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$140,000,000
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF MARCH 23, 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
Exhibit F - Subordinated Indebtedness Terms and Conditions
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 3.18 - Insurance
Schedule 3.20 - Environmental Matters
Schedule 3.23 - Film Inventory
Schedule 6.01 - Subsidiary Indebtedness
Schedule 6.02 - Liens
Schedule 6.04 - Investments
Schedule 6.03 - Permitted Sale Leaseback
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.......................................... 24
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments.............................................. 25
SECTION 2.02. Loans.................................................... 25
SECTION 2.03. Borrowing Procedure...................................... 28
SECTION 2.04. Evidence of Debt; Repayment of Loans..................... 28
SECTION 2.05. Fees..................................................... 29
SECTION 2.06. Interest on Loans........................................ 30
SECTION 2.07. Default Interest......................................... 31
SECTION 2.08. Alternate Rate of Interest............................... 31
SECTION 2.09. Termination and Reduction of Commitments; Termination
of the Term Loan; Extension of Maturity Date............. 31
SECTION 2.10. Conversion and Continuation of Borrowings................ 33
SECTION 2.11. Prepayment............................................... 34
SECTION 2.12. Reserve Requirements; Change in Circumstances............ 36
SECTION 2.13. Change in Legality....................................... 37
SECTION 2.14. Indemnity................................................ 38
SECTION 2.15. Sharing of Payments...................................... 39
SECTION 2.16. Sharing of Setoffs....................................... 39
SECTION 2.17. Payments................................................. 40
SECTION 2.18. Taxes.................................................... 40
SECTION 2.19. Assignment of Commitments Under Certain Circumstances;
Duty to Mitigate......................................... 44
SECTION 2.20. Letters of Credit........................................ 45
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Organization; Powers..................................... 49
SECTION 3.02. Authorization............................................ 49
i
SECTION 3.03. Enforceability........................................... 50
SECTION 3.04. Governmental Approvals................................... 50
SECTION 3.05. Financial Statements..................................... 50
SECTION 3.06. No Material Adverse Change............................... 50
SECTION 3.07. Title to Properties; Possession Under Leases............. 50
SECTION 3.08. The Subsidiaries and On Command Corp..................... 51
SECTION 3.09. Litigation; Compliance with Laws......................... 51
SECTION 3.10. Agreements............................................... 52
SECTION 3.11. Federal Reserve Regulations.............................. 52
SECTION 3.12. Investment Company Act; Public Utility Holding
Company Act.............................................. 52
SECTION 3.13. Use of Proceeds.......................................... 52
SECTION 3.14. Tax Returns.............................................. 52
SECTION 3.15. No Material Misstatements................................ 53
SECTION 3.16. Employee Benefit Plans................................... 53
SECTION 3.17. Solvency................................................. 53
SECTION 3.18. Insurance................................................ 54
SECTION 3.19. Labor Matters............................................ 54
SECTION 3.20. Environmental Matters.................................... 54
SECTION 3.21. Ownership of the Franchises.............................. 55
SECTION 3.22. Strikes.................................................. 55
SECTION 3.23. Film Inventory........................................... 56
SECTION 3.24. Survival of Representations and Warranties, etc.......... 56
ARTICLE IV
CONDITIONS OF LENDING
SECTION 4.01. All Credit Events........................................ 56
SECTION 4.02. First Credit Event....................................... 57
ARTICLE V
AFFIRMATIVE COVENANTS
SECTION 5.01. Existence; Businesses and Properties..................... 60
SECTION 5.02. Insurance................................................ 60
SECTION 5.03. Obligations and Taxes.................................... 60
SECTION 5.04. Financial Statements, Reports, etc....................... 61
SECTION 5.05. Litigation and Other Notices............................. 62
SECTION 5.06. Employee Benefits........................................ 62
SECTION 5.07. Maintaining Records; Access to Properties and
Inspections.............................................. 63
ii
SECTION 5.08. Use of Proceeds.......................................... 63
SECTION 5.09. Compliance with Environmental Laws....................... 63
SECTION 5.10. Compliance with Material Contracts....................... 63
SECTION 5.11. Arena/Complex Construction............................... 64
SECTION 5.12. NBA and NHL Obligations.................................. 64
SECTION 5.13. Operation of Franchises.................................. 64
SECTION 5.14. Services Contracts....................................... 64
SECTION 5.15. Key Man Life Insurance/NBA and NHL Financial
Information.............................................. 64
SECTION 5.16. Arena/Complex Notice..................................... 65
SECTION 5.17. Syndication.............................................. 65
ARTICLE VI
NEGATIVE COVENANTS
SECTION 6.01. Indebtedness............................................. 65
SECTION 6.02. Liens.................................................... 67
SECTION 6.03. Sale and Lease Back Transactions......................... 68
SECTION 6.04. Investments, Acquisitions, Loans and Advances............ 68
SECTION 6.05. Mergers, Consolidations and Sales of Assets.............. 69
SECTION 6.06. Dividends and Distributions; Restrictions on
Ability of Subsidiaries to Pay Dividends................. 70
SECTION 6.07. Transactions with Affiliates............................. 71
SECTION 6.08. Limitation on Restrictive Agreements..................... 71
SECTION 6.09. Coverage Ratio........................................... 72
SECTION 6.10. Financial Covenants Regarding On Command Corp............ 72
SECTION 6.11. Film Inventory........................................... 73
SECTION 6.12. Amendments to Organizational Documents and Subordinated
Indebtedness Documentation. ............................ 73
ARTICLE VII
EVENTS OF DEFAULT
ARTICLE VIII
THE ADMINISTRATIVE AGENT
iii
iv
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices.................................................. 82
SECTION 9.02. Survival of Agreement.................................... 84
SECTION 9.03. Binding Effect........................................... 84
SECTION 9.04. Successors and Assigns................................... 84
SECTION 9.05. Expenses; Indemnity...................................... 88
SECTION 9.06. Right of Setoff.......................................... 89
SECTION 9.07. Applicable Law........................................... 89
SECTION 9.08. Waivers; Amendment....................................... 89
SECTION 9.09. Interest Rate Limitation................................. 90
SECTION 9.10. NBA Consent Letter and NHL Consent Letter................ 91
SECTION 9.11. ENTIRE AGREEMENT......................................... 91
SECTION 9.12. WAIVER OF JURY TRIAL..................................... 91
SECTION 9.13. Severability............................................. 91
SECTION 9.14. Counterparts............................................. 92
SECTION 9.15. Headings................................................. 92
SECTION 9.16. Jurisdiction; Consent to Service of Process.............. 92
SECTION 9.17. Confidentiality.......................................... 93
SECTION 9.18. Proposed Merger of Ascent Network Services, Inc.......... 93
v
ASCENT ENTERTAINMENT GROUP, INC.
