other than
the failure of Administrative Agent or any Lender to take any action within its
control, or (iii) any Loan Party shall contest the validity or enforceability
of any Loan Document in writing or deny in writing that it has any further
liability, including with respect to future advances by Lenders, under any Loan
Document to which it is a party; or
8.13 SUBORDINATED INDEBTEDNESS.
Holdings shall fail to comply with any provisions contained in any
Subordinated Indebtedness subordinating such Indebtedness to the Obligations of
the Loan Parties under the Loan Documents; or
8.14 LICENSES.
Any material License shall be cancelled, terminated, rescinded,
revoked, suspended, impaired, otherwise finally denied renewal, or otherwise
modified in any material adverse respect, or shall be renewed on terms that
materially and adversely affect the economic or commercial value or usefulness
thereof; or any material License shall cease to be in full force and effect; or
the grant of any material License shall have been stayed, vacated or reversed,
or modified in any material adverse respect by judicial or administrative
proceedings; or any administrative law judge or other representative of the FCC
or State PUC shall have issued an initial decision in any non-comparative
license renewal, license revocation or any comparative (multiple applicant)
proceeding to the effect that any material License should be revoked or not be
renewed; or any other proceeding shall have been instituted by or shall have
been commenced before any court, the FCC or any State PUC that could reasonably
be expected to result in (i) cancellation, termination, rescission, revocation,
material impairment, suspension or denial of renewal of a material License, or
(ii) a modification of a material License in a material adverse respect or a
renewal thereof on terms that materially and adversely affect the economic or
commercial value or usefulness thereof; or any material Interconnection
Agreement shall be terminated, reformed, suspended or otherwise impaired in any
material adverse respect, or shall be renegotiated and renewed or replaced on
terms that materially and adversely affect the economic or commercial value or
usefulness thereof, whether by action of the parties thereto or by action of or
under, modification to, or rescinding of the Communications Act, State Law or
any Regulations, in whole or in part, in each case which would have a Material
Adverse Effect.
THEN (i) upon the occurrence of any Event of Default described in subsection
8.6 or 8.7, each of (a) the unpaid principal amount of and accrued interest on
the Loans, (b) an amount equal to the maximum amount that may at any time be
drawn under all Letters of Credit then outstanding (whether or not any
beneficiary under any such Letter of Credit shall have presented, or shall be
entitled at such time to present, the drafts or other documents or certificates
required to draw under such Letter of Credit), and (c) all other Obligations
shall automatically become immediately due and payable, without presentment,
demand, protest or other requirements of any kind, all of which are hereby
expressly waived by Company, and the obligation of each Lender to make any
Loan, the obligation of Issuing Lender to issue any Letter of Credit, and (ii)
upon the occurrence and during the continuation of any other Event of Default,
Administra-
115
123
tive Agent shall, upon the written request or with the written consent of
Requisite Lenders, by written notice to Company, declare all or any portion of
the amounts described in clauses (a) through (c) above to be, and the same
shall forthwith become, immediately due and payable, and the obligation of each
Lender to make any Loan, the obligation of Issuing Lender to issue any Letter
of Credit hereunder shall thereupon terminate; provided that the foregoing
shall not affect in any way the obligations of Lenders under subsection
3.3C(i).
Any amounts described in clause (b) above, when received by
Administrative Agent, shall be held by Administrative Agent pursuant to the
terms of the Collateral Account Agreement and shall be applied as therein
provided.
Notwithstanding anything contained in the second preceding paragraph,
if at any time within 60 days after an acceleration of the Loans pursuant to
clause (ii) of such paragraph Company shall pay all arrears of interest and all
payments on account of principal which shall have become due otherwise than as
a result of such acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this
Agreement) and all Events of Default and Potential Events of Default (other
than non-payment of the principal of and accrued interest on the Loans, in each
case which is due and payable solely by virtue of acceleration) shall be
remedied or waived pursuant to subsection 10.6, then Requisite Lenders, by
written notice to Company, may at their option rescind and annul such
acceleration and its consequences; but such action shall not affect any
subsequent Event of Default or Potential Event of Default or impair any right
consequent thereon. The provisions of this paragraph are intended merely to
bind Lenders to a decision which may be made at the election of Requisite
Lenders and are not intended, directly or indirectly, to benefit Company, and
such provisions shall not at any time be construed so as to grant Company the
right to require Lenders to rescind or annul any acceleration hereunder or to
preclude Administrative Agent or Lenders from exercising any of the rights or
remedies available to them under any of the Loan Documents, even if the
conditions set forth in this paragraph are met.
SECTION 9.
AGENTS
9.1 APPOINTMENT.
A. APPOINTMENT OF AGENTS. GSCP is hereby appointed Arranger and
Syndication Agent hereunder, and each Lender hereby authorizes Arranger and
Syndication Agent to act as its agent in accordance with the terms of this
Agreement and the other Loan Documents. Each of CIBC and General Electric
Capital Corporation is hereby appointed Administrative Agent and Documentation
Agent, respectively, hereunder and under the other Loan Documents and each
Lender hereby authorizes Administrative Agent and Documentation Agent to act as
its agent in accordance with the terms of this Agreement and the other Loan
Documents. Each Agent hereby agrees to act upon the express conditions
contained in this Agreement and the other Loan Documents, as applicable. The
provisions of this Section 9 are solely for the benefit of Agents and Lenders
and Company shall have no rights as a third party beneficiary of any of the
116
124
provisions thereof. In performing its functions and duties under this
Agreement, each Agent shall act solely as an agent of Lenders and does not
assume and shall not be deemed to have assumed any obligation towards or
relationship of agency or trust with or for Company or any of its Subsidiaries.
Each of Arranger and Syndication Agent, without consent of or notice to any
party hereto, may assign any and all of its rights or obligations hereunder to
any of its Affiliates. As of the Closing Date, all obligations of Arranger and
Syndication Agent hereunder shall terminate.
