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$50,000,000
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF DECEMBER 22, 1997
AMONG
ASCENT ENTERTAINMENT GROUP, INC.
AS THE BORROWER
AND
THE LENDERS NAMED HEREIN
AND
NATIONSBANK OF TEXAS, N.A.
AS THE ADMINISTRATIVE AGENT
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EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A - Form of Administrative Questionnaire
Exhibit B - Form of Assignment and Acceptance
Exhibit C - Form of Borrowing Request
Exhibit D - Form of Application for a Letter of Credit
Exhibit E - Form of Compliance Certificate
SCHEDULES
Schedule 1.01 - Films Not Included in Film Cash Flow
Schedule 2.01 - Lenders and Commitments
Schedule 3.08 - Subsidiaries
Schedule 3.09 - Litigation
Schedule 3.10 - Restrictive Material Agreements
Schedule 3.17 - Insurance
Schedule 3.19 - Environmental Matters
Schedule 3.22 - Film Inventory
Schedule 6.01 - Subsidiary Indebtedness
Schedule 6.02 - Liens
Schedule 6.03 - Permitted Sale Leaseback
Schedule 6.04a - Existing Investments
Schedule 6.04b - Investments in On Command Corp.
Schedule 6.04c - Investments in Ascent Arena Company, LLC
Schedule 6.05 - Capital Stock owned by the Borrower Permitted
to be Sold
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINED TERMS. . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. TERMS GENERALLY. . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE II
THE CREDIT
SECTION 2.01. REVOLVING LOANS. . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.02. LOANS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.03. BORROWING PROCEDURE. . . . . . . . . . . . . . . . . . . . . . 26
SECTION 2.04. EVIDENCE OF DEBT; REPAYMENT OF LOANS . . . . . . . . . . . . . 27
SECTION 2.05. FEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 2.06. INTEREST ON LOANS. . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 2.07. DEFAULT INTEREST . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 2.08. ALTERNATE RATE OF INTEREST . . . . . . . . . . . . . . . . . . 29
SECTION 2.09. TERMINATION AND REDUCTION OF COMMITMENTS . . . . . . . . . . . 29
SECTION 2.10. CONVERSION AND CONTINUATION OF BORROWINGS. . . . . . . . . . . 31
SECTION 2.11. PREPAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 2.12. RESERVE REQUIREMENTS; CHANGE IN CIRCUMSTANCES. . . . . . . . . 34
SECTION 2.13. CHANGE IN LEGALITY . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 2.14. INDEMNITY. . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 2.15. SHARING OF SETOFFS . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 2.16. PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 2.17. TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 2.18. ASSIGNMENT OF COMMITMENTS UNDER CERTAIN CIRCUMSTANCES; DUTY
TO MITIGATE. . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 2.19. LETTERS OF CREDIT. . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. ORGANIZATION; POWERS . . . . . . . . . . . . . . . . . . . . . 47
SECTION 3.02. AUTHORIZATION. . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 3.03. ENFORCEABILITY . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 3.04. GOVERNMENTAL APPROVALS . . . . . . . . . . . . . . . . . . . . 48
ii
SECTION 3.05. FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . 48
SECTION 3.06. NO MATERIAL ADVERSE CHANGE . . . . . . . . . . . . . . . . . . 48
SECTION 3.07. TITLE TO PROPERTIES; POSSESSION UNDER LEASES . . . . . . . . . 48
SECTION 3.08. THE SUBSIDIARIES AND ON COMMAND CORP.. . . . . . . . . . . . . 49
SECTION 3.09. LITIGATION; COMPLIANCE WITH LAWS . . . . . . . . . . . . . . . 49
SECTION 3.10. AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 3.11. FEDERAL RESERVE REGULATIONS. . . . . . . . . . . . . . . . . . 50
SECTION 3.12. INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY
ACT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 3.13. TAX RETURNS. . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 3.14. NO MATERIAL MISSTATEMENTS. . . . . . . . . . . . . . . . . . . 50
SECTION 3.15. EMPLOYEE BENEFIT PLANS . . . . . . . . . . . . . . . . . . . . 51
SECTION 3.16. SOLVENCY . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 3.17. INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 3.18. LABOR MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 3.19. ENVIRONMENTAL MATTERS. . . . . . . . . . . . . . . . . . . . . 52
SECTION 3.20. OWNERSHIP OF THE FRANCHISES. . . . . . . . . . . . . . . . . . 53
SECTION 3.21. STRIKES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 3.22. FILM INVENTORY . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 3.23. SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC. . . . . . . . 54
ARTICLE IV
CONDITIONS OF LENDING
SECTION 4.01. ALL CREDIT EVENTS. . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 4.02. FIRST CREDIT EVENT . . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE V
AFFIRMATIVE COVENANTS
SECTION 5.01. EXISTENCE; BUSINESSES AND PROPERTIES . . . . . . . . . . . . . 58
SECTION 5.02. INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 5.03. OBLIGATIONS AND TAXES. . . . . . . . . . . . . . . . . . . . . 58
SECTION 5.04. FINANCIAL STATEMENTS, REPORTS, ETC.. . . . . . . . . . . . . . 59
SECTION 5.05. LITIGATION AND OTHER NOTICES . . . . . . . . . . . . . . . . . 60
SECTION 5.06. EMPLOYEE BENEFITS. . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 5.07. MAINTAINING RECORDS; ACCESS TO PROPERTIES AND
INSPECTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 5.08. USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 5.09. COMPLIANCE WITH ENVIRONMENTAL LAWS . . . . . . . . . . . . . . 61
SECTION 5.10. COMPLIANCE WITH MATERIAL CONTRACTS . . . . . . . . . . . . . . 62
iii
SECTION 5.11. ARENA/COMPLEX CONSTRUCTION . . . . . . . . . . . . . . . . . . 62
SECTION 5.12. NBA AND NHL OBLIGATIONS. . . . . . . . . . . . . . . . . . . . 62
SECTION 5.13. OPERATION OF FRANCHISES. . . . . . . . . . . . . . . . . . . . 62
SECTION 5.14. SERVICES CONTRACTS . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 5.15. KEY MAN LIFE INSURANCE/NBA AND NHL FINANCIAL
INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 5.16. ARENA/COMPLEX NOTICE . . . . . . . . . . . . . . . . . . . . . 63
SECTION 5.17. SYNDICATION. . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 5.18. NBA AND NHL CONSENT. . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE VI
NEGATIVE COVENANTS
SECTION 6.01. INDEBTEDNESS . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 6.02. LIENS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 6.03. SALE AND LEASE BACK TRANSACTIONS . . . . . . . . . . . . . . . 66
SECTION 6.04. INVESTMENTS, ACQUISITIONS, LOANS AND ADVANCES. . . . . . . . . 67
SECTION 6.05. MERGERS, CONSOLIDATIONS AND SALES OF ASSETS. . . . . . . . . . 68
SECTION 6.06. DIVIDENDS AND DISTRIBUTIONS; RESTRICTIONS ON ABILITY OF
SUBSIDIARIES TO PAY DIVIDENDS. . . . . . . . . . . . . . . . . 69
SECTION 6.07. TRANSACTIONS WITH AFFILIATES . . . . . . . . . . . . . . . . . 69
SECTION 6.08. LIMITATION ON RESTRICTIVE AGREEMENTS . . . . . . . . . . . . . 70
SECTION 6.09. COVERAGE RATIO . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 6.10. MINIMUM ADJUSTED EBITDA. . . . . . . . . . . . . . . . . . . . 71
SECTION 6.11. FILM INVENTORY . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 6.12. AMENDMENTS TO ORGANIZATIONAL DOCUMENTS AND MATERIAL DOCUMENTS. 72
ARTICLE VII
EVENTS OF DEFAULT
ARTICLE VIII
THE ADMINISTRATIVE AGENT
ARTICLE IX
iv
MISCELLANEOUS
SECTION 9.01. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 9.02. SURVIVAL OF AGREEMENT. . . . . . . . . . . . . . . . . . . . . 82
SECTION 9.03. BINDING EFFECT . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 9.04. SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . . . . 83
SECTION 9.05. EXPENSES; INDEMNITY. . . . . . . . . . . . . . . . . . . . . . 86
SECTION 9.06. RIGHT OF SETOFF. . . . . . . . . . . . . . . . . . . . . . . . 87
SECTION 9.07. APPLICABLE LAW . . . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 9.08. WAIVERS; AMENDMENT . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 9.09. INTEREST RATE LIMITATION . . . . . . . . . . . . . . . . . . . 89
SECTION 9.10. NBA CONSENT LETTER AND NHL CONSENT LETTER. . . . . . . . . . . 89
SECTION 9.11. ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 9.12. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . 90
SECTION 9.13. SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 9.14. COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 9.15. HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 9.16. JURISDICTION; CONSENT TO SERVICE OF PROCESS. . . . . . . . . . 91
SECTION 9.17. CONFIDENTIALITY. . . . . . . . . . . . . . . . . . . . . . . . 91
v
ASCENT ENTERTAINMENT GROUP, INC.
$50,000,000
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
This SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this "AGREEMENT"),
dated as of December 22, 1997, among ASCENT ENTERTAINMENT GROUP, INC., a
Delaware corporation (the "BORROWER"), the Lenders (as defined in Article I
hereof), and NATIONSBANK OF TEXAS, N.A., a national banking association, as
issuing bank (in such capacity, the "ISSUING BANK"), and as administrative
agent (in such capacity, the "ADMINISTRATIVE AGENT") for the Lenders.
WHEREAS, the Borrower and Lenders entered in to that certain Credit
Agreement dated as of October 8, 1996 in the maximum principal amount of
$200,000,000, as amended and restated by that First Amended and Restated
Credit Agreement, dated as of March 23, 1997, as amended by that certain
First Amendment to First Amended and Restated Credit Agreement, dated as of
October 9, 1997, and that certain Second Amendment to First Amended and
Restated Credit Agreement, dated as of November 13, 1997 (such Credit
Agreements, as amended, restated or modified, the "Existing Credit
Agreement");
WHEREAS, the Borrower has requested the Lenders to amend and restate the
Existing Credit Agreement to reduce the Existing Credit Agreement and provide
for a loan facility in the aggregate maximum amount of $50,000,000,
consisting of Revolving Loans (such term and each other capitalized term used
but not defined herein having the meaning given it in Article I hereof), at
any time and from time to time prior to the Maturity Date, in an aggregate
principal amount at any time outstanding not in excess of $50,000,000 (of
which not more than $5,000,000 may be used for Letters of Credit), the
proceeds of which will be used in accordance with the terms and conditions of
this Agreement.
WHEREAS, the Lenders are willing to extend such credit to the Borrower,
and the Issuing Bank is willing to issue letters of credit for the account of
the Borrower, in each case on the terms and subject to the conditions set
forth herein. Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINED TERMS. As used in this Agreement, the following
terms shall have the meanings specified below:
1
"ABR BORROWING" shall mean a Borrowing comprised of ABR Loans.
"ABR LOAN" shall mean any Loan bearing interest at the Alternate Base
Rate in accordance with the provisions of Article II hereof.
"ADJUSTED EBITDA" shall mean, the sum of (a) EBITDA for the most
recently completed four fiscal quarters, plus (b) Revolver Availability on
any date of determination, plus (c) the aggregate amount of cash of the
Borrower and the Subsidiaries on any date of determination, minus
Consolidated Cash Interest Expense for the four most recently completed
fiscal quarters.
"ADJUSTED LIBO RATE" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, a simple per annum interest rate equal to
the lesser of (a) the Highest Lawful Rate and (b) the sum of (i) the quotient
of (x) the LIBO Rate divided by (y) one minus the LIBOR Reserve Percentage,
stated as a decimal, plus (ii) the Applicable Percentage. The Adjusted LIBO
Rate shall apply to Interest Periods of one, two, three or six months, or, if
determined available by the Administrative Agent, twelve months. The
Adjusted LIBO Rate shall be subject to availability with respect to the
Lenders and to Section 2.13 hereof. Once determined, the Adjusted LIBO Rate
shall remain unchanged during the applicable Interest Period, except for
changes to reflect adjustments in the LIBOR Reserve Percentage.
"ADMINISTRATIVE AGENT FEES" shall have the meaning assigned to such term
in Section 2.05(b) hereof.
"ADMINISTRATIVE QUESTIONNAIRE" shall mean an Administrative Questionnaire
in the form of EXHIBIT A hereto.
"ADVERTISING AGREEMENTS" shall mean all material agreements between Ascent
Sports, Avalanche Sub or Nuggets Sub and any other Person in any manner relating
to signage or advertising in, around or relating to the Arena, or, after its
completion, the Arena/Complex.
"AFFILIATE" shall mean, when used with respect to a specified Person,
another Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the Person
specified.
"ALTERNATE BASE RATE" shall mean, for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/100 of 1%) equal to the lesser of (a)
the Highest Lawful Rate and (b) sum of (i) the Applicable Percentage, plus
(ii) the greater of (A) the Prime Rate in effect on such day, and (B) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. If for
any reason the Administrative Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is unable to
ascertain the Federal Funds Effective Rate for any reason, including the
inability or failure of the Administrative Agent to obtain sufficient
quotations in accordance with the terms of the definition thereof, the
Alternate Base Rate shall be determined without regard to clause (B) of the
preceding sentence, until the circumstances giving rise to such
2
inability no longer exist. Any change in the Alternate Base Rate due to a
change in the Prime Rate or the Federal Funds Effective Rate shall be
effective on the effective date of such change in the Prime Rate or the
Federal Funds Effective Rate, respectively. The term "PRIME RATE" shall mean
the rate of interest per annum publicly announced from time to time by the
Administrative Agent as its prime rate in effect at its office in Dallas,
Texas; each change in the Prime Rate shall be effective on the date such
change is publicly announced as being effective. The term "FEDERAL FUNDS
EFFECTIVE RATE" shall mean, for any day, 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 on the next succeeding
Business Day by the Federal Reserve Bank of Dallas, Texas or, if such rate is
not so published for any day that is a Business Day, the average of the
quotations for the day for such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by it.
"APPLICABLE LAW" shall mean (a) in respect of any Person, all provisions
of Laws of tribunals applicable to such Person, and all orders and decrees of
all courts and arbitrators in proceedings or actions to which the Person in
question is a party and (b) in respect of contracts made or performed in the
State of Texas, "Applicable Law" also means the laws of the United States of
America, including, without limiting the foregoing, 12 USC Sections 85 and
86, as amended to the date hereof and as the same may be amended at any time
and from time to time hereafter, and any other statute of the United States
of America now or at any time hereafter prescribing the maximum rates of
interest on loans and extensions of credit, and the laws of the State of
Texas, including, without limitation, Article 5069-1H, Title 79, Revised
Civil Statutes of Texas, 1925, ("ART. 1H"), as amended, if applicable, and if
Art. 1H is not applicable, Article 5069-1D, Title 79, Revised Civil Statutes
of Texas, 1925, ("ART. 1D"), as amended, and any other statute of the State
of Texas now or at any time hereafter prescribing maximum rates of interest
on loans and extensions of credit; PROVIDED HOWEVER, that pursuant to Article
5069-15.10(b), Title 79, Revised Civil Statutes of Texas, 1925, as amended,
the Borrower agrees that the provisions of Chapter 15, Title 79, Revised
Civil Statutes of Texas, 1925, as amended, shall not apply to Loans hereunder.
"APPLICABLE PERCENTAGE" shall mean, for any day, with respect to any
Eurodollar Loan or ABR Loan, the applicable percentage set forth below under
the caption "Eurodollar Margin" or "ABR Margin", as the case may be, based
upon the ratio of (a) the product of the Borrower's and its consolidated
Subsidiaries' EBITDA for the most recently completed four fiscal quarters to
(b) Consolidated Cash Interest Expense for the most recently completed four
fiscal quarters (the "DETERMINING RATIO"), then in effect for purposes
hereof:
Eurodollar ABR
Determining Ratio Margin Margin
----------------- --------- ------
CATEGORY 1 2.75% 1.50%
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Less than or equal
3
to 1.10 to 1.00
CATEGORY 2 2.25% 1.00%
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Greater than or equal to
1.10 to 1.00 but less than
1.50 to 1.00
CATEGORY 3
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Greater than or equal to 2.00% 0.75%
1.50 to 1.00
Except as set forth below, the Determining Ratio utilized for purposes
of determining the Eurodollar Margin and ABR Margin shall be that in effect
as of the last day of the most recent fiscal quarter of the Borrower in
respect of which financial statements have been delivered pursuant to this
Agreement. From the date hereof until the earliest to occur of the initial
delivery of financial statements pursuant to Section 5.04(a) or (b) hereof,
the Borrower's failure to timely deliver such financial statements or the
occurrence of an Event of Default, the Determining Ratio shall be deemed to
be within Category 1 above. The Applicable Percentage from time to time in
effect shall be based on the Determining Ratio from time to time in effect,
and each change in the Applicable Percentage resulting from a change in (or
the initial establishment of) the Determining Ratio shall be effective with
respect to all Loans, Total Commitment and Letters of Credit outstanding on
and after the date of delivery to the Administrative Agent of the financial
statements and certificates required by Section 5.04(a) or (b) hereof
indicating such change to and including the date immediately preceding the
next date of delivery of such financial statements and certificates
indicating another such change. Notwithstanding the foregoing, (a) at any
time during which the Borrower has failed to deliver the financial statements
and certificates required by Section 5.04(a) or (b) hereof, or (b) at any
time after the occurrence and during the continuance of an Event of Default,
the Determining Ratio shall be deemed to be in Category 1 above for purposes
of determining the Applicable Percentage.
"APPLICABLE SPECIFIED PERCENTAGE" shall mean the Revolving Loan Specified
Percentage.
"APPLICATION" shall mean any stand-by letter of credit application
delivered to the Administrative Agent for or in connection with any Letter of
Credit pursuant to Section 2.19 hereof, in the Administrative Agent's
standard form for stand-by letters of credit, the form of which, on the
Closing Date, is attached as EXHIBIT D hereto.
"ARENA" shall mean the arena owned by the City and County of Denver, in
Denver, Colorado, commonly known as "▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇. Sports Arena".
"ARENA/COMPLEX" shall mean the proposed multi-purpose sports arena and
entertainment complex which is expected to include, among other things,
facilities for basketball, hockey, live
4
concerts and other shows, television and audio production and post-production
facilities and integrated office space, retail stores and restaurants.
"ARENA OPERATING AGREEMENT" shall mean that certain Operating Agreement
entered into by Ascent Arena Company, LLC (formerly Denver Arena Company,
LLC) and the Borrower, dated as of November 14, 1997.
"ART. 1D" has the meaning specified in the definition herein of
"Applicable Law".
"ART. 1H" has the meaning specified in the definition herein of
"Applicable Law".
"ASCENT SPORTS" shall mean Ascent Sports, Inc., a Delaware corporation
and wholly owned Subsidiary of the Borrower.
"ASCENT SPORTS HOLDINGS" shall mean Ascent Sports Holdings, Inc., a
Delaware corporation and wholly owned Subsidiary of the Borrower.
"ASSET DISPOSITION" shall mean the sale or disposition of assets
(including Capital Stock owned by the Borrower or any Subsidiary of the
Borrower) for fair market value in cash outside the ordinary course of
business.
"ASSIGNMENT AND ACCEPTANCE" shall mean an assignment and acceptance
entered into by a Lender and an assignee, and accepted by the Administrative
Agent, in the form of EXHIBIT B hereto or such other form as shall be
approved by the Administrative Agent.
"AVALANCHE SUB" shall mean Colorado Avalanche, LLC, a Colorado limited
liability corporation and wholly owned indirect Subsidiary of the Borrower,
which such Subsidiary owns and operates the Colorado Avalanche, a franchise
of the NHL.
"AVALANCHE LICENSE AGREEMENT" shall mean the User Agreement, between the
City and County of Denver and Avalanche Sub, related to Avalanche Sub's
rights to use and occupancy of the Arena.
"AVALANCHE LICENSE DOCUMENTS" shall mean the Avalanche License Agreement
and each other material agreement related to Avalanche Sub's rights to the
use and occupancy of the Arena, or, after its completion, the similar
agreements related to the Arena/Complex.
"BEACON" shall mean Beacon Communications Corp., a Delaware corporation
and wholly owned Subsidiary of the Borrower.
"BOARD" shall mean the Board of Governors of the Federal Reserve System
of the United States of America.
5
"BORROWING" shall mean, with respect to the Revolving Loans, Loans of a
single Type made by the Lenders in accordance with the terms hereof on a
single date and as to which a single Interest Period is in effect.
"BORROWING REQUEST" shall mean a request by the Borrower in accordance
with the terms of Section 2.03 hereof and substantially in the form of
EXHIBIT C hereto.
"BROADCAST RIGHTS" shall mean (a) any and all rights of Ascent Sports,
Avalanche Sub or Nuggets Sub to broadcast, disseminate or publish, or to
permit the broadcast, dissemination or publication of, by means of
television, radio, cable, satellite or other electronic transmissions or
recordings, any activities of either Franchise; (b) any and all rights to
license, sell, lease, convey or otherwise transfer any of the foregoing
described in CLAUSE (a); (c) any and all rights of Ascent Sports, Avalanche
Sub or Nuggets Sub, pursuant to any agreement, contract, transaction or
understanding, as a result of which any Person is or becomes entitled to
broadcast, disseminate or publish such activities; and (d) any and all
renewals and extensions of any of the foregoing and any and all amendments
and supplements thereto.
"BROADCASTING AGREEMENTS" shall mean all material agreements now or
hereafter granting the Broadcast Rights by and between Ascent Sports,
Avalanche Sub or Nuggets Sub and any other Person.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or day
on which banks in Dallas, Texas or New York, New York are authorized or
required by Law to close; provided, however, that when used in connection
with a Eurodollar Loan, the term "Business Day" shall also exclude any day on
which banks are not open for dealings in dollar deposits in the London
interbank market.
"CAPITAL LEASE OBLIGATIONS" of any Person shall mean the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"CAPITAL STOCK" shall mean, as to any Person, the equity interests in
such Person, including, without limitation, the shares of each class of
capital stock of any Person that is a corporation and each class of
partnership interests (including without limitation, general, limited and
preference units) in any Person that is a partnership.
A "CHANGE IN CONTROL" shall be deemed to have occurred if any Person or
group other than the ownership group as of the date of this Agreement (within
the meaning of Rule 13d-5 of the Securities Exchange Act of 1934 as in effect
on the date hereof) shall (a) own directly or indirectly, beneficially or of
record, shares of Capital Stock of the Borrower representing more
6
than 35% of the aggregate ordinary voting power, or (b) control a majority of
the seats on the Board of Directors of the Borrower, or (c) have effective
voting control of the Borrower, unless such Person or group has a long term
senior unsecured debt rating of A- or A3 or better from Standard & Poor's
Ratings Group, a Division of ▇▇▇▇▇▇-▇▇▇▇, Inc. or from ▇▇▇▇▇'▇ Investors
Service, Inc., respectively, and such Person or group is otherwise acceptable
to the Administrative Agent as evidenced by its prior written consent to such
change (which such consent may not be unreasonably withheld or delayed).
"CLOSING DATE" shall mean the date of the first Credit Event.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"COLLATERAL" shall mean first priority and perfected Liens in 100% of
the Capital Stock of all Subsidiaries of the Borrower, except Nuggets Sub and
the Avalanche Sub.
"COMMITMENT" shall mean, with respect to each Lender under the Revolving
Loans, the lesser of (a) $50,000,000 and (b) the commitment of such Lender to
make Loans hereunder as set forth on SCHEDULE 2.01 hereto, or in the
Assignment and Acceptance pursuant to which such Lender assumed its
Commitment, as applicable.
"COMMITMENT FEE" shall have the meaning assigned to such term in Section
2.05(d) hereof.
"COMPLIANCE CERTIFICATE" shall mean a compliance certificate,
substantially in the form of EXHIBIT E hereto, and certifying that there
exists no Default or Event of Default at the time of delivery thereof.
"CONCESSION AGREEMENTS" shall mean all material agreements now or
hereafter existing covering or affecting the sale of food, beverage,
merchandise or other goods at or near the Arena, or, after its completion,
the Arena/Complex, and any and all amendments thereto or substitutions
therefor between Ascent Sports, Avalanche Sub or Nuggets Sub and any other
Person.
"CONSOLIDATED CASH INTEREST EXPENSE" shall mean, for any period of
determination, the interest expense of the Borrower and its Subsidiaries for
such period determined on a consolidated basis in accordance with GAAP,
excluding any amounts not paid or not required (whether during or after such
period) to be paid in cash. For purposes of the foregoing, interest expense
shall be determined after giving effect to any net cash payments made or
received by the Borrower with respect to rate protection agreements entered
into as a hedge against interest rate exposure. Interest expense shall be
calculated in accordance with GAAP as in effect and applied by the Borrower
on the date of this Agreement and, accordingly, shall exclude the effects of
any changes in GAAP or its application by the Borrower after the date hereof.
7
"CONSOLIDATED TOTAL INDEBTEDNESS" shall mean, for any Person, all
Indebtedness of such Person and its consolidated subsidiaries (other than
Indebtedness referred to in clause (h) of the definition of such term),
determined on a consolidated basis in accordance with GAAP; PROVIDED,
HOWEVER, that Consolidated Total Indebtedness of the Borrower shall not
include Non-Recourse Arena Financing or Non-Recourse Film Indebtedness, in
each case incurred in compliance with the provisions of this Agreement.
"CONTROL" shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise, and "Controlling" and "Controlled" shall have the meanings
correlative thereto.
"COVERAGE RATIO" shall mean, on any date for the Borrower and its
Subsidiaries on a consolidated basis, the ratio of (a) EBITDA for the four
most recently completed fiscal quarters to (b) Consolidated Cash Interest
Expense for the four most recently completed fiscal quarters.
"CREDIT EVENT" shall have the meaning assigned to such term in Section
4.01 hereto.
"DEBTOR RELIEF LAWS" shall mean applicable bankruptcy, reorganization,
moratorium, or similar Laws, or principles of equity affecting the
enforcement of creditors' rights generally.
"DEFAULT" shall mean any event or condition which upon notice, lapse of
time or both would constitute an Event of Default.
"DOLLARS" or "$" shall mean lawful money of the United States of
America.
"EBITDA" shall mean, with respect to the Borrower and its Subsidiaries
on a consolidated basis for any period, the consolidated net income of the
Borrower and its Subsidiaries for such period, computed in accordance with
GAAP, plus, to the extent deducted in computing such consolidated net income
and without duplication, the sum of (a) income tax expense, (b) interest
expense, (c) depreciation and amortization expense (but excluding the
amortization of Film Inventory), (d) allocation of income to minority
interests in earnings of consolidated subsidiaries and (e) extraordinary
losses (including restructuring provisions) during such period minus, to the
extent added in computing such consolidated net income and without
duplication, (y) extraordinary gains during such period and (z) allocation of
losses to minority interests in earnings of consolidated subsidiaries.
EBITDA shall be calculated in accordance with GAAP as in effect and applied
by the Borrower on the date of this Agreement and, accordingly, shall exclude
the effects of any changes in GAAP or its application by the Borrower after
the date hereof.
"ELIGIBLE ASSIGNEE" shall mean (a) any Lender, (b) a commercial bank
organized under the laws of the United States, or any state thereof, and
having total assets in excess of $1,000,000,000; (c) a savings and loan
association or savings bank organized under the laws of the United States, or
any state thereof, having total assets in excess of $500,000,000, and not in
8
receivership or conservatorship; (d) a commercial bank organized under the
laws of any other country which is a member of the Organization for Economic
Cooperation and Development, or a political subdivision of any such country,
and having total assets in excess of $1,000,000,000, provided that such bank
is acting through a branch or agency located in the country in which it is
organized or another country which is described in this clause; (e) the
central bank of any country which is a member of the Organization for
Economic Cooperation and Development; and (f) any fund organized under the
laws of the United States, or any state thereof, and having total assets in
excess of $500,000,000.
"ENVIRONMENT" shall mean ambient air, surface water and groundwater
(including potable water, navigable water and wetlands), the land surface or
subsurface strata, the workplace or as otherwise defined in any Environmental
Law.
"ENVIRONMENTAL CLAIM" shall mean any written accusation, allegation,
notice of violation, claim, demand, order, directive, consent decree, cost
recovery action or other cause of action by, or on behalf of, any
Governmental Authority or any Person for damages, injunctive or equitable
relief, personal injury (including sickness, disease or death), Remedial
Action costs, tangible or intangible property damage, natural resource
damages, nuisance, pollution, any adverse effect on the Environment caused by
any Hazardous Material, or for fines, penalties or restrictions, resulting
from or based upon: (a) the existence, or the continuation of the existence,
of a Release (including sudden or non-sudden, accidental or non-accidental
Releases); (b) exposure to any Hazardous Material; (c) the presence, use,
handling, transportation, storage, treatment or disposal of any Hazardous
Material; or (d) the violation or alleged violation of any Environmental Law
or Environmental Permit.
"ENVIRONMENTAL LAW" shall mean any and all applicable present and future
treaties, Laws, codes, judgments, injunctions, notices or binding agreements
issued, promulgated or entered into by any Governmental Authority, relating
in any way to the Environment, preservation or reclamation of natural
resources, the management, Release or threatened Release of any Hazardous
Material or to health and safety matters, including the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. Sections
9601 ET SEQ. (collectively "CERCLA"), the Solid Waste Disposal Act, as
amended by the Resource Conservation and Recovery Act of 1976 and Hazardous
and Solid Waste Amendments of 1984, 42 U.S.C. Sections 6901 ET SEQ., the
Federal Water Pollution Control Act, as amended by the Clean Water Act of
1977, 33 U.S.C. Sections 1251 ET SEQ., the Clean Air Act of 1970, 42 U.S.C.
