1
Exhibit 10.2
$150,000,000
AMENDED AND RESTATED
CREDIT AGREEMENT
among
GOLDEN SKY HOLDINGS, INC.,
GOLDEN SKY SYSTEMS, INC.,
VARIOUS BANKS,
BANQUE PARIBAS,
as Syndication Agent,
FLEET NATIONAL BANK,
as Administrative Agent,
and
GENERAL ELECTRIC CAPITAL
CORPORATION,
as Documentation Agent
----------------------------------------
Dated as of July 7, 1997
Amended and Restated as of May 8, 1998
----------------------------------------
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[CAPTION]
TABLE OF CONTENTS
Page
Section 1. Amount and Terms of Credit........................................
1.01 The Commitments................................................
1.02 Minimum Amount of Each Borrowing...............................
1.03 Notice of Borrowing............................................
1.04 Disbursement of Funds..........................................
1.05 Notes..........................................................
1.06 Conversions....................................................
1.07 Pro Rata Borrowings............................................
1.08 Interest.......................................................
1.09 Interest Periods...............................................
1.10 Increased Costs, Illegality, etc...............................
1.11 Compensation...................................................
1.12 Replacement of Banks...........................................
Section 1A. Letters of Credit................................................
1A.01 Letters of Credit.............................................
1A.02 Minimum Stated Amount.........................................
1A.03 Letter of Credit Requests.....................................
1A.04 Letter of Credit Participations...............................
1A.05 Agreement to Repay Letter of Credit Drawings..................
1A.06 Increased Costs...............................................
Section 2. Commitment Commission; Fees; Reductions of Commitment.............
2.01 Fees...........................................................
2.02 Voluntary Termination of Unutilized Commitments................
2.03 Mandatory Reduction of Commitments.............................
Section 3. Prepayments; Payments; Taxes......................................
3.01 Voluntary Prepayments..........................................
3.02 Mandatory Repayments and Commitment Reductions.................
3.03 Method and Place of Payment....................................
3.04 Net Payments...................................................
Section 4. Conditions Precedent to the Restatement Effective Date
and Loans on the Restatement Effective Date..........................
4.01 Execution of Agreement; Notes..................................
4.02 Officer's Certificate..........................................
4.03 Opinions of Counsel............................................
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Page
4.04 Corporate Documents; Proceedings...............................
4.05 Employee Benefit Plans; Shareholders' Agreements; Management
Agreements; Employment Agreements; Collective Bargaining
Agreements; Debt Agreements; Tax Sharing Agreements;
Affiliate Contracts and Material Contracts..................
4.06 Consummation of the Reorganization Transaction.................
4.07 Existing Credit Agreement......................................
4.08 Subsidiaries Guaranty..........................................
4.09 Holdings Pledge Agreement......................................
4.10 Security Document Acknowledgment; Pledge Agreements; Security
Agreement...................................................
4.11 Minimum Subscribers and Households.............................
4.12 Material Adverse Change, etc...................................
4.13 Litigation.....................................................
4.14 Fees, etc......................................................
4.15 Solvency Certificate; Insurance Analyses.......................
4.16 Approvals......................................................
4.17 Financial Statements; Projections; Management Letter Reports...
4.18 Consent Letter.................................................
4.19 Acquisitions...................................................
Section 5. Conditions Precedent to All Credit Events.........................
5.01 No Default; Representations and Warranties.....................
5.02 Notice of Borrowing; Letter of Credit Request..................
5.03 Permitted Acquisitions.........................................
5.04 Material Adverse Change, etc...................................
5.05 Litigation.....................................................
5.06 Borrowing Base Certificate.....................................
Section 6. Representations, Warranties and Agreements........................
6.01 Corporate Status...............................................
6.02 Corporate Power and Authority..................................
6.03 No Violation...................................................
6.04 Governmental Approvals.........................................
6.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc...............................
6.06 Litigation.....................................................
6.07 True and Complete Disclosure...................................
6.08 Use of Proceeds; Margin Regulations............................
6.09 Tax Returns and Payments.......................................
6.10 Compliance with ERISA..........................................
6.11 The Security Documents.........................................
6.12 Material Contracts.............................................
6.13 Properties.....................................................
6.14 Capitalization.................................................
6.15 Subsidiaries...................................................
6.16 Compliance with Statutes, etc..................................
6.17 Investment Company Act.........................................
6.18 Public Utility Holding Company Act.............................
6.19 Environmental Matters..........................................
6.20 Labor Relations................................................
6.21 Patents, Licenses, Franchises and Formulas.....................
6.22 Indebtedness...................................................
6.23 Restrictions on or Relating to Subsidiaries....................
6.24 The Transaction and Permitted Acquisitions.....................
6.25 Year 2000 Reprogramming........................................
Section 7. Affirmative Covenants.............................................
7.01 Information Covenants..........................................
7.02 Books, Records and Inspections.................................
7.03 Maintenance of Property, Insurance.............................
7.04 Corporate Franchises...........................................
7.05 Compliance with Statutes, etc..................................
7.06 Compliance with Environmental Laws.............................
7.07 ERISA..........................................................
7.08 End of Fiscal Years; Fiscal Quarters...........................
7.09 Performance of Obligations.....................................
7.10 Payment of Taxes...............................................
7.11 Interest Rate Protection.......................................
7.12 Use of Proceeds................................................
7.13 Acceptable Subordinated Debt...................................
7.14 Intellectual Property Rights...................................
7.15 Permitted Acquisitions.........................................
7.16 Registry.......................................................
7.17 Additional Security; Further Assurances........................
7.18 Senior Seller Notes............................................
Section 8. Negative Covenants................................................
8.01 Liens..........................................................
8.02 Consolidation, Merger, Purchase or Sale of Assets, etc.........
8.03 Dividends......................................................
8.04 Indebtedness...................................................
8.05 Advances, Investments and Loans................................
8.06 Transactions with Affiliates...................................
8.07 Capital Expenditures...........................................
8.08 Net Adjusted Consolidated Indebtedness to Qualified Paying
Subscriber Ratio............................................
8.09 Adjusted Consolidated Senior Indebtedness to Qualified Paying
Subscriber Ratio............................................
8.10 Net Subscriber Acquisition Cost................................
8.11 Fixed Charge Coverage Ratio....................................
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Page
8.12 Annualized Adjusted Consolidated Interest Coverage Ratio.......
8.13 Consolidated Interest Coverage Ratio...........................
8.14 Net Adjusted Consolidated Indebtedness to Pro Forma Annualized
Adjusted Consolidated EBITDA................................
8.15 Adjusted Consolidated Senior Indebtedness to Pro Forma
Annualized Adjusted Consolidated EBITDA.....................
8.16 Net Adjusted Consolidated Indebtedness to Pro Forma Annualized
Consolidated EBITDA.........................................
8.17 Adjusted Consolidated Senior Indebtedness to Pro Forma
Annualized Consolidated EBITDA..............................
8.18 Limitation on Voluntary Payments and Modification of Existing
Indebtedness; Limitation on Modifications of Certificate of
Incorporation, By-Laws and Certain Other Agreements; etc....
8.19 Limitation on Certain Restrictions on Subsidiaries.............
8.20 Limitation on Issuance of Capital Stock........................
8.21 Business.......................................................
8.22 Limitation on Creation of Subsidiaries.........................
Section 9. Events of Default.................................................
9.01 Payments.......................................................
9.02 Representations, etc...........................................
9.03 Covenants......................................................
9.04 Default Under Other Agreements.................................
9.05 Bankruptcy, etc................................................
9.06 ERISA..........................................................
9.07 Security Documents.............................................
9.08 Guaranties.....................................................
9.09 Judgments......................................................
9.10 Change in Control..............................................
9.11 DBS Agreement; NRTC Agreements; FCC Licenses...................
Section 10. Definitions and Accounting Terms.................................
10.01 Defined Terms.................................................
Section 11. The Agents.......................................................
11.01 Appointment...................................................
11.02 Nature of Duties..............................................
11.03 Lack of Reliance on the Administrative Agent, the
Syndication Agent and the Documentation Agent..............
11.04 Certain Rights of the Administrative Agent and the
Syndication Agent..........................................
11.05 Reliance......................................................
11.06 Indemnification...............................................
11.07 The Administrative Agent and the Syndication Agent in Their
Individual Capacities.......................................
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Page
11.08 Holders.......................................................
11.09 Resignation by the Agents.....................................
Section 12. Miscellaneous....................................................
12.01 Payment of Expenses, Indemnities, etc.........................
12.02 Right of Setoff...............................................
12.03 Notices.......................................................
12.04 Benefit of Agreement..........................................
12.05 No Waiver; Remedies Cumulative................................
12.06 Payments Pro Rata.............................................
12.07 Calculations; Computations....................................
12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL........................................
12.09 Counterparts..................................................
12.10 Effectiveness.................................................
12.11 Headings Descriptive..........................................
12.12 Amendment or Waiver...........................................
12.13 Survival......................................................
12.14 Domicile of Loans.............................................
12.15 Post-Closing Obligations......................................
12.16 Amendment and Restatement; Termination of Existing Credit
Agreement...................................................
12.17 Additions of New Banks; Conversion of Existing Loans of
Continuing Banks; Termination of Commitments of
Non-Continuing Banks........................................
12.18 Entire Agreement; Successors and Assigns......................
Section 13. Holdings Guaranty................................................
13.01 The Guaranty..................................................
13.02 Bankruptcy....................................................
13.03 Nature of Liability...........................................
13.04 Guaranty Absolute.............................................
13.05 Independent Obligation........................................
13.06 Authorization.................................................
13.07 Reliance......................................................
13.08 Subordination.................................................
13.09 Waiver........................................................
13.10 Binding Nature of Guaranty....................................
13.11 Judgments Binding.............................................
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SCHEDULE I Commitments
SCHEDULE II Existing Letters of Credit
SCHEDULE III Projections
SCHEDULE IV Tax Matters
SCHEDULE V ERISA
SCHEDULE VI Material Contracts
SCHEDULE VII Real Property
SCHEDULE VIII Capitalization
SCHEDULE IX Subsidiaries
SCHEDULE X Patents and Licenses
SCHEDULE XI Existing Indebtedness
SCHEDULE XII Insurance
SCHEDULE XIII Existing Liens
EXHIBIT A Notice of Borrowing
EXHIBIT B-1 Term Note
EXHIBIT B-2 Revolving Note
EXHIBIT C Notice of Conversion
EXHIBIT D Letter of Credit Request
EXHIBIT E Section 3.04(b)(ii) Certificate
EXHIBIT F Form of Opinion of Reboul, MacMurray, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & Kristol
EXHIBIT G Officers' Certificate of Credit Parties
EXHIBIT H Subsidiaries Guaranty
EXHIBIT I-1 Holdings Pledge Agreement
EXHIBIT I-2 Partnership Pledge Agreement
EXHIBIT J Security Documents Acknowledgment
EXHIBIT K Solvency Certificate
EXHIBIT L Consent Letter
EXHIBIT M Borrowing Base Certificate
EXHIBIT N Bank Assignment and Assumption Agreement
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AMENDED AND RESTATED CREDIT AGREEMENT, dated as of July 7, 1997,
amended and restated as of May 8, 1998, among GOLDEN SKY HOLDINGS, INC., a
corporation organized and existing under the laws of the State of Delaware
("Holdings"), GOLDEN SKY SYSTEMS, INC., a corporation organized and existing
under the laws of the State of Delaware (the "Borrower"), the Banks party hereto
from time to time, BANQUE PARIBAS, as Syndication Agent, FLEET NATIONAL BANK, as
Administrative Agent, and GENERAL ELECTRIC CAPITAL CORPORATION, as Documentation
Agent. Unless otherwise defined herein, all capitalized terms used herein and
defined in Section 10 are used herein as therein defined.
W I T N E S S E T H:
WHEREAS, the Borrower, each of the Banks (excluding the New Banks),
the Syndication Agent and the Administrative Agent are party to a Credit
Agreement, dated as of July 7, 1997 (as the same has been amended, modified or
supplemented prior to, but not including, the Restatement Effective Date, the
"Existing Credit Agreement");
WHEREAS, the parties hereto wish to amend and restate the Existing
Credit Agreement as herein provided;
WHEREAS, the Borrower wishes to obtain a credit facility to (i)
refinance Existing Loans, (ii) repay the Rocky Mountain Note, (iii) effect
Permitted Acquisitions, (iv) pay Transaction Fees and Expenses, (v) provide for
general corporate, capital expenditure and working capital purposes and (vi)
issue Letters of Credit in an amount not to exceed the limits in Section
1A.01(c);
WHEREAS, subject to and upon the terms and conditions herein set
forth, the Banks are willing to make available to the Borrower the respective
credit facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
Section 1. Amount and Terms of Credit.
1.01 The Commitments. (a) Subject to and upon the terms and conditions
set forth herein, each Bank with a Term Loan Commitment severally agrees (A) in
the case of each Continuing Bank with a Term Loan Commitment, to convert into
Term Loans (each a "Term Loan Conversion," and together, the "Term Loan
Conversions"), on the Restatement Effective Date, Existing Term Loans made by
such Continuing Bank to the Borrower pursuant to the Existing Credit Agreement
and outstanding on the Restatement Effective Date and (B) in the case of New
Banks with a Term Loan Commitment and in the case of any Continuing Bank whose
Term Loan Commitment is greater than the aggregate outstanding principal amount
of Existing Term Loans made by such Continuing Bank to the Borrower pursuant to
the Existing Credit Agreement and outstanding on the Restatement Effective Date,
prior to the Restatement Effective Date, on the Restatement Effective Date, to
make a term loan (together with each Term Loan Conversion, each, a "Term Loan"
and, collectively, the "Term Loans") to the Borrower, which Term Loans (i)
shall, at the option of the Borrower, be Base Rate Loans or Eurodollar Loans;
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provided that (x) except as otherwise specifically provided in Section 1.10(b),
all Term Loans comprising the same Borrowing shall at all times be of the same
Type and (y) no Eurodollar Loans may be incurred prior to the Syndication
Termination Date, (ii) shall not exceed for any Bank, in initial aggregate
principal amount, that amount which equals the Term Loan Commitment of such Bank
on such date (before giving effect to any reductions thereto on such date
pursuant to Section 2.03(b)) and (iii) shall not exceed for all Banks at any
time an aggregate principal amount which, when added to the aggregate amount of
all outstanding Revolving Loans at such time, and all Letter of Credit
Outstandings at such time and the aggregate outstanding amount of all other Net
Adjusted Consolidated Indebtedness at such time, equals the Borrowing Base at
such time. Once repaid, Term Loans incurred hereunder may not be reborrowed. To
the extent that any Continuing Bank's Term Loan Commitment is less than the
amount of Existing Term Loans made by such Continuing Bank to the Borrower
pursuant to the Existing Credit Agreement and outstanding on the Restatement
Effective Date immediately prior to the Restatement Effective Date, the proceeds
of other Term Loans shall be used to repay such Continuing Bank the amount of
such Continuing Bank's Existing Term Loans which exceeds such Term Loan
Commitment.
(b) Subject to and upon the terms and conditions set forth herein,
each Bank with a Revolving Loan Commitment severally agrees (A) in the case of
each Continuing Bank with a Revolving Loan Commitment, to convert into Revolving
Loans (each a "Revolving Loan Conversion," and together, the "Revolving Loan
Conversions"), on the Restatement Effective Date, Existing Revolving Loans made
by such Continuing Bank to the Borrower pursuant to the Existing Credit
Agreement and outstanding on the Restatement Effective Date and (B) in the case
of New Banks with a Revolving Loan Commitment and in the case of any Continuing
Bank whose Revolving Loan Commitment is greater than the aggregate outstanding
principal amount of Revolving Loans made by such Continuing Bank to the Borrower
pursuant to the Existing Credit Agreement and outstanding on the Restatement
Effective Date, prior to the Restatement Effective Date, at any time and from
time to time on or after the Restatement Effective Date and prior to the
Revolving Loan Maturity Date, to make a loan or loans (together with each
Revolving Loan Conversion, each a "Revolving Loan" and, collectively, the
"Revolving Loans") to the Borrower, which Revolving Loans (i) shall, at the
option of the Borrower, be Base Rate Loans or Eurodollar Loans, provided that
(x) except as otherwise specifically provided in Section 1.10(b), all Revolving
Loans comprising the same Borrowing shall at all times be of the same Type and
(y) prior to the Syndication Termination Date, only Borrowings of Eurodollar
Loans with an Interest Period of one week may be incurred, (ii) may be repaid
and reborrowed in accordance with the provisions hereof, (iii) shall not exceed
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for any Bank at any time outstanding that aggregate principal amount which, when
added to the product of (x) such Bank's Percentage and (y) the aggregate amount
of all Letter of Credit Outstandings (exclusive of Unpaid Drawings which are
repaid with the proceeds of, and simultaneously with the incurrence of, the
respective incurrence of Revolving Loans), equals the Revolving Loan Commitment
of such Bank at such time and (iv) shall not exceed for all Banks at any time
that aggregate principal amount which, when added to the aggregate amount of all
Letter of Credit Outstandings at such time and all outstanding Term Loans at
such time and the aggregate outstanding amount of all other Net Adjusted
Consolidated Indebtedness at such time, equals the Borrowing Base at such time.
1.02 Minimum Amount of Each Borrowing. The aggregate principal amount
of each Borrowing hereunder shall not be less than the Minimum Borrowing Amount
and, if greater, shall be in integral multiples of $250,000 in the case of Base
Rate Loans and $500,000 in the case of Eurodollar Loans. More than one Borrowing
may occur on the same date, but at no time shall there be outstanding more than
eight (8) Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires to make a
Borrowing hereunder, it shall give the Administrative Agent at its Notice
Office, prior to 10:00 A.M. (New York time) at least one (1) Business Day's
prior written notice (or telephonic notice promptly confirmed in writing) of
each Borrowing of Base Rate Loans and at least three (3) Business Days' prior
written notice (or telephonic notice promptly confirmed in writing) of each
Borrowing of Eurodollar Loans. Each such notice (each a "Notice of Borrowing"),
except as otherwise expressly provided in Section 1.10, shall be irrevocable and
shall be given by the Borrower in the form of Exhibit A, appropriately completed
to specify (i) the aggregate principal amount of the Loans to be made pursuant
to such Borrowing, (ii) the date of such Borrowing (which shall be a Business
Day), (iii) whether the Loans being made pursuant to such Borrowing shall
constitute Term Loans or Revolving Loans, (iv) whether the Loans being made
pursuant to such Borrowing are to be initially maintained as Base Rate Loans or
Eurodollar Loans and, if Eurodollar Loans, the initial Interest Period to be
applicable thereto, and (v) the purposes for which the Loans being made pursuant
to such Borrowing are to be used (i.e., either Permitted Acquisitions, repayment
of Existing Indebtedness or working capital, capital expenditures or general
corporate purposes). Any notice received after 10:00 A.M. (New York time) shall
be deemed to be received on the next succeeding Business Day. The Administrative
Agent shall promptly give each Bank which is required to make Loans of the
Tranche specified in the respective Notice of Borrowing notice of such proposed
Borrowing, of such Bank's proportionate share thereof and of the other matters
specified in the Notice of Borrowing.
(b) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice permitted to be given hereunder, the
Administrative Agent or the respective Issuing Bank (in the case of Letters of
Credit) may, prior to receipt of written confirmation, act without liability
upon the basis of telephonic notice believed by the Administrative Agent or the
respective Issuing Bank (in the case of Letters of Credit) in good faith to be
from the President, the Chief Executive Officer, Chief Financial Officer,
General Counsel or Controller of the Borrower. In each such case, the
Administrative Agent's or such Issuing Bank's record of the terms of such
telephonic notice shall be conclusive absent manifest error.
1.04 Disbursement of Funds. No later than 12:00 Noon (New York time)
on the date specified in each Notice of Borrowing, each Bank with a Commitment
of the respective Tranche will make available its pro rata portion (determined
in accordance with Section 1.07) of each such Borrowing requested to be made on
such date. All such amounts shall be made available in Dollars and in
immediately available funds at the Payment Office of the Administrative Agent,
and the Administrative Agent will make available to the Borrower at the Payment
Office the aggregate of the amounts so made available by the Banks. Unless the
Administrative Agent shall have been notified in writing by any Bank prior to
the date of Borrowing that such Bank does not intend to make available to the
Administrative Agent such Bank's portion of any Borrowing to be made on such
date, the Administrative Agent may assume that such Bank has made such amount
available to the Administrative Agent on such date of Borrowing and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such corresponding amount is not in fact
10
made available to the Administrative Agent by such Bank, the Administrative
Agent shall be entitled to recover such corresponding amount on demand from such
Bank. If such Bank does not pay such corresponding amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent shall promptly
notify the Borrower, and the Borrower shall immediately pay such corresponding
amount to the Administrative Agent. The Administrative Agent shall also be
entitled to recover on demand from such Bank or the Borrower, as the case may
be, interest on such corresponding amount in respect of each day from the date
such corresponding amount was made available by the Administrative Agent to the
Borrower, until the date such corresponding amount is recovered by the
Administrative Agent, at a rate per annum equal to (i) if recovered from such
Bank, the cost to the Administrative Agent of acquiring overnight federal funds
and (ii) if recovered from the Borrower, the rate of interest applicable to the
respective Borrowing, as determined pursuant to Section 1.08. Nothing in this
Section 1.04 shall be deemed to relieve any Bank from its obligation to make
Loans hereunder or to prejudice any rights which the Borrower may have against
any Bank as a result of any failure by such Bank to make Loans hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal of, and
interest on, the Loans made by each Bank shall be evidenced (i) if Term Loans,
by a promissory note duly executed and delivered by the Borrower substantially
in the form of Exhibit B-1 with blanks appropriately completed in conformity
herewith (each, a "Term Note" and, collectively, the "Term Notes") and (ii) if
Revolving Loans, by a promissory note duly executed and delivered by the
Borrower substantially in the form of Exhibit B-2, with blanks appropriately
completed in conformity herewith (each a "Revolving Note" and, collectively, the
"Revolving Notes").
(b) The Term Note issued to each Bank shall (i) be executed by the
Borrower, (ii) be payable to the order of such Bank and be dated the Restatement
Effective Date, (iii) be in a stated principal amount equal to the Term Loan
Commitment of such Bank and be payable in the principal amount of the Term Loans
evidenced thereby, (iv) mature on the Term Loan Maturity Date, (v) bear interest
as provided in the appropriate clause of Section 1.08 in respect of the Base
Rate Loans and Eurodollar Loans, as the case may be, evidenced thereby, (vi) be
subject to voluntary prepayment as provided in Section 3.01, and mandatory
repayment as provided in Section 3.02 and (vii) be entitled to the benefits of
this Agreement and the Guaranties and be secured by the Security Documents.
(c) The Revolving Note issued to each Bank with a Revolving Loan
Commitment shall (i) be executed by the Borrower, (ii) be payable to the order
of such Bank and be dated the Restatement Effective Date, (iii) be in a stated
principal amount equal to the Revolving Loan Commitment of such Bank and be
payable in the principal amount of the Revolving Loans evidenced thereby, (iv)
mature on the Revolving Loan Maturity Date, (v) bear interest as provided in the
11
appropriate clause of Section 1.08 in respect of the Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to
voluntary prepayment as provided in Section 3.01, and mandatory repayment as
provided in Section 3.02 and (vii) be entitled to the benefits of this Agreement
and the Guaranties and be secured by the Security Documents.
(d) Each Bank will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
or the making of an incorrect notation shall not affect the Borrower's
obligations in respect of such Loans.
1.06 Conversions. The Borrower shall have the option to convert, on
any Business Day, all or a portion at least equal to the Minimum Borrowing
Amount of the outstanding principal amount of the Loans made pursuant to one or
more Borrowings (so long as of the same Tranche) of one Type of Loan into a
Borrowing or Borrowings (of the same Tranche) of the other Type of Loan;
provided that:
(i) except as otherwise provided in Section 1.10(b), Eurodollar
Loans may be converted into Base Rate Loans only on the last day of an
Interest Period applicable to the Loans being converted and no such
partial conversion of Eurodollar Loans shall reduce the outstanding
principal amount of such Eurodollar Loans made pursuant to a single
Borrowing to less than the Minimum Borrowing Amount applicable
thereto;
(ii) Base Rate Loans may only be converted into Eurodollar Loans
if no Default or Event of Default is in existence on the date of the
conversion;
(iii) no conversion pursuant to this Section 1.06 shall result in
a greater number of Borrowings than is permitted under Section 1.02;
and
(iv) prior to the Syndication Termination Date, Loans may be
converted into Eurodollar Loans that have a one-week Interest Period.
Each such conversion shall be effected by the Borrower by giving the
Administrative Agent at its Notice Office prior to 12:00 Noon (New York time) at
least three (3) Business Days' prior written notice (or telephonic notice
promptly confirmed in writing) (each a "Notice of Conversion") which notice
shall be in the form of Exhibit C, appropriately completed to specify the Loans
to be so converted, the Borrowing(s) pursuant to which such Loans were made and,
if to be converted into Eurodollar Loans, the Interest Period to be initially
applicable thereto. The Administrative Agent shall give each Bank prompt notice
of any such proposed conversion affecting any of its Loans.
1.07 Pro Rata Borrowings. All Borrowings of Loans under this Agreement
shall be incurred from the Banks pro rata on the basis of their respective Term
Loan Commitments or Revolving Loan Commitments, as the case may be. It is
understood that no Bank shall be responsible for any default by any other Bank
of its obligation to make Loans hereunder and that each Bank shall be obligated
to make the Loans provided to be made by it hereunder regardless of the failure
of any other Bank to make its Loans hereunder.
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1.08 Interest. (a) The Borrower agrees to pay interest in respect of
the unpaid principal amount of each Base Rate Loan made to it from the date of
the Borrowing thereof until the earlier of (i) the maturity thereof (whether by
acceleration or otherwise) of such Base Rate Loan and (ii) the conversion of
such Base Rate Loan to a Eurodollar Loan pursuant to Section 1.06, at a rate per
annum which shall at all times be equal to the sum of the Applicable Margin plus
the Base Rate in effect from time to time.
(b) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Loan made to it from the date of the
Borrowing thereof until the earlier of (i) the maturity (whether by acceleration
or otherwise) of such Eurodollar Loan and (ii) the conversion of such Eurodollar
Loan to a Base Rate Loan pursuant to Section 1.06, 1.09 or 1.10(b), as
applicable, at a rate per annum which shall, during each Interest Period
applicable thereto, be equal to the sum of the Applicable Margin plus the Quoted
Rate for such Interest Period.
(c) Following an Event of Default under Section 9.03 with respect to
Sections 8.08 through 8.14, inclusive, or Section 8.20, or a Default under
Section 9.01 or Section 9.05, the unpaid principal amount of each Loan shall
bear interest at a rate per annum equal to the greater of (x) 2% per annum in
excess of the rate otherwise applicable to the Base Rate Loans of the respective
Tranche of Loans from time to time and (y) the rate which is 2% in excess of the
rate borne by such Loans. In addition, overdue principal and, to the extent
permitted by law, overdue interest in respect of each Loan and any other overdue
amount payable hereunder shall, in each case, bear interest at a rate per annum
equal to the greater of (x) 2% per annum in excess of the rate otherwise
applicable to the Base Rate Loans of the respective Tranche of Loans from time
to time and (y) the rate which is 2% in excess of the rate borne by such Loans.
Interest which accrues under this Section 1.08(c) shall be payable on demand;
provided, however, in no event shall the increased interest rate specified in
the two preceding sentences be cumulative.
(d) Accrued (and theretofore unpaid) interest shall be payable (i) in
respect of each Base Rate Loan, quarterly in arrears on each Quarterly Payment
Day, (ii) in respect of each Eurodollar Loan on (x) the date of any prepayment
or repayment thereof (on the amount prepaid or repaid), (y) the date of any
conversion into a Base Rate Loan pursuant to Section 1.06, 1.09 or 1.10(b), as
applicable (on the amount converted) and (z) on the last day of each Interest
Period applicable thereto and, in the case of an Interest Period in excess of
three months, on each date occurring at three month intervals after the first
day of such Interest Period, (iii) in respect of each Loan, at maturity (whether
by acceleration or otherwise) and, after such maturity, on demand and (iv) in
respect of each Existing Loan, on the Restatement Effective Date.
(e) Upon each Interest Determination Date, the Administrative Agent
shall determine the Quoted Rate for the Interest Period applicable to Eurodollar
Loans and shall promptly notify the Borrower and the Banks thereof. Each such
determination shall, absent manifest error, be final and conclusive and binding
on all parties hereto.
(f) All computations of interest hereunder shall be made in accordance
with Section 12.07(b).
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1.09 Interest Periods. At the time it gives any Notice of Borrowing or
Notice of Conversion in respect of the making of, or conversion into, a
Eurodollar Loan (in the case of the initial Interest Period applicable thereto)
or prior to 10:00 A.M. (New York time) on the third Business Day prior to the
expiration of an Interest Period applicable to such Eurodollar Loan (in the case
of any subsequent Interest Period), the Borrower shall have the right to elect,
by giving the Administrative Agent notice thereof, the interest period (each an
"Interest Period") applicable to such Eurodollar Loan, which Interest Period
shall, at the option of the Borrower, be a one, two, three, six or, if available
to each of the Banks (as determined by each such Bank in its sole discretion
based on prevailing conditions in the interbank Eurodollar market on any date of
determination thereof), nine or twelve month period provided that prior to the
Syndication Termination Date, one week Interest Periods may be selected so long
as all Interest Periods end on the same date, such date to occur prior to the
Syndication Termination Date; provided that:
(i) all Eurodollar Loans comprising a single Borrowing shall at
all times have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan shall
commence on the date of Borrowing of such Loan (including the date of
any conversion thereto from a Borrowing of Base Rate Loans) and each
Interest Period occurring thereafter in respect of such Loan shall
commence on the day on which the next preceding Interest Period
applicable thereto expires;
(iii) if any Interest Period relating to a Eurodollar Loan begins
on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period, such Interest
Period shall end on the last Business Day of such calendar month;
(iv) if any Interest Period would otherwise expire on a day which
is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided, however, that if any Interest
Period for a Eurodollar Loan would otherwise expire on a day which is
not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire
on the next preceding Business Day;
(v) no Interest Period for a Borrowing under a Tranche shall be
selected which extends beyond the respective Maturity Date of such
Tranche;
(vi) no Interest Period may be selected at any time when any
Default or Event of Default is then in existence;
(vii) no Interest Period in respect of any Borrowing of Term
Loans shall be selected which extends beyond any date upon which a
mandatory repayment of such Term Loans will be required to be made
under Section 3.02(A)(c) if, after giving effect to the selection of
such Interest Period, the aggregate principal amount of such Term
Loans maintained as Eurodollar Loans which have Interest Periods
expiring after such date will be in excess of the aggregate principal
amount of such Term Loans then outstanding less the aggregate amount
of such required prepayment;
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(viii) no Interest Period in respect of any Borrowing of
Revolving Loans shall be selected which extends beyond any Scheduled
Revolving Loan Commitment Reduction Date if, after giving effect to
the selection of such Interest Period, the aggregate principal amount
of Revolving Loans maintained as Eurodollar Loans which have Interest
Periods expiring after such date will be in excess of the aggregate
principal amount of Revolving Loans then outstanding less the excess,
if any, of the amount of the Scheduled Revolving Loan Commitment
Reduction on such date over the Total Unutilized Revolving Loan
Commitment; and
(ix) no Interest Period (other than an Interest Period which is a
one (1) week period) may be selected prior to the Syndication
Termination Date.
If upon the expiration of any Interest Period applicable to a Borrowing of
Eurodollar Loans the Borrower has failed to elect a new Interest Period to be
applicable to such Eurodollar Loans as provided above or a Default or Event of
Default then exists, the Borrower shall be deemed to have elected to convert
such Eurodollar Loans into Base Rate Loans effective as of the expiration date
of such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that any Bank
shall have determined (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto but, with respect to
clause (i) below, may be made only by the Administrative Agent):
(i) on any Interest Determination Date that, by reason of any
changes arising after the date of this Agreement affecting the
interbank Eurodollar market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in
the definition of Quoted Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with
respect to any Eurodollar Loan because of (x) any change since the
Original Effective Date in any applicable law or governmental rule,
regulation, order, guideline or request (whether or not having the
force of law) or in the interpretation or administration thereof and
including the introduction of any new law or governmental rule,
regulation, order, guideline or request, such as, for example, but not
limited to: (A) a change in the basis of taxation of payments to any
Bank of the principal of or interest on the Notes or any other amounts
payable hereunder (except for changes in the rate of tax on, or
determined by reference to, the net income or profits of such Bank
imposed by the jurisdiction in which its principal office or
applicable lending office is located) or (B) a change in official
reserve requirements (but, in all events, excluding reserves required
under Regulation D to the extent included in the computation of the
Quoted Rate) and/or (y) other circumstances since the Original
Effective Date affecting such Bank or the interbank Eurodollar market
or the position of such Bank in such market; or
(iii) at any time, that the making or continuance of any
Eurodollar Loan has been made (x) unlawful by any law or governmental
rule, regulation or order, (y) impossible by compliance by any Bank in
15
good faith with any governmental request (whether or not having the
force of law) or (z) impracticable as a result of a contingency
occurring after the date of this Agreement which materially and
adversely affects the interbank Eurodollar market;
then, and in any such event, such Bank (or the Administrative Agent, in the case
of clause (i) above) shall promptly give notice (if by telephone, promptly
confirmed in writing) to the Borrower, and, except in the case of clause (i)
above, to the Administrative Agent of such determination (which notice the
Administrative Agent shall promptly transmit to each of the other Banks).
Thereafter (x) in the case of clause (i) above, Eurodollar Loans shall no longer
be available until such time as the Administrative Agent notifies the Borrower
and the Banks that the circumstances giving rise to such notice by the
Administrative Agent no longer exist, and any Notice of Borrowing or Notice of
Conversion given by the Borrower with respect to Eurodollar Loans which have not
yet been incurred (including by way of conversion) shall be deemed rescinded by
the Borrower, (y) in the case of clause (ii) above, the Borrower shall pay to
such Bank, upon written demand therefor, such additional amounts (in the form of
an increased rate of, or a different method of calculating, interest
or otherwise as such Bank in its sole discretion shall determine) as shall be
required to compensate such Bank for such increased costs or reductions in
amounts received or receivable hereunder (a written notice as to the additional
amounts owed to such Bank, showing in reasonable detail the basis for the
calculation thereof, submitted to the Borrower by such Bank shall, absent
manifest error, be final and conclusive and binding on all the parties hereto)
and (z) in the case of clause (iii) above, the Borrower shall take one of the
actions specified in Section 1.10(b) as promptly as possible and, in any event,
within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected by the circumstances described in
Section 1.10(a)(iii) shall) either (i) if the affected Eurodollar Loan is then
being made initially or pursuant to a conversion, by giving the Administrative
Agent telephonic notice (confirmed in writing) on the same date that the
Borrower was notified by the affected Bank or the Administrative Agent pursuant
to Section 1.10(a)(ii) or (iii), cancel the respective Borrowing or conversion,
or (ii) if the affected Eurodollar Loan is then outstanding, upon at least three
(3) Business Days' written notice to the Administrative Agent, require the
affected Bank to convert such Eurodollar Loan into a Base Rate Loan; provided
that if more than one Bank is affected at any time, then all affected Banks must
be treated the same pursuant to this Section 1.10(b).
(c) If at any time after the Original Effective Date hereof, any Bank
determines that the introduction of or any change in applicable law or
governmental rule, regulation, order, guideline or request (whether or not
having the force of law) concerning capital adequacy, or any change in
interpretation or administration thereof by any governmental authority, central
bank or comparable agency, will have the effect of increasing the amount of
capital required or expected to be maintained by such Bank or any corporation
controlling such Bank based on the existence of such Bank's Commitments
hereunder or its obligations hereunder, then the Borrower shall pay to such
Bank, upon its written demand therefor, such additional amounts as shall be
required to compensate such Bank for the increased cost to such Bank or such
other corporation or the reduction in the rate of return to such Bank or such
16
other corporation as a result of such increase of capital. In determining such
additional amounts, each Bank will act reasonably and in good faith and will use
averaging and attribution methods which are reasonable; provided that such
Bank's determination of compensation owing under this Section 1.10(c) shall,
absent manifest error, be final and conclusive and binding on all the parties
hereto. Each Bank, upon determining that any additional amounts will be payable
pursuant to this Section 1.10(c), will give prompt written notice thereof to the
Borrower, which notice shall show in reasonable detail the basis for calculation
of such additional amounts, although the failure to give any such notice shall
not release or diminish any of the Borrower's obligations to pay additional
amounts pursuant to this Section 1.10(c).
1.11 Compensation. Holdings and the Borrower jointly and severally
agree to compensate each Bank, upon its written request (which request shall set
forth in reasonable detail the basis for requesting such compensation), for all
losses, expenses and liabilities (including, without limitation, any loss,
expense or liability incurred by reason of the liquidation or reemployment of
deposits or other funds required by such Bank to fund its Eurodollar Loans)
which such Bank may sustain: (i) if for any reason (other than a default by such
Bank or the Administrative Agent) a Borrowing of, or conversion from or into,
Eurodollar Loans does not occur on a date specified therefor in a Notice of
Borrowing or Notice of Conversion (whether or not withdrawn by the Borrower or
deemed withdrawn pursuant to Section 1.10(a)); (ii) if any repayment (including
any repayment made on the Restatement Effective Date or made pursuant to Section
3.02 or as a result of an acceleration of the Loans pursuant to Section 9) or
conversion of any of its Eurodollar Loans occurs on a date which is not the last
day of an Interest Period with respect thereto; (iii) if any prepayment of any
of its Eurodollar Loans is not made on any date specified in a notice of
prepayment given by the Borrower; or (iv) as a consequence of (x) any other
default by the Borrower to repay its Eurodollar Loans when required by the terms
of this Agreement or any Note held by such Bank or (y) any election made
pursuant to Section 1.10(b). A Bank's basis for requesting compensation pursuant
to this Section, and a Bank's calculations of the amount thereof, shall, absent
manifest error, be final and conclusive and binding on all the parties hereto.