B. APPOINTMENT OF SUPPLEMENTAL COLLATERAL AGENTS. It is the
purpose of this Agreement and the other Loan Documents that there shall be no
violation of any law of any jurisdiction denying or restricting the right of
banking corporations or associations to transact business as agent or trustee
in such jurisdiction. It is recognized that in case of litigation under this
Agreement or any of the other Loan Documents, and in particular in case of the
enforcement of any of the Loan Documents, or in case Administrative Agent deems
that by reason of any present or future law of any jurisdiction it may not
exercise any of the rights, powers or remedies granted herein or in any of the
other Loan Documents or take any other action which may be desirable or
necessary in connection therewith, it may be necessary that Administrative
Agent appoint an additional individual or institution as a separate trustee,
co-trustee, collateral agent or collateral co-agent (any such additional
individual or institution being referred to herein individually as a
"SUPPLEMENTAL COLLATERAL AGENT" and collectively as "SUPPLEMENTAL COLLATERAL
AGENTS").
In the event that Administrative Agent appoints a Supplemental
Collateral Agent with respect to any Collateral, (i) each and every right,
power, privilege or duty expressed or intended by this Agreement or any of the
other Loan Documents to be exercised by or vested in or conveyed to
Administrative Agent with respect to such Collateral shall be exercisable by
and vest in such Supplemental Collateral Agent to the extent, and only to the
extent, necessary to enable such Supplemental Collateral Agent to exercise such
rights, powers and privileges with respect to such Collateral and to perform
such duties with respect to such Collateral, and every covenant and obligation
contained in the Loan Documents and necessary to the exercise or performance
thereof by such Supplemental Collateral Agent shall run to and be enforceable
by either Agent or such Supplemental Collateral Agent, and (ii) the provisions
of this Section 9 and of subsections 10.2 and 10.3 that refer to Administrative
Agent shall inure to the benefit of such Supplemental Collateral Agent and all
references therein to Administrative Agent shall be deemed to be references to
Administrative Agent and/or such Supplemental Collateral Agent, as the context
may require.
Should any instrument in writing from Company or any other Loan Party
be required by any Supplemental Collateral Agent so appointed by Administrative
Agent for more fully and certainly vesting in and confirming to him or it such
rights, powers, privileges and duties, Company shall, or shall cause such Loan
Party to, execute, acknowledge and deliver any and all such instruments
promptly upon request by Administrative Agent. In case any Supplemental
Collateral Agent, or a successor thereto, shall die, become incapable of
acting, resign or be removed, all the rights, powers, privileges and duties of
such Supplemental Collateral Agent,
117
125
to the extent permitted by law, shall vest in and be exercised by
Administrative Agent until the appointment of a new Supplemental Collateral
Agent.
9.2 POWERS AND DUTIES; GENERAL IMMUNITY.
▇. ▇▇▇▇▇▇; DUTIES SPECIFIED. Each Lender irrevocably authorizes
each Agent to take such action on such Lender's behalf and to exercise such
powers, rights and remedies hereunder and under the other Loan Documents as are
specifically delegated or granted to such Agent by the terms hereof and
thereof, together with such powers, rights and remedies as are reasonably
incidental thereto. Each Agent shall have only those duties and
responsibilities that are expressly specified in this Agreement and the other
Loan Documents. Each Agent may exercise such powers, rights and remedies and
perform such duties by or through its agents or employees. No Agent shall
have, by reason of this Agreement or any of the other Loan Documents, a
fiduciary relationship in respect of any Lender; and nothing in this Agreement
or any of the other Loan Documents, expressed or implied, is intended to or
shall be so construed as to impose upon any Agent any obligations in respect of
this Agreement or any of the other Loan Documents except as expressly set forth
herein or therein.
B. NO RESPONSIBILITY FOR CERTAIN MATTERS. No Agent shall be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement or
any other Loan Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statements or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by any of Agent to Lenders or by or on
behalf of Company to any Agent or any Lender in connection with the Loan
Documents and the transactions contemplated thereby or for the financial
condition or business affairs of Company or any other Person liable for the
payment of any Obligations, nor shall any Agent be required to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained in any of the Loan Documents or
as to the use of the proceeds of the Loans or as to the existence or possible
existence of any Event of Default or Potential Event of Default. Anything
contained in this Agreement to the contrary notwithstanding, Administrative
Agent shall not have any liability arising from confirmations of the amount of
outstanding Loans or the Letter of Credit Usage or the component amounts
thereof.
C. EXCULPATORY PROVISIONS. None of Agents nor any of their
respective officers, partners, directors, employees or agents shall be liable
to Lenders for any action taken or omitted by any Agent under or in connection
with any of the Loan Documents except to the extent caused by such Agent's
gross negligence or willful misconduct. Each Agent shall be entitled to
refrain from any act or the taking of any action (including the failure to take
an action) in connection with this Agreement or any of the other Loan Documents
or from the exercise of any power, discretion or authority vested in it
hereunder or thereunder unless and until such Agent shall have received
instructions in respect thereof from Requisite Lenders (or such other Lenders
as may be required to give such instructions under subsection 10.6) and, upon
receipt of such instructions from Requisite Lenders (or such other Lenders, as
the case may be), such Agent shall be entitled to act or (where so instructed)
refrain from acting, or to
118
126
exercise such power, discretion or authority, in accordance with such
instructions. Without prejudice to the generality of the foregoing, (i) each
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any communication, instrument or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or persons, and
shall be entitled to rely and shall be protected in relying on opinions and
judgments of attorneys (who may be attorneys for Company and its Subsidiaries),
accountants, experts and other professional advisors selected by it; and (ii)
no Lender shall have any right of action whatsoever against any Agent as a
result of such Agent acting or (where so instructed) refraining from acting
under this Agreement or any of the other Loan Documents in accordance with the
instructions of Requisite Lenders (or such other Lenders as may be required to
give such instructions under subsection 10.6).