Sections 7401 ET SEQ., as amended, the Toxic Substances Control Act of 1976,
15 U.S.C. Sections 2601 ET SEQ., the Occupational Safety and Health Act of
1970, as amended by 29 U.S.C. Sections 651 ET SEQ., the Emergency Planning
and Community Right-to-Know Act of 1986, 42 U.S.C. Sections 11001 ET SEQ.,
the Safe Drinking Water Act of 1974, as amended by 42 U.S.C. Sections 300(f)
ET SEQ., the Hazardous Materials Transportation Act, 49 U.S.C. Sections 5101
ET SEQ., and any similar or implementing state or local law, and all
amendments or regulations promulgated thereunder.
9
"ENVIRONMENTAL PERMIT" shall mean any permit, approval, authorization,
certificate, license, variance, filing or permission required by or from any
Governmental Authority pursuant to any Environmental Law.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
the same may be amended from time to time.
"ERISA AFFILIATE" shall mean any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code, or solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA EVENT" shall mean (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder, with respect to a Plan; (b)
the adoption of any amendment to a Plan that would require the provision of
security pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA; (c)
the existence with respect to any Plan of an "accumulated funding deficiency"
(as defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (d) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (e) the incurrence of any liability under Title IV of ERISA
upon the termination of any Plan or the withdrawal or partial withdrawal of the
Borrower or any of its ERISA Affiliates from any Plan or Multiemployer Plan; (f)
the receipt by the Borrower or any ERISA Affiliate from the PBGC of any notice
relating to the intention to terminate any Plan or Plans or to appoint a trustee
to administer any Plan; (g) the receipt by the Borrower or any ERISA Affiliate
of any notice concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization, within the meaning of Title IV of ERISA; and (h) the
occurrence of a "prohibited transaction" with respect to which the Borrower or
any of its Subsidiaries is a "disqualified person" (within the meaning of
Section 4975 of the Code) or with respect to which the Borrower or any such
Subsidiary could otherwise be liable.
"EURODOLLAR BORROWING" shall mean a Borrowing comprised of Eurodollar
Loans.
"EURODOLLAR LOANS" shall mean Loans bearing interest at a rate determined
by reference to the Adjusted LIBO Rate in accordance with the provisions of
Article II hereof.
"EVENT OF DEFAULT" shall have the meaning assigned to such term in Article
VII hereof.
"EXISTING CREDIT AGREEMENT" shall have the meaning assigned to such term in
the preamble to this Agreement.
"FACILITY FEE" shall have the meaning assigned to such term in Section
2.05(a) hereof.
"FEE LETTERS" shall mean that certain Fee Letter dated the Closing Date,
between the Borrower and the Administrative Agent, and any other fee letters
executed from time to time
10
among the Borrower, the Administrative Agent and the Lenders, as each may be
amended, extended, increased, revised or substituted from time to time.
"FEES" shall mean the Facility Fees, the Commitment Fees, the
Administrative Agent Fees, the L/C Participation Fees and the Issuing Bank Fees.
"FILM CASH FLOW" shall mean, for the period from March 23, 1997 through any
date of determination, positive or negative earnings before interest and taxes
generated by Motion Picture projects included in Film Inventory on the balance
sheet of the Borrower and its Subsidiaries, provided that revenues and losses
attributable to those film projects listed on SCHEDULE 1.01 hereto shall not be
included in the calculation of Film Cash Flow.
"FILM INVENTORY" shall mean film inventory on the balance sheet of the
Borrower and its Subsidiaries from time to time.
"FINANCIAL OFFICER" of any corporation shall mean the chief financial
officer, principal accounting officer, Treasurer or Controller of such
corporation.
"FRANCHISE" shall mean either the NBA Franchise or the NHL Franchise, and
"Franchises" means both such franchises.
"GAAP" shall mean generally accepted accounting principles.
"GAME" shall mean any game participated in by either Franchise and
conducted pursuant to the governance of or consented to by the NBA or the NHL,
including any promotional, exhibition, regular season, playoff or championship
game.
"GOVERNMENTAL AUTHORITY" shall mean any Federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body.
"GUARANTEE" of or by any Person shall mean any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person (the "PRIMARY OBLIGOR") in any
manner, whether directly or indirectly, and including any obligation of such
Person, direct or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or to purchase (or to advance
or supply funds for the purchase of) any security for the payment of such
Indebtedness, (b) to purchase or lease property, securities or services for the
purpose of assuring the owner of such Indebtedness of the payment of such
Indebtedness or (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness, and (d) to guaranty the
obligations, payments by or performance of, a Person that is not a wholly owned
direct or indirect Subsidiary of the Borrower; PROVIDED, HOWEVER, that the term
Guarantee shall not include (i) endorsements for collection or deposit in the
ordinary course of business, (ii) any obligation, contingent or otherwise,
incurred in the
11
ordinary course of business, to pay any amounts pursuant to valid and binding
actor's agreements in respect of any Motion Pictures, whether or not the
Person to whom such obligation is owed uses the obligation to secure
Indebtedness or services, or (iii) any obligation, contingent or otherwise,
incurred in the ordinary course of business, to purchase any Motion Picture
after its completion pursuant to valid and binding production or distribution
agreements in respect of any Motion Pictures, whether or not the Person to
whom such obligation is owed uses the obligation to secure Indebtedness or
services.
"GUARANTORS" shall mean: Ascent Sports Holdings, Ascent Sports, Ascent
Arena and Development Corporation, Ascent Arena Company, LLC, Beacon, Beacon
Music Publishing, Inc., Club Pictures, Inc. and Daily Double Music Co., and all
other wholly owned direct or indirect Subsidiaries of the Borrower from time to
time.
"HAZARDOUS MATERIALS" shall mean all explosive or radioactive substances or
wastes, hazardous or toxic substances or wastes, pollutants, solid, liquid or
gaseous wastes, including petroleum or petroleum distillates, asbestos or
asbestos-containing materials, polychlorinated biphenyls ("PCBs") or
PCB-containing materials or equipment, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"HIGHEST LAWFUL RATE" shall mean at the particular time in question the
maximum rate of interest which, under Applicable Law, any Lender is then
permitted to charge on the Obligations. If the maximum rate of interest which,
under Applicable Law, any Lender is permitted to charge on the Obligations shall
change after the date hereof, the Highest Lawful Rate shall be automatically
increased or decreased, as the case may be, from time to time as of the
effective time of each change in the Highest Lawful Rate without notice to the
Borrower. For purposes of determining the Highest Lawful Rate under Applicable
Law, the weekly ceiling shall be (a) the weekly ceiling described in and
computed in accordance with the provisions of Art. 1H, or (b) either the
annualized ceiling or quarterly ceiling computed pursuant to Section .008 of
Art. 1D; PROVIDED, HOWEVER, that at any time the indicated rate ceiling, the
annualized ceiling or the quarterly ceiling, as applicable, shall be less than
18% per annum or more than 24% per annum, the provisions of Sections .009(a),
.009(b) or .009(c) of said Art. 1D shall control for purposes of such
determination, as applicable.
"INDEBTEDNESS" of any Person shall mean, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits with
such Person or advances to such Person of any kind, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property or assets purchased by such Person, (d) all
obligations of such Person issued or assumed as the deferred purchase price of
property or services (excluding trade accounts payable and accrued obligations
incurred in the ordinary course of business), (e) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such
12
Person, whether or not the obligations secured thereby have been assumed, (f)
all Guarantees by such Person, (g) all Capital Lease Obligations of such
Person, (h) all net obligations of such Person in respect of interest rate
protection agreements, foreign currency exchange agreements or other interest
or exchange rate hedging arrangements and (i) all obligations of such Person
as an account party in respect to letters of credit and bankers' acceptances.
The Indebtedness of any Person shall include the Indebtedness of any
partnership in which such Person is a general partner.
"INDENTURE" shall mean that certain Indenture, dated as of December 22,
1997, between the Borrower and the Bank of New York, as trustee, pursuant to
which the Senior Notes are to be issued.
"INTEREST PAYMENT DATE" shall mean the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurodollar Borrowing with an Interest Period of more than three months'
duration, each day that would have been an Interest Payment Date had successive
Interest Periods of three months' duration been applicable to such Borrowing,
and, in addition, the date of any prepayment of such Borrowing or conversion of
such Borrowing to a Borrowing of a different Type.
"INTEREST PERIOD" shall mean (a) as to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the last
day) in the calendar month that is 1, 2, 3 or 6 months thereafter, or if
determined available by the Administrative Agent, 12 months thereafter, as the
Borrower may elect and (b) as to any ABR Borrowing, the period commencing on the
date of such Borrowing and ending on the earliest of (i) the next succeeding
March 31, June 30, September 30 or December 31, (ii) the Maturity Date and (iii)
the date such Borrowing is converted to a Borrowing of a different Type in
accordance with Section 2.10 hereof or repaid or prepaid in accordance with
Section 2.11 hereof; PROVIDED, HOWEVER, that if any Interest Period would end on
a day other than a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless, in the case of a Eurodollar Borrowing only,
such next succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the next preceding Business Day.
Interest shall accrue from and including the first day of an Interest Period to
but excluding the last day of such Interest Period.
"ISSUING BANK" shall mean NationsBank (or any Affiliate thereof) or any
other Lender that may become an Issuing Bank pursuant to Section 2.19(i) hereof,
in each case with respect to Letters of Credit issued by it.
"ISSUING BANK FEES" shall have the meaning assigned to such term in Section
2.05(c) hereof.
"LAW" shall mean any applicable constitution, statute, law, ordinance,
regulation, rule, order, writ, injunction, or decree of any tribunal.
13
"L/C COMMITMENT" shall mean the commitment of the Issuing Bank to issue
Letters of Credit pursuant to Section 2.19 hereof.
"L/C DISBURSEMENT" shall mean a payment or disbursement made by the Issuing
Bank pursuant to a Letter of Credit.
"L/C EXPOSURE" shall mean at any time the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time PLUS (b) the aggregate
principal amount of all L/C Disbursements that have not yet been reimbursed at
such time. The L/C Exposure of any Lender at any time shall mean its Revolving
Loan Specified Percentage of the aggregate L/C Exposure at such time.
"L/C PARTICIPATION FEE" shall have the meaning assigned to such term in
Section 2.05(c) hereof.
"LENDERS" shall mean (a) the financial institutions listed on SCHEDULE 2.01
hereto (other than any such financial institution that has ceased to be a party
hereto pursuant to an Assignment and Acceptance) and (b) any Eligible Assignee
that has become a party hereto pursuant to an Assignment and Acceptance.
"LETTER OF CREDIT" shall mean any letter of credit issued pursuant to
Section 2.19 hereof.
"LIBO RATE" shall mean, for any Eurodollar Borrowing for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest one-one hundredth (1/100th) of one percent (1%)) appearing on Telerate
Page 3750 (or any successor page) as the London interbank offered rate for
deposits in United States dollars at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period. If for any reason
such rate is not available, the term "LIBO Rate" shall mean, for any Eurodollar
Borrowing for any Interest Period therefor, the rate per annum (rounded upwards,
if necessary, to the nearest one-one hundredth (1/100th) of one percent (1%))
appearing on Reuters Screen LIBO page as the London interbank offered rate for
deposits in United States dollars at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; PROVIDED, HOWEVER, if more than one rate is
specified on Reuters Screen LIBO Page, the applicable rate shall be the
arithmetic mean of all such rates.
"LIBOR RESERVE PERCENTAGE" shall mean, with respect to any Interest Period,
the percentage which is in effect on the first day of such period under
Regulation D of the Board of Governors of the Federal Reserve System, as such
regulation may be amended from time to time, as the maximum reserve requirement
(including, without limitation, any basic, supplemental, emergency or marginal
reserves) applicable to any Lender with respect to eurocurrency liabilities (as
that term is defined in Regulation D). The Adjusted LIBO Rate for any
Eurodollar Borrowing shall be adjusted for any change in the LIBOR Reserve
Percentage.
14
"LIEN" shall mean, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
"LOAN" shall mean the Revolving Loans made in accordance with the terms of
this agreement.
"LOAN PAPERS" shall mean this Agreement, the promissory notes evidencing
the Loans, all pledge agreements, guaranties of the Obligations executed by the
Guarantors, Fee Letters, financing statements, all Letters of Credit, all
Applications and all other agreements between the Borrower or any Subsidiary of
the Borrower and the Administrative Agent related to any Letter of Credit, all
Assignment and Acceptances, post-closing letters, and all other documents,
instruments, agreements, or certificates executed or delivered from time to time
by any Person in connection with this Agreement or as security for the
Obligations hereunder, granting Collateral or otherwise, as each such agreement
may be amended, modified, substituted, replaced or extended from time to time.
"MARGIN STOCK" shall have the meaning assigned to such term in Regulation
U.
"MATERIAL ADVERSE EFFECT" shall mean (a) a materially adverse effect on the
business, assets, operations, or financial condition of the Borrower, the
Subsidiaries of the Borrower and On Command Corp. and its Subsidiaries taken as
a whole, (b) material impairment of the ability of the Borrower to perform any
of its obligations under this Agreement or under any other Loan Paper or (c)
material impairment of the enforceability of this Agreement, any other Loan
Paper or the Loans.
"MATURITY DATE" shall mean December 31, 2002, or such earlier date as the
Obligations are due and payable in full (whether by scheduled reduction,
acceleration, termination or otherwise).
"MAXIMUM AMOUNT" shall mean the maximum amount of interest which, under
Applicable Law, the Administrative Agent or any Lender is permitted to charge on
the Obligations.
"MOTION PICTURES" shall mean motion pictures produced for distribution
through theaters and broadcast or cable television.
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
15
"NATIONAL MEDIA CONTRACTS" shall mean radio or television or other media
agreements now existing or entered into in the future respecting the broadcast
of the Games to audiences beyond the local areas in which games are played or
the local areas of the visiting team, whether such games are regular season
games or otherwise, and whether transmission of such broadcast is over-the-air,
over cable, by pay per view or by any other means of transmission (except for
those contracts that are the subject of a Superstation Agreement), including
each agreement between (a) the NBA or any Affiliate of the NBA, on its own
behalf and as agent for each of the Teams, and any other Person and (b) the NHL
or any Affiliate of the NHL, on its own behalf and as agent for each of the
Teams, and any other Person, in each case, as each may be supplemented,
modified, amended or restated from time to time in the manner provided therein
and all successor contracts that may in the future be entered into.
"NATIONSBANK" shall mean NationsBank of Texas, N.A., a national banking
association.
"NBA" shall mean the National Basketball Association, a joint venture, and
each successor and assign thereof.
"NBA CONSENT LETTER" shall mean the letter agreement among the Borrower and
certain of its Subsidiaries, the Administrative Agent (on behalf of itself and
the Lenders), NBA, NBA Properties, Inc. and NBA Market Extension Partnership,
approving the Transactions evidenced by the Loan Papers, giving the
Administrative Agent and the Lenders the right to assign any portion of the
Obligations in accordance with Section 9.04 hereof and setting forth certain
restrictions with respect to the Administrative Agent and the Lenders exercise
of their rights hereunder.
"NBA DOCUMENTS" shall mean, collectively, (a) the Amended and Restated
Joint Venture Agreement made as of January 1, 1989 among Nuggets Sub and the
other joint venturers in the NBA, and (b) the Constitution and Bylaws of the
NBA, as the same may be renewed, extended, modified or replaced from time to
time.
"NBA FRANCHISE" shall mean the NBA franchise known as the "Denver Nuggets"
and all rights of Nuggets Sub and Ascent Sports pursuant to the agreements with
the NBA related thereto.
"NBC CONTRACT" shall mean the Service Contract dated September 15, 1983,
between COMSAT General Corporation (now Ascent Network Services, a division of
the Borrower) and National Broadcasting Company, Inc., as amended from time to
time.
"NET CASH PROCEEDS" shall mean with respect to any Asset Disposition (i)
the gross amount of any cash paid to or received by the Borrower or any of its
Subsidiaries in respect of such Asset Disposition (including (a) payments of
principal or interest, or cash proceeds from the sale or other disposition in
respect of noncash consideration permitted under Section 6.05 hereof, and (b)
insurance proceeds, condemnation awards and payments from time to time in
respect of installment obligations, if applicable), less (ii) the amount, if
any, of (x) the Borrower's good faith
16
best estimate of all taxes attributable to such Asset Disposition which it in
good faith expects to be paid in the taxable year in which such Asset
Disposition shall occur or in the next taxable year, (y) reasonable and
customary fees, discounts, commissions, costs and other expenses (other than
those payable to the Borrower or any Affiliate of the Borrower), which are
incurred in connection with such Asset Disposition and are payable by the
Borrower or any of its Subsidiaries and (z) in the case of an Asset
Disposition that is a sale, transfer or other disposition of assets or
properties, proceeds required to discharge Liens in respect of such assets or
properties permitted by Section 6.02 hereof.
"NET PROCEEDS" shall mean the gross cash proceeds received by the Borrower
or any Subsidiary in connection with or as a result of any additional equity or
permitted Indebtedness, minus (so long as it is estimated in good faith by the
management of the Borrower or such Subsidiary and certified to the Lenders in
reasonable detail by a Secretary or Assistant Secretary of the Borrower),
reasonable and customary transaction costs (including reasonable and customary
broker's fees), payable by the Borrower or any Subsidiary to any Person other
than an Affiliate of the Borrower related to such transaction, provided that,
the Borrower shall be entitled to pay reasonable broker's fees negotiated at
arm's length to ▇▇▇▇▇ & Company Incorporated.
"NHL" shall mean the National Hockey League, an unincorporated association,
and each successor and assign thereof.
"NHL CONSENT LETTER" shall mean the letter agreement among the Borrower and
certain of its Subsidiaries, the Administrative Agent, each Lender and the NHL,
approving the Transactions evidenced by the Loan Papers, giving the
Administrative Agent and the Lenders the right to assign any portion of the
Obligations in accordance with Section 9.04 hereof and setting forth certain
restrictions with respect to the Administrative Agent and the Lenders exercise
of their rights hereunder.
"NHL DOCUMENTS" shall mean, collectively, (a) the Consent Agreement, made
as of July 1, 1995 among National Hockey League, le Club de Hockey Les
Nordiques, Les Nordiques de Quebec 1988, 2627-9455 Quebec Inc., ▇▇▇▇▇▇ ▇▇▇▇▇,
COMSAT Hockey Enterprises, COMSAT Video Enterprises, Inc., COMSAT Denver, Inc.,
COMSAT Entertainment Group, Inc., and COMSAT Corporation and the other joint
venturers in the NHL, (b) the Consent Agreement, dated June 27, 1997, by and
among the National Hockey League, Colorado Avalanche, LLC, the Borrower, Ascent
Sports, Inc. and COMSAT Corporation and (c) the Constitution and Bylaws of the
NHL, as the same may be renewed, extended, modified or replaced from time to
time.
"NHL FRANCHISE" shall mean the NHL franchise known as the "Colorado
Avalanche" and all rights of Avalanche Sub and Ascent Sports pursuant to the
agreements with the NHL related thereto.
"NON-RECOURSE ARENA FINANCING" shall mean Indebtedness incurred by the
Ascent Arena Company, LLC in connection with the financing of the Arena/Complex
(i) as to which neither the Borrower nor any other Subsidiary of the Borrower
(A) provides credit support (including any
17
undertaking, agreement or instrument which would constitute Indebtedness) or
has given or made other written assurances regarding repayment (except with
respect to the limited construction Guarantee permitted by Section 6.01(e)
hereof), (B) is directly or indirectly personally liable (except with respect
to the limited construction Guarantee permitted by Section 6.01(e) hereof) or
(C) constitutes the lender and (ii) the obligees of which will have recourse
solely against the assets comprising such project (including rights of Ascent
Arena Company, LLC as a lessor under leases thereto) for repayment of the
principal of and interest on such Indebtedness and fees, indemnities, expense
reimbursements or other amounts of whatever nature accrued or payable in
connection with such Indebtedness and that has terms and provisions
reasonably satisfactory in form and substance to, and approved in writing by,
the Administrative Agent in respect of the matters referred to in clause (i)
or clause (ii) above.
"NON-RECOURSE FILM INDEBTEDNESS" shall mean Indebtedness of Beacon incurred
solely for the purpose of financing Motion Pictures (i) as to which neither the
Borrower nor any other Subsidiary of the Borrower (A) provides credit support
(including any undertaking, agreement or instrument which would constitute
Indebtedness) or has given or made other written assurances regarding repayment,
(B) is directly or indirectly personally liable or (C) constitutes the lender
and (ii) the obligees of which will have recourse for repayment of the principal
of and interest on such Indebtedness and any fees, indemnities, expense
reimbursements or other amounts of whatever nature accrued or payable in
connection with such Indebtedness solely against (x) the negatives for such
Motion Pictures, (y) ownership, distribution or exploitation rights with respect
to such Motion Pictures or (z) standby letters of credit constituting
Indebtedness which itself qualifies as Non-Recourse Film Indebtedness.
"NUGGETS LICENSE AGREEMENT" shall mean the User Agreement, dated as of July
15, 1992, as amended, between the City and County of Denver and Nuggets Sub
related to Nuggets Sub's right to use and occupancy of the Arena.
"NUGGETS LICENSE DOCUMENTS" shall mean the Nuggets License Agreement and
each other material agreement related to Nuggets Sub's rights to the use and
occupancy of the Arena, or, after its completion, the similar agreements related
to the Arena/Complex.
"NUGGETS SUB" shall mean Denver Nuggets Limited Partnership, a Delaware
limited partnership and wholly owned indirect Subsidiary of the Borrower, which
such Subsidiary owns and operates the Denver Nuggets, a franchise of the NBA.
"OBLIGATIONS" shall mean all present and future obligations, indebtedness
and liabilities, and all renewals and extensions of all or any part thereof, of
the Borrower and each Obligor to the Lenders and the Administrative Agent
arising from, by virtue of, or pursuant to this Agreement, any of the other Loan
Papers and any and all renewals and extensions thereof or any part thereof, or
future amendments thereto, all interest accruing on all or any part thereof and
reasonable attorneys' fees incurred by the Administrative Agent for the
preparation of this Agreement and consummation of this credit facility,
execution of waivers, amendments and
18
consents, and in connection with the enforcement or the collection of all or
any part thereof, and reasonable attorneys' fees incurred by the Lenders in
connection with the enforcement or the collection of all or any part of the
Obligations during the continuance of an Event of Default, in each case
whether such obligations, indebtedness and liabilities are direct, indirect,
fixed, contingent, joint, several or joint and several. Without limiting the
generality of the foregoing, "Obligations" includes all amounts which would
be owed by the Borrower, each other Obligor and any other Person (other than
the Administrative Agent or the Lenders) to the Administrative Agent or the
Lenders under any Loan Paper, but for the fact that they are unenforceable or
not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving the Borrower, any other Obligor or any other Person
(including all such amounts which would become due or would be secured but
for the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding of the Borrower, any other
Obligor or any other Person under any Debtor Relief Law).
"OBLIGOR" shall mean (a) the Borrower, (b) each Guarantor, (c) each other
Person liable for performance of any of the Obligations and (d) each other
Person the Property of which now or hereafter secures the performance of any of
the Obligations.
"OCC AGREEMENTS" shall mean the Services Agreement and the Corporate
Agreement, in each case between the Borrower and On Command Corp., in the forms
delivered to the Lenders, as such agreements may hereafter be amended as
permitted by, and in accordance with, the provisions of this Agreement.
"OFFERING MEMORANDUM" shall mean that certain Offering Memorandum, dated as
of December 17, 1997, regarding the Senior Notes.
"ON COMMAND CORP." shall mean On Command Corporation, a Delaware
corporation, approximately 57.0% of whose outstanding Capital Stock is owned,
directly or indirectly, by the Borrower on the Closing Date.
"ON COMMAND CORP. LOAN FACILITY" shall mean a revolving credit facility
made available to On Command Corp. through a syndication of creditors, dated
November 19, 1997, or any refinancing thereof in accordance with the terms of
the Senior Notes Documentation.
"ON COMMAND CORP. STOCK SALE" shall mean the sale by the Borrower of any of
the Capital Stock owned by it in On Command Corp.
"PARKING AGREEMENTS" shall mean all material agreements now or hereafter
existing covering or affecting Game patron parking at or near the Arena, or,
after its completion, the similar agreements related to the Arena/Complex
(including shuttle and remote parking), and any and all amendments thereto or
substitutions therefor and any and all other agreements of a similar nature or
providing similar services between Ascent Sports, Avalanche Sub or Nuggets Sub
and any other Person.
19
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.
"PERMITTED INVESTMENTS" shall mean:
(a) direct obligations of, or obligations the principal of and interest
on which are unconditionally guaranteed by, the United States of America (or
by any agency thereof to the extent such obligations are backed by the full
faith and credit of the United States of America), in each case maturing
within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, the
highest credit rating obtainable from Standard & Poor's Ratings Group, a
Division of ▇▇▇▇▇▇-▇▇▇▇, Inc. or from ▇▇▇▇▇'▇ Investors Service, Inc.;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within one year from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts
issued or offered by, any domestic office of any commercial bank which bank
or office is organized under the Laws of the United States of America or any
State thereof which has a combined capital and surplus and undivided profits
of not less than $250,000,000; and
(d) fully collateralized repurchase agreements with a term of not more
than 30 days for underlying securities of the type described in clause (a)
above entered into with any institution meeting the qualifications specified
in clause (c) above.
"PERSON" shall mean any natural person, corporation, business trust,
joint venture, association, company, partnership or government, or any agency
or political subdivision thereof.
"PLAN" shall mean any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
112 of the Code or Section 307 of ERISA and in respect of which the Borrower
or any ERISA Affiliate is (or if such plan were terminated would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section
3(5) of ERISA.
"PLAYER CONTRACTS" shall mean any and all player contracts existing by
and between Nuggets Sub or Avalanche Sub and the professional basketball
players or professional hockey players whose aggregate annual compensation
package is contractually in excess of $1,000,000 from time to time employed
by Nuggets Sub or Avalanche Sub, respectively, and any and all material
amendments, modifications, restatements or replacements of or substitutions
for any of the foregoing.
20
"PREFERRED STOCK", as applied to the Capital Stock of any corporation,
shall mean Capital Stock of any class or classes (however designated) which
is preferred as to the payment of dividends, or as to the distribution or
assets upon any voluntary or involuntary liquidation or dissolution of any
such corporation, over shares of Capital Stock of any other class of such
corporation.
"REGISTER" shall have the meaning given such term in Section 9.04(d)
hereof.
"REGULATION G" shall mean Regulation G of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.
"REGULATION U" shall mean Regulation U of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.
"REGULATION X" shall mean Regulation X of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.
"RELATED CONTRACTS" shall mean all material contracts and agreements,
other than the License Agreements, Services Contracts and the Player
Contracts, by and between Ascent Sports, Avalanche Sub or Nuggets Sub and
other Persons, including, without limitation, leases and related agreements
related to training facilities, non-Arena training facilities, non-Arena
offices, non-Arena realty, suites and boxes, suites and boxes marketing,
option agreements, and all material amendments, modifications, restatements
or replacements of or substitutions for any of the foregoing.
"RELEASE" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing,
depositing, dispersing, emanating or migrating of any Hazardous Material in,
into, onto or through the Environment.
"REMEDIAL ACTION" shall mean (a) "remedial action" as such term is
defined in CERCLA, 42 U.S.C. Section 9601(24), and (b) all other actions
required by any Governmental Authority or voluntarily undertaken to: (i)
cleanup, remove, treat, ▇▇▇▇▇ or in any other way address any Hazardous
Material in the Environment; (ii) prevent the Release or threat of Release,
or minimize the further Release of any Hazardous Material so it does not
migrate or endanger or threaten to endanger public health, welfare or the
Environment; or (iii) perform studies and investigations in connection with,
or as a precondition to, (i) or (ii) above.
"REQUIRED LENDERS" shall mean, at any time, Lenders (a) having Total
Specified Percentages resulting in exposure to such Lenders equal to at least
51% of the sum of (i) all outstanding Revolving Loan Borrowings on such date
plus (ii) the Revolver Availability on such date, (b) for purposes of
acceleration pursuant to clause (ii) of the last paragraph of Article VII,
Lenders having Loans, L/C Exposures and unused Commitments representing at least
51% of the sum of all Loans outstanding, L/C Exposure and unused Commitments or
(c) after the Maturity
21
Date or after the Commitments have terminated, Lenders having Loans and L/C
Exposure representing at least 51% of the sum of all Loans outstanding and
L/C Exposure; and, in each case, if there is more than one Lender party
hereto, at least two Lenders.
"RESPONSIBLE OFFICER" of any corporation shall mean any executive
officer or Financial Officer of such corporation and any other officer or
similar official thereof responsible for the administration of the
obligations of such corporation in respect of this Agreement and the other
Loan Papers.
"REVOLVER AVAILABILITY" shall mean, on any date of determination, the
difference between the Total Commitment minus the Total Exposure.
"REVOLVING LOANS" shall mean the revolving loans made available by the
Lenders to the Borrower pursuant to the Total Commitment and Section 2.01
hereof. Each Revolving Loan shall be a Eurodollar Loan or an ABR Loan.
"REVOLVING LOAN SPECIFIED PERCENTAGE" shall mean, as to any Lender, the
percentage indicated beside its name on the signature pages hereof as its
Revolving Loan Specified Percentage, or as adjusted or specified in any
amendment to this Agreement or in any Assignment and Acceptance.
