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EXHIBIT (4)(b)
CREDIT AGREEMENT
DATED AS OF MARCH 2, 2001
BETWEEN
▇▇▇▇▇ ▇▇▇▇▇ PARTNERS, L.P.,
AS BORROWER,
AND
THE LENDERS LISTED HEREIN
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TABLE OF CONTENTS
PAGE
SECTION 1 DEFINITIONS ...................................................................................... 1
1.1 Certain Defined Terms..................................................................... 1
1.2 Accounting Terms; Utilization Of Gaap For Purposes Of Calculations Under Agreement........ 19
1.3 Other Definitional Provisions............................................................. 20
SECTION 2 AMOUNTS AND TERMS OF COMMITMENTS AND LOANS........................................................ 20
2.1 Commitments; Making Of Loans; Notes....................................................... 20
2.2 Interest On The Loans..................................................................... 22
2.3 Fees...................................................................................... 22
2.4 Repayment; Prepayments; General Provisions Regarding Payments............................. 22
2.5 Use Of Proceeds........................................................................... 26
2.6 Taxes..................................................................................... 27
2.7 Obligation Of Lenders To Mitigate......................................................... 31
SECTION 3 CONDITIONS TO LOANS............................................................................... 31
3.1 Conditions To Initial Loan................................................................ 31
3.2 Conditions To All Loans................................................................... 35
SECTION 4 COMPANY'S REPRESENTATIONS AND WARRANTIES.......................................................... 36
4.1 Organization, Powers, Qualification, Good Standing, Business And Subsidiaries............. 36
4.2 Authorization Of Borrowing, Etc........................................................... 38
4.3 Financial Condition; Financial Statements................................................. 38
4.4 No Material Adverse Change; No Restricted Junior Payments................................. 39
4.5 Title To Properties; Liens................................................................ 39
4.6 Litigation; Adverse Facts................................................................. 40
4.7 Payment Of Taxes.......................................................................... 40
4.8 Performance Of Agreements; Franchises..................................................... 41
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PAGE
4.9 Governmental Regulation................................................................... 41
4.10 Securities Activities..................................................................... 41
4.11 Employee Benefit Plans.................................................................... 42
4.12 Certain Fees.............................................................................. 42
4.13 Environmental Protection.................................................................. 42
4.14 Employee Matters.......................................................................... 44
4.15 Solvency.................................................................................. 44
4.16 Disclosure................................................................................ 44
SECTION 5 COMPANY'S AFFIRMATIVE COVENANTS................................................................... 45
5.1 Financial Statements And Other Reports.................................................... 45
5.2 Corporate Existence, Etc.................................................................. 50
5.3 Payment Of Taxes And Claims; Tax Consolidation............................................ 50
5.4 Maintenance Of Properties; Insurance...................................................... 50
5.5 Inspection................................................................................ 51
5.6 Compliance With Laws, Etc................................................................. 51
5.7 Environmental Disclosure And Inspection................................................... 51
5.8 Company's Remedial Action Regarding Hazardous Materials................................... 53
5.9 Further Assurances; New Subsidiaries...................................................... 53
5.10 Real Estate............................................................................... 54
5.11 Franchise Consents........................................................................ 55
5.12 Other Terms............................................................................... 55
5.13 Post-Closing Obligations.................................................................. 55
SECTION 6 COMPANY'S NEGATIVE COVENANTS...................................................................... 56
6.1 Indebtedness.............................................................................. 57
6.2 Liens And Related Matters................................................................. 57
6.3 Investments; Joint Ventures............................................................... 59
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PAGE
6.4 Contingent Obligations.................................................................... 59
6.5 Restricted Junior Payments................................................................ 60
6.6 Financial Covenants....................................................................... 61
6.7 Restriction On Fundamental Changes; Asset Sales And Acquisitions; New Subsidiaries........ 62
6.8 Sales And Lease-Backs..................................................................... 63
6.9 Sale Or Discount Of Receivables........................................................... 63
6.10 Transactions With Shareholders And Affiliates............................................. 63
6.11 Conduct Of Business....................................................................... 64
6.12 Amendments To The Indenture, Senior Unsecured Notes And Other Material Agreements......... 64
6.13 Fiscal Year............................................................................... 65
6.14 Capital Expenditures...................................................................... 65
SECTION 7 EVENTS OF DEFAULT................................................................................. 65
7.1 Failure To Make Payments When Due......................................................... 65
7.2 Default In Other Agreements............................................................... 65
7.3 Breach Of Certain Covenants............................................................... 66
7.4 Breach Of Warranty........................................................................ 66
7.5 Other Defaults Under Loan Documents....................................................... 66
7.6 Involuntary Bankruptcy, Appointment Of Receiver, Etc...................................... 66
7.7 Voluntary Bankruptcy; Appointment Of Receiver, Etc........................................ 67
7.8 Judgments And Attachments................................................................. 67
7.9 Dissolution............................................................................... 67
7.10 Employee Benefit Plans.................................................................... 68
7.11 Change In Control......................................................................... 68
7.12 Invalidity Of Guaranties.................................................................. 68
7.13 Failure Of Security....................................................................... 68
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PAGE
7.14 Franchises................................................................................ 69
7.15 Default In Partnership Agreement.......................................................... 69
SECTION 8 MISCELLANEOUS..................................................................................... 70
8.1 Assignments And Participations In Loans................................................... 70
8.2 Expenses.................................................................................. 72
8.3 Indemnity................................................................................. 72
8.4 Set-Off................................................................................... 73
8.5 Ratable Sharing........................................................................... 74
8.6 Amendments And Waivers.................................................................... 74
8.7 Independence Of Covenants................................................................. 75
8.8 Notices................................................................................... 75
8.9 Survival Of Representations, Warranties And Agreements.................................... 75
8.10 Failure Or Indulgence Not Waiver; Remedies Cumulative..................................... 76
8.11 Marshalling; Payments Set Aside........................................................... 76
8.12 Severability.............................................................................. 76
8.13 Obligations Several; Independent Nature Of Lenders' Rights................................ 76
8.14 Headings.................................................................................. 77
8.15 Applicable Law............................................................................ 77
8.16 Successors And Assigns.................................................................... 77
8.17 Consent To Jurisdiction And Service Of Process............................................ 77
8.18 Waiver Of Jury Trial...................................................................... 78
8.19 Confidential.............................................................................. 78
8.20 Counterparts; Effectiveness............................................................... 79
8.21 Limitation On Recourse.................................................................... 79
8.22 Relationship Of This Agreement To The Original Credit Agreement........................... 79
SIGNATURES......................................................................................... S-1
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Schedules
Schedule 1 - - Funding/Payment office
Schedule 2.1A-1 - - Borrowing Schedule
Schedule 2.1A-2 - - Pro Rata Share
Schedule 2.5 - - Outstanding Indebtedness
Schedule 3.1B - - Indebtedness To Be Paid Off
Schedule 4.1D - - Subsidiaries
Schedule 4.2 - - Governmental Consents
Schedule 4.5 - - Title to Properties; Leases
Schedule 4.6 - - Litigation; Adverse Facts
Schedule 4.8A - - Defaults
Schedule 4.8B - - Licenses; Franchises
Schedule 4.13 - - Environmental Protection
Schedule 5.11 - - Franchise Consents
Schedule 5.13 - - Mortgaged Real Property
Schedule 6.1 - - Allowed Indebtedness
Schedule 6.2 - - Liens
Schedule 6.3 - - Investments
Schedule 6.4 - - Contingent Obligations
Schedule 6.10 - - Transactions With Shareholders and Affiliates
Exhibits
Exhibit 1 - - Assignment Agreement
Exhibit 2 - - Company Security Agreement
Exhibit 3 - - Compliance Certificate
Exhibit 4 - - Guarantor Security Agreement
Exhibit 5 - - Guaranty
Exhibit 6 - - Notes
Exhibit 7 - - Notice of Borrowing
Exhibit 8 - - Financial Condition Certificate
Exhibit 9-A - - Company Counsel Opinion
Exhibit 9-B - - FCC Opinion
Exhibit 10- - Local Counsel Opinion
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▇▇▇▇▇ ▇▇▇▇▇ PARTNERS, L.P.
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of March 2, 2001 and entered into by
and between ▇▇▇▇▇ ▇▇▇▇▇ PARTNERS, L.P., a Delaware limited partnership
("COMPANY"), and THE ENTITY LISTED ON THE SIGNATURE PAGES HEREOF (together with
any successors and permitted assigns pursuant to subsection 8.1, "LENDERS").
WITNESSETH:
WHEREAS, the parties hereto desire to amend and restate the Original
Credit Agreement (as defined below) in its entirety;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company and Lenders agree that the
Original Credit Agreement shall be amended and restated as follows:
SECTION 1 DEFINITIONS
1.1 CERTAIN DEFINED TERMS. The following terms used in this Agreement shall have
the following meanings:
"AFFILIATE" means, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under common
control with, that Person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms
"controlling", "controlled by" and "under common control with"), as
applied to any Person, means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting
securities or by contract or otherwise.
"AGREEMENT" means this Credit Agreement dated as of March 2,
2001, as it may be amended, supplemented or otherwise modified from
time to time.
"ASSET SALE" means the sale (including any sale-leaseback
transaction and any disposition of any rights under any Franchise
Agreement) by Company or any of its Subsidiaries to any Person other
than Company or any of its wholly-owned Subsidiaries of (i) any of the
stock or partnership interests of any of Company's Subsidiaries, (ii)
substantially all of the assets of any division or line of business of
Company or any of its Subsidiaries, or (iii) any other assets (whether
tangible or intangible) of Company or any of its Subsidiaries outside
of the ordinary course of business; provided, that for the purposes of
subsections 2.4B(iii) and 6.7, there shall be excluded from the
definition of Asset Sale (A) any
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such sale or related series of sales of assets in the ordinary course
of business to the extent that the Net Cash Proceeds of such sale or
related series of sales do not exceed $1,000,000, provided that the
aggregate amount of Net Cash Proceeds from all such sales or related
series of sales of assets excluded from this definition of Asset Sale
due to this clause (A) shall not exceed $2,000,000 per year, and (B)
any sale of assets described in clause (i), (ii) or (iii) of this
definition if the proceeds of such sale are reinvested in similar
assets used or usable by Company in its business of approximately equal
or greater value than the assets sold within 12 months after such sale,
and Company agrees to provide a certificate monthly to Lenders of any
such sales occurring during such month for which the proceeds are to be
reinvested, detailing the assets sold and when the proceeds are to be
reinvested, and if such proceeds are not reinvested within 12 months of
such sale it shall be considered an Asset Sale for purposes of
subsections 2.4B(iii) and 6.7.
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in
substantially the form of Exhibit 1 annexed hereto.
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor
statute.
"BUSINESS DAY" means any day excluding Saturday, Sunday and
any day which is a legal holiday under the laws of the State of New
York or the State of Michigan or is a day on which banking institutions
located in such states are authorized or required by law or other
governmental action to close.
"CAPITAL EXPENDITURES" means, without duplication, any
expenditures for any purchase or other acquisition of any asset which
would be classified as a fixed or capital asset on a consolidated
balance sheet of the Company and its Subsidiaries prepared in
accordance with GAAP.
"CAPITAL LEASE", as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee
that, in conformity with GAAP, is accounted for as a capital lease on
the balance sheet of that Person.
"CASH" means money, currency or a credit balance in a Deposit
Account.
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally
guaranteed as to interest and principal by the United States Government
or (b) issued by any agency of the United States the obligations of
which are backed by the full faith and credit of the United States, in
each case maturing within six months after such date; (ii) marketable
direct obligations issued by any state of the United States of America
or any political subdivision of any such state or any public
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instrumentality thereof, in each case maturing within six months after
such date and having, at the time of the acquisition thereof, the
highest rating obtainable from either Standard & Poor's Ratings Group
("SAP") or ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's"); (iii)
commercial paper maturing no more than six months from the date of
creation thereof and having, at the time of the acquisition thereof, a
rating of at least A-1 from SAP or at least P-1 from Moody's; (iv)
certificates of deposit or bankers' acceptances maturing within six
months after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of
America or any state thereof or the District of Columbia that (a) is at
least "adequately capitalized" (as defined in the regulations of its
primary Federal banking regulator) and (b) has Tier 1 capital (as
defined in such regulations) of not less than $100,000,000; and (v)
shares of any money market mutual fund that (a) has at least 95% of its
assets invested continuously in the types of investments referred to in
clauses (i) and (ii) above, (b) has net assets of not less than
$500,000,000, and (c) has the highest rating obtainable from either SAP
or Moody's.
"CASH PROCEEDS" means, with respect to any Asset Sale, Cash
payments (including any Cash received by way of deferred payment
pursuant to, or monetization of, a note receivable or otherwise, but
only as and when so received) received from such Asset Sale.
"CHANGE IN CONTROL" has the meaning given such term in
subsection 7.11.
"CLOSING DATE" means the date on or before March 2, 2001.
"COLLATERAL" means all of the properties and assets (including
capital stock) in which Liens are purported to be granted by the
Collateral Documents.
"COLLATERAL DOCUMENTS" means the Company Security Agreement,
any Guarantor Security Agreement and any and all Mortgages.
"COMMITMENTS" means, with respect to each Lender, the
Commitment of such Lender to make Loans to Company in the amount set
forth opposite such Lender's name in Schedule 2.1A-2 hereto, as such
amount may be terminated or reduced or changed from time to time in
accordance with this Agreement.
"COMPANY" has the meaning assigned to that term in the
introduction to this Agreement.
"COMPANY SECURITY AGREEMENT" means that certain Company
Security Agreement by and between Company and the agent named therein
dated as of the Closing Date and substantially in the form of Exhibit 2
annexed hereto,
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as such Company Security Agreement may be amended, supplemented or
otherwise modified from time to time.
"COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of Exhibit 3 annexed hereto delivered to Lenders by Company
pursuant to subsection 5.1(iv).
"CONSOLIDATED ADJUSTED EBITDA" means, for any period,
Consolidated System Cash Flow minus Management Fees and Unallocated
Corporate Overhead to the extent actually paid in that period.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total
interest expense (including that portion attributable to Capital Leases
in accordance with GAAP and capitalized interest) of Company and its
Subsidiaries on a consolidated basis with respect to all outstanding
Indebtedness of Company and its Subsidiaries, including, without
limitation, all commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing and
net costs under Interest Rate Agreements.
"CONSOLIDATED NET INCOME" means, for any period, the net
income (or loss) of Company and its Subsidiaries on a consolidated
basis for such period taken as a single accounting period determined in
conformity with GAAP; provided that there shall be excluded (i) the
income (or loss) of any Person (other than a Subsidiary of Company) in
which any other Person (other than Company or any of its Subsidiaries)
has a joint interest, except to the extent of the amount of dividends
or other distributions actually paid to Company or any of its
Subsidiaries by such Person during such period, (ii) the income (or
loss) of any Person accrued prior to the date it becomes a Subsidiary
of Company or is merged into or consolidated with Company or any of its
Subsidiaries or that Person's assets are acquired by Company or any of
its Subsidiaries, (iii) the income of any Subsidiary of Company to the
extent that the declaration or payment of dividends or similar
distributions by that Subsidiary of that income is not at the time
permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Subsidiary, (iv) any after-tax gains or
losses attributable to Asset Sales or returned surplus assets of any
Pension Plan, and (v) (to the extent not included in clauses (i)
through (iv) above) any net extraordinary gains or net noncash
extraordinary losses and guaranteed payments made to purchase limited
partner interests to the extent permitted by subsection 6.5(iii).
"CONSOLIDATED SENIOR DEBT" means, as at any date of
determination, all Indebtedness of Company and its Subsidiaries, other
than Indebtedness under the Senior Unsecured Notes, determined on a
consolidated basis in accordance with GAAP.
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"CONSOLIDATED SYSTEM CASH FLOW" means, for any period, the sum
of the amounts for such period of (i) Consolidated Net Income, (ii)
Consolidated Interest Expense, (iii) income tax expense to the extent
actually paid in that period but excluding, to the extent otherwise
included therein, current income tax expense attributable to gains on
Asset Sales, (iv) total depreciation expense, (v) total amortization
expense, (vi) Management Fees and Unallocated Corporate Overhead to the
extent actually paid in that period, and (vii) other non-cash items
reducing Consolidated Net Income less other non-cash items increasing
Consolidated Net Income, all of the foregoing as determined on a
consolidated basis for Company and its Subsidiaries in conformity with
GAAP. For purposes of calculating Consolidated System Cash Flow (and
the components thereof, including Consolidated Net Income) for any
period, any Asset Sale or acquisition by Company shall be deemed to
have occurred (i) for purposes of subsection 6.6, on the first day of
such period and (ii) for all other purposes, on the day on which such
Asset Sale or acquisition occurred and Consolidated System Cash Flow
shall be adjusted to give effect to such Asset Sale or acquisition in
accordance with the foregoing.
"CONSOLIDATED TOTAL DEBT" means, as at any date of
determination, the aggregate stated balance sheet amount of all
Indebtedness of Company and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP; provided, however, that for
purposes of subsection 6.6 there shall be excluded from Consolidated
Total Debt, the stated principal amount of any and all Senior Unsecured
Notes held, directly or indirectly, by Company and its Subsidiaries.
"CONTINGENT OBLIGATION" means, as applied to any Person, any
direct or indirect liability (including any guarantees), contingent or
otherwise, of that Person (i) with respect to any Indebtedness, lease,
dividend or other obligation of another if the primary purpose or
intent thereof by the Person incurring the Contingent Obligation is to
provide assurance to the obligee of such obligation of another that
such obligation of another will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders
of such obligation will be protected (in whole or in part) against loss
in respect thereof, (ii) with respect to any letter of credit issued
for the account of that Person or as to which that Person is otherwise
liable for reimbursement of drawings, or (iii) under Interest Rate
Agreements and Currency Agreements. Contingent Obligations shall
include, without limitation, (a) the direct or indirect guaranty,
endorsement (otherwise than for collection or deposit in the ordinary
course of business), co-making, discounting with recourse or sale with
recourse by such Person of the obligation of another, (b) the
obligation to make take-or-pay or similar payments if required
regardless of nonperformance by any other party or parties to an
agreement, and (c) any liability of such Person for the obligation of
another
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through any agreement (contingent or otherwise) (x) to purchase,
repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or discharge of such
obligation (whether in the form of loans, advances, stock purchases,
capital contributions or otherwise) or (y) to maintain the solvency or
any balance sheet item, level of income or financial condition of
another if, in the case of any agreement described under subclauses (x)
or (y) of this sentence, the primary purpose or intent thereof is as
described in the preceding sentence. The amount of any Contingent
Obligation shall be equal to the amount of the obligation so guaranteed
or otherwise supported or, if less, the amount to which such Contingent
Obligation is specifically limited.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any
provision of any Security issued by that Person or of any material
indenture, mortgage, deed of trust, contract, undertaking, agreement or
other instrument to which that Person is a party or by which it or any
of its properties is bound or to which it or any of its properties is
subject.
"CURRENCY AGREEMENT" means any foreign exchange contract,
currency swap agreement, futures contract, option contract, synthetic
cap or other similar agreement or arrangement designed to protect
Company or any of its Subsidiaries against fluctuations in currency
values.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or
like account with a bank, savings and loan association, credit union or
like organization, other than an account evidenced by a negotiable
certificate of deposit.
"DOLLARS" and the sign "$" mean the lawful money of the United
States of America.
"DKSH" means DKS Holdings, Inc., a Michigan corporation.
"ELIGIBLE ASSIGNEE" means (A) (i) a commercial bank organized
under the laws of the United States or any state thereof having total
assets in excess of $3,000,000,000; (ii) 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 $3,000,000,000; (iii) a
commercial bank organized under the laws of any other country or a
political subdivision thereof having total assets in excess of
$3,000,000,000; provided that (x) such bank is acting through a branch
or agency located in the United States or (y) such bank is organized
under the laws of a country that is a member of the Organization for
Economic Cooperation and Development or a political subdivision of such
country; and (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,
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purchasing or otherwise investing in commercial loans in the ordinary
course of its business and having a combined capital and surplus or
total assets of at least $250,000,000, in each case (under clauses (i)
through (iv) above) that (i) has executed and delivered an Assignment
Agreement in accordance with Section 8.1B, has delivered any forms,
certificates or other evidence required under subsections 2.6B(iii) and
8.1B and (ii) on the date of the applicable Assignment Agreement, would
not subject Company to payment of any increased costs, taxes or
gross-up payments under subsection 2.6 or 8.3 that otherwise would not
have been payable by Company to a Lender had no assignment been made;
and (B) any Lender and any Affiliate of any Lender; provided that no
Affiliate or limited partner of Company shall be an Eligible Assignee.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is, or was at any time,
maintained or contributed to by Company or any of its ERISA Affiliates.
"ENVIRONMENTAL CLAIM" means any accusation, allegation, notice
of violation, claim, demand, abatement order or other order or
direction (conditional or otherwise) by any governmental authority or
any Person for any damage, including, without limitation, personal
injury (including sickness, disease or death), tangible or intangible
property damage, contribution, indemnity, indirect or consequential
damages, damage to the environment, nuisance, pollution, contamination
or other adverse effects on the environment, or for fines, penalties or
restrictions, in each case relating to, resulting from or in connection
with Hazardous Materials and relating to Company, any of its
Subsidiaries, any of their respective Affiliates or any Facility.
"ENVIRONMENTAL LAWS" means all statutes, ordinances, orders,
rules, regulations, plans, policies or decrees and the like relating to
(i) environmental matters, including, without limitation, those
relating to fines, injunctions, penalties, damages, contribution, cost
recovery compensation, losses or injuries resulting from the Release or
threatened Release of Hazardous Materials, (ii) the generation, use,
storage, transportation or disposal of Hazardous Materials, or (iii)
occupational safety and health, industrial hygiene, land use or the
protection of human, plant or animal health or welfare, in any manner
applicable to Company or any of its Subsidiaries or any of their
respective properties, including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C.