1.12 Replacement of Banks. If any Bank becomes a Defaulting Bank then
the Borrower shall have the right, if no Default or Event of Default then
exists, to replace such Bank (the "Replaced Bank") with any other Bank or with
one or more Eligible Transferee or Transferees, none of whom shall constitute a
Defaulting Bank at the time of such replacement (collectively, the "Replacement
Bank") reasonably acceptable to the Agents and the Issuing Bank or, at the
option of the Borrower, to replace the Commitments (and Loans outstanding
pursuant thereto) of the Replaced Bank with identical Commitments (and Loans
outstanding pursuant thereto) provided by the Replacement Bank; provided that:
(i) at the time of any replacement pursuant to this Section 1.12,
the Replacement Bank shall enter into one or more assignment
agreements pursuant to Section 12.04(b) (and with all fees payable
pursuant to said Section 12.04(b) to be paid by the Replacement Bank)
pursuant to which the Replacement Bank shall acquire all of the
Commitments and outstanding Loans of the Replaced Bank and, in the
case of replacement of the Revolving Loan Commitment of the respective
Bank, participations in Letters of Credit by, the Replaced Bank and in
connection therewith, shall pay to (x) the Replaced Bank in respect
thereof an amount equal to the sum of (A) an amount equal to the
principal of, and all accrued interest on, all outstanding Loans and
(B) an amount equal to such Replaced Bank's Percentage of all Unpaid
Drawings that have been funded by (and not reimbursed to) such
Replaced Bank, together with all then unpaid interest with respect
thereto at such time and (C) an amount equal to all accrued, but
theretofore unpaid, Fees owing to the Replaced Bank pursuant to
Section 2.01 hereof, and (y) the Issuing Bank or Banks, an amount
equal to such Replaced Bank's Percentage of any Unpaid Drawing (which
at such time remains an Unpaid Drawing) with respect to a Letter of
Credit issued by such Issuing Bank to the extent such amount was not
theretofore funded by such Replaced Bank; and
17
(ii) all obligations of the Borrower owing to the Replaced Bank
(other than those specifically described in clause (i) above in
respect of which the assignment purchase price has been, or is
concurrently being, paid) shall be paid in full by the Borrower to
such Replaced Bank concurrently with such replacement.
Upon the execution of the respective assignment documentation, the payment of
amounts referred to in clauses (i) and (ii) above, recordation of the assignment
on the Register by the Administrative Agent pursuant to Section 7.16 and, if so
requested by the Replacement Bank, delivery to the Replacement Bank of the
appropriate Note or Notes, executed by the Borrower, (x) the Replacement Bank
shall become a Bank hereunder and (y) the Replaced Bank shall cease to
constitute a Bank hereunder with respect to the Loans and Commitments so
transferred, except with respect to indemnification provisions under this
Agreement, which shall survive as to such Replaced Bank, and the Percentages of
the Banks shall be automatically adjusted at such time to give effect to such
replacement.
Section 1A. Letters of Credit.
1A.01 Letters of Credit. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower may request any Issuing Bank at any
time and from time to time on and after the Restatement Effective Date and prior
to the third Business Day immediately preceding the Revolving Loan Maturity Date
to issue, for the account of the Borrower and for the benefit of any holder (or
any trustee, agent or other similar representative for any such holders) of L/C
Supportable Indebtedness, an irrevocable standby letter of credit in a form
customarily used by such Issuing Bank or in such other form as has been approved
by such Issuing Bank in support of said L/C Supportable Indebtedness (each such
letter of credit, a "Letter of Credit" and, collectively, the "Letters of
Credit"); provided that the Borrower may request any Issuing Bank after the
Restatement Effective Date to issue one or more Letters of Credit in support of
the NRTC L/C Obligation (collectively, the "NRTC Letter of Credit"). All Letters
of Credit shall be denominated in Dollars.
(b) Each Issuing Bank (other than Fleet) may agree in its sole
discretion and Fleet hereby agrees that it will (subject to the terms and
conditions contained herein), at any time and from time to time after the
Restatement Effective Date and prior to the Revolving Loan Maturity Date,
following its receipt of the respective Letter of Credit Request, issue for the
account of the Borrower one or more Letters of Credit in support of such L/C
Supportable Indebtedness as is permitted to remain outstanding without giving
rise to a Default or Event of Default hereunder; provided that the respective
Issuing Bank shall be under no obligation to issue any Letter of Credit if at
the time of such issuance:
18
(i) any order, judgment or decree of any governmental authority
or arbitrator shall purport by its terms to enjoin or restrain such
Issuing Bank from issuing such Letter of Credit or any requirement of
law applicable to such Issuing Bank or any request or directive
(whether or not having the force of law) from any governmental
authority with jurisdiction over such Issuing Bank shall prohibit, or
request that such Issuing Bank refrain from, the issuance of letters
of credit generally or such Letter of Credit in particular or shall
impose upon such Issuing Bank with respect to such Letter of Credit
any restriction or reserve or capital requirement (for which such
Issuing Bank is not otherwise compensated) not in effect on the date
hereof, or any unreimbursed loss, cost or expense which was not
applicable, in effect or known to such Issuing Bank as of the date
hereof and which such Issuing Bank in good ▇▇▇▇▇ ▇▇▇▇▇ material to it;
(ii) such Issuing Bank shall have received a notice of the type
described in the second sentence of Section 1A.03(b) from any Bank
prior to the issuance of such Letter of Credit; or
(iii) a Bank Default exists, unless such Issuing Bank has entered
into arrangements satisfactory to it and the Borrower to eliminate
such Issuing Bank's risk with respect to the Bank which is the subject
of the Bank Default, including by cash collateralizing such Bank's
Percentage of the Letter of Credit Outstandings.
Schedule II attached hereto contains a description of all letters of credit
issued by an Issuing Bank pursuant to the Existing Credit Agreement and which
are to remain outstanding on the Restatement Effective Date. Each such letter of
credit, including any extension thereof (each an "Existing Letter of Credit")
shall constitute a "Letter of Credit" for all purposes of this Agreement. Each
Existing Letter of Credit shall be deemed issued for purposes of Sections 1A.04
and 2.01(b) through (d), inclusive, on the Restatement Effective Date.
(c) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of,
prior to the issuance of, the respective Letter of Credit) at such time, would
exceed (x) $20,000,000 (or $40,000,000 at any time after the Borrower shall have
issued Acceptable Subordinated Debt), (y) when added to the aggregate principal
amount of all Revolving Loans then outstanding, the Total Revolving Loan
Commitment then in effect (after giving effect to any reductions to the Total
Revolving Loan Commitment on such date) or (z) when added to the aggregate
principal amount of all Revolving Loans then outstanding and the aggregate
principal amount of all Term Loans then outstanding and the aggregate
outstanding amount of all other Net Adjusted Consolidated Indebtedness at such
time, the Borrowing Base at such time and (ii) each Letter of Credit shall by
its terms terminate on or before the earlier of (x) the date which occurs twelve
(12) months after the date of the issuance thereof (although any such Letter of
Credit may be renewable for successive periods of up to twelve (12) months, but
not beyond the Revolving Loan Maturity Date, on terms acceptable to the Issuing
Bank) and (y) the third Business Day immediately preceding the Revolving Loan
Maturity Date.
19
1A.02 Minimum Stated Amount. The Stated Amount of each Letter of
Credit shall be not less than $1,000,000 or such lesser amount as is acceptable
to the Issuing Bank.
1A.03 Letter of Credit Requests. (a) Whenever the Borrower desires
that a Letter of Credit be issued for its account, the Borrower shall give the
Administrative Agent and the respective Issuing Bank at least ten (10) Business
Days' (or such shorter period as is acceptable to the respective Issuing Bank in
any given case) written notice prior to the proposed date of issuance (which
shall be a Business Day). Each notice shall be in the form of Exhibit D (each a
"Letter of Credit Request"). The Issuing Bank shall promptly transmit copies of
each Letter of Credit Request to each Bank.
(b) The making of each Letter of Credit Request shall be deemed to be
a representation and warranty by the Borrower that such Letter of Credit may be
issued in accordance with, and will not violate the requirements of, Section
1A.01(c). Unless the Issuing Bank has received notice from any Bank before it
issues a Letter of Credit that one or more of the conditions specified in
Section 5 are not then satisfied, or that the issuance of such Letter of Credit
would violate Section 1A.01(c), then such Issuing Bank may issue the requested
Letter of Credit for the account of the Borrower in accordance with the Issuing
Bank's usual and customary practices.
1A.04 Letter of Credit Participations. (a) Immediately upon the
issuance by the respective Issuing Bank of any Letter of Credit or on the
Restatement Effective Date with respect to Existing Letters of Credit, such
Issuing Bank shall be deemed to have sold and transferred to each Bank with a
Revolving Loan Commitment, other than such Issuing Bank (each such Bank, in its
capacity under this Section 1A.04, a "Participant"), and each such Participant
shall be deemed irrevocably and unconditionally to have purchased and received
from such Issuing Bank, without recourse or warranty, an undivided interest and
participation, to the extent of such Participant's Percentage in such Letter of
Credit, each substitute letter of credit, each drawing made thereunder and the
obligations of the Borrower under this Agreement with respect thereto, and any
security therefor or guaranty pertaining thereto. Upon any change in the
Revolving Loan Commitments of the Banks pursuant to Section 12.04, it is hereby
agreed that, with respect to all outstanding Letters of Credit and Unpaid
Drawings, there shall be an automatic adjustment to the participations pursuant
to this Section 1A.04 to reflect the new Percentages of the assignor and
assignee Bank or of all Banks with Revolving Loan Commitments, as the case may
be.
(b) In determining whether to pay under any Letter of Credit, the
Issuing Bank shall not have any obligation relative to the other Banks other
than to confirm that any documents required to be delivered under such Letter of
Credit appear to have been delivered and that they appear to comply on their
face with the requirements of such Letter of Credit. Any action taken or omitted
to be taken by any Issuing Bank under or in connection with any Letter of Credit
if taken or omitted in the absence of gross negligence or willful misconduct,
shall not create for such Issuing Bank any resulting liability to the Borrower
or any Bank.
20
(c) In the event that any Issuing Bank makes any payment under any
Letter of Credit and the Borrower shall not have reimbursed such amount in full
to the Issuing Bank pursuant to Section 1A.05(a), such Issuing Bank shall
promptly notify the Administrative Agent, which shall promptly notify each
Participant of such failure, and each Participant shall promptly and
unconditionally pay to the Administrative Agent for the account of such Issuing
Bank the amount of such Participant's Percentage of such unreimbursed payment in
Dollars and in same day funds. If the Administrative Agent so notifies, prior to
11:00 A.M. (New York time) on any Business Day, any Participant required to fund
a payment under a Letter of Credit, such Participant shall make available to the
Administrative Agent at the Payment Office of the Administrative Agent for the
account of such Issuing Bank in Dollars such Participant's Percentage of the
amount of such payment on such Business Day in same day funds. If and to the
extent such Participant shall not have so made its Percentage of the amount of
such payment available to the Administrative Agent for the account of such
Issuing Bank, such Participant agrees to pay to the Administrative Agent for the
account of such Issuing Bank, forthwith on demand such amount, together with
interest thereon, for each day from such date until the date such amount is paid
to the Administrative Agent for the account of such Issuing Bank at the
overnight Federal Funds Rate. The failure of any Participant to make available
to the Administrative Agent for the account of such Issuing Bank its Percentage
of any payment under any Letter of Credit shall not relieve any other
Participant of its obligation hereunder to make available to the Administrative
Agent for the account of such Issuing Bank its Percentage of any Letter of
Credit on the date required, as specified above, but no Participant shall be
responsible for the failure of any other Participant to make available to the
Administrative Agent for the account of such Issuing Bank such other
Participant's Percentage of any such payment.
(d) Whenever any Issuing Bank receives a payment of a reimbursement
obligation as to which the Administrative Agent has received for the account of
such Issuing Bank any payments from the Participants pursuant to clause (c)
above, such Issuing Bank shall pay to the Administrative Agent and the
Administrative Agent shall promptly pay each Participant which has paid its
Percentage thereof, in Dollars and in same day funds, an amount equal to such
Participant's share (based on the proportionate aggregate amount funded by such
Participant to the aggregate amount funded by all Participants) of the principal
amount of such reimbursement obligation and interest thereon accruing after the
purchase of the respective participations.
(e) The obligations of the Participants to make payments to the
Administrative Agent for the account of each Issuing Bank with respect to
Letters of Credit issued shall be irrevocable and not subject to any
qualification or exception whatsoever and shall be made in accordance with the
terms and conditions of this Agreement under all circumstances, including,
without limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or
any of the Credit Documents;
(ii) the existence of any claim, setoff, defense or other right
which the Borrower may have at any time against a beneficiary named in
a Letter of Credit, any transferee of any Letter of Credit (or any
Person for whom any such transferee may be acting), the Agents, any
Participant, or any other Person, whether in connection with this
21
Agreement, any Letter of Credit, the transactions contemplated herein
or any unrelated transactions (including any underlying transaction
between the Borrower and the beneficiary named in any such Letter of
Credit);
(iii) any draft, certificate or any 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) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
1A.05 Agreement to Repay Letter of Credit Drawings. (a) The Borrower
hereby agrees to reimburse the respective Issuing Bank, by making payment to the
Administrative Agent in immediately available funds at the Payment Office (or by
making the payment directly to such Issuing Bank at such location as may
otherwise have been agreed upon by the Borrower and such Issuing Bank), for any
payment or disbursement made by such Issuing Bank under any Letter of Credit
(each such amount so paid until reimbursed, an "Unpaid Drawing"), immediately
after, and in any event on the date of, such payment or disbursement, with
interest on the amount so paid or disbursed by such Issuing Bank, to the extent
not reimbursed prior to 12:00 Noon (New York time) on the date of such payment
or disbursement, from and including the date paid or disbursed to but excluding
the date such Issuing Bank is reimbursed by the Borrower therefor at a rate per
annum which shall be the Base Rate in effect from time to time plus 4 1/4%, in
each case with such interest to be payable on demand.
(b) The obligations of the Borrower under this Section 1A.05 to
reimburse the respective Issuing Bank with respect to Unpaid Drawings
(including, in each case, interest thereon) shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which the Borrower may have or have had against any Bank
(including in its capacity as Issuing Bank or as Participant), including,
without limitation, any defense based upon the failure of any drawing under a
Letter of Credit (each a "Drawing") to conform to the terms of the Letter of
Credit or any nonapplication or misapplication by the beneficiary of the
proceeds of such Drawing; provided, however, that the Borrower shall not be
obligated to reimburse any Issuing Bank for any wrongful payment made by such
Issuing Bank under a Letter of Credit as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of such Issuing
Bank.
1A.06 Increased Costs. If at any time after the Original Effective
Date hereof any Issuing Bank or any Participant determines that the introduction
of or any change in any applicable law, rule, regulation, order, guideline or
request or in the interpretation or administration thereof by any governmental
authority charged with the interpretation or administration thereof, or
compliance by such Issuing Bank or any Participant, or any corporation
22
controlling such Person, with any request or directive by any such authority
(whether or not having the force of law), shall either (i) impose, modify or
make applicable any reserve, deposit, capital adequacy or similar requirement
against letters of credit issued by such Issuing Bank or participated in by any
Participant, or (ii) impose on such Issuing Bank or any Participant, or any
corporation controlling such Person, any other conditions relating, directly or
indirectly, to this Agreement or any Letter of Credit; and the result of any of
the foregoing is to increase the cost to such Issuing Bank or any Participant of
issuing, maintaining or participating in any Letter of Credit, or reduce the
amount of any sum received or receivable by such Issuing Bank or any Participant
hereunder or reduce the rate of return on its capital with respect to Letters of
Credit, then, upon demand to the Borrower by such Issuing Bank or any
Participant (a copy of which demand shall be sent by such Issuing Bank or such
Participant to the Administrative Agent), the Borrower shall pay to such Issuing
Bank or such Participant such additional amount or amounts as will compensate
such Bank for such increased cost or reduction in the amount receivable or
reduction on the rate of return on its capital. Such Issuing Bank or any
Participant, upon determining that any additional amounts will be payable
pursuant to this Section 1A.06, will give prompt written notice thereof to the
Borrower, which notice shall include a certificate submitted to the Borrower by
such Issuing Bank or such Participant (a copy of which certificate shall be sent
by such Issuing Bank or such Participant to the Administrative Agent), setting
forth in reasonable detail the basis for the calculation of such additional
amount or amounts necessary to compensate such Issuing Bank or such Participant,
although failure to give any such notice shall not release or diminish the
Borrower's obligations to pay additional amounts pursuant to this Section 1A.06.
The certificate required to be delivered pursuant to this Section 1A.06 shall,
absent manifest error, be final, conclusive and binding on the Borrower.
Section 2. Commitment Commission; Fees; Reductions of Commitment.
2.01 Fees. (a) The Borrower agrees to pay to the Administrative Agent
for distribution to each Bank with a Revolving Loan Commitment a commitment
commission (the "Commitment Commission") for the period from and including the
Restatement Effective Date to and excluding the Revolving Loan Maturity Date (or
such earlier date as the Total Commitment shall have been terminated) computed
at a rate for each day equal to 1/2 of 1% per annum on the daily Unutilized
Revolving Loan Commitment of such Bank. Accrued Commitment Commission shall be
due and payable quarterly in arrears on each Quarterly Payment Date and on the
Revolving Loan Maturity Date or such earlier date upon which the Total
Commitment is terminated.
(b) The Borrower agrees to pay to each Issuing Bank, for its own
account, a facing fee in respect of each Letter of Credit issued by such Issuing
Bank hereunder (the "Facing Fee"), for the period from and including the date of
issuance of such Letter of Credit (which in the case of the Existing Letters of
Credit shall be the Restatement Effective Date) to and including the date of
termination of such Letter of Credit, equal to 1/4 of 1% per annum of the daily
Stated Amount of such Letter of Credit; provided that in no event shall the
annual Facing Fee with respect to each Letter of Credit be less than $500.
23
Accrued Facing Fees shall be due and payable in arrears to the Issuing Bank in
respect of each Letter of Credit issued by it on each Quarterly Payment Date and
the date of the termination of the Total Revolving Loan Commitment on which no
Letters of Credit remain outstanding.
(c) The Borrower agrees to pay to the Administrative Agent for
distribution to each Bank with a Revolving Loan Commitment a fee in respect of
each Letter of Credit issued hereunder (the "Letter of Credit Fee"), for the
period from and including the date of issuance of such Letter of Credit (which
in the case of the Existing Letters of Credit shall be the Restatement Effective
Date) to and including the date of termination of such Letter of Credit,
computed at a rate per annum equal to the product of (x) the Applicable
Eurodollar Rate Margin for Revolving Loans and (y) the daily Stated Amount of
such Letter of Credit. Letter of Credit Fees shall be distributed by the
Administrative Agent to the Banks on the basis of the respective Percentages as
in effect from time to time. Accrued Letter of Credit Fees shall be due and
payable quarterly in arrears on each Quarterly Payment Date and on the date of
the termination of the Total Revolving Loan Commitment on which no Letters of
Credit remain outstanding.
(d) The Borrower hereby agrees to pay in immediately available funds
directly to the Issuing Bank upon each issuance of, drawing under, and/or
amendment of, a Letter of Credit issued by the Issuing Bank such amount as shall
at the time of such issuance, drawing or amendment be the administrative charge
which the Issuing Bank is customarily charging for issuances of, drawings under
(including wire charges) or amendments of, letters of credit issued by it or
such alternative amounts as may have been agreed upon in writing by the Borrower
and the Issuing Bank.
(e) Notwithstanding anything to the contrary contained in this
Agreement or in the Existing Credit Agreement, all unpaid Fees under, and as
defined in, the Existing Credit Agreement (including, without limitation, all
Commitment Commission as defined in the Existing Credit Agreement) accrued to
the Restatement Effective Date (immediately prior to giving effect thereto)
shall be payable on the Restatement Effective Date.
(f) The Borrower shall pay to the Agents, for their accounts, such
other fees and other consideration as have been agreed to in writing by the
Borrower or any of its Subsidiaries and one or both of the Agents.
2.02 Voluntary Termination of Unutilized Commitments. Upon at least
three (3) Business Days' prior written notice (or telephonic notice promptly
confirmed in writing) to the Administrative Agent at its Notice Office (which
notice the Administrative Agent shall promptly transmit to each of the Banks),
the Borrower shall have the right, without premium or penalty, to terminate the
Total Unutilized Revolving Loan Commitment in whole or in part; provided that
(i) each such reduction shall apply proportionately to reduce the Revolving Loan
Commitment of each Bank with such a Commitment, (ii) any partial reduction
pursuant to this Section 2.02 shall be in integral multiples of at least
$1,000,000 in the case of reductions to the Total Unutilized Revolving Loan
Commitment, and (iii) any partial reduction of the Total Unutilized Revolving
Loan Commitment pursuant to this Section 2.02 shall apply to reduce the amount
of the then-remaining Scheduled Revolving Loan Commitment Reductions in inverse
order of maturity.
2.03 Mandatory Reduction of Commitments. (a) The Total Commitment (and
the Term Loan Commitment and the Revolving Loan Commitment of each Bank with
such a Commitment) shall terminate on May 15, 1998 unless the Restatement
Effective Date has occurred on or before such date.
(b) In addition to any other mandatory commitment reductions pursuant
to this Section 2.03, the Total Term Loan Commitment (and the Term Loan
Commitment of each Bank with such a Commitment) shall terminate in its entirety
on the Restatement Effective Date (after giving effect to the incurrence of Term
Loans on such date).
24
(c) In addition to any other mandatory commitment reductions pursuant
to this Section 2.03, the Total Revolving Loan Commitment (and the Revolving
Loan Commitment of each Bank with such a Commitment) shall terminate in its
entirety on the Revolving Loan Maturity Date.
(d) In addition to any other mandatory commitment reductions pursuant
to this Section 2.03, the Total Revolving Loan Commitment (and the Revolving
Loan Commitment of each Bank with such a Commitment) shall be reduced at the
time any payment is required to be made on the principal amount of Revolving
Loans (or would be required to be made if Revolving Loans were then outstanding)
pursuant to Section 3.02(B)(a), by an amount equal to the maximum amount of
Revolving Loans that would be required to be repaid pursuant to Section
3.02(B)(a) assuming that Revolving Loans were outstanding in an aggregate
principal amount equal to the Total Revolving Loan Commitment. All reductions to
the Total Revolving Loan Commitment pursuant to this Section 2.03(d) shall be
applied to reduce the amount of then-remaining Scheduled Revolving Loan
Commitment Reductions in inverse order of maturity.
(e) In addition to any other mandatory commitment reductions pursuant
to this Section 2.03, on each date set forth below (each, a "Scheduled Revolving
Loan Commitment Reduction Date"), the Revolving Loan Commitment shall be
permanently reduced by the amount set forth opposite such date (each such
reduction, as such reduction may have been reduced pursuant to Section 2.02
and/or 2.03(d), a "Scheduled Revolving Loan Commitment Reduction"):
Scheduled Revolving Loan Commitment Reduction Amount Date
June 30, 2000 $4,312,500
September 30, 2000 $4,312,500
December 31, 2000 $4,312,500
March 31, 2001 $4,312,500
June 30, 2001 $5,750,000
September 30, 2001 $5,750,000
December 31, 2001 $5,750,000
March 31, 2002 $5,750,000
June 30, 2002 $7,187,500
September 30, 2002 $7,187,500
December 31, 2002 $7,187,500
March 31, 2003 $7,187,500
June 30, 2003 $8,625,000
September 30, 2003 $8,625,000
December 31, 2003 $8,625,000
March 31, 2004 $8,625,000
June 30, 2004 $11,500,000
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(f) Each reduction to the Total Revolving Loan Commitment pursuant to
this Section 2.03 shall be applied proportionately to reduce the Revolving Loan
Commitment of each Bank with such a Commitment.
Section 3. Prepayments; Payments; Taxes.
3.01 Voluntary Prepayments. The Borrower shall have the right to
prepay Loans, without premium or penalty, in whole or in part from time to time
on the following terms and conditions:
(i) the Borrower shall give the Administrative Agent prior to
10:00 A.M. (New York time) at its Notice Office at least three (3)
Business Days' prior written notice in the case of Eurodollar Loans
and one (1) Business Day's prior written notice in the case of Base
Rate Loans of its intent to prepay the Loans, whether Term Loans or
Revolving Loans shall be prepaid, the amount of such prepayment and
the Types of Loans to be prepaid and, in the case of Eurodollar Loans,
the specific Borrowing or Borrowings pursuant to which made, which
notice the Administrative Agent shall promptly transmit to each of the
Banks;
(ii) each prepayment shall be in an aggregate principal amount of
at least the applicable Minimum Borrowing Amount and, if greater, in
integral multiples of $500,000; provided that no partial prepayment of
Eurodollar Loans made pursuant to any Borrowing shall reduce the
outstanding Loans made pursuant to such Borrowing to an amount less
than the Minimum Borrowing Amount;
(iii) no prepayments of Eurodollar Loans made pursuant to this
Section 3.01 may be made on a day other than the last day of an
Interest Period applicable thereto;
(iv) each prepayment in respect of any Loans made pursuant to a
Borrowing shall be applied pro rata among such Loans; and
(v) each prepayment of Term Loans pursuant to this Section 3.01
shall be applied to reduce the then remaining Scheduled Repayments in
inverse order of maturity.
3.02 Mandatory Repayments and Commitment Reductions.
(A) Requirements:
(a) If any Borrowing Base Certificate shall disclose the existence of
a Borrowing Base Deficiency, the Borrower shall on the date of delivery of the
Borrowing Base Certificate in accordance with Section 5.06, repay the principal
of the Revolving Loans outstanding in an aggregate amount equal to the Borrowing
Base Deficiency and, to the extent such Revolving Loans have been repaid in
full, and, to the extent such Borrowing Base Deficiency continues to exist after
such repayment, the Borrower shall pay to the Administrative Agent at its
Payment Office an amount of cash or Cash Equivalents equal to such excess, such
cash or Cash Equivalents to be held as security for all Obligations of the
26
Borrower hereunder with respect to the Letter of Credit Outstandings in a cash
collateral account established and maintained (including the investments made
pursuant thereto) by the Administrative Agent pursuant to a cash collateral
agreement in form and substance satisfactory to the Administrative Agent (the
"Letter of Credit Cash Collateral Account"). In the event that a Borrowing Base
Deficiency continues to exist after such repayment and cash collateralization,
the Borrower shall not be required to make any further repayments in connection
with such Borrowing Base Deficiency. In the event that cash and Cash Equivalents
held in the Letter of Credit Cash Collateral Account exceed the amount of the
Borrowing Base Deficiency, then, so long as there shall exist no Default or
Event of Default, such excess amount shall be returned to the Borrower.
(b) On any day on which the sum of the aggregate outstanding principal
amount of the Revolving Loans and Letter of Credit Outstandings at such time
exceeds the Total Revolving Loan Commitment as then in effect, the Borrower
shall prepay the principal of Revolving Loans in an amount equal to such excess.
If, after giving effect to the prepayment of all outstanding Revolving Loans,
the aggregate amount of the Letter of Credit Outstandings exceeds the Total
Revolving Loan Commitment as then in effect, the Borrower shall pay to the
Administrative Agent at its Payment Office on such date an amount of cash or
Cash Equivalents equal to the amount of such excess, such cash or Cash
Equivalents to be held as security for all Obligations of the Borrower hereunder
in the Letter of Credit Cash Collateral Account.
(c) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 3.02(A), the Borrower shall repay on each
date set forth below (provided that if any date set forth below is not a
Business Day then the repayment shall occur on the first Business Day
immediately succeeding such date set forth below) the principal amount of Term
Loans, to the extent then outstanding, set forth below opposite such date (each
such repayment as the same may be reduced as provided in Sections 3.01 and
3.02(B), a "Scheduled Repayment"):
Scheduled Term Loan Repayment Date Amount
June 30, 2001 $87,500
September 30, 2001 $87,500
December 31, 2001 $87,500
March 31, 2002 $87,500
June 30, 2002 $87,500
September 30, 2002 $87,500
December 31, 2002 $87,500
March 31, 2003 $87,500
June 30, 2003 $175,000
September 30, 2003 $175,000
December 31, 2003 $175,000
March 31, 2004 $175,000
June 30, 2004 $2,100,000
September 30, 2004 $10,500,000
December 31, 2004 $10,500,000
March 31, 2005 $10,500,000
27
(d) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 3.02, on the date of the receipt thereof by
Holdings or any of its Subsidiaries, an amount equal to:
(i) 100% of the cash proceeds (net of underwriting discounts and
commissions and all other reasonable costs associated with such
transaction) from any sale or issuance after the Restatement Effective
Date of equity of Holdings or any Subsidiary of Holdings (other than
proceeds from issuances of Holdings Common Stock to shareholders,
directors and employees of Holdings and its Subsidiaries and other
individuals as a result, in each case, of the exercise of any options
or warrants of up to $500,000 in the aggregate in any fiscal year);
and
(ii) 100% of the cash proceeds (net of underwriting discounts and
commissions, loan fees and all other reasonable costs associated with
such transaction) from any incurrence of any Indebtedness by Holdings
or any Subsidiary of Holdings (other than Indebtedness permitted by
Sections 8.04(i) through (vi), inclusive, it being understood that
Indebtedness permitted pursuant to Section 8.04(vii) shall be required
to be applied as provided in Section 3.02(B) as said Sections are in
effect on the Restatement Effective Date), shall be applied as
provided in Section 3.02(B).
(e) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 3.02, on or prior to each Excess Cash Flow
Payment Date, an amount equal to the Excess Cash Flow Recapture Percentage of
Excess Cash Flow of Holdings and its Subsidiaries for the relevant Excess Cash
Flow Payment Period shall be applied as provided in Section 3.02(B).
(f) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 3.02, (A) on each date after the Restatement
Effective Date on which Holdings or any Subsidiary of Holdings receives cash
proceeds from any sale of assets (including capital stock and securities other
than capital stock) the proceeds from the sale of which is recaptured (or would
be recaptured except for the parenthetical continued therein) under Section
3.02(A)(d) but excluding (i) sales of inventory in the ordinary course of
business, (ii) sales of assets so long as the aggregate amount of Net Sale
Proceeds excluded pursuant to this clause (ii) does not exceed $100,000 in the
aggregate for all such asset sales in any fiscal year of Holdings and (iii)
Permitted Acquisition Cash Collateralized Amounts (so long as the aggregate
deposits in the Permitted Acquisition Cash Collateral Account from proceeds of
sales of assets shall not exceed an amount equal to $10,000,000 per year and
shall not exceed a maximum aggregate amount equal to $30,000,000 during any
rolling five-year period), an amount equal to 100% of the Net Sale Proceeds
thereof shall be applied as provided in Section 3.02(B); (B) on any date on
which there shall exist an Event of Default, all Permitted Acquisition Cash
Collateralized Amounts shall be applied as provided in Section 3.02(B) and (C)
on the 180th day after which amounts were deposited into the Permitted
Acquisition Cash Collateral Account, to the extent any such amounts have not
been utilized to effect a Permitted Acquisition in accordance with Section 7.15,
all such amounts held in such account shall be applied as provided in Section
3.02(B).
28
(g) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 3.02, on each date after the Restatement
Effective Date of the receipt thereof by Holdings or any Subsidiary of Holdings,
an amount equal to 100% of the cash proceeds of any Recovery Event (net of
reasonable costs incurred in connection with such Recovery Event (including the
estimated marginal increase in income taxes which will be payable as a result of
such Recovery Event by Holdings or any Subsidiary of Holdings)) shall be applied
as provided in Section 3.02(B); provided that proceeds from Recovery Events not
in excess of $250,000 in the aggregate for all Recovery Events occurring on and
after the Restatement Effective Date, and prior to the date on which there are
no outstanding Obligations, shall not be required to be so applied on such date;
provided further, that proceeds from Recovery Events in excess of $250,000 in
the aggregate for all Recovery Events occurring on or after the Restatement
Effective Date and prior to the day on which there are no outstanding
Obligations, shall not be required to be so applied on such date to the extent
that the Borrower delivers a certificate to the Administrative Agent on or prior
to such date stating that such proceeds shall be used to replace or restore any
properties or assets in respect of which such proceeds were paid within a period
specified in such certificate not to exceed 180 days after the date of receipt
of such proceeds (which certificate shall set forth estimates of the proceeds to
be so expended); and provided further, that if all or any portion of such
proceeds not so applied pursuant to Section 3.02(B) are not so used within the
period specified in the proviso, such remaining portion shall be applied on the
last day of such specified period as provided in Section 3.02(B).
Notwithstanding the forgoing, so long as on the date of such Recovery Event and
during the period commencing on such date and ending on the date on which the
repurchase of Holdings Capital Stock referred to below is effected there shall
exist no Default or Event of Default, proceeds from a Recovery Event relating to
the Weary Key-Man Life Insurance, occurring on or after the Restatement
Effective Date and prior to the date on which there are no outstanding
Obligations shall not be required to be applied as provided in Section 3.02(B)
on such date to the extent that the Borrower delivers a certificate to the
Administrative Agent on or prior to such date stating that such proceeds shall
be used to (i) purchase all the Holdings Capital Stock previously owned by the
person in respect of whose life such insurance proceeds were paid and (ii)
appoint a replacement Chief Executive Officer of the Borrower, both within a
period not to exceed 180 days after the date of receipt of such proceeds (which
certificate shall set forth estimates of the proceeds to be so expended);
provided that if all or any portion of such proceeds not so applied pursuant to
Section 3.02(B) are not so used within such 180 day period, such remaining
portion shall be applied on the last day of such specified period as provided in
Section 3.02(B).
(h) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 3.02(A), on each date upon which Holdings or
any of its Subsidiaries receives cash proceeds pursuant to any agreement or
understanding relating to any Permitted Acquisition, including, without
limitation, indemnification or similar payments and post-closing adjustments,
but excluding in each case post-closing working capital adjustments and
reimbursement of out-of-pocket costs and expenses, an amount equal to 100% of
such proceeds (net of reasonable expenses incurred in connection with obtaining
such proceeds and the estimated marginal increase in income taxes payable in
respect thereof) shall be applied as provided in Section 3.02(B).
29
(i) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 3.02(A), on the date of the receipt thereof
by Holdings or any of its Subsidiaries, an amount equal to 100% of the proceeds
of any Tax Refund (net of reasonable expenses incurred in connection with
obtaining same and the estimated marginal increase in income taxes payable as a
result thereof) shall be applied as provided in Section 3.02(B); provided that
any refunds of estimated taxes paid in the ordinary course of business in excess
of the actual amount of taxes owing shall not be required to be so applied.
(j) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 3.02(A), on the date of the receipt thereof
by Holdings or any of its Subsidiaries of a Pension Plan Refund, an amount equal
to 100% of such Pension Plan Refund (net of reasonable expenses incurred in
connection with obtaining same and the estimated marginal increase in income
taxes payable in respect thereof) shall be applied as provided in Section
3.02(B).
(k) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, all then outstanding Loans of each respective Tranche shall be
repaid in full on the Maturity Date for such Tranche.
(B) Application:
(a) Each mandatory repayment of Loans pursuant to Sections
3.02(A)(d)(ii), (e) through (g), inclusive (other than in the case of proceeds
of a Recovery Event relating to the Weary Key-Man Life Insurance), and (i)
through (j), inclusive, shall be applied:
(i) first, to prepay the principal of outstanding Revolving Loans
(with a corresponding reduction to the Total Revolving Loan
Commitment) and Term Loans on a pro rata basis based on the aggregate
principal amount of all Term Loans outstanding at such time and the
then Total Revolving Loan Commitment;
(ii) second, to cash collateralize Letter of Credit Outstandings
by depositing cash into the Letter of Credit Cash Collateral Account
in an amount equal to such Letter of Credit Outstandings (with a
corresponding reduction to the Total Revolving Loan Commitment); and
(iii) third, to reduce the remaining (i.e., after giving effect
to all prior reductions thereto, including, without limitation, the
reductions theretofore effected pursuant to the preceding clauses (i)
and (ii)) Total Revolving Loan Commitment (it being understood and
agreed that the amount of such reductions shall be deemed to be an
application of proceeds for purposes of this Section 3.02(B)(a)(iii)
even though cash is not actually applied).
(b)(I) Each mandatory repayment of Loans pursuant to Section
3.02(A)(d)(i) shall be applied:
(i) until the first anniversary of the Restatement Effective Date
(and so long as there shall exist no Default or Event of Default, in
which case all such mandatory repayments shall be applied in
accordance with Section 3.02(B)(a)), to prepay the principal of
outstanding Revolving Loans (without a corresponding reduction to the
Total Revolving Loan Commitment), and second, to cash collateralize
Letter of Credit Outstandings by depositing cash into the Letter of
Credit Cash Collateral Account in an amount equal to such Letter of
Credit Outstandings (without a reduction to the Total Revolving Loan
Commitment) and to the extent no Revolving Loans are then outstanding
and there are no Letter of Credit Outstandings, the Borrower may
retain the proceeds which otherwise would have applied to such
Revolving Loans or Letter of Credit Outstandings; and
30
(ii) after the first anniversary of the Restatement Effective
Date (and so long as there shall exist no Default or Event of Default,
in which case all such mandatory repayments shall be applied in
accordance with Section 3.02(B)(a)), 50% of the amount to be applied
shall be applied in the same manner as if such proceeds were to be
applied in accordance with Section 3.02(B)(a) and the remaining 50%
shall be applied in the same manner as it would be applied in
accordance with Section 3.02(B)(b)(i), except that to the extent
Revolving Loans in such amount are not outstanding and there are no
Letter of Credit Outstandings, such excess amounts shall be deposited
in the Permitted Acquisition Cash Collateral Account.
(II) Each mandatory repayment of Loans pursuant to Section
3.02(A)(d)(ii) arising from the receipt of proceeds of Indebtedness permitted by
Section 8.04(vii) shall be applied to prepay the principal of outstanding
Revolving Loans (without a corresponding reduction to the Total Revolving Loan
Commitment) and to the extent no Revolving Loans are then outstanding, the
Borrower may retain the proceeds which otherwise would have been applied to such
Revolving Loans; provided, however, to the extent that the aggregate principal
amount of Acceptable Subordinated Debt issued by the Borrower exceeds
$150,000,000, then 50% of such excess amount shall be applied in accordance with
Section 3.02(B)(a) with the remaining amount of such proceeds being applied in
accordance with this Section 3.02(B)(b)(II) (without giving effect to this
proviso).
(c) Each mandatory repayment of Loans pursuant to Section 3.02(A)(g)
arising from the receipt of proceeds of a Recovery Event relating to the Weary
Key-Man Life Insurance shall be applied: (i) the first $3,000,000 shall be
applied in the same manner as if such proceeds were to be applied in accordance
with Section 3.02(B)(a) and (ii) 50% of the remaining amount shall be applied in
the same manner as it would be applied in accordance with Section 3.02(B)(a) and
(so long as there shall exist no Default or Event of Default, in which case all
such mandatory repayments shall be applied in accordance with Section
3.02(B)(a)) the remaining 50% may be retained by the Borrower.