"SENIOR NOTES" shall mean those 117/8% Senior Secured Discount Notes Due
2004 to be issued by the Borrower in connection with the Offering Memorandum.
"SENIOR NOTES DOCUMENTATION" shall mean the Indenture and all agreements
(including the pledge agreement granting a Lien on the Capital Stock of On
Command Corp. to secure the Senior Notes) and other documentation executed or
delivered by the Borrower in connection with the issuance of the Senior Notes.
"SERVICES CONTRACTS" shall mean the Broadcasting Agreements, the
Concession Agreements, the Advertising Agreements, the Parking Agreements,
and any and all material extensions, amendments, modifications, replacements
and substitutions for any of the above.
"SPORTS SUBS" shall mean Ascent Sports and Ascent Sports Holdings.
"SUBSIDIARY" shall mean, with respect to any Person (herein referred to
as the "parent"), any corporation, partnership, association or other business
entity of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or more
than 50% of the general partnership interests are, at the time any
determination is being made, owned, controlled or held, by the parent or one
or more subsidiaries of the parent or by the parent and one or more
subsidiaries of the parent, provided that, when the term "Subsidiary" is used
with respect to the Borrower, it shall be deemed by the parties hereto not to
include On Command Corp. and its Subsidiaries.
22
"SUPERSTATION AGREEMENTS" shall mean all material agreements now
existing or entered into in the future between the NBA or NHL and/or
individual Teams regarding the sharing with the other Teams of revenues
received by the individual Teams with respect to agreements to broadcast
basketball games outside of the local areas of such Teams or the local areas
of the visiting teams entered into by such Teams with individual
broadcasters, as each may be supplemented, modified, amended or restated form
time to time in the manner provided therein and all material successor
contracts that may in the further be entered into.
"TEAM" shall mean any joint venturer of the NBA, or of the NHL as
applicable in the context used.
"TOTAL COMMITMENT" shall mean, at any time, the aggregate amount of the
Lenders' Commitments, as in effect at such time.
"TOTAL EXPOSURE" shall mean, with respect to the Lenders at any time,
the aggregate principal amount at such time of all outstanding Revolving
Loans of the Lenders, plus the aggregate amount at such time of all Lenders'
L/C Exposure.
"TOTAL SPECIFIED PERCENTAGE" shall mean, as to any Lender, the
percentage indicated beside its name on the signature pages hereof as its
Total Specified Percentage, or as adjusted or specified in any amendment to
this Agreement or in any Assignment and Acceptance.
"TRANSACTIONS" shall have the meaning assigned to such term in Section
3.02 hereof.
"TYPE", when used in respect of any Loan or Borrowing, shall refer to
the Rate by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined. For purposes hereof, the term
"Rate" shall include the Adjusted LIBO Rate and the Alternate Base Rate.
"WHOLLY OWNED SUBSIDIARY" of any Person shall mean a subsidiary of such
Person of which securities (except for directors' qualifying shares) or other
ownership interests representing 100% of the outstanding Capital Stock or
partnership interests, as the case may be, are, at the time any determination
is being made, owned by such Person or one or more Wholly Owned Subsidiaries
of such Person or by such Person and one or more Wholly Owned Subsidiaries of
such Person, provided that, notwithstanding any factual circumstance, for the
purposes of this Agreement and the Loan Papers, On Command Corp. shall never
be considered to be a Wholly Owned Subsidiary of the Borrower.
"WITHDRAWAL LIABILITY" shall mean liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
23
SECTION 1.02. TERMS GENERALLY. The definitions in Section 1.01 shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without
limitation". All references herein to Articles, Sections, Exhibits and
Schedules shall be deemed references to Articles and Sections of, and
Exhibits and Schedules to, this Agreement unless the context shall otherwise
require. Except as otherwise expressly provided herein, all terms of an
accounting or financial nature shall be construed in accordance with GAAP, as
in effect from time to time; provided, however, that for purposes of
determining compliance with the covenants contained in Article VI hereof, all
accounting terms herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP as in effect
on the date of this Agreement and applied on a basis consistent with the
application used in the financial statements referred to in Section 3.05
hereof.
ARTICLE II
THE CREDIT
SECTION 2.01. REVOLVING LOANS. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Lender
agrees, severally and not jointly, to make Revolving Loans to the Borrower,
at any time and from time to time on or after the date hereof, and until the
earlier of (a) the Maturity Date, and (b) the termination of the Commitment
of such Lender in accordance with the terms hereof, in an aggregate principal
amount at any time up to such Lender's Commitment, provided that, the
Borrower agrees that, notwithstanding anything in this Agreement or in any
other Loan Paper to the contrary, no Lender shall at any time be obligated to
make any Loan if such Loan would result in such Lender's Revolving Loan
Specified Percentage of Total Exposure exceeding such Lender's Commitment.
Within the limits set forth in the preceding sentence and subject to the
terms, conditions and limitations set forth herein, the Borrower may borrow,
pay or prepay and reborrow Revolving Loans.
SECTION 2.02. LOANS.
(a) REVOLVING LOANS. Each Revolving Loan shall be made as part of a
Borrowing consisting of Revolving Loans made by the Lenders in an aggregate
outstanding amount not to exceed at any time outstanding the difference
between such Lender's Commitment, minus such Lender's Revolving Loan
Specified Percentage of the L/C Exposure; PROVIDED, HOWEVER, that the failure
of any Lender to make any Revolving Loan shall not in itself relieve any
other Lender of its obligation to lend hereunder (it being understood,
however, that no Lender shall be responsible for the failure of any other
Lender to make any Revolving Loan required to be made by such other Lender).
Except for Revolving Loans deemed made pursuant to Section 2.02(f) hereof,
the Revolving Loans comprising any Borrowing shall be in an aggregate
principal amount that is (i)
24
an integral multiple of $1,000,000 and not less than $3,000,000 or (ii) equal
to the Revolver Availability.
(b) Subject to Sections 2.08 and 2.13 hereof, each other Borrowing
shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower
may request pursuant to Section 2.03 hereof, as applicable; PROVIDED,
HOWEVER, that Borrowings on the Closing Date shall be comprised entirely of
ABR Loans. Each Lender may at its option make any Eurodollar Loan by causing
any domestic or foreign branch or Affiliate of such Lender to make such Loan;
provided that any exercise of such option shall not affect the obligation of
the Borrower to repay such Loan in accordance with the terms of this
Agreement. Borrowings of more than one Type may be outstanding at the same
time; PROVIDED, HOWEVER, that the Borrower shall not be entitled to request
any Borrowing that, if made, would result in more than twelve Eurodollar
Borrowings outstanding hereunder at any time. For purposes of the foregoing,
Borrowings having different Interest Periods, regardless of whether they
commence on the same date, shall be considered separate Borrowings.
(c) After the Closing Date, each Lender shall make each Revolving Loan
to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds to such account in Dallas, Texas as the
Administrative Agent may designate not later than 12:00 noon, Dallas, Texas
time, and the Administrative Agent shall by 3:00 p.m., Dallas, Texas time,
credit the amounts so received to an account in the name of the Borrower,
maintained with the Administrative Agent and designated by the Borrower in
the applicable Borrowing Request or, if a Borrowing shall not occur on such
date because any condition precedent herein specified shall not have been
met, return the amounts so received to the respective Lenders.
(d) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing under the Revolving Loans that such
Lender will not make available to the Administrative Agent such Lender's
Revolving Loan Specified Percentage of such Borrowing, the Administrative
Agent may assume that such Lender has made such portion available to the
Administrative Agent on the date of such Borrowing under the Revolving Loan
in accordance with paragraph (c) above and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If the Administrative Agent shall have so made funds
available then, to the extent that such Lender shall not have made such
portion available to the Administrative Agent, such Lender and the Borrower
severally agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the
date such amount is made available to the Borrower until the date such amount
is repaid to the Administrative Agent at (i) in the case of the Borrower, the
interest rate applicable at the time to the Revolving Loans comprising such
Borrowing and (ii) in the case of such Lender, a rate determined by the
Administrative Agent to represent its cost of overnight or short-term funds
(which determination shall be conclusive absent manifest error). If such
Lender shall repay to the Administrative Agent such corresponding amount,
such amount shall constitute such Lender's Loan as part of such Borrowing
under the Revolving Loans for purposes of this Agreement.
25
(e) The Borrower acknowledges that if the Borrower requests any
Borrowing with an Interest Period that would end after the Maturity Date, a
Breakage Event (as defined in Section 2.14 hereof) will occur on the Maturity
Date and the Borrower will be obligated to indemnify the Lenders in
accordance with the terms of Section 2.14 hereof.
(f) If the Issuing Bank shall not have received from the Borrower the
payment required to be made by Section 2.19(e) hereof within the time
specified in such Section, the Issuing Bank will promptly notify the
Administrative Agent of the L/C Disbursement and the Administrative Agent
will promptly notify each Lender of such L/C Disbursement and its Revolving
Loan Specified Percentage thereof. Each Lender shall pay by wire transfer of
immediately available funds to the Administrative Agent not later than 2:00
p.m., Dallas, Texas time, on such date (or, if such Lender shall have
received such notice later than 12:00 (noon), Dallas, Texas time, on any day,
not later than 10:00 a.m., Dallas, Texas time, on the immediately following
Business Day), an amount equal to such Lender's Revolving Loan Specified
Percentage of such L/C Disbursement (it being understood that such amount
shall be deemed to constitute an ABR Loan of such Lender and such payment
shall be deemed to have reduced the L/C Exposure), and the Administrative
Agent will promptly pay to the Issuing Bank amounts so received by it from
the Lenders. The Administrative Agent will promptly pay to the Issuing Bank
any amounts received by it from the Borrower pursuant to Section 2.19(e)
hereof prior to the time that any Lender makes any payment pursuant to this
paragraph (f); any such amounts received by the Administrative Agent
thereafter will be promptly remitted by the Administrative Agent to the
Lenders that shall have made such payments and to the Issuing Bank, as their
interests may appear. If any Lender shall not have made its Revolving Loan
Specified Percentage of such L/C Disbursement available to the Administrative
Agent as provided above, such Lender and the Borrower severally agree to pay
interest on such amount, for each day from and including the date such amount
is required to be paid in accordance with this paragraph to but excluding the
date such amount is paid, to the Administrative Agent at (i) in the case of
the Borrower, a rate per annum equal to the interest rate applicable to ABR
Loans pursuant to Section 2.06 hereof, and (ii) in the case of such Lender,
for the first such day, the Federal Funds Effective Rate, and for each day
thereafter, the Alternate Base Rate.
SECTION 2.03. BORROWING PROCEDURE. After the Closing Date, in order to
request a Borrowing under the Revolving Loans (other than a deemed Borrowing
pursuant to Section 2.02(f) hereof, as to which this Section 2.03 shall not
apply), the Borrower shall hand deliver or telecopy to the Administrative
Agent a duly completed Borrowing Request (a) in the case of a Eurodollar
Borrowing, not later than 11:00 a.m., Dallas, Texas time, three Business Days
before a proposed Borrowing under the Revolving Loans, and (b) in the case of
an ABR Borrowing, not later than 10:00 a.m., Dallas, Texas on the date (which
shall be a Business Day) of a proposed Borrowing under the Revolving Loans.
Each Borrowing Request shall be irrevocable, shall be signed by or on behalf
of the Borrower and shall specify the following information: (i) whether the
Borrowing under the Revolving Loans then being requested is to be a
Eurodollar Borrowing or an ABR Borrowing (it being understood that the
Borrowing under the Revolving Loans on the
26
Closing Date shall be an ABR Borrowing); (ii) the date of such Borrowing
under the Revolving Loans (which shall be a Business Day); (iii) the number
and location of the account to which funds are to be disbursed; (iv) the
amount of such Borrowing under the Revolving Loans; (v) if such Borrowing is
to be a Eurodollar Borrowing, the Interest Period with respect thereto and
(vi) so long as Section 6.10 hereof is still in effect, that the attached
Compliance Certificate demonstrates no Default or Event of Default after
giving effect to such Borrowing. If no election as to the Type of Borrowing
under the Revolving Loans is specified in any such notice, then the requested
Borrowing under the Revolving Loans shall be an ABR Borrowing. If no
Interest Period with respect to any Eurodollar Borrowing is specified in any
such notice, then the Borrower shall be deemed to have selected an Interest
Period of one month's duration. The Administrative Agent shall promptly
advise the Lenders of any notice given pursuant to this Section 2.03 hereof
(and the contents thereof), and of each Lender's portion of the requested
Borrowing under the Revolving Loans.
SECTION 2.04. EVIDENCE OF DEBT; REPAYMENT OF LOANS.
(a) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Revolving Loan on the Maturity Date.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such
Lender resulting from each Loan made by such Lender from time to time,
including the amounts of principal and interest payable and paid such Lender
from time to time under this Agreement.
(c) The Administrative Agent shall maintain accounts in which it will
record (i) the amount of each Loan made hereunder, the Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to
each Lender hereunder and (iii) the amount of any sum received by the
Administrative Agent hereunder from the Borrower and each Lender's share
thereof.
(d) The entries made in the accounts maintained pursuant to paragraphs
(b) and (c) above shall be prima facie evidence of the existence and amounts
of the obligations therein recorded; provided however, that the failure of
any Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligations of the Borrower to
repay the Loans in accordance with their terms.
(e) As evidence of the Loans hereunder, on the Closing Date the
Borrower shall deliver to each Lender one promissory note evidencing its
Applicable Specified Percentage of each of the Loans made hereunder. Each
such promissory note will evidence each Lenders' Applicable Specified
Percentage of the Revolving Loan and L/C Exposure.
(f) Notwithstanding anything in this Agreement or in any of the other Loan
Papers to the contrary, and in addition to the required payments set forth in
this Section 2.04 and Section
27
2.09 below, all outstanding portions of the Obligation shall be due and
payable on the Maturity Date.
(g) Notwithstanding anything in this Agreement or in any of the other
Loan Papers to the contrary, to the extent any such repayments are not
otherwise designated, any such repayment shall be first applied to ABR
Borrowings and then to repay Eurodollar Borrowings with respect to the
repayment of any Loans.
SECTION 2.05. FEES.
(a) The Borrower agrees to pay to each Lender, through the
Administrative Agent, such Facility Fees as are set forth in any Fee Letters
(the "FACILITY FEES") in accordance with such terms set forth in the Fee
Letters.
(b) The Borrower agrees to pay to the Administrative Agent, for its own
account, the administrative fees set forth in its Fee Letter at the times and
in the amounts specified therein (the "ADMINISTRATIVE AGENT FEES").
(c) The Borrower agrees to pay (i) to each Lender, through the
Administrative Agent, on the last day of March, June, September and December
of each year and on the date on which the Commitment of such Lender shall be
terminated as provided herein, a fee (an "L/C PARTICIPATION FEE") calculated
on such Lender's Revolving Loan Specified Percentage of the average daily
aggregate L/C Exposure (excluding the portion thereof attributable to
unreimbursed L/C Disbursements) during the preceding quarter (or shorter
period commencing with the date hereof or ending with the Maturity Date or
the date on which all Letters of Credit have been canceled or have expired
and the Commitments of all Lenders shall have been terminated) at a rate
equal to the Applicable Percentage from time to time used to determine the
interest rate on Borrowings comprised of Eurodollar Loans pursuant to Section
2.06 hereof, and (ii) to the Issuing Bank with respect to each Letter of
Credit the standard fronting, issuance and drawing fees specified from time
to time by the Issuing Bank (the "ISSUING BANK FEES"). Subject to Section
9.09 hereof and Applicable Law, all L/C Participation Fees and Issuing Bank
Fees shall be computed on the basis of the actual number of days elapsed in a
year of 365 or 366 days, as applicable.
(d) Subject to Section 9.09 hereof, the Borrower agrees to pay to each
Lender, through the Administrative Agent, on the last day of March, June,
September and December of each year and on the date on which the Commitment
of such Lender shall be terminated as provided herein, the Borrower shall pay
to the Administrative Agent for the account of Lenders commitment fees (the
"COMMITMENT FEES") equal to the product of (i) the average daily amount of
the difference, if any, of (A) the Total Commitment minus (B) the Total
Exposure, times (ii) the per annum rate of .50%. Subject to Section 9.09
hereof and Applicable Law, all Commitment Fees shall be computed on the basis
of the actual number of days elapsed in a year of 365 or 366 days, as
applicable.
28
(e) All Fees shall be paid on the dates due, in immediately available
funds, to the Administrative Agent for distribution, if and as appropriate,
among the Lenders, except that the Issuing Bank Fees shall be paid directly
to the Issuing Bank. Once paid, none of the Fees shall be refundable, except
in accordance with the provisions of Section 9.09 hereof.
SECTION 2.06. INTEREST ON LOANS.
(a) Subject to the provisions of Section 2.07 hereof, the Loans
comprising each ABR Borrowing shall bear interest (computed on the basis of
the actual number of days elapsed over a year of 365 or 366 days, as the case
may be, when the Alternate Base Rate is determined by reference to the Prime
Rate and over a year of 360 days at all other times) at a rate per annum
equal to the Alternate Base Rate. If the amount of interest payable in
respect of any interest computation period is limited to the Highest Lawful
Rate in accordance with the definition of Alternate Base Rate, and the amount
of interest payable in respect of any subsequent interest computation period
would be less than the Maximum Amount, then the amount of interest payable in
respect of such subsequent interest computation period shall be automatically
increased to the Maximum Amount; PROVIDED that at no time shall the aggregate
amount by which interest paid has been increased pursuant to this sentence
exceed the aggregate amount by which interest has been reduced had the
Alternate Base Rate not been limited to the Highest Lawful Rate.
(b) Subject to the provisions of Section 2.07 hereof, the Loans
comprising each Eurodollar Borrowing shall bear interest (computed on the
basis of the actual number of days elapsed over a year of 360 days) at a rate
per annum equal to the Adjusted LIBO Rate for the Interest Period in effect
for such Borrowing.
(c) Interest on each Loan shall be payable on the Interest Payment
Dates applicable to such Loan except as otherwise provided in this Agreement.
The applicable Alternate Base Rate or Adjusted LIBO Rate for each Interest
Period or day within an Interest Period, as the case may be, shall be
determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.
SECTION 2.07. DEFAULT INTEREST. Notwithstanding any other provision of
this Agreement and the other Loan Papers except Section 9.09 hereof to the
contrary, if there shall exist any Event of Default hereunder, the Borrower
shall pay interest on the Obligations to but excluding the date of actual
payment (after as well as before judgment) at a rate per annum equal to the
lesser of (a) the Highest Lawful Rate and (b) a rate per annum (computed on
the basis of the actual number of days elapsed over a year of 365 or 366
days, as the case may be, when determined by reference to the Prime Rate and
over a year of 360 days at all other times) equal to the sum of the Alternate
Base Rate plus 1.00%.
SECTION 2.08. ALTERNATE RATE OF INTEREST. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar
29
Borrowing the Administrative Agent shall have determined that dollar deposits
in the principal amounts of the Loans comprising such Borrowing are not
generally available in the London interbank market, or that the rates at
which such dollar deposits are being offered will not adequately and fairly
reflect the cost to the Required Lenders of making or maintaining Eurodollar
Loans during such Interest Period, or that reasonable means do not exist for
ascertaining the Adjusted LIBO Rate, the Administrative Agent shall, as soon
as practicable thereafter, give written or telecopy notice of such
determination to the Borrower and the Lenders. In the event of any such
determination, until the Administrative Agent shall have advised the Borrower
and the Lenders that the circumstances giving rise to such notice no longer
exist, any request by the Borrower for a Eurodollar Borrowing pursuant to
Section 2.03 hereof shall be deemed to be a request for an ABR Borrowing.
Each determination by the Administrative Agent hereunder shall be conclusive
absent manifest error.
SECTION 2.09. TERMINATION AND REDUCTION OF COMMITMENTS.
(a) VOLUNTARY. Upon at least three Business Days' prior irrevocable
written or telecopy notice to the Administrative Agent (specifying the
Commitments to be terminated or reduced and the amount of reduction), the
Borrower may at any time in whole permanently terminate, or from time to time
in part permanently reduce, the Commitments; PROVIDED, HOWEVER, that (i) each
partial reduction of the Commitments shall be in an integral multiple of
$1,000,000 and in a minimum amount of $5,000,000 and (ii) the Total
Commitment shall not be reduced to an amount that is less than the Total
Exposure.
(b) MANDATORY.
(i) MATURITY. The Commitments and the L/C Commitment shall
automatically be reduced to zero and terminate on the Maturity Date.
(ii) MANDATORY SCHEDULED REDUCTION OF THE COMMITMENTS. The
Commitments shall be immediately and automatically reduced quarterly on the
last day of each fiscal quarter, commencing with the last day in March,
2000, by the amounts set forth below opposite such fiscal quarter ends as
follows:
QUARTERLY DATE AMOUNT OF REDUCTION
LAST DAY OF:
March, 2000 $3,125,000
June, 2000 $3,125,000
September, 2000 $3,125,000
December, 2000 $3,125,000
March, 2001 $3,125,000
June, 2001 $3,125,000
30
September, 2001 $3,125,000
December, 2001 $3,125,000
March, 2002 $6,250,000
June, 2002 $6,250,000
September, 2002 $6,250,000
December, 2002 $6,250,000 and each Commitment and the
Total Commitment shall be zero
(iii) ADDITIONAL EQUITY. To the extent that the Borrower or any of
its Subsidiaries issues any equity securities (this provision shall not in
and of itself permit the Borrower to consummate any of the above described
transactions), the Commitments shall be automatically and immediately
reduced by the amount of the Net Proceeds of any such transaction.
(iv) ASSET SALES. To the extent that the Borrower or any of its
Subsidiaries consummates any Asset Disposition, then unless the Net Cash
Proceeds therefrom are (A) reinvested within 120 days thereafter in similar
assets in accordance with the terms of this Agreement, or (B) both (I) from
an On Command Corp. Stock Sale and (II) used to repay, repurchase or redeem
the Senior Notes, the Commitments shall be automatically and immediately
reduced by the amount of the Net Cash Proceeds of any such transaction.
(c) COMMITMENT REDUCTIONS, GENERALLY. If, as a result of a reduction
described above, the Total Exposure exceeds the Total Commitment, then the
Borrower shall, on the date of such reduction, repay Loans in accordance with
this Agreement in an aggregate principal amount sufficient to eliminate such
excess. Each reduction in the Commitments hereunder shall be made ratably
among the Lenders in accordance with their respective Commitments. The
Borrower shall pay, to the Administrative Agent for the account of the
applicable Lenders, on the date of each termination or reduction, the
Commitment Fees on the amount of the Commitments so terminated or reduced
accrued to but excluding the date of such termination or reduction. No
reduction of the Commitments under any of Sections 2.09(a), (b)(iii) or
(b)(iv) shall effect the scheduled reductions of the Commitments under
Sections 2.09(b)(i) and (b)(ii) hereof.
31
SECTION 2.10. CONVERSION AND CONTINUATION OF BORROWINGS.
(a) The Borrower shall have the right at any time upon prior
irrevocable notice to the Administrative Agent (x) not later than 12:00
(noon), Dallas, Texas time, one Business Day prior to conversion, to convert
any Eurodollar Borrowing into an ABR Borrowing, (y) not later than 10:00
a.m., Dallas, Texas time, three Business Days prior to conversion or
continuation, to convert any ABR Borrowing into a Eurodollar Borrowing or to
continue any Eurodollar Borrowing as a Eurodollar Borrowing for an additional
Interest Period, and (z) not later than 10:00 a.m., Dallas, Texas time, three
Business Days prior to conversion, to convert the Interest Period with
respect to any Eurodollar Borrowing to another permissible Interest Period,
subject in each case to the following:
(i) each conversion or continuation shall be made pro rata among the
Lenders in accordance with the Applicable Specified Percentage of the Loans
comprising the converted or continued Borrowing;
(ii) if less than all the outstanding principal amount of any
Borrowing shall be converted or continued, then each resulting Borrowing
shall satisfy the limitations specified in Sections 2.02 and 2.08(b) hereof
regarding the principal amount and maximum number of Borrowings of the
relevant Type;
(iii) each conversion shall be effected by each Lender and the
Administrative Agent by recording for the account of such Lender the new
Loan of such Lender resulting from such conversion and reducing the Loan
(or portion thereof) of such Lender being converted by an equivalent
principal amount; accrued interest on any Eurodollar Loan (or portion
thereof) being converted shall be paid by the Borrower at the time of
conversion;
(iv) if any Eurodollar Borrowing is converted at a time other than the
end of the Interest Period applicable thereto, the Borrower shall pay, upon
demand, any amounts due to the Lenders pursuant to Section 2.14 hereof;
(v) any portion of a Borrowing maturing or required to be repaid in
less than one month may not be converted into or continued as a Eurodollar
Borrowing;
(vi) any portion of a Eurodollar Borrowing that cannot be converted
into or continued as a Eurodollar Borrowing by reason of the immediately
preceding clause shall be automatically converted at the end of the
Interest Period in effect for such Borrowing into an ABR Borrowing; and
(vii) after the occurrence and during the continuance of a Default
or an Event of Default, no outstanding Loan may be converted into, or
continued for an additional interest period as, a Eurodollar Loan.
32
(b) Each notice pursuant to this Section 2.10 shall be irrevocable and
shall refer to this Agreement and specify (i) the identity and amount of the
Borrowing that the Borrower requests be converted or continued, (ii) whether
such Borrowing is to be converted to or continued as a Eurodollar Borrowing
or an ABR Borrowing, (iii) if such notice requests a conversion, the date of
such conversion (which shall be a Business Day) and (iv) if such Borrowing is
to be converted to or continued as a Eurodollar Borrowing, the Interest
Period with respect thereto. If no Interest Period is specified in any such
notice with respect to any conversion to or continuation as a Eurodollar
Borrowing, the Borrower shall be deemed to have selected an Interest Period
of one month's duration. The Administrative Agent shall advise the Lenders
of any notice given pursuant to this Section 2.10 and of each Lender's
portion of any converted or continued Borrowing. If the Borrower shall not
have given notice in accordance with this Section 2.10 to continue any
Borrowing into a subsequent Interest Period (and shall not otherwise have
given notice in accordance with this Section 2.10 to convert such Borrowing),
such Borrowing shall, at the end of the Interest Period applicable thereto
(unless repaid pursuant to the terms hereof), automatically be continued into
a new Interest Period as an ABR Borrowing.
SECTION 2.11. PREPAYMENT.
(a) The Borrower shall have the right at any time and from time to time
to prepay any Borrowing, in whole or in part, upon at least two Business
Days' prior written or telecopy notice (or telephone notice promptly
confirmed by written or telecopy notice) to the Administrative Agent before
11:00 a.m., Dallas, Texas time; provided, however, that each partial
prepayment shall be in an amount that is an integral multiple of $1,000,000
and not less than $3,000,000.
(b) In the event of any termination of the Commitments, the Borrower
shall repay or prepay all its outstanding Borrowings (and irrevocably cash
collateralize the L/C Exposure in the manner contemplated by Section 2.19(j)
hereof) on the date of such termination. In the event of any partial
reduction of the Commitments, then (i) at or prior to the effective date of
such reduction or termination, the Administrative Agent shall notify the
Borrower and the Lenders of the aggregate amount of outstanding Revolving
Loans or Total Exposure, as the case may be, after giving effect thereto and
(ii) if the sum of the aggregate amount of outstanding Revolving Loans or
Total Exposure, as the case may be, at the time would exceed the Total
Commitment after giving effect to such reduction or termination, then the
Borrower shall, on the date of such reduction or termination, repay or prepay
Borrowings in an amount sufficient to eliminate such excess.
(c) Whenever and on each occasion that the Total Exposure exceeds the
Total Commitment, the Borrower will immediately prepay the Revolving Loans by
the amount necessary to reduce the Total Exposure to an amount less than or
equal to the Total Commitment.
(d) To the extent that the Borrower or any of its Subsidiaries issues
any equity securities (this provision shall not in and of itself permit the
Borrower to consummate any of the above described transactions), the Borrower
agrees to use 100% of the Net Proceeds of any such
33
transaction to make an immediate prepayment on the Obligations. To the
extent that the Borrower or any of its Subsidiaries issues any public or
private indebtedness other than Indebtedness permitted to be incurred under
▇▇▇▇▇▇▇▇ ▇.▇▇(▇), (▇), (▇), (▇), (▇), (▇), (▇), (▇), (▇) and (k) hereof (this
provision shall not in and of itself permit the Borrower to consummate any of
the above described transactions), the Borrower agrees to use 100% of the Net
Proceeds of any such transaction to make an immediate prepayment on the
Obligations.
(e) To the extent that the Borrower or any of its Subsidiaries
consummates any sale of any Asset Disposition, then Borrower agrees to use
100% of the Net Cash Proceeds of any such transaction shall be used to make
an immediate prepayment on the Obligations, unless such Net Cash Proceeds are
both (i) from an On Command Corp. Stock Sale and (ii) promptly used to repay,
repurchase or redeem the Senior Notes in accordance with the terms of the
Senior Notes Documentation.