Section 9601 et seq.), the Hazardous Materials Transportation Act (49
U.S.C. Section 1801 et seq.), the Resource Conservation and Recovery
Act (42 U.S.C. Section 6901 et seq.), the Federal Water Pollution
Control Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act (42
U.S.C. Section 7401 et seq.), the Toxic Substances Control Act (15
U.S.C. Section 2601 et seq.), the Federal Insecticide, Fungicide and
Rodenticide
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Act (7 U.S.C. Section 136 et seq.), the Occupational Safety and Health
Act (29 U.S.C. Section 651 et seq.) and the Emergency Planning and
Community Right-to-Know Act (42 U.S.C. Section 11001 et seq.), each as
amended or supplemented, and any analogous future or present local,
state and federal statutes and regulations promulgated pursuant
thereto, each as in effect as of the date of determination.
"EQUITY PROCEEDS" means the cash proceeds (net of underwriting
discounts and commissions and other reasonable costs associated
therewith) from the issuance of any equity Securities of Company;
provided, that for the purposes of subsection 2.4B(c), there shall be
excluded from the definition of Equity Proceeds any such cash proceeds
if such cash proceeds are reinvested in assets that are used or usable
by Company in its business within 12 months after the receipt thereof,
and Company agrees to provide a certificate monthly to Lenders
detailing the reinvestment of such cash proceeds, and if such cash
proceeds are not so reinvested within 12 months of the receipt thereof,
then, to the extent not so reinvested, such cash proceeds shall be
considered Equity Proceeds for purposes of subsection 2.4B(c).
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"ERISA AFFILIATE" means, as applied to any Person, (i) any
corporation which is, or was at any time, a member of a controlled
group of corporations within the meaning of Section 414(b) of the
Internal Revenue Code of which that Person is, or was at any time, a
member; (ii) any trade or business (whether or not incorporated) which
is, or was at any time, a member of a group of trades or businesses
under common control within the meaning of Section 414(c) of the
Internal Revenue Code of which that Person is, or was at any time, a
member; and (iii) any member of an affiliated service group within the
meaning of Section 414(m) or (o) of the Internal Revenue Code of which
that Person, any corporation described in clause (i) above or any trade
or business described in clause (ii) above is, or was at any time, a
member.
"ERISA EVENT" means (i) a "reportable event" within the
meaning of Section 4043 of ERISA and the regulations issued thereunder
with respect to any Pension Plan (excluding those for which the
provision for 30-day notice to the PBGC has been waived by regulation);
(ii) the failure to meet the minimum funding standard of Section 412 of
the Internal Revenue Code with respect to any Pension Plan (whether or
not waived in accordance with Section 412(d) of the Internal Revenue
Code) or the failure to make by its due date a required installment
under Section 412(m) of the Internal Revenue Code with respect to any
Pension Plan or the failure to make any required contribution to a
Multiemployer Plan; (iii) the provision by the administrator of any
Pension Plan
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pursuant to Section 4041(a)(2) of ERISA of a notice of intent to
terminate such plan in a distress termination described in Section
4041(c) of ERISA; (iv) the withdrawal by Company or any of its ERISA
Affiliates from any Pension Plan with two or more contributing sponsors
or the termination of any such Pension Plan resulting in liability
pursuant to Sections 4063 or 4064 of ERISA; (v) the institution by the
PBGC of proceedings to terminate any Pension Plan, or the occurrence of
any event or condition which might constitute grounds under ERISA for
the termination of, or the appointment of a trustee to administer, any
Pension Plan; (vi) the imposition of liability on Company or any of its
ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by
reason of the application of Section 4212(c) of ERISA; (vii) the
withdrawal by Company or any of its ERISA Affiliates in a complete or
partial withdrawal (within the meaning of Sections 4203 and 4205 of
ERISA) from any Multiemployer Plan if there is any potential liability
therefor, or the receipt by Company or any of its ERISA Affiliates of
notice from any Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA, or that it
intends to terminate or has terminated under Section 4041A or 4042 of
ERISA; (viii) the occurrence of an act or omission which could give
rise to the imposition on Company or any of its ERISA Affiliates of
fines, penalties, taxes or related charges under Chapter 43 of the
Internal Revenue Code or under Section 409 or 502(c), (i) or (1) or
4071 of ERISA in respect of any Employee Benefit Plan; (ix) the
assertion of a material claim (other than routine claims for benefits)
against any Employee Benefit Plan other than a Multiemployer Plan or
the assets thereof, or against Company or any of its ERISA Affiliates
in connection with any such Employee Benefit Plan; (x) receipt from the
Internal Revenue Service of notice of the failure of any Pension Plan
(or any other Employee Benefit Plan intended to be qualified under
Section 401(a) of the Internal Revenue Code) to qualify under Section
401(a) of the Internal Revenue Code, or the failure of any trust
forming part of any Pension Plan to qualify for exemption from taxation
under Section 501(a) of the Internal Revenue Code; or (xi) the
imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or pursuant to ERISA with respect to any Pension
Plan.
"EVENT OF DEFAULT" means each of the events set forth in
Section 7 unless remedied or waived in accordance with the terms of
this Agreement.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"FACILITIES" means any and all real property (including,
without limitation, all buildings, fixtures or other improvements
located thereon) now, hereafter or heretofore owned, leased, operated
or used by Company or any of its Subsidiaries or any of their
respective predecessors or Affiliates.
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"FCC" means the Federal Communications Commission and any
successor governmental agency performing functions similar to those
performed by the Federal Communications Commission on the date hereof.
"FISCAL YEAR" means the fiscal year of Company and its
Subsidiaries ending on December 31 of each calendar year. For purposes
of this Agreement, any particular Fiscal Year shall be designated by
reference to the calendar year in which such Fiscal Year ends.
"FRANCHISE" means any franchise to operate a cable television
system granted by any federal, state or local governmental authority or
agency.
"FUNDING AND PAYMENT OFFICE" means the office of Lenders set
forth on Schedule 1 hereto or such other office or agency as shall be
agreed to in writing by Company and Requisite Lenders.
"FUNDING DATE" has the meaning given such term in subsection
2.1A.
"GAAP" means, subject to the limitations on the application
thereof set forth in subsection 1.2, generally accepted accounting
principles set forth in opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other
entity as may be approved by a significant segment of the accounting
profession, in each case as the same are applicable to the
circumstances as of the date of determination as adjusted to reflect
the impact of tax basis accounting on depreciation, amortization and
the capitalization of expenses and other non-material variations, all
on a basis consistent with Company's historical financial statements.
"GENERAL PARTNER" means ▇▇▇▇▇ Communications Partners, a
Michigan general partnership or its successor in its capacity as
general partner of Company.
"GENERAL PARTNERSHIP AGREEMENT" means the Third Amended and
Restated Partnership Agreement of the General Partner dated as of
August 29, 2000 by and between Jamesco and DKSH, as amended,
supplemented or otherwise modified from time to time as permitted by
the terms thereof and hereof.
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, plan, directive, consent order or consent decree of or
from any federal, state or local governmental authority, agency or
court.
"GUARANTOR" means any Subsidiary of Company that executes and
delivers a Guaranty from time to time pursuant to subsection 5.9.
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"GUARANTOR SECURITY AGREEMENT" means a Guarantor Security
Agreement by and among any Guarantor and Lenders pursuant to subsection
5.9 and substantially in the form of Exhibit 4 annexed hereto, as such
Guarantor Security Agreement may be amended, supplemented or otherwise
modified from time to time.
"GUARANTORS" means JCFC, any subsidiary of the Company that
executes and deliver a Guaranty from time to time pursuant to
subsection 5.9 or any other Person that executes a Guaranty at any
time.
"GUARANTY" means a Guaranty delivered by any Guarantor
pursuant to subsection 5.9 and substantially in the form of Exhibit 5
annexed hereto, as such Guaranty may be amended, supplemented or
otherwise modified from time to time.
"HAZARDOUS MATERIALS" means (i) any chemical, material or
substance at any time defined as or included in the definition of
"hazardous substances", "hazardous wastes", "hazardous materials",
"extremely hazardous waste", "restricted hazardous waste", "infectious
waste", "toxic substances" or any other formulations intended to
define, list or classify substances by reason of deleterious properties
such as ignitability, corrosivity, reactivity, carcinogenicity,
toxicity, reproductive toxicity, "TCLP toxicity" or "EP toxicity" or
words of similar import under any applicable Environmental Laws or
publications promulgated pursuant thereto; (ii) any oil, petroleum,
petroleum fraction or petroleum derived substance; (iii) any drilling
fluids, produced waters and other wastes associated with the
exploration, development or production of crude oil, natural gas or
geothermal resources; (iv) any flammable substances or explosives; (v)
any radioactive materials; (vi) asbestos in any form; (vii) urea
formaldehyde foam insulation; (viii) electrical equipment which
contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of fifty parts per million; (ix)
pesticides; and (x) any other chemical, material or substance, exposure
to which is prohibited, limited or regulated by any governmental
authority or which may or could pose a hazard to the health and safety
of the owners, occupants or any Persons in the vicinity of the
Facilities.
"INDEBTEDNESS" means, as applied to any Person, without
duplication, (i) all liabilities, contingent or otherwise, of such
Person (a) for borrowed money (whether or not the recourse of the
lender is to the whole of the assets of such Person or only to a
portion thereof), (b) evidenced by bonds (not including performance
bonds incurred in the ordinary course of business that aggregate less
than $1,500,000 at any one time outstanding), notes, debentures, drafts
accepted or similar instruments or letters of credit or representing
the balance deferred and unpaid of the purchase price of any property
(other than any such balance that represents an account payable or any
other monetary obligation to a trade creditor
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created, incurred, assumed or guaranteed by such Person in the ordinary
course of business of such Person in connection with obtaining goods,
materials or services, which account is not overdue by more than 90
days, according to the original terms of sale, unless such account
payable is being contested or has been renegotiated in good faith) or
(c) for the payment of money relating to a Capital Lease; (ii)
reimbursement obligations of such Person with respect to letters of
credit; (iii) obligations of such Person with respect to Interest Rate
Agreements and Currency Agreements; (iv) all liabilities of others of
the kind described in the preceding clauses (i), (ii) or (iii) that
such person has guaranteed, that have been incurred by a partnership in
which it is a general partner (to the extent such Person is liable,
contingently or otherwise, therefor) that is otherwise its legal
liability (other than endorsements for collection in the ordinary
course of business); and (v) all obligations of others secured by a
Lien to which any of the properties or assets (including, without
limitation, leasehold interests and any other tangible or intangible
property rights) of such Person are subject, whether or not the
obligations secured thereby shall have been assumed by such Person or
shall otherwise be such Person's legal liability.
"INDEMNITEE" has the meaning assigned to that term in
subsection 8.3.
"INDENTURE" means the Indenture dated August 15, 1997 among
the Company, JCFC and United States Trust Company of New York as
Trustee, as such Indenture is modified from time to time if permitted
by this Agreement.
"INTEREST PAYMENT DATE" means with respect to any Loan, each
March 31, June 30, September 30 and December 31 of each year,
commencing on the first such date to occur after the Closing Date.
"INTEREST RATE AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement
or other similar agreement or arrangement designed to protect Company
or any of its Subsidiaries against fluctuations in interest rates.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter.
"INVESTMENT" means (i) any direct or indirect purchase or
other acquisition by Company or any of its Subsidiaries of, or of a
beneficial interest in, any Securities of any other Person or (ii) any
direct or indirect loan, advance (other than advances to employees for
moving, entertainment and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital
contribution by Company or any of its Subsidiaries to any other Person,
including all indebtedness and accounts receivable from that other
Person that are not current assets or did not arise from sales to that
other Person in the ordinary
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course of business. The amount of any Investment shall be the original
cost of such Investment plus the cost of all additions thereto, without
any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment.
"JAMESCO" means Jamesco, Inc., a Michigan corporation.
"JCFC" means ▇▇▇▇▇ ▇▇▇▇▇ Finance Corp., a Michigan
corporation.
"JOINT VENTURE" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal
form; provided that in no event shall any corporate Subsidiary of any
Person be considered to be a Joint Venture to which such Person is a
party.
"LENDER" and "LENDERS" means the Persons identified as
"Lenders" and listed on the signature pages of this Agreement together
with their successors and permitted assigns pursuant to subsection 8.1.
"LIEN" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional
sale or other title retention agreement, any lease in the nature
thereof, and any agreement to give any security interest) and any
option, trust or other preferential arrangement having the practical
effect of any of the foregoing.
"LOAN DOCUMENTS" means this Agreement, the Notes, any
Guaranty, and the Collateral Documents.
"LOAN EXPOSURE" means, with respect to any Lender as of any
date of determination (i) prior to the termination of the Commitments,
that Lender's Commitment and (ii) after the termination of the
Commitments, the aggregate outstanding principal amount of the Loans of
that Lender.
"LOAN PARTIES" means Company and any Guarantors.
"LOANS" means the Loans made by Lenders to Company pursuant to
subsection 2.1A.
"MANAGEMENT FEES" means payments made to the General Partner
pursuant to Sections 5.5 and 5.6.1(a)(vii) of the Partnership
Agreement.
"MARGIN STOCK" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as
in effect from time to time.
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"MATERIAL ADVERSE EFFECT" means a material adverse effect upon
the business, operations, properties, assets or condition (financial or
otherwise) of Company and its Subsidiaries taken as a whole.
"MATURITY DATE" means March 2, 2004.
"MORTGAGE" means any mortgage, deed of trust or other similar
document granted by Company or any of its subsidiaries in any interest
in real property to secure the Obligations.
"MULTIEMPLOYER PLAN" means a "multiemployer plan", as defined
in Section 3(37) of ERISA, to which Company or any of its ERISA
Affiliates is contributing, or ever has contributed, or to which
Company or any of its ERISA Affiliates has, or ever has had, an
obligation to contribute.
"NET CASH PROCEEDS" means, with respect to any Asset Sale,
Cash Proceeds of such Asset Sale net of bona fide direct costs of sale
(including (i) income taxes reasonably estimated to be actually payable
as a result of such Asset Sale within two years of the date of such
Asset Sale and (ii) payment of the outstanding principal amount of,
premium or penalty, if any, and interest on any Indebtedness (other
than the Loans) that is secured by a Lien on the stock or assets in
question and that is required to be repaid under the terms thereof as a
result of such Asset Sale).
"NOTES" means (i) the promissory note of Company issued
pursuant to subsection 2.1D and (ii) any promissory notes issued by the
Company pursuant to the last sentence of subsection 8.1B(i) in
connection with assignments of the Commitments and Loans of any
Lenders, in each case substantially in the form of Exhibit 6 annexed
hereto, as they may be amended, supplemented or otherwise modified from
time to time.
"NOTICE OF BORROWING" means a notice substantially in the form
of Exhibit 7 annexed hereto delivered by Company to Lenders pursuant to
subsection 2.1.B with respect to a proposed borrowing.
"OBLIGATIONS" means all obligations of every nature of each
Loan Party from time to time owed to Lenders under the Loan Documents,
whether for principal, premium, interest, fees, expenses,
indemnification or otherwise.
"OFFICERS' CERTIFICATE" means, (x) as applied to a
partnership, a certificate executed on behalf of such partnership by
the chairman of the board (if an officer) or the president or one of
the vice presidents of the managing or general partner of such
partnership or by the chief financial officer or the treasurer of the
managing or general partner of such partnership and (y) as applied to
any
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21
corporation, a certificate executed on behalf of such corporation by
its chairman of the board (if an officer) or its president or one of
its vice presidents or by its chief financial officer or its treasurer;
provided that every Officers' Certificate with respect to the
compliance with a condition precedent to the making of any Loans
hereunder shall include (i) a statement that the officer or officers
making or giving such Officers' Certificate have read such condition
and any definitions or other provisions contained in this Agreement
relating thereto, (ii) a statement that, in the opinion of the signers,
they have made or have caused to be made such examination or
investigation as is necessary to enable them to express an informed
opinion as to whether or not such condition has been complied with, and
(iii) a statement as to whether, in the opinion of the signers, such
condition has been complied with.
"OPERATING LEASE" means, as applied to any Person, any lease
(including, without limitation, leases that may be terminated by the
lessee at any time) of any property (whether real, personal or mixed)
that is not a Capital Lease other than any such lease under which that
Person is the lessor.
"ORIGINAL CREDIT AGREEMENT" means the Credit Agreement dated
as of August 15, 1997 among the Company, the lenders party thereto, NBD
Bank, as Documentation Agent, and Canadian Imperial Bank of Commerce,
as Administration Agent, as amended.
"PARTNERSHIP AGREEMENT" means the Second Amended and Restated
Agreement of Limited Partnership of ▇▇▇▇▇ ▇▇▇▇▇ Partners, L.P. dated as
of December 29, 1999 and as further amended, supplemented or otherwise
modified from time to time as permitted under the terms thereof and
hereof.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor thereto).
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal
Revenue Code or Section 302 of ERISA.
"PERMITTED ENCUMBRANCES" means the following types of Liens
(other than any such Lien imposed pursuant to Section 401(a)(29) or
412(n) of the Internal Revenue Code or by ERISA): (i) Liens for taxes,
assessments or governmental charges or claims the payment of which is
not, at the time, required by subsection 5.3; (ii) statutory Liens of
landlords and Liens of carriers, warehousemen, mechanics and
materialmen and other Liens imposed by law incurred in the ordinary
course of business for sums not yet delinquent or being contested in
good faith, if such reserve or other appropriate provision, if any, as
shall be required by GAAP shall have been made therefor; (iii) Liens
incurred or
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deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government
contracts, trade contracts, performance and return-of-money bonds and
other similar obligations (exclusive of obligations for the payment of
borrowed money); (iv) any attachment or judgment Lien not constituting
an Event of Default under subsection 7.8; (v) leases or subleases
granted to others not interfering in any material respect with the
ordinary conduct of the business of Company or any of its Subsidiaries;
(vi) easements, rights-of-way, restrictions, minor defects,
encroachments or irregularities in title and other similar charges or
encumbrances not interfering in any material respect with the ordinary
conduct of the business of Company or any of its Subsidiaries; (vii)
any (a) interest or title of a lessor or sublessor under any lease
permitted hereunder, (b) restriction or encumbrance that the interest
or title of such lessor or sublessor may be subject to, or (c)
subordination of the interest of the lessee or sublessee under such
lease to any restriction or encumbrance referred to in the preceding
clause (b); (viii) Liens arising from filing UCC financing statements
relating solely to leases permitted by this Agreement; and (ix) Liens
in favor of customs and revenue authorities arising as a matter of law
to secure payment of customs duties in connection with the importation
of goods.
"PERSON" means and includes natural persons, corporations,
limited partnerships, general partnerships, joint stock companies,
Joint Ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether
or not legal entities, and governments and agencies and political
subdivisions thereof.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that,
after notice or lapse of time or both, would constitute an Event of
Default.
"PRO FORMA BASIS" means, with respect to compliance with any
covenant hereunder, compliance with such covenant after giving effect
to any proposed acquisition, asset sale, or any other action which
requires compliance on a Pro Forma Basis. In making any determination
of compliance on a Pro Forma Basis, such determination shall be
performed after good faith consultation with Lenders using the
consolidated financial statements of Company and its Subsidiaries which
shall be reformulated as if any acquisition, asset sale, or any other
action had been consummated at the beginning of the period specified in
the covenant with respect to which Pro Forma Basis compliance is
required.
"PRO RATA SHARE" means with respect to each Lender, the
percentage obtained by dividing (x) the Loan Exposure of that Lender by
(y) the aggregate Loan Exposures of all Lenders, as such percentage may
be adjusted by assignments permitted pursuant to subsection 8.1. The
initial Pro Rata Share of
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each Lender is set forth opposite the name of that Lender in Schedule
2.1A-2 annexed hereto.
"PURCHASE MONEY OBLIGATIONS" means Indebtedness representing,
or incurred to finance, the cost of acquiring any assets (including
Purchase Money Obligations of any other Person at the time such other
Person is merged with or into or is otherwise acquired by Company),
provided that (i) the principal amount of such Indebtedness does not
exceed 100% of such cost, including construction charges, (ii) any Lien
securing such Indebtedness does not extend to or cover any other asset
or property other than the asset or property being so acquired and
(iii) such Indebtedness is incurred, and any Liens with respect thereto
are granted within 180 days of the acquisition of such property or
asset.
"RELEASE" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge,
dispersal, dumping, leaching or migration of Hazardous Materials into
the indoor or outdoor environment (including, without limitation, the
abandonment or disposal of any barrels, containers or other closed
receptacles containing any Hazardous Materials), or into or out of any
Facility, including the movement of any Hazardous Material through the
air, soil, surface water, groundwater or property.
"REQUISITE LENDERS" means Lenders having or holding 75% or
more of the aggregate Loan Exposure of all Lenders.
"RESTRICTED JUNIOR PAYMENT" means, with respect to any Person,
(i) any dividend or other distribution, direct or indirect, on account
of any partnership interests, capital stock or other interests of such
Person now or hereafter outstanding, (ii) any redemption, retirement,
sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any partnership interests, capital stock
or other interests of such Person now or hereafter outstanding, (iii)
any payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire partnership
interests or other interests of such Person now or hereafter
outstanding, (iv) any payment or prepayment of principal of, premium,
if any, or interest on, or redemption, purchase, retirement, defeasance
(including in-substance or legal defeasance), sinking fund or similar
payment with respect to, the Senior Unsecured Notes and (v) any payment
of Management Fees or other payments to the General Partner or any of
its Affiliates.
"SANDLER" means SCP ▇▇▇▇▇ Acquisition LLC.
"SECURITIES" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in
any profit-sharing agreement
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or arrangement, options, warrants, bonds, debentures, notes (other than
the Notes), or other evidences of indebtedness, secured or unsecured,
convertible, subordinated or otherwise, or in general any instruments
commonly known as "securities" or any certificates of interest, shares
or participations in temporary or interim certificates for the purchase
or acquisition of, or any right to subscribe to, purchase or acquire,
any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"SENIOR UNSECURED DEBT DOCUMENTS" means the Senior Unsecured
Notes, the Indenture and all of their agreements, documents and
instruments executed or delivered in connection therewith.