$140,000,000
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
This FIRST AMENDED AND RESTATED CREDIT AGREEMENT (this "AGREEMENT"), dated
as of March 23, 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 (said Credit Agreement, 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 provide for a loan facility in the aggregate
maximum amount of $140,000,000, consisting of (a) 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
$90,000,000 (of which not more than $15,000,000 may be used for Letters of
Credit) and (b) a Term Loan, in an aggregate principal amount at any time
outstanding not in excess of $50,000,000, 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:
"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 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 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
2
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
limitations, Articles 5069-1.04 and 5069-1.07(a), Title 79, Revised Civil
Statutes of Texas, 1925, as amended ("ART. 1.04"), 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 the 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 2.50% 1.50%
Less than 1.10 to 1.00
CATEGORY 2 2.00% 1.00%
Greater than or equal to
1.10 to 1.00 but less than
2.00 to 1.00
3
CATEGORY 3
Greater than or equal to 1.75% 0.75%
2.00 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, Commitments 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" means either the Revolving Loan Specified
Percentage or the Term Loan Specified Percentage, as applicable in the context
used.
"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 2.20 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 concerts and other shows, television and
audio production and post-production facilities and integrated office space,
retail stores and restaurants.
"ART. 1.04" has the meaning specified in the definition of "Applicable
Law".
4
"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 (not
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.
"BORROWING" shall mean, with respect to the Revolving Loans and the Term
Loan, as applicable, 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 BASE" shall mean, on any date of determination, the sum of (a)
$100,000,000, plus (b) 50% of the product of (i) the number of shares of the
Borrower's and its Subsidiaries' Capital Stock of On Command Corp. times (i) the
most recently quoted public price of such Capital Stock. Notwithstanding
anything herein to the contrary, (A) effective on any date of execution of any
such Guarantee, the Borrowing Base shall be automatically reduced by the maximum
amount of any outstanding completion Guarantee of the Borrower executed in
accordance with the terms of Section 6.01(f) hereof, and (B) effective on the
date that is two
5
Business Days after the Administrative Agent gives the Borrower written notice
thereof from time to time (which such notice must be within seven Business Days
after the Administrative Agent's receipt of written notice from the Borrower
regarding the receipt of such amounts), the Borrowing Base shall be
automatically reduced by amounts equal to (I) the Net Cash Proceeds of each
Asset Disposition consummated by the Borrower or any Subsidiary of the Borrower
during the term of this Agreement which requires a reduction in the Borrowing
Base in accordance with the terms of Section 6.05(b) hereof, and (II) the
difference between aggregate cash proceeds received by the Borrower or any
Subsidiary of the Borrower during the term of this Agreement from any and each
expansion of the NHL or NBA less the amount, if any, of the Borrower's good
faith best estimate of all taxes attributable to such cash expansion proceeds
which it in good faith expects to be paid in such taxable year or in the next
taxable year.
"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
6
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 (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
a majority 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 (i) such Person or group is COMSAT or
(ii) 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 (a) 100% of
the Capital Stock of all Subsidiaries of the Borrower, except Nuggets Sub and
the Avalanche Sub and (b) all of the Borrower's and each Subsidiary's interest
in the Capital Stock of On Command Corp.
"COMMITMENT" shall mean, with respect to each Lender under the Revolving
Loans, the lesser of (a) $90,000,000 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, provided that, effective on any date of execution of any such
Guarantee, each Lender's Commitment shall be automatically reduced by the amount
of any such Lender's Revolving Loan Specified Percentage of the maximum amount
of any outstanding completion Guarantee of the Borrower executed in accordance
with the terms of Section 6.01(f) hereof, and further, as the same may be (x)
reduced from time to time pursuant to Section 2.09 hereof or pursuant to Section
2.19 hereof and (y) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 9.04 hereof.
"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.
"COMSAT" shall mean COMSAT Corporation, a corporation organized under the
Laws of the District of Columbia.
7
"COMSAT AGREEMENTS" shall mean the Services Agreement, the Corporate
Agreement and the Tax Sharing Agreement, in each case between the Borrower and
COMSAT, 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.
"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 gross 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, gross 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. Gross 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.
"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.
"CORPORATE RESTRUCTURING" shall mean that series of transactions described
in the S-4 Registration Statement.
"COVERAGE RATIO" shall mean, on any date for the Borrower and its
Subsidiaries on a consolidated basis, the ratio of (a) the sum of (i) EBITDA for
the four most recently completed consecutive fiscal quarters, plus (ii) the
Revolver Availability on the date of determination, to (b) the product of (i)
Consolidated Total Indebtedness of the Borrower and its Subsidiaries on such
date times (ii) the current weighted average rate of interest being charged to
the Borrower on such date; PROVIDED, HOWEVER, that solely for purposes of
calculating the Coverage Ratio prior to the earlier of (i) October 9, 1997 and
(ii) the date on which the Borrower receives proceeds from the Subordinated
Indebtedness contemplated by Section 2.09(e) hereof, the Total Commitment shall
8
mean the sum of (i) the aggregate amount of Lenders' Commitments, as in effect
at such time, plus (ii) $50,000,000.
"CREDIT EVENT" shall have the meaning assigned to such term in Section 4.01
hereto.
"DEBTOR RELIEF LAWS" shall mean applicable bankruptcy, reorganization,
moratorium, or similar Laws, or principles of equity affecting the enforcement
of creditors' rights generally.