(f) In the event the amount of any prepayment required to be made above
shall exceed the aggregate principal amount of the applicable outstanding ABR
Loans (the amount of any such excess being called the "ESCROW AMOUNT"), the
Borrower shall have the right, in lieu of making such prepayment in full, to
prepay all the outstanding applicable ABR Loans and to deposit an amount
equal to the Escrow Amount with the Administrative Agent in a cash collateral
account maintained by and in the sole dominion and control of the
Administrative Agent. Any amounts so deposited shall be held by the
Administrative Agent as collateral for the Obligations and applied to the
prepayment of outstanding Eurodollar Loans at the end of the current Interest
Periods applicable thereto. On any Business Day on which (x) collected
amounts remain on deposit in or to the credit of such cash collateral account
after giving effect to the payments made on such day and (y) the Borrower
shall have delivered to the Administrative Agent a written request or
telephonic request (which shall be promptly confirmed in writing) that such
remaining collected amounts be invested in the Permitted Investments
specified in such request, the Administrative Agent shall use its reasonable
efforts to invest such remaining collected amounts in such Permitted
Investments; PROVIDED, HOWEVER, that the Administrative Agent shall have
continuous dominion and full control over any such investments (and over any
interest that accrues thereon) to the same extent that it has dominion and
control over such cash collateral account and no Permitted Investment shall
mature after the end of the Interest Period for which it is to be applied.
The Borrower shall NOT have the right to withdraw any amount from such cash
collateral account until such Eurodollar Loans and accrued interest thereon
are paid in full or if a Default or Event of Default then exists or would
result.
(g) Each notice of prepayment shall specify the prepayment date and the
principal amount of each Borrowing (or portion thereof) to be prepaid, shall
be irrevocable and shall commit the Borrower to prepay such Borrowing by the
amount stated therein on the date stated therein. All prepayments under this
Section 2.11 shall be subject to Section 2.14 hereof but otherwise without
premium or penalty. All prepayments under this Section 2.11 shall be
accompanied by accrued interest on the principal amount being prepaid to the
date of payment.
34
SECTION 2.12. RESERVE REQUIREMENTS; CHANGE IN CIRCUMSTANCES.
(a) Notwithstanding any other provision of this Agreement, if after the
date of this Agreement any change in any Law or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force of
Law) shall change the basis of taxation of payments to any Lender or the
Issuing Bank of the principal of or interest on any Eurodollar Loan made by
such Lender or any Fees or other amounts payable hereunder (other than
changes in respect of taxes imposed on the overall net income (including
without limitation franchise taxes on net income, branch profit taxes and
alternate minimum income taxes) of such Lender or the Issuing Bank by the
jurisdiction in which such Lender or the Issuing Bank is incorporated or has
its principal office or by any political subdivision or taxing authority
therein), or shall impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for the
account of or credit extended by any Lender or the Issuing Bank (except any
such reserve requirement which is reflected in the Adjusted LIBO Rate) or
shall impose on such Lender or the Issuing Bank or the London interbank
market any other condition affecting this Agreement or Eurodollar Loans made
by such Lender or any Letter of Credit or participation therein, and the
result of any of the foregoing shall be to increase the cost to such Lender
or the Issuing Bank of making or maintaining any Eurodollar Loan or increase
the cost to any Lender of issuing or maintaining any Letter of Credit or
purchasing or maintaining a participation therein or to reduce the amount of
any sum received or receivable by such Lender or the Issuing Bank hereunder
whether of principal, interest or otherwise, by an amount deemed by such
Lender or the Issuing Bank to be material, then the Borrower will pay to such
Lender or the Issuing Bank, as the case may be, upon demand such additional
amount or amounts as will compensate such Lender or the Issuing Bank, as the
case may be, for such additional costs incurred or reduction suffered.
(b) If any Lender or the Issuing Bank shall have determined that the
adoption after the date hereof of any Law, agreement or guideline regarding
capital adequacy, or any change after the date hereof in any such Law,
agreement or guideline (regardless of whether the change in such Law,
agreement or guideline has been adopted) or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or compliance by any Lender (or any
lending office of such Lender) or the Issuing Bank or any Lender's or the
Issuing Bank's holding company with any request or directive regarding
capital adequacy (whether or not having the force of Law) of any Governmental
Authority has or would have the effect of reducing the rate of return on such
Lender's or the Issuing Bank's capital or on the capital of such Lender's or
the Issuing Bank's holding company, if any, as a consequence of this
Agreement or the Loans made or participations in Letters of Credit purchased
by such Lender pursuant hereto or the Letters of Credit issued by the Issuing
Bank pursuant hereto to a level below that which such Lender or the Issuing
Bank or such Lender's or the Issuing Bank's holding company could have
achieved but for such applicability, adoption, change or compliance (taking
into consideration such Lender's or the Issuing Bank's policies and the
policies of such Lender's or the Issuing Bank's holding company with respect
to capital adequacy) by an amount deemed by such Lender or the Issuing Bank
to be material, then from time to time the Borrower shall pay
35
to such Lender or the Issuing Bank, as the case may be, such additional
amount or amounts as will compensate such Lender or the Issuing Bank or such
Lender's or the Issuing Bank's holding company for any such reduction
suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth in
reasonable detail the basis for computation of the amount or amounts
necessary to compensate such Lender or the Issuing Bank or its holding
company, as applicable, as specified in paragraph (a) or (b) above shall be
delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay such Lender or the Issuing Bank the amount shown as due on
any such certificate delivered by it within 10 days after its receipt of the
same.
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation for any increased costs or reduction in amounts received
or receivable or reduction in return on capital shall not constitute a waiver
of such Lender's or the Issuing Bank's right to demand such compensation;
provided, however, that in no event shall the Borrower be obligated to make
any payment under this Section 2.12 in respect of increased costs incurred
prior to the period commencing 90 days prior to the date on which demand for
compensation in respect of such increased costs is first made. In addition,
the Borrower shall not incur liability for additional amounts with respect to
changes in the basis of taxation described above for periods of time before
such Lender or Issuing Bank becomes aware of the change in such basis except
in the case of any retroactive application of such a change. The protection
of this Section shall be available to each Lender and the Issuing Bank
regardless of any possible contention of the invalidity or inapplicability or
the Law, agreement, guideline or other change or condition that shall have
occurred or been imposed.
SECTION 2.13. CHANGE IN LEGALITY.
(a) Notwithstanding any other provision of this Agreement, if, after
the date hereof, any change in any Law or regulation or in the interpretation
thereof by any Governmental Authority charged with the administration or
interpretation thereof shall make it unlawful for any Lender to make or
maintain any Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to any Eurodollar Loan, then, by written
notice to the Borrower and to the Administrative Agent:
(i) such Lender may declare that Eurodollar Loans will not thereafter
(for the duration of such unlawfulness) be made by such Lender hereunder
(or be continued for additional Interest Periods and ABR Loans will not
thereafter (for such duration) be converted into Eurodollar Loans),
whereupon any request for a Eurodollar Borrowing (or to convert an ABR
Borrowing to a Eurodollar Borrowing or to continue a Eurodollar Borrowing
for an additional interest Period) shall, as to such Lender only, be deemed
a request for an ABR Loan (or a request to continue an ABR Loan as such for
an additional Interest Period or to convert a Eurodollar Loan into an ABR
Loan, as the case may be), unless such declaration shall be subsequently
withdrawn; and
36
(ii) such Lender may require that all outstanding Eurodollar Loans
made by it be converted to ABR Loans, in which event all such Eurodollar
Loans shall be automatically converted to ABR Loans as of the effective
date of such notice as provided in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above,
all payments and prepayments of principal that would otherwise have been
applied to repay the Eurodollar Loans that would have been made by such
Lender or the converted Eurodollar Loans of such Lender shall instead be
applied to repay the ABR Loans made by such Lender in lieu of, or resulting
from the conversion of, such Eurodollar Loans.
(b) For purposes of this Section 2.13, a notice to the Borrower by any
Lender shall be effective as to each Eurodollar Loan made by such Lender, if
lawful, on the last day of the Interest Period currently applicable to such
Eurodollar Loan; in all other cases such notice shall be effective on the
date of receipt by the Borrower.
SECTION 2.14. INDEMNITY. The Borrower shall indemnify each Lender
against any loss or expense that such Lender may sustain or incur as a
consequence of (a) any event, other than a default by such Lender in the
performance of its obligations hereunder, which results in (i) such Lender
receiving or being deemed to receive any amount on account of the principal
of any Eurodollar Loan prior to the end of the Interest Period in effect
therefor, (ii) the conversion of any Eurodollar Loan to an ABR Loan, or the
conversion of the Interest Period with respect to any Eurodollar Loan, in
each case other than on the last day of the Interest Period in effect
therefor, or (iii) any Eurodollar Loan to be made by such Lender (including
any Eurodollar Loan to be made pursuant to a conversion or continuation under
Section 2.10 hereof) not being made after notice of such Loan shall have been
given by the Borrower hereunder for any reason other than default by a Lender
(any of the events referred to in this clause (a) being called a "BREAKAGE
EVENT") or (b) any default in the making of any payment or prepayment
required to be made hereunder. In the case of any Breakage Event, such loss
shall include an amount equal to the excess, as reasonably determined by such
Lender, of (i) its cost of obtaining funds for the Eurodollar Loan that is
the subject of such Breakage Event for the period from the date of such
Breakage Event to the last day of the Interest Period in effect (or that
would have been in effect) for such Loan over (ii) the amount of interest
likely to be realized by such Lender in redeploying the funds released or not
utilized by reason of such Breakage Event for such period. A certificate of
any such Lender shall be delivered to the Borrower and shall be conclusive
absent manifest error, so long as such certificate sets forth in reasonable
detail any amount or amounts which such Lender is entitled to receive
pursuant to this Section 2.14 and the basis of computation of the amount or
amounts necessary to compensate such Lender.
SECTION 2.15. SHARING OF SETOFFS. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim
against the Borrower, or pursuant to a secured claim under Section 506 of
Title 11 of the United States Code or other security or
37
interest arising from, or in lieu of, such secured claim, received by such
Lender under any Debtor Relief Law or other similar Law or otherwise, or by
any other means, obtain payment (voluntary or involuntary) in respect of any
Loan or Loans or L/C Disbursement as a result of which the unpaid principal
portion of its Revolving Loans and participations in L/C Disbursements shall
be proportionately less than the unpaid principal portion of the Revolving
Loans and participations in L/C Disbursements of any other Lender, it shall
be deemed simultaneously to have purchased from such other Lender at face
value, and shall promptly pay to such other Lender the purchase price for, a
participation in the Revolving Loans and L/C Exposure of such other Lender,
so that the aggregate unpaid principal amount of the Revolving Loans and L/C
Exposure and participations in Revolving Loans and L/C Exposure held by each
Lender shall be in the same proportion to the aggregate unpaid principal
amount of all Revolving Loans and L/C Exposure then outstanding as the
principal amount of its Revolving Loans and L/C Exposure prior to such
exercise of banker's lien, setoff or counterclaim or other event was to the
principal amount of all Revolving Loans and L/C Exposure outstanding prior to
such exercise of banker's lien, setoff or counterclaim or other event;
provided, however, that if any such purchase or purchases or adjustments
shall be made pursuant to this Section 2.15 and the payment giving rise
thereto shall thereafter be recovered, such purchase or purchases or
adjustments shall be rescinded to the extent of such recovery and the
purchase price or prices or adjustment restored without interest. The
Borrower expressly consents to the foregoing arrangements and agrees that any
Lender holding a participation in a Revolving Loan or L/C Disbursement deemed
to have been so purchased may exercise any and all rights of banker's lien,
setoff or counterclaim with respect to any and all moneys owing by the
Borrower to such Lender by reason thereof as fully as if such Lender had made
a Loan directly to the Borrower in the amount of such participation.
SECTION 2.16. PAYMENTS.
(a) The Borrower shall make each payment (including principal of or
interest on any Borrowing or any L/C Disbursement or any Fees or other
amounts) hereunder not later than 12:00 (noon), Dallas, Texas time, on the
date when due in immediately available dollars, without setoff, defense or
counterclaim. Each such payment (other than Issuing Bank Fees, which shall
be paid directly to the Issuing Bank,) shall be made to the Administrative
Agent at its offices at ▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
(b) Whenever any payment (including principal of or interest on any
Borrowing or any Fees or other amounts) hereunder shall become due, or
otherwise would occur, on a day that is not a Business Day, such payment may
be made on the next succeeding Business Day, and such extension of time shall
in such case be included in the computation of interest or Fees, if
applicable.
SECTION 2.17. TAXES.
(a) Any and all payments by the Borrower hereunder shall be made, in
accordance with Section 2.16 hereof, free and clear of and without deduction
for any and all current or future taxes, levies, imposts, deductions, charges
or withholdings, and all liabilities with respect thereto
38
EXCLUDING (i) income taxes imposed on the net income (including without
limitation, branch profit taxes and alternative minimum income taxes of the
Administrative Agent, any Lender or the Issuing Bank (or any transferee or
assignee thereof, including a participation holder (any such entity a
"TRANSFEREE")), (ii) franchise taxes imposed on the net income of the
Administrative Agent, any Lender or the Issuing Bank (or Transferee), in each
case by the jurisdiction under the Laws of which the Administrative Agent,
such Lender or the Issuing Bank (or Transferee) is organized or any political
subdivision thereof or by the jurisdiction in which the applicable lending or
issuing office of the Administrative Agent, such Lender, or the Issuing Bank
(or Transferee) is located or any political subdivision thereof (all such
nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities, collectively or individually, being called "TAXES"). If the
Borrower shall be required to deduct any Taxes from or in respect of any sum
payable hereunder to the Administrative Agent, any Lender or the Issuing Bank
(or and Transferee), (i) the sum payable shall be increased by the amount (an
"ADDITIONAL AMOUNT") necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
Section 2.17) the Administrative Agent, such Lender or the Issuing Bank or
Transferee), as the case may be, shall receive an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrower shall
make such deductions and (iii) the Borrower shall pay the full amount
deducted to the relevant Governmental Authority in accordance with Applicable
Law.
(b) In addition, the Borrower agrees to pay to the relevant
Governmental Authority in accordance with Applicable Law any current or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies that arise from and payment made hereunder or from
the execution, delivery or registration of, or otherwise with respect to,
this Agreement ("OTHER TAXES").
(c) The Borrower will indemnify the Administrative Agent, each Lender
and the Issuing Bank (or Transferee) for the full amount of Taxes and Other
Taxes paid by the Administrative Agent, such Lender or the Issuing Bank (or
Transferee), as the case may be, and any liability, (including penalties,
interest and expenses (including reasonable attorney's fees and expenses))
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability
prepared by the Administrative Agent, a Lender or the Issuing Bank (or
Transferee), or the Administrative Agent on its behalf, absent manifest
error, shall be final, conclusive and binding for all purposes. Such
indemnification shall be made within 30 days after the date the
Administrative Agent, any Lender or the Issuing Bank (or Transferee), as the
case may be, makes written demand therefor.
(d) If the Administrative Agent, a Lender or the Issuing Bank (or
Transferee) receives a refund in respect of any Taxes or Other Taxes as to
which it has been indemnified by the Borrower or with respect to which the
Borrower has paid additional amounts pursuant to this Section 2.17, it shall
within 30 days from the date of such receipt pay over to the Borrower (a)
such refund (but only to the extent of indemnity payments made, or additional
amounts paid, by
39
the Borrower under this Section 2.17 with respect to the Taxes or Other Taxes
giving rise to such refund), net of all out-of-pocket expenses of the
Administrative Agent, such Lender or the Issuing Bank (or Transferee) and (b)
interest paid by the relevant Governmental Authority with respect to such
refund; PROVIDED, HOWEVER, that the Borrower, upon the request of the
Administrative Agent, such Lender or the Issuing Bank (or Transferee), shall
repay the amount paid over to the Borrower (plus penalties, interest or other
charges) to the Administrative Agent, such Lender or the Issuing Bank (or
Transferee) in the event the Administrative Agent, such Lender or the Issuing
Bank (or Transferee) is required to repay such refunds to such Governmental
Authority. If the Borrower determines in good faith that a reasonable basis
exists for contesting any Tax or Other Tax, the Administrative Agent, the
Lender, Issuing Bank or Transferee, as applicable, shall cooperate with the
Borrower in challenging such Tax or Other Tax at the Borrower's expense if
requested by the Borrower (it being understood and agreed that the
Administrative Agent, the Lender, Issuing Bank or Transferee, as applicable,
shall have no obligation to contest or responsibility for contesting such Tax
or Other Tax).
(e) As soon as practicable after the date of any payment of Taxes or
Other Taxes by the Borrower to the relevant Governmental Authority, the
Borrower will deliver to the Administrative Agent, at its address referred to
in Section 9.01 hereof, the original or a certified copy of any receipt
actually issued by such Governmental Authority evidencing payment thereof.
(f) Each Lender (or Transferee) that is organized under the Laws of a
jurisdiction other than the United States, any State thereof or the District
of Columbia (a "NON-U.S. LENDER") shall deliver to the Borrower and the
Administrative Agent two copies of either United States Internal Revenue
Service Form 1001 or Form 4224, or, in the case of a Non-U.S. Lender claiming
exemption from U.S. Federal withholding tax under Section 871(h) or 881(c) of
the Code with respect to payments of "portfolio interest", a Form W-8, or any
subsequent versions thereof or successors thereto (and, if such Non-U.S.
Lender delivers a Form W-8, a certificate containing representations
regarding the status of such Non-U.S. Lender as not being a bank for purposes
of Section 881(c) of the Code, as not being a 10-percent shareholder (within
the meaning of Section 871(h)(3)(B) of the Code) of the Borrower and as not
being a controlled foreign corporation related to the Borrower (within the
meaning of Section 864(d)(4) of the Code)), properly completed and duly
executed by such Non-U.S. Lender claiming complete exemption from, or reduced
rate of, U.S. Federal withholding tax on payments by the Borrower under this
Agreement. Such forms shall be delivered by each Non-U.S. Lender on or
before the date it becomes a party to this Agreement (or, in the case of a
Transferee that is a participation holder, on or before the date such
participation holder becomes a Transferee hereunder) and on or before the
date, if any, such Non-U.S. Lender changes its applicable lending office by
designating a different lending office (a "NEW LENDING OFFICE"). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U S.
Lender. Notwithstanding any other provision of this Section 2.17(f), a
Non-U.S. Lender shall not be required to deliver any form pursuant to this
Section 2.17(f) that such Non-U.S. Lender is not legally able to deliver.
40
(g) The Borrower shall not be required to indemnify any Non-U.S. Lender
or to pay any additional amounts to any Non-U.S. Lender, in respect of United
States Federal withholding tax pursuant to paragraph (a) or (c) above to the
extent that (i) the obligation to withhold amounts with respect to United
States Federal withholding tax existed on the date such Non-U.S. Lender
became a party to this Agreement (or, in the case of a Transferee that is a
participation holder, on the date such participation holder became a
Transferee hereunder) or, with respect to payments to a New Lending Office,
the date such Non-U.S. Lender designated such New Lending Office with respect
to a Loan; provided, however, that this paragraph (g) shall not apply (x) to
any Transferee or New Lending Office that becomes a Transferee or New Lending
Office as a result of an assignment, participation, transfer or designation
made at the request of the Borrower and (y) to the extent the indemnity
payment or additional amounts any Transferee, or any Lender (or Transferee),
acting through a New Lending Office, would be entitled to receive (without
regard to this paragraph (g)) do not exceed the indemnity payment or
additional amounts that the Person making the assignment, participation or
transfer to such Transferee, or the Lender (or Transferee) making the
designation of such New Lending Office, would have been entitled to receive
in the absence of such assignment, participation, transfer or designation or
(ii) the obligation to pay such additional amounts would not have arisen but
for a failure by such Non-U.S. Lender to comply with the provisions of
paragraph (g) above.
(h) Nothing contained in this Section 2.17 shall require any Lender or
the Issuing Bank (or any Transferee) or the Administrative Agent to make
available any of its tax returns (or any other information that it deems to
be confidential or proprietary).
(i) Each Bank represents that, to the best of its knowledge, it is not
a party to any "conduit financing arrangement" as defined under applicable
Treasury Regulations promulgated under the Code.
(j) Any Non-U.S. Lender that could become completely exempt from
withholding of any tax, assessment or other charge or levy imposed by or on
behalf of the United States of America or any taxing authority thereof ("U.S.
TAXES") in respect of payment of any obligations due to such Non-U.S. Lender
under this Agreement ("LENDER OBLIGATIONS") if the Lender Obligations were in
registered form for U.S. Federal income tax purposes may request the Borrower
(through the Administrative Agent), and the Borrower agrees thereupon, to
exchange any promissory note(s) evidencing such Lender Obligations for
promissory note(s) registered as provided in subsection (k) below (each, a
"REGISTERED NOTE"). Registered Notes may not be exchanged for promissory
notes that are not Registered Notes.
(k) From and after the time, if any, when any Lender requests a
Registered Note, the Borrower shall maintain, or cause to be maintained, a
register (the "REGISTER") on which it enters the name of the registered owner
of the Lender Obligation(s) evidenced by each Registered Note. A Registered
Note and the Lender Obligation(s) evidenced thereby may be assigned or
otherwise transferred in whole or in part only by registration of such
assignment or transfer of such Registered Note and the Lender Obligation(s)
evidenced thereby on the Register (and each
41
Registered Note shall expressly so provide). Any assignment or transfer of
all or part of such Lender Obligation(s) and the Registered Note(s)
evidencing the same shall be registered on the Register only upon surrender
for registration of assignment or transfer of the Registered Note(s)
evidencing such Lender Obligation(s), duly endorsed by (or accompanied by a
written instrument of assignment or transfer duly executed by) the Registered
Noteholder thereof, and thereupon one or more new Registered Note(s) in the
same aggregate principal amount shall be issued to the designated assignee(s)
or transferee(s) pursuant to, in accordance with, and subject to the
restrictions of, Section 9.04 hereof. Prior to the due presentment for
registration of assignment or transfer of any Registered Note, the Borrower
and the Administrative Agent shall treat the Person in whose name such Lender
Obligation(s) and the Registered Note(s) evidencing the same is registered as
the owner thereof for the purpose of receiving all payments thereon and for
all other purposes, notwithstanding any notice to the contrary. The Register
shall be available for inspection by the Administrative Agent and any Lender
at any reasonable time upon reasonable prior notice.
42
SECTION 2.18. ASSIGNMENT OF COMMITMENTS UNDER CERTAIN CIRCUMSTANCES; DUTY
TO MITIGATE.
(a) In the event (i) any Lender or the Issuing Bank delivers a
certificate requesting compensation pursuant to Section 2.12 hereof, (ii) any
Lender or the Issuing Bank delivers a notice described in Section 2.13 hereof
or (iii) the Borrower is required to pay any additional amount to any Lender
or the Issuing Bank or any Governmental Authority on account of any Lender or
the Issuing Bank pursuant to Section 2.17 hereof, the Borrower may, at its
sole expense and effort (including with respect to the processing and
recordation fee referred to in Section 9.04(b) hereof), upon notice to such
Lender or the Issuing Bank and the Administrative Agent, require such Lender
or the Issuing Bank to transfer and assign, without recourse (in accordance
with and subject to the restrictions contained in Section 9.04 hereof), all
of its interests, rights and obligations under this Agreement to an assignee
that shall assume such assigned obligations which assignee may be another
Lender, if a Lender accepts such assignment); provided that (x) such
assignment shall not conflict with any Law, rule or regulation or order of
any court or other Governmental Authority having jurisdiction, (v) the
Borrower shall have received the prior written consent of the Administrative
Agent (and, if a Commitment is being assigned, of the Issuing Bank), which
consent shall not unreasonably be withheld, and (z) the Borrower or such
assignee shall have paid to the affected Lender or the Issuing Bank in
immediately available funds an amount equal to the sum of the principal of
and interest accrued to the date of such payment on the outstanding Loans and
participations in L/C Disbursements of such Lender or the Issuing Bank plus
all Fees and other amounts accrued for the account of such Lender or the
Issuing Bank hereunder (including any amounts under Section 2.12 hereof and
Section 2.14 hereof); provided further that, if prior to any such transfer
and assignment the circumstances or event that resulted in such Lender's or
the Issuing Bank's claim for compensation under Section 2.12 hereof or notice
under Section 2.13 hereof or the amounts paid pursuant to Section 2.17
hereof, as the case may be, cease to cause such Lender or the Issuing Bank to
suffer increased costs or reductions in amounts received or receivable or
reduction in return on capital, or cease to have the consequences specified
in Section 2.13, or cease to result in amounts being payable under Section
2.17 hereof, as the case may be, including as a result of any action taken by
such Lender or the Issuing Bank pursuant to paragraph (b) below), or if such
Lender or the Issuing Bank shall waive its right to claim further
compensation under Section 2.12 hereof in respect of such circumstances or
event or shall withdraw its notice under Section 2.13 hereof or shall waive
its right to further payments under Section 2.17 hereof in respect of such
circumstances or event, as the case may be, then such Lender or the Issuing
Bank shall not thereafter be required to make any such transfer and
assignment hereunder.
(b) If (i) any Lender or the Issuing Bank shall request compensation
under Section 2.12 hereof, (ii) any Lender or the Issuing Bank delivers a
notice described in Section 2.13 hereof or (iii) the Borrower is required to
pay any additional amount to any Lender or the Issuing Bank or any
Governmental Authority on account of any Lender or the Issuing Bank, pursuant
to Section 2.17, then such Lender or the Issuing Bank shall use reasonable
efforts (which shall not require such Lender or the Issuing Bank to incur an
unreimbursed loss or unreimbursed cost or expense
43
or otherwise take any action inconsistent with its internal policies or legal
or regulatory restrictions or suffer any disadvantage or burden deemed by it
to be significant) (x) to file any certificate or document reasonably
requested in writing by the Borrower or (y) to assign its rights and delegate
and transfer its obligations hereunder to another of its offices, branches or
affiliates, if such filing or assignment would reduce its claims for
compensation under Section 2.12 hereof or enable it to withdraw its notice
pursuant to Section 2.13 hereof or would reduce accounts payable pursuant to
Section 2.17 hereof, as the case may be, in the future. The Borrower hereby
agrees to pay all reasonable costs and expenses incurred by any Lender or the
Issuing Bank in connection with any such filing or assignment, delegation and
transfer.
SECTION 2.19. LETTERS OF CREDIT.
(a) GENERAL. The Borrower may request the issuance of a Letter of
Credit, in a form reasonably acceptable to the Administrative Agent and the
Issuing Bank, appropriately completed, for the account of the Borrower, at
any time and from time to time while the Commitments remain in effect. This
Section shall not be construed to impose an obligation upon the Issuing Bank
to issue any Letter of Credit that is inconsistent with the terms and
conditions of this Agreement.
(b) NOTICE OF ISSUANCE, AMENDMENT, RENEWAL, EXTENSION; CERTAIN
CONDITIONS. In order to request the issuance of a Letter of Credit (or to
amend, renew or extend an existing Letter of Credit), the Borrower shall hand
deliver or telecopy to the Issuing Bank and the Administrative Agent
(reasonably in advance of the requested date of issuance, amendment, renewal
or extension) a completed Application and a notice requesting the issuance of
a Letter of Credit, or identifying the Letter of Credit to be amended,
renewed or extended, the date of issuance, amendment, renewal or extension,
the date on which such Letter of Credit is to expire (which shall comply with
paragraph (c) below), the amount of such Letter of Credit, the name and
address of the beneficiary thereof and such other information as shall be
necessary to prepare such Letter of Credit. In connection with a request for
the issuance of a Letter of Credit, in the event of any inconsistency between
the terms of any Application and the provisions of this Agreement, the
provisions of this Agreement shall be controlling. A Letter of Credit shall
be issued, amended, renewed or extended only if, and upon issuance,
amendment, renewal or extension of each Letter of Credit the Borrower shall
be deemed to represent and warrant that, after giving effect to such
issuance, amendment, renewal or extension (A) the L/C Exposure shall not
exceed $5,000,000 and (B) the sum of the Total Exposure shall not exceed the
Total Commitment. The Issuing Bank shall not enter into any amendment of an
outstanding Letter of Credit which has not been requested or approved in
writing by the Borrower.
(c) EXPIRATION DATE. Each Letter of Credit shall expire at the close
of business on the earlier of the date one year after the date of the
issuance of such Letter of Credit and the date that is five Business Days
prior to the Maturity Date, unless such Letter of Credit (i) expires by its
terms on an earlier date or (ii) has a one-year tenor and provides for the
renewal thereof for additional one-year periods, so long as such periods
referred to in this clause (ii) shall not in any event expire at a date later
than the date that is five Business Days prior to the Maturity Date.
44
(d) PARTICIPATIONS. By the issuance of a Letter of Credit and without
any further action on the part of the Issuing Bank or the Lenders, the
Issuing Bank hereby grants to each Lender, and each such Lender hereby
acquires from the applicable Issuing Bank, a participation in such Letter of
Credit equal to such Lender's Revolving Loan Specified Percentage of the
aggregate amount available to bc drawn under such Letter of Credit, effective
upon the issuance of such Letter of Credit. In consideration and in
furtherance of the foregoing, each Lender hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, for the account of
the Issuing Bank, such Lender's Revolving Loan Specified Percentage of each
L/C Disbursement made by the Issuing Bank and not reimbursed by the Borrower
forthwith on the date due as provided in Section 2.02(e) hereof. Each Lender
acknowledges and agrees that its obligation to acquire participations
pursuant to this paragraph in respect of Letters of Credit is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or an Event of Default,
and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever.
(e) REIMBURSEMENT. If the Issuing Bank shall make any L/C Disbursement
in respect of a Letter of Credit, the Borrower shall pay to the
Administrative Agent an amount equal to such L/C Disbursement not later than
two hours after the Borrower shall have received notice from the Issuing Bank
that payment of such draft will be made, or, if the Borrower shall have
received such notice later than 10:00 a.m., Dallas, Texas time, on any
Business Day, not later than 10:00 a.m., Dallas, Texas time, on the
immediately following Business Day.