D. AGENT ENTITLED TO ACT AS LENDER. The agency hereby created
shall in no way impair or affect any of the rights and powers of, or impose any
duties or obligations upon, any Agent in its individual capacity as a Lender
hereunder. With respect to its participation in the Loans and the Letters of
Credit, each Agent shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not performing the duties
and functions delegated to it hereunder, and the term "Lender" or "Lenders" or
any similar term shall, unless the context clearly otherwise indicates, include
each Agent in its individual capacity. Any Agent and its Affiliates may accept
deposits from, lend money to and generally engage in any kind of banking,
trust, financial advisory or other business with Company or any of its
Affiliates as if it were not performing the duties specified herein, and may
accept fees and other consideration from Company for services in connection
with this Agreement and otherwise without having to account for the same to
Lenders.
9.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF
CREDITWORTHINESS.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with the making of the Loans and the issuance of
Letters of Credit hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Company and its Subsidiaries. No
Agent shall have any duty or responsibility, either initially or on a
continuing basis, to make any such investigation or any such appraisal on
behalf of Lenders or to provide any Lender with any credit or other information
with respect thereto, whether coming into its possession before the making of
the Loans or at any time or times thereafter, and no Agent shall have any
responsibility with respect to the accuracy of or the completeness of any
information provided to Lenders.
9.4 RIGHT TO INDEMNITY.
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify each Agent, to the extent that such Agent shall not have been
reimbursed by Company, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including counsel fees and disbursements) or disbursements of any kind or
119
127
nature whatsoever which may be imposed on, incurred by or asserted against such
Agent in exercising its powers, rights and remedies or performing its duties
hereunder or under the other Loan Documents or otherwise in its capacity as
such Agent in any way relating to or arising out of this Agreement or the other
Loan Documents; provided that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from such Agent's gross
negligence or willful misconduct. If any indemnity furnished to any Agent for
any purpose shall, in the opinion of such Agent, be insufficient or become
impaired, such Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished; provided that in no event shall this sentence require any Lender to
indemnify any Agent against any liability, obligation, loss, damage, penalty,
action, judgment, suit, cost, expense or disbursement in excess of such
Lender's Pro Rata Share thereof; and provided, further, that this sentence
shall not be deemed to require any Lender to indemnify any Agent against any
liability, obligation, loss, damage, penalty, action, judgment, suit, cost,
expense or disbursement described in the proviso in the immediately preceding
sentence.
9.5 SUCCESSOR ADMINISTRATIVE AGENT.
SUCCESSOR ADMINISTRATIVE AGENT. Administrative Agent may resign at
any time by giving 30 days' prior written notice thereof to Lenders and
Company, and Administrative Agent may be removed at any time with or without
cause by an instrument or concurrent instruments in writing delivered to
Company and Administrative Agent and signed by Requisite Lenders. Upon any
such notice of resignation or any such removal, Requisite Lenders shall have
the right, upon five Business Days' notice to Company, to appoint a successor
Administrative Agent. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, that successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or removed Administrative
Agent and the retiring or removed Administrative Agent shall be discharged from
its duties and obligations under this Agreement. After any retiring or removed
Administrative Agent's resignation or removal hereunder as Administrative
Agent, the provisions of this Section 9 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement.
9.6 COLLATERAL DOCUMENTS AND GUARANTIES.
Each Lender hereby further authorizes Administrative Agent, on behalf
of and for the benefit of Lenders, to enter into each Collateral Document as
secured party and to be the agent for and representative of Lenders under each
Guaranty and the Lender Subordination Agreement, and each Lender agrees to be
bound by the terms of each Collateral Document and Guaranty; provided that
Administrative Agent shall not (i) enter into or consent to any material
amendment, modification, termination or waiver of any provision contained in
any Collateral Document or Guaranty or (ii) release any Collateral (except as
otherwise expressly permitted or required pursuant to the terms of this
Agreement or the applicable Collateral Document), in each case without the
prior consent of Requisite Lenders (or, if required pursuant to subsection
10.6, all Lenders); provided further, however, that, without further written
consent or authorization from
120
128
Lenders, Administrative Agent may execute any documents or instruments
necessary to (a) release any Lien encumbering any item of Collateral that is
the subject of a sale or other disposition of assets permitted by this
Agreement or to which Requisite Lenders have otherwise consented or (b) release
any Subsidiary Guarantor from the Subsidiary Guaranty if all of the capital
stock of such Subsidiary Guarantor is sold to any Person (other than an
Affiliate of Company) pursuant to a sale or other disposition permitted
hereunder or to which Requisite Lenders have otherwise consented. In the event
Collateral is sold in an Asset Sale permitted hereunder or otherwise consented
to by Requisite Lenders, Administrative Agent may, without further consent or
authorization from Lenders, release the Liens granted under the Collateral
Documents on the Collateral that is the subject of such Asset Sale concurrently
with the consummation of such Asset Sale; provided that Administrative Agent
shall have received (i) reasonable, and in any event not less than 30 days'
prior written notice of such Asset Sale from Company unless a shorter notice
period is agreed to by Administrative Agent; (ii) an Officers' Certificate (1)
certifying that no Event of Default or Potential Event of Default shall have
occurred and be continuing as of the date of such release of Collateral, (2)
setting forth a detailed description of the Collateral subject to such Asset
Sale, and (3) certifying that such Asset Sale is permitted under this Agreement
and that all conditions precedent to such Asset Sale under this Agreement have
been met; and (iii) Administrative Agent shall have received all Net Cash
Proceeds of Asset Sale, if any, required to be applied to repay Secured
Obligations under this Agreement. Upon payment in full of all of the
Obligations and termination of the Commitments, Administrative Agent shall
release the Liens on such Collateral granted pursuant to the Collateral
Documents. Upon any release of Collateral pursuant to the foregoing,
Administrative Agent shall, at Borrowers' expense, execute and deliver such
documents (without recourse or representation or warranty) as reasonably
requested to evidence such release. Anything contained in any of the Loan
Documents to the contrary notwithstanding, Company, Administrative Agent and
each Lender hereby agree that (1) no Lender shall have any right individually
to realize upon any of the Collateral under any Collateral Document or to
enforce any Guaranty, it being understood and agreed that all powers, rights
and remedies under the Collateral Documents and the Guaranties may be exercised
solely by Administrative Agent for the benefit of Lenders in accordance with
the terms thereof, and (2) in the event of a foreclosure by Administrative
Agent on any of the Collateral pursuant to a public or private sale,
Administrative Agent or any Lender may be the purchaser of any or all of such
Collateral at any such sale and Administrative Agent, as agent for and
representative of Lenders (but not any Lender or Lenders in its or their
respective individual capacities unless Requisite Lenders shall otherwise agree
in writing) shall be entitled, for the purpose of bidding and making settlement
or payment of the purchase price for all or any portion of the Collateral sold
at any such public sale, to use and apply any of the Obligations as a credit on
account of the purchase price for any collateral payable by Administrative
Agent at such sale.