"DEFAULT" shall mean any event or condition which upon notice, lapse of
time or both would constitute an Event of Default.
"DOLLARS" or "$" shall mean lawful money of the United States of America.
"EBITDA" shall mean, with respect to any Person and its subsidiaries on a
consolidated basis for any period, the consolidated net income of such Person
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" means (a) with respect to any assignment of any
Lender's Revolving Loan Specified Percentage of the Commitment and the
outstanding Borrowings under the Revolving Loans (i) any Lender, (ii) 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; (iii) 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 receivership or conservatorship; (iv) 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; and (v) the
central bank of any country which is a member of the Organization for Economic
Cooperation and Development, and (b) with respect to any assignment of any
Lender's Term Loan Specified Percentage of the Term Loan and the outstanding
Borrowings under the Term Loan, (i) a Lender, (ii) a commercial bank organized
under the laws of any country that is a member of the Organization for Economic
Cooperation and Development, or a political subdivision of any such country, and
having a combined capital and surplus of at least $100,000,000, (iii) the
central bank of any country that is a member of the
9
Organization for Economic Cooperation and Development and (iv) a finance
company, insurance company or other financial institution or fund (whether a
corporation, partnership, trust or other entity) that is engaged in making,
purchasing or otherwise investing in commercial loans in the ordinary course of
its business and having a combined capital and surplus of at least $100,000,000,
provided that, neither the Borrower or any Affiliate of the Borrower shall
qualify as an Eligible Assignee.
"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.
10
"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.
11
"FEE LETTERS" shall mean that certain Fee Letter dated March 23, 1997,
between the Borrower and the Administrative Agent, and any other fee letters
executed from time to time 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 the date hereof 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,
12
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 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 Network Services, Inc., Ascent Sports
Holdings, Ascent Sports, Ascent Arena Corporation, 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 applicable rate ceiling shall be (a) the indicated rate ceiling
described in and computed in accordance with the provisions of Section (a)(1) of
Art. l.04; or (b) provided notice is given as required in Section (h)(1) of Art.
1.04, either the annualized ceiling or quarterly ceiling computed pursuant to
Section (d) of Art. 1.04; 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 (b)(1) and (2) of said Art. 1.04 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
13
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 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.
"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 2.20(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.
14
"L/C COMMITMENT" shall mean the commitment of the Issuing Bank to issue
Letters of Credit pursuant to Section 2.20 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 2.20 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.
15
"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 and the Term Loan 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, subject to Section 2.09(e) hereof, October 7,
1997, or such earlier date as the Obligations are due and payable in full
(whether by scheduled reduction, acceleration, termination or otherwise).
"MAXIMUM AMOUNT" means 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.
16
"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, Inc.) 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 best estimate of all taxes attributable to
such Asset Disposition which it in good faith expects to
17
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.
"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, and (b) 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
Denver 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 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(f) hereof), (B) is directly or indirectly
personally liable (except with respect to the limited construction Guarantee
permitted by Section 6.01(f) 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 Denver 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
18
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, L.P., 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 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
19
Borrower, any other Obligor 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.
"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. pursuant to documentation dated the Closing
Date, in an amount not to exceed $150,000,000, by a group of lenders with the
Administrative Agent as the administrative agent thereunder.
"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.
"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
20
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.
"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.
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"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, plus, (iii) all outstanding
Borrowings under the Term Loan 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 Date or after the Commitments and Term Loan 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
lesser of (a) the difference between the Total Commitment minus the Total
Exposure, and (b) the difference between (i) the Borrowing Base minus (ii) the
sum of Total Exposure plus all Obligations under the Term Loan.
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"REVOLVING LOANS" shall mean the revolving loans made available by the
Lenders to the Borrower pursuant to the Total Commitments and Section 2.01
hereof. Each Revolving Loan shall be a Eurodollar Loan or an ABR Loan.
"REVOLVING LOAN SPECIFIED PERCENTAGE" means, 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.
"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.
"S-4 REGISTRATION STATEMENT" shall mean that certain Form S-4 Registration
Statement, as filed by On Command Corp. with the Securities and Exchange
Commission on August 16, 1996, as amended on September 4, 1996, September 26,
1996 and as further amended on October 7, 1996.
"SPORTS SUBS" shall mean Ascent Sports and Ascent Sports Holdings.
"SUBORDINATED INDEBTEDNESS" shall mean that subordinated Indebtedness
issued by Borrower in accordance with Section 2.09(e) hereof, in the minimum
amount of $50,000,000, subject to terms and conditions acceptable to the
Administrative Agent and the Required Lenders including, but not limited to the
incorporation of the concepts set forth on EXHIBIT F hereto into the
Subordinated Indebtedness documentation.
"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, so long as the On Command Corp. Loan Facility is in existence and the
Administrative Agent is the administrative agent thereunder, 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.
"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.
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"TEAM" shall mean any joint venturer of the NBA, or of the NHL as
applicable in the context used.
"TERM LOAN" means that certain term loan, made by the Lenders to the
Borrower in accordance with the terms and provisions of Section 2.01(b) hereof.
"TERM LOAN SPECIFIED PERCENTAGE" means, as to any Lender, the percentage
indicated beside its name on the signature pages hereof as its Term Loan
Specified Percentage, or as adjusted or specified in any amendment of this
Agreement or in any Assignment and Acceptance.
"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" means, 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.
"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.
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
24
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 CREDITS
SECTION 2.01. COMMITMENTS. 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 the lesser of (i) such Lender's Commitment and (ii)
such Lender's Revolving Loan Specified Percentage of the difference between the
Borrowing Base minus the aggregate amounts outstanding under the Term Loan,
provided that, the Borrower agrees that, notwithstanding anything in this
Agreement or in any other Loan Paper to the contrary, (A) no Lender shall at any
time be obligated to make any Loan if such Loan would result in such Lender's
Total Exposure exceeding such Lender's Commitment, and (B) Total Exposure plus
all Obligations under the Term Loan shall never exceed the Borrowing Base.
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 Revolving Loan Specified Percentage of the Commitment, minus the
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) an integral multiple of $1,000,000 and not less
than $3,000,000 or (ii) equal to the Revolver Availability.