(f) OBLIGATIONS ABSOLUTE. The Borrower's obligations to reimburse L/C
Disbursements as provided in paragraph (e) above shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement, under any and all circumstances whatsoever,
and irrespective of:
(i) any lack of validity or enforceability of any Letter of Credit
or any other Loan Paper, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure from all
or any of the provisions of any Letter of Credit or this Agreement;
(iii) the existence of any claim, setoff, defense or other right
that the Borrower, any other party guaranteeing, or otherwise obligated
with, the Borrower, any Subsidiary of the Borrower, On Command Corp. or any
of its Subsidiaries, or other Affiliate of any thereof or any other Person
may at any time have against the beneficiary under any Letter of Credit,
the Issuing Bank, the Administrative Agent or any Lender or any other
Person, whether in connection with this Agreement or any other related or
unrelated agreement or transaction;
45
(iv) any draft or other document presented under a 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;
(v) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the
terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of the
Issuing Bank, the Lenders, the Administrative Agent or any other Person or
any other event or circumstance whatsoever, whether or not similar to any
of the foregoing, that might, but for the provisions of this Section,
constitute a legal or equitable discharge of the Borrower's obligations
hereunder.
The foregoing shall not be construed to excuse the Issuing Bank from
liability to the Borrower to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the
Borrower to the extent permitted by Applicable Law) suffered by the Borrower
that are caused by the Issuing Bank's gross negligence or wilful misconduct
in determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof; it is understood that the Issuing Bank
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary and, in making any payment under any Letter of
Credit (i) the Issuing Bank's exclusive reliance on the documents presented
to it under such Letter of Credit as to any and all matters set forth
therein, including reliance on the amount of any draft presented under such
Letter of Credit, whether or not the amount due to the beneficiary thereunder
equals the amount of such draft and whether or not any document presented
pursuant to such Letter of Credit proves to be insufficient in any respect,
if such document on its face appears to be in order, and whether or not any
other statement or any other document presented pursuant to such Letter of
Credit proves to be forged or invalid or any statement therein proves to be
inaccurate or untrue in any respect whatsoever and (ii) any noncompliance in
any immaterial respect of the documents presented under such Letter of Credit
with the terms thereof shall, in each case, be deemed not to constitute
wilful misconduct or gross negligence of the Issuing Bank
(g) DISBURSEMENT PROCEDURES. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent
a demand for payment under a Letter of Credit. The Issuing Bank shall as
promptly as possible give telephonic notification, confirmed by telecopy, to
the Administrative Agent and the Borrower of such demand for payment and
whether the Issuing Bank has made or will make an L/C Disbursement
thereunder; provided that any failure to give or delay in giving such notice
shall not relieve the Borrower of its obligation to reimburse the Issuing
Bank and the Lenders with respect to any such L/C Disbursement. The
Administrative Agent shall promptly give each Lender notice thereof.
(h) INTERIM INTEREST. If the Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit, then, unless the Borrower
shall reimburse such L/C Disbursement in full
46
on such date, the unpaid amount thereof shall bear interest for the account
of the Issuing Bank, for each day from and including the date of such L/C
Disbursement, to but excluding the earlier of the date of payment by the
Borrower or the date on which interest shall commence to accrue thereon as
provided in Section 2.02(f) hereof, at the rate per annum that would apply to
such amount if such amount were an ABR Loan.
(i) RESIGNATION OR REMOVAL OF THE ISSUING BANK. The Issuing Bank may
resign at any time by giving 90 days' prior written notice to the
Administrative Agent, the Lenders and the Borrower, and may be removed at any
time by the Borrower by notice to the Issuing Bank, the Administrative Agent
and the Lenders. Subject to the next succeeding paragraph, upon the
acceptance of any appointment as the Issuing Bank hereunder by a Lender that
shall agree to serve as successor Issuing Bank, such successor shall succeed
to and become vested with all the interests, rights and obligations of the
retiring Issuing Bank and the retiring Issuing Bank shall be discharged from
its obligations to issue additional Letters of Credit hereunder. At the time
such removal or resignation shall become effective, the Borrower shall pay
all accrued and unpaid fees pursuant to Section 2.05(c) hereof. The
acceptance of any appointment as the Issuing Bank hereunder by a successor
Lender shall be evidenced by an agreement entered into by such successor, in
a form satisfactory to the Borrower and the Administrative Agent, and, from
and after the effective date of such agreement, (i) such successor Lender
shall have all the rights and obligations of the previous Issuing Bank under
this Agreement and (ii) references herein to the term Issuing Bank, shall be
deemed to refer to such successor or to any previous Issuing Bank, or to such
successor and all previous Issuing Banks, as the context shall require.
After the resignation or removal of the Issuing Bank hereunder, the retiring
Issuing Bank shall remain a party hereto and shall continue to have all the
rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such resignation or removal, but
shall not be required to issue additional Letters of Credit.
(j) CASH COLLATERALIZATION. If any Event of Default shall occur and be
continuing, the Borrower shall, on the Business Day it receives notice from
the Administrative Agent or the Required Lenders (or, if the maturity of the
Loans has been accelerated, Lenders holding participations in outstanding
Letters of Credit representing greater than 50% of the aggregate undrawn
amount of all outstanding Letters of Credit thereof and of the amount to be
deposited), deposit in an account with the Administrative Agent, for the
benefit of the Lenders, an amount in cash equal to the L/C Exposure as of
such date. Such deposit shall be held by the Administrative Agent as
collateral for the payment and performance of the obligations of the Borrower
under this Agreement. The Administrative Agent shall have exclusive dominion
and control, including the exclusive right of withdrawal, over such account
and, if so requested by the Borrower, shall invest the deposits therein in
Permitted Investments. Other than any interest earned on the investment of
such deposits in Permitted Investments, which investments shall be made at
the option and sole discretion of the Administrative Agent, such deposits
shall not bear interest or profits and interest, if any, on such investments
shall accumulate in such account. Moneys in such account shall (i)
automatically be applied by the Administrative Agent to reimburse the Issuing
Bank for L/C Disbursements for which it has not been reimbursed, (ii) be
47
held for the satisfaction of the reimbursement obligations of the Borrower
for the L/C Exposure at such time and (iii) if the maturity of the Loans has
been accelerated (but subject to the consent of the Lenders holding
participations in outstanding Letters of Credit representing greater than 50%
of the aggregate undrawn amount of all outstanding Letters of Credit), be
applied to satisfy other obligations of the Borrower under this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent, the
Issuing Bank and each of the Lenders that:
SECTION 3.01. ORGANIZATION; POWERS. The Borrower and each of its
Subsidiaries (except as hereinafter provided) (a) is a corporation duly
organized, validly existing and in good standing under the Laws of the
jurisdiction of its organization, (b) has all requisite power and authority
to own its property and assets and to carry on its business as now conducted
and as proposed to be conducted, (c) is qualified to do business in, and is
in good standing in, every jurisdiction where such qualification is required,
except where the failure so to qualify could not reasonably be expected to
result in a Material Adverse Effect, and (d) has the corporate power and
authority to execute, deliver and perform its obligations under this
Agreement, the other Loan Papers, as appropriate, and each other agreement or
instrument contemplated thereby to which it is or will be a party and to
borrow hereunder. Ascent Arena Company, LLC and Avalanche Sub are each
limited liability companies duly organized pursuant to its Articles of
Organization and the laws of the State of Colorado, validly existing and in
good standing under the Laws of such State. Nuggets Sub is a limited
partnership duly organized under the laws of the State of Delaware.
SECTION 3.02. AUTHORIZATION. The execution, delivery and performance
by the Borrower of this Agreement, the promissory notes, the borrowing by the
Borrower hereunder, the granting by the Borrower and the other Obligors of
all Liens securing the Obligations, and the execution of all Loan Papers
(collectively, the "TRANSACTIONS") (a) have been duly authorized by all
requisite partnership, membership, corporate and, if required, stockholder
action, as applicable, and (b) will not (i) violate (A) any provision of Law,
statute, rule or regulation, or of the certificate or articles of
incorporation or other constitutive documents, by-laws or organizational
documents of the Borrower or any of its Subsidiaries, (B) any order of any
Governmental Authority or (C) any provision of any indenture, material
agreement or other material instrument to which the Borrower or any
Subsidiary of the Borrower or On Command Corp. or any of its Subsidiaries is
a party or by which any of them or any of their property is or may be bound,
provided that, for the first 30 days after the Closing Date, the Borrower may
still be pursuing the consent of the NBA and the NHL, (ii) be in conflict
with, result in a breach of or constitute (alone or with notice or lapse of
time or both) a default under, or give rise to any
48
right to accelerate or to require the prepayment, repurchase or redemption of
any obligation under any such indenture, agreement or other instrument or
(iii) result in the creation or imposition of any Lien upon or with respect
to any property or assets now owned or hereafter acquired by the Borrower or
any Subsidiary of the Borrower or On Command Corp. or any of its Subsidiaries.
SECTION 3.03. ENFORCEABILITY. This Agreement has been duly executed
and delivered by the Borrower and constitutes a legal, valid and binding
obligation of the Borrower enforceable against the Borrower in accordance
with its terms, except as such enforceability may be limited by the effect of
any applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights, or general principles of equity.
All other Loan Papers have been duly executed and delivered by the Borrower
and each of the Obligors, as appropriate, and each constitutes the legal,
valid and binding obligation of the Borrower and each Obligor, as
appropriate, enforceable against the Borrower and each Obligor, as
appropriate, in accordance with its terms, except as such enforceability may
be limited by the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights,
or general principles of equity.
SECTION 3.04. GOVERNMENTAL APPROVALS. No action, consent or approval
of, registration or filing with or any other action by any Governmental
Authority is or will be required in connection with the Transactions, except
for such as have been made or obtained and are in full force and effect.
SECTION 3.05. FINANCIAL STATEMENTS. The Borrower has heretofore
furnished to the Lenders its audited consolidated balance sheets and
statements of income and equity and cash flow (a) as of and for the fiscal
year ended December 31, 1996. Such financial statements present fairly the
financial condition and results of operations and cash flows of the Borrower
and its consolidated Subsidiaries as of such dates and for such periods.
Such balance sheets and the notes thereto disclose all material liabilities,
direct or contingent, of the Borrower and its consolidated Subsidiaries as of
the dates thereof. Such financial statements were prepared in accordance
with GAAP applied on a consistent basis.
SECTION 3.06. NO MATERIAL ADVERSE CHANGE. There has been no material
adverse change in the business, assets, operations, financial condition, or
material agreements of the Borrower, any of its Subsidiaries, On Command
Corp. and any of its Subsidiaries, taken as a whole, since December 31, 1996.
SECTION 3.07. TITLE TO PROPERTIES; POSSESSION UNDER LEASES.
(a) Each of the Borrower and its Subsidiaries has good and marketable
title to, or valid leasehold interests in, all its material properties and
assets, except for minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties and assets for their intended purposes. All such material
properties and assets are free and clear of Liens, other than Liens expressly
permitted by Section 6.02 hereof.
49
(b) Each of the Borrower and its Subsidiaries has complied with all
material obligations under all material leases to which it is a party and all
such leases are in full force and effect. Each of the Borrower and its
Subsidiaries enjoys peaceful and undisturbed possession under all such
material leases.
(c) Each of the Borrower and its Subsidiaries owns, possesses or
licenses, or could obtain ownership or possession of or a license of, on
terms not materially adverse to it, all patents, trademarks, service marks,
trade names, copyrights, licenses and rights with respect thereto necessary
for the present conduct of its business, without any known conflict with the
rights of others, and free from any burdensome restrictions, except where
such conflicts and restrictions could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
SECTION 3.08. THE SUBSIDIARIES AND ON COMMAND CORP. SCHEDULE 3.08
hereto sets forth as of the date hereof a list of all Subsidiaries of the
Borrower and On Command Corp. and its Subsidiaries, and the percentage
ownership interest of the Borrower or On Command Corp., as the case may be,
therein. As of the date hereof, the shares of Capital Stock or other
ownership interests so indicated on SCHEDULE 3.08 are fully paid and
non-assessable and are owned by the Borrower, directly or indirectly, free
and clear of all Liens.
SECTION 3.09. LITIGATION; COMPLIANCE WITH LAWS.
(a) Except as set forth on SCHEDULE 3.09 hereof, there are not any
actions, suits or proceedings at Law or in equity or by or before any
Governmental Authority now pending or, to the knowledge of the Borrower,
threatened against or affecting the Borrower or any Subsidiary of the
Borrower or On Command Corp. or any of its Subsidiaries, or any business,
property or rights of any such Person, or the NBA or NHL or any of their
related entities in which the Borrower or any Subsidiary of the Borrower owns
any Capital Stock (i) that involve this Agreement or the Transactions or (ii)
as to which there is a reasonable possibility of an adverse determination and
that, if adversely determined, could reasonably be expected, individually or
in the aggregate, to result in a Material Adverse Effect.
(b) None of the Borrower or any of the Subsidiaries of the Borrower or
On Command Corp. or any of its Subsidiaries, or any of their respective
material properties or assets is in violation of, nor will the continued
operation of their material properties and assets as currently conducted
violate, any Law, or is in default with respect to any judgment, writ,
injunction, decree or order of any Governmental Authority, where such
violation or default could reasonably be expected to result in a Material
Adverse Effect.
50
SECTION 3.10. AGREEMENTS.
(a) Neither the Borrower nor any of the Subsidiaries of the Borrower
nor On Command Corp. nor any of its Subsidiaries is a party to any agreement
or subject to any corporate restriction that, since December 31, 1996, has
resulted or would reasonably be expected to result in a Material Adverse
Effect, except as disclosed on SCHEDULE 3.10 hereof.
(b) Neither the Borrower nor any of the Subsidiaries of the Borrower
nor On Command Corp. nor any of its Subsidiaries is in default in any manner
under any provision of any indenture or other agreement or instrument
evidencing Indebtedness, or any other material agreement or instrument to
which it is a party or by which it or any of its properties or assets are or
may be bound, where such default could reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.11. FEDERAL RESERVE REGULATIONS.
(a) Neither the Borrower nor any of the Subsidiaries of the Borrower is
engaged principally, or as one of its important activities, in the business
of extending credit for the purpose of buying or carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Letter of Credit will be
used, whether directly or indirectly, and whether immediately, incidentally
or ultimately, for any purpose that entails a violation of, or that is
inconsistent with, the provisions of the Regulations of the Board, including
Regulation G, U or X.
(c) No part of proceeds of any Loan or any Letter of Credit will enable
Borrower to maintain, reduce, or retire indebtedness originally incurred to
purchase a security that is currently Margin Stock.
SECTION 3.12. INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY
ACT. Neither the Borrower nor any Subsidiary of the Borrower is (a) an
"investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940 or (b) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.
SECTION 3.13. TAX RETURNS. Each of the Borrower, its Subsidiaries, On
Command Corp. and its Subsidiaries has filed or caused to be filed all
Federal, state, and material local and foreign tax returns or materials
required to have been filed by it and has paid or caused to be paid all taxes
due and payable by it and all assessments received by it, except taxes that
are being contested in good faith by appropriate proceedings and for which
the Borrower or On Command Corp. or such Subsidiary of the Borrower or On
Command Corp., as applicable, shall have set aside on its books adequate
reserves.
51
SECTION 3.14. NO MATERIAL MISSTATEMENTS. No exhibit or schedule
prepared by the Borrower and furnished to the Administrative Agent or any
Lender in connection with the negotiation of this Agreement and the other
Loan Papers, or included herein or delivered pursuant hereto contains or
contained when furnished any material misstatement of fact or omitted, omits
or will omit when furnished to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were,
are or will be made, not misleading. No written information, report,
financial statement filed in any public filing of the Borrower prepared by
the Borrower contains any material misstatement of fact or omitted to state
any material fact necessary to make the statements therein, in the light of
the circumstances under which they were, are or will be made, not misleading.
SECTION 3.15. EMPLOYEE BENEFIT PLANS. Each of the Borrower and its
ERISA Affiliates is in compliance in all material respects with the
applicable provisions of ERISA and the Code and the regulations and published
interpretations thereunder. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events,
could reasonably be expected to result in liability of the Borrower or any of
its Subsidiaries or On Command Corp. or any of its Subsidiaries which would
be material to the Borrower and its Subsidiaries on a consolidated basis.
SECTION 3.16. SOLVENCY.
(a) Immediately after the consummation of the Transactions and the
other transactions to occur on the Closing Date and immediately following the
making of each Loan made and the issuance of each Letter of Credit issued and
after giving effect to the application of the proceeds thereof, (i) the fair
value of the assets of the Borrower and the Subsidiaries of the Borrower on a
consolidated basis, at a fair valuation, will exceed the debts and
liabilities, direct, subordinated, contingent or otherwise, of the Borrower
and the Subsidiaries of the Borrower on a consolidated basis; (ii) the
present fair saleable value of the property of the Borrower and the
Subsidiaries of the Borrower on a consolidated basis will be greater than the
amount that will be required to pay the probable liability of the Borrower
and the Subsidiaries of the Borrower on a consolidated basis on their debts
and other liabilities, direct, subordinated, contingent or otherwise, as such
debts and other liabilities become absolute and matured; (iii) except as
otherwise disclosed in the Offering Memorandum with respect to the
refinancing of the Senior Notes at maturity, the Borrower and the
Subsidiaries of the Borrower on a consolidated basis will be able to pay
their debts and liabilities, direct, subordinated, contingent or otherwise,
as such debts and liabilities become absolute and matured; and (iv) the
Borrower and the Subsidiaries of the Borrower on a consolidated basis will
not have unreasonably small capital with which to conduct the businesses in
which they are engaged as such businesses are now conducted and are proposed
to be conducted following the Closing Date.
(b) Except as otherwise disclosed in the Offering Memorandum with
respect to the refinancing of the Senior Notes at their maturity, the
Borrower does not intend to, and does not believe that it or any of its
Subsidiaries will, incur debts beyond its ability to pay such debts as
52
they mature, taking into account the timing and amounts of cash to be
received by it or any such Subsidiary and the timing and amounts of cash to
be payable on or in respect of its Indebtedness or the Indebtedness of any
such Subsidiary.
SECTION 3.17. INSURANCE. SCHEDULE 3.17 hereto sets forth a true,
complete and correct description of all insurance maintained by or for the
Borrower or for or by its Subsidiaries as of the date hereof and the Closing
Date. As of each such date, such insurance is in full force and effect and
all premiums have been duly paid. The Borrower and its Subsidiaries have
insurance in such amounts and covering such risks and liabilities as are in
accordance with normal industry practice.
SECTION 3.18. LABOR MATTERS. As of the date hereof and the Closing
Date, there are no strikes, lockouts or slowdowns against the Borrower or any
Subsidiary of the Borrower pending or, to the knowledge of the Borrower,
threatened, except as described in the Offering Memorandum with respect to
the NBA Collective Bargaining Agreement. As of the date hereof and the
Closing Date, there are no other strikes, lockouts or slowdowns against the
Borrower or any Subsidiary of the Borrower pending or, to the knowledge of
the Borrower, threatened which could reasonably be expected to have a
Material Adverse Effect. The hours worked by and payments made to employees
of the Borrower and the Subsidiaries of the Borrower have not been in
material violation of the Fair Labor Standards Act or any other applicable
Federal, state, local or foreign Law dealing with such matters. All payments
due from the Borrower or any Subsidiary of the Borrower, or for which any
claim may be made against the Borrower or any Subsidiary of the Borrower, on
account of wages and employee health and welfare insurance and other
benefits, have been paid or accrued as a liability on the books of the
Borrower or such Subsidiary. The consummation of the Transactions to be
consummated on or prior to the Closing Date will not give rise to any right
of termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which the Borrower or any Subsidiary of
the Borrower is bound.
SECTION 3.19. ENVIRONMENTAL MATTERS. Except as set forth in SCHEDULE
3.19:
(a) The properties owned, operated or leased by the Borrower and the
Subsidiaries of the Borrower (the "PROPERTIES") do not contain any Hazardous
Materials in amounts or concentrations which (i) constitute, or constituted a
violation of, or (ii) could reasonably be expected to give rise to liability
under, Environmental Laws, which violations and liabilities, in the
aggregate, could reasonably be expected to result in a Material Adverse
Effect;
(b) All Environmental Permits have been obtained and are in effect with
respect to the Properties and operations of the Borrower and the Subsidiaries
of the Borrower, and the Properties and all operations of the Borrower and
the Subsidiaries of the Borrower are in compliance, and in the last two years
have been in compliance, with all Environmental Laws and all necessary
Environmental Permits, except to the extent that such non-compliance or
failure to
53
obtain any necessary permits, in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect;
(c) Neither the Borrower nor any of the Subsidiaries of the Borrower
has received any notice of an Environmental Claim in connection with the
Properties or the operations of the Borrower or the Subsidiaries of the
Borrower or with regard to any Person whose liabilities for environmental
matters the Borrower or the Subsidiaries of the Borrower has retained or
assumed, in whole or in part, contractually, which, in the aggregate, could
reasonably be expected to result in a Material Adverse Effect, nor do the
Borrower or the Subsidiaries of the Borrower have knowledge that any such
notice will be received or is being threatened;
(d) Hazardous Materials have not been transported from the Properties,
nor have Hazardous Materials been generated, treated, stored or disposed of
at, on or under any of the Properties in a manner that could reasonably be
expected to give rise to liability under any Environmental Law, nor have the
Borrower or the Subsidiaries of the Borrower retained or assumed any
liability contractually, with respect to the generation, treatment, storage
or disposal of Hazardous Materials, which transportation, generation,
treatment, storage or disposal, or retained or assumed liabilities, in the
aggregate, could reasonably be expected to result in a Material Adverse
Effect.
SECTION 3.20. OWNERSHIP OF THE FRANCHISES.
(a) NBA FRANCHISE. Nuggets Sub is, on the Closing Date, the owner of,
and has good and marketable title to, the NBA Franchise, and the NBA
Franchise is in material compliance with all of the rules and regulations of,
and is in good standing with, the NBA, and all agreements related thereto. A
true, correct and complete copy of the NBA Documents in effect on the Closing
Date, together with any all amendments, supplements or other material
agreements relating thereto have been delivered to the Administrative Agent.
(b) NHL FRANCHISE. Avalanche Sub is, on the Closing Date, the owner
of, and has good and marketable title to, the NHL Franchise, and the NHL
Franchise is in material compliance with all of the rules and regulations of,
and is in good standing with, the NHL, and all agreements related thereto. A
true, correct and complete copy of the NHL Documents in effect on the Closing
Date, together with any all amendments, supplements or other material
agreements relating thereto have been delivered to the Administrative Agent.
SECTION 3.21. STRIKES. Except as set forth in the Offering Memorandum
regarding the NBA Collective Bargaining Agreement, there are (a) no labor
disputes or grievances pending against the NBA, the NHL, the Sports Subs,
Nuggets Sub or Avalanche Sub, the Borrower or any Subsidiary of the Borrower,
(b) no unfair labor practice charges or grievances pending or in process or,
to the knowledge of the Borrower, threatened by or on behalf of any employee
or group of employees of the NBA, the NHL, the Sports Subs, Nuggets Sub or
Avalanche Sub, the Borrower or any Subsidiary of the Borrower, or (c) no
written complaints received by Sports
54
Subs, Nuggets Sub, Avalanche Sub, the Borrower or any other Subsidiary of the
Borrower, or, to the knowledge of the Borrower, threatened, or, with respect
to unresolved complaints, on file, with any tribunal alleging employment
discrimination by the NBA, the NHL, the Borrower or any Subsidiary of the
Borrower, pursuant to the provisions of any collective bargaining agreement.
There are no other (a) labor disputes or grievances pending against the NBA,
the NHL, the Sports Subs, Nuggets Sub or Avalanche Sub, the Borrower or any
Subsidiary of the Borrower, (b) unfair labor practice charges or grievances
pending or in process or, to the knowledge of the Borrower, threatened by or
on behalf of any employee or group of employees of the NBA, the NHL, the
Sports Subs, Nuggets Sub or Avalanche Sub, the Borrower or any Subsidiary of
the Borrower, or (c) written complaints received by Sports Subs, Nuggets Sub,
Avalanche Sub, the Borrower or any other Subsidiary of the Borrower, or, to
the knowledge of the Borrower, threatened, or, with respect to unresolved
complaints, on file, with any tribunal alleging employment discrimination by
the NBA, the NHL, the Borrower or any Subsidiary of the Borrower, pursuant to
the provisions of any collective bargaining agreement, which, in each case,
could reasonably be expected to cause a Material Adverse Effect.
SECTION 3.22. FILM INVENTORY. Film Inventory of the Borrower and its
Subsidiaries on the Closing Date is set forth on SCHEDULE 3.22 hereto.
SECTION 3.23. SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC. All
representations and warranties made under this Agreement and the other Loan
Papers shall be deemed to be made at and as of the Closing Date and at and as
of the date of each Revolving Loan, and each shall be true and correct when
made, except to the extent (a) previously fulfilled in accordance with the
terms hereof, (b) subsequently inapplicable, or (c) previously waived in
writing by the Administrative Agent and the Lenders with respect to any
particular factual circumstance. The representations and warranties made
under this Agreement and the other Loan Papers shall be deemed applicable to
each Subsidiary of the Borrower and On Command Corp. and each of its
Subsidiaries, as applicable, as of the later of the Closing Date and the
formation or acquisition of such Subsidiary and at and as of each date the
representations and warranties are remade pursuant to this provision. All
representations and warranties made under this Agreement and the other Loan
Papers shall survive, and not be waived by, the execution hereof by the
Administrative Agent and the Lenders, any investigation or inquiry by the
Administrative Agent or any Lender, or by the making of any Loan under this
Agreement and the other Loan Papers.
55
ARTICLE IV
CONDITIONS OF LENDING
The obligations of the Lenders to make Loans and of the Issuing Bank to
issue Letters of Credit hereunder are subject to the satisfaction of the
following conditions:
SECTION 4.01. ALL CREDIT EVENTS. On the date of each Borrowing, and on
the date of each issuance of a Letter of Credit (each such event being called
a "CREDIT EVENT"):
(a) The Administrative Agent shall have received a notice of such
Borrowing as required by Section 2.03 hereof, as applicable (or such notice
shall have been deemed given in accordance with Section 2.03 hereof), or, in
the case of the issuance of a Letter of Credit, the Issuing Bank and the
Administrative Agent shall have received a duly completed Application and a
notice requesting the issuance of such Letter of Credit, required by Section
2.19(b) hereof.
(b) The representations and warranties set forth in Article III hereof
shall be true and correct in all material respects on and as of the date of
such Credit Event with the same effect as though made on and as of such date,
except to the extent such representations and warranties expressly relate to
an earlier date, and there shall have occurred no event which caused a
Material Adverse Effect.
(c) The Borrower shall be in compliance in all material respects with
the terms and provisions set forth herein on its part to be observed or
performed, and at the time of and immediately after such Credit Event, no
Event of Default or Default shall have occurred and be continuing. So long
as Section 6.10 hereof is still in effect, the Borrower shall have delivered
a Compliance Certificate to the Administrative Agent demonstrating that no
Default or Event of Default exists after giving effect to the Borrowing.
Each Credit Event shall be deemed to constitute a representation and
warranty by the Borrower on the date of such Credit Event as to the matters
specified in paragraphs (b) and (c) of this Section 4.01.
SECTION 4.02. FIRST CREDIT EVENT. On the Closing Date:
(a) The Administrative Agent shall have received, on behalf of itself,
the Lenders and the Issuing Bank, a favorable written opinion of the General
Counsel of the Borrower, for the Borrower and each of its Subsidiaries, dated
the Closing Date, and covering such other matters relating to the
Transactions and this Agreement as the Administrative Agent shall reasonably
request, and in form and substance acceptable to the Administrative Agent and
its counsel, and the Borrower hereby requests and instructs such counsel to
deliver such opinion. The opinions shall be addressed to the Issuing Bank,
the Administrative Agent and the Lenders.
56
(b) All legal matters incident to this Agreement, the Transactions, the
Borrowings and extensions of credit hereunder shall be reasonably
satisfactory to the Lenders, to the Issuing Bank and to the Administrative
Agent.
(c) The Administrative Agent shall have received (i) a copy of the
certificate or articles of incorporation, including all amendments thereto,
of the Borrower and each of its Subsidiaries, certified as of a recent date
by the Secretary of State of the state of its organization, and a certificate
as to the good standing of the Borrower and each of its Subsidiaries as of a
recent date, from such Secretary of State; (ii) a certificate of the
Secretary or Assistant Secretary of the Borrower dated the Closing Date and
certifying (A) that attached thereto is a true and complete copy of the
by-laws of the Borrower and each of its Subsidiaries as in effect on the
Closing Date and at all times since a date prior to the date of the
resolutions described in clause (B) below, (B) that attached thereto is a
true and complete copy of resolutions duly adopted by the Board of Directors
of the Borrower and each of its Subsidiaries authorizing the execution,
delivery and performance of this Agreement, the Loan Papers and the
borrowings hereunder, as appropriate, and that such resolutions have not been
modified rescinded or amended and are in full force and effect, (C) that the
certificate or articles of incorporation of the Borrower and each of its
Subsidiaries have not been amended since the date of the last amendment
thereto shown on the certificate of good standing furnished pursuant to
clause (i) above and (D) as to the incumbency and specimen signature of each
officer executing this Agreement, each Loan Paper, or any other document
delivered in connection herewith on behalf of the Borrower and each of its
Subsidiaries; (iii) a certificate of another officer as to the incumbency and
specimen signature of the Secretary or Assistant Secretary executing the
certificate pursuant to (ii) above; and (iv) such other documents as the
Lenders, the Issuing Bank or ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C., counsel for
the Administrative Agent, may reasonably request.