"SENIOR UNSECURED NOTES" means the $100,000,000 aggregate
principal amount of the 10 3/4% Series B Senior Notes due 2004 issued
by the Company pursuant to the Indenture, as amended or modified from
time to time if permitted by the terms of this Agreement.
"SIGNIFICANT SUBSIDIARY" means at any date of determination,
any Subsidiary of the Company that, together with its Subsidiaries, (i)
for the most recent fiscal quarter of the Company, accounted for more
than 5% of the consolidated revenues of the Company or (ii) as of the
end of such fiscal quarter, was the owner of more than 5% of the
consolidated assets of the Company, all as set forth on the most
recently available consolidated financial statements of the Company for
such fiscal quarter.
"SOLVENT" means, with respect to any Person, that as of the
date of determination both (a) (i) the then fair saleable value of the
property of such Person is (y) greater than the total amount of
liabilities (including contingent liabilities) of such Person and (z)
not less than the amount that will be required to pay the probable
liabilities on such Person's then existing debts as they become
absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (ii) such
Person's capital is not unreasonably small in relation to its business
or any contemplated or undertaken transaction; and (iii) such Person
does not intend to incur, or believe that it will incur, debts beyond
its ability to pay such debts as they become due; and (b) such Person
is "solvent" within the meaning given that term and similar terms under
applicable laws relating to fraudulent transfers and conveyances. For
purposes of this definition, the amount of any contingent liability at
any time shall be computed as the amount that, in light of all of the
facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured
liability.
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"SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, association, joint venture or other business
entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the
occurrence of any contingency) to vote in the election of the Person or
Persons (whether directors, managers, trustees or other Persons
performing similar functions) having the power to direct or cause the
direction of the management and policies thereof is at the time owned
or controlled, directly or indirectly, by that Person or one or more of
the other Subsidiaries of that Person or a combination thereof.
"TAX" OR "TAXES" means any present or future tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature and
whatever called, by whomsoever, on whomsoever and wherever imposed,
levied, collected, withheld or assessed.
"TAX ON THE OVERALL NET INCOME" of a Person shall be construed
as a reference to a tax imposed by the jurisdiction in which that
Person's principal office (and/or, in the case of any Lender, its
lending office) is located or in which that Person is deemed to be
doing business on all or part of the net income, profits or gains of
that Person (whether worldwide, or only insofar as such income, profits
or gains are considered to arise in or to relate to a particular
jurisdiction, or otherwise).
"UCC" means the Uniform Commercial Code as in effect on the
date hereof in the State of Michigan; provided, however, that if by
reason of mandatory provisions of law, the perfection or the effect of
the perfection or non-perfection of the security interest in any item
or portion of the Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than the State of Michigan, "UCC"
shall mean the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such
perfection or effect of perfection or non-perfection.
"UNALLOCATED CORPORATE OVERHEAD" means expenses incurred in
the ordinary course of business (including expenses related to the
audit of financial statements and the preparation of tax returns) that,
consistent with past practice, are not allocated among Company's cable
television systems.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS
UNDER AGREEMENT.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company to Lenders pursuant to clauses (i), (ii),
(iii) and (xi) of subsection 5.1 shall be prepared in
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accordance with GAAP as in effect at the time of such preparation (and delivered
together with the reconciliation statements provided for in subsection 5.1(v)).
Calculations in connection with the definitions, covenants and other provisions
of this Agreement shall utilize accounting principles and policies in conformity
with those used to prepare the financial statements referred to in subsection
4.3.
1.3 OTHER DEFINITIONAL PROVISIONS.
References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided. Any of the terms defined in subsection 1.1 may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference.
SECTION 2
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENTS; MAKING OF LOANS; NOTES.
A. COMMITMENTS. Subject to the terms and conditions of this Agreement
and in reliance upon the representations and warranties of Company herein set
forth, each Lender hereby severally agrees to make the Loans described in this
subsection 2.1A in the amount specified below. Each Lender agrees, subject to
the limitations set forth below with respect to the maximum amount of Loans
permitted to be outstanding from time to time, to lend to Company its Pro Rata
Share of the total Commitment then in effect; provided, during each borrowing
period as set forth on Schedule 2.1A-1 annexed hereto, Company subject to the
conditions set forth in Section 3, (1) may borrow up to the total Commitment
then in effect and (2) shall borrow an aggregate amount sufficient to cause the
principal amount of the Loans outstanding on the funding date for such borrowing
period as set forth on such schedule to be at least the amount listed under the
heading "Minimum Principal Amount of Loans on Funding Date"; provided, further,
for each funding date the amount listed under the heading "Minimum Principal
Amount of Loans on Funding Date" shall be reduced by the aggregate of the
principal amounts previously paid with respect to the Loans pursuant to Section
2.4 (each such amount, as so reduced if applicable, is referred to as a "Minimum
Principal Amount," and each such date for making the Loans with respect to any
such Commitment is referred to herein as a "Funding Date"). The original amount
of each Lender's Commitments is set forth opposite its name on Schedule 2.1A-2
annexed hereto and the aggregate original amount of the Commitments as of the
Closing Date is $30,000,000; provided that (a) the Commitments of Lenders shall
be adjusted to give effect to any assignments of the Commitments pursuant to
subsection 8.1B and (b) the amount of the Commitments shall be reduced pro rata
with respect to the principal amount of each such Commitment permanently from
time to time by the amount of any prepayments made pursuant to subsection 2.4B.
Each Commitment shall be reduced immediately and without further action on the
applicable Funding Date by the amount, if any, that the principal amount of
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the Loans outstanding on such Funding Date is less than the Minimum Principal
Amount for such Funding Date. Amounts paid or prepaid in respect of Loans may
not be reborrowed.
B. BORROWING MECHANICS. Loans made on any Funding Date shall be in an
aggregate minimum amount of $500,000 and integral multiples of $100,000 in
excess of that amount. Whenever Company desires that Lenders make a Loan it
shall deliver to Lenders a Notice of Borrowing no later than 12:00 noon (New
York City time) at least one Business Day in advance of the proposed Funding
Date. The Notice of Borrowing shall specify (i) the proposed Funding Date (which
shall be a Business Day) and (ii) the amount of the Loan requested. In lieu of
delivering the above described Notice of Borrowing, Company may give Lenders
telephonic notice by the required time of any proposed borrowing under this
subsection 2.1B; provided that such notice shall be promptly confirmed in
writing by delivery of a Notice of Borrowing to Lenders on or before the
applicable Funding Date.
No Lender shall incur any liability to Company in acting upon any
telephonic notice referred to above that such Lender believes in good faith to
have been given by a duly authorized officer or other person authorized to
borrow on behalf of Company or for otherwise acting in good faith under this
subsection 2.1B, and upon funding of Loans by such Lender in accordance with
this Agreement pursuant to any such telephonic notice Company shall have
effected Loans hereunder.
Company shall notify Lenders prior to the funding of any Loans in the
event that any of the matters to which Company is required to certify in the
applicable Notice of Borrowing is no longer true and correct as of the
applicable Funding Date, and the acceptance by Company of the proceeds of any
Loans shall constitute a re-certification by Company, as of the applicable
Funding Date, as to the matters to which Company is required to certify in the
applicable Notice of Borrowing.
C. DISBURSEMENT OF FUNDS. All Loans under this Agreement shall be made
by Lenders simultaneously and proportionately to their respective Pro Rata
Shares, it being understood that no Lender shall be responsible for any default
by any other Lender in that other Lender's obligation to make a Loan requested
hereunder nor shall the Commitment of any Lender to make the particular type of
Loan requested be increased or decreased as a result of a default by any other
Lender in that other Lender's obligation to make a Loan requested hereunder.
Promptly after receipt by any Lender of a Notice of Borrowing pursuant to
subsection 2.1B (or telephonic notice in lieu thereof), such Lender shall make
the amount of its Loan available to the Company, in same day funds, not later
than 1:00 P.M. (New York City time) on the applicable Funding Date at the
Funding and Payment Office. Upon satisfaction or waiver of the applicable
conditions precedent specified in Section 3, each Lender shall make the proceeds
of such Loans available to Company on the applicable Funding Date by causing an
amount of same day funds in
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Dollars to be credited to the account of Company at the Funding and Payment
Office by not later than 1:30 P.M. (New York City time).
D. NOTES. Company shall execute and deliver on the Closing Date to each
Lender a Note substantially in the form of Exhibit 6 annexed hereto to evidence
the principal amount of Lender's Loan and with other appropriate insertions to
reflect the amount drawn on each Funding Date and any prepayments thereafter.
2.2 INTEREST ON THE LOANS.
A. RATE OF INTEREST. Subject to the provisions of subsection 2.6, each
Loan shall bear interest on the unpaid principal amount thereof from the date
made to maturity (whether by acceleration or otherwise) at a rate equal to 11.5%
per annum.
B. INTEREST PAYMENTS. Subject to the provisions of subsection 2.2C,
interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity).
C. DEFAULT RATE. Upon the occurrence and during the continuation of any
Event of Default, the outstanding principal amount of all Loans and, to the
extent permitted by applicable law, any interest payments thereon not paid when
due and any fees and other amounts then due and payable hereunder, shall from
and after such date bear interest (including post-petition interest in any
proceeding under the Bankruptcy Code or other applicable bankruptcy laws)
payable upon demand at a rate that is two percent (2%) per annum in excess of
the interest rate otherwise payable under this Agreement with respect to the
applicable Loans. Payment or acceptance of the increased rates of interest
provided for in this subsection 2.2C is not a permitted alternative to timely
payment and shall not constitute a waiver of any Event of Default or otherwise
prejudice or limit any rights or remedies of Lenders.
D. COMPUTATION OF INTEREST. Interest on the Loans shall be computed on
the basis of a 360-day year and actual days elapsed based on a year comprised of
twelve 30-day months. In computing interest on any Loan, the date of the making
of such Loan shall be included, and the date of payment of such Loan shall be
excluded; provided that if a Loan is repaid on the same day on which it is made,
one day's interest shall be paid on that Loan.
2.3 FEES.
Company agrees to pay to Lenders a facility fee on the Closing Date
equal to two percent (2%) of the Lenders' total Commitment of $30,000,000.
2.4 REPAYMENT; PREPAYMENTS; GENERAL PROVISIONS REGARDING PAYMENTS.
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A. REPAYMENT OF LOANS. To the extent not previously paid, all Loans
shall be due and payable on the Maturity Date, together with accrued and unpaid
interest on the principal amount to be paid to but excluding the date of
payment.
B. PREPAYMENTS
(i) Voluntary Prepayments. Company may, upon not less than
three Business Days' prior written or telephonic notice given to
Lenders by 10:00 A.M. (New York City time) on the date required and, if
given by telephone, promptly confirmed in writing to Lenders, at any
time and from time to time prepay any Loans, in whole or in part, in
integral multiples of $100,000, on any Business Day (i) prior to the
first-year anniversary of the Closing Date at 102% of the principal
amount of the Loans, plus accrued and unpaid interest to the repayment
date or (ii) on and after the first-year anniversary of the Closing
Date, but prior to the eighteen (18) month anniversary of the Closing
Date at 101.5% of the principal amount of the Loans, plus accrued and
unpaid interest to the repayment date or (iii) on and after the
eighteen (18) month anniversary of the Closing Date at 100% of the
principal amount of the Loans, plus accrued and unpaid interest to the
repayment date (unless such prepayment occurs prior to the second-year
anniversary of the Closing Date and is made with the proceeds of the
incurrence of debt by Company, in which case such prepayment shall be
at 101% of principal amount of the Loans, plus accrued and unpaid
interest to the prepayment date). The foregoing provisions will not
apply to mandatory prepayments made pursuant to subsection 2.4B(iii).
(ii) Prepayments Due to Reductions or Restrictions of
Commitments. Company shall from time to time prepay the Loans to the
extent necessary so that the aggregate outstanding principal amount of
Loans shall not at any time exceed the Commitment then in effect.
(iii) Mandatory Prepayments.
(a) Change in Control. Upon a Change in Control,
Lenders shall have the right to require Company to repay the
principal amount of all Loans outstanding plus accrued and
unpaid interest thereon to the Change in Control Repayment
Date (as defined below) within fifteen (15) Business Days of
the consummation of the Change in Control (the "CHANGE IN
CONTROL REPAYMENT DATE") plus an amount equal to the premium
with respect to any principal repaid equal to the premium, if
any, that would be then payable if such Loans were voluntarily
prepaid pursuant to subsection 2.4B(i) on the Change in
Control Repayment Date.
(b) Prepayments and Reductions from Asset Sales. No
later than the second Business Day following the date of
receipt by Company or any
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of its Subsidiaries of Net Cash Proceeds of any Asset Sale
which in the aggregate exceed $3,000,000 for all such Asset
Sales since the Closing Date, Company shall prepay the Loans
by an amount equal to the Net Cash Proceeds of such Asset
Sale, and the Commitments shall be permanently reduced in an
amount equal to such excess, provided that it is acknowledged
that Cash Proceeds from any sale of assets excluded from the
definition of Asset Sale as described in clause (B) of the
definition of Asset Sale shall not be required to prepay the
Loans except to the extent described in such clause (B).
Concurrently with any prepayment of the Loans and/or reduction
of the Commitments pursuant to this subsection 2.4B(iii)(b),
Company shall deliver to Lenders an Officers' Certificate
demonstrating the derivation of the Net Cash Proceeds of the
correlative Asset Sale from the gross sales price thereof. In
the event that Company shall, at any time after receipt of Net
Cash Proceeds of any Asset Sale requiring a prepayment or a
reduction of the Commitments pursuant to this subsection
2.4B(iii)(b), determine that the prepayments and/or reductions
of the Commitments previously made in respect of such Asset
Sale were in an aggregate amount less than that required by
the terms of this subsection 2.4B(iii)(b), Company shall
promptly make an additional prepayment of the Loans (and the
Commitments shall be permanently reduced), in the manner
described above in an amount equal to the amount of any such
deficit, and Company shall concurrently therewith deliver to
Lenders an Officers' Certificate demonstrating the derivation
of the additional Net Cash Proceeds resulting in such deficit.
(c) Prepayments and Reductions Due to Issuance of
Equity Securities. On the date of receipt by Company or any of
its Subsidiaries of any Equity Proceeds Company shall prepay
the Loans in an amount equal to 50% of such Equity Proceeds.
(d) [Reserved].
(e) Prepayments and Reductions Due to Reversion of
Surplus Assets of Pension Plans. On the date of return to
Company or any of its Subsidiaries of any surplus assets of
any pension plan of Company or any of its Subsidiaries,
Company shall prepay the Loans in an amount (the "Net
Reversion Amount") equal to 100% of such returned surplus
assets, net of transaction costs and expenses incurred in
obtaining such return, including incremental taxes payable as
a result thereof.
(f) Prepayments and Reductions Due to Insurance and
Condemnation Proceeds. Other than the portion of Insurance
Proceeds (as defined below) or Condemnation Proceeds (as
defined below), as the case may be, that Company intends to
reinvest in assets of the general type used
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in the business of Company and its Subsidiaries within twelve
months from the date of receipt of such proceeds, no later
than the second Business Day following the date of receipt by
Company or any of its Subsidiaries of any cash payments under
any of the casualty insurance policies covering damage to or
loss of property maintained pursuant to subsection 5.4
resulting from damage to or loss of all or any portion of the
Collateral or any other tangible asset (net of actual and
documented reasonable costs incurred by Company in connection
with adjustment and settlement thereof, "Insurance Proceeds")
or any proceeds resulting from the taking of assets by the
power of eminent domain, condemnation or otherwise (net of
actual and documented reasonable costs incurred by Company in
connection with adjustment and settlement thereof,
"Condemnation Proceeds") Company shall prepay the Loans in an
amount equal to such proceeds and the Commitments shall be
permanently reduced in an amount equal to such excess. Company
shall, no later than twelve months after receipt of any such
Insurance Proceeds or Condemnation Proceeds that have not
theretofore been applied to the Obligations, make an
additional prepayment of the Loans, (and the Commitments shall
be permanently reduced), in the manner described above, in the
full amount of all such proceeds that have not then been
reinvested in similar assets; provided, however, that no
prepayment from Insurance Proceeds will be required pursuant
to this subsection 2.4B(iii)(f) with respect to business
interruption insurance; and provided, further, that without
prejudice to any other right or remedy of Lenders under this
Agreement and the other Loan Documents, with respect to any
key-man life insurance on ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ maintained by
Company, the prepayment pursuant to this subsection 2.4B(iii)
will be required only if a Change in Control described in
subsection 7. 11 shall have occurred. Any prepayment out of
such key-man life insurance proceeds shall be made on the
later of such Change in Control and 18 months after the
receipt by Company of such proceeds and shall be made in an
amount of such proceeds net of actual and documented
reasonable costs incurred by Company in connection with an
executive search and/or compensation or incentive arrangements
for management assistance following the event giving rise to
the payment of such proceeds.
C. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) Manner and Time of Payment. All payments by Company of
principal, interest, fees and other Obligations hereunder and under the
Notes shall be made in Dollars in same day funds, without defense,
setoff or counterclaim, free of any restriction or condition, and
delivered to Lenders not later than 12:00 Noon (New York City time)
(or, in the case of payments being made from the proceeds of Loans,
1:30 P.M. (New York City time)) on the date due at the
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Funding and Payment Office for the account of Lenders; funds received
by Lenders after that time on such due date shall be deemed to have
been paid by Company on the next succeeding Business Day.
(ii) Application of Payments to Principal and Interest. All
payments in respect of the principal amount of any Loan shall include
payment of accrued interest on the principal amount being repaid or
prepaid, and all such payments shall be applied to the payment of
interest before application to principal.
(iii) Apportionment of Payments. Aggregate principal and
interest payments in respect of Loans shall be apportioned among all
outstanding Loans to which such payments relate, in each case
proportionately to Lenders' respective Pro Rata Shares.
(iv) Payments on Business Days. Whenever any payment to be
made hereunder shall be stated to be due on a day that is not a
Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder.
(v) Notation of Payment. Each Lender agrees that before
disposing of any Note held by it, or any part thereof (other than by
granting participations therein), that Lender will make a notation
thereon of all Loans evidenced by that Note and all principal payments
previously made thereon and of the date to which interest thereon has
been paid; provided that the failure to make (or any error in the
making of) a notation of any Loan made under such Note shall not limit
or otherwise affect the obligations of Company hereunder or under such
Note with respect to any Loan or any payments of principal or interest
on such Note.
2.5 USE OF PROCEEDS.
A. LOANS. The proceeds of Loans may only be applied: (i) to refinance
amounts outstanding on the Closing Date under Company's existing line of credit;
(ii) to pay interest on the Company's Unsecured Senior Notes which was due on
February 15, 2001 and to pay future installments of interest on the Unsecured
Senior Notes when due and payable; (iii) to purchase certain of Company's
outstanding indebtedness as set forth on Schedule 2.5 hereto; (iv) to pay fees
and expenses related to the foregoing transactions; (v) to finance capital
improvements; (vi) to make acquisitions and (vii) for general partnership
purposes.
B. MARGIN REGULATIONS. No portion of the proceeds of any borrowing
under this Agreement shall be used by Company or any of its Subsidiaries in any
manner that might cause the borrowing or the application of such proceeds to
violate Regulation U, Regulation T or Regulation X of the Board of Governors of
the Federal Reserve
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System or any other regulation of such Board or to violate the Exchange Act, in
each case as in effect on the date or dates of such borrowing and such use of
proceeds.
2.6 TAXES.
A. COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the
provisions of subsection 2.6B, in the event that any Lender shall determine
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto) that any law, treaty or governmental rule,
regulation or order, or any change therein or in the interpretation,
administration or application thereof (including the introduction of any new
law, treaty or governmental rule, regulation or order), or any determination of
a court or governmental authority, in each case that becomes effective after the
date hereof, or compliance by such Lender with any guideline, request or
directive issued or made after the date hereof by any central bank or other
governmental or quasi-governmental authority (whether or not having the force of
law):
(i) subjects such Lender (or its applicable lending office) to
any additional Tax (other than any Tax on the overall net income of
such Lender) with respect to this Agreement or any of its obligations
hereunder or any payments to such Lender (or its applicable lending
office) of principal, interest, fees or any other amount payable
hereunder;
(ii) imposes, modifies or holds applicable any reserve
(including without limitation any marginal, emergency, supplemental,
special or other reserve), special deposit, compulsory loan, FDIC
insurance or similar requirement against assets held by, or deposits or
other liabilities in or for the account of, or advances or loans by, or
other credit extended by, or any other acquisition of funds by, any
office of such Lender; or
(iii) imposes any other condition (other than with respect to
a Tax matter) on or affecting such Lender (or its applicable lending
office) or its obligations hereunder;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto; then, in any such case, Company shall promptly pay to such
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to Company a written statement, setting
forth in reasonable detail the basis for calculating the additional amounts owed
to such Lender
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under this subsection 2.6A, which statement shall be conclusive and binding upon
all parties hereto absent manifest error.
B. WITHHOLDING.
(i) Payments to Be Free and Clear. All sums payable by Company
under this Agreement and the other Loan Documents shall be paid free
and clear of and (except to the extent required by law) without any
deduction or withholding on account of any Tax (other than a Tax on the
overall net income of any Lender) imposed, levied, collected, withheld
or assessed by or within the United States of America or any political
subdivision in or of the United States of America or any other
jurisdiction from or to which a payment is made by or on behalf of
Company or by any federation or organization of which the United States
of America or any such jurisdiction is a member at the time of payment.