25
(b) TERM LOANS. Each Lender severally agrees, subject to the terms and
conditions hereinafter set forth, on the Closing Date only, to make its Term
Loan Specified Percentage of the Term Loan available to the Borrower until the
Maturity Date in an aggregate outstanding amount not to exceed such Lender's
Term Loan Specified Percentage of $50,000,000 as repaid and reduced pursuant to
Section 2.04, Section 2.09 and Section 2.11 hereof. After the Closing Date, the
Borrower agrees to repay the Term Loan in accordance with the terms of Section
2.04, Section 2.09 and Section 2.11 hereof, and only conversion or continuation
Borrowings will be available under the Term Loan. The Term Loan shall initially
consist of a Borrowing which shall be an ABR Loan only, and each subsequent
Borrowing shall be either an ABR Borrowing or a Eurodollar Borrowing as
specified in the related notice of conversion, as applicable; provided that,
after the occurrence and during the continuance of any Event of Default,
Eurodollar Borrowings shall not be available to the Borrower. Subject to
Section 2.02 hereof and the other terms and conditions of this Agreement, the
Borrower may convert an ABR Loan made under the Term Loan to a Eurodollar
Borrowing at any time after the Closing Date; provided that the Borrower pay all
accrued and unpaid interest on such ABR Borrowing concurrently. All Borrowings
made under this Section 2.02(b) shall be made in accordance with Section 2.02
below. On any date of determination, the sum of all outstanding Borrowings
under the Term Loan shall never exceed the difference between $50,000,000 minus
the sum of (i) all scheduled payments to be made on the Term Loan through such
date of determination pursuant to Section 2.04 and Section 2.09 hereof plus (ii)
all prepayments made on the Term Loan.
(c) 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. After the initial Borrowing, no Borrowing under
the Term Loan shall increase the amount outstanding under the Term Loan.
(d) 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.
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(e) 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.
(f) 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.
(g) If the Issuing Bank shall not have received from the Borrower the
payment required to be made by Section 2.20(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 2.20(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
27
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(g) 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 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 (which
shall be an account that complies with the requirements of Section 2.02(c))
hereof; (iv) the amount of such Borrowing under the Revolving Loans; and (v) if
such Borrowing is to be a Eurodollar Borrowing, the Interest Period with respect
thereto. 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.
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(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 (i) the
Revolving Loan and L/C Exposure, and (ii) the Term Loan.
(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 2.09 below, all Borrowings under the Term Loan and
all remaining 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
29
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 sum of (i) on the average daily amount of the
excess, if any, of (A) the lesser of (I) the Total Commitment or (II) the
difference between the Borrowing Base minus the aggregate outstanding amount of
the Term Loan, over (B) the Total Exposure, at the per annum rate of .50%, plus
(ii) to the extent the difference between the Borrowing Base minus the aggregate
outstanding amount under the Term Loan is less than the Total Commitment, the
average daily amount of the excess, of (A) the Total Commitment over (B) the
difference between the Borrowing Base minus the aggregate outstanding amount
under the Term Loan, at the per annum rate of .25%, commencing with the first
such date after the Closing Date, and continuing until the Commitment has been
reduced to zero or terminated. Notwithstanding anything in this Agreement to
the contrary, in each determination of the Borrowing Base and the Total
Commitment in connection with this Section 2.05(d), the amount of any completion
Guarantee deducted from the Borrowing Base and the Total Commitment in
accordance with the definition of each such term shall be added back to the
Borrowing Base and the Total Commitment, respectively. 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.
(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
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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 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.
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SECTION 2.09. TERMINATION AND REDUCTION OF COMMITMENTS; TERMINATION OF THE
TERM LOAN; EXTENSION OF MATURITY DATE.
(a) The Commitments and the L/C Commitment shall automatically terminate
on the Maturity Date and the Term Loan shall mature on the Maturity Date (and
the same may be extended pursuant to paragraph (e) of this Section).
(b) (i) 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 (A) 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 (B) the Total Commitment shall not be reduced to an
amount that is less than the Total Exposure. (ii) If (A) Borrower or any
Subsidiary receives net proceeds in excess of $50,000,000 from the Subordinated
Indebtedness contemplated by Section 2.09(e) hereof, (B) any Lender declines to
accept a partial prepayment under the Term Loan pursuant to Section 2.11(b)
hereof, or (C) any payments are received pursuant to Section 2.15(b) hereof,
then the Commitments shall be reduced by the amount of the excess Subordinated
Indebtedness, the amount of the declined partial payment under the Term Loan, or
the amount of such payment received under Section 2.15(b) hereof respectively.
(c) If, as a result of a reduction described in paragraph (b) above, the
Total Exposure exceeds the Total Commitments, 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.
(d) 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.
(e) The Borrower may, by giving written notice to the Administrative Agent
(which shall promptly deliver a copy to each of the Lenders) not fewer than 15
days prior to the then current Maturity Date (the "EXISTING MATURITY DATE"),
extend the Maturity Date to the date that occurs 364 days after the Existing
Maturity Date (or if such 364th day is not a Business Day, the immediately
preceding Business Day); PROVIDED, HOWEVER, that the Borrower may effect only
two extensions pursuant to this Section 2.09(e) hereof; PROVIDED, FURTHER,
HOWEVER, that the Maturity Date may not be extended to any date after October 9,
1997 unless prior thereto the Borrower has received not less than $50,000,000 in
proceeds from Subordinated Indebtedness, subordinated to Lenders and
incorporating the subordination concepts specified on EXHIBIT F hereto and
Borrower has used such proceeds to prepay existing Borrowings under this
Agreement. Notwithstanding the foregoing, the extension of the Existing
Maturity Date shall not be effective with respect to
32
any Lender unless (i) no Default or Event of Default shall have occurred and be
continuing on both the date of the notice requesting such extension and on the
Existing Maturity Date and (ii) each of the representations and warranties set
forth in Article III hereof (including, without limitation, those set forth in
Section 3.06 hereof and Section 3.09 hereof) shall be true and correct in all
material respects on and as of each of the date of the notice requesting such
extension and the Existing Maturity Date with the same force and effect as if
made on and as of each such date, except to the extent such representations and
warranties expressly relate to an earlier date.