(d) Each mandatory repayment of Loans pursuant to Section 3.02(A)(h)
shall, so long as there shall exist no Default or Event of Default, in which
case all such mandatory repayments shall be applied in accordance with Section
3.02(B)(a), be applied to prepay the principal of outstanding Revolving Loans
(without a corresponding reduction to the Total Revolving Loan Commitment), and
second, to cash collateralize Letter of Credit Outstandings by depositing cash
into the Letter of Credit Cash Collateral Account in an amount equal to such
Letter of Credit Outstandings (without a reduction to the Total Revolving Loan
Commitment) and to the extent no Revolving Loans are then outstanding and there
are no Letter of Credit Outstandings, the Borrower may retain the proceeds which
otherwise would have applied to such Revolving Loans or Letter of Credit
Outstandings.
(e) All mandatory repayments of Revolving Loans pursuant to this
Section 3.02(B) (and mandatory reductions to the Total Revolving Loan
Commitment) shall be applied to reduce the then-remaining Scheduled Revolving
Loan Commitment Reductions in inverse order of maturity and all mandatory
repayments of Term Loans pursuant to this Section 3.02(B) shall be applied to
31
reduce the then-remaining Scheduled Repayments in inverse order of maturity.
(f) Notwithstanding anything to the contrary contained in this Section
3.02 or elsewhere in this Agreement (including, without limitation, in Section
12.12), the Borrower shall have the option, in its sole discretion, to give the
Banks with outstanding Terms Loans the option to waive a mandatory repayment of
such Loans pursuant to Section 3.02, in each case, upon the terms and provisions
set forth in this Section 3.02. If the Borrower elects to exercise the option
referred to in the preceding sentence, the Borrower shall give to the
Administrative Agent written notice of its intention to give the Banks the right
to waive a mandatory repayment at least five (5) Business Days prior to such
repayment, which notice the Administrative Agent shall promptly forward to all
Banks with outstanding Term Loans (indicating in such notice the amount of such
repayment to be applied to each such Bank's outstanding Term Loans). The
Borrower's offer to permit such Banks to waive any such mandatory repayment may
apply to all or part of such repayment, provided that any offer to waive part of
such repayment must be made ratably to such Banks on the basis of their
outstanding Term Loans. In the event any such Bank desires to waive such Bank's
right to receive any such mandatory repayment, in whole or in part, such Bank
shall so advise the Administrative Agent no later than the close of business two
(2) Business Days after the date of such notice from the Administrative Agent,
which notice shall also include the amount such Bank desires to receive in
respect of such repayment. If any Bank does not reply to the Administrative
Agent within the two (2) Business Days, it will be deemed not to have waived any
part of such repayment. If any Bank does not specify an amount it wishes to
receive, it will be deemed to have accepted 100% of the total payment. In the
event that any such Bank waives all or part of such right to receive any such
mandatory repayment, the Administrative Agent shall apply 100% of the amount so
waived by such Bank to the Revolving Loans in accordance with Section 3.02(B).
(g) With respect to each repayment of Loans required by this Section
3.02, the Borrower may designate the Types of Loans which are to be repaid and,
in the case of Eurodollar Loans, the specific Borrowing or Borrowings of the
respective Tranche pursuant to which made; provided that: (i) repayments of
Eurodollar Loans pursuant to this Section 3.02 may only be made on the last day
of an Interest Period applicable thereto unless all Eurodollar Loans of the
respective Tranche with Interest Periods ending on such date of required
repayment and all Base Rate Loans of the respective Tranche have been paid in
full; (ii) if any repayment of Eurodollar Loans made pursuant to a single
Borrowing shall reduce the outstanding Eurodollar Loans made pursuant to such
Borrowing to an amount less than the applicable Minimum Borrowing Amount, such
Borrowing shall immediately be converted into Base Rate Loans; and (iii) each
repayment of any Loans made pursuant to a single Borrowing shall be applied pro
rata among such Loans. In the absence of a designation by such Borrower as
described in the preceding sentence, the Administrative Agent shall, subject to
the above, make such designation in its sole discretion.
32
3.03 Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement or any Note shall be made to
the Administrative Agent for the account of the Bank or Banks entitled thereto
not later than 12:00 Noon (New York time) on the date when due and shall be made
in Dollars in immediately available funds at the Payment Office of the
Administrative Agent. Whenever any payment to be made hereunder or under any
Note shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable at the applicable
rate during such extension.
3.04 Net Payments. (a) All payments made by Holdings or the Borrower
hereunder or under any Note will be made without setoff, counterclaim or other
defense. Except as provided in Section 3.04(b), all such payments will be made
free and clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such payments
(but excluding, except as provided in the second succeeding sentence, any tax
imposed on or measured by the net income or net profits of a Bank pursuant to
the laws of the jurisdiction in which it is organized or the jurisdiction in
which the principal office or applicable lending office of such Bank is located
or any political subdivision or taxing authority thereof or therein) and all
interest, penalties or similar liabilities with respect to such non-excluded
taxes, levies, imposts, duties, fees, assessments or other charges (all such
non-excluded taxes, levies, imposts, duties, fees, assessments or other charges
being referred to collectively as "Taxes"). If any Taxes are so levied or
imposed, Holdings and the Borrower jointly and severally agree to pay the full
amount of such Taxes, and such additional amounts as may be necessary so that
every payment of all amounts due hereunder or under any Note, after withholding
or deduction for or on account of any Taxes, will not be less than the amount
provided for herein or in such Note. If any amounts are payable in respect of
Taxes pursuant to the preceding sentence, Holdings and the Borrower jointly and
severally agree to reimburse each Bank, upon the written request of such Bank,
for taxes imposed on or measured by the net income or net profits of such Bank
pursuant to the laws of the jurisdiction or any political subdivision or taxing
authority thereof or therein in which such Bank is organized or in which the
principal office or applicable lending office of such Bank is located and for
any withholding of taxes as such Bank shall determine are payable by, or
withheld from, such Bank in respect of such amounts so paid to or on behalf of
such Bank pursuant to the preceding sentence and in respect of any amounts paid
to or on behalf of such Bank pursuant to this sentence. Holdings and the
Borrower jointly and severally will furnish to the Administrative Agent within
forty-five (45) days after the date of the payment of any Taxes due pursuant to
applicable law certified copies of tax receipts evidencing such payment by
Holdings and the Borrower jointly and severally. Holdings and the Borrower
jointly and severally agree to indemnify and hold harmless each Bank, and
reimburse such Bank upon its written request, for the amount of any Taxes so
levied or imposed and paid by such Bank.
(b) Each Bank that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) agrees to deliver to the Borrower
and the Administrative Agent on or prior to the Restatement Effective Date, or
in the case of a Bank that is an assignee or transferee of an interest under
33
this Agreement pursuant to Section 12.04 (unless the respective Bank was already
a Bank hereunder immediately prior to such assignment or transfer), on the date
of such assignment or transfer to such Bank, (i) two accurate and complete
original signed copies of Internal Revenue Service Form 4224 or 1001 (or
successor forms) certifying to such Bank's entitlement to a complete exemption
from United States withholding tax with respect to payments to be made under
this Agreement and under any Note, or (ii) if the Bank is not a "bank" within
the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either
Internal Revenue Service Form 1001 or 4224 pursuant to clause (i) above, (x) a
certificate substantially in the form of Exhibit E (any such certificate, a
"Section 3.04(b)(ii) Certificate") and (y) two accurate and complete original
signed copies of Internal Revenue Service Form W-8 (or successor form)
certifying to such Bank's entitlement to a complete exemption from United States
withholding tax with respect to payments of interest to be made under this
Agreement and under any Note. In addition, each Bank agrees that from time to
time after the Restatement Effective Date, when a lapse in time or change in
circumstances renders the previous certification obsolete or inaccurate in any
material respect, it will deliver to the Borrower and the Administrative Agent
two new accurate and complete original signed copies of Internal Revenue Service
Form 4224 or 1001, or Form W-8 and a Section 3.04(b)(ii) Certificate, as the
case may be, and such other forms as may be required in order to confirm or
establish the entitlement of such Bank to a continued exemption from or
reduction in United States withholding tax with respect to payments under this
Agreement and any Note, or it shall immediately notify the Borrower and the
Administrative Agent of its inability to deliver any such form or certificate,
in which case such Bank shall not be required to deliver any such form or
certificate pursuant to this Section 3.04(b). Notwithstanding anything to the
contrary contained in Section 3.04(a), but subject to the immediately succeeding
sentence, (x) the Borrower shall be entitled, to the extent it is required to do
so by law, to deduct or withhold income or similar taxes imposed by the United
States (or any political subdivision or taxing authority thereof or therein)
from interest, fees or other amounts payable hereunder for the account of any
Bank which is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for U.S. Federal income tax purposes to the extent that
such Bank has not provided to the Borrower U.S. Internal Revenue Service Forms
that establish a complete exemption from such deduction or withholding and (y)
the Borrower shall not be obligated pursuant to Section 3.04(a) hereof to
gross-up payments to be made to a Bank in respect of income or similar taxes
imposed by the United States if (I) such Bank has not provided the Borrower the
Internal Revenue Service Forms required to be provided the Borrower pursuant to
this Section 3.04(b) or (II) in the case of a payment, other than interest, to a
Bank described in clause (ii) above, to the extent that such forms do not
establish a complete exemption from withholding of such taxes. Notwithstanding
anything to the contrary contained in the preceding sentence or elsewhere in
this Section 3.04, the Borrower agrees to pay additional amounts and to
indemnify each Bank in the manner set forth in Section 3.04(a) (without regard
to the identity of the jurisdiction requiring the deduction or withholding) in
respect of any Taxes deducted or withheld by it as described in the immediately
preceding sentence as a result of any changes after the Restatement Effective
Date in any applicable law, treaty, governmental rule, regulation, guideline or
order, or in the interpretation thereof, relating to the deducting or
withholding of such Taxes.
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Section 4. Conditions Precedent to the Restatement Effective Date and
Loans on the Restatement Effective Date. The obligation of each Bank to make
Loans on the Restatement Effective Date is subject at the time of such Loan to
the satisfaction of the following conditions unless any of such conditions are
waived by the Agents:
4.01 Execution of Agreement; Notes. On or prior to the Restatement
Effective Date (i) this Agreement shall have become effective as provided in
Section 12.10 and (ii) there shall have been delivered to the Administrative
Agent for the account of each of the Banks the appropriate Term Note or
Revolving Note executed by the Borrower, in each case in the amount, maturity
and as otherwise provided herein.
4.02 Officer's Certificate. On the Restatement Effective Date,
the Agents shall have received a certificate dated the Restatement Effective
Date signed on behalf of each Credit Party by the President, the Chief Financial
Officer, the General Counsel or any Vice President of such Credit Party and
which certificate, in the case of the Borrower, shall state that all of the
conditions in Sections 4.06, 4.07(iii) and (iv) (with respect to 4.07(iii)),
4.11, 4.12, 4.13, 4.14, 4.16, 4.19, 5.01, 5.03 (if a Permitted Acquisition will
be consummated on the Restatement Effective Date) and 5.04 have been satisfied
on such date; provided that the certificate shall not be required to certify as
to the acceptability of any items to the Agents and/or the Banks or as to
whether the Agents and/or the Banks are satisfied with any of the matters
described in said Sections.
4.03 Opinions of Counsel. On the Restatement Effective Date, the
Agents shall have received from Reboul, MacMurray, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & Kristol,
counsel to the Borrower and its Subsidiaries, an opinion addressed to the
Agents, the Collateral Agent and each of the Banks and dated the Restatement
Effective Date covering the matters set forth in Exhibit F and such other
matters incident to the transactions contemplated herein as the Agents may
reasonably request.
4.04 Corporate Documents; Proceedings. (a) On the Restatement
Effective Date, the Agents shall have received a certificate, dated the
Restatement Effective Date, signed by the President or any Vice President of
each Credit Party, and attested to by the Secretary or any Assistant Secretary
of such Credit Party, in the form of Exhibit G with appropriate insertions,
together with copies of the Certificate of Incorporation, By-Laws or other
organizational documents of such Credit Party and the resolutions of such Credit
Party referred to in such certificate, and the foregoing shall be acceptable to
the Agents and the Required Banks in their sole discretion.
(b) On the Restatement Effective Date, all corporate and legal
proceedings and all instruments and agreements relating to the transactions
contemplated by this Agreement and the other Credit Documents shall be
satisfactory in form and substance to the Agents and the Required Banks, and the
Agents shall have received all information and copies of all documents and
papers, including records of corporate proceedings, governmental approvals, good
standing certificates and bring-down telegrams, if any, which the Agents or the
Required Banks may have requested in connection therewith, such documents and
35
papers where appropriate to be certified by proper corporate or governmental
authorities.
4.05 Employee Benefit Plans; Shareholders' Agreements; Management
Agreements; Employment Agreements; Collective Bargaining Agreements; Debt
Agreements; Tax Sharing Agreements; Affiliate Contracts and Material Contracts.
To the extent that documents previously delivered to the Banks in connection
with Section 4.05 of the Existing Credit Agreement have undergone material
changes or that such documents have not been so delivered, on or prior to the
Restatement Effective Date, there shall have been delivered to the Banks true
and correct copies, certified as true and complete by an appropriate officer of
the Borrower of the following documents:
(i) all Plans (and for each Plan that is required to file an
annual report on Internal Revenue Service Form 5500-series, a copy of
the most recent such report (including, to the extent required, the
related financial and actuarial statements and opinions and other
supporting statements, certifications, schedules and information), and
for each Plan that is a "single-employer plan," as defined in Section
4001(a)(15) of ERISA, the most recently prepared actuarial valuation
therefor) and any other "employee benefit plans," as defined in
Section 3(3) of ERISA, and any other material agreements, plans or
arrangements, with or for the benefit of current or former employees
of the Borrower or any of its Subsidiaries or any ERISA Affiliate
(provided that the foregoing shall apply in the case of any
multiemployer plan, as defined in 4001(a)(3) of ERISA, only to the
extent that any document described therein is in the possession of the
Borrower or any Subsidiary of the Borrower or any ERISA Affiliate or
reasonably available thereto from the sponsor or trustee of any such
plan); and all other employee benefit plans, or any other similar
plans or arrangements for the benefit of employees of the Borrower or
any Subsidiary of the Borrower and any profit sharing plans and
deferred compensation plans of the Borrower or any Subsidiary of the
Borrower (collectively, the "Employee Benefit Plans");
(ii) all agreements entered into by the Borrower or any
Subsidiary of the Borrower governing the terms and relative rights of
its capital stock and any agreements entered into by shareholders
relating to any such entity with respect to their capital stock
(collectively, the "Shareholders' Agreements");
(iii) all agreements with members of, or with respect to the,
management of the Borrower or any Subsidiary of the Borrower other
than Employment Agreements (collectively, the "Management
Agreements");
(iv) any employment agreements entered into by the Borrower or
any Subsidiary of the Borrower (collectively, the "Employment
Agreements");
(v) all collective bargaining agreements applying or relating to
any employee of the Borrower or any Subsidiary of the Borrower
(collectively, the "Collective Bargaining Agreements");
(vi) all agreements evidencing or relating to Indebtedness of the
Borrower or any Subsidiary of the Borrower whether or not such
agreement is to remain outstanding after giving effect to the
incurrence of Loans on the Restatement Effective Date (collectively,
the "Debt Agreements");
36
(vii) all tax sharing, tax allocation and other similar
agreements entered into by the Borrower or any Subsidiary of the
Borrower (collectively, the "Tax Sharing Agreements");
(viii) all contracts, agreements or understandings entered into
between the Borrower or any of its Subsidiaries on the one hand, and
any of its Affiliates, on the other hand (collectively, the "Affiliate
Contracts"); and
(ix) all material contracts and licenses of the Borrower or any
of its Subsidiaries that are to remain in effect after giving effect
to the consummation of the Transaction, including, without limitation,
all NRTC Agreements, all leases pursuant to which the Borrower or any
of its Subsidiaries are lessees and all agreements, letters of intent
and memoranda of understanding with respect to the acquisition or sale
by the Borrower of any assets which are unconsummated and in effect
(collectively, the "Material Contracts");
all of which Plans, Employee Benefit Plans, Shareholders' Agreements, Management
Agreements, Employment Agreements, Collective Bargaining Agreements, Debt
Agreements, Tax Sharing Agreements, Affiliate Contracts and Material Contracts
shall be in form and substance satisfactory to the Agents and the Required Banks
and shall be in full force and effect on the Restatement Effective Date.
4.06 Consummation of the Reorganization Transaction. On or prior to
the Restatement Effective Date, there shall have been delivered to the Agents
true and correct copies of all Reorganization Transaction Documents, and all
terms and provisions of such Reorganization Transaction Documents shall be in
form and substance satisfactory to the Agents. The Reorganization Transaction
shall have been consummated in accordance with all applicable law and the
Reorganization Transaction Documents.
4.07 Existing Credit Agreement. On the Restatement Effective Date, (i)
each Continuing Bank shall have converted its Existing Loans as contemplated by
Section 1.01, (ii) the Borrower shall have paid all interest and fees (including
commitment fees) owing under the Existing Credit Agreement through the
Restatement Effective Date, (iii) the Borrower shall have repaid to any
Continuing Bank and any Non-Continuing Bank all amounts owing to it, including
without limitation, all Existing Loans (not being converted in the case of
Continuing Banks), interest thereon, fees and expenses, if any, set forth in
Section 1.11 and (iv) the Agents shall have received evidence in form, scope and
substance satisfactory to them that the matters set forth in this Section 4.07
have been satisfied on the Restatement Effective Date.
4.08 Subsidiaries Guaranty. On the Restatement Effective Date, each
Subsidiary of the Borrower (excluding the South Plains DBS Limited Partnership
and DCE Satellite Entertainment, LLC, in each case so long as (i) neither such
partnership nor such limited liability company is a Wholly-Owned Subsidiary of
the Borrower and (ii) the Borrower does not own a sufficient equity interest in
such partnership or sufficient membership interests in such limited liability
company to require such partnership or limited liability company, as the case
may be, to act otherwise) shall have executed and delivered a guaranty
agreement, substantially in the form of Exhibit H (the "Subsidiaries Guaranty").
37
4.09 Holdings Pledge Agreement. On the Restatement Effective Date,
Holdings (i) shall have executed and delivered a pledge agreement substantially
in the form of Exhibit I-1 (the "Holdings Pledge Agreement") and (ii) shall have
delivered to the Collateral Agent, as Pledgee thereunder, all of the Pledged
Securities referred to in the Holdings Pledge Agreement, then owned by Holdings,
together with executed and undated irrevocable stock powers with respect to the
Pledged Securities.
4.10 Security Document Acknowledgment; Pledge Agreements; Security
Agreement. (a) On the Restatement Effective Date, the Borrower and each
Subsidiary Guarantor shall have duly authorized, executed and delivered either
original Security Documents, if not previously executed by such party, or, if
such has been previously executed by such party, an assumption and
acknowledgment in the form of Exhibit J (the "Security Documents
Acknowledgment") with respect to the Borrower/Subsidiary Pledge Agreement, the
Security Agreement and the Collateral Assignment of Marketing and Distribution
Agreements, which assumption and acknowledgment, among other things, (i)
acknowledges and agrees that the "Obligations" (as defined in each of such
documents) include all of the Obligations under this Agreement after giving
effect to the Restatement Effective Date, (ii) acknowledges and agrees that,
after giving effect to the Restatement Effective Date, each of the Security
Documents shall remain in full force and effect in accordance with the
respective terms thereof and (iii) has confirmatory schedules attached thereto
with respect to all of the information required to be provided on the schedules
to the Security Documents, and each of the Borrower and each Subsidiary
Guarantor shall have taken all actions reasonably requested by the Collateral
Agent (including, without limitation, the obtaining of UCC-11's or equivalent
reports and the preparation, execution and delivery of UCC-1's, UCC-2's or
UCC-3's to be filed) in connection with the granting of liens pursuant to the
Security Documents.
(b) On the Restatement Effective Date, the Collateral Agent, as
pledgee shall have in its possession all of the Pledged Securities referred to
in the Holdings Pledge Agreement, endorsed in blank in the case of promissory
notes or accompanied by executed and undated stock powers in the case of capital
stock, and each Pledge Agreement shall be in full force and effect.
(c) On the Restatement Effective Date, (i) no filings, recordings,
registrations or other actions (other than as set forth in Section 4.10(a)(ii))
shall be necessary to maintain the perfection and priority of the security
interests granted pursuant to the Security Documents in the Collateral covered
thereby, and (ii) the Banks shall have received evidence that all other actions
necessary or, in the opinion of the Collateral Agent, desirable to perfect and
protect the security interests purported to be created by the Security Documents
have been taken.
4.11 Minimum Subscribers and Households. The Agents shall have
received evidence satisfactory to them that, on and as of the Restatement
Effective Date, the Borrower's franchise service area includes no less than (a)
117,000 subscribers and (b) 1,220,000 households.
4.12 Material Adverse Change, etc. Since December 31, 1997, nothing
shall have occurred (and the Banks shall have become aware of no facts or
conditions not previously known) which the Agents or the Required Banks shall
determine (a) could reasonably be expected to have a material adverse effect on
the rights or remedies of the Banks or the Agents, or on the ability of the
Borrower or any of its Subsidiaries to perform their obligations to the Agents
and the Banks under this Agreement or any other Credit Document, (b) could
38
reasonably be expected to have a materially adverse effect on the performance,
business, assets, nature of assets, liabilities, operations, properties,
condition (financial or otherwise) or prospects of Holdings and its Subsidiaries
taken as a whole or (c) indicates the inaccuracy in any material respect of the
information previously provided to the Agents or the Banks (taken as a whole) in
connection with their analysis of the transactions contemplated hereby or
indicates that the information previously provided omitted to disclose any
material information.
4.13 Litigation. On the Restatement Effective Date, no litigation by
any entity (private or governmental) shall be pending or threatened with respect
to this Agreement, any other Document or any documentation executed in
connection herewith or with respect to the transactions contemplated hereby, or
which the Agents or Required Banks shall determine could reasonably be expected
to have a materially adverse effect on the Transaction or on the performance,
business, assets, nature of assets, liabilities, operations, properties,
condition (financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole.
4.14 Fees, etc. On the Restatement Effective Date, the Borrower shall
have paid in full to the Agents and the Banks all costs, fees and expenses
(including, without limitation, all legal fees and expenses) payable to the
Agents and the Banks to the extent then due pursuant hereto or as otherwise
agreed between the Borrower and the Agents.
4.15 Solvency Certificate; Insurance Analyses. On the Restatement
Effective Date, the Borrower shall cause to be delivered to the Agents and the
Banks:
(i) a certificate from the Chief Financial Officer of the
Borrower, in the form of Exhibit K hereto, supporting the conclusions
that, after giving effect to the Transaction and the incurrence of all
financings contemplated herein, that each Credit Party, and all Credit
Parties taken as a whole, as the case may be, are not insolvent and
will not be rendered insolvent by the Indebtedness incurred in
connection therewith, will not be left with unreasonably small capital
with which to engage in Credit Party businesses and will not have
incurred debts beyond their ability to pay such debts as they mature;
and
(ii) evidence (including, without limitation, certificates with
respect to each insurance policy listed on Schedule XII) of insurance,
complying with the requirements of Section 7.03, with respect to the
executives, business and properties of the Borrower and its
Subsidiaries, in scope, form and substance satisfactory to the Agents
and the Required Banks and naming each of the Collateral Agent, the
Agents and the Banks as an additional insured and the Collateral Agent
as loss payee and stating that such insurance shall not be canceled or
revised without thirty (30) days' prior written notice by the insurer
to the Collateral Agent.
4.16 Approvals. All necessary governmental and third party approvals
in connection with the transactions contemplated by the Credit Documents and
otherwise referred to herein or therein (including, but not limited to, those
approvals required in respect of existing permits, landlord consents and
transfers of contract rights) shall have been obtained and remain in effect, and
all applicable waiting periods shall have expired without any action being taken
39
by any competent authority which restrains, prevents or imposes, in the sole
judgment of the Agents or the Required Banks, adverse conditions upon the
consummation of the Transaction or the other transactions contemplated by the
Documents and otherwise referred to herein or therein. Additionally, there shall
not exist any judgment, order, injunction or other restraint issued or filed or
a hearing seeking injunction relief or other restraint pending or notified
prohibiting or imposing materially adverse conditions upon the consummation of
the Transaction, the transactions contemplated by the Documents, the making of
the Loans or the issuance of Letters of Credit.
4.17 Financial Statements; Projections; Management Letter Reports. (a)
On or prior to the Restatement Effective Date, the Banks shall have received:
(i) the consolidated balance sheet of the Borrower or Holdings,
as the case may be, as at December 31, 1996 and December 31, 1997 and
the related consolidated statements of earnings and stockholders'
equity and cash flows of such Person, as applicable for the fiscal
periods ended as of said dates, which statements have been examined by
KPMG Peat Marwick LLP, which is an independent certified public
accountant, which delivered unqualified opinions in respect thereto;
and
(ii) the pro forma (after giving effect to the Transaction)
consolidated balance sheet of Holdings as at February 28, 1998, all of
which financial statements referred to in clause (i) and (ii) shall be
prepared in accordance with generally accepted accounting principles
consistent with past practices and shall be in form and substance
satisfactory to the Agents and the Required Banks, and shall not
disclose any material adverse differences in the business, properties,
assets, liabilities, results of operations, condition (financial or
otherwise) or prospects of Holdings and its Subsidiaries taken as a
whole from that previously disclosed to the Agents and the Required
Banks.
(b) On the Restatement Effective Date, the Banks shall have received
detailed consolidated financial projections, certified by the Chief Financial
Officer of the Borrower, for Holdings and its Subsidiaries, which include the
projected consolidated results of Holdings, after giving effect to the
Transaction and the other transactions contemplated herein, for the period
commencing on the Restatement Effective Date and ending after the Term Loan
Maturity Date (the "Projections"), which Projections, and the supporting
assumptions and explanations thereto, and the accounting practices and
procedures to be utilized by Holdings following the Restatement Effective Date,
shall be satisfactory in form and substance to the Agents and the Required Banks
and shall be as set forth on Schedule III hereto.
(c) On or prior to the Restatement Effective Date, the Agents shall
have received a copy of any "management letter" received by Holdings or any of
its Subsidiaries from its certified public accountants since the Original
Effective Date.
4.18 Consent Letter. The Agents shall have received a letter from
Corporation Service Company, with offices on the date hereof at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, substantially in the form of Exhibit L hereto,
indicating its consent to its appointment by Holdings and its Subsidiaries as
their agent to receive service of process as specified in Section 12.08 of this
Agreement.
40
4.19 Acquisitions. The Agents shall have received a schedule of all
acquisitions of DirecTV franchises since the Original Effective Date and shall
be satisfied that all such acquired entities (excluding the South Plains DBS
Limited Partnership and DCE Satellite Entertainment, LLC, in each case so long
as (i) neither such partnership nor such limited liability company is a
Wholly-Owned Subsidiary and (ii) the Borrower does not own a sufficient equity
interest in such partnership or sufficient membership interests in such limited
liability company to require such partnership or limited liability company, as
the case may be, to act otherwise) shall have executed and delivered the
appropriate Subsidiaries Guaranty and Security Documents and that the Collateral
Agent for the benefit of the Secured Creditors has a valid and perfected first
priority security interest in all assets and capital stock of such entities.
Section 5. Conditions Precedent to All Credit Events. The obligation
of each Bank to make Loans (including Loans made on the Restatement Effective
Date) and the obligation of an Issuing Bank to issue any Letter of Credit is
subject, at the time of each such Credit Event (except as hereinafter
indicated), to the satisfaction of the following conditions:
5.01 No Default; Representations and Warranties. At the time of each
such Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein and in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of the making of such Credit Event (except
to the extent such representations specifically relate to earlier dates in which
case such representations shall be correct in all material respects on and as of
such dates).
5.02 Notice of Borrowing; Letter of Credit Request. (a) Prior to the
making of each Loan, the Administrative Agent shall have received a Notice of
Borrowing meeting the requirements of Section 1.03.
(b) Prior to the issuance of each Letter of Credit, the Issuing Bank
shall have received a Letter of Credit Request meeting the requirements of
Section 1A.03.
5.03 Permitted Acquisitions. Prior to the making of each Revolving
Loan, the proceeds of which are to be utilized to effect, in whole or in part, a
Permitted Acquisition, (i) all conditions to such Permitted Acquisition set
forth in Section 7.15 and in the definition thereof shall have been satisfied
and the President or any other senior executive officer of the Borrower shall
have delivered an officer's certificate certifying that such conditions have
been met and (ii) the Total Unutilized Revolving Loan Commitment shall be at
least $15,000,000.
5.04 Material Adverse Change, etc. Nothing shall have occurred since
December 31, 1997 (and the Banks shall have become aware of no facts or
conditions not previously known) which the Agents or the Required Banks shall
determine (i) could reasonably be expected to have a material adverse effect on
the rights or remedies of the Banks or the Agents, or on the ability of the
41
Borrower or any Subsidiary of the Borrower to perform its obligations to the
Banks under this Agreement or any other Credit Document or (ii) which could
reasonably be expected to have a materially adverse effect on the performance,
business, assets, nature of assets, liabilities, operations, properties,
condition (financial or otherwise) or prospects of Holdings and its Subsidiaries
taken as a whole.
5.05 Litigation. At the time of each such Credit Event and also after
giving effect thereto, no litigation by any entity (private or governmental)
shall be pending or threatened with respect to this Agreement or any other
Credit Document executed in connection herewith or the transactions contemplated
hereby or which the Required Banks shall determine could reasonably be expected
to have a materially adverse effect on the performance, business, assets, nature
of assets, liabilities, operations, properties, condition (financial or
otherwise) or prospects of Holdings and its Subsidiaries taken as a whole.
5.06 Borrowing Base Certificate. On the date of each Credit Event, the
Agents shall have received a borrowing base certificate of the Borrower in the
form of Exhibit M (each a "Borrowing Base Certificate"), with respect to the
Qualified Paying Subscribers and the Subscribers to be Acquired of the Borrower
and its Subsidiaries as of the last day of the immediately preceding month
(after giving effect to the Credit Events being contemplated and the
transactions contemplated hereby and by the other Credit Documents) certified by
the Chief Financial Officer of the Borrower.
The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by the Borrower to each of the Banks that all the
conditions specified in Section 4 and in this Section 5 and applicable to such
Credit Event exist as of that time; provided that such acceptance of benefits of
each Credit Event shall not constitute a representation and warranty by the
Borrower as to the acceptability of any items to the Agents and/or the Banks or
as to whether the Agents and/or the Banks are satisfied with any of the matters
described in such sections. All of the Notes, certificates, legal opinions and
other documents and papers referred to in Section 4 and in this Section 5,
unless otherwise specified, shall be delivered to the Administrative Agent at
the Notice Office for the account of each of the Banks and, except for the
Notes, in sufficient counterparts for each of the Banks and, unless otherwise
specified, shall be in form and substance satisfactory to the Banks.
Section 6. Representations, Warranties and Agreements. In order to
induce the Banks to enter into this Agreement on the Restatement Effective Date
and to make the Loans, and issue (or participate in) the Letters of Credit as
provided herein, each of Holdings and the Borrower makes the following
representations, warranties and agreements as to itself and as to each of its
Subsidiaries (to the extent applicable), as of the Restatement Effective Date
(both before and after giving effect to the Credit Events occurring on such
date, the Transaction and the other transactions contemplated by the Documents,
and all references to the Borrower herein and elsewhere in this Agreement,
shall, unless otherwise specifically indicated, be references to the Borrower
after giving effect to the Transaction) and as of the date of each subsequent
Credit Event which representations, warranties and agreements shall survive the
execution and delivery of this Agreement and the Notes and any subsequent Credit
Event, with the occurrence of each Credit Event on or after the Restatement
Effective Date being deemed to constitute a representation and warranty that the
42
matters specified in this Section 6 are true and correct on and as of the
Restatement Effective Date and on the date of each such Credit Event (except to
the extent such representations specifically relate to earlier dates in which
case such representations shall be correct in all material respects on and as of
such dates):
6.01 Corporate Status. Each of Holdings and its Subsidiaries (i) is a
duly organized and validly existing corporation in good standing under the laws
of the jurisdiction of its organization, (ii) has the power and authority to own
its property and assets and to transact the business in which it is engaged and
presently proposes to engage and (iii) is duly qualified and is authorized to do
business and is in good standing in each jurisdiction where the ownership,
leasing or operation of property or the conduct of its business requires such
qualifications except for failures to be so qualified which, in the aggregate,
could not reasonably be expected to have a material adverse effect on the
performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole.
6.02 Corporate Power and Authority. Each of Holdings and its
Subsidiaries has the corporate power to execute, deliver and perform the terms
and provisions of each of the Documents to which it is party and has taken all
necessary corporate action to authorize the execution, delivery and performance
by it of each of such Documents. Each of Holdings and its Subsidiaries has duly
executed and delivered each of the Documents to which it is party, and each of
such Documents constitutes its legal, valid and binding obligation enforceable
in accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, reorganization, moratorium or similar laws relating to or
limiting creditors' rights generally or by general equitable principles
(regardless of whether the issue of enforceability is considered in a proceeding
in equity or at law).
6.03 No Violation. Neither the execution, delivery or performance by
Holdings or any of its Subsidiaries of the Credit Documents to which it is a
party, nor compliance by it with the terms and provisions thereof, (i) will
contravene any provision of any applicable law, statute, rule or regulation or
any order, writ, injunction or decree of any court or governmental
instrumentality, (ii) will conflict with or result in any breach of any of the
terms, covenants, conditions or provisions of, or constitute a default under, or
result in the creation or imposition of (or the obligation to create or impose)
any Lien (except pursuant to the Security Documents) upon any of the property or
assets of Holdings or any of its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement or loan agreement, or any
other agreement, contract or instrument to which Holdings or its Subsidiaries is
a party or by which it or any of its property or assets is bound or to which it
may be subject or (iii) will violate any provision of the Certificate of
Incorporation or By-Laws (or similar organizational documents) of Holdings or
any of its Subsidiaries. Neither the execution, delivery or performance by
Holdings or any of its Subsidiaries of the Documents (other than the Credit
Documents) to which it is a party, nor compliance by it with the terms and
provisions thereof, (i) will contravene any provision of any applicable material
law, statute, rule or regulation or any material order, writ, injunction or
decree of any court or governmental instrumentality, (ii) will conflict with or
result in any breach of any of the terms, covenants, conditions or provisions
of, or constitute a default under, or result in the creation or imposition of
(or the obligation to create or impose) any Lien (except pursuant to the
Security Documents) upon any of the property or assets of Holdings or any of its
43
Subsidiaries pursuant to the terms of any material indenture, mortgage, deed of
trust, credit agreement or loan agreement, or any other material agreement,
contract or instrument to which Holdings or its Subsidiaries is a party or by
which it or any of its property or assets is bound or to which it may be subject
or (iii) will violate any provision of the Certificate of Incorporation or
By-Laws (or similar organizational documents) of Holdings or any of its
Subsidiaries.
6.04 Governmental Approvals. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made on or prior to the Restatement Effective
Date and are in full force and effect), or exemption by, any governmental or
public body or authority, or any subdivision thereof, is required to authorize,
or is required in connection with, (i) the execution, delivery and performance
of any Credit Document or (ii) the legality, validity, binding effect or
enforceability of any such Credit Document. No material order, consent,
approval, license, authorization or validation of, or material filing, recording
or registration with (except as have been obtained or made on or prior to the
Restatement Effective Date and are in full force and effect), or exemption by,
any governmental or public body or authority, or any subdivision thereof, is
required to authorize, or is required in connection with, (i) the execution,
delivery and performance of any Document (other than the Credit Documents) or
(ii) the legality, validity, binding effect or enforceability of any such
Document (other than the Credit Documents).
6.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc. (a) The consolidated balance sheet of the
Borrower as at December 31, 1996 and Holdings as at December 31, 1997, and the
related statements of earnings and stockholders' equity and cash flows for the
fiscal period ended as of such date, in the case of the annual statements, have
been examined by KMPG Peat Marwick LLP, which is an independent certified public
accountant, which delivered unqualified opinions in respect thereto, copies of
all of which financial statements referred to in the preceding clause have
heretofore been furnished to each Bank, present fairly in all material respects
the financial position of the Borrower or Holdings, as the case may be, and
their respective Subsidiaries at the dates of said statements and the results of
operations for the period covered thereby. All such financial statements have
been prepared in accordance with generally accepted accounting principles and
practices consistently applied except to the extent provided in the notes to
said financial statements and with respect to interim financial statements,
subject to normal year end adjustments. Since December 31, 1997, there has been
no material adverse change in the performance, business, assets, nature of
assets, liabilities, operations, properties, condition (financial or otherwise)
or prospects of Holdings and its Subsidiaries as a whole.
(b) On and as of the Restatement Effective Date, on a pro forma basis
after giving effect to the Transaction and all other transactions contemplated
to take place on or prior to the Restatement Effective Date and to all
Indebtedness (including the Loans) being incurred in connection with the
Transaction, and Liens created, and to be created, by each Credit Party in
connection therewith: (a) the sum of the assets (including all intangible
assets), at a fair market valuation, of each Credit Party will exceed its debts;
(b) no Credit Party has incurred or intends to, or believes that it will, incur
debts beyond its ability to pay such debts as such debts mature; and (c) each
Credit Party will have sufficient capital with which to conduct its business.
For purposes of this Section 6.05(b) "debt" means any liability on a claim, and
"claim" means (i) right to payment, whether or not such a right is reduced to
44
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured, or unsecured or (ii) right to
an equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.
(c) Except as fully reflected in the financial statements and the
notes related thereto described in Section 6.05(a) there were as of the
Restatement Effective Date (and after giving effect to the Transaction and the
other transactions contemplated hereby and by the Documents) no liabilities or
obligations with respect to Holdings or any of its Subsidiaries of any nature
whatsoever (whether absolute, accrued, contingent or otherwise and whether or
not due) which, either individually or in aggregate, could reasonably be
expected to have a materially adverse effect on the performance, business,
assets, nature of assets, liabilities, operations, properties, condition
(financial or otherwise) or prospects of Holdings and its Subsidiaries taken as
a whole. As of the Restatement Effective Date, neither Holdings nor any of its
Subsidiaries knows of any basis for the assertion against Holdings or any of its
Subsidiaries of any liability or obligation of any nature whatsoever that is not
fully reflected in the financial statements and the notes related thereto
described in Section 6.05(a) which, either individually or in the aggregate,
could reasonably be expected to be material to the Borrower and its Subsidiaries
taken as a whole. As of the Restatement Effective Date (and after giving effect
to the Transaction) none of Holdings or any of its Subsidiaries will have any
outstanding Indebtedness or preferred stock other than (i) the Loans, (ii) the
Existing Indebtedness and (iii) 418,000 shares of Series A Convertible
Participating Preferred Stock of Holdings and 228,500 shares of Series B
Convertible Participating Preferred Stock of Holdings.