(ii) Grossing-up of Payments. If Company or any other Person
is required by law to make any deduction or withholding on account of
any such Tax from any sum paid or payable by Company to any Lender
under any of the Loan Documents:
(a) Company shall notify the Lenders of any such
requirement or any change in any such requirement as soon as
Company becomes aware of it;
(b) Company shall pay any such Tax before the date on
which penalties attach thereto, such payment to be made (if
the liability to pay is imposed on Company) for its own
account or (if that liability is imposed on such Lender) on
behalf of and in the name of such Lender;
(c) the sum payable by Company in respect of which
the relevant deduction, withholding or payment is required
shall be increased to the extent necessary to ensure that,
after the making of that deduction, withholding or payment,
such Lender receives on the due date a net sum equal to what
it would have received had no such deduction, withholding or
payment been required or made; and
(d) within 30 days after paying any sum from which it
is required by law to make any deduction or withholding, and
within 30 days after the due date of payment of any Tax which
it is required by clause (b) above to pay, Company shall
deliver to the Lenders evidence satisfactory to the other
affected parties of such deduction, withholding or payment and
of the remittance thereof to the relevant taxing or other
authority;
(iii) Evidence of Exemption from U.S. Withholding Tax.
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(a) Each Lender that is organized under the laws of
any jurisdiction other than the United States or any state or
other political subdivision thereof (for purposes of this
subsection 2.6B(iii), a "Non-US Lender") shall deliver to
Company, on or prior to the Closing Date (in the case of each
Lender listed on the signature pages hereof) or on the date of
the Assignment Agreement pursuant to which it becomes a Lender
(in the case of each other Lender), and at such other times as
may be necessary in the determination of Company, (1) two
original copies of Internal Revenue Service Form 1001 or 4224
(or any successor forms), properly completed and duty executed
by such Lender, together with any other certificate or
statement of exemption required under the Internal Revenue
Code or the regulations issued thereunder to establish that
such Lender is not subject to deduction or withholding of
United States federal income tax with respect to any payments
to such Lender of principal, interest, fees or other amounts
payable under any of the Loan Documents or (2) if such Lender
is not a "bank" or other Person described in Section 881(c)(3)
of the Internal Revenue Code and cannot deliver either
Internal Revenue Service Form 1001 or 4224 pursuant to clause
(1) above, a Certificate re Non-Bank Status together with two
original copies of Internal Revenue Service Form W-8 (or any
successor form), properly completed and duly executed by such
Lender, together with any other certificate or statement of
exemption required under the Internal Revenue Code or the
regulations issued thereunder to establish that such Lender is
not subject to deduction or withholding of United States
federal income tax with respect to any payments to such Lender
of interest payable under any of the Loan Documents.
(b) Each Lender required to deliver any forms,
certificates or other evidence with respect to United States
federal income tax withholding matters pursuant to subsection
2.6B(iii)(a) hereby agrees, from time to time after the
initial delivery by such Lender of such forms, certificates or
other evidence, whenever a lapse in time or change in
circumstances renders such forms, certificates or other
evidence obsolete or inaccurate in any material respect, such
Lender shall (1) deliver to Company two new original copies of
Internal Revenue Service Form 1001 or 4224, or a Certificate
re Non-Bank Status and two original copies of Internal Revenue
Service Form W-8, as the case may be, properly completed and
duly executed by such Lender, together with any other
certificate or statement of exemption required in order to
confirm or establish that such Lender is not subject to
deduction or withholding of United States federal income tax
with respect to payments to such Lender under the Loan
Documents or (2) immediately notify Company of its inability
to deliver any such forms, certificates or other evidence
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(c) Company shall not be required to pay any
additional amount to any Non-US Lender under clause (c) of
subsection 2.6B(ii) if such Lender shall have failed to
satisfy the requirements of subsection 2.6B(iii)(a); provided
that if such Lender shall have satisfied such requirements on
the Closing Date (in the case of each Lender listed on the
signature pages hereof) or on the date of the Assignment
Agreement pursuant to which it became a Lender (in the case of
each other Lender), nothing in this subsection 2.6B(iii)(c)
shall relieve Company of its obligation to pay any additional
amounts pursuant to clause (c) of subsection 2.6B(ii) in the
event that, as a result of any change in any applicable law,
treaty or governmental rule, regulation or order, or any
change in the interpretation, administration or application
thereof, such Lender is no longer properly entitled to deliver
forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender is not subject to
withholding as described in subsection 2.6B(iii)(a).
C. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have determined
that the adoption, effectiveness, phase-in or applicability after the date
hereof of any law, rule or regulation (or any provision thereof) regarding
capital adequacy, or any change therein or in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its applicable lending office) with any guideline, request or
directive regarding capital adequacy (whether or not having the force of law) of
any such governmental authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender as a consequence of, or with reference
to, such Lender's Loans or Commitments or other obligations hereunder with
respect to the Loans to a level below that which such Lender or such controlling
corporation could have achieved but for such adoption, effectiveness, phase-in,
applicability, change or compliance (taking into consideration the policies of
such Lender or such controlling corporation with regard to capital adequacy),
then from time to time, within five Business Days after receipt by Company from
such Lender of the statement referred to in the next sentence, Company shall pay
to such Lender such additional amount or amounts as will compensate such Lender
or such controlling corporation on an after-tax basis for such reduction. Such
Lender shall deliver to Company a written statement, setting forth in reasonable
detail the basis of the calculation of such additional amounts, which statement
shall be conclusive and binding upon all parties hereto absent manifest error.
D. SUBSTITUTE LENDERS. In the event Company is required under the
provisions of this subsection 2.6 to make payments in a material amount to any
Lender, Company may, so long as no Event of Default or Potential Event of
Default shall have occurred and be continuing, elect to terminate such Lender as
a party to this Agreement; provided that, concurrently with such termination,
(i) Company shall pay that Lender all
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principal, interest and fees and other amounts (including without limitation,
amounts, if any, owed under this subsection 2.6) owed to such Lender through
such date of termination, (ii) another financial institution satisfactory to
Company and the other Lenders shall agree, as of such date, to become a Lender
for all purposes under this Agreement (whether by assignment or amendment) and
to assume all obligations of the Lender to be terminated as of such date, and
(iii) all documents and supporting materials necessary, in the judgment of
Company and the other Lenders to evidence the substitution of such Lender shall
have been received and approved by each of the other Lenders and Company (which
approval shall not be unreasonably withheld) as of such date.
2.7 OBLIGATION OF LENDERS TO MITIGATE.
Each Lender agrees that, as promptly as practicable after any one or
more of the officers of such Lender responsible for administering the Loans of
such Lender becomes aware of the occurrence of an event or the existence of a
condition that would entitle such Lender to receive payments under subsection
2.6, it will, to the extent not inconsistent with the internal policies of such
Lender and any applicable legal or regulatory restrictions, use reasonable
efforts (i) to make, fund or maintain the Commitments of such Lender or the
affected Loans of such Lender through another lending office of such Lender, or
(ii) take such other measures as such Lender may deem reasonable, if as a result
thereof the circumstances which would cause such Lender to be an Affected Lender
would cease to exist or the additional amounts which would otherwise be required
to be paid to such Lender pursuant to subsection 2.6 would be materially reduced
and if, as determined by such Lender in its sole discretion, the making, funding
or maintaining of such Commitments or Loans through such other lending office or
in accordance with such other measures, as the case may be, would not otherwise
materially adversely affect such Commitments or Loans or the interests of such
Lender; provided that such Lender will not be obligated to utilize such other
lending office pursuant to this subsection 2.6 unless Company agrees to pay all
incremental expenses incurred by such Lender as a result of utilizing such other
lending office as described in clause (i) above. A certificate as to the amount
of any such expenses payable by Company pursuant to this subsection 2.6 (setting
forth in reasonable detail the basis for requesting such amount) submitted by
such Lender to Company shall be conclusive absent manifest error.
SECTION 3
CONDITIONS TO LOANS
The obligations of Lenders to make Loans hereunder are subject to the
satisfaction of the following conditions.
3.1 CONDITIONS TO INITIAL LOAN. The obligations of Lenders to make any
Loans pursuant to the initial Commitment are, in addition to the conditions
precedent
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specified in subsection 3.2, subject to prior or concurrent satisfaction of the
following conditions:
A. COMPANY DOCUMENTS. On or before the Closing Date, Company shall
deliver or cause to be delivered to Lenders the following, each, unless
otherwise noted, dated the Closing Date:
(i) Certified copies of its Partnership Agreement, together
with a good standing certificate from the Secretary of State of the
State of Delaware, Oklahoma, Texas, Georgia, Louisiana, Colorado,
Wyoming, Tennessee, Alabama, Florida and Michigan and each other state
in which it is qualified as a foreign partnership to do business and,
to the extent generally available, a certificate or other evidence of
good standing as to payment of any applicable franchise or similar
taxes from the appropriate taxing authority of each of such states,
each dated a recent date prior to the Closing Date;
(ii) A certified copy of the General Partnership Agreement;
(iii) A certified copy of the articles of incorporation and
by-laws of Jamesco and DKSH;
(iv) Resolutions of the Board of Directors of Jamesco in its
capacity as general partner of the General Partner and resolutions of
the partners of the General Partner and each Guarantor, in each case
approving and authorizing the execution, delivery and performance of
this Agreement and the other Loan Documents, certified as of the
Closing Date by the corporate secretary or an assistant secretary of
Jamesco and each Guarantor as being in full force and effect without
modification or amendment;
(v) Signature and incumbency certificates of the officers
executing this Agreement and the other Loan Documents;
(vi) Executed originals of this Agreement, the Notes (duly
executed in accordance with subsection 2.1D, drawn to the order of
Lenders and with appropriate insertions) and the other Loan Documents;
and
(vii) Such other documents as Lenders may reasonably request
and that are reasonably available to Company.
B. CAPITALIZATION. (i) Lenders shall be satisfied with the capital,
organization, ownership and management structure of Company and its Subsidiaries
and with the form and substance of the Partnership Agreement, including, without
limitation, amendments thereto consented to by the limited partners of Company,
and (ii) Lenders shall have received evidence satisfactory to it that all
Indebtedness and other obligations described on Schedule 3.1B are being paid in
full on the Closing Date and received
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satisfactory pay off letters and assignments from any lenders party to the
Original Credit Agreement.
C. PERFECTION OF SECURITY INTERESTS. Company shall have taken or caused
to be taken such actions in such a manner so that Lenders have a valid and
perfected first priority security interest in the entire Collateral with respect
to which a security interest can be perfected by the filing of UCC financing
statements (other than real estate and motor vehicles) (subject to Liens
consented to in writing by Requisite Lenders with respect to such Collateral and
other Liens permitted by subsection 6.2) granted by the Collateral Documents.
Such actions shall include, without limitation: (i) the delivery to Lenders of
UCC financing statements, executed by the applicable Loan Parties as to the
Collateral granted by such Loan Parties for all jurisdictions as may be
necessary or desirable to perfect Lenders' security interest in such Collateral;
(ii) evidence reasonably satisfactory to Lenders that all other filings
(including, without limitation, UCC termination statements), recordings and
other actions Lenders deems necessary or advisable to establish, preserve and
perfect the first priority Liens (subject to Liens permitted by subsection 6.2
with respect to such Collateral) granted to Lenders in personal and mixed
property shall have been made and (iii) delivery of certified copies of Requests
for Information (Form UCC-11), tax lien, judgment lien, bankruptcy and pending
lawsuit searches or equivalent reports or lien search reports, each of a recent
date listing all effective financing statements, lien notices or comparable
documents that name any Loan Party as debtor and that are filed in those state
and county jurisdictions in which any of the property of any Loan Party is
located, the state and county jurisdictions in which any Loan Party's principal
place of business is located, and the state and county jurisdictions in which
any Loan Party is organized or resides or has a place of business, none of which
encumber the Collateral covered or intended to be covered by the Loan Documents.
D. FINANCIAL CONDITION CERTIFICATE. Company shall have delivered to
Lenders a Financial Condition Certificate dated the Closing Date, substantially
in the form annexed hereto as Exhibit 8, with appropriate attachments
demonstrating that, after giving effect to the consummation of the financing
transactions contemplated hereby, Company and its Subsidiaries, taken as a
whole, are Solvent.
E. OPINIONS OF COMPANY'S COUNSEL. Lenders and their counsel shall have
received originally executed copies of one or more favorable written opinions of
Miller, Canfield, Paddock and Stone, P.L.C., counsel for Company, in the form of
Exhibit 9-A and ▇▇▇▇, Raywid & ▇▇▇▇▇▇▇▇▇, in the form of Exhibit 9-B.
F. [Reserved].
G. FEES. Company shall have paid to Lenders the fees payable on the
Closing Date referred to in subsection 2.3.
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H. PRO FORMA BALANCE SHEETS; FINANCIAL STATEMENTS. On or before the
Closing Date, Lenders shall have received from Company (i) unaudited pro forma
consolidated and consolidating balance sheets of Company and its Subsidiaries as
at the Closing Date, prepared in accordance with GAAP (including an estimated
pro forma opening balance sheet), reflecting the forecasted financial condition,
income and expenses of Company (including tax assumptions) after giving effect
to the transactions contemplated hereby and by the other Loan Documents, which
pro forma financial statements shall be in form and substance satisfactory to
Lenders and (ii) the unaudited annual and quarterly balance sheets of the
Company as at December 31, 2000 and. the related consolidated and consolidating
statements of operations, partners' equity and cash flows of Company for the
three month and twelve month periods ending on such date, all in reasonable
detail and certified by the chief financial officer of Company that they fairly
present the financial condition of Company as at the dates indicated and the
results of their operations and their cash flows for the periods indicated,
subject to changes resulting from normal year-end adjustments, which financial
statements demonstrate to Lenders' satisfaction that no material adverse change
in the condition (financial or otherwise), results of operations, assets,
liabilities or prospects of the Business has occurred relative to the
information previously disclosed to Lenders.
I. EVIDENCE OF INSURANCE. Company shall have delivered to Lenders
certificates of insurance naming Lenders as loss payee under the casualty
insurance policies and as additional insured under the liability and business
interruption policies, all as required pursuant to subsection 5.4 hereof or
pursuant to the Collateral Documents. All such certificates of insurance shall
contain such endorsements as are reasonably required by Lenders.
J. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS. Company
shall have delivered to Lenders an Officers' Certificate, in form and substance
satisfactory to Lenders, to the effect that the representations and warranties
in Section 4 hereof are true, correct and complete in all material respects on
and as of the Closing Date to the same extent as though made on and as of that
date and that Company shall have performed in all material respects agreements
and satisfied all conditions which this Agreement provides shall be performed or
satisfied by it on or before the Closing Date except as otherwise disclosed to
and agreed to in writing by Requisite Lenders.
K. DELIVERY OF COMPLIANCE CERTIFICATE. Company shall have delivered to
Lenders a Compliance Certificate substantially in the form of Exhibit 3 annexed
hereto, dated as of the Closing Date, and calculated to give effect to the
initial funding under this Agreement, demonstrating compliance with the
covenants set forth in this Agreement.
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L. FRANCHISES. Lenders shall have had an opportunity to review all of
the Franchises which shall be in full force and effect and shall be reasonably
satisfactory to Lenders.
M. COMPLETION OF PROCEEDINGS. All corporate, partnership and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Requisite Lenders shall be satisfactory in form and substance to
Lenders, and Lenders shall have received all such counterpart originals or
certified copies of such documents as Lenders may reasonably request.
3.2 CONDITIONS TO ALL LOANS.
The obligations of Lenders to make Loans on each Funding Date are
subject to the following further conditions precedent:
A. Lenders shall have received before that Funding Date, in accordance
with the provisions of subsection 2.1B, an originally executed Notice of
Borrowing, in each case signed by the chief executive officer, the chief
financial officer or the treasurer of Company or by any executive officer of
Company designated by any of the above-described officers on behalf of Company
in a writing delivered to Lenders.
B. As of that Funding Date:
(i) The representations and warranties contained in Section 4
and in the other Loan Documents shall be true, correct and complete in
all material respects on and as of that Funding Date to the same extent
as though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date,
in which case such representations and warranties shall have been true,
correct and complete in all material respects on and as of such earlier
date;
(ii) No event shall have occurred and be continuing or would
result from the consummation of the borrowing contemplated by such
Notice of Borrowing that would constitute an Event of Default or a
Potential Event of Default;
(iii) Company shall have performed in all material respects
all agreements and satisfied all conditions which this Agreement
provides shall be performed or satisfied by it on or before that
Funding Date;
(iv) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain Lenders from
making the Loans to be made by it on that Funding Date;
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(v) The making of the Loans requested on such Funding Date
shall not violate any law including, without limitation, Regulation T,
Regulation U or Regulation X of the Board of Governors of the Federal
Reserve System; and
(vi) There shall not be pending or, to the knowledge of
Company, threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting Company or any of its
Subsidiaries or any property of Company or any of its Subsidiaries that
has not been disclosed by Company in writing pursuant to subsection 4.6
or 5.1(ix) prior to the making of the last preceding Loans (or, in the
case of the initial Loans, prior to the execution of this Agreement),
and there shall have occurred no development not so disclosed in any
such action, suit, proceeding, governmental investigation or
arbitration so disclosed, that, in either event, in the opinion of
Requisite Lenders, would be expected to have a Material Adverse Effect;
and no injunction or other restraining order shall have been issued and
no hearing to cause an injunction or other restraining order to be
issued shall be pending or noticed with respect to any action, suit or
proceeding seeking to enjoin or otherwise prevent the consummation of,
or to recover any damages or obtain relief as a result of, the
transactions contemplated by this Agreement or the making of Loans
hereunder.
(vii) Company shall have taken or caused to be taken such
actions in such a manner so that Lenders have a valid and perfected
first priority security interest in the entire Collateral with respect
to which a security interest can be perfected by the filing of UCC
financing statements.
(viii) Lenders shall have received an Officers' Certificate of
Company, dated the Funding Date confirming compliance with the
conditions precedent set forth in this Section 3 with respect to the
Loan to be made on such date.
SECTION 4
COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make the
Loans hereunder Company represents and warrants to Lenders, on the date of this
Agreement and on each Funding Date that the following statements are true,
correct and complete:
4.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
SUBSIDIARIES.
A. ORGANIZATION AND POWERS. Company is a limited partnership duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Company has all requisite partnership power and authority to own and
operate its properties, to carry on its business as now conducted and as
proposed to be conducted, to enter into the Loan Documents and to carry out the
transactions contemplated thereby.
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B. QUALIFICATION AND GOOD STANDING. Company is qualified to do business
and in good standing in every jurisdiction where its assets are located and
wherever necessary to carry out its business and operations, except in
jurisdictions where the failure to be so qualified or in good standing has not
had and will not have a Material Adverse Effect.
C. CONDUCT OF BUSINESS. Company and its Subsidiaries are engaged only
in the businesses permitted to be engaged in pursuant to subsection 6.11.
D. SUBSIDIARIES. All of the Subsidiaries of Company as of the Closing
Date are identified in Schedule 4.1 annexed hereto. The capital stock or
partnership interests of each of the Subsidiaries of Company identified in
Schedule 4.1 annexed hereto is duly authorized and validly issued and none of
such capital stock or partnership interests constitutes Margin Stock. Each of
the Subsidiaries of Company identified in Schedule 4.1 annexed hereto is a
corporation or partnership duly organized, validly existing and in good standing
under the laws of its respective jurisdiction of incorporation set forth
therein, has all requisite corporate or partnership, as the case may be, power
and authority to own and operate its properties and to carry on its business as
now conducted and as proposed to be conducted, and is qualified to do business
and in good standing in every jurisdiction where its assets are located and
wherever necessary to carry out its business and operations, in each case except
where failure to be so qualified or in good standing or a lack of such corporate
or partnership power and authority has not had and will not have a Material
Adverse Effect. Schedule 4.1 annexed hereto correctly sets forth the ownership
interest of Company and each of its Subsidiaries in each of the Subsidiaries of
Company identified therein.
E. COLLATERAL DOCUMENTS. The security interests created in favor of
Lenders under the Collateral Documents will at all times from and after the
Closing Date constitute, as security for the obligations purported to be secured
thereby, a legal, valid and enforceable security interest in and Lien on all of
the Collateral referred to therein in favor of Lenders, perfected (by the filing
of UCC financing statements or as otherwise required by the Collateral
Documents) and prior to the rights of all third persons in accordance with the
requirements of all applicable Collateral Documents, subject only to Liens
permitted by subsection 6.2. Each Loan Party has good and marketable title to
its respective Collateral, and all such Collateral is free and clear of all
Liens except for Liens permitted by subsection 6.2. No consents, filings or
recordings are required in order to perfect or maintain the perfection or
priority of (by the filing of UCC financing statements or as otherwise required
by the Collateral Documents) the security interests purported to be created by
any of the Collateral Documents, other than such as have been obtained and which
remain in full force and effect and UCC financing statements to be filed, or
delivered to Lenders for filing, on the Closing Date and periodic UCC
continuation filings or as is specifically otherwise permitted by the terms of
any applicable Collateral Document.
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F. PARTNERS. Set forth on Schedule 4.1 annexed hereto is a true,
correct and complete list of each person holding any partnership interest or any
right to obtain a partnership or other equity interest in Company as of the
Closing Date and a description of such interest.
4.2 AUTHORIZATION OF BORROWING, ETC.
A. AUTHORIZATION OF BORROWING. The execution, delivery and performance
of the Loan Documents have been duly authorized by all necessary corporate or
partnership, as the case may be, action on the part of each Loan Party.
B. NO CONFLICT. The execution, delivery and performance by the Loan
Parties of the Loan Documents and the consummation of the transactions
contemplated by the Loan Documents do not and will not (i) violate any provision
of any law or any governmental rule or regulation applicable to Company or any
of its Subsidiaries, the Partnership Agreement, the General Partnership
Agreement, the Certificate or Articles of Incorporation or Bylaws of any
Subsidiary of Company or any order, judgment or decree of any court or other
agency of government binding on Company or any of its Subsidiaries, (ii)
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any Contractual Obligation of Company or any of
its Subsidiaries, (iii) result in or require the creation or imposition of any
Lien upon any of the properties or assets of Company or any of its Subsidiaries
(other than any Liens created under any of the Loan Documents in favor of
Lenders), or (iv) require any approval of stockholders or partners or any
approval or consent of any Person under any Contractual Obligation of Company or
any of its Subsidiaries, except for such approvals or consents which will be
obtained on or before the Closing Date and disclosed in writing to Lenders.