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;
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(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.
(b) Each notice pursuant to this Section 2.10 shall be irrevocable and
shall refer to this Agreement and specify (i) whether the notice related to the
Term Loan or the Revolving Loans and 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) Subject to the limitations contained in this Section 2.11(b), the
Borrower may from time to time prepay Borrowings outstanding under the Term
Loan, in whole or in part, but not in any amount less than $3,000,000 and in an
integral multiple of $1,000,000, without premium or penalty except as provided
in Section 2.14 below, upon notice to the Administrative Agent (if telephone
notice promptly confirmed by written or telecopy notice) not later than 11:00
a.m., Dallas, Texas time two Business Days' prior to such prepayment. Any
Lender having a Term Loan Specified Percentage in excess of zero may, at its
option in writing to the Administrative Agent, decline partial prepayments on
its portion of the Term Loan. In the event that any Lender having a Term Loan
Specified Percentage in excess of zero declines a partial prepayment on its
34
portion of the Term Loan, the Commitment shall be automatically and permanently
reduced by an amount equal to any amount which the Borrower would have prepaid
the Term Loan in accordance with Section 2.11(b) hereof but was declined for
prepayment by such Term Loan Lender; provided that, to the extent any such
voluntary prepayment was made from the ordinary course of business operating
cash flow of the Borrower and its Subsidiaries, any prepayment declined by any
Term Loan Lender shall be applied to repay the Revolving Loans, but shall not
reduce the Commitment.
(c) In the event of any termination of the Commitments and/or the Term
Loan maturity, the Borrower shall repay or prepay all its outstanding Borrowings
(and irrevocably cash collateralize the L/C Exposure in the manner contemplated
by Section 2.20(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 lesser of the Total
Commitments and the difference between the Borrowing Base minus the aggregate
outstanding balance of the Term Loan, 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.
(d) Whenever and on each occasion that the Total Exposure exceeds the
lesser of (i) the Total Commitments and (ii) the Borrowing Base minus the
aggregate outstandings under the Term Loan, 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 lesser of (i) the Total Commitments and (ii)
the Borrowing Base minus the aggregate outstandings under the Term Loan.
(e) 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
35
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.
(f) 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.
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
36
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 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
37
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
(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
38
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 PAYMENTS. Except as required under Section 2.13
hereof and notwithstanding anything in this Agreement to the contrary, all
payments received by the Administrative Agent from the Borrower shall be applied
as follows:
(a) So long as there then exists no Event of Default or the Commitments or
Term Loan have not been terminated, the Administrative Agent shall apply all
such payments as between the Revolving Loans and the Term Loan as directed by
the Borrower (unless prepayment of the Term Loan has been declined by any Lender
in accordance with the terms of Section 2.11(b) hereof) and, in the absence of
any direction by the Borrower, first to any amounts due and payable under the
Revolving Loans and then amounts due under the Term Loan, in each case in each
Lender's Applicable Specified Percentage.
(b) If there then exists an Event of Default or the Commitments and Term
Loan have been terminated, notwithstanding any direction by the Borrower, the
Administrative Agent shall apply all such payments received by it from the
Borrower to reduce the Revolving Loans and the Term Loan ratably in accordance
with each Lender's Total Specified Percentage.
SECTION 2.16. 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 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 or Term Loan shall be proportionately less than the unpaid
principal portion of the Revolving Loans and participations in L/C Disbursements
or Term Loan 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 or Term Loan of such other Lender, so that the aggregate unpaid
principal amount of the Revolving Loans and L/C Exposure or Term Loan and
participations in Revolving Loans and L/C Exposure or Term Loan held by each
Lender shall be in the same proportion to the aggregate unpaid principal amount
of all Revolving Loans and L/C Exposure or Term Loan then outstanding as the
principal amount of its Revolving Loans and L/C Exposure or Term Loan prior to
such
39
exercise of banker's lien, setoff or counterclaim or other event was to the
principal amount of all Revolving Loans and L/C Exposure or Term Loan
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 2.16 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, L/C Disbursement or Term Loan 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 2.17. 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 2.18. TAXES.
(a) Any and all payments by the Borrower hereunder shall be made, in
accordance with Section 2.17 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 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
40
"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 2.18) 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 2.18, 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
the Borrower under this Section 2.18 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
41
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 2.18(f), a
Non-U.S. Lender shall not be required to deliver any form pursuant to this
Section 2.18(f) that such Non-U.S. Lender is not legally able to deliver.
(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
42
(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 2.18 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 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
43
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.
SECTION 2.19. 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 2.18 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 2.18 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 2.18 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
2.18 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.
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(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
2.18, 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 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 2.18 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 2.20. 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
$15,000,000 and (B) the sum of the Total Exposure shall not exceed the lesser of
(i) the Total Commitment and (ii) the difference between the Borrowing Base
minus the aggregate outstandings under the Term Loan. 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.
45
(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.
(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(f) 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
46
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;
(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
47
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 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(g) 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
48
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,
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 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. Denver 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
49
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 90 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 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.
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.
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 consolidated balance sheets and statements of income and
equity and cash flow (a) as of and for the fiscal year ended December 31, 1996,
audited, and the Borrower shall deliver the opinion of Deloitte & Touche, LLP,
independent public accountants, no later than April 3, 1997. 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
50
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.
(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 or possesses, or could
obtain ownership or possession 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.
51
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. USE OF PROCEEDS. The Borrower will use the proceeds of the
Loans and will request the issuance of Letters of Credit (i) to refinance
existing indebtedness and (ii) for general corporate purposes of the Borrower
and its Subsidiaries.
SECTION 3.14. 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
52
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.
SECTION 3.15. NO MATERIAL MISSTATEMENTS. None of (a) the S-4 Registration
Statement (at the time it is declared effective under the Securities Act of
1933), or (b) any other written information, report, financial statement,
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 in connection with any of the Corporate Restructuring
transactions, or included herein or delivered pursuant hereto contained (in the
case of subsection (a) above) and contained, contains or will contain (in the
case of subsection (b) above) 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.