121
129
SECTION 10.
MISCELLANEOUS
10.1 ASSIGNMENTS AND PARTICIPATIONS IN LOANS AND LETTERS OF CREDIT.
A. GENERAL. Subject to subsection 10.1B, each Lender shall have
the right at any time to (i) sell, assign or transfer to any Eligible Assignee,
or (ii) sell participations to any Person in, all or any part of its
Commitments or any Loan or Loans made by it or its Letters of Credit or
participations therein or any other interest herein or in any other Obligations
owed to it; provided that no such sale, assignment, transfer or participation
shall, without the consent of Company, require Company to file a registration
statement with the Securities and Exchange Commission or apply to qualify such
sale, assignment, transfer or participation under the securities laws of any
state; provided, further that no such sale, assignment or transfer described in
clause (i) above shall be effective unless and until an Assignment Agreement
effecting such sale, assignment or transfer shall have been accepted by
Administrative Agent and recorded in the Register as provided in subsection
10.1B(ii); and provided, further that no such sale, assignment, transfer or
participation of any Letter of Credit or any participation therein may be made
separately from a sale, assignment, transfer or participation of a
corresponding interest in the Revolving Loan Commitment and the Revolving Loans
of the Lender effecting such sale, assignment, transfer or participation.
Except as otherwise provided in this subsection 10.1, no Lender shall, as
between Company and such Lender, be relieved of any of its obligations
hereunder as a result of any sale, assignment or transfer of, or any granting
of participations in, all or any part of its Commitments or the Loans, the
Letters of Credit or participations therein, or the other Obligations owed to
such Lender.
B. ASSIGNMENTS.
(i) Amounts and Terms of Assignments. Each Commitment,
Loan, Letter of Credit or participation therein, or other Obligation
may (a) be assigned in any amount to another Lender, or to an
Affiliate of the assigning Lender or another Lender or to a Related
Fund, with the giving of notice to Company and Administrative Agent or
(b) be assigned in an aggregate amount of not less than $5,000,000 (or
such lesser amount as shall constitute the aggregate amount of the
Commitments, Loans, Letters of Credit and participations therein, and
other Obligations of the assigning Lender) to any other Eligible
Assignee with the giving of notice to, and reasonable consultation
with, Company and with the consent of Administrative Agent (which
consent of Administrative Agent shall not be unreasonably withheld or
delayed);provided that (1) any assignment from Arranger to any
Eligible Assignee shall not require the consent of Administrative
Agent and (2) no consultation with Company shall be required if at the
time of the assignment an Event of Default shall have occurred and be
continuing. To the extent of any such assignment in accordance with
either clause (a) or (b) above, the assigning Lender shall be relieved
of its obligations with respect to its Commitments, Loans, Letters of
Credit or participations therein, or other Obligations or the portion
thereof so assigned. The parties to each such assignment shall
execute and deliver to Administrative Agent, for its acceptance and
recording in the Register, an Assignment
122
130
Agreement, together with a processing and recordation fee of $3000 and
such forms, certificates or other evidence, if any, with respect to
United States federal income tax withholding matters as the assignee
under such Assignment Agreement may be required to deliver to
Administrative Agent pursuant to subsection 2.7B(iii)(a). Upon such
execution, delivery, acceptance and recordation, from and after the
effective date specified in such Assignment Agreement, (1) the
assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to
such Assignment Agreement, shall have the rights and obligations of a
Lender hereunder and (2) the assigning Lender thereunder shall, to the
extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment Agreement, relinquish its rights (other
than any rights which survive the termination of this Agreement under
subsection 10.9B) and be released from its obligations under this
Agreement (and, in the case of an Assignment Agreement covering all or
the remaining portion of an assigning Lender's rights and obligations
under this Agreement, such Lender shall cease to be a party hereto;
provided that, anything contained in any of the Loan Documents to the
contrary notwithstanding, if such Lender is Issuing Lender with
respect to any outstanding Letters of Credit such Lender shall
continue to have all rights and obligations of Issuing Lender with
respect to such Letters of Credit until the cancellation or expiration
of such Letters of Credit and the reimbursement of any amounts drawn
thereunder). The Commitments hereunder shall be modified to reflect
the Commitment of such assignee and any remaining Commitment of such
assigning Lender and, if any such assignment occurs after the issuance
of any Notes hereunder, the assigning Lender shall, upon the
effectiveness of such assignment or as promptly thereafter as
practicable, surrender its applicable Notes to Administrative Agent
for cancellation, and thereupon, upon the request of the assignee
and/or the assigning Lender, new Notes shall be issued to the assignee
and/or to the assigning Lender, substantially in the form of Exhibit
IV or Exhibit VI annexed hereto, as the case may be, with appropriate
insertions, to reflect the new Commitments and/or outstanding AXELs
and/or Converted Term Loans, as the case may be, of the assignee
and/or the assigning Lender.