(d) On and as of the Restatement Effective Date, the Projections have
been prepared in good faith by the Borrower and there are no statements or
conclusions in any of the Projections which are based upon or include
information known to the Borrower to be misleading or which fail to take into
account material information regarding the matters reported therein. On the
Restatement Effective Date, the Borrower believes that the Projections were
reasonable and attainable (although actual results may differ from the
Projections and no representation is made that the Projections will in fact be
attained).
6.06 Litigation. There are no actions, suits or proceedings pending
or, to the best knowledge of Holdings and its Subsidiaries, threatened (i) with
respect to any Document, or (ii) that are reasonably likely to materially and
adversely affect the performance, business, assets, nature of assets,
liabilities, operations, properties, condition (financial or otherwise) or
prospects of Holdings and its Subsidiaries taken as a whole.
6.07 True and Complete Disclosure. All factual information (taken as a
whole) heretofore or contemporaneously furnished by or on behalf of Holdings or
any of its Subsidiaries in writing to any Bank (including, without limitation,
all information contained in the Documents) for purposes of or in connection
with this Agreement or any transaction contemplated herein (including, without
limitation, in connection with the issuance of Acceptable Subordinated Debt) is,
and all other such factual information (taken as a whole with all information
previously furnished) hereafter furnished by or on behalf of Holdings or any of
its Subsidiaries in writing to any Bank will be, true and accurate in all
45
material respects on the date as of which such information is dated or certified
and not incomplete by omitting to state any material fact.
6.08 Use of Proceeds; Margin Regulations. (a) All proceeds of the Term
Loans and up to $100,000,000 of the proceeds of Revolving Loans incurred by the
Borrower on the Restatement Effective Date shall be used by the Borrower to (i)
repay Existing Loans, accrued interest thereon, breakage costs and fees relating
thereto and relating to the Existing Letters of Credit, (ii) repay the Rocky
Mountain Note, (iii) pay Transaction Fees and Expenses and (iv) provide for
working capital purposes. Proceeds of Revolving Loans incurred after the
Restatement Effective Date shall be used by the Borrower only to effect
Permitted Acquisitions and for general corporate, capital expenditure and
working capital purposes.
(b) No part of the proceeds of any Loan will be used to purchase or
carry any Margin Stock or to extend credit for the purpose of purchasing or
carrying any Margin Stock. Neither the making of any Loan nor the use of the
proceeds thereof nor the occurrence of any other Credit Event will violate or be
inconsistent with the provisions of Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System.
6.09 Tax Returns and Payments. Each of Holdings and each of its
Subsidiaries has timely filed or caused to be timely filed (including pursuant
to any valid extensions of time for filing) with the appropriate taxing
authority, all material returns, statements, forms and reports for taxes (the
"Returns") required to be filed by or with respect to the income, properties or
operations of Holdings and/or any of its Subsidiaries. The Returns accurately
reflect in all material respects all liability for taxes of Holdings and its
Subsidiaries for the periods covered thereby. Each of Holdings and each of its
Subsidiaries has paid, or have provided adequate reserves in accordance with
generally accepted accounting principles for all material taxes (including,
without limitation, all withholding taxes) payable by them which have become due
or will become due for the current fiscal year through the date hereof. There is
no material action, suit, proceeding, investigation, audit, or claim now pending
or, to the best knowledge of Holdings or any of its Subsidiaries, threatened by
any authority regarding any taxes relating to Holdings or any of its
Subsidiaries. Except as set forth on Schedule IV, as of the Restatement
Effective Date, neither Holdings nor any of its Subsidiaries has entered into an
agreement or waiver or been requested to enter into an agreement or waiver
extending any statute of limitations relating to the payment or collection of a
material amount of taxes of Holdings or any of its Subsidiaries, or is aware of
any circumstances that would cause the taxable years or other taxable periods of
the Borrower or any of its Subsidiaries not to be subject to the normally
applicable statute of limitations. Neither Holdings nor any of its Subsidiaries
has incurred, or will incur, any material tax liability in connection with the
Transaction or any other transactions contemplated hereby.
6.10 Compliance with ERISA. Schedule V sets forth each Plan;
each Plan (and each related trust, insurance contract or fund) is in substantial
compliance with its terms and with all applicable laws, including, without
46
limitation, ERISA and the Code; each Plan (and each related trust, if any) which
is intended to be qualified under Section 401(a) of the Code has received a
determination letter from the Internal Revenue Service to the effect that it
meets the requirements of Sections 401(a) and 501(a) of the Code; no Reportable
Event has occurred; no Plan which is a multiemployer plan (as defined in Section
4001(a)(3) of ERISA) is insolvent or in reorganization; no Plan has an Unfunded
Current Liability; no Plan which is subject to Section 412 of the Code or
Section 302 of ERISA has an accumulated funding deficiency, within the meaning
of such sections of the Code or ERISA, or has applied for or received a waiver
of an accumulated funding deficiency or an extension of any amortization period,
within the meaning of Section 412 of the Code or Section 303 or 304 of ERISA;
all contributions required to be made with respect to a Plan have been timely
made; neither Holdings nor any of its Subsidiaries Holdings nor any ERISA
Affiliate has incurred any material liability (including any indirect,
contingent or secondary liability) to or on account of a Plan pursuant to
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of
ERISA or Section 401(a)(29), 4971 or 4975 of the Code or expects to incur any
such liability under any of the foregoing sections with respect to any Plan; no
condition exists which presents a material risk to Holdings, any of its
Subsidiaries or any ERISA Affiliate of incurring a liability to or on account of
a Plan pursuant to the foregoing provisions of ERISA and the Code; no
proceedings have been instituted to terminate or appoint a trustee to administer
any Plan which is subject to Title IV of ERISA; no action, suit, proceeding,
hearing, audit or investigation with respect to the administration, operation or
the investment of assets of any Plan (other than routine claims for benefits) is
pending, expected or threatened; using actuarial assumptions and computation
methods consistent with Part 1 of subtitle E of Title IV of ERISA, there exist
no liabilities of Holdings, its Subsidiaries and/or its ERISA Affiliates to all
Plans which are multiemployer plans (as defined in Section 4001(a)(3) of ERISA)
in the event of a complete withdrawal therefrom, as of the close of the most
recent fiscal year of each such Plan ended prior to the date of the most recent
Credit Event; each group health plan (as defined in Section 607(1) of ERISA or
Section 4980B(g)(2) of the Code) which covers or has covered employees or former
employees of Holdings, its Subsidiaries, or any ERISA Affiliate has at all times
been operated in compliance with the provisions of Part 6 of subtitle B of Title
I of ERISA and Section 4980B of the Code; no lien imposed under the Code or
ERISA on the assets of Holdings, any of its Subsidiaries or any ERISA Affiliate
exists or is likely to arise on account of any Plan; and Holdings and its
Subsidiaries may cease contributions to or terminate any employee benefit plan
maintained by any of them without incurring any material liability.
6.11 The Security Documents. (a) The provisions of the Security
Documents (other than the Pledge Agreements) are effective to create in favor of
the Collateral Agent for the benefit of the Secured Creditors a legal, valid and
enforceable security interest in all right, title and interest of the respective
Credit Parties in the Collateral described therein and the Collateral Agent, for
the benefit of the Secured Creditors, has a fully perfected Lien on, and
security interest in, all right, title and interest of the respective Credit
Parties, in all of the Collateral described therein, subject to no other Liens
other than Permitted Liens. The recordation of the Security Agreement in the
United States Patent and Trademark Office together with filings on Form UCC-1
made pursuant to the Security Agreement will be effective, under federal and
state law, to perfect the security interest granted to the Collateral Agent in
the trademarks and patents covered by the Security Agreement and the filing of
the Security Agreement with the United States Copyright Office together with
filings on Form UCC-1 made pursuant to the Security Agreement will be effective
under federal and state law to perfect the security interest granted to the
Collateral Agent in the copyrights covered by the Security Agreement. Each of
the Credit Parties party to the Security Agreement has good and merchantable
title to all Collateral described therein, free and clear of all Liens except
those described above in this clause (a).
47
(b) The security interests created in favor of the Collateral Agent,
as Pledgee for the benefit of the Secured Creditors, under the Pledge Agreements
constitute first perfected security interests in the Pledged Securities
described in the Pledge Agreements, subject to no security interests of any
other Person. No filings or recordings are required in order to perfect (or
maintain the perfection or priority of) the security interests created in the
Pledged Securities and the proceeds thereof under the Pledge Agreements.
6.12 Material Contracts. All Material Contracts of Holdings and each
of its Subsidiaries as of the Restatement Effective Date are listed on Schedule
VI.
6.13 Properties. Each of Holdings and each of its Subsidiaries has
good and merchantable title to all properties owned by them, including all
property reflected in the consolidated pro forma balance sheet (after giving
effect to the Transaction) referred to in Section 6.05(a) (except as sold or
otherwise disposed of since the date of such balance sheet in the ordinary
course of business or as permitted by Section 8.02), free and clear of all
Liens, other than (i) as referred to in the consolidated balance sheet or in the
notes thereto or in the pro forma balance sheet or (ii) otherwise permitted by
Section 8.01. Schedule VII contains a true and complete list of each parcel of
Real Property owned or leased by Holdings and each of its Subsidiaries on the
Restatement Effective Date, and the type of interest therein held by Holdings
and/or its Subsidiaries.
6.14 Capitalization. On the Restatement Effective Date, after giving
effect to the Transaction, the authorized capital stock of (a) Holdings consists
of (i) 1,000,000 shares of common stock, $.01 par value per share ("Holdings
Common Stock"), 100 of which shares are issued and outstanding, (ii) 1,293,800
shares of designated preferred stock, $.01 par value per share, of which (a)
418,000 shares have been designated as Series A Convertible Participating
Preferred stock ("Holdings Series A Convertible Preferred Stock"), all of which
are issued and outstanding, (b) 418,000 shares have been designated as Series A
Redeemable Preferred Stock ("Holdings Series A Redeemable Preferred Stock"),
none of which are issued, (c) 228,500 shares have been designated as Series B
Convertible Participating Preferred Stock ("Holdings Series B Convertible
Preferred Stock"), of which 228,442 shares are issued and outstanding, (d)
228,500 shares have been designated as Series B Redeemable Preferred Stock
("Holdings Series B Redeemable Preferred Stock"), none of which are issued, and
(iii) 300,000 shares of undesignated preferred stock, $.01 par value per share
("Holdings Undesignated Preferred Stock") and (b) the Borrower consists of 1,000
shares of common stock, $.01 par value per share ("Borrower Common Stock"), all
of which shares are issued and outstanding. Such Holdings Common Stock, Borrower
Common Stock, Holdings Series A Convertible Preferred Stock and Holdings Series
B Convertible Preferred Stock is owned in the amounts, and by the Persons, set
forth on Schedule VIII. Except as set forth in Schedule VIII, all of such
outstanding shares have been duly and validly issued, are fully paid and
nonassessable and are free of preemptive rights. Except as set forth in this
Section and on Part A of Schedule VIII, on the Restatement Effective Date,
neither Holdings, the Borrower nor any Subsidiary of the Borrower has
outstanding any securities convertible into or exchangeable for its capital
stock or outstanding any rights to subscribe for or to purchase, or any options
for the purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
its capital stock.
48
6.15 Subsidiaries. Schedule IX hereto lists each Subsidiary of
Holdings, and the direct and indirect ownership interest of Holdings therein, in
each case existing on the Restatement Effective Date.
6.16 Compliance with Statutes, etc. Each of Holdings and its
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property (including applicable statutes, regulations, orders and
restrictions relating to environmental standards and controls), except with
respect to each of the foregoing such noncompliance as could not, individually
or in the aggregate, reasonably be expected to have a material adverse effect on
the performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole.
6.17 Investment Company Act. None of Holdings and any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
6.18 Public Utility Holding Company Act. None of Holdings and any of
its Subsidiaries is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company" within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
6.19 Environmental Matters. (a) Holdings and each of its Subsidiaries
have complied with, and on the date of such Credit Event are in compliance with,
in all respects, all applicable Environmental Laws and the requirements of any
permits issued under such Environmental Laws except such noncompliances which,
in the aggregate, could not reasonably be expected to have a material adverse
effect on the performance, business, assets, nature of assets, liabilities,
operations, properties, condition (financial or otherwise) or prospects of
Holdings and its Subsidiaries taken as a whole. There are no past, pending or,
to the best knowledge of Holdings or any of its Subsidiaries, threatened
material Environmental Claims against Holdings or any of its Subsidiaries or any
Real Property currently owned or operated by Holdings or any of its
Subsidiaries. There are no facts, circumstances, conditions or occurrences
concerning the business or operations of Holdings or any of its Subsidiaries or
any Real Property owned or operated at any time by Holdings or any of its
Subsidiaries or, to the knowledge of Holdings or any of its Subsidiaries, any
property adjoining any such Real Property that could reasonably be expected (i)
to form the basis of an Environmental Claim against Holdings or any of its
Subsidiaries or any Real Property owned or operated by Holdings or any of its
Subsidiaries or (ii) to cause such Real Property to be subject to any
restrictions on the ownership, occupancy, use or transferability of such Real
Property under any Environmental Law except such Environmental Claims and
restrictions which individually or in the aggregate could not reasonably be
expected to have a material adverse effect on the performance, business, assets,
nature of assets, liabilities, operations, properties, condition (financial or
otherwise) or prospects of Holdings and its Subsidiaries taken as a whole.
49
(b) Neither Holdings nor any of its Subsidiaries has, at any time,
generated, used, treated, stored, transported or released Hazardous Materials
on, to or from any Real Property at any time owned, leased or at any time
operated by Holdings or any of its Subsidiaries.
(c) There are no underground storage tanks located on any Real
Property owned or operated by Holdings or any of its Subsidiaries the existence
of which could reasonably be expected to have a material adverse effect on the
performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole.
6.20 Labor Relations. None of Holdings and any of its Subsidiaries is
engaged in any unfair labor practice that could reasonably be expected to have a
material adverse effect on Holdings and its Subsidiaries taken as a whole. There
is (i) no significant unfair labor practice complaint pending against Holdings
or any of its Subsidiaries or, to the best knowledge of Holdings, threatened
against any of them, before the National Labor Relations Board, and no
significant grievance or significant arbitration proceeding arising out of or
under any collective bargaining agreement is so pending against Holdings or any
of its Subsidiaries or, to the best knowledge of Holdings, threatened against
any of them and (ii) no significant strike, labor dispute, slowdown or stoppage
pending against Holdings or any of its Subsidiaries or, to the best knowledge of
Holdings, threatened against Holdings or any of its Subsidiaries.
6.21 Patents, Licenses, Franchises and Formulas. (a) Except as set
forth in Schedule X, Holdings, together with its Subsidiaries, has a license to
use or otherwise has the right to use, free and clear of pending or threatened
Liens, all the material patents, patent applications, trademarks, service marks,
trade names, trade secrets, copyrights, proprietary information, computer
programs, data bases, licenses, franchises and formulas, or rights with respect
to the foregoing (collectively, "Intellectual Property"), and has obtained all
licenses and other rights of whatever nature, necessary for the present conduct
of its business, without any known conflict with the rights of others which, or
the failure to obtain which, as the case may be, could reasonably be expected to
have a material adverse effect on the performance, business, assets, nature of
assets, liabilities, operations, properties, condition (financial or otherwise)
or prospects of Holdings and its Subsidiaries taken as a whole.
(b) Neither Holdings nor any of its Subsidiaries has knowledge of any
claim by any third party contesting the validity, enforceability, use or
ownership of the Intellectual Property, or of any existing state of facts that
would support a claim that use by Holdings or any of its Subsidiaries of any
such Intellectual Property has infringed or otherwise violated any Intellectual
Property right of any other Person and, that to the best knowledge of Holdings
and its Subsidiaries, no claim is threatened except, in each case, for such
claims that could not individually or in the aggregate reasonably be expected to
have a material adverse affect on the performance, business, assets, nature of
assets, liabilities, operations, properties, condition (financial or otherwise)
or prospects of Holdings and its Subsidiaries taken as a whole.
6.22 Indebtedness. Schedule XI sets forth a true and complete list of
all Indebtedness and preferred stock (other than the Loans and Convertible
Preferred Stock) of Holdings and each of its Subsidiaries as of the Restatement
Effective Date after giving effect to the Transaction and the other transactions
50
contemplated hereby (the "Existing Indebtedness"), in each case showing the
aggregate amount thereof and the name of the respective obligor and any other
entity which directly or indirectly guaranteed such debt. None of the Existing
Indebtedness was incurred in connection with, or in contemplation of, the
Transaction or the other transactions contemplated hereby.
6.23 Restrictions on or Relating to Subsidiaries. There does not exist
any encumbrance or restriction on the ability of (i) any Subsidiary of Holdings
to pay dividends or make any other distributions on its capital stock or any
other interest or participation in its profits owned by Holdings or any
Subsidiary of Holdings, or to pay any Indebtedness owed to Holdings or a
Subsidiary of Holdings, (ii) any Subsidiary of Holdings to make loans or
advances to Holdings or any of its Subsidiaries or (iii) any Subsidiary of
Holdings to transfer any of its properties or assets to Holdings or any
Subsidiary of Holdings, except for such encumbrances or restrictions existing
under or by reason of (x) applicable law, (y) this Agreement and the other
Credit Documents or (z) provisions restricting assignment of any contract by
which Holdings or a Subsidiary of Holdings is bound.
6.24 The Transaction and Permitted Acquisitions. All aspects of the
Transaction have been effected in accordance with the Documents and applicable
law except for such non-compliances as could not reasonably be expected to have
a material adverse effect on the performance, business, assets, nature of
assets, liabilities, operations, properties, condition (financial or otherwise)
or prospects of Holdings and its Subsidiaries taken as a whole. At the time of
the consummation thereof, each Permitted Acquisition and the issuance of the
Acceptable Subordinated Debt shall have been effected in accordance with the
documents relating to such Permitted Acquisition or issuance of Acceptable
Subordinated Debt, as the case may be, and all applicable law except for such
non-compliances as could not reasonably be expected to have a material adverse
effect on the performance, business, assets, nature of assets, liabilities,
operations, properties, condition (financial or otherwise) or prospects of
Holdings and its Subsidiaries taken as a whole. At the time of consummation
thereof, all consents and approvals of, and filings and registrations with, and
all other actions in respect of, all governmental agencies, authorities or
instrumentalities required in order to consummate the Transaction and any
Permitted Acquisition and the issuance of the Acceptable Subordinated Debt shall
have been obtained, given, filed or taken and are in full force and effect (or
effective judicial relief with respect thereto has been obtained) except for
such consents, approvals, filings, and registrations, or other actions the
failure to obtain, give, file or take as could not reasonably be expected to
have a material adverse effect on the performance, business, assets, nature of
assets, liabilities, operations, properties, condition (financial or otherwise)
or prospects of Holdings and its Subsidiaries taken as a whole. All applicable
waiting periods with respect thereto have or, prior to the time when required,
will have, expired without, in all such cases, any action being taken by any
competent authority which restrains, prevents or imposes material adverse
conditions upon the consummation of the Transaction or any Permitted Acquisition
or the issuance of the Acceptable Subordinated Debt. Additionally, at the time
of consummation thereof, there does not exist any judgment, order or injunction
prohibiting or imposing material adverse conditions upon the consummation of the
Transaction or any Permitted Acquisition.
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6.25 Year 2000 Reprogramming. Any reprogramming required to permit the
proper functioning, in and following the year 2000, of the Borrower's or any of
its Subsidiaries', or, to the knowledge of the Borrower, NRTC's or DirecTV's (i)
computer systems and (ii) equipment containing embedded microchips (including
systems and equipment supplied by others or with which the Borrower's, NRTC's or
DirecTV's systems interface) and the testing of all such systems and equipment,
as so reprogrammed, shall be completed by April 1, 1999. The costs to the
Borrower of such reprogramming and testing and of the reasonably foreseeable
consequences of year 2000 (including, without limitation, reprogramming errors
and the failure of others' systems or equipment) could not reasonably be
expected to have a material adverse effect on the performance, business, assets,
nature of assets, liabilities, operations, properties, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole.
Except for such of the reprogramming referred to in the preceding sentence as
may be necessary, the computer and management information systems of the
Borrower and its Subsidiaries are, and to the knowledge of the Borrower, the
computer and management information systems of NRTC and DirecTV are, and with
ordinary course upgrading and maintenance will continue to be for the term of
this Agreement, sufficient to permit the Borrower and its Subsidiaries to
conduct its business without such conduct resulting in a material adverse effect
on the performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole.
Section 7. Affirmative Covenants. Each of Holdings and the Borrower
covenants and agrees that on and after the Restatement Effective Date and until
the Total Commitment and all Letters of Credit have terminated and the Loans and
Notes and Unpaid Drawings, together with interest, Fees and all other
obligations incurred hereunder and thereunder, are paid in full:
7.01 Information Covenants. Holdings will furnish to each Bank:
(a) Monthly Reports. Within fortyfive (45) days after the end of
each fiscal month other than the last such month of any fiscal quarter
of Holdings, the consolidated and consolidating balance sheets of
Holdings and its Subsidiaries as at the end of such month and for the
elapsed portion of the fiscal year ended with the last day of such
month and the related consolidated and consolidating statements of
income for such month and for the elapsed portion of the fiscal year
ended with the last day of such month and a statement of cash flows
for the elapsed portion of the fiscal year ended with the last day of
such month, in each case setting forth comparative figures for the
corresponding month and elapsed portion of such fiscal year for the
prior fiscal year and comparable budgeted figures for such period as
well as subscriber information (including, without limitation, with
respect to new subscribers and disconnected subscribers) and the
amount of MDU Investments (and a break-down thereof) for such period
and, upon request of either Agent, a management discussion and
analysis of such results, all of which shall be certified by the Chief
Financial Officer or Controller of Holdings, subject to normal
year-end audit adjustments.
(b) Quarterly Financial Statements. Within forty-five (45) days
after the close of each quarterly accounting period in each fiscal
year of Holdings, the consolidated and consolidating balance sheets of
Holdings and its Subsidiaries as at the end of such quarterly period
and the related consolidated and consolidating statements of income,
stockholders' equity and cash flows, in each case for such quarterly
period and for the elapsed portion of the fiscal year ended with the
last day of such quarterly period, in each case setting forth
52
comparative figures for the related periods in the prior fiscal year
and comparable budgeted figures for such period as well as subscriber
information (including, without limitation, with respect to new
subscribers and disconnected subscribers) and the amount of MDU
Investments (and a break-down thereof) for such period and the period
commencing on the Restatement Effective Date and a management
discussion and analysis of such results, all of which shall be
certified by the Chief Financial Officer or Controller of Holdings,
subject to normal year-end audit adjustments.
(c) Annual Financial Statements. Within 120 days after the close
of each fiscal year of Holdings, the consolidated and consolidating
balance sheets of Holdings and its Subsidiaries as at the end of such
fiscal year and the related consolidated and consolidating statements
of income, stockholders' equity and cash flows for such fiscal year
and setting forth comparative figures for the preceding fiscal year
and comparable budgeted figures for such period as well as subscriber
information (including, without limitation, with respect to new
subscribers and disconnected subscribers) and the amount of MDU
Investments (and a break-down thereof) for such period and the period
commencing on the Restatement Effective Date and a management
discussion and analysis of such results, certified, (x) in the case of
the consolidating statements, by the chief financial officer or
controller of Holdings and (y) in the case of the consolidated
financial statements of Holdings and its Subsidiaries, by KMPG Peat
Marwick, LLP or any of the "big six" or other independent certified
public accountants of recognized national standing reasonably
acceptable to the Agents, together with a signed opinion of such
accounting firm (which opinion shall not be qualified as to the scope
of the audit or the status of Holdings or any Subsidiary of Holdings
as a going concern in any respect) stating that in the course of its
regular audit of the financial statements of Holdings which audit was
conducted in accordance with generally accepted auditing standards,
such accounting firm obtained no knowledge of any Default or Event of
Default which has occurred and is continuing or, if in the opinion of
such accounting firm such a Default or Event of Default has occurred
and is continuing, a statement as to the nature thereof.
(d) Management Letters. Promptly after the receipt thereof by
Holdings or any Subsidiary of Holdings, a copy of any "management
letter" received by Holdings or any Subsidiary of Holdings from its
certified public accountants.
(e) Budgets. As soon as available but in no event later than
thirty (30) days after the first day of each fiscal year of Holdings,
a budget for Holdings and its Subsidiaries in form customarily
prepared by Holdings (including budgeted statements of earnings and
sources and uses of cash and balance sheets and budgeted acquisitions
of franchises) prepared by Holdings for each calendar month of such
53
fiscal year in reasonable detail with appropriate presentation and
discussion of the principal assumptions upon which such budgets are
based, accompanied by the statement of the Chief Financial Officer or
Controller of Holdings to the effect that, to the best of his
knowledge, the budget is a reasonable estimate for the period covered
thereby.
(f) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Sections 7.01(a), (b) and (c), a
certificate of the Chief Financial Officer or Controller of Holdings
and the Borrower to the effect that no Default or Event of Default has
occurred and is continuing or, if any Default or Event of Default has
occurred and is continuing, specifying the nature and extent thereof,
which certificate, (x) in the case of certificates delivered pursuant
to Section 7.01(b) or (c), shall set forth the calculations required
to establish whether Holdings and the Borrower were in compliance with
the provisions of Sections 2.03, 3.02, 7.15, 8.02, 8.04, 8.05, 8.07,
8.08 through 8.17, inclusive, at the end of such fiscal quarter or
year, as the case may be, and (y) in the case of certificates
delivered pursuant to Section 7.01(c), the amount of Excess Cash Flow
for the relevant Excess Cash Flow Payment Period.
(g) Notice of Default or Litigation. Promptly, and in any event
within three (3) Business Days after an officer of Holdings or any of
its Subsidiaries obtains knowledge thereof, notice of (i) the
occurrence of any event which constitutes a Default or Event of
Default, (ii) any litigation or governmental investigation or
proceeding pending (x) against any of Holdings or its Subsidiaries
which could reasonably be expected to materially and adversely affect
the performance, business, assets, nature of assets, liabilities,
operations, properties, condition (financial or otherwise) or
prospects of Holdings and its Subsidiaries taken as a whole or (y)
with respect to any Document and (iii) any other event which could
reasonably be expected to materially and adversely affect the
performance, business, assets, nature of assets, liabilities,
operations, properties, condition (financial or otherwise) or
prospects of Holdings and its Subsidiaries taken as a whole.
(h) Other Reports and Filings. Promptly upon transmission
thereof, copies of any financial information, proxy materials and
other information and reports, if any, which Holdings or any of its
Subsidiaries (x) has filed with the Securities and Exchange Commission
or any successor thereto (the "SEC") or (y) has delivered to holders
of, or any agent or trustee with respect to, Indebtedness of Holdings
or any of its Subsidiaries in its capacity as such a holder, agent, or
trustee or (z) has delivered to any shareholder in its capacity as a
shareholder.
(i) Environmental Matters. Promptly upon, and in any event within
three (3) Business Days after an officer of Holdings or of any of its
Subsidiaries obtains knowledge thereof, notice of any of the following
environmental matters (i) any pending or threatened material
Environmental Claim against Holdings or any of its Subsidiaries or any
Real Property owned or operated at any time by Holdings or any of its
Subsidiaries; (ii) any condition or occurrence on or arising from any
Real Property owned or operated at any time by Holdings or any of its
Subsidiaries that (a) could reasonably be anticipated to result in a
material noncompliance by Holdings or any of its Subsidiaries with any
material applicable Environmental Law, or (b) could reasonably be
anticipated to form the basis of a material Environmental Claim
against Holdings or any of its Subsidiaries or any Real Property owned
or operated by Holdings or any of its Subsidiaries; (iii) any
condition or occurrence on any material Real Property owned or
operated by Holdings or any of its Subsidiaries that could reasonably
be anticipated to cause such Real Property to be subject to any
material restrictions on the ownership, occupancy, use or
transferability of such Real Property under any Environmental Law; and
(iv) the taking of any removal or remedial action in response to a
material Release or material threatened Release or the actual or
alleged presence of any Hazardous Material on or from any Real
54
Property owned or operated at any time by Holdings or any of its
Subsidiaries in each case as required by any Environmental Law or any
governmental or other administrative agency. All such notices shall
describe in reasonable detail the nature of the claim, investigation,
condition, occurrence or removal or remedial action and Holdings' or
such Subsidiary's response thereto. In addition, Holdings will provide
the Banks with copies of all material communications with any
government or governmental agency relating to material Environmental
Claims, all material communications with any person relating to
material Environmental Claims, and such detailed reports of any
Environmental Claim as may reasonably be requested by the Required
Banks.
(j) Annual Meetings with Banks. Within 150 days after the close
of each fiscal year of the Borrower, the Borrower shall, at the
request of either Agent or Required Banks, hold a meeting (at a
mutually agreeable location and time) with all Banks who choose to
attend such meeting at which meeting shall be reviewed the financial
results of the previous fiscal year and the financial condition of
Holdings and its Subsidiaries and the budgets presented for the
current fiscal year of Holdings and its Subsidiaries.
(k) Other Information. From time to time, such other information
or documents (financial or otherwise) with respect to Holdings or any
of its Subsidiaries, as the Agents, or the Required Banks may
reasonably request.
7.02 Books, Records and Inspections. Holdings will, and will cause
each of its Subsidiaries to, keep proper books of record and account in which
full, true and correct entries, in conformity with United States generally
accepted accounting principles and all requirements of law, shall be made of all
dealings and transactions in relation to its business and activities. Holdings
will, and will cause each of its Subsidiaries to, permit officers and designated
representatives of the Agents or any Bank to visit and inspect, under guidance
of officers of Holdings or of such Subsidiary, any of the properties of the
Borrower or such Subsidiary, and to examine the books of account of Holdings or
such Subsidiary and discuss the affairs, finances and accounts of Holdings or of
such Subsidiary with, and be advised as to the same by, its and their officers,
all at such reasonable times and intervals and to such reasonable extent as the
Agents or such Bank may request.
7.03 Maintenance of Property, Insurance. (a) Schedule XII sets forth a
true and complete listing of all insurance maintained by Holdings and each of
its Subsidiaries as of the Restatement Effective Date. Holdings will, and will
cause each of its Subsidiaries to, (i) keep all material property useful and
necessary in its business in good working order and condition (ordinary wear and
tear excepted), (ii) maintain with financially sound and reputable insurance
companies key-man life insurance, liability insurance and insurance on all its
property in at least such amounts and against at least such risks as are
described on Schedule XII and (iii) furnish to the Administrative Agent, upon
written request, full information as to the insurance carried. The provisions of
this Section 7.03 shall be deemed to be supplemental to, but not duplicative of,
the provisions of any of the Security Documents that require the maintenance of
insurance.
55
(b) Holdings will at all times keep, and will cause each of its
Subsidiaries to keep, its property insured in favor of the Collateral Agent, and
all policies (including mortgage policies) or certificates (or certified copies
thereof) with respect to such insurance (and any other insurance maintained by
Holdings or its Subsidiaries (other than employee benefit insurance)) (i) shall
be endorsed to the Collateral Agent's satisfaction for the benefit of the
Collateral Agent (including, without limitation, by naming the Collateral Agent
as loss payee and naming the Collateral Agent, the Agents and each Bank as an
additional insured) with respect to Collateral, (ii) shall state that such
insurance policies shall not be canceled or revised in a manner adverse to the
Banks without thirty (30) days' prior written notice thereof by the respective
insurer to the Collateral Agent, (iii) shall provide that the respective
insurers irrevocably waive any and all rights of subrogation with respect to the
Collateral Agent, (iv) shall contain the standard noncontributory mortgagee
clause endorsement in favor of the Collateral Agent with respect to hazard
insurance coverage, (v) shall provide that any losses shall be payable
notwithstanding (A) any act or neglect of Holdings or any of its Subsidiaries,
(B) the occupation or use of the properties for purposes more hazardous than
those permitted by the terms of the respective policy if such coverage is
obtainable at commercially reasonable rates and is of the kind from time to time
customarily insured against by Persons owning or using similar property and in
such amounts as are customary, (C) any foreclosure or other proceeding relating
to the insured properties or (D) any change in the title to or ownership or
possession of the insured properties and (vi) shall be deposited with the
Collateral Agent. If Holdings or any of its Subsidiaries shall fail to insure
its property in accordance with this Section 7.03, or if Holdings or any of its
Subsidiaries shall fail to endorse and deposit all policies or certificates with
respect thereto, the Collateral Agent shall have the right (but shall be under
no obligation) to procure such insurance and the Borrower jointly and severally
agrees, to reimburse the Collateral Agent for all costs and expenses of
procuring such insurance.
7.04 Corporate Franchises. Holdings will do, and will cause each of
its Subsidiaries to do or cause to be done, all things necessary to preserve and
keep in full force and effect its existence and its material rights, franchises
and authority to do business; provided, however, that nothing in this Section
7.04 shall prevent the withdrawal by Holdings or any Subsidiary of Holdings of
its qualification as a foreign corporation in any jurisdiction where such
withdrawal could not reasonably be expected to have a material adverse effect on
the performance, business, assets, nature of assets, liabilities, properties,
operations, condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole.
7.05 Compliance with Statutes, etc. Holdings will, and will cause each
of its Subsidiaries to, comply with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property except such noncompliances as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole.
7.06 Compliance with Environmental Laws. (a) Holdings will comply, and
will cause each of its Subsidiaries to comply, in all material respects with all
material Environmental Laws applicable to ownership or use of the Real Property,
will promptly pay or cause the Borrower to pay all costs and expenses incurred
in such compliance, and will keep or cause to be kept all such Real Properties
56
free and clear of any Liens imposed pursuant to such Environmental Laws. None of
Holdings and any Subsidiary of Holdings will generate, use, treat, store,
release or dispose of, or permit the generation, use, treatment, storage,
Release or disposal of Hazardous Materials on any Real Property, or transport or
permit the transportation of Hazardous Materials to or from any Real Property,
other than in compliance in all material respects with applicable law.
(b) At the request of the Agents or the Required Banks at any time and
from time to time during the existence of this Agreement: (i) if an Event of
Default exists under this Agreement, (ii) upon the reasonable belief by the
Agents that Holdings or any of its Subsidiaries has breached any representation
or covenant herein with respect to any environmental matters and such breach is
continuing, or (iii) in the event notice is provided under Section 7.01(i)
herein, Holdings will cause the Borrower to, and the Borrower will, provide, at
its sole cost and expense (or will cause the relevant Subsidiary to provide at
its sole cost and expense), an environmental site assessment report reasonable
in scope concerning any Real Property of Holdings or its Subsidiaries, prepared
by an environmental consulting firm approved by the Agents and the Required
Banks, indicating the presence or Release of Hazardous Materials on or from any
of the Real Property and the potential cost of any removal or remedial action in
connection with any Hazardous Materials on such Real Property. If the Borrower
fails to provide the same after thirty (30) days' notice, the Agents may order
the same, and the Borrower shall grant and hereby grants to the Agents and the
Banks and their agents access to such Real Property and specifically grants the
Agents and the Banks an irrevocable non-exclusive license, subject to the rights
of tenants, to undertake such an assessment all at the Borrower' expense, which
assessments, if obtained, will be provided to the Borrower.
7.07 ERISA. As soon as possible and, in any event, within ten (10)
days after Holdings, any Subsidiary of Holdings or any ERISA Affiliate knows or
has reason to know of the occurrence of any of the following, Holdings will
cause the Borrower to, and the Borrower will, deliver to each of the Banks a
certificate of the chief financial officer of the Borrower setting forth the
full details as to such occurrence and the action, if any, that Holdings, such
Subsidiary of Holdings or such ERISA Affiliate is required or proposes to take,
together with any notices required or proposed to be given to or filed with or
by Holdings, such Subsidiary of Holdings, the ERISA Affiliate, the PBGC, a Plan
participant or the Plan administrator with respect thereto: that a Reportable
Event has occurred (except to the extent that Holdings, any Subsidiary of
Holdings or any ERISA Affiliate has previously delivered to the Banks a
certificate and notices (if any) concerning such event pursuant to the next
clause hereof); that a contributing sponsor (as defined in Section 4001(a)(13)
of ERISA) of a Plan subject to Title IV of ERISA is subject to the advance
reporting requirement of PBGC Regulation Section 4043.61 (without regard to
subparagraph (b)(1) thereof) and an event described in subsection .62, .63, .64,
.65, .66, .67 or .68 of PBGC Regulation Section 4043 is reasonably expected to
occur with respect to such Plan within the following thirty (30) days; that an
accumulated funding deficiency, within the meaning of Section 412 of the Code or
Section 302 of ERISA, has been incurred or an application may be or has been
made for a waiver or modification of the minimum funding standard (including any
required installment payments) or an extension of any amortization period under
57
Section 412 of the Code or Section 303 or 304 of ERISA with respect to a Plan;
that any contribution required to be made with respect to a Plan has not been
timely made; that a Plan has been or may be terminated, reorganized, partitioned
or declared insolvent under Title IV of ERISA; that a Plan has an Unfunded
Current Liability; that proceedings may be or have been instituted to terminate
or appoint a trustee to administer a Plan which is subject to Title IV of ERISA;
that a proceeding has been instituted pursuant to Section 515 of ERISA to
collect a delinquent contribution to a Plan; that Holdings, any Subsidiary of
Holdings or any ERISA Affiliate will or may incur any liability (including any
indirect, contingent, or secondary liability) to or on account of the
termination of or withdrawal from a Plan under Section 4062, 4063, 4064, 4069,
4201, 4204 or 4212 of ERISA or with respect to a Plan under Section 401(a)(29),
4971, 4975 or 4980 of the Code or Section 409 or 502(i) or 502(l) of ERISA or
with respect to a group health plan (as defined in Section 607(1) of ERISA or
Section 4980B(g)(2) of the Code) under Section 4980B of the Code; or that
Holdings or any Subsidiary of Holdings may incur any material liability pursuant
to any employee welfare benefit plan (as defined in Section 3(1) of ERISA) that
provides benefits to retired employees or other former employees (other than as
required by Section 601 of ERISA) or any Plan. Holdings will cause the Borrower
to, and the Borrower will, deliver to each of the Banks (i) a complete copy of
the annual report (on Internal Revenue Service Form 5500-series) of each Plan
(including, to the extent required, the related financial and actuarial
statements and opinions and other supporting statements, certifications,
schedules and information) required to be filed with the Internal Revenue
Service and (ii) copies of any records, documents or other information that must
be furnished to the PBGC with respect to any Plan pursuant to Section 4010 of
ERISA. In addition to any certificates or notices delivered to the Banks
pursuant to the first sentence hereof, copies of annual reports and any records,
documents or other information required to be furnished to the PBGC, and any
material notices received by Holdings, any Subsidiary of Holdings or any ERISA
Affiliate with respect to any Plan shall be delivered to the Banks no later than
ten (10) days after the date such report has been filed with the Internal
Revenue Service or such records, documents and/or information has been furnished
to the PBGC or such notice has been received by Holdings, the Subsidiary or the
ERISA Affiliate, as applicable.