(d) The Administrative Agent shall have received a Compliance
Certificate, dated the Closing Date and signed by a Financial Officer of the
Borrower, confirming compliance with (i) the conditions precedent set forth
in paragraphs (b) and (c) of ▇▇▇▇▇▇▇ ▇.▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ (▇), (▇),
(▇), (▇) and (k) of this Section 4.02 and (ii) the financial covenants set
forth in Sections 6.09, 6.10 and 6.11 hereof, and certifying to the fact that
there exists no Default or Event of Default under the terms of this Agreement
and the Existing Credit Agreement, and consummating the Agreement and making
the initial Loans hereunder would not cause a Default or Event of Default.
(e) Each Lender and the Administrative Agent shall have received
payment in full of all Fees and other amounts due and payable on or prior to
the Closing Date, including reimbursement or payment of all reasonable
out-of-pocket expenses required to be reimbursed or paid by the Borrower
hereunder.
(f) All indebtedness of the Borrower owed to the syndication of
financial institutions under its Existing Credit Agreement and all
"Obligations" as defined in the Existing Credit Agreement shall be paid in
full by the end of the Closing Date.
57
(g) The Borrower shall have delivered duly executed and completed
copies by the Borrower and each of the Subsidiaries of the Borrower, as
applicable, to each of the Lenders of each of the following documents and
agreements, in form and substance satisfactory to each Lender: this
Agreement, applicable Fee Letters, pledge agreements pledging 100% of the
Capital Stock of all Subsidiaries of the Borrower except the Capital Stock of
Avalanche Sub, Nuggets Sub and Ascent Sports to secure the Obligations, and
guaranties of the Obligations executed by all Subsidiaries of the Borrower
except Avalanche Sub and Nuggets Sub. Each such pledge agreement delivered
on the Closing Date shall be accompanied by stock certificates evidencing
100% of the Capital Stock of each such pledged entity, together with stock
powers executed in blank. The Borrower shall have delivered a promissory
note to each Lender, in form and substance satisfactory to each such Lender
and any other Loan Papers reasonably required by any Lender in connection
with this Agreement.
(h) Except for the NBA Consent Letter and the NHL Consent Letter, all
governmental and third party approvals necessary or advisable in connection
with the Transactions and the continuing operations of the Borrower and its
Subsidiaries and On Command Corp. and its Subsidiaries shall have been
obtained and be in full force and effect, and all applicable waiting periods
shall have expired without any action being taken or threatened by any
Governmental Authority which would restrain, prevent or otherwise impose
adverse conditions on the Transactions.
(i) Except as disclosed in the Offering Memorandum, there shall not
have occurred any material change in the capitalization (whether in debt or
in equity), corporate structure or assets of the Borrower or any of its
Subsidiaries and On Command Corp. or any of its Subsidiaries, since September
30, 1997.
(j) Except as set forth on SCHEDULE 3.09 hereto, no action, suit,
litigation or similar proceeding by or before any Governmental Authority
shall exist or, in the case of litigation by a Governmental Authority, be
threatened, with respect to the Transactions contemplated thereby or
otherwise, which would be likely in the reasonable opinion of the Required
Lenders to have a Material Adverse Effect.
(k) The structure and documentation of the Transactions, and all
corporate and other proceedings taken or to be taken and all documents
incidental thereto, shall be reasonably satisfactory in form and substance to
the Administrative Agent and ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C., counsel for
the Administrative Agent, and each Lender shall have received copies of all
such documents as such Lender, acting through the Administrative Agent, may
reasonably request.
(l) The Lenders shall have received a certification from the chief
financial officer of the Borrower, in form and substance reasonably
satisfactory to the Lenders, as to the solvency of
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the Borrower and its Subsidiaries on a consolidated basis after giving effect
to the transactions contemplated hereby.
(m) The Administrative Agent shall have received evidence satisfactory
to the Administrative Agent that each Person necessary for the pledge of the
stock in the Sports Subs, except the NBA and the NHL, has consented to such
transactions.
(n) The Administrative Agent shall have received copies of all NBA
Documents, NHL Documents, Broadcasting Agreements (other than Superstation
Agreements and National Media Contracts copies of which are not provided to
Teams by the NBA or NHL), Concession Agreements, Avalanche License Documents,
Nuggets License Documents, Parking Agreements, Player Contracts, Related
Contracts and Advertising Agreements.
(o) The Administrative Agent shall have received copies of a
description in detail satisfactory to the Administrative Agent describing all
material pending litigation and, to the knowledge of the Borrower, threatened
litigation in which each Obligor, the NBA and the NHL and the related NBA and
NHL entities in which the Borrower or any Subsidiary of the Borrower owns any
Capital Stock is a defendant.
(p) The Administrative Agent shall have received evidence satisfactory
to it that the Borrower has applied for NHL Consent and NBA Consent with
respect to the Transactions, this Agreement and the other Loan Papers.
ARTICLE V
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees with each Lender that so long as this
Agreement shall remain in effect and until the Commitments have been
terminated and the Obligations shall have been paid in full and all Letters
of Credit have been canceled or have expired and all amounts drawn thereunder
have been reimbursed in full, the Borrower will, and will cause each of its
Subsidiaries to:
SECTION 5.01. EXISTENCE; BUSINESSES AND PROPERTIES.
(a) Do or cause to be done all things necessary to preserve, renew and
keep in full force and effect its legal existence, except as otherwise
expressly permitted under Section 6.05 hereof.
(b) Do or cause to be done all things necessary to obtain, preserve,
renew, extend and keep in full force and effect the rights, licenses,
permits, franchises, authorizations, patents, copyrights, trademarks and
trade names material to the conduct of its business; comply in all
59
material respects with all applicable Laws, rules, regulations and decrees
and orders of any Governmental Authority, whether now in effect or hereafter
enacted; and at all times maintain and preserve all property material to the
conduct of such business and keep such property in good repair, working order
and condition and from time to time make, or cause to be made, all needful
and proper repairs, renewals, additions, improvements and replacements
thereto necessary in order that the business carried on in connection
therewith may be properly conducted at all times.
SECTION 5.02. INSURANCE. Keep its insurable properties insured in
accordance with industry standards at all times by financially sound and
reputable insurers; maintain such other insurance, to such extent and against
such risks, including (a) fire and other risks insured against by extended
coverage, as is customary with companies in the same or similar businesses
operating in the same or similar locations, (b) public liability insurance
against claims for personal injury or death or property damage occurring
upon, in, about or in connection with the use of any properties owned,
occupied or controlled by it, and (c) key-man and player disability and life
insurance in minimum amounts and in the form required by the NBA and NHL, but
in no event in amounts less than or having coverage less than standard
practice for Teams; and maintain such other insurance as may be required by
Law.
SECTION 5.03. OBLIGATIONS AND TAXES. Pay and discharge promptly when
due all taxes, assessments and governmental charges or levies imposed upon it
or upon its income or profits or in respect of its property before the same
shall become delinquent or in default, as well as all lawful claims for
labor, materials and supplies or otherwise that, if unpaid, might give rise
to a Lien upon such properties or any part thereof; PROVIDED, HOWEVER, that
such payment and discharge shall not be required with respect to any such
tax, assessment, charge, levy or claim so long as the validity or amount
thereof shall be contested in good faith by appropriate proceedings and the
Borrower shall have set aside on its books adequate reserves with respect
thereto in accordance with GAAP and such contest operates to suspend
collection of the contested obligation, tax, assessment or charge and
enforcement of a Lien.
SECTION 5.04. FINANCIAL STATEMENTS, REPORTS, ETC. In the case of the
Borrower, furnish to the Administrative Agent and each Lender:
(a) within 105 days after the end of each fiscal year, its consolidated
and consolidating balance sheet and related consolidated and consolidating
statements of income and cash flow, showing the financial condition of the
Borrower and its consolidated Subsidiaries as of the close of such fiscal
year and the results of their operations during such year, and a comparison
of such financial position and results of operations as of the corresponding
date and for the previous fiscal year, all audited (in the case of the
consolidated financial statements) by Deloitte & Touche, LLP or other
independent public accountants of recognized national standing acceptable to
the Required Lenders and accompanied by an opinion of such accountants (which
shall not be qualified in any material respect) to the effect that such
consolidated financial statements fairly present the financial condition and
results of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied;
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(b) within 60 days after the end of each of the first three fiscal
quarters of each fiscal year, its consolidated balance sheet and related
consolidated statements of operations and cash flow showing the financial
condition of the Borrower and its consolidated Subsidiaries as of the close
of such fiscal quarter and the results of their operations during such fiscal
quarter and the then elapsed portion of the fiscal year, and a comparison of
such financial position and results of operations as of the corresponding
date and for the corresponding periods in the previous fiscal year, all
certified by one of its Financial Officers as fairly presenting the financial
condition and results of operations of the Borrower and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustment;
(c) (i) concurrently with any delivery of financial statements under
sub-paragraph (a) above, a certificate of the accounting firm opining on or
certifying such statements (which certificate may be limited to accounting
matters and disclaim responsibility for legal interpretations) certifying
that no Event of Default has occurred in Sections 6.01, 6.02(i), 6.03, 6.04,
6.05, 6.06, 6.09, 6.10 and 6.11 hereof; and (ii) concurrently with any
delivery of financial statements under sub-paragraph (a) or (b) above, a
Compliance Certificate of a Financial Officer of the Borrower certifying that
no Event of Default or Default has occurred or, if such an Event of Default
or Default has occurred, specifying the nature and extent thereof and any
corrective action taken or proposed to be taken with respect thereto and
setting forth computations in reasonable detail (which detail shall be
reasonably satisfactory to the Administrative Agent) demonstrating compliance
with the covenants contained in Sections 6.01, 6.03, 6.04, 6.06, 6.09, 6.10
and 6.11 hereof;
(d) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements, registration statements (other
than on Form S-8) and other similar materials filed by the Borrower or any
Subsidiary of the Borrower with the Securities and Exchange Commission, or
any Governmental Authority succeeding to any or all of the function of said
Commission, or with any national securities exchange, or distributed
generally to its shareholders, as the case may be; and
(e) promptly, from time to time, such other information regarding the
operations, business affairs and financial condition of the Borrower or any
Subsidiary of the Borrower, On Command Corp., the Subsidiaries of On Command
Corp., the NBA, the NHL, any of the related entities of the NBA or NHL in
which the Borrower or any Subsidiary of the Borrower or On Command Corp. or
any of its Subsidiaries owns any Capital Stock, or compliance with the terms
of this Agreement and the other Loan Papers, as the Administrative Agent or
any Lender may reasonably request.
SECTION 5.05. LITIGATION AND OTHER NOTICES. Furnish to the
Administrative Agent, the Issuing Bank and each Lender prompt written notice
of the following:
(a) any Event of Default or Default, specifying the nature and extent
thereof and the corrective action (if any) taken or proposed to be taken with
respect thereto;
61
(b) the (i) filing or commencement of, or any written threat or notice
of intention of any Person to file or commence, any action, suit or
proceeding, whether at Law or in equity or by or before any Governmental
Authority, or (ii) the making of any written claim, in either case against
the Borrower, any Affiliate of the Borrower, the NBA or the NHL, as to which
there is a reasonable possibility of an adverse determination and which if
adversely determined, could reasonably be expected to result in a Material
Adverse Effect;
(c) any development (including, without limitation, developments in
pending litigation, developments in pending or threatened labor disruption
and loss or, to the knowledge of the Borrower, threatened loss, of either
Franchise or any Broadcasting Agreement or other material NHL Document or NBA
Document) that has resulted in, or could reasonably be expected to result in,
a Material Adverse Effect; and
(d) receipt by the Borrower or any Subsidiary of the Borrower of the
proceeds of any and each expansion of the NHL or the NBA.
SECTION 5.06. EMPLOYEE BENEFITS. (a) Comply in all material respects
with the applicable provisions of ERISA and the Code and (b) furnish to the
Administrative Agent (i) as soon as possible after, and in any event within
10 days after any Responsible Officer of the Borrower or any ERISA Affiliate
knows or has reason to know that, any ERISA Event has occurred that, alone or
together with any other ERISA Event could reasonably be expected to result in
liability of the Borrower in an aggregate amount exceeding $5,000,000, a
statement of a Financial Officer of the Borrower setting forth details as to
such ERISA Event and the action, if any, that the Borrower proposes to take
with respect thereto.
SECTION 5.07. MAINTAINING RECORDS; ACCESS TO PROPERTIES AND
INSPECTIONS. Keep proper books of record and account in which full, true and
correct entries in conformity with GAAP and all requirements of Law are made
of all dealings and transactions in relation to its business and activities.
The Borrower will, and will cause each of its Subsidiaries and will use its
best efforts to cause On Command Corp. and its Subsidiaries, to, permit any
representatives designated by the Administrative Agent or any Lender, upon
reasonable prior written notice, to visit and inspect the financial records
and the properties of the Borrower or any Subsidiary of the Borrower or On
Command Corp. or its Subsidiaries, as the case may be, at reasonable times
and as often as reasonably requested and to make extracts from and copies of
such financial records, and permit any representatives designated by the
Administrative Agent or any Lender to discuss the affairs, finances and
condition of the Borrower or any Subsidiary of the Borrower or On Command
Corp. or any of its Subsidiaries, as the case may be, with the officers
thereof and (with the concurrence of the Administrative Agent) independent
accountants therefor (provided that the Borrower has the right to have a
representative present for any meeting with the Borrower's independent
accountants).
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SECTION 5.08. USE OF PROCEEDS. Use the proceeds of the Loans and
request the issuance of Letters of Credit only (i) to refinance existing
indebtedness and (ii) for general corporate purposes of the Borrower and its
Subsidiaries.
SECTION 5.09. COMPLIANCE WITH ENVIRONMENTAL LAWS.
(a) Comply, and exercise best efforts to cause all lessees and other
Persons occupying its Properties to comply, in all material respects with all
Environmental Laws and Environmental Permits applicable to its operations and
Properties; and obtain and renew all material Environmental Permits necessary
for its operations and Properties; and conduct any Remedial Action to the
extent required by and in accordance with Environmental Laws; provided,
however, that none of the Borrower or any of its Subsidiaries shall be
required to undertake any Remedial Action to the extent that its obligation
to do so is being contested in good faith and by proper proceedings and
appropriate reserves are being maintained with respect to such circumstances.
(b) If a Default caused by reason of a breach of paragraph (a) above or
Section 3.19 hereof shall have occurred and be continuing, at the request of
the Required Lenders through the Administrative Agent, provide to the Lenders
within 45 days after such request, at the expense of the Borrower, a "Phase
1" environmental site assessment report for the Properties which are the
subject of such default prepared by an environmental consulting firm
acceptable to the Administrative Agent and indicating the presence or absence
of Hazardous Materials and the estimated cost of any compliance or Remedial
Action in connection with such Properties.
SECTION 5.10. COMPLIANCE WITH MATERIAL CONTRACTS. Except as set forth
in Section 6.07 hereof, maintain in full force and effect (including
exercising any available renewal option), and without amendment or
modification, each material contract, unless the failure so to maintain any
such material contract or replacement contract or contracts thereof (or any
amendment or modification thereto) could not, individually or in the
aggregate, be reasonably expected to have a Material Adverse Effect.
SECTION 5.11. ARENA/COMPLEX CONSTRUCTION. The Borrower shall provide
the Administrative Agent and each Lender with quarterly written reports
regarding the status of plans/budget/financing and other information
regarding the Arena/Complex Construction, which such information must be in
detail reasonably acceptable to the Administrative Agent.
SECTION 5.12. NBA AND NHL OBLIGATIONS. The Borrower shall timely
perform all of its obligations under the NBA Documents and the NHL Documents,
and all other obligations relating to the NBA and NHL which are binding on
it, except where the failure to so perform would not result in a Material
Adverse Effect.
SECTION 5.13. OPERATION OF FRANCHISES. Each of Ascent Sports, Ascent
Sports Holdings, Nuggets Sub, Avalanche Sub and the Borrower shall take any
and all action which is necessary or appropriate to keep each of the
Franchises in full force and effect and in good
63
standing, shall conform to and duly observe in all material respects the
requirements of the NBA Documents and NHL Documents, respectively, and shall
promptly notify the Administrative Agent of any violation, or alleged
violation thereof, and shall provide the Administrative Agent with copies of
all written documents or notices relating thereto. Each of Ascent Sports,
Ascent Sports Holdings, Nuggets Sub, Avalanche Sub and the Borrower shall
actively promote and conduct, and use its best efforts to promote and
conduct, ticket sales for its basketball operations and hockey operations
(both season and individual Game tickets).
SECTION 5.14. SERVICES CONTRACTS. Each of Ascent Sports, Ascent Sports
Holdings, Nuggets Sub, Avalanche Sub and the Borrower shall comply and use
all reasonable efforts to compel compliance by third parties through
appropriate means, with all material terms and conditions of all Services
Contracts and to maintain all of the foregoing in full force and effect,
except where the failure to so perform would not result in a Material Adverse
Effect.
SECTION 5.15. KEY MAN LIFE INSURANCE/NBA AND NHL FINANCIAL INFORMATION.
(a) Within 30 days after the Closing Date, the Borrower shall have
provided the Administrative Agent with copies of all key-man life insurance
contracts which exist for any of the employees of the Borrower and its
Subsidiaries, and
(b) Within 10 days after receipt by the Borrower or any Subsidiary of
the Borrower of such information, the Borrower shall have provided the
Administrative Agent with copies of all financial statements for each of the
NBA and the NHL and the related NBA and NHL entities in which the Borrower or
any Subsidiary of the Borrower owns any Capital Stock to the extent such
financial statements are provided to the Teams.
SECTION 5.16. ARENA/COMPLEX NOTICE. As soon as practical after the
Borrower has negotiated with any creditor the terms of the Non-Recourse Arena
Financing, the Borrower shall deliver to the Administrative Agent a summary
in reasonable detail of all final financing plans regarding such
construction. Upon request of the Administrative Agent, the Borrower shall
promptly provide the Administrative Agent with such additional information
regarding the construction as requested by the Administrative Agent or any
Lender.
SECTION 5.17. SYNDICATION. In connection with the syndication of the
Loans, the Borrower shall promptly upon request, but in no case later than
five business after such reasonable request, provide to Administrative Agent
all updated financial information including but not limited to financial
statements, income statements, balances sheets and pro forma calculations
related to Borrower and its Subsidiaries.
SECTION 5.18. NBA AND NHL CONSENT. Within 30 days after the Closing
Date, the Borrower shall have provided the Administrative Agent with copies
of executed consents to the Transaction, this Agreement and the other Loan
Papers by the NBA and the NHL.
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ARTICLE VI
NEGATIVE COVENANTS
The Borrower covenants and agrees with each Lender that, so long as this
Agreement shall remain in effect and until the Commitments have been
terminated and the Obligations have been paid in full and all Letters of
Credit have been canceled or have expired and all amounts drawn thereunder
have been reimbursed in full:
SECTION 6.01. INDEBTEDNESS. The Borrower will not, and will not cause
or permit any of its Subsidiaries of the Borrower or On Command Corp. or its
Subsidiaries to, issue any Preferred Stock, or to issue, incur, create,
assume or permit to exist any Indebtedness, except:
(a) Indebtedness of the Borrower and any Subsidiary of the Borrower
existing on the date hereof and set forth in SCHEDULE 6.01 hereto, but not
any extensions, renewals or replacements of such Indebtedness;
(b) Indebtedness of any Subsidiary of the Borrower owed to the Borrower
or to a Wholly Owned Subsidiary of the Borrower (or to Ascent Arena Company,
LLC but only as contemplated by Section 6.03(c) hereof), in each case that
does not otherwise violate any provision of this Agreement or any other Loan
Paper;
(c) so long as there exists no Default or Event of Default both before
and after giving effect to the incurrence of such Indebtedness, Ascent Arena
Company, LLC may incur Non-Recourse Arena Financing;
(d) so long as there exists no Default or Event of Default both before
and after giving effect to the incurrence of such Indebtedness, Beacon may
incur Non-Recourse Film Indebtedness;
(e) so long as there exists no Default or Event of Default both before
and after giving effect to the execution of such Guarantee, the Borrower may
Guarantee the completion of the construction of the Arena/Complex, provided
that such Guarantee may not be in an aggregate amount in excess of
$25,000,000;
(f) so long as there exists no Default or Event of Default both before
and after giving effect to the incurrence of such Indebtedness, the Borrower
or any Subsidiary of the Borrower may incur Capital Lease Obligations and/or
purchase money indebtedness in a maximum aggregate amount not to exceed
$35,000,000 at any one time outstanding;
(g) so long as there exists no Default or Event of Default both before
and after giving effect to the issuance of such Preferred Stock, the Borrower
may issue Preferred Stock, provided
65
that the terms of such Preferred Stock require payment-in-kind only until
such date that is two years after the Maturity Date and the Borrower complies
with Section 2.09 hereof;
(h) so long as there exists no Default or Event of Default both before
and after giving effect to the issuance of such Indebtedness, the Borrower
may incur indebtedness under the Senior Notes secured only by the Borrower's
ownership interest in the Capital Stock of On Command Corp. owned by the
Borrower as of the Closing Date or acquired thereafter;
(i) so long as there exists no Default or Event of Default both before
and after giving effect to the execution of such Guarantee, the Borrower,
Ascent Arena Company, LLC, the Nuggets Sub and the Avalanche Sub may
Guarantee each other's performance, in each case pursuant to the 1997
Arena/Complex agreement and the related ground lease;
(j) in addition to Indebtedness permitted by subsections (a) through
(i) above, so long as there exists no Default or Event of Default both before
and after giving effect to the incurrence of such Indebtedness, the Borrower
may incur other unsecured Indebtedness up to a maximum amount outstanding at
any one time of $5,000,000, provided that the weighted average of the per
annum interest rates on such Indebtedness may not exceed 12%; and
(k) On Command Corp. and its Subsidiaries may incur Indebtedness under
the On Command Corp. Loan Facility, and, additionally, On Command Corp. may
incur Indebtedness or issue Preferred Stock to the extent permitted by the On
Command Corp. Loan Facility and the Indenture.
Notwithstanding anything in this Agreement or in any other Loan Paper to
the contrary, Ascent Sports Holdings may not operate as any business other
than a holding company for Capital Stock or the developer of the office
space, retail stores and restaurants included in the Arena/Complex but not
developed by Ascent Arena Company, LLC.
SECTION 6.02. LIENS. The Borrower will not, and will not cause or
permit any of its Subsidiaries to, create, incur, assume or permit to exist
any Lien on any of its property or assets (including on the stock or other
securities of any Person, including any Subsidiary of the Borrower and On
Command Corp. and its Subsidiaries) now owned or hereafter acquired by it or
them or on any income or revenues or rights in respect of any thereof,
except:
(a) Liens on property or assets of the Borrower and its Subsidiaries
existing on the date hereof and set forth in SCHEDULE 6.02 hereto; provided
that such Liens shall secure only those obligations which they secure on the
date hereof;
(b) any Lien existing on any property or asset prior to the acquisition
thereof by the Borrower or any Subsidiary of the Borrower; provided that (i)
such Lien is not created in contemplation of or in connection with such
acquisition and (ii) such Lien does not apply to any other property or assets
of such Subsidiary;
66
(c) Liens for taxes not yet due or which are being contested in
compliance with Section 5.03 hereof;
(d) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business and securing
obligations that are not due and payable or which are being contested in
compliance with Section 5.03 hereof, which, in the aggregate, are not
substantial in amount and do not materially detract from the value of the
property subject thereto or materially interfere with the ordinary conduct of
the business of the Borrower or any of its Subsidiaries;
(e) pledges and deposits made in the ordinary course of business in
compliance with workmen's compensation, unemployment insurance and other
social security Laws or regulations;
(f) deposits to secure the performance of bids, trade contracts (other
than for Indebtedness), leases (other than Capital Lease Obligations),
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course or business;
(g) zoning restrictions, easements, rights-of-way, restrictions on use
of real property and other similar encumbrances incurred in the ordinary
course of business which, in the aggregate, are not substantial in amount and
do not materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries;
(h) Liens granted by Ascent Arena Company, LLC securing any permitted
Non-Recourse Arena Financing or the City and County of Denver's interest in
the Arena/Complex, but only to the extent such Liens are limited to the
realty, fixtures, equipment and other assets comprising the Arena/Complex
(including rights under contracts to which the Ascent Arena Company, LLC is a
party, such as a lessor under leases relating thereto);
(i) Liens granted by Beacon securing Non-Recourse Film Indebtedness
permitted hereby, but only to the extent such Liens are limited and apply
only to the film negatives for the Motion Pictures financed with such
Indebtedness and any rights of the Borrower or the Subsidiaries of the
Borrower of ownership, distribution or exploitation of such Motion Pictures;
(j) Liens securing Capital Lease Obligations permitted to be incurred
in accordance with the provisions of Section 6.01(f) hereof and Liens
securing purchase money loans permitted to be incurred in accordance with the
provisions of Section 6.01(f) hereof, provided that (i) such Liens are
created in connection with vendor financing of the purchase by the Borrower
or any Subsidiary of the Borrower of a tangible asset and (ii) such Liens do
not apply to any other property or assets of such Subsidiary other than those
acquired with the vendor financing;
67
(k) Liens on the Capital Stock of On Command owned by the Borrower on
the Closing Date or thereafter acquired, securing Indebtedness permitted to
be incurred in accordance with the provisions of Section 6.01(h) hereof;
(l) Leases or subleases granted to others that do not materially
interfere with the business of the Company or any Subsidiary incurred in the
ordinary course of business, and Liens arising from filing UCC statements in
connection with such leases or subleases;
(m) Liens arising by reason of any judgment, decree or order of any
court, so long as such Lien is adequately bonded and any appropriate legal
proceedings that may have been duly initiated for the review of such
judgment, decree or order have not been finally terminated or the period
within which such proceedings may be initiated has not expired; and
(n) Liens arising under the Loan Papers.
SECTION 6.03. SALE AND LEASE BACK TRANSACTIONS. The Borrower will not,
and will not cause or permit any of its Subsidiaries to, enter into any
arrangement, directly or indirectly, with any Person whereby it shall sell or
transfer any property, real or personal, used or useful in its business,
whether now owned or hereafter acquired, and thereafter rent or lease such
property or other property which it intends to use for substantially the same
purpose or purposes as the property being sold or transferred, provided that,
(a) nothing herein shall be deemed to prevent the Borrower and its
Subsidiaries from entering into operating leases, (b) Ascent Arena Company,
LLC may enter into any such transaction with the City of Denver regarding the
real estate for the Arena/Complex, and (c) so long as there exists no Default
or Event of Default both before and after giving effect thereto, the Borrower
may consummate the sale leaseback transaction described on SCHEDULE 6.03
hereto.
SECTION 6.04. INVESTMENTS, ACQUISITIONS, LOANS AND ADVANCES. The
Borrower will not, and will not cause or permit any of its Subsidiaries to,
purchase, hold or acquire any Capital Stock, evidences of indebtedness (other
than restructured receivables) or other securities of, make or permit to
exist any loans or advances to, or make or permit to exist any investment or
any other interest in, or make any acquisition of assets of any other Person
as a going concern, or create any Subsidiary (each, an "INVESTMENT"), except:
(a) Investments existing on the date hereof in the Capital Stock set
forth on SCHEDULE 6.04a hereto;
(b) Permitted Investments;
(c) so long as there exists no Default or Event of Default both before
and after giving effect thereto, Investments by the Borrower in the
Arena/Complex in an aggregate amount for the Borrower not in excess of
$50,000,000 (inclusive of amounts invested as of the Closing Date) in form
and substance substantially the same as the Investments made in the
Arena/Complex prior to the Closing Date, or in form and substance otherwise
acceptable to the Required Lenders;
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(d) (i) Investments consisting of loans or advances to employees of the
Borrower or the Wholly Owned Subsidiaries, provided that such loans or
advances are made in the ordinary course of business and in accordance with
company policy, and provided further that the proceeds of such loan or
advance are used to finance employee related expenses (including relocation
expenses and travel and entertainment expenses), (ii) so long as there exists
no Default or Event of Default both before and after giving effect thereto,
Investments pursuant to promissory notes to a Wholly Owned Subsidiary,
provided that such loans or advances are not subordinated to any other
Indebtedness or other obligations of such Subsidiary and rank pari passu with
all senior, unsecured Indebtedness of such Subsidiary, (iii) so long as there
exists no Default or Event of Default both before and after giving effect
thereto, Investments by the Borrower in Ascent Arena Company, LLC in the form
of capital contributions to the extent necessary to allow Ascent Arena
Company, LLC to make payments to its member that is not the Borrower or any
Subsidiary of the Borrower of the Profits Interest (as defined in the Arena
Operating Agreement) in accordance with the terms of the Arena Operating
Agreement, and (iv) so long as there exists no Default or Event of Default
both before and after giving effect thereto, Investments by the Borrower in
Nuggets Sub or the Sports Subs consisting of the land on which the
Arena/Complex is being constructed;
(e) so long as there exists no Default or Event of Default both before
and after giving effect thereto, non cash Investments by the Borrower in
acquisitions, provided that (i) the Borrower must use its common Capital
Stock as consideration for each such acquisition and (ii) in no event shall
more than 30% of the outstanding Capital Stock of the Borrower in the
aggregate be used by the Borrower for such acquisitions over the life of this
Agreement;
(f) in addition to those permitted Investments in (a) through (e)
above, so long as there exists no Default or Event of Default both before and
after giving effect to any such Investment, other Investments made by the
Borrower up to a maximum amount outstanding at any one time of $10,000,000,
but no such Investment under this subsection (f) shall be made in On Command
Corp.; and
(g) so long as there exists no Default or Event of Default both before
and after giving effect to any such Investment, Investments made by Ascent
Arena Company, LLC that constitute loans or advances to its member that is
not the Borrower or any Subsidiary of the Borrower, but only in accordance
with Arena Operating Agreement.