(ii) Acceptance by Administrative Agent; Recordation in
Register. Upon its receipt of an Assignment Agreement executed by an
assigning Lender and an assignee representing that it is an Eligible
Assignee, together with the processing and recordation fee referred to
in subsection 10.1B(i) and any forms, certificates or other evidence
with respect to United States federal income tax withholding matters
that such assignee may be required to deliver to Administrative Agent
pursuant to subsection 2.7B(iii)(a), Administrative Agent shall, if
Administrative Agent has consented to the assignment evidenced thereby
(to the extent such consent is required pursuant to subsection
10.1B(i)), (a) accept such Assignment Agreement by executing a
counterpart thereof as provided therein (which acceptance shall
evidence any required consent of Administrative Agent to such
assignment), (b) record the information contained therein in the
Register, and (c) give prompt notice thereof to Company.
Administrative Agent shall maintain a copy of each Assignment
Agreement delivered to and accepted by it as provided in this
subsection 10.1B(ii).
123
131
C. PARTICIPATIONS. The holder of any participation, other than
an Affiliate of the Lender granting such participation, shall not be entitled
to require such Lender to take or omit to take any action hereunder except
action directly affecting (i) the extension of the scheduled final maturity
date of any Loan allocated to such participation or (ii) a reduction of the
principal amount of or the rate of interest or fees payable on any Loan
allocated to such participation or (iii) the release of all or substantially
all of the Collateral or Guaranties, and all amounts payable by Company
hereunder (including amounts payable to such Lender pursuant to subsections
2.6D, 2.7 and 3.6) shall be determined as if such Lender had not sold such
participation. Company and each Lender hereby acknowledge and agree that,
solely for purposes of subsections 10.4 and 10.5, (a) any participation will
give rise to a direct obligation of Company to the participant and (b) the
participant shall be considered to be a "Lender".
D. ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the
assignments and participations permitted under the foregoing provisions of this
subsection 10.1, any Lender may assign and pledge all or any portion of its
Loans, the other Obligations owed to such Lender, and its Notes to any Federal
Reserve Bank as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any operating circular issued by
such Federal Reserve Bank; provided that (i) no Lender shall, as between
Company and such Lender, be relieved of any of its obligations hereunder as a
result of any such assignment and pledge and (ii) in no event shall such
Federal Reserve Bank be considered to be a "Lender" or be entitled to require
the assigning Lender to take or omit to take any action hereunder.
E. INFORMATION. Each Lender may furnish any information
concerning Company and its Subsidiaries in the possession of that Lender from
time to time to assignees and participants (including prospective assignees and
participants), subject to subsection 10.19.
F. REPRESENTATIONS OF LENDERS. Each Lender listed on the
signature pages hereof hereby represents and warrants (i) that it is an
Eligible Assignee described in clause (i) of the definition thereof; (ii) that
it has experience and expertise in the making of or investment in loans such as
the Loans; and (iii) that it will make or invest its Loans for its own account
in the ordinary course of its business and without a view to distribution of
such Loans within the meaning of the Securities Act or the Exchange Act or
other federal securities laws (it being understood that, subject to the
provisions of this subsection 10.1, the disposition of such Loans or any
interests therein shall at all times remain within its exclusive control).
Each Lender that becomes a party hereto pursuant to an Assignment Agreement
shall be deemed to agree that the representations and warranties of such Lender
contained in Section 2(c) of such Assignment Agreement are incorporated herein
by this reference.
10.2 EXPENSES.
Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly (i) all the actual and reasonable
costs and expenses of preparation of the Loan Documents and any consents,
amendments, waivers or other modifications thereto; (ii) all the costs of
furnishing all opinions by counsel for Company (including any opinions
requested by Lenders as to any legal matters arising hereunder) and of
Company's performance of and
124
132
compliance with all agreements and conditions on its part to be performed or
complied with under this Agreement and the other Loan Documents including with
respect to confirming compliance with environmental, insurance and solvency
require- ments; (iii) the reasonable fees, expenses and disbursements of
counsel to Arranger and counsel to Administrative Agent (in each case including
allocated costs of internal counsel) in connection with the negotiation,
preparation, execution and administration of the Loan Documents and any
consents, amendments, waivers or other modifications thereto and any other
documents or matters requested by Company; (iv) all the actual costs and
reasonable expenses of creating and perfecting Liens in favor of Administrative
Agent on behalf of Lenders pursuant to any Collateral Document, including
filing and recording fees, expenses and taxes, stamp or documentary taxes,
search fees, title insurance premiums, and reasonable fees, expenses and
disbursements of counsel to Arranger and counsel to Administrative Agent and of
counsel providing any opinions that Arranger, Administrative Agent or Requisite
Lenders may request in respect of the Collateral Documents or the Liens created
pursuant thereto; (v) all the actual costs and reasonable expenses (including
the reasonable fees, expenses and disbursements of any auditors, accountants or
appraisers and any environmental or other consultants, advisors and agents
employed or retained by Administrative Agent or Arranger and its counsel) of
obtaining and reviewing any appraisals provided for under subsection 4.1G or
6.8C, any environmental audits or reports provided for under subsection 4.1H or
6.8B(viii); (vi) all the actual costs and reasonable expenses (including the
reasonable fees, expenses and disbursements of any consultants, advisors and
agents employed or retained by Administrative Agent and its counsel) in
connection with the custody or preservation of any of the Collateral; (vii) all
other actual and reasonable costs and expenses incurred by Syndication Agent,
Arranger or Administrative Agent in connection with the syndication of the
Commitments and the negotiation, preparation and execution of the Loan
Documents and any consents, amendments, waivers or other modifications thereto
and the transactions contemplated thereby; and (viii) after the occurrence of
an Event of Default, all costs and expenses, including reasonable attorneys'
fees (including allocated costs of internal counsel) and costs of settlement,
incurred by Arranger, Administrative Agent and Lenders in enforcing any
Obligations of or in collecting any payments due from any Loan Party hereunder
or under the other Loan Documents by reason of such Event of Default (including
in connection with the sale of, collection from, or other realization upon any
of the Collateral or the enforcement of the Guaranties) or in connection with
any refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a "work-out" or pursuant to any insolvency or
bankruptcy proceedings.