C. GOVERNMENTAL CONSENTS. Except as set forth on Schedule 4.2, the
execution, delivery and performance by the Loan Parties of the Loan Documents
and the consummation of the transactions contemplated by the Loan Documents do
not and will not require any registration with, consent or approval of, or
notice to, or other action to, with or by, any federal, state or other
governmental authority or regulatory body, other than the filing of UCC
financing statements which are being filed on or about the Closing Date.
D. BINDING OBLIGATION. Each of the Loan Documents has been duly
executed and delivered by each of the Loan Parties party thereto and is the
legally valid and binding obligation of each such Loan Party, enforceable
against such Loan Party in accordance with its respective terms, except as may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability.
4.3 FINANCIAL CONDITION; FINANCIAL STATEMENTS.
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Company has heretofore delivered to Lenders, at Lenders' request, the
following financial statements and information: (i) the audited consolidated
balance sheet of Company and its Subsidiaries as at December 31, 1999 and the
related consolidated statements of income, partners' equity and cash flows of
Company and its Subsidiaries for the Fiscal Year then ended and (ii) the
unaudited consolidated balance sheet of Company and its Subsidiaries as at
December 31, 2000 and the related unaudited consolidated statements of income,
partners' equity and cash flows of Company and its Subsidiaries for the three
months and twelve months then ended. All such statements were prepared in
conformity with GAAP and fairly present the financial position (on a
consolidated basis) of the entities described in such financial statements as at
the respective dates thereof and the results of operations and cash flows (on a
consolidated basis) of the entities described therein for each of the periods
then ended, subject, in the case of any such unaudited financial statements, to
changes resulting from audit and normal year-end adjustments. Company does not
(and (other than the initial Loans) will not following the funding of the
initial Loans) have any liabilities (other than the initial Loans), whether a
Contingent Obligation, contingent liability or liability for taxes, long-term
lease or unusual forward or long-term commitment that is not reflected in the
foregoing financial statements or the notes thereto and which in any such case
could reasonably be expected to result in a Material Adverse Effect.
4.4 NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR PAYMENTS.
Since December 31, 1999, no event or circumstance has occurred that has
caused or evidences, either in any case or in the aggregate, a Material Adverse
Effect. Neither Company nor any of its Subsidiaries has directly or indirectly
declared, ordered, paid or made, or set apart any sum or property for, any
Restricted Junior Payment or agreed to do so except as permitted by subsection
6.5.
4.5 TITLE TO PROPERTIES; LIENS.
Company and its Subsidiaries have (i) good, sufficient and legal title
to (in the case of fee interests in real property), (ii) valid leasehold
interests in (in the case of leasehold interests in real or personal property),
or (iii) good title to (in the case of all other personal property), all of the
material properties and assets reflected in the financial statements referred to
in subsection 4.3 or in the most recent financial statements delivered pursuant
to subsection 5.1, in each case except for assets disposed of since the date of
such financial statements in the ordinary course of business or as otherwise
permitted under subsection 6.7. Except as permitted by subsection 6.2, all such
properties and assets are free and clear of Liens. Schedule 4.5 annexed hereto
correctly sets forth (i) each of the parcels of real property owned by the
Company and the Company's estimate of the value of each such parcel and (ii)
each lease to which the Company is a party and the payments required under such
lease. Each Lease is valid and in full force and effect and Company is not in
default under any such Lease and, to the knowledge of
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Company, the other party or parties thereto are not in default of its or their
obligations thereunder except for defaults which, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect. Company is in possession of all the material real property described in
Schedule 4.5 annexed hereto except with respect to portions thereof subleased to
third parties in the ordinary course of business. The property of the Company,
taken as a whole, (i) is in good operating order, condition and repair (ordinary
wear and tear excepted) (except to the extent the failure to maintain such
condition could not reasonably be expected to result in a Material Adverse
Effect) and (ii) constitutes all the assets and properties which are required
for the business and operations of the Company as presently conducted. The
Company has not received any notice of, nor has any knowledge of, the occurrence
or pendency or contemplation of any theft, loss or damage (whether or not
covered by insurance) affecting all or any portion of the material property of
Company. Except as otherwise set forth in Schedule 4.5 annexed hereto, as of the
date of this Agreement the Company is not obligated under any right of first
refusal, option or other contractual right to sell, assign or otherwise dispose
of any of its material property or any interest therein.
4.6 LITIGATION; ADVERSE FACTS.
Except as set forth in Schedule 4.6 annexed hereto, there are no
actions, suits, proceedings, arbitrations or governmental investigations
(whether or not purportedly on behalf of Company or any of its Subsidiaries) at
law or in equity or before or by any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, pending or, to the knowledge of Company, threatened against
or affecting Company or any of its Subsidiaries or any property of Company or
any of its Subsidiaries that, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect. Except as set forth in
Schedule 4.6 annexed hereto, neither Company nor any of its Subsidiaries is (i)
in violation of any applicable laws that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect or (ii)
subject to or in default with respect to any final judgments, writs,
injunctions, decrees, rules or regulations of any court or any federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect.
4.7 PAYMENT OF TAXES.
Except to the extent permitted by subsection 5.3, all tax returns and
reports of Company and its Subsidiaries required to be filed by any of them have
been timely filed, and all taxes, assessments, fees and other governmental
charges upon Company and its Subsidiaries and upon their respective properties,
assets, income, businesses and franchises which are due and payable have been
paid when due and payable. Company does not know of any proposed tax assessment
against Company or any of its Subsidiaries which is not being actively contested
by Company or such Subsidiary in
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good faith and by appropriate proceedings; provided that such reserves or other
appropriate provisions, if any, as shall be required in conformity with GAAP
shall have been made or provided therefor.
4.8 PERFORMANCE OF AGREEMENTS; FRANCHISES.
A. Except where the consequences, direct or indirect, of such default
or defaults, if any, would not have a Material Adverse Effect, neither Company
nor any of its Subsidiaries is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
of its Contractual Obligations, and no condition exists that, with the giving of
notice or the lapse of time or both, would constitute such a default. Except as
set forth in Schedule 4.8 annexed hereto, Company is not in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in the Indenture.
B. Schedule 4.8 annexed hereto accurately and completely lists all
material authorizations, licenses, permits and Franchises granted or assigned to
Company by the FCC or any other public or governmental agency or regulatory
body, including all material authorizations, licenses, permits and Franchises
for the construction, installation or operation of cable television systems. The
same constitute the only material licenses, permits or Franchises or other
authorizations of any public or governmental agency or regulatory body required
or advisable in connection with the business of Company as conducted or proposed
to be conducted. All existing Franchises are in full force and effect, are duly
issued in the name of, or validly assigned to, Company and Company has full
power and authority to operate thereunder. Except as set forth in Schedule 4.8
annexed hereto, no cable television Franchise issued has a term which will
expire prior to March 2, 2004. Except as set forth in Schedule 4.8 annexed
hereto, each of the Franchises listed on Schedule 4.8 annexed hereto are
assignable to Lenders as collateral security for the Obligations. Schedule 4.8
also accurately and completely lists all material agreements, if any, which are
presently in effect for the use of public utility facilities in connection with
the cable systems operated by Company.
4.9 GOVERNMENTAL REGULATION.
Neither Company nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable.
4.10 SECURITIES ACTIVITIES.
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A. Neither Company nor any of its Subsidiaries is engaged principally,
or as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each Loan, not more than
twenty-five percent (25%) of the value of the assets (either of Company only or
of Company and its Subsidiaries on a consolidated basis) subject to the
provisions of subsection 6.2 or 6.7 or subject to any restriction contained in
any agreement or instrument, between any Loan Party, on the one had, and Lenders
or any Affiliate of Lenders, on the other hand, relating to Indebtedness and
within the scope of subsection 7.2, will be Margin Stock.
4.11 EMPLOYEE BENEFIT PLANS.
A. Company and each of its ERISA Affiliates are in compliance with all
applicable provisions and requirements of ERISA and the regulations and
published interpretations thereunder with respect to each Employee Benefit Plan,
and have performed all their obligations under each Employee Benefit Plan.
B. No ERISA Event has occurred or is reasonably expected to occur.
C. Except to the extent required under Section 4980B of the Internal
Revenue Code, no Employee Benefit Plan provides health or welfare benefits
(through the purchase of insurance or otherwise) for any retired or former
employees of Company or any of its ERISA Affiliates.
D. As of the most recent valuation date for any Pension Plan, there are
no unfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA) for
any Pension Plan (excluding for purposes of such computation any Pension Plans
with respect to which assets exceed benefit liabilities).
4.12 CERTAIN FEES.
No broker's or finder's fee or commission will be payable by Company
with respect to this Agreement or any of the transactions contemplated hereby,
and Company hereby indemnifies Lenders against, and agrees that it will hold
Lenders harmless from, any claim, demand or liability for any such broker's or
finder's fees alleged to have been incurred in connection herewith or therewith
and any expenses (including reasonable fees, expenses and disbursements of
counsel) arising in connection with any such claim, demand or liability.
4.13 ENVIRONMENTAL PROTECTION.
Except as set forth in Schedule 4.13 annexed hereto:
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(i) the operations of Company and each of its Subsidiaries
(including, without limitation, all operations and conditions at or in
the Facilities) comply in all material respects with all Environmental
Laws;
(ii) Company and each of its Subsidiaries have obtained all
Governmental Authorizations under Environmental Laws necessary to their
respective operations, and all such Governmental Authorizations are in
good standing, and Company and each of its Subsidiaries are in
compliance with all material terms and conditions of such Governmental
Authorizations;
(iii) neither Company nor any of its Subsidiaries has received
(a) any notice or claim to the effect that it is or may be liable to
any Person as a result of or in connection with any Hazardous Materials
or (b) any letter or request for information under Section 104 of the
Comprehensive Environmental Response, Compensation, and Liability Act
(42 U.S.C. Section 9604) or comparable state laws, and, to the best of
Company's knowledge, none of the operations of Company or any of its
Subsidiaries is the subject of any federal or state investigation
relating to or in connection with any Hazardous Materials at any
Facility or at any other location;
(iv) none of the operations of Company or any of its
Subsidiaries is subject to any judicial or administrative proceeding
alleging the violation of or liability under any Environmental Laws
which if adversely determined could reasonably be expected to have a
Material Adverse Effect;
(v) neither Company nor any of its Subsidiaries nor any of
their respective Facilities or operations are subject to any
outstanding written order or agreement with any governmental authority
or private party relating to (a) any Environmental Laws or (b) any
Environmental Claims;
(vi) neither Company nor any of its Subsidiaries has any
contingent liability in connection with any Release of any Hazardous
Materials by Company or any of its Subsidiaries;
(vii) neither Company nor any of its Subsidiaries nor, to the
best knowledge of Company, any predecessor of Company or any of its
Subsidiaries has filed any notice under any Environmental Law
indicating past or present treatment or Release of Hazardous Materials
at any Facility, and none of Company's or any of its Subsidiaries'
operations involves the generation, transportation, treatment, storage
or disposal of hazardous waste, as defined under 40 C.F.R. Parts
260-270 or any state equivalent;
(viii) no Hazardous Materials exist on, under or about any
Facility in a manner that has a reasonable possibility of giving rise
to an Environmental Claim
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having a Material Adverse Effect, and neither Company nor any of its
Subsidiaries has filed any notice or report of a Release of any
Hazardous Materials that has a reasonable possibility of giving rise to
an Environmental Claim having a Material Adverse Effect;
(ix) neither Company nor any of its Subsidiaries nor, to the
best knowledge of Company, any of their respective predecessors has
disposed of any Hazardous Materials in a manner that has a reasonable
possibility of giving rise to an Environmental Claim having a Material
Adverse Effect;
(x) no underground storage tanks or surface impoundments are
on or at any Facility; and
(xi) no Lien in favor of any Person relating to or in
connection with any Environmental Claim has been filed or has been
attached to any Facility.
4.14 EMPLOYEE MATTERS.
There is no strike or work stoppage in existence or threatened
involving Company or any of its Subsidiaries that could reasonably be expected
to have a Material Adverse Effect.
4.15 SOLVENCY.
Company and each of its Subsidiaries is and, upon the incurrence of any
Obligations by Company on any date on which this representation is made, will
be, Solvent.
4.16 DISCLOSURE.
To the best of the Company's knowledge after the exercise of reasonable
due diligence, no representation or warranty of Company or any Loan Party
contained in any Loan Document or in any other document, certificate or written
statement furnished to Lenders by or on behalf of Company or any Loan Party for
use in connection with the transactions contemplated by this Agreement contains
any untrue statement of a material fact or omits to state a material fact (known
to Company, in the case of any document not furnished by it) necessary in order
to make the statements contained herein or therein not misleading in light of
the circumstances in which the same were made. Any projections and pro forma
financial information contained in such materials are based upon good faith
estimates and assumptions believed by Company to be reasonable at the time made,
it being recognized by Lenders that such projections as to future events are not
to be viewed as facts and that actual results during the period or periods
covered by any such projections may differ from the projected results. There are
no facts known (or which should upon the reasonable exercise of diligence be
known) to Company (other than matters of a general economic nature) that,
individually or in the aggregate, could
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reasonably be expected in Company's reasonable judgment to result in a Material
Adverse Effect and that have not been disclosed herein or in such other
documents, certificates and statements furnished to Lenders for use in
connection with the transactions contemplated hereby.
SECTION 5
COMPANY'S AFFIRMATIVE COVENANTS
Company covenants and agrees that, so long as all or any portion of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations, unless Requisite Lenders shall otherwise give
prior written consent, Company shall perform, and shall cause each of its
Subsidiaries to perform, all covenants in this Section 5.
5.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
Company will maintain, and cause each of its Subsidiaries to maintain,
a system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. Company will deliver to Lenders:
(i) Monthly Reports: Upon request of Lenders, within 30 days
after the end of each of the first two months of each fiscal quarter,
the unaudited combined consolidated statements of income and cash flows
of Company for such month and for the then elapsed portion of the
Fiscal Year, in comparative form with the combined consolidated and the
consolidated statements of income and cash flows for the comparable
periods in the previous Fiscal Year.
(ii) Quarterly Financials: as soon as available and in any
event within 45 days after the end of each fiscal quarter of each
Fiscal Year, (a) the consolidated balance sheet of Company as at the
end of such fiscal quarter and the related consolidated statements of
income, partners' equity and cash flows of Company and statements of
income for each of its cable television systems for such fiscal quarter
and for the period from the beginning of the then current Fiscal Year
to the end of such fiscal quarter, setting forth in each case in
comparative form the corresponding figures for the corresponding
periods of the previous Fiscal Year and the corresponding figures from
the consolidated plan and financial forecast for the current Fiscal
Year delivered pursuant to subsection 5.1(xii), all in reasonable
detail and certified by the chief financial officer of Company that
they fairly present the financial condition of Company and each of its
cable television systems as at the dates indicated and the results of
their operations and their cash flows for the periods indicated,
subject to changes resulting from normal year-end adjustments, and (b)
a narrative report describing the operations of Company and any
material variances from the consolidated plan and financial forecast
for the
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current Fiscal Year for Company and each of its cable television
systems in the form prepared for presentation to senior management for
such fiscal quarter and for the period from the beginning of the then
current Fiscal Year to the end of such fiscal quarter;
(iii) Year-End Financials: as soon as available and in any
event within 90 days after the end of each Fiscal Year, (a) the
consolidated balance sheet of Company as at the end of such Fiscal Year
and the related consolidated statements of income, partners' equity and
cash flows of Company and statements of income for each of its cable
television systems for such Fiscal Year, setting forth in each case in
comparative form the corresponding figures for the previous Fiscal Year
and the corresponding figures from the consolidated plan and financial
forecast delivered pursuant to subsection 5.1(xii) for the Fiscal Year
covered by such financial statements, all in reasonable detail and
certified by the chief financial officer of Company that they fairly
present the financial condition of Company and each of its cable
television systems as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, (b) a
narrative report describing the operations of Company and each of its
cable television systems in the form prepared for presentation to
senior management for such Fiscal Year, and (c) in the case of such
consolidated financial statements, a report thereon of Deloitte &
Touche or other independent certified public accountants of recognized
national standing selected by Company and satisfactory to Lenders,
which report shall be unqualified, shall express no doubts about the
ability of Company and each of its cable television systems to continue
as a going concern, and shall state that such consolidated financial
statements fairly present the consolidated financial position of
Company and each of its cable television systems as at the dates
indicated and the results of their operations and their cash flows for
the periods indicated in conformity with GAAP applied on a basis
consistent with prior years (except as otherwise disclosed in such
financial statements) and that the examination by such accountants in
connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards;
(iv) Officers' and Compliance Certificates: together with each
delivery of financial statements of Company and its Subsidiaries
pursuant to subdivisions (ii) and (iii) above, (a) an Officers'
Certificate of Company stating that the signers have reviewed the terms
of this Agreement and have made, or caused to be made under their
supervision, a review in reasonable detail of the transactions and
condition of Company and its Subsidiaries during the accounting period
covered by such financial statements and that such review has not
disclosed the existence during or at the end of such accounting period,
and that the signers do not have knowledge of the existence as at the
date of such Officers' Certificate, of any condition or event that
constitutes an Event of Default or Potential Event of
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Default, or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action
Company has taken, is taking and proposes to take with respect thereto;
and (b) a Compliance Certificate demonstrating in reasonable detail
compliance during and at the end of the applicable accounting periods
with the restrictions contained in Section 6;
(v) Reconciliation Statements: if, as a result of any change
in accounting principles and policies from those used in the
preparation of the audited financial statements referred to in
subsection 4.3, the consolidated financial statements of Company and
its Subsidiaries delivered pursuant to subdivisions (i), (ii), (iii) or
(xii) of this subsection 5.1 will differ in any material respect from
the consolidated financial statements that would have been delivered
pursuant to such subdivisions had no such change in accounting
principles and policies been made, then (a) together with the first
delivery of financial statements pursuant to subdivision (i), (ii),
(iii) or (xii) of this subsection 5.1 following such change,
consolidated financial statements of Company and its Subsidiaries for
(y) the current Fiscal Year to the effective date of such change and
(z) the two full Fiscal Years immediately preceding the Fiscal Year in
which such change is made, in each case prepared on a pro forma basis
as if such change had been in effect during such periods, and (b)
together with each delivery of financial statements pursuant to
subdivision (i), (ii), (iii) or (xii) of this subsection 5.1 following
such change, a written statement of the chief accounting officer or
chief financial officer of Company setting forth the differences which
would have resulted if such financial statements had been prepared
without giving effect to such change;
(vi) Accountants' Reports: promptly upon receipt thereof
(unless restricted by applicable professional standards), copies of all
reports submitted to Company by independent certified public
accountants in connection with each annual, interim or special audit of
the financial statements of Company and its Subsidiaries made by such
accountants, including, without limitation, any comment letter
submitted by such accountants to management in connection with their
annual audit;
(vii) SEC Filings and Press Releases: promptly upon the
earlier of their filing with the SEC or their becoming publicly
available, copies of (a) all financial statements, reports, notices and
proxy statements sent or made available generally by Company to its
security holders, partners or Affiliates or by any Subsidiary of
Company to its security holders, partners or Affiliates, (b) all
regular and periodic reports and all registration statements (other
than on Form S-8 or a similar form) and prospectuses, if any, filed by
Company or any of its Subsidiaries with any securities exchange or with
the Securities and Exchange Commission or any governmental or private
regulatory authority, and (c) all press releases and other statements
made available generally by Company or any of its Subsidiaries to the
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public concerning material developments in the business of Company or
any of its Subsidiaries;
(viii) Events of Default, etc.: promptly upon any officer of
Company obtaining knowledge (a) of any condition or event that
constitutes an Event of Default or Potential Event of Default, or
becoming aware that Lenders have given any notice or taken any other
action with respect to a claimed Event of Default or Potential Event of
Default, (b) that any Person has given any notice to Company or any of
its Subsidiaries or taken any other action with respect to a claimed
default or event or condition of the type referred to in subsection
7.2, (c) of any condition or event that would be required to be
disclosed in a current report filed by Company with the Securities and
Exchange Commission on Form 8-K (Items 1, 2, 4, 5 and 6 of such Form as
in effect on the date hereof) if Company were required to file such
reports under the Exchange Act, or (d) of the occurrence of any event
or change that has caused or evidences, either in any case or in the
aggregate, a Material Adverse Effect, an Officers' Certificate
specifying the nature and period of existence of such condition, event
or change, or specifying the notice given or action taken by any such
Person and the nature of such claimed Event of Default, Potential Event
of Default, default, event or condition, and what action Company has
taken, is taking and proposes to take with respect thereto;
(ix) Litigation or Other Proceedings: (a) promptly upon any
officer of Company obtaining knowledge of (x) the institution of, or
non-frivolous threat of, any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration against or affecting Company or any of its Subsidiaries or
any property of Company or any of its Subsidiaries (collectively,
"Proceedings") not previously disclosed in writing by Company to
Lenders or (y) any material development in any Proceeding that, in any
case: (1) if reasonably expected to be adversely determined, has a
reasonable possibility of giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the consummation of, or to
recover any damages or obtain relief as a result of, the transactions
contemplated hereby; written notice thereof together with such other
information as may be reasonably available to Company to enable Lenders
and their counsel to evaluate such matters; and (b) within twenty days
after the end of each fiscal quarter of Company, a schedule of all
Proceedings involving an alleged liability of, or claims against or
affecting, Company or any of its Subsidiaries equal to or greater than
$1,000,000, and promptly after request by Lenders such other
information as may be reasonably requested by Lenders and their counsel
to enable Lenders to evaluate any of such Proceedings;
(x) ERISA Events: promptly upon becoming aware of the
occurrence of or forthcoming occurrence of any ERISA Event, a written
notice specifying the nature thereof, what action Company or any of its
ERISA Affiliates has taken, is
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taking or proposes to take with respect thereto and, when known, any
action taken or threatened by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto;
(xi) ERISA Notices: with reasonable promptness, copies of (a)
each Schedule B (Actuarial Information) to the annual report (Form 5500
Series) filed by Company or any of its ERISA Affiliates with the
Internal Revenue Service with respect to each Pension Plan; (b) all
notices received by Company or any of its ERISA Affiliates from a
Multiemployer Plan sponsor concerning an ERISA Event; and (c) such
other documents or governmental reports or filings relating to any
Employee Benefit Plan as Lenders shall reasonably request;
(xii) Financial Plans: upon request of Lenders, as soon as
practicable and in any event no later than January 31 of each Fiscal
Year, a consolidated plan and financial forecast for such Fiscal Year
and the next four succeeding Fiscal Years, including without limitation
(a) a forecasted consolidated balance sheet of Company and forecasted
consolidated statements of income of Company and each of its cable
television systems for each such Fiscal Year, together with pro forma
Compliance Certificate for each such Fiscal Year and an explanation of
the assumptions on which such forecasts are based, (b) forecasted
consolidated statements of income of Company and each of its cable
television systems for each month of the first such Fiscal Year,
together with an explanation of the assumptions on which such forecasts
are based, (c) the amount of forecasted unallocated overhead for each
such Fiscal Year, and (d) such other information and projections as
Lenders may reasonably request and that is reasonably available to
Company;
(xiii) Insurance: as soon as practicable and in any event by
the last day of each Fiscal Year, a report in form and substance
satisfactory to Lenders outlining all material insurance coverage
maintained as of the date of such report by Company and its
Subsidiaries and all material insurance coverage planned to be
maintained by Company and its Subsidiaries in the immediately
succeeding Fiscal Year;
(xiv) Environmental Audits and Reports: as soon as practicable
following receipt thereof, copies of all environmental audits and
reports, whether prepared by personnel of Company or any of its
Subsidiaries or by independent consultants, with respect to significant
environmental matters at any Facility or which relate to an
Environmental Claim which could result in a Material Adverse Effect;
and
(xv) Other Information: with reasonable promptness, such other
information and data with respect to Company or any of its Subsidiaries
as from time to time may be reasonably requested by Lenders and that is
reasonably available to Company.