Notwithstanding anything in this Agreement or in any Loan Paper to the
contrary, except as set forth on SCHEDULE 6.04b hereto, in no event shall the
Borrower or any Subsidiary of the Borrower be entitled to make any
Investment, loan, advance, payment or other contribution (in any form) to, or
on behalf of or for the benefit of, On Command Corp. or any of the
subsidiaries of On Command Corp.. Notwithstanding anything in this Agreement
or in any Loan Paper to the contrary, except as set forth on SCHEDULE 6.04c
hereto or in accordance with the terms of the Arena Operating Agreement, in
no event shall the Borrower or any Subsidiary of the Borrower
69
be entitled to make any Investment, loan, advance, payment or other
contribution (in any form) to, or on behalf of, or for the benefit of, Ascent
Arena Company, LLC. or any of its Subsidiaries.
SECTION 6.05. MERGERS, CONSOLIDATIONS AND SALES OF ASSETS. The
Borrower will not, and will not cause or permit any of its Subsidiaries to:
(a) merge into or consolidate with any Person, or permit any other
Person to merge into or consolidate with it, provided that, if there exists
no Default or Event of Default at the time thereof or immediately after
giving effect thereto (i) any Wholly Owned Subsidiary may merge into the
Borrower in a transaction in which the Borrower is the surviving corporation,
(ii) any Wholly Owned Subsidiary may merge into or consolidate with any other
Wholly Owned Subsidiary in a transaction in which the surviving entity is a
Wholly Owned Subsidiary and no Person other than the Borrower or a Wholly
Owned Subsidiary receives any consideration, provided further that any such
merger or consolidation may not include any Subsidiary that incurred the
Non-Recourse Arena Financing; or
(b) sell, transfer, lease or otherwise dispose of (in one transaction
or in a series of transactions) all or any substantial part of its assets
(whether now owned or hereafter acquired) or any amount of Capital Stock of
any Subsidiary of the Borrower, except that (i) the Borrower and any
Subsidiary of the Borrower may sell or dispose of inventory and obsolete
equipment in the ordinary course of business, (ii) so long as there exists no
Default or Event of Default both before and after giving effect thereto the
Borrower or any of its Subsidiaries may (A) make an Asset Disposition, so
long as (I) the cumulative aggregate consideration for all such Asset
Dispositions after the date hereof shall not exceed $10,000,000, and (II)
such assets are not used in the operation of the Nuggets Sub or the Avalanche
Sub or the related Teams, and (B) in addition to Asset Dispositions permitted
by subsection (A) above, make an Asset Disposition, so long as (I) the
cumulative aggregate consideration for all such Asset Dispositions after the
date hereof (but excluding the proceeds from sales of those assets described
on SCHEDULE 6.05 hereto) shall not exceed $10,000,000 and (II) such assets
are not used in the operation of the Nuggets Sub or the Avalanche Sub or the
related Teams, (iii) so long as there exists no Default or Event of Default
both before and after giving effect thereto the Borrower or any of its
Subsidiaries may sell the Capital Stock described on SCHEDULE 6.05 hereto,
(iv) so long as there exists no Default or Event of Default both before and
after giving effect thereto, the Borrower, Nuggets Sub or the Ascent Arena
Company, LLC may convey the real estate used for the Arena/Complex to the
City and County of Denver, (v) so long as there exists no Event of Default
both before and after giving effect thereto, any Wholly Owned Subsidiary of
the Borrower may transfer all or any part of its assets to the Borrower, (vi)
so long as there exists no Default or Event of Default both before and after
giving effect thereto, the Borrower may consummate the sale leaseback
transaction described on SCHEDULE 6.03 hereto, and (vii) the Borrower may
consummate an On Command Corp. Stock Sale. Notwithstanding anything to the
contrary herein or in any other Loan Paper, under no circumstance may the
Borrower or any Subsidiary of the Borrower sell, dispose of or transfer any
of the Capital Stock owned by the Borrower, any Subsidiary of the Borrower or
On Command
70
Corp. and its Subsidiaries, except the Capital Stock described on SCHEDULE
6.05 hereto and pursuant to any On Command Corp. Stock Sale.
SECTION 6.06. DIVIDENDS AND DISTRIBUTIONS; RESTRICTIONS ON ABILITY OF
SUBSIDIARIES TO PAY DIVIDENDS. The Borrower will not, and will not cause or
permit any of its Subsidiaries to, declare or pay, directly or indirectly,
any dividend or make any other distribution (by reduction of capital or
otherwise), whether in cash, property, securities or a combination thereof,
with respect to any shares of its Capital Stock or directly or indirectly
redeem, purchase, retire or otherwise acquire for value (or permit any
Subsidiary of the Borrower to purchase or acquire) any shares of any class of
its Capital Stock or set aside any amount for any such purpose; PROVIDED,
HOWEVER, that (i) any Subsidiary of the Borrower may declare and pay
dividends or make other distributions to another Wholly Owned Subsidiary or
to the Borrower, (ii) the Borrower may declare and pay dividends or make
other distributions that consist solely of common stock of the Borrower,
(iii) the Borrower may make redemptions or repurchases of its Capital Stock
in connection with employee stock options upon termination of such
employment, for an aggregate amount of consideration paid from and after the
date hereof of up to $10,000,000, in connection with any employee stock
option or incentive plans, (iv) the Borrower may make dividends of Preferred
Stock in accordance with the terms and provisions of Section 6.01(g) hereof,
and (v) so long as there exists no Default or Event of Default both before
and after giving effect to any such distribution, distributions by Ascent
Arena Company, LLC to its member that is not the Borrower or its Subsidiary
in accordance with the Arena Operating Agreement.
SECTION 6.07. TRANSACTIONS WITH AFFILIATES. Except as permitted in
Section 6.06 hereof, the Borrower will not, and will not cause or permit any
of its Subsidiaries to, sell or transfer any property or assets to, or
purchase or acquire any property or assets from, or otherwise engage in any
other transactions with, or permit any Subsidiary of the Borrower to sell or
transfer any property or assets to, or purchase or acquire any property or
assets from, or otherwise engage in any other transactions with any of its
Affiliates (including, without limitation, On Command Corp. and its
Subsidiaries), except that the Borrower or any Subsidiary of the Borrower may
engage in any of the foregoing transactions in the ordinary course of
business as currently conducted or to be conducted at prices and on terms and
conditions not less favorable to the Borrower or such Subsidiary than could
be obtained on an arm's length basis from unrelated third parties; PROVIDED,
HOWEVER, that the foregoing shall not preclude the Borrower nor any
Subsidiary of the Borrower from performing and complying with its obligations
under the OCC Agreements in accordance with the terms thereof on the date
hereof or, so long as any such amendment (or extension to additional
services, in the case of the Services Agreement) does not materially
adversely affect the interests of the Administrative Agent, the Issuing Bank
or the Lenders, as the same may be hereafter amended (or extended to
additional services). Notwithstanding anything in this Agreement or the
other Loan Papers to the contrary, it is understood by all parties hereto
that all or any of the OCC Agreements may be terminated by the parties
thereto at any time during the term of this Agreement.
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SECTION 6.08. LIMITATION ON RESTRICTIVE AGREEMENTS. The Borrower will
not, and will not cause or permit any of its Subsidiaries to, enter into any
indenture, agreement, instrument, financing document or other arrangement
which, directly or indirectly, contains any financial covenants or prohibits
or restrains, or has the effect of prohibiting or restraining, or imposes
materially adverse conditions upon: (a) the incurrence of Indebtedness, (b)
the granting of Liens, (c) the making or granting of Guarantees, (d) the
payment of dividends or distributions, (e) the purchase, redemption or
retirement of any Capital Stock, (f) the making of loans or advances, (g)
transfers or sales of property or assets (including Capital Stock) by the
Borrower or any of its Subsidiaries, other than restrictions on the granting
of Liens on, or the transfer of, assets that are encumbered by Liens
permitted under clauses (b), (h) and (i) of Section 6.02 hereof with respect
to the property or assets covered by such Lien only, or (h) the making of
amendments, changes, waivers or consents with respect to this Agreement and
the Loan Papers, provided that, notwithstanding the foregoing, (i) Nuggets
Sub, Avalanche Sub and Ascent Arena Company, LLC may enter into restrictive
agreements relating solely to the Ascent Arena Company, LLC and the
Arena/Complex, each exclusively in connection with the Non-Recourse Arena
Financing, the Arena/Complex or the interest of the City and County of Denver
in the Arena/Complex acceptable to the Administrative Agent, (ii) Ascent
Arena Company, LLC may enter into the Arena Operating Agreement, (iii) Beacon
may enter into restrictive agreements relating solely to Beacon, its
Subsidiaries and the related Motion Pictures invested in by Beacon and its
Subsidiaries, each exclusively in connection with Non-Recourse Film
Indebtedness, (iv) the Borrower may enter into any such restrictive
agreements relating to any Preferred Stock permitted under Section 6.01(g)
hereof so long as no such restrictive agreement shall be effective or binding
on the Borrower or any of its Subsidiaries until the earlier of (A) the
Maturity Date and (B) the payment in full of the Obligations and the
termination of the Commitments, and (v) the Borrower may issue the Senior
Notes and enter into the Senior Notes Documentation.
SECTION 6.09. COVERAGE RATIO. Commencing July 1, 2000, the Borrower
will not permit the Coverage Ratio at any time during any period set forth
below to be less than the ratio set forth below for such period:
QUARTER ENDING RATIO
-------------- -----
From July 1, 2000
through June 30, 2001 1.10 to 1.00
July 1, 2001 and thereafter 1.25 to 1.00
SECTION 6.10. MINIMUM ADJUSTED EBITDA. Until July 1, 2000, the
Borrower will not permit Adjusted EBITDA at any time during any period set
forth below to be less than the amount set forth below for such period:
MINIMUM AMOUNT OF
-----------------
QUARTER ENDING ADJUSTED EBITDA
-------------- ---------------
72
From the Closing Date
through March 31, 1998 $29,000,000
April 1, 1998 through $25,500,000
June 30, 1998
July 1, 1998 through $44,500,000
September 30, 1998
October 1, 1998 through $41,0000,000
December 31, 1998
January 1, 1999 through $36,000,000
March 31, 1999
April 1, 1999 through $45,000,000
June 30, 1999
July 1, 1999 through $50,000,000
June 30, 2000
SECTION 6.11. FILM INVENTORY. The Borrower will not, and will not
cause or permit any of its Subsidiaries to cause or permit, gross Film
Inventory on the balance sheet of the Borrower and its consolidated
Subsidiaries less the sum of (a) deferred revenues associated with such Film
Inventory, plus (b) contractually guaranteed pre-sales that have been
secured, to be more than $60,000,000 at any time, provided that, the
$60,000,000 limitation shall be adjusted quarterly by increasing or
decreasing such number by Film Cash Flow, which such number shall remain as
adjusted until the following quarter at which point the $60,000,000
limitation shall be readjusted by Film Cash Flow.
SECTION 6.12. AMENDMENTS TO ORGANIZATIONAL DOCUMENTS AND MATERIAL
DOCUMENTS. The Borrower will not, and will not cause or permit any of its
Subsidiaries to, enter into any amendment of any term or provision, or accept
any consent or waiver with respect to any such provision, of (a) its articles
of incorporation, by-laws, or its organizational documents, as applicable, in
any manner that is material and adverse to the Lenders, or (b) the Arena
Operating Agreement. The Borrower shall not, nor shall it permit any
Subsidiary to, permit any amendment or change to (or take any action or fail
to take any action the result of which is an effective amendment or change)
or accept any waiver or consent with respect to, the Senior Notes or the
Senior Notes Documentation, or any other document or instrument related to
the Senior Notes (the "Senior Notes Agreements") that would result in (i) an
increase in the outstanding issued amount of the Senior Notes, (ii) any
increase in any interest, fees, dividend or other amounts payable under the
Senior Notes or under the Senior Notes Agreements (whether payable in kind or
in
73
cash), (iii) a change in any date fixed for any payment or declaration of
interest, dividend, fees, or other amounts payable (whether payable in kind
or in cash) under the Senior Notes or the Senior Notes Agreements (including,
without limitation, as a result of any call, put, repurchase or redemption),
(iv) a change in any percentage of holders of the Senior Notes required under
the terms of the Senior Notes Agreements and/or any other documentation to
take (or refrain from taking) any action, (v) a change in any negative
covenant (including, without limitation, financial covenants) in the Senior
Notes Agreements and the other documentation, (vi) a change in any remedy or
right of the holders of the Senior Notes, (vii) a change in the definition of
"Change of Control" in the Senior Notes Agreements, (viii) a change in any
covenant, term or provision in the Senior Notes and/or the Senior Notes
Agreements and/or any other documentation which would result in such term or
provision being more restrictive than the terms of this Agreement and the
Loan Papers, (ix) a change which would result in any limitation on the
Borrower or any Subsidiary to amend or change this Agreement or any other
Loan Paper, (x) a change in any collateral granted by the Borrower or any of
its Subsidiaries or On Command Corp. to secure the Senior Notes; or (xi) a
change in any term or provision of the Senior Notes and/or the Senior Notes
Agreements or any other document or instrument in connection therewith that
could have, in any material respect, an adverse effect on the interests of
the Lenders.
ARTICLE VII
EVENTS OF DEFAULT
In case of the happening of any of the following events ("EVENTS OF
DEFAULT"):
(a) any representation or warranty made or deemed made by the Borrower
or any of its Subsidiaries in or in connection with this Agreement or in any
other Loan Paper, or in connection with the borrowings or issuances of
Letters of Credit hereunder; or any representation, warranty, statement or
written information contained in any report, certificate, financial statement
or other instrument prepared by the Borrower or any Subsidiary of the
Borrower and furnished by the Borrower or any Subsidiary of the Borrower in
connection with or pursuant to this Agreement or any other Loan Paper, shall
prove to have been false or misleading in any material respect when so made,
deemed made or furnished;
(b) default shall be made in the payment of any principal of any Loan
or the reimbursement of principal with respect to any L/C Disbursement when
and as the same shall become due and payable, whether at the due date thereof
or at a date fixed for prepayment thereof or by acceleration thereof or
otherwise;
(c) default shall be made in the payment of any interest on any Loan or
any Fee or L/C Disbursement or any other amount (other than an amount
referred to in (b) above) due under this Agreement or any other Loan Paper,
when and as the same shall become due and payable, and such default shall
continue unremedied for a period of five Business Days;
74
(d) default shall be made in the due observance or performance by the
Borrower or any Subsidiary of the Borrower, as applicable, of any covenant,
condition or agreement contained in Sections 5.01(a), 5.05 or 5.08 hereof or
in Article VI hereof;
(e) default shall be made in the due observance or performance by the
Borrower or any Subsidiary of the Borrower or On Command Corp. or any of its
Subsidiaries, as applicable, of any covenant, condition or agreement
contained in this Agreement (other than those specified in (b), (c) or (d)
above) or in any Loan Paper and such default shall continue unremedied for a
period of 15 days after notice thereof from the Administrative Agent or any
Lender to the Borrower;
(f) If any of the following events shall occur:
(i) On Command Corp. or any Subsidiary of On Command Corp. shall (A)
fail to pay any principal or interest, regardless of amount, due in respect
of the On Command Corp. Loan Facility, when and as the same shall become
due and payable, or (B) fail to observe or perform any other term,
covenant, condition or agreement contained in any agreement or instrument
evidencing or governing any such Indebtedness, but only if, in the case of
both (A) and (B) above, the effect of any such failure is to cause such
Indebtedness to become due prior to its stated maturity; or
(ii) the Borrower or any Subsidiary of the Borrower shall (A) fail to
pay any principal or interest, regardless of amount, due in respect of any
Indebtedness in a principal amount in excess of $5,000,000, when and as the
same shall become due and payable, or (B) fail to observe or perform any
other term, covenant, condition or agreement contained in any agreement or
instrument evidencing or governing any such Indebtedness, in each case only
if the effect of any such breach referred to in this clause (ii) is to
cause or to permit the holder or holders of such indebtedness or a trustee
on its or their behalf (with or without the giving of notice, the lapse of
time or both) to cause, any amount of such Indebtedness to (I) become due
prior to its stated maturity, (II) be prepaid, redeemed, repurchased or
otherwise require receipt of any payment of any amount with respect thereto
or (III) be defeased, or require the establishment of any escrow or related
deposits similar to a defeasance; or
(iii) if the aggregate amount of any such Indebtedness referred to in
clause (i) or (ii) above remains matured or subject to redemption,
defeasance or repurchase for a period of more than three consecutive days;
(g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i)
relief in respect of the Borrower, any Subsidiary of the Borrower or
75
On Command Corp. or any Subsidiary of On Command Corp., or of a substantial
part of the property or assets of the Borrower, a Subsidiary of the Borrower
or On Command Corp. or a Subsidiary of On Command Corp., under Title 11 of
the United States Code, as now constituted or hereafter amended, or any other
Federal, state or foreign bankruptcy, insolvency, receivership or similar
Law, (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower, any Subsidiary of the
Borrower or On Command Corp. or any Subsidiary of On Command Corp. or for a
substantial part of the property or assets of the Borrower, a Subsidiary of
the Borrower or On Command Corp. or a Subsidiary of On Command Corp. or (iii)
the winding-up or liquidation of the Borrower, any Subsidiary of the Borrower
or On Command Corp. or any Subsidiary of On Command Corp.; and such
proceeding or petition shall continue undismissed for 60 days or an order or
decree approving or ordering any of the foregoing shall be entered;
(h) the Borrower, any Subsidiary of the Borrower or On Command Corp. or
any Subsidiary of On Command Corp. shall (i) voluntarily commence any
proceeding or file any petition seeking relief under Title 11 of the United
States Code, as now constituted or hereafter amended, or any other Federal,
state or foreign bankruptcy, insolvency, receivership or similar Law, (ii)
consent to the institution of, or fail to contest in a timely and appropriate
manner, any proceeding or the filing of any petition described in (g) above,
(iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Borrower,
any Subsidiary of the Borrower or On Command Corp. or any Subsidiary of On
Command Corp. or for a substantial part of the property or assets of the
Borrower, any Subsidiary of the Borrower or On Command Corp. or any
Subsidiary of On Command Corp., (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors, (vi) become unable, admit in
writing its inability or fail generally to pay its debts as they become due
or (vii) take any action for the purpose of effecting any of the foregoing;
(i) one or more judgments for the payment of money in an aggregate
amount in excess of $10,000,000 shall be rendered against the Borrower, any
Subsidiary of the Borrower or On Command Corp. or any Subsidiary of On
Command Corp., or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days during which execution shall
not be effectively stayed, or any action shall be legally taken by a judgment
creditor to levy upon assets or properties of the Borrower, or any Subsidiary
of the Borrower or On Command Corp. or any Subsidiary of On Command Corp. to
enforce any such judgment;
(j) an ERISA Event shall have occurred that, when taken together with
all other such ERISA Events, could reasonably be expected to result in
liability of the Borrower, any Subsidiary of the Borrower or On Command Corp.
or any Subsidiary of On Command Corp., or any combination thereof, in an
aggregate amount exceeding $10,000,000;
(k) there shall have occurred a Change in Control of the Borrower; or
any Person or group of affiliated Persons shall own or control in the
aggregate a greater percentage of the ordinary voting Capital Stock of On
Command Corp. than the Borrower; or the Borrower shall fail to control,
directly or indirectly, a majority of the Board of Directors of On Command
Corp.;
76
(l) There shall occur any default, breach or event of default under the
Senior Notes or the Senior Notes Documentation if the effect of any failure
is to cause, or to permit the holder or holders of such indebtedness or a
trustee on its or their behalf (with or without the giving of notice, the
lapse of time or both) to cause, such Indebtedness to (i) become due prior to
its stated maturity, (ii) be prepaid, redeemed, repurchased or otherwise
require receipt of any payment of any amount with respect thereto or (iii) be
defeased, or require the establishment of any escrow or related deposits
similar to a defeasance; or if the aggregate amount of any such Indebtedness
referred to above remains matured or subject to redemption, defeasance or
repurchase for a period of more than three consecutive days;
(m) any of the following shall occur: (i) This Agreement, any pledge
agreement, guarantee or promissory note executed in connection with this
Agreement (collectively, the "Material Agreements"), or any material
provision of any thereof shall, for any reason, not be valid and binding on
the Obligor signatory thereto, or not be in full force and effect, or shall
be declared to be null and void; or (ii) the validity or enforceability of
any Material Agreement shall be contested by any Obligor, any Subsidiary of
the Borrower, or On Command Corp. or any of its Subsidiaries, or any of their
Affiliates; or (iii) any Obligor shall deny in writing that it has any or
further liability or obligation under its respective Material Agreements; or
(iv) any default or breach under any provision of any Material Agreement
shall continue after the applicable grace period, if any, specified in such
Material Agreement;
(n) any of the following shall have occurred: (i) Any Loan Paper shall
for any reason (other than pursuant to the terms thereof) cease to create a
valid and perfected first priority Lien in the Collateral purported to be
covered thereby (except as permitted by the terms of this Agreement or
consented to by the Lenders); or (ii) at any time after the date that is 90
days after the Closing Date, less than 100% of the Capital Stock of all of
the Wholly Owned Subsidiaries of the Borrower shall be pledged to secure the
Obligations;
(o) there shall be a breach, violation or default under any material
provision of any of the NBA Documents or the NHL Documents, or any other
material agreement relating to the operation of either Franchise; or either
the NBA Franchise or the NHL Franchise is transferred, sold, or the governing
bodies of either the NBA or the NHL shall dissolve, or no longer function as
a governing body, or either league shall fail to continue substantially in
accordance with past practices; or any material contract with any
international, regional or local company which has a television, radio or
cable-related contractual relationship with the NBA, the NHL, Nuggets Sub,
Avalanche Sub or the Sports Subs, or with any other Person for the benefit of
Nuggets Sub, Avalanche Sub, the NBA Franchise or the NHL Franchise shall be
violated, breached or in default, or any such Person party thereto shall fail
to honor any such contract, if the effect of such failure results or could
reasonably be expected to have a Material Adverse Effect; or the NBA or NHL
shall enter into a collective bargaining agreement or change its governing
agreements and documents binding the NBA Franchise or the NHL Franchise in a
manner which could reasonably be expected to have a material adverse effect
on Nuggets Sub, Avalanche Sub, the Sports Subs
77
or the Borrower, or materially and adversely affect the Borrower's ability to
perform and meet the terms of this Agreement and the other Loan Papers;
(p) the Arena/Complex is not completed and open for business by
December 31, 1999, in a condition reasonably satisfactory to the
Administrative Agent substantially in accordance with the description of
luxury suites, seating capacity, club seats, concessionaire agreements,
parking, and other similar amenities set forth in the Borrower's letter to
the Administrative Agent, dated September 23, 1997 from ▇▇▇▇▇▇ ▇▇▇▇▇.
(q) either (i) there shall occur any sale of a majority or greater
interest in any franchise under the NHL for an aggregate purchase price that
is less than $35,000,000 (which shall be grossed up to reflect a 100%
interest in such franchise and shall include in the amount of consideration
paid any franchise transfer or relocation fees assessed or imposed by the NHL
as a condition to such sale); or (ii) the average price of all such sales
(and in any event at least two such sales) made subsequent to the Closing
Date (which shall be grossed up to reflect a 100% interest in such franchise
and shall include in the amount of consideration paid any franchise transfer
or relocation fees assessed or imposed by the NHL as a condition to such
sale), shall be less than $55,000,000;
(r) either (i) there shall occur any sale of a majority or greater
interest in any franchise under the NBA for an aggregate purchase price that
is less than $45,000,000 (which shall be grossed up to reflect a 100%
interest in such franchise and shall include in the amount of consideration
paid any franchise transfer or relocation fees assessed or imposed by the NBA
as a condition to such sale); or (ii) the average price of all such sales
(and in any event at least two such sales) made subsequent to the Closing
Date (which shall be grossed up to reflect a 100% interest in such franchise
and shall include in the amount of consideration paid any franchise transfer
or relocation fees assessed or imposed by the NBA as a condition to such
sale), shall be less than $70,000,000;
(s) there shall occur any amendment to any NBA Document or NHL Document
which could reasonably be expected to result in a Material Adverse Effect;
(t) either of the following events shall have occurred: (i) the
Borrower shall not have received the written consent of the NBA regarding the
Transactions within the 30 day period after the Closing Date; or (ii) the
Borrower shall not have received the written consent of the NHL regarding the
Transactions within the 30 day period after the Closing Date; or
(u) the Borrower or any Subsidiary of the Borrower, or On Command
Corp., shall make any payment of any amount (whether such amount is for
interest, principal, or any other obligation) or any redemption, defeasance,
prepayment, repurchase or any similar payment in any amount with respect to
any Senior Note, except exclusively to the extent that any such payments are
made directly out of the proceeds of an On Command Corp. Stock Sale;
78
then, and in every such event (other than an event with respect to the
Borrower described in paragraph (g) or (h) above), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at
the request of the Required Lenders shall, by notice to the Borrower, take
either or both of the following actions, at the same or different times: (i)
terminate forthwith the Commitments, (ii) declare the Loans then outstanding
to be forthwith due and payable in whole or in part, whereupon the principal
of the Loans so declared to be due and payable, together with accrued
interest thereon and any unpaid accrued Fees and all other liabilities of the
Borrower accrued hereunder, shall become forthwith due and payable, without
presentment, demand, protest or any other notice of any kind, all of which
are hereby expressly waived by the Borrower, anything contained herein to the
contrary notwithstanding or (iii) require cash collateral as contemplated by
Section 2.19(j) hereof; and in any event with respect to the Borrower
described in paragraph (g) or (h) above, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with
accrued interest hereon and any unpaid accrued Fees and all other liabilities
of the Borrower accrued hereunder, shall automatically become due and
payable, without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived by the Borrower, anything
contained herein to the contrary notwithstanding.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
In order to expedite the transactions contemplated by this Agreement and
the other Loan Papers, NationsBank is hereby appointed to act as
Administrative Agent on behalf of the Lenders and the Issuing Bank. Each of
the Lenders and each assignee of any such Lender, hereby irrevocably
authorizes the Administrative Agent to take such actions on behalf of such
Lender or assignee or the Issuing Bank and to exercise such powers as are
specifically delegated to the Administrative Agent by the terms and
provisions hereof, together with such actions and powers as are reasonably
incidental thereto. The Administrative Agent is hereby expressly authorized
by the Lenders and the Issuing Bank, without hereby limiting any implied
authority, (a) to receive on behalf of the Lenders and the Issuing Bank all
payments of principal of and interest on the Loans, all payments in respect
of L/C Disbursements and all other amounts due to the Lenders hereunder, and
promptly to distribute to each Lender or the Issuing Bank its proper share of
each payment so received; (b) to give notice on behalf of each of the Lenders
to the Borrower of any Event of Default specified in this Agreement of which
the Administrative Agent has actual knowledge acquired in connection with its
agency hereunder; and (c) to distribute to each Lender copies of all notices,
financial statements and other materials delivered by the Borrower pursuant
to this Agreement and the other Loan Papers as received by the Administrative
Agent.
Neither the Administrative Agent nor any of its directors, officers,
employees or agents shall be liable as such for any action taken or omitted
by any of them except for its or his own gross negligence or wilful
misconduct, or be responsible for any statement, warranty or
79
representation herein or the contents of any document delivered in connection
herewith, or be required to ascertain or to make any inquiry concerning the
performance or observance by the Borrower of any of the terms, conditions,
covenants or agreements contained herein. The Administrative Agent shall not
be responsible to the Lenders for the due execution, genuineness, validity,
enforceability or effectiveness of this Agreement, the other Loan Papers or
any other instruments or agreements. The Administrative Agent shall in all
cases be fully protected in acting, or refraining from acting, in accordance
with written instructions signed by the Required Lenders and, except as
otherwise specifically provided herein, such instructions and any action or
inaction pursuant thereto shall be binding on all the Lenders. The
Administrative Agent shall, in the absence of knowledge to the contrary, be
entitled to rely on any instrument or document believed by it in good faith
to be genuine and correct and to have been signed or sent by the proper
Person or Persons. Neither the Administrative Agent nor any of its
directors, officers, employees or agents shall have any responsibility to the
Borrower on account of the failure of or delay in performance or breach by
any Lender or the Issuing Bank of any of its obligations hereunder or to any
Lender or the Issuing Bank on account of the failure of or delay in
performance or breach by any other Lender or the issuing Bank or the Borrower
of any of their respective obligations hereunder or in connection herewith.
The Administrative Agent may execute any and all duties hereunder by or
through agents or employees and shall be entitled to rely upon the advice of
legal counsel selected by it with respect to all matters arising hereunder
and shall not be liable for any action taken or suffered in good faith by it
in accordance with the advice of such counsel.
The Lenders hereby acknowledge that the Administrative Agent shall be
under no duty to take any discretionary action permitted to be taken by it
pursuant to the provisions of this Agreement or any other Loan Paper unless
it shall be requested in writing to do so by the Required Lenders.
Subject to the appointment and acceptance of a successor Administrative
Agent as provided below, the Administrative Agent may resign at any time by
notifying the Lenders and the Borrower. Upon any such resignation, the
Required Lenders shall have the right to appoint a successor. If no
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative
Agent gives notice of its resignation, then the retiring Administrative Agent
may, on behalf of the Lenders, appoint a successor Administrative Agent which
shall be a bank having a combined capital and surplus of at least
$500,000,000 or an Affiliate of any such bank. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor bank, such
successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 9.05 hereof shall continue in effect
for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as Administrative Agent.