SECTION 3.16. 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 3.17. 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) 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.
53
(b) 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
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 3.18. INSURANCE. SCHEDULE 3.18 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 3.19. 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 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 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 3.20. ENVIRONMENTAL MATTERS. Except as set forth in SCHEDULE
3.20:
(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 obtain any
necessary permits, in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect;
54
(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 3.21. OWNERSHIP OF THE FRANCHISES.
(a) NBA FRANCHISE. Nuggets Sub is, on the Closing Date, the owner of, and
have good and marketable title to, the NBA Franchise, and the NBA Franchise is
in 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 have good and marketable title to, the NHL Franchise, and the NHL Franchise
is in 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 3.22. STRIKES. 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
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
55
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 3.23. FILM INVENTORY. Film Inventory of the Borrower and its
Subsidiaries on the Closing Date is set forth on SCHEDULE 3.23 hereto.
SECTION 3.24. 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 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.
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
2.20(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.
56
(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.
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 (i) the General
Counsel of the Borrower, (ii) ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Borrower and
each of its Subsidiaries, and (iii) ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, in its capacity as counsel
to the Borrower and each of its Subsidiaries in connection with the Corporate
Restructuring, in each case (y) dated the Closing Date, and (z) covering such
other matters relating to this Agreement, the Transactions and the Corporate
Restructuring 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.
(b) All legal matters incident to this Agreement, 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, (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
57
and (E) that attached thereto is a true and complete copy of each of the COMSAT
Agreements and OCC Agreements as in effect on the Closing Date; (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, (ii) with the Borrowing Base and (iii) 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 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 revolving credit facility shall be paid in full
by the end of the Closing Date.
(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, Ascent Network Services, Inc. and Ascent Sports to secure the Obligations,
a pledge agreement pledging all the Capital Stock of On Command Corp. owned by
the Borrower or any of its Subsidiaries 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 (except On Command Corp., which such stock shall
evidence not less than 57% of the Capital Stock of On Command Corp.), 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) All governmental and third party approvals necessary or advisable in
connection with the Corporate Restructuring, 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
58
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 Corporate
Restructuring or the Transactions.
(i) Except as contemplated by the Corporate Restructuring and the
Transactions, or as specifically contemplated hereby, 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 December 31,
1996.
(j) 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 Corporate
Restructuring or 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 Corporate Restructuring and the
Transactions contemplated thereby, 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. All transactions necessary to
consummate the Corporate Restructuring shall have been completed.
(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 the Borrower and its Subsidiaries on a
consolidated basis after giving effect to the Corporate Restructuring and the
consummation of the other 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.
59
(p) The On Command Corp. Loan Facility must have been consummated or must
be consummated simultaneously with the Transaction.
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 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
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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;
(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 earnings 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(j), 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
61
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 and showing the
Borrowing Base;
(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;
(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 or anticipated 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
62
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 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 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
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).
SECTION 5.08. USE OF PROCEEDS. Use the proceeds of the Loans and request
the issuance of Letters of Credit only for the purposes set forth in the
preamble to this Agreement.
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 3.20 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.
63
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 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
64
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. Not later than 30 Business Days
prior to the commencement of construction on the Arena/Complex, the Borrower
shall give each Lender written notice of the date of such intended commencement
of construction, together with 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 such 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.
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 for
borrowed money 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 (except Denver Arena Company, LLC)
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, Denver Arena
Company, LLC may incur Non-Recourse Arena Financing;
65
(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) On Command Corp. and its Subsidiaries may incur Indebtedness under the
On Command Corp. Loan Facility, and, additionally, On Command Corp. may, so long
as there exists no Default or Event of Default both before and after giving
effect to each such issuance or incurrence, (i) issue Preferred Stock in a
maximum amount equal to $50,000,000, provided that such Preferred Stock must not
have terms more onerous than the terms in this Agreement and the Loan Papers,
and may not mature, require redemption or otherwise be redeemed or retired until
three years after the Obligations hereunder are repaid in full and the
Commitments have been terminated, and (ii) incur Indebtedness up to a maximum
outstanding amount of $50,000,000, provided that such Indebtedness must not have
terms more onerous than the terms in this Agreement and the Loan Papers;
(f) 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
(i) such Guarantee may not be in an aggregate amount in excess of $25,000,000;
and (ii) the amount of any such Guarantee reduces the Borrowing Base in
accordance with the terms of the definition thereof;
(g) 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 in a maximum
aggregate amount not to exceed $10,000,000 at any one time outstanding;
(h) 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 that the terms of such Preferred Stock require
payment-in-kind only until such date that is two years after the Maturity Date;
(i) provided that no Default or Event of Default exists both before and
after giving effect to the issuance of Subordinated Indebtedness, and so long as
copies of all documentation related to the Subordinated Indebtedness (including
all disclosure documentation) are delivered to the Administrative Agent in form
and substance reasonably acceptable to the Administrative Agent, Borrower may
issue Subordinated Indebtedness; and
(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 $10,000,000, provided that the weighted average of the per annum
interest rates on such Indebtedness may not exceed 12%.
66
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.
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;
(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;
67
(h) Liens granted by Denver 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 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(g) hereof; and
(k) 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) Denver 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 6.04 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 $30,000,000 in form and
substance substantially the same as the
68
Investments made in the Arena/Complex prior to the Closing Date, or in form and
substance otherwise acceptable to the Required Lenders;
(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), and (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 (except Denver Arena
Company, LLC), 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;
(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
20% 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) so long as there exists no Default or Event of Default both before and
after giving effect to any such Investment, the Borrower or any of its
Subsidiaries (except Denver Arena Company, LLC) may purchase shares of Capital
Stock of On Command Corp., so long as such shares are immediately delivered to
the Administrative Agent together with stock powers executed in blank and a duly
completed and executed pledge agreement in the form executed on the Closing
Date, pledging such shares to the Administrative Agent and the Lenders to secure
the Obligations;
(g) promissory notes delivered on or prior to the Closing Date in
connection with the Corporate Restructuring, which such promissory notes may not
have maturities in excess of one year;
(h) if permitted by Section 6.01(i) hereof, the Borrower may issue
Subordinated Indebtedness; and
(i) in addition to those permitted Investments in (a) through (h) 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.