10.3 INDEMNITY.
In addition to the payment of expenses pursuant to subsection 10.2,
whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend (subject to Indemnitees' selection of counsel),
indemnify, pay and hold harmless Agents and Lenders, and the officers,
partners, directors, employees, agents and affiliates of any of Agents and
Lenders (collectively called the "INDEMNITEES"), from and against any and all
Indemnified Liabilities (as hereinafter defined) and to periodically reimburse
Agents and Lenders for all legal and other expenses (including the cost of any
investigation and preparation) in the event that any of the Indemnitees becomes
involved in any action, proceeding or investigation brought by or against
125
133
any such Indemnitee relating to the Indemnified Liabilities; provided that
Company shall not have any obligation to any Indemnitee hereunder with respect
to any Indemnified Liabilities to the extent such Indemnified Liabilities arise
solely from the gross negligence or willful misconduct of that Indemnitee as
determined by a final judgment of a court of competent jurisdiction.
As used herein, "INDEMNIFIED LIABILITIES" means, collectively, any and
all liabilities, obligations, losses, damages (including natural resource
damages), penalties, actions, judgments, suits, claims (including Environmental
Claims), costs (including the costs of any investigation, study, sampling,
testing, abatement, cleanup, removal, remediation or other response action
necessary to remove, remediate, clean up or ▇▇▇▇▇ any Hazardous Materials
Activity), expenses and disbursements of any kind or nature whatsoever
(including the reasonable fees and disbursements of counsel for Indemnitees in
connection with any investigative, administrative or judicial proceeding
commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto, and any fees or expenses
incurred by Indemnitees in enforcing this indemnity), whether direct, indirect
or consequential and whether based on any federal, state or foreign laws,
statutes, rules or regulations (including securities and commercial laws,
statutes, rules or regulations and Environmental Laws), on common law or
equitable cause or on contract or otherwise, that may be imposed on, incurred
by, or asserted against any such Indemnitee, in any manner relating to or
arising out of (i) this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby (including Lenders' agreement to
make the Loans hereunder or the use or intended use of the proceeds thereof or
the issuance of Letters of Credit hereunder or the use or intended use of any
thereof, or any enforcement of any of the Loan Documents (including any sale
of, collection from, or other realization upon any of the Collateral or the
enforcement of the Guaranties)), (ii) the statements contained in the
commitment letter delivered by any Lender to Company with respect thereto, or
(iii) any Environmental Claim or any Hazardous Materials Activity relating to
or arising from, directly or indirectly, any past or present activity,
operation, land ownership, or practice of Company or any of its Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in this subsection 10.3 may be unenforceable in whole or in
part because they are violative of any law or public policy, Company shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
10.4 SET-OFF; SECURITY INTEREST IN DEPOSIT ACCOUNTS.
In addition to any rights now or hereafter granted under applicable
law and not by way of limitation of any such rights, upon the occurrence of any
Event of Default each Lender is hereby authorized by Company at any time or
from time to time, without notice to Company 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, including Indebtedness
evidenced by certificates of deposit, whether matured or unmatured, but not
including trust accounts) and any other Indebtedness at any time held or owing
by that Lender to or for the credit or the account
126
134
of Company against and on account of the obligations and liabilities of Company
to that Lender under this Agreement, the Letters of Credit and participations
therein and the other Loan Documents, including all claims of any nature or
description arising out of or connected with this Agreement, the Letters of
Credit and participations therein or any other Loan Document, irrespective of
whether or not (i) that Lender shall have made any demand hereunder or (ii) the
principal of or the interest on the Loans or any amounts in respect of the
Letters of Credit or any other amounts due hereunder shall have become due and
payable pursuant to Section 8 and although said obligations and liabilities, or
any of them, may be contingent or unmatured. Company hereby further grants to
Administrative Agent and each Lender a security interest in all deposits and
accounts maintained with Administrative Agent or such Lender as security for
the Obligations.
10.5 RATABLE SHARING.
Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with the terms of this Agreement), by realization
upon security, through the exercise of any right of set-off or banker's lien,
by counterclaim or cross action or by the enforcement of any right under the
Loan Documents or otherwise, or as adequate protection of a deposit treated as
cash collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the
"AGGREGATE AMOUNTS DUE" to such Lender) which is greater than the proportion
received by any other Lender in respect of the Aggregate Amounts Due to such
other Lender, then the Lender receiving such proportionately greater payment
shall (i) notify Administrative Agent and each other Lender of the receipt of
such payment and (ii) apply a portion of such payment to purchase
participations (which it shall be deemed to have purchased from each seller of
a participation simultaneously upon the receipt by such seller of its portion
of such payment) in the Aggregate Amounts Due to the other Lenders so that all
such recoveries of Aggregate Amounts Due shall be shared by all Lenders in
proportion to the Aggregate Amounts Due to them; provided that if all or part
of such proportionately greater payment received by such purchasing Lender is
thereafter recovered from such Lender upon the bankruptcy or reorganization of
Company or otherwise, those purchases shall be rescinded and the purchase
prices paid for such participations shall be returned to such purchasing Lender
ratably to the extent of such recovery, but without interest. Company
expressly consents to the foregoing arrangement and agrees that any holder of a
participation so purchased may exercise any and all rights of banker's lien,
set-off or counterclaim with respect to any and all monies owing by Company to
that holder with respect thereto as fully as if that holder were owed the
amount of the participation held by that holder.