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With respect to the Loans made by it hereunder, the Administrative Agent
in its individual capacity and not as Administrative Agent shall have the
same rights and powers as any other Lender and may exercise the same as
though it were not the Administrative Agent, and the Administrative Agent and
its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrower or any Subsidiary of the Borrower
or On Command Corp. or any of its Subsidiaries, or other Affiliate thereof as
if it were not the Administrative Agent.
Each Lender agrees (a) to reimburse the Administrative Agent, on demand,
in the amount of its pro rata share (based on its Commitment hereunder) of
any expenses incurred for the benefit of the Lenders by the Administrative
Agent, including reasonable counsel fees and compensation of agents and
employees paid for services rendered on behalf of the Lenders, that shall not
have been reimbursed by the Borrower and (b) to indemnify and hold harmless
the Administrative Agent and any of its directors, officers, employees or
agents, on demand, in the amount of such pro rata share, from and against any
and all liabilities, taxes, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be Imposed on, incurred by or asserted against it in its
capacity as the Administrative Agent or any of them in any way relating to or
arising out of this Agreement or any other Loan Paper or any action taken or
omitted by it or any of them under this Agreement or any other Loan Paper, to
the extent the same shall not have been reimbursed by the Borrower; provided
that no Lender shall be liable to the Administrative Agent or any such other
indemnified Person for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or
wilful misconduct of the Administrative Agent or any of its directors,
officers, employees or agents.
Each Lender acknowledges that it has, independently and without reliance
upon the Administrative Agent, or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and the other Loan Papers.
Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or
based upon this Agreement and the other Loan Papers, or any related agreement
or any document furnished hereunder or thereunder.
THE LENDERS, IN ACCORDANCE WITH THEIR TOTAL SPECIFIED PERCENTAGES,
HEREBY AGREE TO INDEMNIFY THE ADMINISTRATIVE AGENT AND THE ISSUING BANK, IN
THEIR CAPACITY AS ADMINISTRATIVE AGENT AND ISSUING BANK, FROM AND AGAINST ANY
AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS,
JUDGMENTS, SUITS, COSTS, EXPENSES, OR DISBURSEMENTS OF ANY KIND OR NATURE
WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST THE
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ADMINISTRATIVE AGENT OR THE ISSUING BANK IN THEIR CAPACITY AS ADMINISTRATIVE
AGENT OR ISSUING BANK, IN ANY WAY RELATING TO OR ARISING OUT OF ANY LOAN
PAPERS OR ANY OTHER DOCUMENTS OR INSTRUMENTS EXECUTED OR DELIVERED IN
CONNECTION WITH THIS AGREEMENT, OR ANY ACTION TAKEN OR OMITTED BY THE
ADMINISTRATIVE AGENT THEREUNDER OR THE ISSUING BANK THEREUNDER, INCLUDING ANY
NEGLIGENCE OF THE ADMINISTRATIVE AGENT OR THE ISSUING BANK; PROVIDED,
HOWEVER, THAT NO LENDER SHALL BE LIABLE TO THE ADMINISTRATIVE AGENT OR
ISSUING BANK, RESPECTIVELY, FOR ANY PORTION OF SUCH LIABILITIES, OBLIGATIONS,
LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES, OR
DISBURSEMENTS RESULTING FROM THE ADMINISTRATIVE AGENT'S OR ISSUING BANK'S,
RESPECTIVELY, GROSS NEGLIGENCE OR WILFUL MISCONDUCT. WITHOUT LIMITATION OF
THE FOREGOING, THE LENDERS AGREE TO REIMBURSE THE ADMINISTRATIVE AGENT OR THE
ISSUING BANK, AS APPROPRIATE, IN ACCORDANCE WITH EACH SUCH LENDER'S TOTAL
SPECIFIED PERCENTAGE, PROMPTLY UPON DEMAND FOR ANY REASONABLE OUT-OF-POCKET
EXPENSES (INCLUDING ATTORNEYS' FEES) INCURRED BY THE ADMINISTRATIVE AGENT OR
ISSUING, IN ITS CAPACITY AS A ADMINISTRATIVE AGENT OR ISSUING BANK
RESPECTIVELY, IN CONNECTION WITH THE PREPARATION, EXECUTION, DELIVERY,
ADMINISTRATION, MODIFICATION, AMENDMENT, OR ENFORCEMENT (WHETHER THROUGH
NEGOTIATION, LEGAL PROCEEDINGS OR OTHERWISE) OF, OR LEGAL ADVICE IN RESPECT
OF RIGHTS OR RESPONSIBILITIES UNDER, THE LOAN PAPERS, PROVIDED, HOWEVER, THAT
NO LENDER SHALL BE LIABLE TO THE ADMINISTRATIVE AGENT OR ISSUING BANK,
RESPECTIVELY, FOR ANY PORTION OF SUCH OUT-OF-POCKET EXPENSES RESULTING FROM
THE ADMINISTRATIVE AGENT'S OR ISSUING BANK'S, RESPECTIVELY, GROSS NEGLIGENCE
OR WILFUL MISCONDUCT. TO THE EXTENT THE ADMINISTRATIVE AGENT OR ISSUING BANK
RECOVERS ANY AMOUNT FROM THE BORROWER WHICH HAS BEEN PAID BY THE LENDERS
PURSUANT TO THE TERMS OF THIS ARTICLE VIII, ADMINISTRATIVE AGENT OR ISSUING
BANK AGREES TO REIMBURSE THE LENDERS IN THEIR TOTAL SPECIFIED PERCENTAGES TO
THE EXTENT OF SUCH RECOVERY. THE INDEMNITY PROVIDED IN THIS SECTION SHALL
SURVIVE THE TERMINATION OF THIS AGREEMENT.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.01. NOTICES. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopy,
as follows:
(a) if to the Borrower, to it at:
Ascent Entertainment Group, Inc.
One ▇▇▇▇▇ Center, Suite 2800
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
Executive Vice President, Chief Financial Officer
and Chief Operating Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Ascent Entertainment Group, Inc.
One ▇▇▇▇▇ Center, Suite 2800
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Vice President-Business & Legal Affairs/Corporate
Secretary
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Administrative Agent, to it at:
NationsBank of Texas, National Association
NationsBank Plaza
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Vice President
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With a copy to:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C.
3400 Renaissance Tower
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
(c) if to a Lender, to it at its address (or telecopy number) set forth
on the signature pages hereto or in the Assignment and Acceptance pursuant to
which such Lender shall have become a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement and the other Loan Papers shall be
deemed to have been given on the date of receipt if delivered by hand or
overnight courier service or sent by telecopy or on the date five Business
Days after dispatch by certified or registered mail if mailed, in each case
delivered, sent or mailed (properly addressed) to such party as provided in
this Section 9.01 or in accordance with the latest unrevoked direction from
such party given in accordance with this Section 9.01.
SECTION 9.02. SURVIVAL OF AGREEMENT. All covenants, agreements,
representations and warranties made by the Borrower herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement and the other Loan Papers shall be considered to
have been relied upon by the Lenders and the Issuing Bank and shall survive
the making by the Lenders of the Loans and the issuance of Letters of Credit
by the Issuing Bank, regardless of any investigation made by the Lenders or
the Issuing Bank or on their behalf, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any
Fee or any other amount payable under this Agreement or any other Loan Paper
is outstanding and unpaid or any Letter of Credit is outstanding and so long
as the Commitments have not been terminated. The provisions of Sections
2.12. 2.14, 2.17 and 9.05 hereof shall remain operative and in full force and
effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Loans, the expiration of the Commitments, the expiration of any Letter of
Credit, the invalidity or unenforceability of any term or provision of this
Agreement or any other Loan Paper, or any investigation made by or on behalf
of the Administrative Agent, any Lender or the Issuing Bank.
SECTION 9.03. BINDING EFFECT. This Agreement shall become effective
when it shall have been executed by the Borrower and the Administrative Agent
and when the Administrative Agent shall have received counterparts hereof
which, when taken together, bear the signatures of each of the other parties
hereto, and thereafter shall be binding upon and inure to the benefit of the
parties hereto and their respective permitted successors and assigns.
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SECTION 9.04. SUCCESSORS AND ASSIGNS.
(a) Whenever in this Agreement or any other Loan Paper any of the
parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party, and all covenants, promises
and agreements by or on behalf of the Borrower, the Administrative Agent, the
Issuing Bank or the Lenders that are contained in this Agreement and the
other Loan Papers shall bind and inure to the benefit of their respective
successors and assigns.
(b) Each Lender may assign to one or more Eligible Assignees all or a
portion of its interests, rights and obligations under this Agreement and the
other Loan Papers (including all or a portion of its Commitment and the
Revolving Loans at the time owing to it); PROVIDED, HOWEVER, that (i) except
in the case of an assignment to a Lender or an Affiliate of such Lender, (x)
the Borrower and the Administrative Agent (and, in the case of any assignment
of a Commitment, the Issuing Bank) must give their prior written consent to
such assignment (which consent shall not be unreasonably withheld) and (y)
the amount of the Commitment of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Administrative Agent) shall
not be less than $5,000,000 (or, if less, the entire remaining amount of such
Lender's Commitment) and will not result in the unassigned portion, if any,
of the assigning Lender's Commitment being less than $5,000,000 (provided,
however, that the $5,000,000 amounts referred to in this clause (i) shall be
reduced ratably in accordance with any reductions in the Total Commitment)
(ii) the parties to each such assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with a processing
and recordation fee of $3,500 and (iii) the assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire. Upon acceptance and recording pursuant to paragraph (e) of
this Section 9.04, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least five
Business Days after the execution thereof, (A) the assignee thereunder shall
be a party hereto and, to the extent of the interest assigned by such
Assignment and Acceptance, have the rights and obligations of a Lender under
this Agreement and the other Loan Papers and (B) the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment
and Acceptance, be released from its obligations under this Agreement and the
other Loan Papers (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender's rights and obligations
under this Agreement and the other Loan Papers, such Lender shall cease to be
a party hereto and to the Loan Papers, but shall continue to be entitled to
the benefits of Sections 2.12, 2.14, 2.17 and 9.05 hereof, as well as to any
Fees accrued for its account and not yet paid). The Borrower shall, at its
expense, issue to the assignor and assignee new promissory notes, as
applicable, in the respective amounts of each such Lender's Applicable
Specified Percentage in the Loans, each in the form of the promissory notes
delivered by the Borrower on the Closing Date.
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(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner
of the interest being assigned thereby free and clear of any adverse claim
and that its Commitment and the outstanding balances of its Revolving Loans,
in each case without giving effect to assignments thereof which have nor
become effective, are as set forth in such Assignment and Acceptance; (ii)
except as set forth in (i) above, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Paper, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any
other Loan Paper, or any other instrument or document furnished pursuant
hereto, or the financial condition of the Borrower or any Subsidiary of the
Borrower or On Command Corp. or any Subsidiary of On Command Corp., or the
performance or observance by the Borrower, any Subsidiary of the Borrower or
On Command Corp. or any Subsidiary of On Command Corp. of any of its
obligations under this Agreement or any other Loan Paper, or any other
instrument or document furnished pursuant hereto; (iii) such assignee
represents and warrants that it is legally authorized to enter into such
Assignment and Acceptance; (iv) such assignee confirms that it has received a
copy of this Agreement, together with copies of the most recent financial
statements referred to in Section 3.05 or delivered pursuant to Section 5.04
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such Assignment and
Acceptance; (v) such assignee will independently and without reliance upon
the Administrative Agent, such assigning Lender or any other Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement and the other Loan Papers; (vi) such assignee appoints
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement and the other Loan
Papers as are delegated to the Administrative Agent by the terms hereof and
thereof, together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their
terms all the obligations which by the terms of this Agreement and the other
Loan Papers are required to be performed by it as a Lender.
(d) The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at its offices in Dallas, Texas a copy of each
Assignment and Acceptance delivered to it and a register for the recordation
of the names and addresses of the Lenders, and the Commitment of, and
principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "REGISTER"). The entries in the Register shall
be conclusive and the Borrower, the Administrative Agent, the Issuing Bank
and the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement and the other Loan Papers, notwithstanding notice to the contrary.
The Register shall be available for inspection by the Borrower, the Issuing
Bank and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
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(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, an Administrative
Questionnaire completed in respect of the assignee (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred
to in paragraph (b) above and, if required, the written consent of the
Borrower, the Issuing Bank and the Administrative Agent to such assignment,
the Administrative Agent shall (i) accept such Assignment and Acceptance,
(ii) record the information contained therein in the Register and (iii) give
prompt notice thereof to the Lenders and the Issuing Bank. No assignment
shall be effective unless it has been recorded in the Register as provided in
this paragraph (e).
(f) Each Lender may without the consent of the Borrower, the Issuing
Bank or the Administrative Agent sell participations to one or more banks or
other entities in all or a portion of its rights and obligations under this
Agreement and the other Loan Papers (including all or a portion of its
Commitment and the Loans owing to it); PROVIDED, HOWEVER, that (i) such
Lender's obligations under this Agreement and the other Loan Papers shall
remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii) the
participating banks or other entities shall be entitled to the benefit of the
cost protection provisions contained in Sections 2.12, 2.14 and 2.17 hereof
to the same extent as if they were Lenders and (iv) the Borrower, the
Administrative Agent, the Issuing Bank and the Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights
and obligations under this Agreement and the other Loan Papers, and such
Lender shall retain the sole right to enforce the obligations of the Borrower
relating to the Loans or L/C Disbursements and to approve any amendment,
modification or waiver of any provision of this Agreement and the other Loan
Papers (other than amendments, modifications or waivers decreasing any fees
payable hereunder or the amount of principal of or the rate at which interest
is payable on the Loans, extending any scheduled principal payment date or
date fixed for the payment of interest on the Loans or increasing or
extending the Commitments).
(g) Any Lender or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 9.04. disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrower furnished to such Lender
by or on behalf of the Borrower; PROVIDED that, prior to any such disclosure
of information designated by the Borrower as confidential, each such assignee
or participant or proposed assignee or participant shall execute an agreement
whereby such assignee or participant shall agree (subject to customary
exceptions) to preserve the confidentiality of such confidential information
on terms no less restrictive than those applicable to the Lenders pursuant to
Section 9.16 hereof.
(h) Any Lender may at any time assign all or any portion of its rights
under this Agreement and the other Loan Papers to a Federal Reserve Bank to
secure extensions of credit by such Federal Reserve Bank to such Lender;
PROVIDED that no such assignment shall release a Lender from any of its
obligations hereunder or substitute any such Bank for such Lender as a party
hereto. In order to facilitate such an assignment to a Federal Reserve Bank,
the Borrower shall, at the request of the assigning Lender, duly execute and
deliver to the assigning Lender a
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promissory note or notes evidencing the Loans made to the Borrower by the
assigning Lender hereunder.
(i) The Borrower shall not assign or delegate any of its rights or
duties hereunder without the prior written consent of the Administrative
Agent, the Issuing Bank and each Lender, and any attempted assignment without
such consent shall be null and void.
(j) In the event that Standard & Poor's Ratings Group, a Division of
▇▇▇▇▇▇-▇▇▇▇, Inc., ▇▇▇▇▇'▇ Investors Service, Inc., and ▇▇▇▇▇▇▇▇'▇ BankWatch
(or Insurance Watch Ratings Service, in the case of Lenders that are
insurance companies (or Best's Insurance Reports, if such insurance company
is not rated by Insurance Watch Ratings Service)) shall, after the date that
any Lender becomes a Lender, downgrade the longterm certificate deposit
ratings of such Lender, and the resulting ratings shall be below BBB-, Baa3
and C (or BB, in the case of a Lender that is an insurance company (or B, in
the case of an insurance company not rated by Insurance Watch Ratings
Service)), then the Issuing Bank shall have the right, but not the
obligation, at its own expense, upon notice to such Lender and the
Administrative Agent, to replace (or to request the Borrower to use its
reasonable efforts to replace) such Lender with an assignee (in accordance
with and subject to the restrictions contained in paragraph (b) above), and
such Lender hereby agrees to transfer and assign without recourse (in
accordance with and subject to the restrictions contained in paragraph (b)
above) all its interests, rights and obligations in respect of its Commitment
to such assignee; PROVIDED, HOWEVER, that (i) no such assignment shall
conflict with any Law, rule and regulation or order of any Governmental
Authority and (ii) the Issuing Bank or such assignee, as the case may be,
shall pay to such Lender in immediately available funds on the date of such
assignment the principal of and interest accrued to the date of payment on
the Loans made by such Lender hereunder and all other amounts accrued for
such Lender's account or owed to it hereunder.
SECTION 9.05. EXPENSES; INDEMNITY.
(a) The Borrower agrees to pay all reasonable out-of-pocket expenses
incurred by the Administrative Agent and the Issuing Bank in connection with
the syndication of the credit facilities provided for herein and the
preparation and administration of this Agreement and the other Loan Papers or
in connection with any amendments, modifications or waivers of the provisions
hereof (whether or not the transactions hereby or thereby contemplated shall
be consummated) or incurred by the Administrative Agent or any Lender in
connection with the enforcement or protection of its rights in connection
with this Agreement and the Loan Papers, or in connection with the Loans made
or Letters of Credit issued hereunder, including the reasonable fees, charges
and disbursements of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C., counsel for the
Administrative Agent, and, in connection with any such enforcement or
protection, the reasonable fees, charges and disbursements of any other
counsel for the Administrative Agent or any Lender.
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(b) The Borrower agrees to indemnify the Administrative Agent, each
Lender and the Issuing Bank, each Affiliate of any of the foregoing Persons
and each of their respective directors, officers, employees and agents (each
such Person being called an "INDEMNITEE") against, and to hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities
and related expenses, including reasonable counsel fees, charges and
disbursements, incurred by or asserted against any Indemnitee arising out of,
in any way connected with, or as a result of (i) the execution or delivery of
this Agreement and the other Loan Papers or any agreement or instrument
contemplated thereby, the performance by the parties thereto of their
respective obligations thereunder or the consummation of the Transactions and
the other transactions contemplated thereby, (ii) the use of the proceeds of
the Loans or issuance of Lenders of Credit or (iii) any claim, litigation,
investigation or proceeding relating to any of the foregoing, whether or not
any Indemnitee is a party thereto; provided that such indemnity shall not, as
to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or wilful misconduct of, or breach of contract by,
such Indemnitee.
(c) The provisions of this Section 9.05 shall remain operative and in
full force and effect regardless of the expiration of the term of this
Agreement, the other Loan Papers, the consummation of the transactions
contemplated hereby, the repayment of any of the Loans, the expiration of the
Commitments, the expiration of any Letter of Credit, the invalidity or
unenforceability of any term or provision of this Agreement, any other Loan
Paper, or any investigation made by or on behalf of the Administrative Agent,
any Lender or the Issuing Bank. All amounts due under this Section 9.05
shall be payable on written demand therefor.
SECTION 9.06. RIGHT OF SETOFF. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by Law, to set off and
apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Lender to or for the credit or the account of the Borrower against any of and
all the obligations of the Borrower now or hereafter existing under this
Agreement and the other Loan Papers held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement
and although such obligations may be unmatured. The rights of each Lender
under this Section 9.06 are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
SECTION 9.07. APPLICABLE LAW. THIS AGREEMENT AND THE OTHER LOAN PAPERS
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE
OF TEXAS (EXCEPT, IN THE CASE OF CERTAIN OF THE OTHER LOAN PAPERS, TO THE
EXTENT THE LAWS OF ANOTHER JURISDICTION GOVERN THE PERFECTION AND EFFECT OF
PERFECTION OR NON-PERFECTION OF, CERTAIN LIENS). EACH LETTER OF CREDIT SHALL
BE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OR RULES
DESIGNATED IN
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SUCH LETTER OF CREDIT OR IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM
CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS (1993 REVISION), INTERNATIONAL
CHAMBER OF COMMERCE, PUBLICATION NO. 500 (THE "UNIFORM CUSTOMS") AND, AS TO
MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF TEXAS.
SECTION 9.08. WAIVERS; AMENDMENT.
(a) No failure or delay of the Administrative Agent, any Lender or the
Issuing Bank in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right
or power, preclude any other or further exercise thereof or the exercise of
any other right or power. The rights and remedies of the Administrative
Agent, the Issuing Bank and the Lenders hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of this Agreement or any other Loan Paper, or consent
to any departure by the Borrower therefrom shall in any event be effective
unless the same shall be permitted by paragraph (b) below, and then such
waiver or consent shall be effective only in the specific instance and for
the purpose for which given. No notice or demand on the Borrower in any case
shall entitle the Borrower to any other or further notice or demand in
similar or other circumstances.
(b) Neither this Agreement nor any provision hereof or in any other
Loan Paper may be waived, amended or modified except pursuant to an agreement
or agreements in writing entered into by the Borrower and the Required
Lenders; PROVIDED, HOWEVER, that no such agreement shall (i) decrease the
principal amount of, or extend the maturity of or any scheduled principal
payment date or date for the payment of any interest on any Loan or any date
for reimbursement of an L/C Disbursement, or waive or excuse any such payment
or any part thereof, or decrease the rate of interest on any Loan or L/C
Disbursement, without the prior written consent of each Lender affected
thereby, (ii) change or extend the Commitment or decrease the Commitment Fees
or the Facility Fees of any Lender without the prior written consent of such
Lender, or (iii) amend or modify the provisions of Section 9.04(i) hereof,
the provisions of this Section or the definition of the term "Required
Lenders", without the prior written consent of each Lender; PROVIDED FURTHER
that no such agreement shall amend, modify or otherwise affect the rights or
duties of the Administrative Agent or the Issuing Bank hereunder without the
prior written consent of the Administrative Agent or the Issuing Bank, and
PROVIDED FURTHER that to the extent any Wholly Owned Subsidiary is merged
into the Borrower, the Administrative Agent is authorized by each Lender to
release (i) all Capital Stock of such merged Wholly Owned Subsidiary pledged
to secure the Obligations and (ii) any guarantee of the Obligations hereunder
executed by any such merged Wholly Owned Subsidiary.
SECTION 9.09. INTEREST RATE LIMITATION. It is not the intention of any
party to any Loan Papers to make an agreement violative of the Laws of any
applicable jurisdiction relating to usury. In no event shall the Borrower or
any other Person be obligated to pay any amount in
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excess of the Maximum Amount. If the Administrative Agent or any Lender ever
receives, collects or applies, as interest, any such excess, such amount
which would be excessive interest shall be deemed a partial repayment of
principal and treated hereunder as such; and if principal is paid in full,
any remaining excess shall be paid to the Borrower or the other Person
entitled thereto. In determining whether or not the interest paid or
payable, under any specific contingency, exceeds the Maximum Amount, each
Obligor, the Administrative Agent and each Lender shall, to the maximum
extent permitted under Applicable Law, (a) characterize any nonprincipal
payment as an expense, fee or premium rather than as interest, (b) exclude
voluntary prepayments and the effect thereof, and (c) amortize, prorate,
allocate and spread in equal parts, the total amount of interest throughout
the entire contemplated term of the Obligation so that the interest rate is
uniform throughout the entire term of the Obligation; PROVIDED that if the
Obligation is paid and performed in full prior to the end of the full
contemplated term thereof, and if the interest received for the actual period
of existence thereof exceeds the Maximum Amount, the Administrative Agent or
Lenders, as appropriate, shall refund to the Borrower the amount of such
excess or credit the amount of such excess against the total principal amount
owing, and, in such event, neither the Administrative Agent nor any Lender
shall be subject to any penalties provided by any Laws for contracting for,
charging or receiving interest in excess of the Maximum Amount. This SECTION
9.09 shall control every other provision of all agreements among the parties
to the Loan Papers pertaining to the transactions contemplated by or
contained in the Loan Papers.
SECTION 9.10. NBA CONSENT LETTER AND NHL CONSENT LETTER. Each of the
Loan Papers will be subject to the provisions of the NBA Consent Letter and
the NHL Consent Letter from and after the date on which each is obtained.
Without limiting the generality of the preceding sentence, neither the
Administrative Agent nor any Lender (whether acting through the
Administrative Agent or otherwise) shall exercise, enforce or attempt to
exercise or enforce any of its rights or remedies under any of the Loan
Papers except in accordance with and subject to the NBA Consent Letter and
the NHL Consent Letter. Each Lender hereby irrevocably authorizes, and each
holder of any promissory note by the acceptance of such note shall be deemed
irrevocably to authorize, the Administrative Agent to execute, deliver and
perform on its behalf the NBA Consent Letter, the NHL Consent Letter and all
amendments, modifications, extensions, waivers and other acts in connection
with the NBA Consent Letter and the NHL Consent Letter as the Administrative
Agent shall deem appropriate, and all third parties shall be entitled to rely
on the Administrative Agent's taking of any such action or execution of any
such document as conclusive evidence of its authority to do so on behalf of
the Lenders.
SECTION 9.11. ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN
PAPERS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENT OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
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SECTION 9.12. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN PAPER. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER
AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED
TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN PAPERS BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.12.
SECTION 9.13. SEVERABILITY. In the event any one or more of the
provisions contained in this Agreement or in any other Loan Paper should be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby (it being understood
that the invalidity of a particular provision in a particular jurisdiction
shall not in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid
provisions the economic effect of which comes as close as possible to that of
the invalid, illegal or unenforceable provisions.
SECTION 9.14. COUNTERPARTS. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts),
each of which shall constitute an original but all of which when taken
together shall constitute a single contract, and shall become effective as
provided in Section 9.03 hereof. Delivery of an executed signature page to
this Agreement by facsimile transmission shall be as effective as delivery of
a manually signed counterpart of this Agreement.
SECTION 9.15. HEADINGS. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of
this Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 9.16. JURISDICTION; CONSENT TO SERVICE OF PROCESS.
(a) The Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any Texas State
court or Federal court of the United States of America sitting in Dallas,
Texas and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or any other Loan Paper, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of
any such action or proceeding may be heard
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and determined in such Texas State or, to the extent permitted by Law, in
such Federal court. Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided
by Law. Nothing in this Agreement or in any other Loan Paper shall affect
any right that the Administrative Agent, the Issuing Bank or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement
or any other Loan Paper against the Borrower or its properties in the courts
of any jurisdiction.
(b) The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Paper in any Dallas, Texas State or Federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by Law, the
defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(c) Each party to this Agreement and any other Loan Paper irrevocably
consents to service of process in the manner provided for notices in Section
9.01 hereof. Nothing in this Agreement or any other Loan Paper will affect
the right of any party to this Agreement or any other Loan Paper to serve
process in any other manner permitted by Law.
SECTION 9.17. CONFIDENTIALITY. The Administrative Agent, the Issuing
Bank and each of the Lenders agrees to keep confidential (and to use its best
efforts to cause its respective agents and representatives to keep
confidential) the Information (as defined below) and all copies thereof,
extracts therefrom and analyses or other materials based thereon, except that
the Administrative Agent, the Issuing Bank or any Lender shall be permitted
to disclose Information (a) to such of its respective officers, directors,
employees, agents, affiliates and representatives as need to know such
Information, (b) to the extent requested by any regulatory authority, (c) to
the extent otherwise required by Applicable Laws and regulations or by any
subpoena or similar legal process, (d) in connection with any suit, action or
proceeding relating to the enforcement of its rights hereunder or (e) to the
extent such Information (i) becomes publicly available other than as a result
of a breach of this Section 9.17 or (ii) becomes available to the
Administrative Agent the Issuing Bank or any Lender on a nonconfidential
basis from a source other than the Borrower. For the purposes of this
Section, "INFORMATION" shall mean all financial statements, certificates,
reports, agreements and information (including all analyses, compilations and
studies prepared by the Administrative Agent, the Issuing Bank or any Lender
based on any of the foregoing) that are received from the Borrower and
related to the Borrower, any shareholder of the Borrower or any employee,
customer or supplier of the Borrower, other than any of the foregoing that
were available to the Administrative Agent, the Issuing Bank or any Lender on
a nonconfidential basis prior to its disclosure thereto by the Borrower, and
which are in the case of Information provided after the date hereof, clearly
identified at the time of delivery as confidential. The provisions of this
Section 9.17 shall remain operative and in full force and effect regardless
of the expiration and term of this Agreement.
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SECTION 9.18 AMENDMENT, RESTATEMENT, EXTENSION AND RENEWAL. This
Agreement is a renewal, extension, amendment and restatement of that certain
Existing Credit Agreement, and as such, except for the "Obligations" as
defined in the Existing Credit Agreement (which shall survive, be renewed,
extended and restated by the terms of this Agreement), all other terms and
provisions supersede in their entirety the Existing Credit Agreement. All
Loan Papers executed and delivered in connection with this Agreement shall,
to the extent stated therein, supersede the Loan Papers executed and
delivered in connection with the Existing Credit Agreement (the "Original
Loan Papers"), except for the Liens created under the Original Loan Papers
which shall remain valid, binding and enforceable Liens against the Borrower
and each of the Guarantors, as applicable, and each of the other Persons
which granted such Liens.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
THE BORROWER: ASCENT ENTERTAINMENT GROUP, INC.,
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
----------------------------------------------
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
Its: Executive Vice President, Chief Financial
Officer and Chief Operating Officer
THE ADMINISTRATIVE AGENT:
NATIONSBANK OF TEXAS, NATIONAL
ASSOCIATION, as Administrative Agent
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------------
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Its: Vice President
THE LENDERS:
REVOLVING LOAN SPECIFIED NATIONSBANK OF TEXAS, NATIONAL
PERCENTAGE ON THE CLOSING: ASSOCIATION, individually as a Lender
DATE: 100%
Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
64th Floor /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ -----------------------------------------------
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ Its: Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