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
69
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 or On Command Corp., 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, (II) such assets are not used in the
operation of the Nuggets Sub or the Avalanche Sub or the related Teams, and
(III) the Borrowing Base is reduced by the Net Cash Proceeds of each such Asset
Disposition, (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 or the Denver Arena Company, LLC may sell 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, and (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.
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 of On Command Corp. or any other
Capital Stock owned by the Borrower, any Subsidiary of the Borrower or On
Command Corp. and its Subsidiaries, except the Capital Stock described on
Schedule 6.05 hereto.
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
70
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,
and (iv) the Borrower may make dividends of Preferred Stock in accordance with
the terms and provisions of Section 6.01(h) hereof.
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 (a) the COMSAT Agreements and 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) or (b) the transactions
necessary to consummate the Corporate Restructuring. 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 COMSAT Agreements or OCC Agreements
may be terminated by the parties thereto at any time during the term of this
Agreement.
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, or (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, provided that, notwithstanding the foregoing, (i)
Denver Arena Company, LLC may enter into restrictive agreements relating
71
solely to the Denver 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, (ii) 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, (iii) the
Borrower may enter into any such restrictive agreements relating to any
Preferred Stock permitted under Section 6.01(h) 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 (iv) in
connection with the issuance of Subordinated Indebtedness, the Borrower may
enter into restrictive agreements and provisions permitted by the terms set
forth in EXHIBIT F attached hereto and otherwise acceptable to Administrative
Agent and Required Lenders, but in no event shall any such restrictive
provisions be more restrictive than the provisions contained in this Agreement
and the other Loan Papers.
SECTION 6.09. COVERAGE RATIO. The Borrower will not permit the Coverage
Ratio as of the last day of any fiscal quarter ending during any period set
forth below to be less than the ratio set forth below for such period:
Quarter Ending Ratio Ratio
-------------------- -----
From the Closing Date to
through December 31, 1997 1.50 to 1.00
January 1, 1998 and thereafter 1.10 to 1.00
SECTION 6.10. FINANCIAL COVENANTS REGARDING ON COMMAND CORP. On Command
Corp. will meet each of the following covenants:
(a) Beginning with the fourth fiscal quarter of 1997, On Command
Corp.'s EBITDA, as of the last day of any fiscal quarter ending during the
term of this Agreement for the most recently completed four fiscal
quarters, may not be less than $50,000,000; and
(b) as of the last day of any fiscal quarter ending during any period
set forth below, the ratio of On Command Corp.'s (a) Consolidated Total
Indebtedness plus any Preferred Stock issued by On Command Corp. to (b)
EBITDA for the most recently completed four fiscal quarters may not exceed
the ratio set forth below for such period:
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Quarter Ending Ratio Ratio
-------------------- -----
Closing Date through 3.00 to 1.00
December 31, 1997
January 1, 1998 and 2.50 to 1.00
thereafter
In the event that On Command Corp. shall complete, directly or through
a Subsidiary of On Command Corp., a permitted acquisition, the ratio of
Consolidated Total Indebtedness of On Command Corp. to EBITDA of On Command
Corp. shall be determined thereafter, to the extent necessary, by computing
such ratio on a pro forma basis as if such acquisition had been completed
on the first day of the period of four consecutive fiscal quarters ending
on the dates indicated above occurring after the date of such acquisition.
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 SUBORDINATED
INDEBTEDNESS DOCUMENTATION. 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, and (b)
any agreement or other documentation related to the Subordinated Indebtedness.
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 any agreement related to the Corporate
Restructuring or the borrowings or issuances of Letters of Credit hereunder; or
any representation, warranty, statement or written
73
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;
(d) 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 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) the Borrower or any Subsidiary of the Borrower, or On Command Corp. or
any Subsidiary of On Command Corp. shall (i) fail to pay any principal or
interest, regardless of amount, due in respect of any Indebtedness in a
principal amount in excess of $10,000,000, when and as the same shall become due
and payable, or (ii) fail to observe or perform any other term, covenant,
condition or agreement contained in any agreement or instrument evidencing or
governing any such Indebtedness if the effect of any failure 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, such Indebtedness to become due prior to its
stated maturity;
(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 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
74
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 the
Borrower shall fail to own directly or indirectly, beneficially or of record,
shares of Capital Stock of On Command Corp. representing 50.1% or more of the
aggregate ordinary voting power of On Command Corp.; or the Borrower shall fail
to control, directly or indirectly, a majority of the Board of Directors of On
Command Corp., provided that, if the Borrower fails to own directly
75
or indirectly beneficially or of record shares of Capital Stock of On Command
Corp. representing less than 50.1% but more than 45%, and such failure is not a
result of the sale by the Borrower or any of its Subsidiaries of any such shares
of Capital Stock, no Default or Event of Default shall occur under this
subsection (k) until such date that is 30 days after the date of occurrence;
(l) On Command Corp. or any of its Subsidiaries shall: (i) 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 taking
into account any applicable period of grace thereunder, or (ii) fail to observe
or perform any other term, covenant, condition or agreement contained in any
agreement or instrument evidencing or governing the On Command Corp. Loan
Facility if the effect of any failure 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, such Indebtedness to become due prior to its stated maturity;
(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 Subsidiaries of
the Borrower shall be pledged to secure the Obligations, or (iii) less than all
of the issued and outstanding Capital Stock of On Command Corp. that is owned by
the Borrower or any Subsidiary 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,
76
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 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, provided that, in any case, if the sum of (A) fair
market value of the Capital Stock of On Command Corp. owned directly or
indirectly by the Borrower on such date, plus (B) 50% the fair market value of
the unaffected Franchise on the Closing Date is in excess of $250,000,000, there
shall exist no Default or Event of Default under the terms of this
subsection (o);
(p) there shall occur either of the following events: (i) failure of
construction to begin on the Arena/Complex prior to August 31, 1997; or (ii) the
commencement of construction on the Arena/Complex at any time pursuant to terms,
conditions, plans, budget or financing that are not substantially similar in the
aggregate to those set forth in that certain letter from ▇▇. ▇.▇. ▇▇▇▇▇▇ of the