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5.2 CORPORATE EXISTENCE, ETC.
Company will, and will cause each of its respective Subsidiaries to, at
all times preserve and keep in full force and effect its corporate or
partnership, as the case may be, existence and all rights and franchises
material to its business, except (i) any of the foregoing to the extent they are
permitted under subsection 6.7, (ii) the failure to keep any Franchises in full
force and effect to the extent that an Event of Default or a Potential Event of
Default would not be caused under Section 7.14 if such Franchises were
terminated and compliance with the financial covenants contained in Section 6.6
were calculated as if such termination had occurred as of the first day of the
period for which such financial covenants were calculated, as described in
Section 7.14, (iii) any of the foregoing with respect to any Subsidiary of the
Company which is not a Significant Subsidiary and (iv) any event provided for in
the Partnership Agreement which would require Company to be dissolved, wound up
or terminated if the term of the Company is subsequently extended by a vote of
the partners within 90 days of such event.
5.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
A. Company will, and will cause each of its Subsidiaries to, pay all
taxes, assessments and other governmental charges imposed upon it or any of its
properties or assets or in respect of any of its income, businesses or
franchises before any penalty accrues thereon, and all claims (including,
without limitation, claims for labor, services, materials and supplies) for sums
that have become due and payable and that by law have or may become a Lien upon
any of its properties or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; provided that no such charge or claim
need be paid if being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted and if such reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made therefor.
B. Company will not, and will not permit any of its Subsidiaries to,
file or consent to the filing of any consolidated income tax return with any
Person (other than Company or any Subsidiary of Company).
5.4 MAINTENANCE OF PROPERTIES; INSURANCE.
Company will, and will cause each of its Subsidiaries to, maintain or
cause to be maintained in good repair, working order and condition, ordinary
wear and tear excepted, all material properties used or useful in the business
of Company and its Subsidiaries and from time to time will make or cause to be
made all appropriate repairs, renewals and replacements thereof. Company will
maintain or cause to be maintained, with financially sound and reputable
insurers, insurance with respect to its properties and business and the
properties and businesses of its Subsidiaries against loss or damage (including,
without limitation, flood insurance, if necessary or advisable) of the kinds and
in amounts customarily carried or maintained under similar circumstances by
corporations and
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partnerships of established reputation engaged in similar businesses in similar
geographic locations, including such insurance as may be required by law or
regulation. Each such policy of insurance shall name Lenders as the loss payee
thereunder and shall provide for at least 30 days prior written notice to
Lenders of any modification or cancellation of such policy.
5.5 INSPECTION.
Company will, and will cause each of its Subsidiaries to, permit any
authorized representatives designated by Lenders to visit and inspect any of the
properties of Company or any of its Subsidiaries, including its and their
financial and accounting records, and to make copies and take extracts
therefrom, and to discuss its and their affairs, finances and accounts with its
and their officers and independent public accountants (provided that Company
may, if it so chooses, be present at or participate in any such discussion), all
upon reasonable notice and at such reasonable times during normal business hours
and as often as may be reasonably requested. Without in any way limiting the
foregoing, Company will, upon the request of Requisite Lenders, participate in a
meeting with Lenders once during each Fiscal Year to be held at Company's
corporate offices (or such other location as may be agreed to by Company and
Requisite Lenders at such time as may be agreed to by Company and Requisite
Lenders).
5.6 COMPLIANCE WITH LAWS, ETC.
Company will, and will cause each of its Subsidiaries to, comply with
the requirements of all applicable laws, rules, regulations and orders of any
governmental authority, noncompliance with which could reasonably be expected to
cause a Material Adverse Effect.
5.7 ENVIRONMENTAL DISCLOSURE AND INSPECTION.
A. Company will, and will cause each of its Subsidiaries to, exercise
all due diligence in order to comply and cause (i) all tenants under any leases
or occupancy agreements affecting any portion of the Facilities and (ii) all
other Persons on or occupying such property, to comply with all Environmental
Laws.
B. Company agrees that Lenders may, from time to time and in its
reasonable discretion taking into account the potential risk to Company and
Lenders, retain, at Company's expense, an independent professional consultant to
review any report relating to Hazardous Materials prepared by or for Company and
to conduct its own investigation of any Facility currently owned, leased,
operated or used by Company or any of its Subsidiaries, and Company agrees to
use its best efforts to obtain permission for Lenders' professional consultant
to conduct its own investigation of any Facility previously owned, leased,
operated or used by Company or any of its Subsidiaries. Company hereby grants to
Lenders and their agents, employees, consultants and contractors the right to
enter into
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or on to the Facilities currently owned, leased, operated or used by Company or
any of its Subsidiaries to perform such tests on such property as are reasonably
necessary to conduct such a review and/or investigation. Any such investigation
of any Facility shall be conducted, unless otherwise agreed to by Company and
Lenders, during normal business hours and, to the extent reasonably practicable,
shall be conducted so as not to interfere with the ongoing operations at any
such Facility or to cause any damage or loss to any property at such Facility.
Company and Lenders hereby acknowledge and agree that any report of any
investigation conducted at the request of Requisite Lenders pursuant to this
subsection 5.7B will be obtained and shall be used by Lenders for the purposes
of Lenders' internal credit decisions, to monitor and police the Loans and to
protect Lenders' security interests, if any, created by the Loan Documents.
Lenders agree to deliver a copy of any such report to Company with the
understanding that Company acknowledges and agrees that (i) it will indemnify
and hold harmless Lenders from any costs, losses or liabilities relating to
Company's use of or reliance on such report, (ii) Lenders do not make any
representation or warranty with respect to such report, and (iii) by delivering
such report to Company, Lenders are not requiring or recommending the
implementation of any suggestions or recommendations contained in such report.
C. Company will promptly advise Lenders in writing and in reasonable
detail of (i) any Release of any Hazardous Materials required to be reported to
any federal, state or local governmental or regulatory agency under any
applicable Environmental Laws, (ii) any and all written communications with
respect to any Environmental Claims that have a reasonable possibility of giving
rise to a Material Adverse Effect or with respect to any Release of Hazardous
Materials required to be reported to any federal, state or local governmental or
regulatory agency, (iii) any remedial action taken by Company or any other
Person in response to (x) any Hazardous Materials on, under or about any
Facility, the existence of which has a reasonable possibility of resulting in an
Environmental Claim having a Material Adverse Effect, or (y) any Environmental
Claim that could have a Material Adverse Effect, (iv) Company's discovery of any
occurrence or condition on any real property adjoining or in the vicinity of any
Facility that could cause such Facility or any part thereof to be subject to any
restrictions on the ownership, occupancy, transferability or use thereof under
any Environmental Laws, and (v) any request for information from any
governmental agency that suggests such agency is investigating whether Company
or any of its Subsidiaries may be potentially responsible for a Release of
Hazardous Materials.
D. Company will promptly notify Lenders of (i) any proposed acquisition
of stock, partnership interests, assets, or property by Company or any of its
Subsidiaries that could reasonably be expected to expose Company or any of its
Subsidiaries to, or result in, Environmental Claims that could have a Material
Adverse Effect or that could reasonably be expected to have a material adverse
effect on any Governmental Authorization then held by Company or any of its
Subsidiaries and (ii) any proposed action to be taken by Company or any of its
Subsidiaries to commence manufacturing,
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industrial or other operations that could reasonably be expected to subject
Company or any of its Subsidiaries to additional laws, rules or regulations,
including, without limitation, laws, rules and regulations requiring additional
environmental permits or licenses.
E. Company will, at its own expense, provide copies of such documents
or information as Lenders may reasonably request and that are reasonably
available to Company in relation to any matters disclosed pursuant to this
subsection 5.7.
5.8 COMPANY'S REMEDIAL ACTION REGARDING HAZARDOUS MATERIALS.
Company will promptly take, and will cause each of its Subsidiaries
promptly to take, any and all necessary remedial action in connection with the
presence, storage, use, disposal, transportation or Release of any Hazardous
Materials on, under or about any Facility in order to comply with all applicable
Environmental Laws and Governmental Authorizations. In the event Company or any
of its Subsidiaries undertakes any remedial action with respect to any Hazardous
Materials on, under or about any Facility, Company or such Subsidiary will
conduct and complete such remedial action in compliance with all applicable
Environmental Laws, and in accordance with the policies, orders and directives
of all federal, state and local governmental authorities except when, and only
to the extent that, Company's or such Subsidiary's liability for such presence,
storage, use, disposal, transportation or discharge of any Hazardous Materials
is being contested in good faith by Company or such Subsidiary.
5.9 FURTHER ASSURANCES; NEW SUBSIDIARIES.
In addition to the Obligations set forth in Section 5.13, at any time
or from time to time upon the request of Requisite Lenders, Company will, at its
expense, promptly execute, acknowledge and deliver such further documents and do
such other acts and things Requisite Lenders may reasonably request in order to
effect fully the purposes of the Loan Documents and to provide for payment of
the Obligations in accordance with the terms of this Agreement, the Notes and
the other Loan Documents. In furtherance and not in limitation of the foregoing,
Company will take, and cause each of its respective Subsidiaries to take, such
actions as Requisite Lenders may reasonably request from time to time
(including, without limitation, the execution and delivery of guaranties,
security agreements, pledge agreements, mortgages, deeds of trust, stock powers,
financing statements and other documents, the filing or recording of any of the
foregoing, title insurance with respect to any of the foregoing that relates to
an interest in real property, and the delivery of stock certificates and other
collateral with respect to which perfection is obtained by possession) to ensure
that the Obligations are guarantied by any material Subsidiaries of Company
created after the Closing Date and are secured on a first priority basis by
substantially all of the assets of Company and its Subsidiaries. In the event
that any new Subsidiary of Company is created, whether or not in compliance
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with the requirements of subsection 6.7(iii), all of the capital stock or
partnership interests of such new Subsidiary shall be duly and validly pledged
to Lenders pursuant to the Collateral Documents, subject to no other Liens, and
if such Subsidiary is in the judgment of Lenders material to the operation of
the business of Company or the performance of the Obligations, such Subsidiary
shall execute and deliver to Lenders its Guarantor Security Agreement. The
parties hereto acknowledge and agree that the Loans shall be secured by, among
other things, a first priority Lien subject to no Liens other than Permitted
Encumbrances on substantially all the property of Company (including material
real property and other property acquired subsequent to the Closing Date).
Promptly, and in any event within 30 days after the acquisition of any real
property or other property by Company, it will, at its cost and expense,
promptly secure the Loans by pledging or creating, or causing to be pledged or
created, perfected first priority security interests with respect to such
property (other than to the extent prohibited by applicable law or regulation)
subject to no Liens other than Permitted Encumbrances. Such security interests
and Liens will be created under security agreements, assignments of leases and
rents, mortgages, deeds of trust and other instruments and documents in form and
substance reasonably satisfactory to Lenders, and Company shall deliver or cause
to be delivered to Lenders all such instruments and documents (including legal
opinions, title insurance policies, surveys, appraisals, certificates of title,
consents, lien waivers, subordination, non-disturbance and attornment agreements
and lien searches) as Requisite Lenders shall reasonably request to evidence
compliance with this Section 5.9.
5.10 REAL ESTATE
Without limiting subsection 5.9, and in addition to the obligations set
forth in Section 5.13, Requisite Lenders may from time to time designate real
property of Company or any of its Subsidiaries now owned or hereafter acquired
as "Mortgaged Property," in which case Company shall, and shall cause its
Subsidiaries to, execute and deliver all Mortgages and take all other action
Requisite Lenders may reasonably request to grant Lenders, as security for the
Obligations, a first priority security interest only to Permitted Encumbrances
on all such real property interests on terms and conditions reasonably
satisfactory to Requisite Lenders. Concurrently with the execution and delivery
of any Mortgage, Company shall cause to be delivered to Lenders: (i) a title
report with respect to the Mortgaged Property, in form and substance reasonably
satisfactory to Requisite Lenders, (ii) an opinion of local counsel admitted to
practice in the state in which any Mortgaged Property is located, addressed to
Lenders, in form and substance reasonably satisfactory to Requisite Lenders,
(iii) extended coverage title insurance policies (with endorsements for any
matter Requisite Lenders may reasonably request) issued by a nationally
recognized title insurance company acceptable to Requisite Lenders in their
reasonable discretion, in amounts reasonably satisfactory to Requisite Lenders,
ensuring that as of the date of recording thereof the Mortgages will be valid
and enforceable first priority mortgage Lien on the property encumbered thereby,
free and clear of all Liens, except as Requisite Lenders may approve, and the
Liens
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permitted under subsection 6.2, in form and substance satisfactory to Requisite
Lenders, and (iv) such certificates and affidavits as the title insurer may
reasonably require in connection with the issuance of the title insurance policy
described in clause (iii) hereof.
5.11 FRANCHISE CONSENTS
Upon request of Requisite Lenders, Company shall use its reasonable
best efforts, to obtain consents of the other parties to the Franchises set
forth on Schedule 5.11 annexed hereto to the assignment and pledge of such
Franchises to Lenders pursuant to the Collateral Documents; provided that
Company shall not be required to seek the consent of the other parties to a
Franchise if in Company's reasonable judgment such action would impair Company's
ability to conduct business with such other party or Company's relationship with
such other party.
5.12 OTHER TERMS.
If at any time after the date hereof Company shall enter into any
instrument or agreement with respect to any Indebtedness which in the aggregate,
together with any related Indebtedness, exceeds $1,000,000, relating to or
amending any terms or conditions applicable to any of such Indebtedness which
includes covenants, terms, conditions or defaults not substantially provided for
in this Agreement or more favorable to the lender or lenders thereunder than
those provided for in this Agreement, then the Company shall promptly so advise
the Lenders. Thereupon, if Requisite Lenders shall request, upon notice to the
Company, Lenders shall enter into an amendment to this Agreement or an
additional agreement (as Requisite Lenders may request), providing for
substantially the same covenants, terms, conditions and defaults as those
provided for in such instrument or agreement to the extent required and as may
be selected by Lenders. In addition to the foregoing, any covenants or defaults
or similar provisions (which include without limitation any provisions requiring
any mandatory prepayments or defeasance under the Senior Unsecured Notes,
Indenture or any other Senior Unsecured Debt Document) in any Senior Unsecured
Debt Document at any time not substantially provided for in this Agreement or
more favorable to the holders of the Indebtedness under the Senior Unsecured
Notes issued in connection therewith are hereby incorporated by reference into
this Agreement to the same extent as if set forth fully herein, and no
subsequent amendment, waiver, termination or modification thereof shall affect
any such covenants or defaults or other provisions as incorporated herein.
5.13 POST-CLOSING OBLIGATIONS.
Company shall, as expeditiously as possible, but in no event later than
the number of days after the Closing Date applicable to each item set forth
below: (i) within 30 days of the Closing Date, deliver certified copies of
Requests for Information (Form UCC-11), tax lien, judgment lien, bankruptcy and
pending lawsuit searches or equivalent reports or lien search reports, each of a
recent date listing all effective financing statements, lien
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notices or comparable documents that name as debtor any entity identified by a
name Company has previously used in the conduct of its business (including
without limitation any tradename) and that are filed in those state and county
jurisdictions in which any of the property of any Loan Party is located, the
state and county jurisdictions in which any Loan Party's principal place of
business is located, and the state and county jurisdictions in which any Loan
Party is organized or resides or has a place of business, none of which encumber
the Collateral covered or intended to be covered by the Loan Documents; (ii)
within 30 days of the Closing Date, procure opinions of local counsel to Company
substantially in the form of Exhibit 10 hereto in each jurisdiction governing
any Lien granted for the benefit of Lenders under any Collateral Document; (iii)
within 30 days after the Closing Date, execute and deliver a Mortgage
encumbering each parcel of real property of Company set forth on Schedule 5.13
hereto, in form for recording in the recording office of each political
subdivision where each such property is situated, together with such
certificates, affidavits, questionnaires or returns as shall be required in
connection with the recording or filing thereof to create a lien under
applicable law, all of which shall be in form and substance reasonably
satisfactory to Requisite Lenders, and any other instruments necessary to grant
a mortgage lien under the laws of any applicable jurisdiction, including
appropriate title insurance policies (together with endorsements thereto)
reasonably acceptable to Lenders, which Mortgage and financing statements and
other instruments shall when recorded be effective to create a first priority
Lien on such property subordinate and/or subject to no other Liens except Liens
expressly permitted by such Mortgage; (iv) within 30 days after the Closing
Date, deliver (a) policies or certificates of insurance as required by the
Mortgage relating thereto, which policies or certificates shall comply with the
insurance requirements contained in such Mortgage and evidence reasonably
acceptable to Lenders of payment of all title insurance premiums, search and
examination charges, and related charges, mortgage recording taxes, fees,
charges, costs and expenses required for the recording of the Mortgages and
issuance of such title insurance policies, (b) consents, tenant subordination
agreements and such other instruments as necessary or required to consummate the
transactions contemplated hereby, and (c) copies of all leases or other
agreements relating to the property subject to a mortgage to which Company is a
party and, to the extent Company is a landlord, cause such leases or agreements
to be subordinate to such Mortgage or otherwise reasonably acceptable to
Requisite Lenders; and (v) within 90 days after the Closing Date (or such other
time as shall be agreed to by Requisite Lenders) one or more surveys relating to
the property subject to a mortgage in form and substance reasonably satisfactory
to the Requisite Lenders.
SECTION 6
COMPANY'S NEGATIVE COVENANTS
Company covenants and agrees that, so long as all or any portion of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations, unless Requisite Lenders shall otherwise give
prior written
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consent, Company shall perform, and shall cause each of its respective
Subsidiaries to perform, all covenants in this Section 6.
6.1 INDEBTEDNESS.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:
(i) Company may become and remain liable with respect to the
Obligations;
(ii) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations permitted by subsection 6.4 and,
upon any matured obligations actually arising pursuant thereto, the
Indebtedness corresponding to the Contingent Obligations so
extinguished;
(iii) Company may become and remain liable with respect to
Indebtedness in respect of Capital Leases and/or Purchase Money
Obligations, in each case incurred for the purpose of financing all or
any part of the purchase price or cost of construction or improvement
of property used in the business of the Company in an aggregate amount
not to exceed $2,500,000;
(iv) Company may remain liable with respect to Indebtedness
described in Schedule 6.1 annexed hereto, including any refinancing or
extension thereof provided that the amount thereof is not increased or
the maturity thereof amended to an earlier date if such date is prior
to one year after the Maturity Date;
(v) Company may become and remain liable with respect to
Indebtedness evidenced by the Senior Unsecured Notes in aggregate
principal amount not to exceed $100,000,000;
(vi) Company may become and remain liable with respect to
other Indebtedness in an aggregate principal amount not to exceed
$5,000,000 at any time outstanding; and
(vii) Without duplication, Contingent Obligations to the
extent permitted by subsection 6.4.
6.2 LIENS AND RELATED MATTERS.
A. PROHIBITION ON LIENS. Company shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Company or any of its
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Subsidiaries, whether now owned or hereafter acquired, or any income or profits
therefrom, or file or permit the filing of, or permit to remain in effect, any
financing statement or other similar notice of any Lien with respect to any such
property, asset, income or profits under the UCC of any state or under any
similar recording or notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the Collateral Documents;
(iii) Liens described in Schedule 6.2 annexed hereto, and any
renewal or extension of any such Lien provided that the aggregate
amount of the Indebtedness secured thereby is not increased and such
Lien does not extend to any property not covered by the Lien being
renewed or extended;
(iv) Purchase-money Liens, and liens in connection with
Capital Leases, securing Indebtedness permitted under subsection
6.1(iii);
(v) Liens existing on such property, asset, income or profits
at the time of its acquisition, provided that such Lien was not
incurred in contemplation of such acquisition and such acquisition was
permitted by Section 6.7(iii); and
(vi) Other Liens securing Indebtedness in an aggregate amount
not to exceed $2,500,000 at any time outstanding.