7.08 End of Fiscal Years; Fiscal Quarters. Holdings will cause its,
and each of its Subsidiaries', fiscal years to end on December 31 and each of
its, and each of its Subsidiaries', first three fiscal quarters to end on March
30, June 30 and September 30.
7.09 Performance of Obligations. The Borrower will, and will cause
each of its Subsidiaries to, perform all of its obligations under the terms of
each mortgage, indenture, security agreement and other debt instrument by which
it is bound, except such non- performances as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole.
7.10 Payment of Taxes. Holdings will pay and discharge, and will cause
each of its Subsidiaries to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any properties belonging to it, prior to the date on which penalties would
otherwise attach
58
thereto, and all lawful claims which, if unpaid, might become a lien or charge
upon any properties of Holdings or any of its Subsidiaries not otherwise
permitted under Section 8.01; provided that neither Holdings nor any of its
Subsidiaries shall be required to pay any such tax, assessment, charge, levy or
claim which is being contested in good faith and by proper proceedings if it has
maintained adequate reserves with respect thereto in accordance with generally
accepted accounting principles.
7.11 Interest Rate Protection. Holdings will cause the Borrower to,
and the Borrower will, no later than 120 days following the Restatement
Effective Date, enter into arrangements acceptable to the Agents establishing a
fixed or maximum interest rate acceptable to the Agents for an aggregate
notional amount of at least an amount equal to 50% of Net Adjusted Consolidated
Indebtedness at any time, and from time to time, for a period of at least three
(3) years after the Restatement Effective Date; provided, however, that the
outstanding principal amount of Acceptable Subordinated Debt less the amount of
Cash Interest Reserves shall be counted as acceptable arrangements for
establishing a fixed interest rate acceptable to the Agents.
7.12 Use of Proceeds. All proceeds of the Loans shall be used as
provided in Section 6.08.
7.13 Acceptable Subordinated Debt. In connection with the issuance of
Acceptable Subordinated Debt, the Agents shall receive, as early as practicable
(but in any event not later than thirty (30) days prior to the printing of the
preliminary offering circular for such Acceptable Subordinated Debt), the
initial terms and conditions of such Acceptable Subordinated Debt and shall
receive on a regular basis after receipt of such initial terms and conditions,
all revisions thereto. The Agents and their counsel shall receive, prior to the
issuance of Acceptable Subordinated Debt, all drafts of the Acceptable
Subordinated Debt Documents which shall be in form and substance satisfactory to
the Agents. The Agents and Banks shall receive (i) certified final copies of all
of the Acceptable Subordinated Debt Documents, (ii) reliance letters with
respect to all legal opinions delivered by counsel to the Borrower in connection
with the issuance of the Acceptable Subordinated Debt and (iii) such other
opinions from counsel to the Borrower as shall be reasonably requested in
connection with such issuance. The Borrower shall cause the offering materials
for the Acceptable Subordinated Debt not to contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein not misleading.
7.14 Intellectual Property Rights. The Borrower will, and Holdings
will cause each of its other Subsidiaries to, maintain in full force and effect
all Intellectual Property rights necessary or appropriate to the business of
Holdings or any Subsidiary of Holdings and take no action (including, without
limitation, the licensing of Intellectual Property), or fail to take an action,
as the case may be, in connection with such Intellectual Property rights which
could reasonably be expected to result in a material adverse effect on the
performance, business, assets, nature of assets, liabilities, properties,
59
operations, condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole. The Borrower will, and Holdings will cause each
of its other Subsidiaries to, diligently prosecute all pending applications
filed in connection with seeking or seeking to perfect the Intellectual Property
rights and take all other reasonable actions necessary for the protection and
maintenance of the Intellectual Property rights necessary or appropriate to the
business of Holdings or any Subsidiary of Holdings at all times from and after
the Restatement Effective Date other than any such actions the failure of which,
in the aggregate, could not reasonably be expected to have a material adverse
effect on the performance, business, assets, nature of assets, liabilities,
operations, properties, condition (financial or otherwise) or prospects of
Holdings and its Subsidiaries taken as a whole.
7.15 Permitted Acquisitions. (a) Subject to the remaining provisions
of this Section 7.15 applicable thereto and the requirements contained in the
definition of Permitted Acquisition, the Borrower and its Subsidiaries may from
time to time on or after the Restatement Effective Date effect Permitted
Acquisitions, so long as with respect to each Permitted Acquisition:
(i) the Borrower demonstrates that no Default or Event of Default
is in existence at the time of the consummation of such Permitted
Acquisition or would exist after giving effect thereto and all
representations and warranties contained herein and in the other
Credit Documents shall be true and correct in all material respects
with the same effect as though such representations and warranties
were made on and as of the date of such Permitted Acquisition (both
before and after giving effect thereto);
(ii) the Borrower shall have given the Agents and the Banks at
least fifteen (15) days prior written notice of any such Permitted
Acquisition (each such notice, a "Permitted Acquisition Notice"),
which notice shall (s) contain the estimated date such Permitted
Acquisition is scheduled to be consummated, (t) attach a true and
correct copy of the draft purchase agreement, letter of intent,
description of material terms or similar agreement executed by the
Borrower and the seller in connection with such Permitted Acquisition,
(u) contain the estimated aggregate purchase price of such Permitted
Acquisition and the amount of related costs and expenses and the
intended method of financing thereof, (v) contain the estimated amount
of Loans required to effect such Permitted Acquisition and any amounts
to be withdrawn from the Permitted Acquisition Cash Collateral
Account, with respect thereto, (w) contain a description of the
Permitted Seller Notes, Holdings Common Stock or Seller Preferred
Stock to be issued by Holdings in connection with such Permitted
Acquisition, and (x) disclose the number of Subscribers to be Acquired
and the number of households in the acquired franchise area and the
purchase price per Subscriber to be Acquired and per household in the
acquired franchise area; provided, however, that if the estimated
aggregate purchase price of such Permitted Acquisition is less than
$3,000,000, such notice need not contain the documents described in
clause (t) above unless the Agents request such information; provided
further, however, in the event that after delivery of the
documentation described in clause (t) above any material economic
terms of the Permitted Acquisition shall be amended in any material
way, then promptly after such amendment the Borrower shall provide the
Agents and the Banks written notice of such changes;
(iii) the Borrower shall have given the Banks such other
information related to the Person or business, division or product
line being acquired and the Permitted Acquisition as the Agents shall
reasonably request;
(iv) (I) as soon as available but not later than the date of the
consummation of such Permitted Acquisition, a copy of the executed
purchase agreement and all related agreements, schedules and exhibits
with respect to such Permitted Acquisition and (II) at the time of
60
delivery of the purchase agreement, a certification from the Borrower
as to the purchase price for the acquisition and the estimated amount
of all related costs, fees and expenses and that, except as described,
there are no other amounts which will be payable in connection with
the respective Permitted Acquisition;
(v) the Agents shall be satisfied in their reasonable discretion
that the proposed Permitted Acquisition will not reasonably likely
result in materially increased liabilities (contingent or otherwise)
of Holdings or any of its Subsidiaries other than Permitted Seller
Notes (including, without limitation, tax, ERISA or environmental
liabilities); provided that, so long as the Permitted Acquisition
Notice has been given as required above and so long as the Borrower
has furnished each Agent with all information with respect to
liabilities of the type described in this clause, if any Agent has not
notified the Borrower on or prior to the tenth day prior to the
consummation of the Permitted Acquisition that such Agent has not yet
been satisfied that the proposed Permitted Acquisition would not be
reasonably likely to result in materially increased liabilities of the
Borrower or any of its Subsidiaries, such Agent shall be deemed for
purposes of this clause (v) to be so satisfied;
(vi) recalculations are made by the Borrower of compliance with
the covenants contained in Sections 8.08 through 8.17, inclusive, for
the fiscal quarter most recently ended prior to the date of the
Permitted Acquisition (the "Calculation Period") annualized and on a
Pro Forma Basis, and such recalculations shall show that all such
covenants would have been complied with throughout the Calculation
Period on a Pro Forma Basis;
(vii) the Borrower in good faith believes that on a Pro Forma
Basis, the financial covenants contained in Sections 8.08 through
8.17, inclusive, will continue to be met following the date of the
consummation of the respective Permitted Acquisition and for the
remaining term of the Loans; provided, however, the Agents may, in
their reasonable discretion, request the Borrower to provide
calculations made by the Borrower with respect to compliance with such
covenants;
(viii) the consent of ▇▇▇▇▇▇ and the NRTC to such Permitted
Acquisition shall have been obtained; and
(ix) prior to the consummation of the respective Permitted
Acquisition, the Borrower shall furnish the Agents and the Banks an
officer's certificate executed by the Chief Financial Officer of the
Borrower, certifying as to compliance with the requirements of
preceding clauses (i) through (viii), inclusive, and containing the
calculations, if any, required by preceding clauses (v) through (vii),
inclusive. The consummation of each Permitted Acquisition shall be
deemed to be a representation and warranty by the Borrower that all
conditions thereto have been satisfied and that same is permitted in
accordance with the terms of this Agreement, which representation and
warranty shall be deemed to be a representation and warranty for all
purposes hereunder, including, without limitation, Sections 5 and 9;
provided that the consummation of each Permitted Acquisition shall not
be deemed to be a representation and warranty by the Borrower as to
the acceptability of any items to the Agents and/or the Banks or as to
whether the Agents and/or the Banks are satisfied with any of the
matters described in such sections.
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(b) At the time of each Permitted Acquisition involving the creation
or acquisition of a Subsidiary, not less than 100% of the capital stock of such
Subsidiary shall be directly owned by the Borrower or a Subsidiary Guarantor and
such 100% owned by the Borrower or such Subsidiary Guarantor shall be pledged
for the benefit of the Secured Creditors pursuant to the applicable Pledge
Agreement or pursuant to a similar agreement satisfactory to the Agents.
(c) The Borrower shall cause each Subsidiary which is formed to
effect, or is acquired pursuant to, a Permitted Acquisition to execute and
deliver, prior to or on the date of the respective Permitted Acquisition, the
Subsidiaries Guaranty (or by an amendment thereto pursuant to which it shall be
a party thereto) or a substantially similar guaranty, in either case with the
documentation to be in form and substance satisfactory to the Agents.
(d) The Borrower shall on the date of a Permitted Acquisition, in the
case of Permitted Acquisitions involving the acquisition of assets by the
Borrower, or, in the case of an acquisition by the respective Subsidiary, shall
cause the respective Subsidiary to, grant to the Collateral Agent, for the
benefit of the Secured Creditors, first priority perfected security interests in
all property of the Borrower or such Subsidiaries acquired in connection with
the Permitted Acquisition and to take, or cause such Subsidiary to take, all
actions requested by the Agents or the Required Banks (including, without
limitation, the obtaining of UCC-11's and the filing of UCC-1's) in connection
with the granting of such security interests. All security interests required to
be granted pursuant to this Section 7.15(d) shall be granted pursuant to such
security documentation (which shall be substantially similar to the analogous
Security Documents already executed and satisfactory in form and substance to
the Agents) and shall (except as otherwise consented to by the Agents and the
Required Banks) constitute valid and enforceable perfected security interests
prior to the rights of all third Persons and subject to no other Liens except
such Liens as are permitted by Section 8.01. The security documents and other
instruments related thereto shall be duly recorded or filed in such manner and
in such places as are required by law to establish, perfect, preserve and
protect the Liens, in favor of the Collateral Agent for the benefit of the
Secured Creditors, required to be granted pursuant to the respective Additional
Security Documents and all taxes, fees and other charges payable in connection
therewith shall be paid in full by the Borrower. At the time of the execution
and delivery of Additional Security Documents, the Borrower shall cause to be
delivered to the Collateral Agent such opinions of counsel, environmental
appraisals and other related documents as may be reasonably requested by the
Collateral Agent or the Required Banks to assure themselves that this Section
has been complied with. All actions required to be taken by this Section 7.15(d)
with respect to the Additional Collateral shall be completed no later than the
date on which the Permitted Acquisition is effected unless otherwise consented
to by the Agents.
7.16 Registry. The Borrower hereby designates the Administrative Agent
to serve as its agent, solely for purposes of this Section 7.16, to maintain a
register (the "Register") on which it will record the Commitments from time to
time of each of the Banks, the Loans made by each of the Banks and each
repayment in respect of the principal amount of the Loans of each Bank. Failure
to make any such recordation, or any error in such recordation shall not affect
the Borrower's obligations in respect of such Loans. With respect to any Bank,
the transfer of the Commitments of such Bank and the rights to the principal of,
and interest on, any Loan made pursuant to such Commitments shall not be
effective until such transfer is recorded on the Register maintained by the
Administrative Agent with respect to ownership of such Commitments and Loans and
62
prior to such recordation all amounts owing to the transferor with respect to
such Commitments and Loans shall remain owing to the transferor. The
registration of an assignment or transfer of all or part of any Commitments and
Loans shall be recorded by the Administrative Agent on the Register only upon
the acceptance by the Administrative Agent of a properly executed and delivered
assignment and assumption agreement pursuant to Section 12.04(b). Coincident
with the delivery of such an assignment and assumption agreement to the
Administrative Agent for acceptance and registration of assignment or transfer
of all or part of a Loan, or as soon thereafter as practicable, the assigning or
transferor Bank shall surrender the Note evidencing such Loan, and thereupon one
or more new Notes in the same aggregate principal amount shall be issued to the
assigning or transferor Bank and/or the new Bank. The Borrower agrees to
indemnify the Administrative Agent from and against any and all losses, claims,
damages and liabilities of whatsoever nature which may be imposed on, asserted
against or incurred by the Administrative Agent in performing its duties under
this Section 7.16.
7.17 Additional Security; Further Assurances. (a) Each Credit Party
shall grant to the Collateral Agent, for the benefit of the Secured Creditors,
at the request of the Agents or the Required Banks, at any time, a security
interest in any Real Property or vehicles owned by any such Credit Party and any
other assets of such Credit Party and not already subject to a Security Document
and shall take all actions requested by the Agents or the Required Banks
(including, without limitation, the obtaining of mortgage policies, title
surveys and real estate appraisals satisfying the requirements of all applicable
laws) in connection with the granting of such security interest.
(b) The security interests required to be granted pursuant to clause
(a) above shall be granted pursuant to mortgages, deeds of trust and security
agreements, in each case satisfactory in form and substance to the Agents and
the Required Banks, which mortgages and security agreements shall create valid
and enforceable perfected security interests prior to the rights of all third
Persons and subject to no other Liens except such Liens as are permitted by
Section 8.01. The mortgages and other instruments related thereto and security
agreements shall be duly recorded or filed in such manner and in such places and
at such times as are required by law to establish, perfect, preserve and protect
the Liens, in favor of the Collateral Agent for the benefit of the Secured
Creditors, required to be granted pursuant to such documents and all taxes, fees
and other charges payable in connection therewith shall be paid in full by the
Borrower. At the time of the execution and delivery of the additional documents,
the Borrower shall cause to be delivered to the Collateral Agent such opinions
of counsel, mortgage policies, title surveys, real estate appraisals,
certificates of title and other related documents as may be reasonably requested
by the Agents or the Required Banks to assure themselves that this Section 7.17
has been complied with.
(c) Each Credit Party agrees that each action required by Section
7.17(a), or (b) shall be completed within sixty (60) days of the date such
action is requested to be taken.
7.18 Senior Seller Notes. The Borrower hereby covenants that, upon
maturity of the Senior Seller Notes described in the definition thereof, the
Collateral Agent shall automatically be granted, for the benefit of the Secured
Creditors, and without the requirement of any action on its part, (i) a first
63
priority perfected security interest in all of the collateral securing such
Senior Secured Notes and (ii) a pledge of the Borrower's capital stock, if any,
in the franchises securing such Senior Seller Notes.
Section 8. Negative Covenants. Each of Holdings and the Borrower
hereby covenants that on and after the Restatement Effective Date and until the
Total Commitment and all Letters of Credit have terminated and the Loans and
Notes and all Unpaid Drawings, together with interest, Fees and all other
Obligations incurred hereunder and thereunder, are paid in full:
8.01 Liens. Holdings will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets (real or personal, tangible or intangible) of
Holdings or any of its Subsidiaries, whether now owned or hereafter acquired, or
sell any such property or assets subject to an understanding or agreement,
contingent or otherwise, to repurchase such property or assets (including sales
of accounts receivable with recourse to Holdings or any of its Subsidiaries), or
assign any right to receive income or permit the filing of any financing
statement under the UCC or any other similar notice of Lien under any similar
recording or notice statute; provided that the provisions of this Section 8.01
shall not prevent Holdings or any of its Subsidiaries from creating, incurring,
assuming or permitting the existence of the following (liens described below are
herein referred to as "Permitted Liens"):
(i) inchoate Liens with respect to Holdings or any of its
Subsidiaries for taxes not yet due or Liens for taxes being contested
in good faith and by appropriate proceedings for which adequate
reserves have been established in accordance with generally accepted
accounting principles;
(ii) unperfected Liens in respect of property or assets of the
Borrower or any of its Subsidiaries imposed by law, which were
incurred in the ordinary course of business and do not secure
Indebtedness for borrowed money, such as carriers', warehousemen's,
materialmen's, mechanics' and landlords' liens and other similar Liens
arising in the ordinary course of business, and (x) which do not in
the aggregate materially detract from the value of the Borrower's or
any of its Subsidiaries' property or assets or materially impair the
use thereof in the operation of the business of the Borrower or its
Subsidiaries or (y) which are being contested in good faith by
appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property or assets subject to
any such Lien;
(iii) Liens of the Borrower or its Subsidiaries in existence on
the Restatement Effective Date which are listed, and the property
subject thereto described, on Schedule XIII, but only to the
respective date, if any, set forth in such Schedule XIII for the
removal and termination of any such Liens;
(iv) Liens created pursuant to the Security Documents;
(v) easements, rights-of-way, restrictions, encroachments and
other similar charges or encumbrances on the property of the Borrower
64
or any of its Subsidiaries arising in the ordinary course of business
and not materially interfering with the conduct of the business of the
Borrower or any of its Subsidiaries;
(vi) Liens on property of the Borrower and its Subsidiaries
subject to, and securing only, Capitalized Lease Obligations to the
extent such Capitalized Lease Obligations are permitted by Section
8.04(iii); provided that such Liens only serve to secure the payment
of Indebtedness arising under such Capitalized Lease Obligation and
the Lien encumbering the asset giving rise to the Capitalized Lease
Obligation does not encumber any other asset of the Borrower or any of
its Subsidiaries;
(vii) Liens (other than any Lien imposed by ERISA) on property of
the Borrower or any of its Subsidiaries incurred or deposits made in
the ordinary course of business in connection with (x) workers'
compensation, unemployment insurance and other types of social
security or (y) 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); provided that the aggregate amount of cash and the
fair market value of the property encumbered by Liens described in
this clause (vii)(y) shall not exceed $500,000;
(viii) Liens placed upon equipment or machinery used in the
ordinary course of the business of the Borrower or any of its
Subsidiaries within sixty (60) days following the time of purchase
thereof by the Borrower or any of its Subsidiaries and improvements
and accretions thereto to secure Indebtedness incurred to pay all or a
portion of the purchase price thereof or any Indebtedness incurred to
refinance such Indebtedness, provided that (x) the aggregate principal
amount of all Indebtedness secured by Liens permitted by this clause
(viii) does not exceed at any one time outstanding, when aggregated
with the amount of Indebtedness permitted pursuant to Section
8.04(iii), $2,000,000 and (y) in all events, the Lien encumbering the
equipment or machinery so acquired and improvements and accretions
thereto does not encumber any other asset of the Borrower or any of
its Subsidiaries;
(ix) Liens arising from precautionary UCC-1 financing statement
filings regarding operating leases entered into by the Borrower or any
of its Subsidiaries in the ordinary course of business;
(x) inchoate Liens (where there has been no execution or levy and
no pledge or delivery of collateral) arising from and out of judgments
or decrees in existence at such time not constituting an Event of
Default; and
(xi) Liens for the benefit of the holders of the Acceptable
Subordinated Debt on the Cash Interest Reserves so long as the amount
of such Cash Interest Reserves and the terms and conditions of the
escrow arrangements and security interests with respect thereto are
satisfactory to the Agents.
65
8.02 Consolidation, Merger, Purchase or Sale of Assets, etc. Holdings
will not, and will not permit any of its Subsidiaries to, wind up, liquidate or
dissolve its affairs or enter into any transaction of merger or consolidation,
or convey, sell, lease or otherwise dispose of (or agree to do any of the
foregoing at any future time) all or any part of its property or assets, or
enter into any partnerships, joint ventures or sale-leaseback transactions, or
purchase or otherwise acquire in one or a series of related transactions (or
agree to do any of the foregoing at any future time) any part of the property or
assets (other than purchases or other acquisitions by Holdings or any of its
Subsidiaries of inventory, materials and equipment in the ordinary course of
business) of any Person, except that:
(i) Capital Expenditures by the Borrower and its Subsidiaries
shall be permitted to the extent not in violation of Section 8.07;
(ii) each of the Borrower and its Subsidiaries may lease (as
lessee) real or personal property in the ordinary course of business
(so long as such lease does not create Capitalized Lease Obligations);
(iii) investments may be made to the extent permitted by Section
8.05;
(iv) the Transaction shall be permitted as contemplated by the
Documents;
(v) the Borrower may effect Permitted Acquisitions in accordance
with the requirements of Section 7.15 and may enter into agreements to
effect Permitted Acquisitions so long as at no time shall the Borrower
have outstanding an aggregate amount of nonrefundable deposits with
respect thereto in excess of the remainder of $2,000,000 over the
aggregate amount of nonrefundable deposits previously forfeited;
(vi) the Borrower may sell assets so long as the aggregate amount
of Net Sales Proceeds received from such sales does not exceed
$500,000 in the aggregate for all such asset sales in any fiscal year;
and
(vii) the Borrower and its Subsidiaries may sell, lease or rent
subscriber broadcast equipment to subscribers in the ordinary course
of business and consistent with past practice.
To the extent the Required Banks waive the provisions of this Section 8.02 with
respect to the sale of any Collateral (to the extent the Required Banks are
permitted to waive such provisions in accordance with Section 12.12), or any
Collateral is sold as permitted by this Section 8.02, such Collateral shall be
sold free and clear of the Liens created by the Security Documents, and the
Administrative Agent and Collateral Agent shall be authorized to take any
actions deemed appropriate in order to effect the foregoing.
8.03 Dividends. Holdings will not, nor will Holdings permit any of its
Subsidiaries to, declare or pay any Dividends with respect to Holdings or any of
its Subsidiaries except that (i) any Subsidiary of Holdings may pay Dividends to
Holdings or any Wholly-Owned Subsidiary of Holdings, (ii) Holdings may pay
Dividends to its stockholders in an aggregate amount not to exceed $500,000 for
the purpose of repurchasing stock held by such stockholders, (iii) proceeds from
the Weary Key-Man Insurance may be applied to purchase all of Holdings Capital
Stock owned by ▇▇. ▇▇▇▇▇ at the time of his death so long as such proceeds are
66
permitted to be used for such repurchase in accordance with Section 3.02(A)(g)
and are not required to be applied in accordance with Section 3.02(B), (iv)
Holdings may pay Dividends (x) to its employees in the form of options
convertible into Holdings Common Stock, (y) in the form of Seller Preferred
Stock payable in connection with a Permitted Acquisition and (z) so long as
there exists no Default or Event of Default, in the form of cash payable to any
Person holding a minority interest (in the form of stock, partnership interest,
membership interest or otherwise) in any Subsidiary of Holdings on or prior to
the Restatement Effective Date for the purpose of purchasing such minority
interest, and (v) holders of warrants shall be permitted to effect the cashless
exercise thereof.
8.04 Indebtedness. Holdings will not, and will not permit any of its
Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the
other Credit Documents;
(ii) Indebtedness of the Borrower under any Interest Rate
Protection or Other Hedging Agreement or under any similar type of
agreement to the extent such is entered into to satisfy the
requirements of Section 7.11;
(iii) Indebtedness evidenced by Capitalized Lease Obligations to
the extent permitted pursuant to Section 8.07; provided that the
aggregate amount of Indebtedness evidenced by Capitalized Lease
Obligations under all Capital Leases outstanding under this clause
(iii) at any one time, when aggregated with the amount of Indebtedness
permitted pursuant to Section 8.04(v), shall not exceed $2,000,000;
(iv) Existing Indebtedness of the Borrower listed on Schedule XI
but without giving effect to any refinancings, renewals or increases
in the principal amount thereof;
(v) Indebtedness in amounts, and subject to Liens, permitted
under Section 8.01(viii);
(vi) Indebtedness of the Borrower evidenced by Permitted Seller
Notes;
(vii) Acceptable Subordinated Debt, provided that both before and
immediately after giving effect to the issuance thereof (with all
covenants being tested at the time of the issuance but using EBITDA
financial information relating to the fiscal quarter or four fiscal
quarters most recently ended prior to the date of issuance), there
shall exist no Default or Event of Default; and
(viii) Guarantees of the Acceptable Subordinated Debt by Holdings
and the Subsidiary Guarantors on a subordinated basis, provided that
the terms of such subordination and all other terms and conditions of
such guaranty shall be in form and substance satisfactory to the
Agents, including, without limitation, that such guaranty with respect
to Holdings or a particular Subsidiary of the Borrower shall be
released at any time that Holdings' guaranty under this Agreement or
the Subsidiaries Guaranty is released with respect to any such
Subsidiary, as the case may be.
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8.05 Advances, Investments and Loans. Holdings will not, and will not
permit any of its Subsidiaries to, directly or indirectly lend money or credit
or make advances to any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital contribution to,
any other Person, or purchase or own a futures contract or otherwise become
liable for the purchase or sale of currency or other commodities at a future
date in the nature of a futures contract, or hold any cash or Cash Equivalents,
except that the following shall be permitted:
(i) Cash Interest Reserves;
(ii) the Borrower and its Subsidiaries may acquire and hold
receivables owing to any of them, if created or acquired in the
ordinary course of business and payable or dischargeable in accordance
with customary terms;
(iii) the Borrower and its Subsidiaries may acquire and hold cash
and Cash Equivalents, provided that during any time that Revolving
Loans are outstanding, the aggregate amount of cash and Cash
Equivalents permitted to be held by the Borrower and its Subsidiaries
shall not exceed $5,000,000 for any period of five (5) consecutive
Business Days, provided further, that amounts on deposit in the Letter
of Credit Cash Collateral Account and the Permitted Acquisitions Cash
Collateral Account shall not be included in calculating such limit;
(iv) the Borrower may enter into interest rate protection
agreements to the extent such is entered into to satisfy the
requirements of Section 7.11;
(v) the Borrower and its Subsidiaries may make Capital
Expenditures to the extent permitted by Section 8.07;
(vi) the Borrower may effect Permitted Acquisitions to the extent
permitted by Section 7.15 and may enter into agreements to effect
Permitted Acquisitions so long as at no time shall the Borrower have
outstanding an aggregate amount of non-refundable deposits in excess
of the remainder of $2,000,000 over the aggregate amount of
non-refundable deposits previously forfeited;
(vii) the Borrower and its Subsidiaries may endorse negotiable
instruments for collection in the ordinary course of business;
(viii) other than Permitted Acquisitions, the Borrower may enter
into joint venture transactions relating directly to the DirecTV
business; provided that the total value of all capital or asset
contributions made by the Borrower in connection therewith shall not
exceed an aggregate amount equal to $1,000,000; and
(ix) the Borrower and its Subsidiaries may make loans and
advances in the ordinary course of business consistent with past
practices to their respective employees for moving, travel and
emergency expenses and other similar expenses, so long as the
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aggregate principal amount thereof at any one time outstanding
(determined without regard to any write-downs or write-offs of such
loans and advances) shall not exceed $500,000.
8.06 Transactions with Affiliates. Holdings will not, and will not
permit any of its Subsidiaries to, enter into any transaction or series of
related transactions, whether or not in the ordinary course of business, with
any Affiliate of Holdings or any Affiliate of any Subsidiary of Holdings, other
than transactions by the Borrower or any of its Subsidiaries with any such
Affiliates in the ordinary course of business unless such transaction or series
of related transactions is in writing and on terms that are no less favorable to
the Borrower or such Subsidiary, as the case may be, than those that would be
available in a comparable transaction in arm's-length dealings with an unrelated
third party; except that (i) the Borrower and its Subsidiaries may effect the
Transaction, (ii) loans and advances made in accordance with Section 8.05(ix)
shall be permitted and (iii) the Borrower and Holdings may pay customary fees to
non-officer directors of the Borrower. In no event may any management or similar
fees be paid or payable by Holdings or any of its Subsidiaries to any Person.
8.07 Capital Expenditures. (a) Holdings will not, and will not permit
any of its Subsidiaries to, make any expenditure for fixed or capital assets
(including, without limitation, expenditures for maintenance and repairs which
should be capitalized in accordance with generally accepted accounting
principles and including Capitalized Lease Obligations but excluding capitalized
Subscriber Acquisition Costs (collectively, "Capital Expenditures"), except that
the Borrower and its Subsidiaries may make Capital Expenditures (other than in
connection with Permitted Acquisitions) so long as the aggregate amount thereof
does not exceed during any fiscal year of the Borrower (i) $2,000,000 or (ii)
$3,000,000 in the event that the Borrower has issued Acceptable Subordinated
Debt.
(b) In addition to the Capital Expenditures permitted above, the
Borrower and its Subsidiaries may make Permitted Acquisitions in accordance with
Section 7.15 in an amount not to exceed the amounts permitted thereby.
(c) In addition to the Capital Expenditures permitted above, the
Borrower and its Subsidiaries may make Capital Expenditures in connection with
the MDU Business so long as the expenditures therefor do not exceed the amounts
permitted pursuant to Section 8.21.
8.08 Net Adjusted Consolidated Indebtedness to Qualified Paying
Subscriber Ratio. Holdings will cause the Borrower not to permit, and the
Borrower will not permit, the ratio of (x) Net Adjusted Consolidated
Indebtedness at the end of any fiscal quarter to (y) the number of Qualified
Paying Subscribers on the last day of such fiscal quarter to exceed the amount
set forth opposite such date set forth below:
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Fiscal Quarter
Ended Amount
-------------- ------
June 30, 1998 $1,200
September 30, 1998 $1,200
December 31, 1998 $1,200
March 31, 1999 $1,100
June 30, 1999 $1,000
September 30, 1999 $1,000
December 31, 1999 $1,000
March 31, 2000 $900
June 30, 2000 $900
September 30, 2000 $900
December 31, 2000 $900
March 31, 2001 $800
June 30, 2001 $800
September 30, 2001 $800
December 31, 2001 $800
March 31, 2002 and $700
thereafter
8.09 Adjusted Consolidated Senior Indebtedness to Qualified Paying
Subscriber Ratio. Holdings will cause the Borrower not to permit, and the
Borrower will not permit, the ratio of (x) Adjusted Consolidated Senior
Indebtedness at the end of any fiscal quarter to (y) the number of Qualified
Paying Subscribers on the last day of such fiscal quarter to exceed the amount
set forth opposite such date set forth below:
Fiscal Quarter
Ended Amount
-------------- ------
June 30, 1998 $1,000
September 30, 1998 $1,000
December 31, 1998 $1,000
March 31, 1999 $900
June 30, 1999 $800
September 30, 1999 $800
December 31, 1999 $800
March 31, 2000 $700
June 30, 2000 $700
September 30, 2000 $700
December 31, 2000 $700
March 31, 2001 $600
June 30, 2001 $600
September 30, 2001 $600
December 31, 2001 $600
March 31, 2002 and $500
thereafter
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8.10 Net Subscriber Acquisition Cost. Holdings will cause the Borrower
not to permit, and the Borrower will not permit, the Net Subscriber Acquisition
Cost for any fiscal quarter ending after March 31, 1998 to exceed an amount
equal to (a) $300 or (b) $400 in the event that the Borrower has issued
Acceptable Subordinated Debt. Notwithstanding the foregoing, the Borrower shall
not be required to comply with this Section 8.10 for any fiscal quarter ended on
and after June 30, 2000 so long as the ratio of (i) Net Adjusted Consolidated
Indebtedness as at the end of such fiscal quarter to (ii) Annualized
Consolidated EBITDA for such quarter and for the immediately preceding quarter
is less than 7.0:1.0.
8.11 Fixed Charge Coverage Ratio. Holdings will cause the Borrower not
to permit, and the Borrower will not permit, the Fixed Charge Coverage Ratio for
any period of four consecutive fiscal quarters ending on or after June 30, 2000,
in each case, taken as one accounting period, to be equal to or less than 1.05
to 1.0.
8.12 Annualized Adjusted Consolidated Interest Coverage Ratio.
Holdings will cause the Borrower not to permit, and the Borrower will not
permit, the ratio of Annualized Adjusted Consolidated EBITDA to Annualized
Adjusted Consolidated Interest Expense for any fiscal quarter ending on a date
set forth below to be less than the ratio set forth opposite such date:
Fiscal Quarter
Ended Ratio
September 30, 1998 1.00x
December 31, 1998 1.25x
March 31, 1999 1.50x
June 30, 1999 1.50x
September 30, 1999 1.50x
December 31, 1999 1.75x
March 31, 2000 2.00x
8.13 Consolidated Interest Coverage Ratio. Holdings will cause the
Borrower not to permit, and the Borrower will not permit, the ratio of
Consolidated EBITDA to Consolidated Interest Expense for any period of four
consecutive fiscal quarters, in each case taken as one accounting period, ending
on a date set forth below to be less than the ratio set forth opposite such
date:
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Fiscal Quarter
Ended Ratio
June 30, 2000 1.50x
September 30, 2000 1.50x
December 31, 2000 1.50x
March 31, 2001 1.50x
June 30, 2001 1.50x
September 30, 2001 1.50x
December 31, 2001 1.50x
March 31, 2002 1.75x
June 30, 2002 1.75x
September 30, 2002 2.00x
December 31, 2002 2.00x
March 31, 2003 2.25x
June 30, 2003 2.25x
September 30, 2003 2.50x
December 31, 2003 2.50x
March 31, 2004 and thereafter 3.00x
8.14 Net Adjusted Consolidated Indebtedness to Pro Forma Annualized
Adjusted Consolidated EBITDA. Holdings will cause the Borrower not to permit,
and the Borrower will not permit, the ratio of Net Adjusted Consolidated
Indebtedness as at the end of any fiscal quarter ended on a date set forth below
to Pro Forma Annualized Adjusted Consolidated EBITDA for such fiscal quarter to
be greater than (i) in the event that the Borrower has not issued Acceptable
Subordinated Debt, the ratio set forth opposite such date below:
Fiscal Quarter
Ended Ratio
September 30, 1998 10.00x
December 31, 1998 8.50x
March 31, 1999 7.50x
June 30, 1999 7.00x
September 30, 1999 6.50x
December 31, 1999 6.00x
March 31, 2000 5.50x
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or (ii) in the event that the Borrower has issued Acceptable Subordinated Debt,
the ratio set forth opposite such date below:
Fiscal Quarter
Ended Ratio
September 30, 1998 12.00x
December 31, 1998 11.00x
March 31, 1999 10.00x
June 30, 1999 9.00x
September 30, 1999 8.00x
December 31, 1999 8.00x
March 31, 2000 7.00x
8.15 Adjusted Consolidated Senior Indebtedness to Pro Forma
Annualized Adjusted Consolidated EBITDA. Holdings will cause the Borrower not to
permit, and the Borrower will not permit, the ratio of Adjusted Consolidated
Senior Indebtedness as at the end of any fiscal quarter ended on a date set
forth below to Pro Forma Annualized Adjusted Consolidated EBITDA for such fiscal
quarter to be greater than (i) in the event that the Borrower has not issued
Acceptable Subordinated Debt, the ratio set forth opposite such date below:
Fiscal Quarter
Ended Ratio
September 30, 1998 10.00x
December 31, 1998 8.50x
March 31, 1999 7.50x
June 30, 1999 7.00x
September 30, 1999 6.50x
December 31, 1999 6.00x
March 31, 2000 5.50x
or (ii) in the event that the Borrower has issued Acceptable Subordinated Debt,
the ratio set forth opposite such date below:
Fiscal Quarter
Ended Ratio
September 30, 1998 6.50x
December 31, 1998 6.50x
March 31, 1999 5.50x
June 30, 1999 5.25x
September 30, 1999 4.75x
December 31, 1999 4.75x
March 31, 2000 4.75x
8.16 Net Adjusted Consolidated Indebtedness to Pro Forma Annualized
Consolidated EBITDA. Holdings will cause the Borrower not to permit, and the
Borrower will not permit, the ratio of Net Adjusted Consolidated Indebtedness as
at the end of any fiscal quarter ended on a date set forth below to Pro Forma
Annualized Consolidated EBITDA for such fiscal quarter to be greater than (i) in
the event that the Borrower has not issued Acceptable Subordinated Debt, the
ratio set forth opposite such date below:
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Fiscal Quarter
Ended Ratio
June 30, 2000 6.50x
September 30, 2000 6.50x
December 31, 2000 6.50x
March 31, 2001 5.00x
June 30, 2001 5.00x
September 30, 2001 5.00x
December 31, 2001 5.00x
March 31, 2002 3.00x
June 30, 2002 3.00x
September 30, 2002 3.00x
December 31, 2002 3.00x
March 31, 2003 and thereafter 2.00x
or (ii) in the event that the Borrower has issued Acceptable Subordinated Debt,
the ratio set forth opposite such date below:
Fiscal Quarter
Ended Ratio
June 30, 2000 8.00x
September 30, 2000 8.00x
December 31, 2000 8.00x
March 31, 2001 7.00x
June 30, 2001 7.00x
September 30, 2001 7.00x
December 31, 2001 7.00x
March 31, 2002 5.50x
June 30, 2002 5.50x
September 30, 2002 5.50x
December 31, 2002 5.50x
March 31, 2003 4.50x
June 30, 2003 4.50x
September 30, 2003 4.50x
December 31, 2003 4.50x
March 31, 2004 and thereafter 4.00x
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8.17 Adjusted Consolidated Senior Indebtedness to Pro Forma
Annualized Consolidated EBITDA. Holdings will cause the Borrower not to permit,
and the Borrower will not permit, the ratio of Adjusted Consolidated Senior
Indebtedness as at the end of any fiscal quarter ended on a date set forth below
to Pro Forma Annualized Consolidated EBITDA for such fiscal quarter to be
greater than (i) in the event that the Borrower has not issued Acceptable
Subordinated Debt, the ratio set forth opposite such date below:
Fiscal Quarter
Ended Ratio
June 30, 2000 6.50x
September 30, 2000 6.50x
December 31, 2000 6.50x
March 31, 2001 5.00x
June 30, 2001 5.00x
September 30, 2001 5.00x
December 31, 2001 5.00x
March 31, 2002 3.00x
June 30, 2002 3.00x
September 30, 2002 3.00x
December 31, 2002 3.00x
March 31, 2003 and thereafter 2.00x
or (ii) in the event that the Borrower has issued Acceptable Subordinated Debt,
the ratio set forth opposite such date below:
Fiscal Quarter
Ended Ratio
June 30, 2000 5.00x
September 30, 2000 5.00x
December 31, 2000 5.00x
March 31, 2001 4.00x
June 30, 2001 4.00x
September 30, 2001 4.00x
December 31, 2001 4.00x
March 31, 2002 3.00x
June 30, 2002 3.00x
September 30, 2002 3.00x
December 31, 2002 3.00x
March 31, 2003 and thereafter 2.00x
8.18 Limitation on Voluntary Payments and Modification of Existing
Indebtedness; Limitation on Modifications of Certificate of Incorporation,
By-Laws and Certain Other Agreements; etc. Holdings will not, and will not
permit any of its Subsidiaries to:
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(i) make (or give any notice in respect of) any voluntary or optional
payment or prepayment on or redemption (including pursuant to any change of
control provision) or acquisition for value of (including, without
limitation, by way of depositing with the trustee with respect thereto
money or securities before due for the purpose of paying when due), any
Existing Indebtedness, any Indebtedness incurred pursuant to Section
8.04(vii) or Permitted Seller Notes (other than the Rocky Mountain Note);
(ii) amend or modify, or permit the amendment or modification of, any
provision of the Existing Indebtedness, the Permitted Seller Notes,
Indebtedness incurred pursuant to Section 8.04(vii) or the Documents or of
any agreement relating to any of the foregoing except for such amendments
or modifications of the Existing Indebtedness or of the Documents entered
into in connection with Permitted Acquisitions which, in the aggregate or
individually, could not reasonably be likely to be adverse to any Bank in
its capacity as such;
(iii) materially amend, modify or change its Certificate of
Incorporation (including, without limitation, by the filing or modification
of any certificate of designation) or By-Laws, in a manner adverse to the
Banks;
(iv) amend, modify or change, terminate, or enter into any new
Shareholders' Agreement or any other agreement with respect to its equity
interests, except for such amendments, modifications or changes which, in
the aggregate or individually could not reasonably be likely to be adverse
to any Bank in its capacity as such;
(v) amend, modify or change, terminate or enter into any new Tax
Sharing Agreement;
(vi) amend, modify or change the NRTC Agreements in any manner that is
deemed to be material by the Agents in their sole discretion; or
(vii) amend, modify or change, or enter into any new Management
Agreement, Employee Benefit Plan, Employment Agreement or Material Contract
(other than the NRTC Agreements and other than Material Contracts which
constitute one of the agreements or documents referred to in preceding
clauses (i) through (vi) of this Section 8.18) except if the aggregate cost
to Holdings and its Subsidiaries as a result of such amendments,
modifications, changes to such plans, agreements and contracts and new
plans, agreements and contracts are not reasonably likely to have a
material adverse effect on the performance, business, property, assets,
nature of assets, liabilities, condition (financial or otherwise) or
prospects of Holdings and its Subsidiaries taken as a whole.