10.6 AMENDMENTS AND WAIVERS.
No amendment, modification, termination or waiver of any provision of
the Loan Documents, or consent to any departure by Company therefrom, shall in
any event be effective without the written concurrence of Requisite Lenders;
provided that no such amendment,
127
135
modification, termination, waiver or consent shall, without the consent of each
Lender (with Obligations directly affected in the case of the following clause
(i)): (i) extend the scheduled final maturity of any Loan or Note, or extend
the stated expiration date of any Letter of Credit beyond the Revolving Loan
Commitment Termination Date, or reduce the rate of interest on any Loan (other
than any waiver of any increase in the interest rate applicable to any Loan
pursuant to subsection 2.2E) or any commitment fees or letter of credit fees
payable hereunder, or extend the time for payment of any such interest or fees,
or reduce the principal amount of any Loan or any reimbursement obligation in
respect of any Letter of Credit, (ii) amend, modify, terminate or waive any
provision of this subsection 10.6, (iii) reduce the percentage specified in the
definition of "Requisite Lenders" (it being understood that, with the consent
of Requisite Lenders, additional extensions of credit pursuant to this
Agreement may be included in the determination of "Requisite Lenders" on
substantially the same basis as the AXEL Commitments, the Term Loans, the
Revolving Loan Commitments and the Revolving Loans are included on the Closing
Date), (iv) consent to the assignment or transfer by Company of any of its
rights and obligations under this Agreement, (v) release all or substantially
all of the Collateral or all or substantially all of the Subsidiary Guarantors
from the Subsidiary Guaranty except as expressly provided in the Loan Documents
or (vi) to amend or modify the last paragraph of Section 8; provided, further
that no such amendment, modification, termination or waiver shall (a) increase
the Commitments of any Lender over the amount thereof then in effect without
the consent of such Lender (it being understood that no amendment, modification
or waiver of any condition precedent, covenant, Potential Event of Default or
Event of Default shall constitute an increase in the Commitment of any Lender,
and that no increase in the available portion of any Commitment of any Lender
shall constitute an increase in such Commitment of such Lender); (b) amend,
modify, terminate or waive any obligation of Lenders relating to the purchase
of participations in Letters of Credit as provided in subsection 3.1C without
the written concurrence of Administrative Agent and of each Issuing Lender
which has a Letter of Credit then outstanding or which has not been reimbursed
for a drawing under a Letter of Credit issued it; or (c) amend, modify,
terminate or waive any provision of Section 9 as the same applies to any Agent,
or any other provision of this Agreement as the same applies to the rights or
obligations of any Agent, in each case without the consent of such Agent.
Administrative Agent may, but shall have no obligation to, with the concurrence
of any Lender, execute amendments, modifications, waivers or consents on behalf
of that Lender. Any waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given. No notice to or
demand on Company in any case shall entitle Company to any other or further
notice or demand in similar or other circumstances. Any amendment,
modification, termination, waiver or consent effected in accordance with this
subsection 10.6 shall be binding upon each Lender at the time outstanding, each
future Lender and, if signed by Company, on Company.
10.7 INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be
within the limitations of, another covenant shall not avoid the occurrence of
an Event of Default or Potential Event of Default if such action is taken or
condition exists.
128
136
10.8 NOTICES.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States
mail or courier service and shall be deemed to have been given when delivered
in person or by courier service, upon receipt of telefacsimile or telex, or
three Business Days after depositing it in the United States mail with postage
prepaid and properly addressed; provided that notices to Arranger, Syndication
Agent or Administrative Agent shall not be effective until received. For the
purposes hereof, the address of each party hereto shall be as set forth under
such party's name on the signature pages hereof or (i) as to Company and
Administrative Agent, such other address as shall be designated by such Person
in a written notice delivered to the other parties hereto and (ii) as to each
other party, such other address as shall be designated by such party in a
written notice delivered to Administrative Agent.
10.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. All representations, warranties and agreements made herein
shall survive the execution and delivery of this Agreement and the making of
the Loans and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law
to the contrary, the agreements of Company set forth in subsections 2.6D, 2.7,
3.5A, 3.6, 10.2, 10.3 and 10.4 and the agreements of Lenders set forth in
subsections 9.2C, 9.4 and 10.5 shall survive the payment of the Loans, the
cancellation or expiration of the Letters of Credit and the reimbursement of
any amounts drawn thereunder, and the termination of this Agreement.
10.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of Administrative Agent or any Lender
in the exercise of any power, right or privilege hereunder or under any other
Loan Document shall impair such power, right or privilege or be construed to be
a waiver of any default or acquiescence therein, nor shall any single or
partial exercise of any such power, right or privilege preclude other or
further exercise thereof or of any other power, right or privilege. All rights
and remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.
10.11 MARSHALLING; PAYMENTS SET ASIDE.
Neither Administrative Agent nor any Lender shall be under any
obligation to marshal any assets in favor of Company or any other party or
against or in payment of any or all of the Obligations. To the extent that
Company makes a payment or payments to Administrative Agent or Lenders (or to
Administrative Agent for the benefit of Lenders), or Administrative Agent or
Lenders enforce any security interests or exercise their rights of setoff, and
such payment or payments or the proceeds of such enforcement or setoff or any
part thereof are subsequently
129
137
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, any other state or federal law, common law or any equitable
cause, then, to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and remedies
therefor or related thereto, shall be revived and continued in full force and
effect as if such payment or payments had not been made or such enforcement or
setoff had not occurred.
10.12 SEVERABILITY.
In case any provision in or obligation under this Agreement or the
Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.
10.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.
The obligations of Lenders hereunder are several and no Lender shall
be responsible for the obligations or Commitments of any other Lender
hereunder. Nothing contained herein or in any other Loan Document, and no
action taken by Lenders pursuant hereto or thereto, shall be deemed to
constitute Lenders as a partnership, an association, a joint venture or any
other kind of entity. The amounts payable at any time hereunder to each Lender
shall be a separate and independent debt, and each Lender shall be entitled to
protect and enforce its rights arising out of this Agreement and it shall not
be necessary for any other Lender to be joined as an additional party in any
proceeding for such purpose.
10.14 HEADINGS.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
10.15 APPLICABLE LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES.
10.16 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 10.1).
130
138
Neither Company's rights or obligations hereunder nor any interest therein may
be assigned or delegated by Company without the prior written consent of all
Lenders.