B. EQUITABLE LIEN IN FAVOR OF LENDER. If Company or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 6.2A, it shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured; provided that, notwithstanding the foregoing,
this covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not permitted by the provisions of
subsection 6.2A.
C. NO FURTHER NEGATIVE PLEDGES. Except with respect to specific
property encumbered to secure payment of particular Indebtedness incurred to pay
the purchase price of such property or to be sold pursuant to an executed
agreement with respect to an Asset Sale and except for the Indenture, neither
Company nor any of its Subsidiaries shall enter into any agreement prohibiting
the creation or assumption of any Lien upon any of its properties or assets,
whether now owned or hereafter acquired.
D. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO COMPANY OR OTHER
SUBSIDIARIES. Except as provided herein, Company will not, and will not permit
any of its Subsidiaries to, create or otherwise cause or suffer to
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exist or become effective any consensual encumbrance or restriction of any kind
on the ability of any such Subsidiary to (i) pay dividends or make any other
distributions on any of such Subsidiary's capital stock, partnership interests
or other interests owned by Company or any other Subsidiary of Company, (ii)
repay or prepay any Indebtedness owed by such Subsidiary to Company or any other
Subsidiary of Company, (iii) make loans or advances to Company or any other
Subsidiary of Company, or (iv) transfer any of its property or assets to Company
or any other Subsidiary of Company.
6.3 INVESTMENTS; JOINT VENTURES.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, make or own any Investment in any Person, including any
Joint Venture, except:
(i) Company and its Subsidiaries may make and own Investments
in Cash Equivalents;
(ii) Company and its Subsidiaries may make intercompany loans
to the extent permitted under subsection 6.1(iv);
(iii) The Company may make Investments in Joint Ventures to
the extent the aggregate amount of the outstanding Investments in all
Joint Ventures does not exceed $2,500,000;
(iv) Company and its Subsidiaries may continue to own the
Investments owned by them and described in Schedule 6.3 annexed hereto;
and
(v) Company may make acquisitions permitted under subsection
6.7.
6.4 CONTINGENT OBLIGATIONS.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:
(i) Any Guarantor may become and remain liable with respect to
Contingent Obligations arising under their guaranties of the
Obligations;
(ii) Company may become and remain liable with respect to
Interest Rate Agreements to the extent such Interest Rate Agreements
are entered into to protect the Company against fluctuations in
interest rates and not for the purpose of financial speculation;
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(iii) Company may remain liable with respect to Contingent
Obligations described in Schedule 6.4 annexed hereto, including any
refinancing or extension thereof, provided that the amount thereof is
not increased;
(iv) Company may become and remain liable with respect to
Contingent Obligations under performance bonds incurred in the ordinary
course of business in an aggregate amount not to exceed $1,500,000 at
any time outstanding (which allowance under this clause (iv) is not in
addition to the exclusion contained in the definition of Indebtedness);
and
(v) Company may become and remain liable with respect to other
Contingent Obligations in an aggregate principal amount not to exceed
$2,000,000 at any time outstanding.
6.5 RESTRICTED JUNIOR PAYMENTS.
Company shall not, and it shall not permit any of its respective
Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart
any sum for any Restricted Junior Payment; provided that:
(i) So long as no Event of Default or Potential Event of
Default has occurred and is continuing or would result therefrom,
Company may make scheduled interest payments which are required to be
paid in cash from time to time and principal payments required upon the
occurrence of certain events (other than an event of default under the
Indenture) pursuant to the terms of the Senior Unsecured Notes without
giving effect to any amendment or modification thereof;
(ii) Company may make payments of Management Fees which are
not in excess of the amount allowed under the Partnership Agreement and
the provisions of Section 6.10 hereof;
(iii) So long as no Event of Default or Potential Event of
Default has occurred and is continuing or would result therefrom,
Company may purchase limited partner interests in Company from limited
partners of Company that are not Affiliates of Company, the General
Partner or Jamesco and pay dividends on partnership interests of the
Company; provided that (x) all such purchases and dividends together do
not exceed $5,000,000 in the aggregate since the Closing Date and (y)
prior to any such purchase or dividend Company delivers an Officers'
Certificate to Lenders in form and substance reasonably satisfactory to
Requisite Lenders, confirming that no Event of Default or Potential
Event of Default is continuing and it will be in compliance, on a Pro
Forma Basis after giving effect to such purchase, with all covenants
set forth in subsection 6.6 hereof and setting forth the percentage
limited partnership interest to be purchased and the aggregate amount
to be paid in connection with such purchase;
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(iv) So long as no Event of Default or Potential Event of
Default has occurred and is continuing or would result therefrom,
payments permitted under Section 6.10(iii); and
(v) So long as no Event of Default or Potential Event of
Default has occurred and is continuing or would result therefrom, the
payment of any dividend or distribution on any general or limited
partnership interest of the Company or any Subsidiary of the Company to
the extent necessary to permit the direct or indirect beneficial owners
of such partnership interests to pay federal and state income tax
liabilities arising from income of the Company or such Subsidiary and
attributable to them solely as a result of the Company or such
Subsidiary (and any intermediate entity through which such holder owns
such partnership interests) being a partnership or similar pass-through
entity for federal income tax purposes.
6.6 FINANCIAL COVENANTS.
A. TOTAL DEBT COVERAGE. Company will not permit the ratio of (y)
Consolidated Total Debt as of any day during the periods set forth below to (z)
Consolidated Adjusted EBITDA for the most recently ended six consecutive month
period ended as of such date multiplied by 2 to be greater than the correlative
ratio indicated below:
Consolidated Total Debt to
Consolidated Adjusted EBITDA
Period
Close thru 6/29/01 9.50
6/30/01 - 12/30/02 9.25
12/31/02 - 3/30/03 9.20
3/31/03 - 6/29/03 9.10
6/30/03 - 9/29/03 9.00
9/30/03 - 12/30/03 8.90
12/31/03 - 03/30/04 8.80
Thereafter 8.60
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B. SENIOR DEBT COVERAGE. Company will not permit the ratio of (y) the
Consolidated Senior Debt as of any day during the period set forth below to (z)
Consolidated Adjusted EBITDA for the six (6) consecutive month period ended as
of such day multiplied by 2 to be greater than the correlative ratio indicated:
Consolidated Senior Debt to
Period Consolidated Adjusted EBITDA
Close thru 9/29/01 2.30
9/30/01 - 3/30/02 2.40
3/31/02 - 9/29/02 2.30
9/30/02 - 3/30/03 2.20
3/31/03 - 9/29/03 2.10
9/30/03 - 3/30/04 2.00
3/31/04 and after 1.90
6.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND ACQUISITIONS; NEW
SUBSIDIARIES.
Company shall not, and shall not permit any of its Subsidiaries to,
alter the corporate, partnership, capital or legal structure of Company or any
of its Subsidiaries, create any new Subsidiaries or enter into any transaction
of merger or consolidation, or liquidate, wind-up or dissolve itself (or suffer
any liquidation or dissolution), or convey, sell, lease, sub-lease, transfer or
otherwise dispose of (other than in the ordinary course of business), in one
transaction or a series of transactions, all or any part of its business,
property or fixed assets, whether now owned or hereafter acquired, or acquire by
purchase or otherwise the business, property or fixed assets of, or stock or
other evidence of beneficial ownership of, any Person or any division or line of
business of any Person (other than inventory in the ordinary course of
business), except:
(i) so long as no Event of Default or Potential Event of
Default shall have occurred and be continuing or would result therefrom
and Company delivers an Officers' Certificate to Lenders, in form and
substance reasonably satisfactory to Requisite Lenders, confirming that
it will be in compliance, on a Pro Forma Basis after giving effect to
such Asset Sale, with all covenants set forth in subsection 6.6 hereof,
Company and its Subsidiaries may make Asset Sales of
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assets with an aggregate book value for all such assets of less than
$3,000,000; provided that (x) the consideration received for such
assets shall be in an amount at least equal to the fair market value
thereof; (y) the sole consideration received shall be cash, except that
the Company shall be allowed to trade assets of like kind and value
with other cable companies; and (z) the proceeds of such Asset Sales
shall be applied as required by subsection 2.4A(iii)(b);
(ii) subject to the requirements of subsection 5.9, Company
may create new Subsidiaries with the prior written consent of Lenders;
and
(iii) so long as no Event of Default or Potential Event of
Default shall have occurred and be continuing or would result therefrom
and Company delivers an Officers' Certificate to Lenders, in form and
substance reasonably satisfactory to Lenders, confirming that it will
be in compliance, on a Pro Forma Basis after giving effect to such
acquisition, with all covenants set forth in subsection 6.6 hereof,
Company may from time to time make acquisitions of cable systems and
related communications systems that are in close proximity to Company's
existing cable systems by way of asset purchase, stock or partnership
interest purchase, merger, consolidation or otherwise not to exceed
$2,000,000 in the aggregate, provided that it is acknowledged that any
acquisitions from the reinvestment of the proceeds of any sale of
assets as permitted under clause (B) contained in the definition of
Asset Sale or the purchase of replacement assets with Insurance
Proceeds or Condemnation Proceeds in accordance with Section
2.4(A)(iii)(f) shall not count against such $2,000,000 basket.
6.8 SALES AND LEASE-BACKS.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease, whether an Operating Lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, (i) which Company or any of its Subsidiaries has sold or
transferred or is to sell or transfer to any other Person (other than Company or
any of its Subsidiaries) or (ii) which Company or any of its Subsidiaries
intends to use for substantially the same purpose as any other property which
has been or is to be sold or transferred by Company or any of its Subsidiaries
to any Person (other than Company or any of its Subsidiaries) in connection with
such lease.
6.9 SALE OR DISCOUNT OF RECEIVABLES.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, sell with recourse, discount, or otherwise sell for less
than the face value thereof any of its notes or accounts receivable, other than
in the ordinary course of business consistent with its past practices.
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6.10 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction
(including, without limitation, the purchase, sale, lease or exchange of any
property or the rendering of any service) with any holder of 5% or more of any
class of equity Securities of Company or with any Affiliate of Company or of any
such holder, on terms that are less favorable to Company or that Subsidiary, as
the case may be, than those that might be obtained at the time from Persons who
are not such a holder or Affiliate; provided that the foregoing restriction
shall not apply to (i) any transaction between Company and any of its
wholly-owned Subsidiaries or between any of its wholly-owned Subsidiaries, (ii)
payment of Management Fees in accordance with subsection 6.5 and the Partnership
Agreement, and in any event not to exceed in any Fiscal Year 4% of the Company's
annual revenues, or (iii) payments and/or issuances described on Schedule 6.10
in connection with the Option Agreement/Option Certificate dated as of December
29, 1999 between Company and General Partner.
6.11 CONDUCT OF BUSINESS.
From and after the Closing Date, Company shall not, and shall not
permit any of its Subsidiaries to, engage in any business other than (i) the
businesses engaged in by Company and its Subsidiaries on the Closing Date and
similar or related businesses or as the Company's business has thereafter
evolved in the fields of cable television systems, enhanced video services,
advanced telecommunications services, such as broadband high speed Internet
access and inter- and intra-network data services and telephony, and (ii) such
other lines of business as may be consented to by Requisite Lenders.
6.12 AMENDMENTS TO THE INDENTURE, SENIOR UNSECURED NOTES AND OTHER MATERIAL
AGREEMENTS.
Company shall not, and shall not permit any of its Subsidiaries or the
Guarantor to, amend or otherwise change the terms of any Senior Unsecured Debt
Document, or make any payment consistent with an amendment thereof or change
thereto, if the effect of such amendment or change is to increase the interest
rate on the Senior Unsecured Notes, change (to earlier dates) any dates upon
which payments of principal or interest are due thereon, change any event of
default or condition to an event of default with respect thereto (other than to
eliminate any such event of default), change any affirmative or negative
covenant in any significant respect, change the redemption, prepayment or
defeasance provisions thereof, or if the effect of such amendment or change,
together with all other amendments or changes made, is to increase materially
the obligations of the obligor thereunder or to confer any additional rights on
the holders of the Senior Unsecured Notes (or a trustee or other representative
on their behalf) which would be adverse to any Loan Party or Lenders. Company
shall not permit the Partnership Agreement, the General Partnership Agreement,
or the certificate or articles of
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incorporation or by laws or partnership agreement of any Subsidiary to be
amended or otherwise modified in any respect without the prior written consent
of Requisite Lenders (other than non-material amendments or modifications, which
individually or taken together with all other amendments or modifications, could
not reasonably be expected to be adverse to Lenders and which do not increase
the Management Fees).
6.13 FISCAL YEAR.
Company shall not change its Fiscal Year-end from December 31.
6.14 CAPITAL EXPENDITURES.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, make any Capital Expenditure if the aggregate Capital
Expenditures made by the Company or any of its Subsidiaries during any Fiscal
Year of the Company would exceed, on a consolidated basis for the Company and
its Subsidiaries, an amount equal to $12,000,000 for the Fiscal Year of the
Company ending December 31, 2001 and for any Fiscal Year thereafter, plus, in
each case, the amount of Capital Expenditures allowed for the Company and its
Subsidiaries for the previous Fiscal Year (commencing with the Fiscal Year
ending December 31, 2002) minus the amount of Capital Expenditures of the
Company and its Subsidiaries made for such previous Fiscal Year.
SECTION 7
EVENTS OF DEFAULT
If any of the following conditions or events ("Events of Default")
shall occur:
7.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
Failure by Company to pay any installment of principal of any Loan when
due, whether at stated maturity, by acceleration, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; failure by Company to pay any
interest on any Loan when due and such failure shall not have been remedied or
waived within two Business Days after the earlier of (i) an officer of the
Company becoming aware of such failure or (ii) receipt by the Company of notice
from Lenders of such default; or failure by Company to pay any fee or any other
amount due under this Agreement when due and such failure shall not have been
remedied or waived within five days after the earlier of (a) an officer of the
Company becoming aware of such failure or (b) receipt by the Company of notice
from Lenders of such default; or
7.2 DEFAULT IN OTHER AGREEMENTS.
(i) Failure of Company or any of its Subsidiaries to pay when due,
beyond the end of any grace period provided therefor, any amount on any
Indebtedness (other than Indebtedness referred to in subsection 7.1) or
Contingent Liabilities which individually or
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together with other such Indebtedness and Contingent Liabilities as to which any
such failure exists has an aggregate outstanding amount in excess of $2,500,000
or (ii) breach or default by Company or any of its Subsidiaries with respect to
any other material term of (a) any evidence of any Indebtedness or Contingent
Liabilities which individually or together with other such Indebtedness and
Contingent Liabilities as to which any such failure exists has an aggregate
outstanding amount in excess of $2,500,000 or (b) any loan agreement, mortgage,
indenture or other agreement relating to such Indebtedness or Contingent
Obligation(s), if the effect of such breach or default is to cause, or to permit
the holder or holders of that Indebtedness or Contingent Obligation(s) (or a
trustee on behalf of such holder or holders) to cause after the expiration of
any applicable grace period, that Indebtedness or Contingent Obligation(s) to
become or be declared due and payable prior to its stated maturity or the stated
maturity of any underlying obligation, as the case may be (upon the giving or
receiving of notice, lapse of time, both, or otherwise); or
7.3 BREACH OF CERTAIN COVENANTS.
Failure of Company or Company to perform or comply with any term or
condition contained in subsection 2.5 or Section 6 of this Agreement; or
7.4 BREACH OF WARRANTY.
Any representation, warranty, certification or other statement made by
any Loan Party in any Loan Document or in any statement or certificate at any
time given by any Loan Party in writing pursuant hereto or thereto or in
connection herewith or therewith shall be false in any material respect on the
date as of which made; or
7.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS.
Any Loan Party shall default in the performance of or compliance with
any term contained in this Agreement or any of the other Loan Documents, other
than any such term referred to in any other subsection of this Section 7, and
such default shall not have been remedied or waived within 30 days after the
earlier of (i) an officer of Company becoming aware of such default or (ii)
receipt by Company of notice from Lenders of such default; or
7.6 INVOLUNTARY BANKRUPTCY, APPOINTMENT OF RECEIVER, ETC.
(i) A court having jurisdiction in the premises shall enter a decree or
order for relief in respect of Company or any of its Subsidiaries or the General
Partner in an involuntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect,
which decree or order is not stayed; or any other similar relief shall be
granted under any applicable federal or state law; or (ii) an involuntary case
shall be commenced against Company or any of its Subsidiaries
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or the General Partner under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect; or a decree or
order of a court having jurisdiction in the premises for the appointment of a
receiver, liquidator, sequestrator, trustee, custodian or other officer having
similar powers over Company or any of its Subsidiaries or the General Partner,
or over all or a substantial part of its property, shall have been entered; or
there shall have occurred the involuntary appointment of an interim receiver,
trustee or other custodian of Company or any of its Subsidiaries or the General
Partner for all or a substantial part of its property; or a warrant-of
attachment, execution or similar process shall have been issued against any
substantial part of the property of Company or any of its Subsidiaries, and any
such event described in this clause (ii) shall continue for 60 days unless
dismissed, bonded or discharged; or
7.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) Company or any of its Subsidiaries or the General Partner shall
have an order for relief entered with respect to it or commence a voluntary case
under the Bankruptcy Code or under any other applicable bankruptcy, insolvency
or similar law now or hereafter in effect, or shall consent to the entry of an
order for relief in an involuntary case, or to the conversion of an involuntary
case to a voluntary case, under any such law, or shall consent to the
appointment of or taking possession by a receiver, trustee or other custodian
for all or a substantial part of its property; or Company or any of its
Subsidiaries or the General Partner shall make any assignment for the benefit of
creditors; or (ii) Company or any of its Subsidiaries or the General Partner
shall be unable, or shall fail generally, or shall admit in writing its
inability, to pay its debts as such debts become due; or the Board of Directors
of Company or any of its Subsidiaries or the General Partner (or any committee
thereof) shall adopt any resolution or otherwise authorize any action to approve
any of the actions referred to in clause (i) above or this clause (ii); or
7.8 JUDGMENTS AND ATTACHMENTS.
Any money judgment, writ or warrant of attachment or similar process,
together with all such other money judgments, writs or warrants of attachment or
similar processes, involving in the aggregate at any time an amount in excess of
$2,500,000 (and not adequately covered by insurance as to which a solvent and
unaffiliated insurance company has acknowledged coverage) shall be entered or
filed against Company or any of its Subsidiaries or any of their respective
assets and shall remain undischarged, unvacated, unbonded or unstayed for a
period of 60 days (or in any event later than five days prior to the date of any
proposed sale thereunder); or
7.9 DISSOLUTION.
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Any order, judgment or decree shall be entered against Company or any
of its Significant Subsidiaries or the General Partner decreeing the dissolution
or split up of Company or that Significant Subsidiary or the General Partner and
such order shall remain undischarged or unstayed for a period in excess of 30
days; or
7.10 EMPLOYEE BENEFIT PLANS.
There shall occur one or more ERISA Events which individually or in the
aggregate results in or might reasonably be expected to result in liability of
Company or any of its ERISA Affiliates in excess of $1,000,000 during the term
of this Agreement; or there shall exist an amount of unfunded benefit
liabilities (as defined in Section 4001(a)(18) of ERISA), individually or in the
aggregate for all Pension Plans (excluding for purposes of such computation any
Pension Plans with respect to which assets exceed benefit liabilities), which
exceeds $1,000,000; or
7.11 CHANGE IN CONTROL.
Any of the following (each a "Change in Control") shall occur: (i) the
General Partner shall, for any reason, cease to be the sole general partner of
Company or shall cease to have the sole power to take all actions the General
Partner is entitled or required to take under the Partnership Agreement as in
effect on the Closing Date, (ii) any "Change of Control" as defined in the
Senior Unsecured Debt Documents, (iii) any event provided for in the Partnership
Agreement which would require Company to be dissolved, wound up or terminated
(unless the term of Company is subsequently extended by a vote of the partners
within 90 days of such event), including, without limitation, (a) expiration of
the term of Company or (b) the General Partner shall be removed, whether or not
such event creates a dissolution, winding up or termination or (iv) Sandler
shall cease to beneficially own directly or indirectly a majority of the
outstanding partnership interests in Company.
7.12 INVALIDITY OF GUARANTIES.
Upon execution and delivery thereof, any guaranty of the Obligations of
Company for any reason, other than the satisfaction in full of all Obligations,
ceases to be in full force and effect other than in accordance with its terms)
or is declared to be null and void, or any Loan Party denies in writing that it
has any further liability, including without limitation with respect to future
advances by Lenders, under any Loan Document to which it is a party; or
7.13 FAILURE OF SECURITY.
Upon execution and delivery thereof, any Collateral Document shall, at
any time, cease to be in full force and effect as to any material Collateral
(other than by reason of a release of Collateral thereunder in accordance with
the terms hereof or thereof, the
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satisfaction in full of the Obligations or any other termination of such
Collateral Document in accordance with the terms hereof or thereof) or shall be
declared null and void, or the validity or enforceability thereof shall be
contested in writing by any Loan Party, or Lenders shall not have or shall cease
to have a valid security interest in any material Collateral (other than
inventory or equipment in transit in the ordinary course of business) purported
to be covered thereby, perfected and with the priority required by the relevant
Collateral Document, for any reason other than the failure of Lenders to take
any action within its control, subject only to Liens permitted under the
applicable Collateral Documents; or
7.14 FRANCHISES.
(i) Company shall lose, fail to keep in force, suffer the termination,
suspension or revocation of or terminate, forfeit or suffer a material adverse
amendment to any Franchise or group of Franchises at any time held by it, or
(ii) any governmental regulatory authority shall schedule or conduct a hearing
on the renewal of any Franchise or group of Franchises held by Company, and the
Requisite Lenders shall reasonably believe that the result thereof shall be the
termination, revocation, suspension, or material adverse amendment of such
Franchise or group of Franchises; and if, after giving pro forma effect to all
such events described in the foregoing clauses (i) and (ii) on a pro forma basis
reasonably acceptable to Requisite Lenders, including without limitation those
events which Requisite Lenders reasonably believe will occur, as if they had all
occurred as of the first day of the period for which each of the financial
covenants contained in Section 6.6 were calculated, the Company would be in
breach of any of the financial covenants contained in Section 6.6; or
7.15 DEFAULT IN PARTNERSHIP AGREEMENT.
Any party to the Partnership Agreement shall default in the performance
of or compliance with any material term contained in such Partnership Agreement,
and, as a result, the ability of Company and the other Loan Parties, taken as a
whole, to perform, or Lenders to enforce, the Obligations of Company shall be
materially and adversely affected.