8.19 Limitation on Certain Restrictions on Subsidiaries. Holdings will
not, and will not permit any of its Subsidiaries to, directly or indirectly,
create or otherwise cause or suffer to exist or become effective any encumbrance
or restriction on the ability of any Subsidiary of Holdings to (i) pay dividends
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or make any other distributions on its capital stock or any other interest or
participation in its profits owned by Holdings or any Subsidiary of Holdings, or
pay any Indebtedness owed to Holdings or a Subsidiary of Holdings, (ii) make
loans or advances to Holdings or any Subsidiaries of Holdings or (iii) transfer
any of its properties or assets to Holdings or the Borrower, except for such
encumbrances or restrictions existing under or by reason of (x) applicable law,
(y) this Agreement and the other Credit Documents and (z) customary provisions
restricting subletting or assignments of any lease governing a leasehold
interest of the Borrower or a Subsidiary of the Borrower.
8.20 Limitation on Issuance of Capital Stock. (a) Holdings will not
permit any of its Subsidiaries to issue any capital stock or other equity
interests (including, without limitation, partnership interests) (including by
way of sales of treasury stock) or any options or warrants to purchase, or
securities convertible into, capital stock, except (i) for transfers and
replacements of then outstanding shares, (ii) for stock splits, stock dividends
and similar issuances which do not decrease the percentage ownership of any
person in any class of the capital stock of the Borrower or such Subsidiary, and
(iii) upon the formation of any new Subsidiaries as permitted by Section 8.22.
Any stock issued as permitted by this Section 8.20, if owned by Holdings or any
of its Subsidiaries, shall be immediately pledged as Collateral and delivered
pursuant to the applicable Pledge Agreement.
(b) Holdings will not issue any capital stock or any options or
warrants to purchase, or securities convertible into, capital stock, except for
issuances of Holdings Capital Stock, options or warrants exercisable into
Holdings Common Stock where, after giving effect to such issuance, the proceeds
therefrom, if any, are applied in accordance with Section 3.02(A)(d) (or, in the
case of Seller Preferred Stock, issued as consideration to the sellers in a
Permitted Acquisition) and no Default or Event of Default will exist under
Section 9.10 (or, in the case of issuance of options, warrants, or convertible
securities, no Default or Event of Default would exist under Section 9.10 if
such options, warrants or convertible securities were to be exercised or
converted), provided that the terms and conditions of any preferred stock issued
in accordance with the foregoing shall be satisfactory to the Agents.
8.21 Business. Holdings, will not engage in any business and will hold
no assets other than common stock of the Borrower and Holdings, will not permit
any of its Subsidiaries, to engage (directly or indirectly) in any business
other than a Permitted Business and the MDU Business so long as, with respect to
engaging in the MDU Business, (i) the aggregate amount spent by the Borrower and
its Subsidiaries in connection with the MDU Business (whether capital
expenditures, operating expenses, Subscriber Acquisition Costs, call center
costs or any other amounts of any type and collectively referred to as "MDU
Investments") shall not exceed during the period commencing on the Restatement
Effective Date and ending on the date on which there shall be no remaining
Obligations or Commitments under this Agreement, (x) $5,000,000 or (y) if the
Acceptable Subordinated Debt has been issued, $10,000,000, without, in either
case, giving effect to any write-offs or write-downs with respect thereto and
(ii) at the time thereof and after giving effect thereto, there is no Default or
Event of Default.
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8.22 Limitation on Creation of Subsidiaries. Holdings will not, and
will not permit any of its Subsidiaries to, establish, create or acquire any new
Subsidiary, except that the Borrower may acquire or form a Subsidiary in
connection with Permitted Acquisitions to the extent otherwise permitted by this
Agreement, so long as (w) such new Subsidiary is a Wholly-Owned Subsidiary, (x)
such new Subsidiary executes and delivers a Subsidiaries Guaranty, (y) such new
Subsidiary executes and delivers counterparts to the applicable Pledge Agreement
and (z) such new Subsidiary executes and is made party to the applicable
Security Documents.
Section 9. Events of Default. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
9.01 Payments. Holdings or the Borrower shall (i) default in the
payment when due of any principal of any Loan or any Note or Unpaid Drawing or
(ii) default, and such default shall continue unremedied for five (5) or more
days, in the payment when due of any interest on any Loan or Note or Unpaid
Drawing, or any Fees or any other amounts owing by it hereunder, thereunder or
under any interest rate protection agreements entered into by Holdings or the
Borrower pursuant to Section 7.11 hereof; or
9.02 Representations, etc. Any representation, warranty or statement
made by any Credit Party herein or in any other Credit Document or in any
certificate delivered pursuant hereto or thereto shall prove to be untrue in any
material respect on the date as of which made or deemed made; or
9.03 Covenants. Any Credit Party shall (i) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 7.01(g)(i), 7.08, 7.11, 7.13, 7.15, 7.17, 7.18 or 8 or (ii) default in
the due performance or observance by it of any other term, covenant or agreement
contained in any Credit Document and such default shall continue unremedied for
a period of fifteen (15) days after written notice to the Borrower by the
Administrative Agent or any Bank; or
9.04 Default Under Other Agreements. Holdings or any of its
Subsidiaries shall (i) default in any payment of any Indebtedness (other than
the Indebtedness referred to in Section 9.01) beyond the period of grace (not to
exceed ten (10) days), if any, provided in the instrument or agreement under
which such Indebtedness was created, (ii) default in the observance or
performance of any agreement or condition relating to any Indebtedness (other
than the Indebtedness referred to in Section 9.01) or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or holders) to
cause (determined without regard to whether any notice is required), such
Indebtedness to become due prior to its stated maturity and such default shall
not have been cured or waived, or (iii) any Indebtedness (other than the
Indebtedness referred to in Section 9.01) of Holdings or any of its Subsidiaries
shall be declared to be due and payable, or required to be prepaid other than by
78
a regularly scheduled required prepayment, prior to the stated maturity thereof;
provided that it shall not constitute an Event of Default pursuant to this
Section 9.04 unless the aggregate amount of all Indebtedness referred to in the
preceding clauses (i) through (iii), inclusive, above exceeds $1,000,000 at any
one time; or
9.05 Bankruptcy, etc. Holdings or any of its Subsidiaries shall
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy," as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced against
Holdings or any of its Subsidiaries and the petition is not controverted within
ten (10) days, or is not dismissed or discharged, within sixty (60) days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
Holdings or any of its Subsidiaries, or Holdings or any of its Subsidiaries
commences any other proceeding under any reorganization, arrangement, adjustment
of debt, relief of debtors, dissolution, insolvency or liquidation or similar
law of any jurisdiction whether now or hereafter in effect relating to Holdings
or any of its Subsidiaries, or there is commenced against Holdings or any of its
Subsidiaries any such proceeding which remains undismissed or undischarged for a
period of sixty (60) days, or Holdings or any of its Subsidiaries is adjudicated
insolvent or bankrupt; or any order of relief or other order approving any such
case or proceeding is entered; or Holdings or any of its Subsidiaries suffers
any appointment of any custodian or the like for it or any substantial part of
its property to continue undischarged or unstayed for a period of sixty (60)
days; or Holdings or any of its Subsidiaries makes a general assignment for the
benefit of creditors; or any corporate action is taken by Holdings or any of its
Subsidiaries for the purpose of effecting any of the foregoing; or
9.06 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof under Section 412 of the
Code or Section 302 of ERISA or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66,
.67 or .68 of PBGC Regulation 4043 shall be reasonably expected to occur with
respect to such Plan within the following thirty (30) days, any Plan which is
subject to Title IV of ERISA shall have had or is likely to have a trustee
appointed to administer such Plan, any Plan which is subject to Title IV of
ERISA is, shall have been or is likely to be terminated or to be the subject of
termination proceedings under ERISA, any Plan shall have an Unfunded Current
Liability, a contribution required to be made with respect to a Plan has not
been timely made, Holdings or any Subsidiary of Holdings or any ERISA Affiliate
has incurred or is likely to incur any liability to or on account of a Plan
under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or
4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the Code or on account of a
group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2)
of the Code) under Section 4980B of the Code, or Holdings or any Subsidiary of
79
Holdings has incurred or is likely to incur liabilities pursuant to one or more
employee welfare benefit plans (as defined in Section 3(1) of ERISA) that
provide benefits to retired employees or other former employees (other than as
required by Section 601 of ERISA) or Plans; (b) there shall result from any such
event or events the imposition of a lien, the granting of a security interest,
or a liability or a material risk of incurring a liability; and (c) such lien,
security interest or liability, individually, and/or in the aggregate, in the
opinion of the Required Banks, has had, or could reasonably be expected to have,
a material adverse effect upon the business, operations, condition (financial or
otherwise) or prospects of Holdings or any Subsidiary of Holdings; or
9.07 Security Documents. At any time after the execution and delivery
thereof, any of the Security Documents shall cease to be in full force and
effect or shall cease to give the Collateral Agent for the benefit of the
Secured Creditors the Liens, rights, powers and privileges purported to be
created thereby (including, without limitation, a perfected security interest
in, and Lien on, all of the Collateral), in favor of the Collateral Agent,
superior to and prior to the rights of all third Persons (except as permitted by
Section 6.11), and subject to no other Liens (except as permitted by Section
6.11), or any Credit Party shall default in the due performance or observance of
any term, covenant or agreement on its part to be performed or observed pursuant
to any of the Security Documents and such default shall continue beyond any
grace period specifically applicable thereto pursuant to the terms of such
Security Document; or
9.08 Guaranties. At any time after the execution and delivery thereof,
any Guaranty or any provision thereof shall cease to be in full force or effect
as to any Guarantor, or any Guarantor or any Person acting by or on behalf of
any Guarantor shall deny or disaffirm such Guarantor's obligations under the
respective Guaranty, or any Guarantor shall default in the due performance or
observance of any term, covenant or agreement on its part to be performed or
observed pursuant to the respective Guaranty and such default shall continue
beyond any grace period specifically applicable thereto; or
9.09 Judgments. One or more judgments or decrees shall be entered
against Holdings or any of its Subsidiaries involving in the aggregate for
Holdings and its Subsidiaries a liability (not paid or fully covered by a
reputable insurance company) of $1,000,000 or more and all such judgments or
decrees shall not be satisfied, vacated, discharged or stayed or bonded pending
appeal for any period of thirty (30) consecutive days; or
9.10 Change in Control. There shall be a Change in Control; or
9.11 DBS Agreement; NRTC Agreements; FCC Licenses. The DBS Agreement
or one or more of the NRTC Agreements shall have been terminated, expired or be
the subject of any dispute that, in each case, could reasonably be expected to
have a material adverse effect on Holdings or any of its Subsidiaries' right or
ability to engage in the Permitted Business or could otherwise be reasonably
expected to have a material adverse effect on the performance, business, assets,
80
nature of assets, liabilities, operations, properties, condition (financial or
otherwise) or prospects of Holdings and its Subsidiaries taken as a whole or any
FCC Licenses (whether issued to ▇▇▇▇▇▇, DirecTV, the NRTC or the Borrower or any
of its Subsidiaries) shall have terminated or expired or shall have been revoked
or canceled, which termination, expiry, revocation or cancellation could
reasonably be expected to have a material adverse effect on Holdings' or any of
its Subsidiaries' right or ability to engage in the Permitted Business or could
otherwise be reasonably expected to have a material adverse effect on the
performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole; then, and in any such event, and at any time
thereafter, if any Event of Default shall then be continuing, the Administrative
Agent, upon the written request of the Required Banks, shall by written notice
to the Borrower, take any or all of the following actions, without prejudice to
the rights of the Agents, any Bank or the holder of any Note to enforce its
claims against any Credit Party (provided that, if an Event of Default specified
in Section 9.05 shall occur with respect to the Borrower, the result which would
occur upon the giving of written notice by the Administrative Agent to the
Borrower as specified in clauses (i) and (ii) below shall occur automatically
without the giving of any such notice): (i) declare the Total Commitment
terminated, whereupon all Commitments of each Bank shall forthwith terminate
immediately and any Fees shall forthwith become due and payable without any
other notice of any kind; (ii) declare the principal of and any accrued interest
in respect of all Loans and the Notes and all Obligations owing hereunder and
thereunder to be, whereupon the same shall become, forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by each Credit Party; (iii) exercise any rights or remedies
under any of the Guaranties; (iv) terminate any Letter of Credit which may be
terminated in accordance with its terms; (v) direct the Borrower to pay (and the
Borrower agrees that upon receipt of such notice, or upon the occurrence of an
Event of Default specified in Section 9.05, it will pay) to the Collateral Agent
at the Payment Office such additional amount of cash, to be held as security by
the Collateral Agent for the benefit of the Banks in a cash collateral account
established and maintained by the Collateral Agent pursuant to a cash collateral
agreement in form and substance satisfactory to the Collateral Agent, as is
equal to the aggregate Stated Amount of all Letters of Credit then outstanding;
and (vi) enforce, as Collateral Agent, all of the Liens and security interests
created pursuant to the Security Documents.
Section 10. Definitions and Accounting Terms.
10.01 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Acceptable Subordinated Debt" shall mean subordinated debt issued by
the Borrower on one date with respect to which the Borrower has received gross
proceeds in an amount not less than $125,000,000 and net proceeds (after
deduction for transaction costs and an interest reserve satisfactory to the
Agents and the Required Banks to cover at least two (2) years' interest on such
81
Acceptable Subordinated Debt) of at least $100,000,000 on or prior to December
31, 1998, on terms and conditions (including, without limitation, interest
rates, redemption provisions, maturity date, subordination provisions, covenants
and events of default) acceptable to, and in form and substance satisfactory to,
the Agents.
"Acceptable Subordinated Debt Documents" shall mean the indenture or
similar document pursuant to which the Acceptable Subordinated Debt is issued
and all related documents, including, without limitation, the preliminary
offering memorandum, the final offering memorandum, the purchase agreement or
underwriting agreement with respect thereto, the registration rights agreement,
the escrow agreement for the Cash Interest Reserve and all related documents,
all of which shall be in form and substance satisfactory to the Agents.
"Additional Collateral" shall mean all property (whether real or
personal) in which security interests are granted (or purported to be granted)
(and continue to be in effect at the time of determination) pursuant to Section
7.15 or 7.17.
"Additional Security Documents" shall mean all mortgages, pledge
agreements, security agreements and other security documents entered into
pursuant to Section 7.15 or 7.17 with respect to Additional Collateral.
"Adjusted Consolidated EBITDA" shall mean for any period the amount of
Consolidated EBITDA for such period plus Subscriber Acquisition Costs during
such period.
"Adjusted Consolidated Indebtedness" shall mean, as of any date, the
remainder of Consolidated Indebtedness minus the sum of (i) the amount, if any,
by which (x) the aggregate amount of NRTC Letter of Credit Outstandings related
to NRTC Letters of Credit exceeds (y) the aggregate amount owed as at such date
by the Borrower and its Subsidiaries to the NRTC under the NRTC Agreements and
(ii) the aggregate amount of Indebtedness of Holdings or any of its Subsidiaries
supported by any Letter of Credit.
"Adjusted Consolidated Interest Expense" for any period shall mean the
remainder of Consolidated Interest Expense for such period minus the amount of
interest paid on the Acceptable Subordinated Debt from Cash Interest Reserves
during such period.
"Adjusted Consolidated Senior Indebtedness" shall mean, as of any
date, the remainder of (i) Adjusted Consolidated Indebtedness minus (ii) the
remainder of (x) the aggregate outstanding principal amount of the Acceptable
Subordinated Debt over (y) the amount of Cash Interest Reserves.
"Administrative Agent" shall mean Fleet in its capacity as
Administrative Agent for the Banks hereunder, and shall include any successor to
the Administrative Agent appointed pursuant to Section 11.09.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including, but not limited, to all directors
82
and officers of such Person), controlled by, or under direct or indirect common
control with, such Person; provided, however, that for purposes of Section 8.06,
an Affiliate of Holdings shall include any Person that directly or indirectly
(including through limited partner or general partner interests) owns more than
5% of any class of the capital stock of Holdings and for all purposes of this
Agreement, neither the Agents, the Collateral Agent, any Bank or any of their
respective Affiliates, shall be considered an Affiliate of Holdings or any of
its Subsidiaries. A Person shall be deemed to control another Person if such
Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such other Person, whether through
the ownership of voting securities, by contract or otherwise.
"Affiliate Contracts" shall have the meaning provided in Section
4.05(viii).
"Agents" shall mean each of the Administrative Agent and the
Syndication Agent.
"Agreement" shall mean this Amended and Restated Credit Agreement, as
modified, supplemented, amended, amended and restated, extended or renewed from
time to time.
"Annualized Adjusted Consolidated EBITDA" for any fiscal quarter shall
mean (i) Consolidated EBITDA for such fiscal quarter plus Non-Capitalized
Subscriber Acquisition Costs for such fiscal quarter times four; less (ii)
Consolidated EBITDA for such fiscal quarter plus the Non-Capitalized Subscriber
Acquisition Costs for such fiscal quarter, in each case, related to the MDU
Business times four.
"Annualized Adjusted Consolidated Interest Expense" shall mean for any
fiscal quarter the product of (i) Adjusted Consolidated Interest Expense for
such fiscal quarter and (ii) four.
"Annualized Consolidated EBITDA" shall mean for any fiscal quarter the
product of (i) Consolidated EBITDA for such fiscal quarter and (ii) four.
"Applicable Base Rate Margin" shall mean a percentage per annum equal
to (i) in the case of Revolving Loans, 2.25% and (ii) in the case of Term Loans,
2.50%, in each case less the then applicable Leverage Reduction Discount, if
any.
"Applicable Eurodollar Rate Margin" shall mean a percentage per annum
equal to (i) in the case of Revolving Loans, 3.50% and (ii) in the case of Term
Loans, 3.75%, in each case less the then applicable Leverage Reduction Discount,
if any.
"Applicable Margin" shall mean the Applicable Base Rate Margin or the
Applicable Eurodollar Rate Margin, as the case may be.
"BancBoston" shall mean BancBoston Capital, acting through BancBoston
Ventures, Inc.
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"Bank" shall mean each financial institution listed on Schedule I, as
well as any institution which becomes a "Bank" hereunder pursuant to Section
12.04.
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any Borrowing or to fund
its portion of any unreimbursed payment under Section 1A.04(c) or (ii) a Bank
having notified in writing to the Borrower and/or the Administrative Agent that
it does not intend to comply with its obligations under Section 1.01, including
in either case as a result of any takeover of such Bank by any regulatory
authority or agency.
"Bankruptcy Code" shall have the meaning provided in Section 9.05.
"Banque Paribas" shall mean Banque Paribas, a French banking
organization acting through its New York branch.
"Base Rate" shall mean the higher of (i) 1/2 of 1% in excess of the
Federal Funds Rate and (ii) the Prime Lending Rate.
"Base Rate Loan" shall mean any Loan designated or deemed designated
as such by the Borrower at the time of the incurrence thereof or conversion
thereto.
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrower Common Stock" shall have the meaning provided in Section
6.14.
"Borrower/Subsidiary Pledge Agreement" shall mean the
Borrower/Subsidiary Pledge Agreement, dated as of July 7, 1997, between the
Borrower and the Collateral Agent, as amended, modified or supplemented from
time to time, including, without limitation, as supplemented by the Security
Documents Acknowledgment.
"Borrowing" shall mean the borrowing of one Type of Loan of a single
Tranche from all the Banks having Commitments with respect to such Tranche on a
pro rata basis on a given date (or resulting from a conversion or conversions on
such date) having in the case of Eurodollar Loans the same Interest Period;
provided that Base Rate Loans incurred pursuant to Section 1.10(b) shall be
considered part of the related Borrowing of Eurodollar Loans.
"Borrowing Base" shall mean, as at any date on which the amount
thereof is being determined, an amount equal to the remainder of (I) the product
of (x) the sum of (i) Qualified Paying Subscribers and (ii) to the extent the
Borrowing Base is being determined in connection with a Loan being made to
finance a Permitted Acquisition, Subscribers to be Acquired in connection with
such acquisition and (y) $1,200 until and including December 31, 1998, and
$1,100 thereafter minus (II) $15,000,000 in the case of Borrowings of Loans
incurred to finance Permitted Acquisitions, each as determined from the
Borrowing Base Certificate most recently delivered pursuant to Section 5.06.
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"Borrowing Base Certificate" shall have the meaning provided in
Section 5.06.
"Borrowing Base Deficiency" shall mean, at any time, the amount, if
any, by which (A) the sum of (x) the aggregate principal amount of outstanding
Revolving Loans and Term Loans at such time, (y) the aggregate amount of Letter
of Credit Outstandings at such time, and (z) the aggregate outstanding amount of
all other Net Adjusted Consolidated Indebtedness at such time exceeds (B) the
Borrowing Base at such time.
"▇▇▇▇ ▇▇▇▇" shall mean Burr, Egan, Deleage & Co., acting through Alta
Subordinated Debt Partners III, L.P., Alta Communications VI, L.P. and Alta Comm
S By S, LLC.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day except Saturday, Sunday and any day which shall be
in New York City or the State of Massachusetts a legal holiday or a day on which
banking institutions are authorized or required by law or other government
action to close and (ii) with respect to all notices and determinations in
connection with, and payments of principal and interest on, Eurodollar Loans,
any day which is a Business Day described in clause (i) above and which is also
a day for trading by and between banks in the New York interbank Eurodollar
market.
"Calculation Period" shall have the meaning provided in Section
7.15(a)(vi).
"Capital Expenditures" shall have the meaning provided in Section
8.07.
"Capital Lease," as applied to any Person, shall mean any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with generally accepted accounting principles, is accounted for as a
capital lease on the balance sheet of that Person.
"Capitalized Lease Obligations" of any Person shall mean all rental
obligations under Capital Leases, in each case taken at the amount thereof
accounted for as Indebtedness in accordance with generally accepted accounting
principles.
"Cash Equivalents" shall mean, as to any Person, (i) securities issued
or directly and fully guaranteed or insured by the United States or any agency
or instrumentality thereof (provided that the full faith and credit of the
United States is pledged in support thereof) having maturities of not more than
six months from the date of acquisition, (ii) time deposits and certificates of
deposit of any commercial bank organized under the laws of the United States,
any State thereof or the District of Columbia having, or which is the principal
banking subsidiary of a bank holding company organized under the laws of the
United States, any State thereof, or the District of Columbia having, capital,
surplus and undivided profits aggregating in excess of $200,000,000 and having a
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long-term unsecured debt rating of at least "A-" or the equivalent thereof from
Standard & Poor's Ratings Services ("S&P") or "A3" or the equivalent thereof
from ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's"), with maturities of not more
than six months from the date of acquisition by such Person, (iii) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (ii) above, (iv) commercial paper issued by
any Person incorporated in the United States rated at least A-1 or the
equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody's
and in each case maturing not more than six months after the date of acquisition
by such Person, and (v) investments in money market funds substantially all of
whose assets are comprised of securities of the types described in clauses (i)
through (iv), inclusive, above.
"Cash Interest Reserve" shall mean cash proceeds from Acceptable
Subordinated Debt deposited by the Borrower into an escrow account with an
escrow agent, and pursuant to terms and conditions, acceptable to the Agents, to
be used solely to make interest payments on the Acceptable Subordinated Debt for
the number of interest payments required by the Acceptable Subordinated Debt
Documents.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. ss. 9601 et seq.
"Change in Control" means the occurrence of one or more of the
following: (i) the Investor Group and their Affiliates shall cease to have the
power to elect a majority of the Board of Directors of Holdings, (ii) the
Investor Group and their Affiliates shall cease to have record and beneficial
ownership of at least 66 2/3% of (a) the voting stock of Holdings and (b) 66
2/3% of all capital stock of Holdings (in each case assuming conversion and
exercise of all options, warrants and similar securities held by Persons other
than the Investor Group and their Affiliates) or (iii) Holdings ceases to own
100% of the Borrower Common Stock.
"Claims" shall have the meaning provided in the definition of
"Environmental Claims."
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement, and to any subsequent provision of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all property (whether real or personal) with
respect to which any security interests have been granted (or purport to be
granted) pursuant to any Security Document, including, without limitation, all
Pledge Agreement Collateral, all Security Agreement Collateral, all Additional
Collateral and all cash and Cash Equivalents delivered as collateral pursuant to
this Agreement or any other Credit Document.
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"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Secured Creditors pursuant to the Security Documents.
"Collateral Assignment of Marketing and Distribution Agreements" shall
mean the Collateral Assignment of Marketing and Distribution Agreements, dated
as of July 7, 1997, between the Borrower and the Collateral Agent as
acknowledged and agreed to by the NRTC and ▇▇▇▇▇▇ as amended, modified or
supplemented from time to time, including, without limitation, as supplemented
by the Security Documents Acknowledgment.
"Collective Bargaining Agreements" shall have the meaning provided in
Section 4.05(v).
"Commitment" shall mean, with respect to each Bank, such Bank's Term
Loan Commitment and Revolving Loan Commitment, if any.
"Commitment Commission" shall have the meaning provided in Section
2.01(a).
"Consolidated EBIT" shall mean, for any period, the Consolidated Net
Income before interest income, Consolidated Interest Expense and provision for
taxes and without giving effect to any extraordinary gains or gains or losses
from sales of assets.
"Consolidated EBITDA" for any period shall mean Consolidated EBIT,
adjusted by adding thereto the amount of all amortization of intangibles and
depreciation that were deducted in arriving at Consolidated Net Income for such
period.
"Consolidated Indebtedness" shall mean, at any time, all Indebtedness
of Holdings and its Subsidiaries determined on a consolidated basis excluding
all Indebtedness of the type described in clause (vii) of the definition
thereof, except to the extent amounts are owing with respect thereto upon the
termination of the respective agreement constituting such Indebtedness, plus any
original issue discount attributable to such Indebtedness that would be payable
at such time if such Indebtedness were to be or become due and payable.
"Consolidated Interest Expense" shall mean, for any period, the total
consolidated interest expense of Holdings and its Subsidiaries for such period
(calculated without regard to any limitations on the payment thereof) payable
during such period in respect of all Indebtedness of Holdings and its
Subsidiaries, on a consolidated basis, for such period (including, without
duplication, that portion of Capitalized Lease Obligations of Holdings and its
Subsidiaries representing the interest factor for such period).
"Consolidated Net Income" shall mean, for any period, the net income
of Holdings and its Subsidiaries for such period determined on a consolidated
basis (after provision for taxes); provided, however, the net income of any
Person, which is not a Subsidiary of Holdings but whose income is included in
the consolidated financial results of Holdings in accordance with GAAP, shall
have its net income included in the consolidated Net Income of Holdings and its
Subsidiaries only to the extent of the net income which Holdings would report in
accordance with GAAP.
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"Contingent Obligation" shall mean, as to any Person, any obligation
of such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (iv) otherwise to assure or hold harmless the holder
of such primary obligation against loss in respect thereof; provided, however,
that the term Contingent Obligation should not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"Continuing Bank" shall mean each Existing Bank with a Commitment
under this Agreement (immediately upon giving effect to this Agreement on the
Restatement Effective Date).
"Contributed Equity" shall mean, at any time, the aggregate amount of
capital contributions to, and purchases of Holdings Capital Stock from, Holdings
which as of the date hereof is an amount equal to $87,488,000.
"Convertible Preferred Stock" shall mean Holdings Series A Convertible
Preferred Stock and Holdings Series B Convertible Preferred Stock.
"Credit Documents" shall mean, collectively, this Agreement and, once
executed and delivered pursuant to the terms of this Agreement (or previously
executed in connection with the Existing Credit Agreement), each Note, each
Notice of Borrowing, each Notice of Conversion, each Letter of Credit, each
Letter of Credit Request, the Subsidiaries Guaranty, each Security Document and
any letter agreements or other documents executed or delivered in connection
with any of the above, as the same may be modified, amended, extended, restated
or supplemented from time to time, except as released prior to or in accordance
with the execution of this Agreement.
"Credit Event" shall mean the making of any Loan or the issuance of
any Letter of Credit.
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"Credit Party" shall mean Holdings, the Borrower and each of its
Subsidiaries party to a Subsidiaries Guaranty.
"DBS Agreement" shall mean the DBS Agreement between NRTC and ▇▇▇▇▇▇.
"Debt Agreements" shall have the meaning provided in Section 4.05(vi).
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a Bank
Default is then in effect.
"DirecTV" shall mean the direct broadcast satellite and programming
service available from DirecTV, a California corporation.
"DirecTV Market" shall mean any exclusive marketing rights from the
NRTC to the Borrower or any of its Subsidiaries to distribute satellite
television services provided by DirecTV.
"Dividend" with respect to any Person shall mean that such Person has
declared or paid a dividend or returned any equity capital to its stockholders
(including, without limitation, its preferred stockholders) or authorized or
made any other distribution, payment or delivery of property (other than common
stock of such Person) or cash to its stockholders in their capacity as
stockholders, or redeemed, retired, purchased or otherwise acquired, directly or
indirectly, for a consideration any shares of any class of its capital stock
outstanding on or after the Restatement Effective Date (or any options or
warrants issued by such Person with respect to its capital stock), or set aside
any funds for any of the foregoing purposes, or shall have permitted any of its
Subsidiaries to purchase or otherwise acquire for a consideration any shares of
any class of the capital stock of such Person outstanding on or after the
Restatement Effective Date (or any options or warrants issued by such Person
with respect to its capital stock). Without limiting the foregoing, "Dividends"
with respect to any Person shall also include all cash payments made or required
to be made by such Person with respect to any stock appreciation rights, equity
incentive plans or any similar plans or setting aside of any funds for the
foregoing purposes.
"Documentation Agent" shall mean GECC in its capacity as Documentation
Agent for the Banks hereunder.
"Documents" shall mean the Credit Documents, the Acceptable
Subordinated Debt Documents, if any, and the material documents entered into in
connection with any Permitted Acquisition.
"Dollars" and the sign "$" shall each mean freely transferable lawful
money of the United States.
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"Drawing" shall have the meaning provided in Section 1A.05(b).
"Eligible Transferee" shall mean and include a commercial bank,
financial institution, other "accredited investor" (as defined in Regulation D
of the Securities Act) other than individuals, or a "qualified institutional
buyer" as defined in Rule 144A of the Securities Act.
"Employee Benefit Plans" shall have the meaning provided in Section
4.05(i).
"Employment Agreements" shall have the meaning provided in Section
4.05)(iv).
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigations or proceedings relating in
any way to any violation of, or liability under, any Environmental Law or any
permit issued, or any approval given, under any such Environmental Law
(hereafter, "Claims"), including, without limitation, (a) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (b) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials arising from alleged injury
or threat of injury to health, safety or the environment.
"Environmental Law" shall mean any Federal, state, foreign or local
statute, law, rule, regulation, ordinance, code, policy and rule of common law
now or hereafter in effect (including, without limitation, the EPA guidance on
asbestos abatement and removal) and in each case as amended, and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, relating to the environment, health, safety
or Hazardous Materials, including, without limitation, CERCLA; RCRA; the Federal
Water Pollution Control Act, as amended, 33 U.S.C. ss. 1251 et seq.; the Toxic
Substances Control Act, 15 U.S.C. ss. 7401 et seq.; the Clean Air Act, 42 U.S.C.
ss. 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. ss. 3803 et seq.; the
Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 et seq.; the Occupational Safety
and Health Act, 29 U.S.C. ss. 651 et seq.; and any applicable state and local or
foreign counterparts or equivalents.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at the
date of this Agreement, and to any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with the Borrower or a Subsidiary of the Borrower would
90
be deemed to be a "single employer" (i) within the meaning of Section 414(b),
(c), (m) or (o) of the Code or (ii) as a result of the Borrower or a Subsidiary
of the Borrower being or having been a general partner of such person.
"Eurodollar Loan" shall mean each Loan designated as such by a
Borrower at the time of the incurrence thereof or conversion thereto.
"Event of Default" shall have the meaning provided in Section 9.
"Excess Cash Flow" shall mean, for any period, the remainder of (i)
the sum of (a) Consolidated EBITDA for such period, (b) the amount of all
extraordinary cash gains realized by Holdings and its Subsidiaries during such
period, and (c) the amount of all interest income realized by Holdings and its
Subsidiaries during such period, minus (ii) the sum of (a) the amount of all
cash payments for any taxes made by Holdings and its Subsidiaries during such
period, (b) the amount of cash Capital Expenditures (to the extent not financed
by Indebtedness but not in excess of the amounts permitted pursuant to Section
8.07) made by Holdings and its Subsidiaries on a consolidated basis during such
period, (c) the amount of all extraordinary cash losses realized by Holdings and
its Subsidiaries during such period, (d) the amount of all interest and fee
payments (including any letter of credit fees and facing fees) relating to the
Indebtedness of Holdings and its Subsidiaries paid during such period, (e) the
amount of permanent principal payments of Indebtedness for borrowed money of
Holdings and its Subsidiaries (other than repayments of Loans); provided that
repayments of Loans shall be deducted in determining Excess Cash Flow if such
repayments were applied to Scheduled Repayments or repayments of Revolving Loans
arising as a result of prepayment with internally generated funds (but in the
case of a voluntary prepayment of Revolving Loans, only to the extent
accompanied by a voluntary reduction to the Total Revolving Loan Commitment)
during such period, and (f) the amount of cash expended in respect of Permitted
Acquisitions and the MDU Business during such period (to the extent not financed
with Indebtedness).
"Excess Cash Flow Payment Date" shall mean the date occurring 120 days
after the last day of each fiscal year of Holdings (beginning with its fiscal
year ended in 2000).
"Excess Cash Flow Payment Period" shall mean with respect to the
repayment required on each Excess Cash Flow Payment Date, the immediately
preceding fiscal year of Holdings.
"Excess Cash Flow Recapture Percentage" shall mean a percentage equal
to 75% or 50% in the event that at the time of a mandatory repayment in
accordance with Section 3.02(A)(e) there exists no Default or Event of Default
and the ratio of Consolidated Indebtedness as of the last day of the applicable
Excess Cash Flow Payment Period to Consolidated EBITDA for the four fiscal
quarters ending on the last day of the applicable Excess Cash Flow Payment
Period is equal to or less than 4.0x.
"Existing Bank" shall mean a Bank with a Commitment pursuant to the
Existing Credit Agreement.
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"Existing Credit Agreement" shall have the meaning provided in the
first WHEREAS clause hereof.
"Existing Indebtedness" shall have the meaning provided in Section
6.22.
"Existing Letter of Credit" shall have the meaning provided in Section
1A.01(b).
"Existing Loans" shall mean the Existing Term Loans and Existing
Revolving Loans.
"Existing Revolving Loans" shall mean the Revolving Loans incurred by
the Borrower pursuant to the Existing Credit Agreement.
"Existing Term Loans" shall mean the Term Loans incurred by the
Borrower pursuant to the Existing Credit Agreement.
"Facing Fee" shall have the meaning provided in Section 2.01(b).