10.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY OR HOLDINGS ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
OBLIGATIONS THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. BY EXECUTING
AND DELIVERING THIS AGREEMENT, EACH OF COMPANY AND HOLDINGS, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY AND
UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II)
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (III) AGREES THAT SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO COMPANY AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SUBSECTION 10.8; (IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE
(III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER COMPANY IN ANY
SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT; (V) AGREES THAT LENDERS RETAIN THE RIGHT TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS
AGAINST COMPANY IN THE COURTS OF ANY OTHER JURISDICTION; AND (VI) AGREES THAT
THE PROVISIONS OF THIS SUBSECTION 10.17 RELATING TO JURISDICTION AND VENUE
SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER NEW
YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.
10.18 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION
OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of
this waiver is intended to be all-encompassing of any and all disputes that may
be filed in any court and that relate to the subject matter of this
transaction, including contract claims, tort claims, breach of duty claims and
all other common law and statutory claims. Each party hereto acknowledges that
this waiver is a material inducement to enter into a business relationship,
that each has already relied on this waiver in entering into this Agreement,
and that each will continue to rely on this waiver in their related future
dealings. Each party hereto further warrants and represents that it has
reviewed this waiver with its legal counsel and that it knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel.
131
139
THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY
OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO
THIS SUBSECTION 10.18 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY
OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. In the
event of litigation, this Agreement may be filed as a written consent to a
trial by the court.
10.19 CONFIDENTIALITY.
Each Lender shall hold all non-public information obtained pursuant to
the requirements of this Agreement which has been identified as confidential by
Company in accordance with such Lender's customary procedures for handling
confidential information of this nature and in accordance with prudent lending
or investing practices, it being understood and agreed by Company that in any
event a Lender may make disclosures to Affiliates of such Lender or disclosures
reasonably required by any bona fide assignee, transferee or participant in
connection with the contemplated assignment or transfer by such Lender of any
Loans or any participations therein or disclosures required or requested by any
governmental agency or representative thereof or by the National Association of
Insurance Commissioners or pursuant to legal process; provided that, unless
specifically prohibited by applicable law or court order, each Lender shall
notify Company of any request by any governmental agency or representative
thereof (other than any such request in connection with any examination of the
financial condition of such Lender by such governmental agency) for disclosure
of any such non-public information prior to disclosure of such information; and
provided, further that in no event shall any Lender be obligated or required to
return any materials furnished by Company or any of its Subsidiaries.
10.20 MAXIMUM AMOUNT.
A. It is the intention of Company and Lenders to conform strictly
to the usury and similar laws relating to interest from time to time in force,
and all agreements between Company, Administrative Agent and Lenders, whether
now existing or hereafter arising and whether oral or written, are hereby
expressly limited so that in no contingency or event whatsoever, whether by
acceleration of maturity hereof or otherwise, shall the amount paid or agreed
to be paid in the aggregate to Lenders or to Administrative Agent on behalf of
Lenders as interest hereunder or under the other Loan Documents or in any other
security agreement given to secure the Obligations, or in any other document
evidencing, securing or pertaining to the indebtedness evidenced hereby or
thereby, exceed the maximum amount permissible under applicable usury or such
other laws (the "MAXIMUM AMOUNT"). If under any circumstances whatsoever
fulfillment of any provision hereof, or of any of the other Loan Documents, at
the time performance of such provision shall be due, shall involve exceeding
the Maximum Amount, then, ipso facto, the obligation to be fulfilled shall be
reduced to the Maximum Amount. For the purposes of calculating the actual
amount of interest paid and/or payable hereunder in respect of laws pertaining
to usury or such other laws, all sums paid or agreed to be paid to Lenders
132
140
for the use, forbearance or detention of the indebtedness of Company evidenced
hereby, outstanding from time to time shall, to the extent permitted by
applicable law, be amortized, pro rated, allocated and spread from the date of
disbursement of the proceeds of the Loans until payment in full of all of such
indebtedness, so that the actual rate of interest on account of such
indebtedness is uniform throughout the term hereof. The terms and provisions
of this subsection shall control and supersede every other provision of all
agreements between Company, Administrative Agent and Lenders.
B. If under any circumstances Lenders shall receive an amount
which would exceed the Maximum Amount, such amount shall be deemed a payment in
reduction of the principal amount of the Loans and shall be treated as a
voluntary prepayment under subsection 2.4B(i), and shall be so applied in
accordance with subsection 2.4B(iv) hereof, or if such amount exceeds the
unpaid balance of the Loans and any other indebtedness of Company in favor of
Lenders, the excess shall be deemed to have been a payment made by mistake and
shall be refunded to Company.
10.21 COUNTERPARTS; EFFECTIVENESS.
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Company and
Administrative Agent of written or telephonic notification of such execution
and authorization of delivery thereof.
[Remainder of page intentionally left blank]
133
141
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY AND HOLDINGS:
TVMAX TELECOMMUNICATIONS, INC.
OPTEL, INC.
By:
--------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Vice President
of each of the above
By:
--------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
Treasurer
of each of the above
Notice Address:
c/o Optel, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
S-1
142
AGENTS AND LENDERS:
▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P.,
individually, as Arranger and as
Syndication Agent
By:
-------------------------------
Authorized Signatory
Notice Address:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P.
c/o Goldman, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: 212-357-4451
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: 212-357-4451
S-2
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇,
individually and as Administrative Agent
By:
-----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
Executive Director, CIBC ▇▇▇▇▇▇▇▇▇▇▇ Corp.,
as Agent
Notice Address:
CIBC ▇▇▇▇▇▇▇▇▇▇▇ Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
and
Attention: Ms. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile:
S-3
144
GENERAL ELECTRIC CAPITAL CORPORATION,
individually and as Documentation Agent
By:
---------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Manager-Operations
Notice Address:
GE Capital Services Structured Finance
Group
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Manager-Domestic
Portfolio (Telecom)
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
S-4
145
[Intentionally Omitted]
S-5
146
[Intentionally Omitted]
S-6
147
▇▇▇▇▇▇▇ ▇▇▇▇▇ SENIOR FLOATING RATE
FUND, INC.
By:
------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Authorized Signatory
Notice Address:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Asset Management
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
and
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
S-7