Borrower to ▇▇. ▇. ▇▇▇▇▇▇ of the Administrative Agent, dated as of October 2,
1996, provided that, to the extent the Borrower has fully complied with the
provisions of Section 5.16 hereof and the Required Lenders did not object in
writing prior to the date ten Business Days before the proposed date of
construction that such plans are not substantially similar to those set forth
above, then any such plans disclosed in accordance with the terms of Section
5.16 hereof shall be deemed to be acceptable to the Required Lenders;
(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, provided that, in either case, if the sum of (A) fair market value
of the Capital Stock of On Command Corp. owned directly or indirectly by the
Borrower on such date, plus (B) 50% of the fair market value of the NBA
Franchise on the Closing Date is in excess of $250,000,000, there shall exist no
Default or Event of Default under the terms of this subsection (q);
(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
77
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,
provided that, in either case, if the sum of (A) fair market value of the
Capital Stock of On Command Corp. owned directly or indirectly by the Borrower
on such date, plus (B) 50% of the fair market value of the NHL Franchise on the
Closing Date is in excess of $250,000,000, there shall exist no Default or Event
of Default under the terms of this subsection (r);
(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 by April 30, 1997 (including, without limitation, a written consent
giving the Administrative Agent and Lenders the right to assign any portion of
the Obligations and their rights hereunder and under the Loan Papers pursuant to
Section 9.04 hereof); or (ii) the Borrower shall not have received the written
consent of the NHL regarding the Transactions by April 30, 1997 (including,
without limitation, a written consent giving the Administrative Agent and
Lenders the right to assign any portion of the Obligations and their rights
hereunder and under the Loan Papers pursuant to Section 9.04 hereof);
(u) the Borrower and its Subsidiaries shall have failed by April 30, 1997,
to either (i) pledge 100% of the Capital Stock of Ascent Sports, Avalanche Sub,
Nuggets Sub and Ascent Network Services, Inc. to the Administrative Agent to
secure the Obligations by amending the schedules to the existing pledge
agreement, or (ii) deliver such pledge agreement(s) together with all stock
certificates evidencing such pledged stock and stock powers executed in blank to
the Administrative Agent; or
(v) at any time that the debt limitation on the Borrower in the Corporate
Agreement with COMSAT operates to limit the ability of the Borrower to make a
borrowing hereunder at a time when the Borrower needs such ability to meet
operating expenses or capital requirements in each case approved by the
Borrower's Board of Directors (as such approval may be amended), provided that,
no amendment to any such approval may be made once operating expenses or capital
requirements have been incurred or made, or to avoid a Default or an Event of
Default under this subsection (v);
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
78
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 2.20(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.
(w) the Borrower or any Subsidiary fails to provide to Administrative
Agent for the benefit of Lenders any documentation necessary for Administrative
Agent to perfect a security interest in the Collateral, including but not
limited to, (i) an affirmation of Guarantee, (ii) an affirmation of each pledge
agreement, (iii) re-issuance of any necessary stock certificates, (iv) execution
of stock powers, (v) execution of stop transfer letters and (vi) execution of
Article 8 letters, by March 31, 1997.
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
WILLFUL 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 WILLFUL 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.
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:
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(a) if to the Borrower, to it at:
Ascent Entertainment Group, Inc.
One ▇▇▇▇▇ Center, Suite 2800
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
Chief Operating Officer & Executive Vice President
of Finance
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, 2.18 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 or the Term Loan 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 or Term Loan 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 or Term Loan) and will not result in the
unassigned portion, if any, of the assigning Lender's Commitment or Term Loan
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, 2.18 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, the outstanding balances of its Revolving Loans, and the
outstanding balance of its Term Loan 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 2.18 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 or
the Term Loan 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, (iii) the Corporate Restructuring or any transactions connected
therewith or (iv) 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 Sections 2.15 or 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. PROPOSED MERGER OF ASCENT NETWORK SERVICES, INC.. The
parties hereto acknowledge that the Borrower currently anticipates that it may
desire to merge or consolidate Ascent Network Services, Inc. into the Borrower
(the "Proposed Merger"), or to dividend or distribute all or substantially all
of the assets of Ascent Network Services, Inc. to the Borrower (the "Proposed
Distribution") on some future date (maintaining the Borrower as the surviving
corporation). Notwithstanding any term or provision in this Agreement or in any
Loan Paper to the contrary, each Lender agrees that, so long as there exists no
Event of Default both before and immediately after giving effect to such
Proposed Merger or Proposed Distribution, as the case may be, the Borrower shall
be permitted to consummate such Proposed Merger or Proposed Distribution. Each
Lender further agrees that the Administrative Agent is hereby authorized, upon
the consummation of any such Proposed Merger, to release and/or cancel the
Guarantee of Ascent Network Services, Inc. of the Obligations hereunder, and to
release the Capital Stock of Ascent Network Services, Inc. that was pledged by
the Borrower to secure the Obligations hereunder. As a further condition to
each Lender's consent to any Proposed Merger or Proposed Distribution, at such
time as the Proposed Merger or Proposed Distribution becomes effective, Borrower
agrees to provide the Administrative Agent with a collateral assignment of the
NBC Contract, or a Lien on the NBC Contract (or on the proceeds thereof and
rights of Ascent Network Services, Inc. therein), in form and substance
satisfactory to the Administrative Agent, to the extent permitted by Applicable
Law and the terms and provisions of the NBC Contract.
SECTION 9.19 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.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.
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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
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By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
Its: Chief Operating Officer & Executive Vice
President of Finance
THE ADMINISTRATIVE AGENT:
NATIONSBANK OF TEXAS, NATIONAL
ASSOCIATION, as Administrative Agent
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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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:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Its: Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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TERM LOAN SPECIFIED NATIONSBANK OF TEXAS, NATIONAL
PERCENTAGE ON THE CLOSING: ASSOCIATION, individually as a Lender
DATE: 100%
Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Its: Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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