"FCC Licenses" shall mean licenses necessary for DirecTV transmission
and distribution, if any.
"Federal Funds Rate" shall mean for any period, a fluctuating interest
rate equal for each day during such period to the weighted average of the rates
on overnight Federal Funds transactions with members of the Federal Reserve
System arranged by Federal Funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or referred to in
Section 2.01.
"Fixed Charge Coverage Ratio" for any period shall mean the ratio of
(x) Consolidated EBITDA less the amount of all cash Capital Expenditures of the
Borrower or any of its Subsidiaries for such period (exclusive of Permitted
Acquisitions and MDU Investments) to (y) Fixed Charges for such period.
"Fixed Charges" for any period shall mean the sum of (i) Consolidated
Interest Expense for such period, plus (ii) the aggregate principal amount of
all scheduled repayments of Indebtedness (including the principal portion of
rentals under Capitalized Lease Obligations and including principal payments
92
with respect to the Senior Seller Notes), plus (iii) taxes paid by Holdings and
its Subsidiaries for such period (including taxes paid during such period by the
Person or business, division or product line acquired by the Borrower or any of
its Subsidiaries pursuant to a Permitted Acquisition during such period but
excluding any taxes paid by such acquired Person or business, division or
product line prior to the date of its acquisition by the Borrower or any of its
Subsidiaries), and minus (iv) interest paid on Acceptable Subordinated Debt with
the Cash Interest Reserves.
"Fleet" shall mean Fleet National Bank, a national banking
association.
"GECC" shall mean General Electric Capital Corporation, a company
organized under the laws of the State of New York.
"Guaranties" shall mean and include the guaranty issued by Holdings
pursuant to Section 13 and each of the Subsidiary Guaranties executed by the
Subsidiaries of the Borrower.
"Guarantor" shall mean Holdings and each Subsidiary of the Borrower.
"HarbourVest" shall mean ▇▇▇▇▇▇▇ Venture Partners V-Direct Fund L.P.
"Hazardous Materials" means (a) petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that contain,
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
(b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous waste," "hazardous materials,"
"extremely hazardous waste," "restricted hazardous waste," "toxic substances,"
"toxic pollutants," "contaminants," or "pollutants," or words of similar meaning
and regulatory effect, under any applicable Environmental Law; and (c) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated under applicable Environmental Laws.
"Holdings" shall have the meaning provided in the first paragraph of
this Agreement.
"Holdings Capital Stock" shall mean Holdings Common Stock, Convertible
Preferred Stock, Redeemable Preferred Stock and Holdings Undesignated Preferred
Stock.
"Holdings Common Stock" shall have the meaning provided in Section
6.14.
"Holdings Pledge Agreement" shall have the meaning provided in Section
4.09.
"Holdings Series A Convertible Preferred Stock" shall have the meaning
provided in Section 6.14.
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"Holdings Series A Redeemable Preferred Stock" shall have the meaning
provided in Section 6.14.
"Holdings Series B Convertible Preferred Stock" shall have the meaning
provided in Section 6.14.
"Holdings Series B Redeemable Preferred Stock" shall have the meaning
provided in Section 6.14.
"Holdings Undesignated Preferred Stock" shall have the meaning
provided in Section 6.14.
"▇▇▇▇▇▇" shall mean ▇▇▇▇▇▇ Communications Galaxy, Inc.
"Indebtedness" shall mean, as to any Person, without duplication, (i)
all indebtedness (including principal, interest, fees and charges) of such
Person for borrowed money or for the deferred purchase price of property or
services other than trade payables and accrued expenses arising in the ordinary
course of business, (ii) the maximum amount available to be drawn under all
letters of credit issued for the account of such Person and all unpaid drawings
in respect of such letters of credit, (iii) all Indebtedness of the types
described in clause (i), (ii), (iv), (v), (vi) or (vii) of this definition
secured by any Lien on any property owned by such Person, whether or not such
Indebtedness has been assumed by such Person, (iv) all Capitalized Lease
Obligations of such Person, (v) all obligations of such Person to pay a
specified purchase price for goods or services, whether or not delivered or
accepted, i.e., take-or-pay and similar obligations, (vi) all Contingent
Obligations of such Person, and (vii) all obligations under any Interest Rate
Protection or Other Hedging Agreement or under any similar type of agreement
entered into with a Person not a Bank.
"Indemnified Matters" shall have the meaning provided in Section
12.01.
"Indemnitees" shall have the meaning provided in Section 12.01.
"Intellectual Property" shall have the meaning provided in Section
6.21.
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section 1.09.
"Interest Rate Protection or Other Hedging Agreements" shall have the
meaning provided in the Security Documents.
"Investor Group" shall mean ▇▇▇▇ ▇▇▇▇, Spectrum, BancBoston, Norwest
and HarbourVest.
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"Issuing Bank" shall mean Fleet and any Bank which at the request of
the Borrower agrees, in such Bank's sole discretion, to become an Issuing Bank
for the purpose of issuing Letters of Credit pursuant to Section 1A.
"L/C Supportable Indebtedness" shall mean (i) obligations of the
Borrower or any of its Subsidiaries incurred in the ordinary course of business
with respect to workers compensation, surety bonds and other similar statutory
obligations, (ii) the NRTC L/C Obligation, (iii) Permitted Seller Notes and (iv)
such other obligations of the Borrower or any of its Subsidiaries as are
reasonably acceptable to the Issuing Bank and otherwise permitted to exist
pursuant to the terms of this Agreement.
"Leaseholds" of any Person means all the right, title and interest of
such Person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section
1A.01(a).
"Letter of Credit Cash Collateral Account" shall have the meaning
provided in Section 3.02(A)(a).
"Letter of Credit Fee" shall have the meaning provided in Section
2.01(c).
"Letter of Credit Outstandings" shall mean, at any time, the sum of
(i) the aggregate Stated Amount of all outstanding Letters of Credit and (ii)
the amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in Section
1A.03(a).
"Leverage Reduction Discount" shall mean as follows:
(i) on the Restatement Effective Date and during any period in which
clause (ii) or (iii) below, as the case may be, does not apply, the
Leverage Reduction Discount shall be 0%;
(ii) in the case of Revolving Loans, from and after the Start Date to
and including the End Date and subject to (iv) below, the following
percentage, to the extent but only to the extent that as of the last day of
the most recent fiscal quarter ending immediately prior to such Start Date
for which a certificate has been delivered to the Banks pursuant to the
next succeeding sentence hereinafter the ratio of Net Adjusted Consolidated
Indebtedness as of the most recent fiscal quarter ending immediately prior
to such Start Date to Annualized Consolidated EBITDA for such fiscal
quarter shall be as set forth below:
Net Adjusted
Consolidated Indebtedness to
Percentage Annualized Consolidated EBITDA
.25% less than 7:1 but greater than or equal to
6:1
.75% less than 6:1 but greater than or equal to
5:1
1.00% less than 5:1 but greater than or equal to
4:1
1.50% less than 4:1;
(iii) in the case of Term Loans, from and after the Start Date to and
including the End Date and subject to (iv) below, .75%, to the extent but
only to the extent that as of the last day of each of the two most recent
fiscal quarters ending immediately prior to such Start Date for which a
certificate has been delivered to the Banks pursuant to the next succeeding
sentence hereinafter the ratio of Net Adjusted Consolidated Indebtedness at
the end of each of such fiscal quarters to Annualized Consolidated EBITDA
for each of such two fiscal quarters (including the quarter with respect to
which the certificate referred to below is being delivered) shall be less
than or equal to 6:1; and
(iv) notwithstanding (ii) and (iii) above, if at any time (a) a
Default or Event of Default shall exist, or (b) the Consolidated EBITDA for
the most recent fiscal quarter shall be less than or equal to zero, the
Leverage Reduction Discount shall be 0%.
The Leverage Reduction Discount shall be determined by the delivery of a
certificate of the Borrower, certified by the Chief Financial Officer of the
Borrower, together with the financial statements required to be delivered
pursuant to Section 7.01(b) or (c), as the case may be, which certificate shall
set forth the Leverage Reduction Discount arising from the calculation of the
ratio of Net Adjusted Consolidated Indebtedness to Annualized Consolidated
EBITDA of the Borrower for the fiscal quarter or quarters, as the case may be,
ending with the fiscal quarter or fiscal year with respect to which such
certificate is being delivered and the basis for such calculations. The Leverage
Reduction Discount so determined shall apply, except as set forth above, to the
period beginning on the date such financial statements are delivered and ending
on the earlier of (the "End Date") (i) the next date of actual delivery of the
financial statements required to be delivered pursuant to Section 7.01(b) or (c)
or (ii) the date on which such financial statements are required to be delivered
(the day of delivery of such financial statements on which such period commences
being herein referred to as the "Start Date").
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), preference,
priority or other security agreement of any kind or nature whatsoever
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(including, without limitation, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the UCC or
any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
"Loan" shall mean each Term Loan and each Revolving Loan.
"Management Agreements" shall have the meaning provided in Section
4.05(iii).
"Managing Agent" shall mean each of Banque Paribas and Fleet in their
capacity as Managing Agents for the Banks hereunder.
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Contracts" shall have the meaning provided in Section
4.05(ix).
"Maturity Date" with respect to a Tranche shall mean either the Term
Loan Maturity Date or the Revolving Loan Maturity Date, as the case may be.
"MDU Business" shall mean the business of the Borrower relating to the
installation of DirecTV services in multiple unit dwellings containing from four
(4) units to 200 units to the extent same is conducted outside of areas in which
the Borrower has exclusive NRTC franchises.
"MDU Investments" shall have the meaning provided in Section 8.21.
"Minimum Borrowing Amount" shall mean (i) for Term Loans, $5,000,000,
and (ii) for Revolving Loans, (a) $1,000,000 in the case of Eurodollar Loans and
(b) $500,000 in the case of Base Rate Loans.
"▇▇▇▇▇'▇" shall have the meaning provided in the definition of "Cash
Equivalents."
"Net Adjusted Consolidated Indebtedness" shall mean the remainder of
Adjusted Consolidated Indebtedness minus Cash Interest Reserves.
"Net Sale Proceeds" shall mean for any sale of assets, the gross cash
proceeds (including any cash received by way of deferred payment pursuant to a
promissory note, receivable or otherwise, but only as and when received)
received from such sale, net of reasonable transaction costs (including, without
limitation, attorneys' fees), the amount of such gross cash proceeds required to
be used to permanently repay any Indebtedness which is secured by the respective
assets which were sold, and the estimated marginal increase in income taxes
which will be payable by the Borrower's consolidated group as a result of such
sale.
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"Net Subscriber Acquisition Cost" shall mean for any period the
product of (x) Subscriber Acquisition Costs for such period divided by (y) Net
Subscribers for such period.
"Net Subscribers" shall mean for any period the number of new DirecTV
subscribers of the Borrower or any of its Subsidiaries added (excluding DirecTV
subscribers acquired through Permitted Acquisitions and excluding subscribers to
the MDU Business) during such period less DirecTV subscribers of the Borrower or
any of its Subsidiaries disconnected during such period.
"New Banks" shall mean each of the Persons listed on Schedule I hereto
that is not a Continuing Bank.
"Non-Capitalized Subscriber Acquisition Costs" shall mean for any
period (I) Subscriber Acquisition Costs minus (II) the remainder of (X) the
amount of the Borrower's and its Subsidiaries' cost of equipment and products,
over (Y) the Borrower's and its Subsidiaries' equipment revenue, in each case
for such period.
"Non-Continuing Bank" shall mean each Existing Bank that is not a
Continuing Bank.
"Norwest" shall mean Norwest Equity Partners V.
"Note" shall mean each Term Note and each Revolving Note.
"Notice of Borrowing" shall have the meaning provided in Section
1.03(a).
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Administrative Agent
located at Mail Stop MA0FD03D, ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ or such other office as the Administrative Agent may
hereafter designate in writing as such to the other parties hereto.
"NRTC" shall mean the National Rural Telecommunications Cooperative.
"NRTC Agreements" shall mean the agreements set forth on Schedule VI.
"NRTC L/C Obligation" shall mean the Borrower's obligation, from time
to time, to post one or more letters of credit for the benefit of the NRTC in an
amount equal to three times the Borrower's subscriber ▇▇▇▇▇▇▇▇ for the one month
during the six full months immediately preceding the date of the issuance of the
NRTC Letter of Credit in which such subscriber ▇▇▇▇▇▇▇▇ were greatest.
"NRTC Letter of Credit" shall have the meaning provided in Section
1A.01.
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"Obligations" shall mean all amounts owing to the Agents, the
Collateral Agent or any Bank pursuant to the terms of this Agreement or any
other Credit Document.
"Original Effective Date" shall mean the Effective Date under, and as
defined in, the Existing Credit Agreement.
"Participant" shall have the meaning provided in Section 1A.04(a).
"Partnership Pledge Agreement" shall have the meaning provided in
Section 4.09.
"Payment Office" shall mean the office of the Administrative Agent
located at Mail Stop MA0FD03D, ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇ or such other office as the Administrative Agent may hereafter
designate in writing as such to the other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Pension Plan Refund" shall mean any cash payments received by the
Borrower or any of its Subsidiaries upon the termination of any Plan as a rebate
or refunding relating to any such Plan unless such payments are used to fund a
replacement plan in accordance with Section 4980 of the Code.
"Percentage" of any Bank at any time shall mean a fraction (expressed
as a percentage) the numerator of which is the Revolving Loan Commitment of such
Bank at such time and the denominator of which is the Total Revolving Loan
Commitment at such time; provided that if the Percentage of any Bank is to be
determined after the Total Revolving Loan Commitment has been terminated, then
the Percentages of the Banks shall be determined immediately prior (and without
giving effect) to such termination.
"Permitted Acquisition" shall mean the acquisition by the Borrower or
any of its Subsidiaries of DirecTV Markets (excluding franchises relating to the
MDU Business), although any such acquisition shall only be a Permitted
Acquisition so long as (A) the consideration therefor consists solely of the
proceeds of the Loans, proceeds of Acceptable Subordinated Debt, issuances of
Holdings Common Stock, Seller Preferred Stock, Permitted Seller Notes or amounts
in the Permitted Acquisition Cash Collateral Account and (B) the Agents shall be
satisfied that the aggregate purchase price for any single acquisition does not
exceed the greater of (x) $2,000 per Subscriber to be Acquired or (y) $150 per
household in the acquired franchise area. Notwithstanding anything to the
contrary contained in the immediately preceding sentence, an acquisition shall
be a Permitted Acquisition only if all requirements of Section 7.15 with respect
to Permitted Acquisitions are met with respect thereto.
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"Permitted Acquisition Cash Collateral Account" shall mean a cash
collateral account to be maintained with the Collateral Agent pursuant to a cash
collateral agreement in form and substance satisfactory to the Collateral Agent
into which, so long as at the time of any sale of assets by the Borrower or any
of its Subsidiaries or sale of equity there shall not exist a Default or Event
of Default, shall be deposited (i) cash proceeds from any such sale of assets
which shall be earmarked by the Borrower for a Permitted Acquisition to be made
in accordance with Section 7.15 and (ii) proceeds of equity issuances permitted
to be deposited in accordance with Section 3.02(B)(b)(ii).
"Permitted Acquisition Cash Collateralized Amounts" shall mean all
amounts held by the Collateral Agent in the Permitted Acquisition Cash
Collateral Account.
"Permitted Acquisition Notice" shall have the meaning provided in
Section 7.15(a)(ii).
"Permitted Business" shall mean the business of operating DirecTV
Franchises excluding the MDU Business.
"Permitted Liens" shall have the meaning provided in Section 8.01.
"Permitted Seller Notes" shall mean (i) Seller Notes supported by a
Letter of Credit and (ii) all other Seller Notes so long as the outstanding
aggregate principal amount of all such other Seller Notes issued after the
Restatement Effective Date does not exceed $5,000,000 at any time.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
"Plan" shall mean any pension plan, as defined in Section 3(2) of
ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) the Borrower, a Subsidiary of the Borrower or an
ERISA Affiliate, and each such plan for the five year period immediately
following the latest date on which the Borrower, a Subsidiary of the Borrower or
an ERISA Affiliate maintained, contributed to or had an obligation to contribute
to such plan.
"Pledge Agreement Collateral" shall mean all "Collateral" as defined
in the Pledge Agreements.
"Pledge Agreements" shall mean the Holdings Pledge Agreement, the
Partnership Pledge Agreement and the Borrower/Subsidiary Pledge Agreement.
"Pledged Securities" shall have the meaning assigned that term in the
applicable Pledge Agreement.
99
"Prime Lending Rate" shall mean the rate which Fleet announces from
time to time as its prime lending rate, the Prime Lending Rate to change when
and as such prime lending rate changes. The Prime Lending Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer by Banque Paribas or Fleet, who may make commercial loans or
other loans at rates of interest at, above or below the Prime Lending Rate.
"Pro Forma Annualized Adjusted Consolidated EBITDA" for any fiscal
quarter shall mean (i) Consolidated EBITDA for such fiscal quarter calculated on
a Pro Forma Basis plus the non-capitalized Subscriber Acquisition Costs for such
fiscal quarter times four; less (ii) Consolidated EBITDA for such fiscal quarter
calculated on a Pro Forma Basis plus the non-capitalized Subscriber Acquisition
Costs for such fiscal quarter, in each case, related to the MDU Business times
four.
"Pro Forma Annualized Consolidated EBITDA" shall mean for any fiscal
quarter the product of (i) the Consolidated EBITDA for such fiscal quarter
calculated on a Pro Forma Basis and (ii) four.
"Pro Forma Basis" shall mean, (a) with respect to any Permitted
Acquisition, the calculation of the consolidated results of Holdings and its
Subsidiaries otherwise determined in accordance with this Agreement as if the
respective Permitted Acquisition (and all other Permitted Acquisitions
consummated during the respective Calculation Period or thereafter and prior to
the date of determination pursuant to Section 7.15 or other applicable provision
of this Agreement) had been effected on the first day of the respective
calculation period and (b) with respect to the determination of Consolidated
EBITDA calculated on a Pro Forma Basis, the calculation of the consolidated
results of Holdings and its Subsidiaries otherwise determined in accordance with
this Agreement as if all Permitted Acquisitions consummated during the period
for which Consolidated EBITDA calculated on a Pro Forma Basis is being
determined had been effected on the first day of the respective period; provided
that all calculations shall take into account the following assumptions:
(i) (x) with respect to the determinations made for Permitted
Acquisitions in accordance with clause (a) above, if any Indebtedness is
incurred pursuant to the respective Permitted Acquisition (or was incurred
in any other Permitted Acquisition which occurred during the relevant
Calculation Period or thereafter and prior to the date of determination)
then all such Indebtedness shall be deemed to have been outstanding from
the first day of the respective Calculation Period (and the interest
expense associated with such Indebtedness, shall be determined at the
actual rates applicable thereto or which would have been applicable had
such debt been outstanding for the whole such period and shall be included
in determining Consolidated Interest Expense on such Pro Forma Basis) and
all Indebtedness that was outstanding during the Calculation Period or
thereafter and prior to the date of the Permitted Acquisition but not
outstanding on the date of the Permitted Acquisition shall be deemed to
have been repaid in full on the first day of the Calculation Period and (y)
with respect to any determinations made of Consolidated EBITDA calculated
on a Pro Forma Basis in accordance with clause (b) above, the maximum
amount of Indebtedness outstanding during the two-week period
100
immediately preceding the date of determination shall be deemed to be
outstanding from the first day of the relevant period (and the Interest
Expense associated with such Indebtedness shall be determined at the actual
rates applicable thereto or which would have been applicable had such debt
been outstanding for the whole such period and shall be included in
determining Adjusted Consolidated Interest Expense for such period on such
Pro Forma Basis); and
(ii) all calculations of Consolidated EBITDA (and the other components
of the definition of Consolidated EBITDA included therein) shall include
only the Consolidated EBITDA of Holdings and its Subsidiaries (and the
other components of the definition of Consolidated EBITDA included therein)
during the relevant Calculation Period or period, as the case may be, and
shall not include any Consolidated EBITDA (or other components) of the
Person or business, division or product line being acquired pursuant to the
Permitted Acquisition or acquired during the period of determination
(except for the Consolidated EBITDA of such Person or business, division or
product line generated after the date of such acquisition) unless either
(x) such Consolidated EBITDA of the Person or business, division or product
line being acquired has been audited for the entire Calculation Period (or
the period prior to acquisition) by any of the "big six" or (y) in the case
of calculations based on unaudited financial statements, the Agents shall
be reasonably satisfied with the amounts of Consolidated EBITDA (and the
other components) of such Person or business, division or product line
being acquired pursuant to the respective Permitted Acquisition (or
acquired during the period of determination).
"Projections" shall have the meaning provided in Section 4.17(b).
"Qualified Paying Subscribers" shall mean all subscribers (other than
subscribers to the MDU Business) of the Borrower or any of its Subsidiaries to
DirecTV that are located in the Borrower's and its Subsidiaries' DirecTV Market
areas and who have paid all amounts due to the Borrower or any of its
Subsidiaries within sixty (60) days of the initial due date thereof.
"Quarterly Payment Date" shall mean the last Business Day of each
March, June, September and December of each calendar year.
"Quoted Rate" shall mean (a) the quotation offered to the
Administrative Agent in the New York interbank Eurodollar market for U.S. dollar
deposits of amounts in immediately available funds comparable to the outstanding
principal amount of the Eurodollar Loan of the Administrative Agent for which an
interest rate is then being determined with maturities comparable to the
Interest Period applicable to such Eurodollar Loan as determined by the
Administrative Agent's Treasury Funding Management on the date which is two (2)
Business Days prior to the commencement of such Interest Period, divided (and
rounded upward to the next whole multiple of 1/16 of 1%) by (b) a percentage
equal to the remainder of 100% minus the then stated maximum rate of all reserve
requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves) applicable to any member bank of the
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Federal Reserve System in respect of Eurocurrency funding or liabilities as
defined in Regulation D (or any successor category of liabilities under
Regulation D).
"RCRA" shall mean the Resource Conservation and Recovery Act, as the
same may be amended from time to time, 42 U.S.C. ss. 6901 et seq.
"Real Property" of any Person shall mean all the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Recovery Event" shall mean the receipt by Holdings or any Subsidiary
of Holdings of any cash insurance proceeds from key-man life insurance or
liability insurance or insurance payable by reason of theft, physical
destruction or damage or any other similar event with respect to any properties
or assets of Holdings or any Subsidiary of Holdings (including, without
limitation, business interruption insurance).
"Redeemable Preferred Stock" shall mean Holdings Series A Redeemable
Preferred Stock and Holdings Series B Redeemable Preferred Stock.
"Register" shall have its meaning provided in Section 7.16.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation G" shall mean Regulation G of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation T" shall mean Regulation T of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Related Fund" shall mean, with respect to any Bank that is a fund
that invests in Loans, any other fund that invests in Loans and is managed by
the same investment advisor as such Bank or by an Affiliate of such investment
advisor.
102
"Release" means disposing, discharging, injecting, spilling, pumping,
leaking, leaching, dumping, emitting, escaping, emptying, seeping, placing,
pouring and the like, into or upon any land or water or air, or otherwise
entering into the environment.
"Reorganization Transaction" shall mean the reorganization transaction
of the Borrower pursuant to which all of the holders of capital stock of the
Borrower exchanged (whether by exchange agreement, merger or otherwise) their
interests in the Borrower for equivalent interests in Holdings, all of whose
assets consist of 100% of the capital stock of the Borrower.
"Reorganization Transaction Documents" shall mean (i) the Agreement
and Plan of Merger, dated September 9, 1997, between the Borrower, Holdings and
GSS Mergersub Inc., (ii) various consents of the shareholders and directors of
the Borrower, (iii) the unanimous written consent of the directors of Holdings,
(iv) the written consent of the sole director of GSS Mergersub Inc. and (v) all
other documents entered into or delivered in connection with said agreements or
the Reorganization Transaction.
"Replaced Bank" shall have the meaning provided in Section 1.12.
"Replacement Bank" shall have the meaning provided in Section 1.12.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day notice period is waived under subsection
.22, .23, .25, .27, or .28 of PBGC Regulation Section 4043.
"Required Banks" shall mean Banks the sum of whose outstanding Term
Loans and Revolving Loan Commitments (or after the termination thereof, the sum
of outstanding Revolving Loans and Letter of Credit Outstandings), represent an
amount equal to or greater than 66.6% of the sum of all outstanding Term Loans
and the Total Revolving Loan Commitment (or after the termination thereof, the
sum of the then total outstanding Revolving Loans and Letter of Credit
Outstandings).
"Required Revolving Banks" shall mean Banks, the sum of whose
outstanding Revolving Loan Commitments represent an amount greater than 66.6% of
the Total Revolving Loan Commitment or after termination of such Commitments,
Banks, the sum of whose outstanding Revolving Loans and Letter of Credit
Outstandings represent an amount greater than 66.6% of the total outstanding
Revolving Loans and Letter of Credit Outstandings.
"Required Term Banks" shall mean Banks the sum of whose outstanding
Term Loans represent an amount greater than 66.6% of all outstanding Term Loans
made by all Banks.
"Restatement Effective Date" shall have the meaning provided in
Section 12.10.
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"Returns" shall have the meaning provided in Section 6.09.
"Revolving Facility" shall mean the facility evidenced by the Total
Revolving Loan Commitment.
"Revolving Loan Commitment" shall mean, for each Bank, the amount set
forth opposite such Bank's name on Schedule I hereto directly below the column
entitled "Revolving Loan Commitment," as same may be (x) reduced or terminated
from time to time pursuant to Sections 2.02, 2.03, 3.02 and/or 9 or (y) adjusted
from time to time as a result of assignments to or from such Bank pursuant to
Section 1.12 or 12.04.
"Revolving Loan Conversion" shall have the meaning provided in Section
1.01(b).
"Revolving Loan Maturity Date" shall mean June 30, 2004
"Revolving Loans" shall have the meaning provided in Section 1.01(b).
"Revolving Note" shall have the meaning provided in Section
1.05(a)(ii).
"Rocky Mountain Note" shall mean the Promissory Note dated May 1,
1997, issued by the Borrower to Western Montana DBS, Inc. d/b/a Rocky Mountain
DBS in the amount of $2,350,000.
"S&P" shall have the meaning provided in the definition of "Cash
Equivalents."
"Scheduled Repayment" shall have the meaning provided in Section
3.02(A)(c).
"Scheduled Revolving Loan Commitment Reduction" shall have the meaning
provided in Section 2.03(e).
"Scheduled Revolving Loan Commitment Reduction Date" shall have the
meaning provided in Section 2.03(e).
"SEC" shall have the meaning provided in Section 7.01(h).
"Section 3.04(b)(ii) Certificate" shall have the meaning provided in
Section 3.04(b)(ii).
"Secured Creditors" shall mean (x) the Banks, the Agents, the
Collateral Agent and (y) any Bank which on the date hereof is, or subsequently
becomes, party to any Interest Rate Protection or Other Hedging Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
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"Security Agreement" shall mean the Security Agreement, dated as of
July 7, 1997, between the Borrower and the Collateral Agent, as amended,
modified or supplemented from time to time, including as supplemented by the
Security Documents Acknowledgment.
"Security Agreement Collateral" shall mean all "Collateral" as defined
in the Security Agreement.
"Security Documents" shall mean the Pledge Agreements, the Security
Agreement, the Collateral Assignment of Marketing and Distribution Agreements,
each Additional Security Document, the Security Documents Acknowledgment and the
agreements relating to the Letter of Credit Cash Collateral Account and the
Permitted Acquisition Cash Collateral Account.
"Security Document Acknowledgment and Consent" shall have the meaning
provided in Section 4.10.
"Seller Notes" shall mean notes issued by Holdings to sellers of
DirecTV Markets in a Permitted Acquisition and issued in accordance with Section
7.15, which notes (other than those notes supported by a Letter of Credit) shall
be fully subordinated to the Obligations and obligations under Interest Rate
Protection or Other Hedging Agreements, and all such notes shall otherwise be in
form and substance satisfactory to the Agents.
"Seller Preferred Stock" shall mean preferred stock issued by Holdings
which preferred stock, so long as this Agreement (as the same may be amended,
modified, extended, renewed, replaced, restated, supplemented, restructured or
refinanced from time to time) remains outstanding, shall not permit mandatory
redemptions, shall not contain sinking fund or similar requirements, shall pay
no cash dividends and shall have no covenants that differ in any material
respect from the covenants contained in the Convertible Preferred Stock, and is
otherwise acceptable in all respects to the Agents.
"Senior Seller Notes" shall mean (i) the Rocky Mountain Note, (ii) the
TEG Note and (iii) the Western Montana Note.
"Shareholder" shall mean any holder of issued and outstanding Borrower
Capital Stock.
"Shareholders' Agreements" shall have the meaning provided in Section
4.05(ii).
"Spectrum" shall mean Spectrum Equity Investors, acting through
Spectrum Equity Investors L.P. and Spectrum Equity Investors II L.P.
"Start Date" shall have the meaning provided in the definition of
"Leverage Reduction Discount."
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"Stated Amount" of each Letter of Credit shall, at any time, mean the
maximum amount available to be drawn thereunder at such time (in each case
determined without regard to whether any conditions to drawing could then be
met).
"Subscriber Acquisition Costs" shall mean for any period the remainder
of (I) the sum of (a) the amount of all payroll expenses of Holdings and its
Subsidiaries for such period in respect of employees or agents engaged primarily
in sales and marketing, (b) the amount of all sales commissions paid by the
Borrower and its Subsidiaries during such period to employees or agents for
services and/or equipment sold, (c) the amount of all expenses paid by the
Borrower and its Subsidiaries during such period for marketing and promotional
activities conducted by the Borrower and its Subsidiaries to promote services
and products, and (d) the excess, if any, of (i) the sum of (x) the amount equal
to the Borrower's and its Subsidiaries' cost of equipment and products and (y)
the amount equal to the Borrower's and its Subsidiaries' expenses incurred in
generating installation revenue, minus (ii) the Borrower's and its Subsidiaries'
equipment and installation revenue for such period minus (II) Subscriber
Acquisition Costs relating to the MDU Business.
"Subscribers to be Acquired" shall mean, in connection with any
Permitted Acquisition, the number of subscribers to DirecTV service to be
acquired as such number shall be certified to the Banks in the Permitted
Acquisition Notice.
"Subsidiaries Guaranty" shall have the meaning provided in Section
4.08.
"Subsidiary" shall mean, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person, (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at the time and (iii) any
partnership or limited liability company in which such Person is the general
partner or manager.
"Subsidiary Guarantor" shall mean each Subsidiary (other than South
Plains DBS Limited Partnership and DCE Satellite Entertainment, LLC, in each
case so long as (i) neither such partnership nor such limited liability company
is a Wholly-Owned Subsidiary of the Borrower and (ii) the Borrower or one of its
Subsidiaries does not own a sufficient equity interest in such partnership or
sufficient membership interests in such limited liability company to require
such partnership or limited liability company, as the case may be, to act
otherwise) of the Borrower.
"Syndication Agent" shall mean Banque Paribas in its capacity as
Syndication Agent for the Banks hereunder, and shall include any successor to
the Syndication Agent appointed pursuant to Section 11.09.
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"Syndication Termination Date" shall mean the earlier of (x) 120 days
after the Restatement Effective Date or (y) the date on which the Agents and the
Documentation Agent, in their sole discretion, determines (and notifies the
Borrower and the other Banks) that the primary syndication (and the resultant
addition of institutions as Banks pursuant to Section 12.04) has been completed.
"Tax Refund" shall mean any cash payment received by Holdings or any
of its Subsidiaries as a rebate or refund relating to any federal, state or
local income taxes paid by Holdings or any of its Subsidiaries or with respect
to the assets or properties of Holdings or any of its Subsidiaries.
"Tax Sharing Agreements" shall have the meaning provided in Section
4.05(vii).
"Taxes" shall have the meaning provided in Section 3.04(a).
"TEG Note" shall mean the Promissory Note dated June 12, 1997, issued
by the Borrower to 59 TEG DBS Services, Inc. in the amount of $2,500,000.
"Term Facility" shall mean the facility evidenced by Total Term Loan
Commitment.
"Term Loan" shall have the meaning provided in Section 1.01(a).
"Term Loan Commitment" shall mean, with respect to each Bank, the
amount set forth opposite such Bank's name in Schedule I directly below the
column entitled "Term Loan Commitment," as the same may be terminated pursuant
to Section 2.03.
"Term Loan Conversion" shall have the meaning provided in Section
1.01(a).
"Term Loan Maturity Date" shall mean March 31, 2005.
"Term Note" shall have the meaning provided in Section 1.05(a)(i).
"Total Commitment" shall mean, at any time, the sum of the Commitments
of each of the Banks.
"Total Revolving Loan Commitment" shall mean, at any time, the sum of
the Revolving Loan Commitments of each of the Banks.
"Total Term Loan Commitment" shall mean, at any time, the sum of the
Term Loan Commitments of each of the Banks.
"Total Unutilized Revolving Loan Commitment" shall mean, at any time,
an amount equal to the remainder of (x) the then Total Revolving Loan
Commitment, less the sum of (y) the aggregate principal amount of Revolving
Loans then outstanding and (z) the then aggregate amount of Letter of Credit
Outstandings.
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"Tranche" shall mean the respective facility and commitments utilized
in making Loans hereunder, with there being two separate Tranches, i.e., whether
Term Loans or Revolving Loans.
"Transaction" shall mean collectively, (i) the incurrence and
continuation of Loans hereunder on the Restatement Effective Date and (ii) the
payment of the Transaction Fees and Expenses in connection therewith.
"Transaction Fees and Expenses" shall mean all fees and expenses
incurred in connection with and arising out of the transactions contemplated by
the Credit Documents; provided, however, that the aggregate amount of such fees
and expenses shall not exceed $2,000,000 in the aggregate.
"Type" shall mean the type of Loan determined with regard to the
interest option applicable thereto, i.e., whether a Base Rate Loan or a
Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the actuarial present value of the accumulated plan benefits under
the Plan as of the close of its most recent plan year, determined in accordance
with actuarial assumptions at such time consistent with Statement of Financial
Accounting Standards No. 87, exceeds the fair market value of the assets
allocable thereto.
"United States" and "U.S." shall each mean the United States of
America.
"Unpaid Drawing" shall have the meaning provided for in Section
1A.05(a).
"Unutilized Revolving Loan Commitment" for any Bank, at any time,
shall mean the Revolving Loan Commitment of such Bank at such time less the sum
of (i) the aggregate principal amount of Revolving Loans made by such Bank and
then outstanding and (ii) such Bank's Percentage of the Letter of Credit
Outstandings.
"Weary Key-Man Insurance" shall mean the key-man life insurance
maintained with respect to ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇.
"Western Montana Note" shall mean the Promissory Note dated December
22, 1997, issued by the Borrower to Western Montana Entertainment Television,
Inc. in the amount of $3,750,000.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock is at the time owned by such Person
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and/or one or more Wholly-Owned Subsidiaries of such Person and (ii) any
partnership, association, joint venture or other entity in which such Person
and/or one or more Wholly-Owned Subsidiaries of such Person has a 100% equity
interest at such time.
Section 11. The Agents.
11.01 Appointment. The Banks hereby designate Fleet as Administrative
Agent (for purposes of this Section 11, the term "Administrative Agent" shall
include Fleet in its capacity as Collateral Agent pursuant to the Security
Documents), Banque Paribas as Syndication Agent, and GECC, as Documentation
Agent, in each case to act as specified herein and in the other Credit
Documents. Each Bank hereby irrevocably authorizes, and each holder of any Note
by the acceptance of such Note shall be deemed irrevocably to authorize, the
Administrative Agent and the Syndication Agent to take such action on its behalf
under the provisions of this Agreement, the other Credit Documents and any other
instruments and agreements referred to herein or therein and to exercise such
powers and to perform such duties hereunder and thereunder as are specifically
delegated to or required of the Administrative Agent and the Syndication Agent
by the terms hereof and thereof and such other powers as are reasonably
incidental thereto. Each of the Administrative Agent and the Syndication Agent
may perform any of its duties hereunder by or through its officers, directors,
agents or employees.
11.02 Nature of Duties. The Administrative Agent shall have no duties
or responsibilities except those expressly set forth in this Agreement and the
Security Documents. The Syndication Agent and the Documentation Agent shall not
have any duties or responsibilities under this Agreement or any Security
Document or any other document or matter related thereto. None of the
Administrative Agent, the Syndication Agent, the Documentation Agent and any of
their respective officers, directors, agents or employees shall be liable for
any action taken or omitted by it or them hereunder or under any other Credit
Document or in connection herewith or therewith, unless caused by its or their
gross negligence or willful misconduct. The duties of the Administrative Agent
and the Syndication Agent shall be mechanical and administrative in nature; the
Administrative Agent, the Syndication Agent and the Documentation Agent shall
not have by reason of this Agreement or any other Credit Document a fiduciary
relationship in respect of any Bank or the holder of any Note; and nothing in
this Agreement or any other Credit Document, expressed or implied, is intended
to or shall be so construed as to impose upon the Administrative Agent, the
Syndication Agent or the Documentation Agent any obligations in respect of this
Agreement or any other Credit Document except as expressly set forth herein.
11.03 Lack of Reliance on the Administrative Agent, the Syndication
Agent and the Documentation Agent. Independently and without reliance upon the
Administrative Agent, the Syndication Agent and the Documentation Agent, each
Bank and the holder of each Note, to the extent it deems appropriate, has made
and shall continue to make (i) its own independent investigation of the
financial condition and affairs of Holdings and its Subsidiaries in connection
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with the making and the continuance of the Loans and the participation in
Letters of Credit and the taking or not taking of any action in connection
herewith and (ii) its own appraisal of the creditworthiness of Holdings and its
Subsidiaries and, except as expressly provided in this Agreement, the
Administrative Agent, the Syndication Agent and the Documentation Agent shall
have no duty or responsibility, either initially or on a continuing basis, to
provide any Bank or the holder of any Note with any credit or other information
with respect thereto, whether coming into its possession before the making of
the Loans, the participation in the Letters of Credit or at any time or times
thereafter. Neither the Administrative Agent, the Syndication Agent nor the
Documentation Agent shall be responsible to any Bank or the holder of any Note
for any recitals, statements, information, representations or warranties herein
or in any document, certificate or other writing delivered in connection
herewith or for the execution, effectiveness, genuineness, validity,
enforceability, perfection, priority or sufficiency of this Agreement or any
other Credit Document or the financial condition of Holdings or its Subsidiaries
or be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this Agreement or
any other Credit Document, or the financial condition of Holdings or its
Subsidiaries or the existence or possible existence of any Default or Event of
Default.
11.04 Certain Rights of the Administrative Agent and the Syndication
Agent. If the Administrative Agent or the Syndication Agent shall request
instructions from the Required Banks with respect to any act or action
(including failure to act) in connection with this Agreement or any other Credit
Document, the Administrative Agent or the Syndication Agent, as the case may be,
shall be entitled to refrain from such act or taking such action unless and
until the Administrative Agent shall have received instructions from the
Required Banks; and the Administrative Agent or the Syndication Agent, as the
case may be, shall not incur liability to any Person by reason of so refraining.
Without limiting the foregoing, no Bank or the holder of any Note shall have any
right of action whatsoever against the Administrative Agent, the Syndication
Agent or the Documentation Agent as a result of the Administrative Agent acting
or refraining from acting hereunder or under any other Credit Document in
accordance with the instructions of the Required Banks.
11.05 Reliance. The Administrative Agent and the Syndication Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
note, writing, resolution, notice, statement, certificate, telex, teletype or
facsimile message, cablegram, radiogram, order or other document or telephone
message signed, sent or made by any Person that the Administrative Agent or the
Syndication Agent believed to be the proper Person, and, with respect to all
legal matters pertaining to this Agreement and any other Credit Document and its
duties hereunder and thereunder, upon advice of counsel selected by the
Administrative Agent and the Syndication Agent (which may be counsel for the
Credit Parties).
11.06 Indemnification. (a) To the extent the Administrative Agent, the
Syndication Agent or the Documentation Agent is not reimbursed and indemnified
by the Borrower, the Banks will reimburse and indemnify the Administrative
Agent, the Syndication Agent or the Documentation Agent, as the case may be, in
proportion to its respective "percentages" as used in determining the Required
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Banks, for and against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, suits, costs, expenses or disbursements
of whatsoever kind or nature which may be imposed on, asserted against or
incurred by the Administrative Agent, the Syndication Agent or the Documentation
Agent, as the case may be, in performing their respective duties hereunder or
under any other Credit Document, in any way relating to or arising out of this
Agreement or any other Credit Document; provided that no Bank shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent's, the Syndication Agent's or the Documentation Agent's
gross negligence or willful misconduct.
(b) The Administrative Agent, the Syndication Agent and the
Documentation Agent shall be fully justified in failing or refusing to take any
action hereunder and under any other Credit Document (except actions expressly
required to be taken by it hereunder or under the Credit Documents) unless it
shall first be indemnified to its satisfaction by the Banks pro rata against any
and all liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.
11.07 The Administrative Agent and the Syndication Agent in Their
Individual Capacities. With respect to its obligation to make Loans under this
Agreement, each of the Administrative Agent, the Syndication Agent and the
Documentation Agent shall have the rights and powers specified herein for a
"Bank" and may exercise the same rights and powers as though it were not
performing the duties specified herein; and the term "Banks," "Required Banks,"
"holders of Notes" or any similar terms shall, unless the context clearly
otherwise indicates, include the Administrative Agent, the Syndication Agent and
the Documentation Agent in their individual capacities. Each of the
Administrative Agent, the Syndication Agent and the Documentation Agent may
accept deposits from, lend money to, and generally engage in any kind of
banking, trust or other business with any Credit Party or any Affiliate of any
Credit Party as if they were not performing the duties specified herein, and may
accept fees and other consideration from the Borrower or any other Credit Party
for services in connection with this Agreement and may purchase and hold equity
interests in the Borrower or any other Credit Party without having to account
for the same to the Banks and otherwise without having to account for the same
to the Banks.
11.08 Holders. The Administrative Agent may deem and treat the payee
of any Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Administrative Agent. Any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, transferee, assignee or indorsee, as the
case may be, of such Note or of any Note or Notes issued in exchange therefor.
11.09 Resignation by the Agents. (a) The Administrative Agent may
resign from the performance of all its functions and duties hereunder and/or
under the other Credit Documents at any time by giving fifteen (15) Business
Days' prior written notice to the Borrower and the Banks. Such resignation shall
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take effect upon the appointment of a successor Administrative Agent pursuant to
clauses (b) and (c) below or as otherwise provided below.
(b) Upon any such notice of resignation, the Required Banks shall
appoint a successor Administrative Agent hereunder or thereunder who shall be a
commercial bank or trust company reasonably acceptable to the Borrower (it being
understood and agreed that any Bank is deemed to be acceptable to the Borrower).
(c) If a successor Administrative Agent shall not have been so
appointed within such fifteen (15) Business Day period, the Administrative
Agent, with the consent of the Borrower, shall then appoint a successor
Administrative Agent who shall serve as Administrative Agent hereunder or
thereunder until such time, if any, as the Banks appoint a successor
Administrative Agent as provided above.
(d) If no successor Administrative Agent has been appointed pursuant
to clause (b) or (c) above by the 30th Business Day after the date such notice
of resignation was given by the Administrative Agent, the Administrative Agent's
resignation shall become effective and the Banks shall thereafter perform all
the duties of the Administrative Agent hereunder and/or under any other Credit
Document until such time, if any, as the Banks appoint a successor
Administrative Agent as provided above.
(e) The Syndication Agent, as such, may resign at any time by giving
five (5) Business Days' prior written notice to the Banks. Such resignation
shall take effect at the end of such five (5) Business Day period.
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Section 12. Miscellaneous.
12.01 Payment of Expenses, Indemnities, etc. The Borrower, agrees to:
(i) whether or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses of the Agents (including, without
limitation, the reasonable fees and disbursements of White & Case and local
counsel) in connection with the preparation, execution and delivery of this
Agreement and the other Credit Documents and the documents and instruments
referred to herein and therein and any amendment, waiver or consent relating
hereto or thereto, of the Agents in connection with its syndication efforts with
respect to this Agreement (including, without limitation, the reasonable fees
and disbursements of White & Case) and of the Agents and each of the Banks in
connection with the enforcement of this Agreement and the other Credit Documents
and the documents and instruments referred to herein and therein (including,
without limitation, the reasonable fees and disbursements of counsel for the
Agents and for each of the Banks); (ii) pay and hold each of the Banks harmless
from and against any and all present and future stamp, excise and other similar
taxes with respect to the foregoing matters and save each of the Banks harmless
from and against any and all liabilities with respect to or resulting from any
delay or omission (other than to the extent attributable to such Bank) to pay
such taxes; and (iii) defend, protect, indemnify and hold harmless the Agents
and each Bank, and each of their respective officers, directors, employees,
representatives, attorneys and agents (collectively called the "Indemnitees")
from and against any and all liabilities, obligations (including removal or
remedial actions), losses, damages (including foreseeable and unforeseeable
consequential damages and punitive damages), penalties, claims, actions,
judgments, suits, costs, expenses and disbursements (including reasonable
attorneys' and consultants fees and disbursements) of any kind or nature
whatsoever that may at any time be incurred by, imposed on or assessed against
the Indemnitees directly or indirectly based on, or arising or resulting from,
or in any way related to, or by reason of (a) any investigation, litigation or
other proceeding (whether or not any Agent, the Collateral Agent or any Bank is
a party thereto and whether or not any such investigation, litigation or other
proceeding is between or among any Agent, the Collateral Agent, any Bank, the
Borrower or any third person or otherwise) related to the entering into and/or
performance of this Agreement or any other Credit Document or the use of any
Letter of Credit or the proceeds of any Loans hereunder or the consummation of
any transactions contemplated herein (including, without limitation, the
Transaction) or in any other Credit Document or the exercise of any of their
rights or remedies provided herein or in the other Credit Documents; or, (b) the
actual or alleged generation, presence or Release of Hazardous Materials on or
from, or the transportation of Hazardous Materials to or from, any Real Property
owned or at any time operated by Holdings or any of its Subsidiaries or; (c) any
Environmental Claim relating to Holdings or any of its Subsidiaries or any Real
Property owned or at any time operated by Holdings or any of its Subsidiaries
or; (d) the exercise of the rights of any Agent and of any Bank under any of the
provisions of this Agreement or any other Credit Document or any Letter of
Credit or any Loans hereunder; or (e) the consummation of any transaction
contemplated herein (including, without limitation, the Transaction) or in any
other Credit Document (the "Indemnified Matters") regardless of when such
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Indemnified Matter arises, but excluding any such Indemnified Matter based the
gross negligence or willful misconduct of any Indemnitee.
12.02 Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, each Bank is hereby authorized at any time or from time to time,
without presentment, demand, protest or other notice of any kind to any Credit
Party or to any other Person, any such notice being hereby expressly waived, to
set off and to appropriate and apply any and all deposits (general or special)
and any other Indebtedness at any time held or owing by such Bank (including,
without limitation, by branches and agencies of such Bank wherever located) to
or for the credit or the account of each Credit Party against and on account of
the Obligations and liabilities of such Credit Party to such Bank under this
Agreement or under any of the other Credit Documents, including, without
limitation, all interests in Obligations purchased by such Bank pursuant to
Section 12.06(b), and all other claims of any nature or description arising out
of or connected with this Agreement or any other Credit Document, irrespective
of whether or not such Bank shall have made any demand hereunder and although
said Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured.
12.03 Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to Holdings or the
Borrower, at its address specified opposite its signature below; if to any Bank,
at its address specified opposite its name below; and if to the Administrative
Agent, at its Notice Office; or, as to any Credit Party or the Administrative
Agent, at such other address as shall be designated by such party in a written
notice to the other parties hereto and, as to each Bank, at such other address
as shall be designated by such Bank in a written notice to the Borrower and the
Administrative Agent. All such notices and communications shall, when mailed,
telegraphed, telexed, facsimilied, or cabled or sent by overnight courier, be
effective three (3) Business Days after deposited in the mails, certified,
return receipt requested, when delivered to the telegraph company, cable company
or one day following delivery to an overnight courier, as the case may be, or
sent by telex or facsimile device, except that notices and communications to the
Administrative Agent shall not be effective until received by the Administrative
Agent.
12.04 Benefit of Agreement. (a) This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided, however, neither Holdings nor any of
its Subsidiaries may assign or transfer any of its rights, obligations or
interest hereunder or under any other Credit Document without the prior written
consent of the Banks; and provided further, that although any Bank may transfer,
assign or grant participations in its rights hereunder, such Bank shall remain a
"Bank" for all purposes hereunder (and may not transfer or assign all or any
portion of its Commitments or Loans hereunder except as provided in Section
12.04(b)) and the transferee, assignee or participant, as the case may be, shall
not constitute a "Bank" hereunder; and provided further, that no Bank shall
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transfer or grant any participation under which the participant shall have
rights to approve any amendment to or waiver of this Agreement or any other
Credit Document except to the extent such amendment or waiver would (i) extend
the final scheduled maturity of any Loan, Note or Letter of Credit (unless such
Letter of Credit is not extended beyond the Revolving Loan Maturity Date) in
which such participant is participating, or reduce the rate or extend the time
of payment of interest or Fees thereon (except in connection with a waiver of
applicability of any post-default increase in interest rates) or reduce the
principal amount thereof, or increase the Commitments in which such participant
is participating over the amount thereof then in effect (it being understood
that a waiver of any Default or Event of Default or of a mandatory reduction in
the Total Commitment shall not constitute a change in the terms of any
Commitment, and that an increase in any Commitment shall be permitted without
the consent of any participant if the participant's participation is not
increased as a result thereof), (ii) consent to the assignment or transfer by
Holdings or any of its Subsidiaries of any of its rights and obligations under
this Agreement or (iii) release all or substantially all of the Collateral under
all of the Security Documents (except as expressly provided in the Credit
Documents) supporting the Loans hereunder in which such participant is
participating. In the case of any such participation, the participant shall not
have any rights under this Agreement or any of the other Credit Documents (the
participant's rights against such Bank in respect of such participation to be
those set forth in the agreement executed by such Bank in favor of the
participant relating thereto) and all amounts payable by the Borrower hereunder
shall be determined as if such Bank had not sold such participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank together with
one or more other Banks) may (x) (A) pledge its Loans and/or Notes hereunder to
a Federal Reserve Bank in support of borrowings made by such Bank from such
Federal Reserve Bank or (B) assign all or a portion of its Loans or Commitments
and related outstanding Obligations hereunder to its parent company, principal
office and/or any Affiliate or Related Fund of such Bank or one or more other
Banks or (y) assign all or a portion equal to at least $5,000,000, of such Loans
or Commitments and related outstanding Obligations hereunder to one or more
Eligible Transferees each of which assignees shall become a party to this
Agreement as a Bank by execution of an assignment and assumption agreement
substantially in the form of Exhibit N (appropriately completed); provided that:
(i) at such time Schedule I shall be deemed modified to reflect the Commitments
of such new Bank and of the existing Banks; (ii) new Notes will be issued to
such new Bank and to the assigning Bank upon the request of such new Bank or
assigning Bank, such new Notes to be in conformity with the requirements of
Section 1.05 to the extent needed to reflect the revised Commitments; (iii) the
consent of the Agents shall be required in connection with any assignment; and
(iv) the Agents shall receive and share equally at the time of each such
assignment, from the assigning Bank, the payment of a non-refundable assignment
fee of $3,000. To the extent of any assignment pursuant to this Section
12.04(b), the assigning Bank shall be relieved of its obligations hereunder with
respect to its assigned Commitments. No transfer or assignment under this
Section 12.04(b) will be effective until recorded by the Administrative Agent on
the Register pursuant to Section 7.16. At the time of each assignment pursuant
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to this Section 12.04(b) to a Person which is not already a Bank hereunder and
which is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for Federal income tax purposes, the respective
assignee Bank shall provide to the Borrower, and the Administrative Agent the
appropriate Internal Revenue Service Forms (and, if applicable, a Section
3.04(b)(ii) Certificate) required by Section 3.04(b).
12.05 No Waiver; Remedies Cumulative. No failure or delay on the part
of either Agent or any Bank or any holder of any Note in exercising any right,
power or privilege hereunder or under any other Credit Document and no course of
dealing between the Borrower or any other Credit Party and the Agents or any
Bank or the holder of any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder or under
any other Credit Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights, powers and remedies herein or in any other Credit Document expressly
provided are cumulative and not exclusive of any rights, powers or remedies
which the Agents or any Bank or the holder of any Note would otherwise have. No
notice to or demand on any Credit Party in any case shall entitle any Credit
Party to any other or further notice or demand in similar or other circumstances
or constitute a waiver of the rights of the Agents or any Bank or the holder of
any Note to any other or further action in any circumstances without notice or
demand.
12.06 Payments Pro Rata. (a) The Administrative Agent agrees that
promptly after its receipt of each payment from or on behalf of Holdings or the
Borrower in respect of any Obligations hereunder, it shall distribute such
payment to the Banks pro rata based upon their respective shares, if any, of the
Obligations with respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings or Fees, of a sum which with respect to the
related sum or sums received by other Banks is in a greater proportion than the
total of such Obligation then owed and due to such Bank bears to the total of
such Obligation then owed and due to all of the Banks immediately prior to such
receipt, then such Bank receiving such excess payment shall purchase for cash
without recourse or warranty from the other Banks an interest in the Obligations
of the respective Credit Party to such Banks in such amount as shall result in a
proportional participation by all the Banks in such amount; provided that if all
or any portion of such excess amount is thereafter recovered from such Bank,
such purchase shall be rescinded and the purchase price restored to the extent
of such recovery, but without interest.
12.07 Calculations; Computations. (a) The financial statements to be
furnished to the Banks pursuant hereto shall be made and prepared in accordance
with generally accepted accounting principles in the United States consistently
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applied throughout the periods involved (except as set forth in the notes
thereto or as otherwise disclosed in writing by the Borrower to the Banks);
provided that, except as otherwise specifically provided herein, all
computations of Excess Cash Flow and all computations determining compliance
with Sections 8.07 through 8.17, inclusive, including the definitions used
therein, shall utilize accounting principles and policies in conformity with
those used to prepare the historical financial statements for the fiscal year
ended December 31, 1997 delivered to the Banks pursuant to Section 6.05.
(b) All computations of interest and Fees hereunder shall be made on
the basis of a year of 360 days for the actual number of days (including the
first day but excluding the last day) occurring in the period for which such
interest or Fees are payable.
12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF. ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS. EACH OF HOLDINGS AND THE BORROWER HEREBY
IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS CORPORATION SERVICE COMPANY WITH
OFFICES ON THE DATE HEREOF AT ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ AS ITS
DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS
BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS,
SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR
PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO
BE AVAILABLE TO ACT AS SUCH, EACH OF HOLDINGS AND THE BORROWER AGREES TO
DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT ON THE TERMS AND FOR THE PURPOSES
OF THIS PROVISION SATISFACTORY TO THE ADMINISTRATIVE AGENT UNDER THIS AGREEMENT.
EACH OF HOLDINGS AND THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO HOLDINGS OR THE BORROWER AT, AS THE CASE MAY BE, ITS ADDRESS SET
FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE THIRTY (30)
DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE
ADMINISTRATIVE AGENT UNDER THIS AGREEMENT, ANY BANK OR THE HOLDER OF ANY NOTE TO
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SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT PARTY IN ANY OTHER
JURISDICTION.
(b) EACH OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF
THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
12.09 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
12.10 Effectiveness. (a) This Agreement shall become effective on the
date (the "Restatement Effective Date") on which all of the parties hereto shall
have signed a copy hereof (whether the same or different copies) and shall have
delivered the same to the Administrative Agent at its Notice Office or, in the
case of the Banks, shall have given to the Administrative Agent telephonic
notice (confirmed in writing), written or facsimile transmission notice
(actually received) in accordance with Section 12.03 at such office that the
same has been signed and mailed to it.
(b) On the Restatement Effective Date, each New Bank and each
Continuing Bank shall have delivered to the Administrative Agent for the account
of the Borrower an amount equal to (i) in the case of each New Bank, the Loans
to be made by such New Bank on the Restatement Effective Date and (ii) in the
case of each Continuing Bank, the amount by which the principal amount of Loans
to be made and/or converted by such Continuing Bank on the Restatement Effective
Date exceeds the amount of the Existing Loans of such Continuing Bank
outstanding on the Restatement Effective Date. Notwithstanding anything to the
contrary contained in this Section 12.10(b), in satisfying the foregoing
condition, unless the Administrative Agent shall have been notified by any Bank
prior to the occurrence of the Restatement Effective Date that such Bank does
not intend to make available to the Administrative Agent such Bank's Loans
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required to be made by it on such date, then the Administrative Agent may, in
reliance on such assumption, make available to the Borrower the corresponding
amounts in accordance with the provisions of Section 1.04, and the making
available by the Administrative Agent of such amounts shall satisfy the
condition contained in this Section 12.10(b).
12.11 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
12.12 Amendment or Waiver. (a) Neither this Agreement nor any other
Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party thereto and the
Required Banks; provided that no such change, waiver, discharge or termination
shall, without the consent of each Bank (with Obligations of the respective
types being directly affected thereby): (i) extend the final scheduled maturity
of any Loan or Note beyond the applicable Maturity Date or extend the stated
maturity of any Letter of Credit beyond the Revolving Loan Maturity Date, or
reduce the rate or extend the time of payment of interest or Fees thereon
(except in connection with a waiver of applicability of any post-default
increase in interest rates), or reduce the principal amount thereof, or increase
the Commitments of any Bank over the amount thereof then in effect (it being
understood that a waiver of any Default or Event of Default or of a mandatory
reduction in the Total Commitment or a mandatory prepayment shall not constitute
an increase of the Commitment of any Bank, and that an increase in the available
portion of any Commitment of any Bank shall not constitute an increase in the
Commitment of such Bank); or (ii) release all or a substantial portion of the
Collateral (except for the release of Collateral (other than the release of all
or substantially all of the Collateral) in connection with asset dispositions
approved by the Required Banks); or (iii) amend, modify or waive any provision
of this Section 12.12; or (iv) reduce the percentage specified in, or otherwise
modify, the definition of Required Banks (it being understood that, with the
consent of the Required Banks, additional extensions of credit pursuant to this
Agreement may be included in the determination of the Required Banks on
substantially the same basis as the extensions of Term Loans, Term Loan
Commitments and Revolving Loan Commitments are included on the Restatement
Effective Date); or (v) modify the date of any Scheduled Repayment or of any
Scheduled Revolving Loan Commitment Reduction Date or the amount of any
Scheduled Repayment or Scheduled Revolving Loan Commitment Reduction; or (vi)
consent to the assignment or transfer by Holdings or the Borrower of any of its
rights and obligations under this Agreement; provided further, that no such
change, waiver, discharge or termination shall: (u) increase the Commitments of
any Bank over the amount thereof then in effect (it being understood that a
waiver of any conditions precedent, covenants, Defaults or Events of Default or
of a mandatory reduction in the Total Commitment or of a mandatory prepayment
shall not constitute an increase of the Commitment of any Bank, and that an
increase in the available portion of any Commitment of any Bank shall not
constitute an increase in the Commitment of such Bank) without the consent of
such Bank; or (v) without the consent of any Issuing Bank effected thereby,
amend, modify or waive any provision of Section 1A or alter its rights or
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obligations with respect to Letters of Credit; or (w) without the consent of
each Agent affected thereby, amend, modify or waive any provision of Section 11
as same applies to such Agent or any other provision relating to the rights or
obligations of such Agent; or (x) without the consent of the Collateral Agent,
amend, modify or waive any provision of Section 11 or any other provision
relating to the rights or obligations of the Collateral Agent; or (y) without
the consent of the Required Term Banks amend, modify or waive (A) Sections
3.01(v) or 3.02(B) to the extent that, in any such case, such amendment,
modification or waiver would alter the application of prepayments or repayments
as between the Term Facility and the Revolving Facility in a manner adverse to
the Term Loans or (B) Section 3.02(A)(c) or the definition of Required Term
Banks; or (z) without the consent of the Required Revolving Banks amend, modify
or waive (A) Section 3.02(B) to the extent that such amendment, modification or
waiver would alter the application of prepayments or repayments as between the
Term Facility and the Revolving Facility in a manner adverse to the Revolving
Loans or Revolving Loan Commitments or (B) Section 2.03(e) or the definition of
Required Revolving Banks.
(b) Notwithstanding anything to the contrary contained above in this
Section 12.12, the Collateral Agent may (i) enter into amendments to the
Subsidiaries Guaranty and the Security Documents for the purpose of adding
additional Subsidiaries of the Borrower (or other Credit Parties) as parties
thereto and (ii) enter into security documents to satisfy the requirements of
Sections 7.15 and 7.17, in each case without the consent of the Required Banks.
12.13 Survival. All indemnities set forth herein including, without
limitation, in Sections 1.10, 1.11, 1A.06, 3.04, 11.06 and 12.01 shall survive
the execution and delivery of this Agreement and the Notes and the making and
repayment of the Loans.
12.14 Domicile of Loans. Each Bank may transfer and carry its Loans
at, to or for the account of any office, Subsidiary or Affiliate of such Bank.
12.15 Post-Closing Obligations. (a) Notwithstanding anything to the
contrary contained in this Agreement or the other Credit Documents, the parties
hereto acknowledge and agree that (i) the UCC financing statements delivered by
the relevant Credit Party on the Restatement Effective Date shall be filed in
the appropriate governmental office and (ii) the UCC-11's or equivalent reports
required to be delivered to the Collateral Agent pursuant to Section 4.10 shall
be so delivered, in each case as early as practicable but in any event not later
than ten (10) Business Days after the Restatement Effective Date, and no
Borrowings (other than the Borrowings made on the Restatement Effective Date)
may be made under this Agreement until the conditions contained in this Section
12.15(a) have been determined by the Agents in their sole discretion to have
been satisfied. The representations and warranties made in each of the Credit
Documents with respect to the due filing or recording of such financing
statements and the perfection and priority of the security interests under the
Security Documents, and any defaults arising therefrom, shall be waived for such
ten (10) Business Day period.
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(b) The Borrower hereby acknowledges that in connection with certain
assignments hereof, the Agents or any of the Banks may be required to obtain a
rating of the Obligations and Commitments hereunder of the Borrower hereby
consents to such Agents or Banks providing to the respective rating agency such
information regarding the Obligations and creditworthiness of the Borrower as is
customary practice of such rating agency.
(c) Notwithstanding anything herein to the contrary, the Borrower
shall have as ten (10) Business Days after the Restatement Effective Date within
which to (i) obtain and deliver to the Agents the NRTC's and DirecTV's
acknowledgment of and agreement to the Security Documents Acknowledgment with
respect to the Collateral Assignment of Marketing and Distribution Agreements,
(ii) deliver to the Agents a true and correct copy of resolutions which have
been duly adopted by the Board of Directors of each of Holdings and the Borrower
ratifying the execution and delivery of each of the Documents and (iii) to the
extent not delivered on or prior to the Restatement Effective Date, deliver, and
cause each of Holdings and Argos to deliver, to the Agents good standing
certificates, including a statement as to the payment of all fees and taxes by
such Person, from the Secretary of State for the State of such Person's
incorporation and listing all charter documents on file with the Secretary of
State, and from each of the jurisdictions in which such Person is qualified to
do business. No Borrowings (other than the Borrowings made on the Restatement
Effective Date) may be made under this Agreement until all the conditions
contained in this Section 12.15(c) have been determined by the Agents in their
sole discretion to have been satisfied.
12.16 Amendment and Restatement; Termination of Existing Credit
Agreement. On the Restatement Effective Date, without further action by any
party, the Existing Credit Agreement shall be amended and restated to read in
full as set forth herein. Holdings, the Borrower and each of the Banks agrees
that the "Commitments" as defined in the Existing Credit Agreement shall be
terminated in their entirety on and as of the Restatement Effective Date.
12.17 Additions of New Banks; Conversion of Existing Loans of
Continuing Banks; Termination of Commitments of Non-Continuing Banks. (a) On and
as of the occurrence of the Restatement Effective Date in accordance with
Section 12.10, each New Bank shall become a "Bank" under, and for all purposes
of, this Agreement and the other Credit Documents.
(b) The parties hereto acknowledge that each Existing Bank has been
offered the opportunity to participate in this Agreement, after the occurrence
of the Restatement Effective Date, as a Continuing Bank hereunder, but that no
Existing Bank is obligated to be a Continuing Bank.
(c) Notwithstanding anything to the contrary contained in the Existing
Credit Agreement, this Agreement or any other Credit Document, Holdings, the
Borrower and each of the Banks hereby agree that on the Restatement Effective
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Date, (i) each Bank with a Commitment as set forth on Schedule I (after giving
effect to the Restatement Effective Date) shall make or maintain (including by
way of conversion) that principal amount of Term Loans and/or Revolving Loans to
the Borrower as is required by Section 1.01, provided that if the Existing Loans
of any Continuing Bank outstanding on the Restatement Effective Date
(immediately before giving effect thereto) exceed the aggregate principal amount
of Loans required to be made available by such Bank on such date (after giving
effect to the Restatement Effective Date), then Existing Loans of such
Continuing Bank in an amount equal to such excess shall be repaid on the
Restatement Effective Date to such Bank and (ii) in the case of each
Non-Continuing Bank, all of such Non-Continuing Bank's Existing Loans
outstanding on the Restatement Effective Date shall be repaid in full on such
date, together with interest thereon and all accrued Fees (and any other
amounts) owing to such Non-Continuing Bank, and the Commitment (under, and as
defined in, the Existing Credit Agreement) of such Non-Continuing Bank, if any,
shall be terminated, effective upon the occurrence of the Restatement Effective
Date. Notwithstanding anything to the contrary contained in the Existing Credit
Agreement, this Agreement or any other Credit Document, the parties hereto
hereby consent to the repayments and reductions required above, and agree that
in the event that any Existing Bank shall fail to execute a counterpart of this
Agreement prior to the occurrence of the Restatement Effective Date, such
Existing Bank shall be deemed to be a Non-Continuing Bank and, concurrently with
the occurrence of the Restatement Effective Date, the Commitment (under, and as
defined, in the Existing Credit Agreement) of such Existing Bank, if any, shall
be terminated, all Existing Loans of such Existing Bank outstanding on the
Restatement Effective Date shall be repaid in full, together with interest
thereon and all accrued Fees (and any other amounts) owing to such Existing
Bank, and concurrently with the occurrence of the Restatement Effective Date,
such Existing Bank shall no longer constitute a "Bank" under this Agreement and
the other Credit Documents, provided that all indemnities of the Credit Parties
under the Existing Credit Agreement and the other Credit Documents (as in effect
prior to the Restatement Effective Date) for the benefit of such Existing Bank
shall survive in accordance with the terms thereof.
12.18 Entire Agreement; Successors and Assigns. This Agreement and the
other Credit Documents constitute the entire agreement among Holdings, the
Borrower, the Agents and the Banks, supersedes any prior agreements among them
(other than the commitment letter, dated May 5, 1998, addressed to the Borrower
from Paribas, Fleet and GECC and the related fee letters), and shall bind and
benefit Holdings, the Borrower, the Agent and the Banks and their respective
successors and permitted assigns.
Section 13. Holdings Guaranty.
13.01 The Guaranty. In order to induce the Banks to enter into this
Agreement and to extend credit hereunder and in recognition of the direct
benefits to be received by Holdings from the proceeds of the Loans, Holdings
hereby agrees with the Secured Creditors as follows: Holdings hereby
unconditionally and irrevocably guarantees as primary obligor and not merely as
surety the full and prompt payment when due, whether upon maturity, by
acceleration or otherwise, of any and all indebtedness of the Borrower to
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the Banks under this Agreement and the other Credit Documents and under each
Interest Rate Protection or Other Hedging Agreement. If any or all of the
indebtedness of the Borrower to the Banks becomes due and payable hereunder or
under such other Credit Documents or Interest Rate Protection or Other Hedging
Agreements, Holdings unconditionally promises to pay such indebtedness to the
Secured Creditors, or order, on demand, together with any and all expenses which
may be incurred by the Agent or the Banks in collecting any of the indebtedness.
The word "indebtedness" is used in this Section 13 in its most comprehensive
sense and means any and all advances, debts, obligations and liabilities of the
Borrower arising in connection with this Agreement or any other Credit Documents
or under any Interest Rate Protection or Other Hedging Agreement, in each
case, heretofore, now, or hereafter made, incurred or created, whether
voluntarily or involuntarily, absolute or contingent, liquidated or
unliquidated, determined or undetermined, whether or not such indebtedness is
from time to time reduced, or extinguished and thereafter increased or incurred,
whether the Borrower may be liable individually or jointly with others, whether
or not recovery upon such indebtedness may be or hereafter become barred by any
statute of limitations, and whether or not such indebtedness may be or hereafter
become otherwise unenforceable.
13.02 Bankruptcy. Additionally, Holdings unconditionally and
irrevocably guarantees the payment of any and all indebtedness of the Borrower
to the Banks under this Agreement and the other Credit Documents and under each
Interest Rate Protection or Other Hedging Agreement, whether or not due or
payable by the Borrower upon the occurrence of any of the events specified in
Section 9.05, and unconditionally and irrevocably promises to pay such
indebtedness to the Banks, or order, on demand, in lawful money of the United
States.
13.03 Nature of Liability. The liability of Holdings hereunder is
exclusive and independent of any security for or other guaranty of the
indebtedness of the Borrower whether executed by Holdings, any other guarantor
or by any other party, and the liability of Holdings hereunder shall not be
affected or impaired by (a) any direction as to application of payment by the
Borrower or by any other party, or (b) any other continuing or other guaranty,
undertaking or maximum liability of a guarantor or of any other party as to the
indebtedness of the Borrower, or (c) any payment on or in reduction of any such
other guaranty or undertaking, or (d) any dissolution, termination or increase,
decrease or change in personnel by the Borrower, or (e) any payment made to the
Agents or the Banks on the indebtedness which the Agents or such Banks repay the
Borrower pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding, and Holdings waives any right to
the deferral or modification of its obligations hereunder by reason of any such
proceeding.
13.04 Guaranty Absolute. No invalidity, irregularity or
unenforceability of all or any part of the indebtedness guaranteed hereby or of
any security therefor shall affect, impair or be a defense to this guaranty, and
this guaranty shall be primary, absolute and unconditional notwithstanding the
occurrence of any event or the existence of any other circumstances which might
constitute a legal or equitable discharge of a surety or guarantor except
payment in full of the indebtedness guaranteed herein.
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13.05 Independent Obligation. The obligations of Holdings hereunder
are independent of the obligations of any other guarantor or the Borrower, and a
separate action or actions may be brought and prosecuted against Holdings
whether or not action is brought against any other guarantor or the Borrower and
whether or not any other guarantor or the Borrower be joined in any such action
or actions. Holdings waives, to the fullest extent permitted by law, the benefit
of any statue of limitations affecting its liability hereunder or the
enforcement thereof. Any payment by the Borrower or other circumstance which
operates to toll any statute of limitations as to the Borrower shall operate to
toll the statute of limitations as to Holdings.
13.06 Authorization. Holdings authorizes the Agents, the Collateral
Agent and the Banks without notice or demand, and without affecting or impairing
its liability hereunder, from time to time to:
(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew, increase, accelerate or alter, any of the
indebtedness (including any increase or decrease in the rate of interest
thereon), any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the guaranty herein made shall apply to the
indebtedness as so changed, extended, renewed or altered;
(b) take and hold security for the payment of the indebtedness and
sell, exchange, release, surrender, realize upon or otherwise deal with in
any manner and in any order any property by whomsoever at any time pledged
or mortgaged to secure, or howsoever securing, the indebtedness or any
liabilities (including any of those hereunder) incurred directly or
indirectly in respect thereof or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors, the
Borrower or other obligors;
(e) settle or compromise any of the indebtedness, any security
therefor or any liability (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and may subordinate
the payment of all or any part thereof to the payment of any liability
(whether due or not) of the Borrower to its creditors other than the Banks;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Banks regardless of what
liability or liabilities of Holdings or the Borrower remain unpaid;
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(g) consent to or waive any breach of, or any act, omission or default
under, this Agreement or any of the instruments or agreements referred to
herein, or otherwise amend, modify or supplement this Agreement or any of
such other instruments or agreements; and/or
(h) take any other action which would, under otherwise applicable
principles of common law, give rise to a legal or equitable discharge of
Holdings from its liabilities under this Section 13.
13.07 Reliance. It is not necessary for the Agent or the Banks to
inquire into the capacity or powers of the Borrower or the Subsidiaries of the
Borrower or the officers, directors, partners or agents acting or purporting to
act on its behalf, and any indebtedness made or created in reliance upon the
professed exercise of such powers shall be guaranteed hereunder.
13.08 Subordination. Any indebtedness of the Borrower now or hereafter
held by Holdings is hereby subordinated to the indebtedness of the Borrower to
the Agents and the Banks; and such indebtedness of the Borrower to Holdings, if
the Agents (at the direction of the Required Banks), after an Event of Default
has occurred, so request, shall be collected, enforced and received by Holdings
as trustee for the Banks and be paid over to the Banks on account of the
indebtedness of the Borrower to the Banks, but without affecting or impairing in
any manner the liability of Holdings under the other provisions of this
guaranty. Prior to the transfer by Holdings of any note or negotiable instrument
evidencing any indebtedness of the Borrower to Holdings, Holdings shall ▇▇▇▇
such note or negotiable instrument with a legend that the same is subject to
this subordination. Without limiting the generality of the foregoing, Holdings
hereby agrees with the Agents and the Banks that it will not exercise any right
of subrogation which it may at any time otherwise have as a result of this
guaranty (whether contractual, under Section 509 of the Bankruptcy Code, or
otherwise) until all guaranteed Obligations have been paid in full in cash.
13.09 Waiver. (a) Holdings waives any right to require the Agents or
the Banks to (i) proceed against the Borrower, any other guarantor or any other
party, (ii) proceed against or exhaust any security held from the Borrower, any
other guarantor or any other party or (iii) pursue any other remedy in the
Agents' or the Banks' power whatsoever. Holdings waives any defense based on or
arising out of any defense of the Borrower, any other guarantor or any other
party other than payment in full of the indebtedness, including, without
limitation, any defense based on or arising out of the disability of the
Borrower, any other guarantor or any other party, or the unenforceability of the
indebtedness or any part thereof from any cause, or the cessation from any cause
of the liability of the Borrower other than payment in full of the indebtedness.
The Agents and the Banks may, in accordance with the Credit Documents, at their
election, foreclose on any security held by the Agents, the Collateral Agent or
the Banks by one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable (to the extent such sale is
permitted by applicable law), or exercise any other right or remedy the Agents
and the Banks may have against the Borrower or any other party, or any security,
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without affecting or impairing in any way the liability of Holdings hereunder
except to the extent the indebtedness has been paid. Holdings waives any defense
arising out of any such election by the Agents and the Banks, even though such
election operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of Holdings against the Borrower or any
other party or any security.
(b) Holdings waives all presentments, demands for performance,
protests and notices, including, without limitation, notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional
indebtedness. Holdings assumes all responsibility for being and keeping itself
informed of the Borrower's financial condition and assets, and of all other
circumstances bearing upon the risk of non-payment of the indebtedness and the
nature, scope and extent of the risks which Holdings assumes and incurs
hereunder, and agrees that the Agents and the Banks shall have no duty to advise
Holdings of information known to them regarding such circumstances or risks.
13.10 Binding Nature of Guaranty. This guaranty shall be binding upon
Holdings and its successors and assigns and shall inure to the benefit of the
Banks and their successors and assigns.
13.11 Judgments Binding. If claim is ever made upon any Bank or any
subsequent holder of a Note for repayment or recovery of any amount or amounts
received in payment or on account of any of the indebtedness and any of the
aforesaid payees repays all or part of said amount by reason of (a) any
judgment, decree or order of any court or administrative body having
jurisdiction over such payee or any of its property, or (b) any settlement or
compromise of any such claim effected by such payee with any such claimant
(including the Borrower) then and in such event Holdings agrees that any such
judgment, decree, order, settlement or compromise shall be binding upon
Holdings, notwithstanding any revocation hereof or the cancellation of any Note,
or other instrument evidencing any liability of the Borrower, and Holdings shall
be and remain liable to the aforesaid payees hereunder for the amount so repaid
or recovered to the same extent as if such amount had never originally been
received by any such payee.
* * *
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ GOLDEN SKY HOLDINGS, INC.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Title: Chief Financial Officer
127
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ GOLDEN SKY SYSTEMS, INC.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Title: Chief Financial Officer
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ BANQUE PARIBAS,
New York, New York 10019 Individually and as Syndication
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Agent and Managing Agent
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Director
By:/s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director,
Group Head
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Mail Stop MAOFDO3D FLEET NATIONAL BANK,
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Individually and as
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Administrative Agent and
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Managing Agent
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ By:/s/▇▇▇▇▇ ▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Senior Vice President
Structured Finance Group GENERAL ELECTRIC CAPITAL
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇ Individually and as
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Documentation Agent
Attention: Manager of
Portfolio Operations By:/s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Title: Manager, Operations