THEN (i) upon the occurrence of any Event of Default described in
subsection 7.6 or 7.7, each of (a) the unpaid principal amount of and accrued
interest on the Loans and (b) all other Obligations shall automatically become
immediately due and payable, without presentment, demand, protest or other
requirements of any kind, all of which are hereby expressly waived by Company,
and the obligation of Lenders to make any Loan, shall thereupon terminate, and
(ii) upon the occurrence and during the continuation of any other Event of
Default, Requisite Lenders shall, by written notice to Company, declare all or
any portion of the amounts described in clauses (a) and (b) above to be, and the
same shall forthwith become, immediately due and payable, and the obligation of
Lenders to make any Loan. Notwithstanding anything contained in the preceding
paragraph, if at any
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time within 60 days after an acceleration of the Loans pursuant to such
paragraph Company shall pay all arrears of interest and all payments on account
of principal which shall have become due otherwise than as a result of such
acceleration (with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified in this Agreement) and all Events of
Default and Potential Events of Default (other than non-payment of the principal
of and accrued interest on the Loans, in each case which is due and payable
solely by virtue of acceleration) shall be remedied or waived pursuant to
subsection 8.6, then Requisite Lenders, by written notice to Company, may at its
option rescind and annul such acceleration and its consequences; but such action
shall not affect any subsequent Event of Default or Potential Event of Default
or impair any right consequent thereon. The provisions of this paragraph are
intended merely to bind Lenders to a decision which may be made at the election
of Requisite Lenders and are not intended to benefit Company and do not grant
Company the right to require Lenders to rescind or annul any acceleration
hereunder, even if the conditions set forth herein are met.
SECTION 8
MISCELLANEOUS
8.1 ASSIGNMENTS AND PARTICIPATIONS IN LOANS.
A. GENERAL. Each Lender shall have the right at any time to (i) sell,
assign or transfer to any Eligible Assignee, or (ii) sell participations to any
Person in, all or any part of its Commitments or any Loan or Loans made by it or
any other interest herein or in any other Obligations owed to it; provided that
no such sale, assignment, transfer or participation shall, without the consent
of Company, require Company to file a registration statement with the Securities
and Exchange Commission or apply to qualify such sale, assignment, transfer or
participation under the securities laws of any state; provided, further, that no
such sale, assignment or transfer described in clause (i) above shall be
effective unless and until an Assignment Agreement effecting such sale,
assignment or transfer shall have been executed. Except as otherwise provided in
this subsection 8.1, no Lender shall, as between Company and such Lender, be
relieved of any of its obligations hereunder as a result of any sale, assignment
or transfer of, or any granting of participations in, all or any part of its
Commitments or the Loans or the other Obligations owed to such Lender.
B. ASSIGNMENTS.
(i) Amounts and Terms of Assignments. Each Commitment Loan or
other Obligation may (a) be assigned in any amount to another Lender,
or to an Affiliate of the assigning Lender or another Lender, with the
giving of notice to Company or (b) be assigned in an aggregate amount
of not less than $5,000,000 (or such lesser amount as shall constitute
the aggregate amount of the Commitments, Loans, and other Obligations
of the assigning Lender) to any other
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Eligible Assignee with the consent of Company (which consent shall not
be unreasonably withheld and may not be withheld during the continuance
of any Event of Default). To the extent of any such assignment in
accordance with either clause (a) or (b) above, the assigning Lender
shall be relieved of its obligations with respect to its Commitments,
Loans, or other Obligations or the portion thereof so assigned. The
parties to each such assignment shall execute an Assignment Agreement,
and such forms, certificates or other evidence, if any, with respect to
United States federal income tax withholding matters as the assignee
under such Assignment Agreement may be required to deliver to the
Company pursuant to subsection 2.6B(iii)(a). Upon such execution,
delivery and acceptance, from and after the effective date specified in
such Assignment Agreement, (y) the assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment Agreement, shall have
the rights and obligations of a Lender hereunder and (z) the assigning
Lender thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment
Agreement, relinquish its rights and be released from its obligations
under this Agreement (and, in the case of an Assignment Agreement
covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a
party hereto). The Commitments hereunder shall be modified to reflect
the Commitment of such assignee and any remaining Commitment of such
assigning Lender and, if any such assignment occurs after the issuance
of the Notes hereunder, the assigning Lender shall, upon the
effectiveness of such assignment or as promptly thereafter as
practicable, surrender its applicable Notes to the Company for
cancellation, and thereupon new Notes shall be issued to the assignee
and to the assigning Lender, substantially in the form of Exhibit 6
annexed hereto with appropriate insertions, to reflect the new
Commitments of the assignee and the assigning Lender.
C. PARTICIPATIONS. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the scheduled final maturity date of any
Loan allocated to such participation, (ii) a reduction of the principal amount
of or the rate of interest payable on any Loan allocated to such participation
or (iii) the release of all or substantially all Collateral, and all amounts
payable by Company hereunder (including without limitation amounts payable to
such Lender pursuant to subsection 2.6) shall be determined as if such Lender
had not sold such participation. Company and each Lender hereby acknowledge and
agree that, solely for purposes of subsections 8.4 and 8.5, (a) any
participation will give rise to a direct obligation of Company to the
participant and (b) the participant shall be considered to be a "Lender".
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D. ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the assignments
and participations permitted under the foregoing provisions of this subsection
8.1, any Lender may assign and pledge all or any portion of its Loans, the other
Obligations owed to such Lender, and its Notes to any Federal Reserve Bank as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any operating circular issued by such Federal Reserve
Bank; provided that (i) no Lender shall, as between Company and such Lender, be
relieved of any of its obligations hereunder as a result of any such assignment
and pledge and (ii) in no event shall such Federal Reserve Bank be considered to
be a "Lender" or be entitled to require the assigning Lender to take or omit to
take any action hereunder.
E. INFORMATION. Each Lender may furnish any information concerning
Company and its Subsidiaries in the possession of that Lender from time to time
to assignees and participants (including prospective assignees and
participants), subject to subsection 8.19.
8.2 EXPENSES.
Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly (i) all the actual and reasonable
costs and expenses of preparation of the Loan Documents; (ii) all the costs of
furnishing all opinions by counsel for Company (including without limitation any
opinions requested by Lenders as to any legal matters arising hereunder) and of
Company's performance of and compliance with all agreements and conditions on
its part to be performed or complied with under this Agreement and the other
Loan Documents including, without limitation, with respect to confirming
compliance with environmental and insurance requirements; (iii) the reasonable
fees, expenses and disbursements of counsel to Lenders (including allocated
costs of internal counsel) in connection with the negotiation, preparation,
execution and administration of the Loan Documents and the Loans and any
consents, amendments, waivers or other modifications hereto or thereto and any
other documents or matters requested by Company; (iv) all the costs and expenses
of creating and perfecting the Liens in favor of Lenders pursuant to the Loan
Documents, including filing and recording fees and expenses, title insurance,
fees and expenses of counsel for providing such opinions as Lenders may
reasonably request; (v) all other actual and reasonable costs and expenses
incurred by Lenders in connection with the negotiation, preparation and
execution of the Loan Documents and the transactions contemplated hereby and
thereby; and (vi) after the occurrence of an Event of Default, all costs and
expenses, including reasonable attorneys' fees (including allocated costs of
internal counsel) and costs of settlement, incurred by Lenders in enforcing any
Obligations of or in collecting any payments due from Company hereunder or under
the other Loan Documents by reason of such Event of Default or in connection
with any refinancing or restructuring of the credit arrangements provided under
this Agreement in the nature of a "work-out" or pursuant to any insolvency or
bankruptcy proceedings.
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8.3 INDEMNITY.
In addition to the payment of expenses pursuant to subsection 8.2,
whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend, indemnify, pay and hold harmless Lenders, and the
respective officers, directors, employees, agents and affiliates of Lenders
(collectively called the "Indemnitees") from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature whatsoever
(including without limitation the reasonable fees and disbursements of counsel
for such Indemnitees in connection with any investigative, administrative or
judicial proceeding commenced or threatened by any Person, whether or not any
such Indemnitee shall be designated as a party or a potential party thereto),
whether direct, indirect or consequential and whether based on any federal,
state or foreign laws, statutes, rules or regulations (including without
limitation securities and commercial laws, statutes, rules or regulations and
Environmental Laws), on common law or equitable cause or on contract or
otherwise, that may be imposed on, incurred by, or asserted against any such
Indemnitee, in any manner relating to or arising out of this Agreement or the
other Loan Documents or the transactions contemplated hereby or thereby
(including without limitation Lenders' agreement to make the Loans hereunder or
the use or intended use of the proceeds of any of the Loans) or the statements
contained in the commitment letter delivered by the Lender named therein to
Company with respect thereto (collectively called the "Indemnified
Liabilities"); provided that Company shall not have any obligation to any
Indemnitee hereunder with respect to any Indemnified Liabilities to the extent
such Indemnified Liabilities arise solely from the gross negligence or willful
misconduct of that Indemnitee as determined by a final judgment of a court of
competent jurisdiction. To the extent that the undertaking to defend, indemnify,
pay and hold harmless set forth in the preceding sentence may be unenforceable
because it is violative of any law or public policy, Company shall contribute
the maximum portion that it is permitted to pay and satisfy under applicable law
to the payment and satisfaction of all Indemnified Liabilities incurred by the
Indemnitees or any of them.
8.4 SET-OFF.
In addition to any rights now or hereafter granted under applicable law
and not by way of limitation of any such rights, upon the occurrence of any
Event of Default Lenders is hereby authorized by Company at any time or from
time to time, without notice to Company or to any other Person, any such notice
being hereby expressly waived, to set off and to appropriate and to apply any
and all deposits (general or special, including, but not limited to,
Indebtedness evidenced by certificates of deposit, whether matured or unmatured,
but not including trust accounts) and any other Indebtedness at any time held or
owing by Lenders to or for the credit or the account of Company against and on
account of the obligations and liabilities of Company to Lenders under this
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Agreement, the Notes, and the other Loan Documents, including, but not limited
to, all claims of any nature or description arising out of or connected with
this Agreement, the Notes, or any other Loan Document, irrespective of whether
or not (i) Lenders shall have made any demand hereunder or (ii) the principal of
or the interest on the Loans or any other amounts due hereunder shall have
become due and payable pursuant to Section 7.
8.5 RATABLE SHARING.
Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment, by realization upon security, through the exercise
of any right of set-off or banker's lien, by counterclaim or cross action or by
the enforcement of any right under the Loan Documents or otherwise, or as
adequate protection of a deposit treated as cash collateral under the Bankruptcy
Code, receive payment or reduction of a proportion of the aggregate amount of
principal, interest, fees and other amounts then due and owing to that Lender
hereunder or under the other Loan Documents (collectively, the "Aggregate
Amounts Due" to such Lender) which is greater than the proportion received by
any other Lender in respect of the Aggregate Amounts Due to such other Lender,
then the Lender receiving such proportionately greater payment shall (i) notify
each other Lender of the receipt of such payment and (ii) apply a portion of
such payment to purchase participations (which it shall be deemed to have
purchased from each seller of a participation simultaneously upon the receipt by
such seller of its portion of such payment) in the Aggregate Amounts Due to the
other Lenders so that all such recoveries of Aggregate Amounts Due shall be
shared by all Lenders in proportion to the Aggregate Amounts Due to them;
provided that if all or part of such proportionately greater payment received by
such purchasing Lender is thereafter recovered from such Lender upon the
bankruptcy or reorganization of Company or otherwise, those purchases shall be
rescinded and the purchase prices paid for such participations shall be returned
to such purchasing Lender ratably to the extent of such recovery, but without
interest. Company expressly consents to the foregoing arrangement and agrees
that any holder of a participation so purchased may exercise any and all rights
of banker's lien, set-off or counterclaim with respect to any and all monies
owing by Company to that holder with respect thereto as fully as if that holder
were owed the amount of the participation held by that holder.
8.6 AMENDMENTS AND WAIVERS.
No amendment, modification, termination or waiver of any provision of
this Agreement or of the Notes, or consent to any departure by Company
therefrom, shall in any event be effective without the written concurrence of
Requisite Lenders; provided that any such amendment, modification, termination,
waiver or consent which: increases the amount of any of the Commitments or
reduces the principal amount of any of the Loans; changes any Lender's Pro Rata
Share; changes in any manner the definition of "Requisite Lenders"; changes in
any manner any provision of this Agreement which, by its terms, expressly
requires the approval or concurrence of all Lenders; postpones the
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scheduled final maturity date (but not the date of any scheduled installment of
principal) of any of the Loans; postpones the date on which any interest or any
fees are payable; decreases the interest rate borne by any of the Loans or the
amount of any fees payable hereunder; releases all or substantially all of the
Collateral; releases any Guarantor from its obligations under its Guaranty; or
changes in any manner the provisions contained in subsection 7.1 or this
subsection 8.6 shall be effective only if evidenced by a writing signed by or on
behalf of all Lenders to whom are owed Obligations being directly affected by
such amendment, modification, termination, waiver or consent. In addition, (i)
no amendment, modification, termination or waiver of any provision of any Note
shall be effective without the written concurrence of the Lender which is the
holder of that Note and (ii) no increase in the Commitments of any Lender over
the amount thereof then in effect shall be effective without the written
concurrence of that Lender, it being understood and agreed that in no event
shall waivers or modifications of conditions precedent, covenants, Events of
Default, Potential Events of Default or of a mandatory prepayment or a reduction
of any or all of the Commitments be deemed to constitute an increase of the
Commitment of any Lender and that an increase in the available portion of any
Commitment of any Lender shall not be deemed to constitute an increase in the
Commitment of such Lender. Any waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given. No notice
to or demand on Company in any case shall entitle Company to any other or
further notice or demand in similar or other circumstances. Any amendment,
modification, termination, waiver or consent effected in accordance with this
subsection 8.6 shall be binding upon each Lender at the time outstanding, each
future Lender and, if signed by Company, on Company.
8.7 INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
8.8 NOTICES.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and property addressed. For the purposes hereof, the address of each party
hereto shall be as set forth under such party's name on the signature pages
hereof or such other address as shall be designated by such Person in a written
notice delivered to the other parties hereto.
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8.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
hereunder.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Company set forth in subsections 8.1, 8.2 and 8.3
shall survive the payment of the Loans, and the termination of this Agreement.
8.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of Lenders in the exercise of any
power, right or privilege hereunder or under any other Loan Document shall
impair such power, right or privilege or be construed to be a waiver of any
default or acquiescence therein, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other power, right or privilege. All rights and remedies existing under this
Agreement and the other Loan Documents are cumulative to, and not exclusive of,
any rights or remedies otherwise available.
8.11 MARSHALLING; PAYMENTS SET ASIDE.
Lenders shall be under no obligation to marshal any assets in favor of
Company or any other party or against or in payment of any or all of the
Obligations. To the extent that Company makes a payment or payments to Lenders,
or Lenders enforce any security interests or exercise its rights of setoff, and
such payment or payments or the proceeds of such enforcement or setoff or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, any other state or federal law, common
law or any equitable cause, then, to the extent of such recovery, the obligation
or part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor or related thereto, shall be revived and continued in full
force and effect as if such payment or payments had not been made or such
enforcement or setoff had not occurred.
8.12 SEVERABILITY.
In case any provision in or obligation under this Agreement or the
Notes or any other Loan Document shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any' other
jurisdiction, shall not in any way be affected or impaired thereby.
8.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.
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The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement and it shall not be necessary for any other
Lender to be joined as an additional party in any proceeding for such purpose.
8.14 HEADINGS.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
8.15 APPLICABLE LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF MICHIGAN, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES.
8.16 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 8.1). Neither Company's
rights or obligations hereunder nor any interest therein may be assigned or
delegated by Company without the prior written consent of all Lenders.
8.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OBLIGATION MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF
MICHIGAN AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT COMPANY ACCEPTS FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED
THEREBY IN CONNECTION WITH THIS
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AGREEMENT, SUCH OTHER LOAN DOCUMENT OR SUCH OBLIGATION. Company hereby agrees
that service of all process in any such proceeding in any such court may be made
by registered or certified mail, return receipt requested, to Company at its
address provided on the signature page hereof, such service being hereby
acknowledged by Company to be sufficient for personal jurisdiction in any action
against Company in any such court and to be otherwise effective and binding
service in every respect. Nothing herein shall affect the right to serve process
in any other manner permitted by law or shall limit the right of Lenders to
bring proceedings against Company in the courts of any other jurisdiction.
8.18 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver
is intended to be all encompassing of any and all disputes that may be filed in
any court and that relate to the subject matter of this transaction, including
without limitation contract claims, tort claims, breach of duty claims and all
other common law and statutory claims. Each party hereto acknowledges that this
waiver is a material inducement to enter into a business relationship, that each
has already relied on this waiver in entering into this Agreement, and that each
will continue to rely on this waiver in their related future dealings. Each
party hereto further warrants and represents that it has reviewed this waiver
with its legal counsel and that it knowingly and voluntarily waives its jury
trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY
OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. In the event
of litigation, this Agreement may be filed as a written consent to a trial by
the court.
8.19 CONFIDENTIAL.
Each Lender shall hold all non-public information obtained pursuant to
the requirements of this Agreement which has been identified as confidential by
Company in accordance with such Lender's customary procedures for handling
confidential information of this nature and in accordance with safe and sound
banking practices, it being understood and agreed by Company that in any event a
Lender may make disclosures reasonably required by any bona fide assignee,
transferee or participant in connection with the contemplated assignment or
transfer by such Lender of any Loans or
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any participation therein or as required or requested by any governmental agency
or representative thereof or pursuant to legal process; provided that, unless
specifically prohibited by applicable law or court order, each Lender shall
notify Company of any request by any governmental agency or representative
thereof (other than any such request in connection with any examination of the
financial condition of such Lender by such governmental agency) for disclosure
of any such non-public information prior to disclosure of such information; and
provided, further, that in no event shall any Lender be obligated or required to
return any materials furnished by Company or any of its Subsidiaries.
8.20 COUNTERPARTS; EFFECTIVENESS.
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Company and
Lenders of written or telephonic notification of such execution and
authorization of delivery thereof.
8.21 LIMITATION ON RECOURSE.
No recourse for the payment of the principal of or premium, if any, or
interest on any Note, or for any claim based thereon or otherwise in respect
thereof, and no recourse under or upon any obligation, covenant or agreement of
Company in this Agreement or in any Note or because of the creation of any
Indebtedness represented thereby, shall be had against any past, present or
future partner of Company, or any officer, director or employee, past, present
or future, of Company or any past, present or future general or limited partner
of the Company or of any successor corporation or partnership or against the
property or assets of any such general or limited partner, officer, employee or
director, either directly or through Company or any partner of Company or any
successor corporation or general or limited partnership, whether by virtue of
any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise.
8.22 RELATIONSHIP OF THIS AGREEMENT TO THE ORIGINAL CREDIT AGREEMENT.
This Agreement shall become effective on the Closing Date. On the
Closing Date, the Loans under the Original Credit Agreement which are not paid
in full shall be considered a part of the Loans under this Agreement for all
purposes, as if made in accordance with an pursuant to the terms of this
Agreement. On and after the Effective
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Date, the rights and obligations of the parties hereto shall be governed solely
by this Agreement and the other Loan Documents, except in respect of any rights
or obligations arising prior to the Closing Date and which shall survive the
Closing Date. All of the Loans and other Obligations of the Loan Parties are a
continuation of, or replace and refund, as the case may be, the "Loans" and
other "Obligations" of the Loan Parties under and as defined in the Original
Credit Agreement, and all Loans and other Obligations of each Loan Party shall
be entitled to, and are secured by, the same Collateral with the same priority,
as the "Loans" and other "Obligations" under and as defined in the Original
Credit Agreement. This Agreement amends and restates in full the terms and
provisions of the Original Credit Agreement and is not intended to constitute a
novation or satisfaction of or a renunciation or cancellation or other discharge
of the indebtedness and other liabilities and obligations created under and
evidenced by the Original Credit Agreement, and Company agrees that all liens
and security interests, including without limitation all security agreements and
financing statements, created, executed or filed in connection with the Original
Credit Agreement shall continue in full force and effect and secure all Loans
and other Obligations under this Agreement and the other Loan Documents. This
Agreement and the Loan Documents are the only agreements among the parties
hereto and thereto with respect to the matters contemplated hereby and thereby
and set forth the entire understanding of the parties with respect hereto and
thereto.
[Remainder of page intentionally left blank]
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87
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY:
▇▇▇▇▇ ▇▇▇▇▇ PARTNERS, L.P.
By: ▇▇▇▇▇ Communication Partners,
a General Partner
By: Jamesco, Inc.,
a General Partner
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
Notice Address:
▇▇▇▇▇ ▇▇▇▇▇ Partners, L.P.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
-81-
88
LENDERS:
GOLDEN TREE HIGH YIELD PARTNERS, L.P.
By:
---------------------------------------
Name:
Title:
Notice Address:
Attention:
Telephone:
Telecopy:
HIGHBRIDGE INTERNATIONAL LLC
By: Golden Tree Asset Management,
as Agent
By:
---------------------------------------
Name:
Title:
Notice Address:
Attention:
Telephone:
Telecopy:
-82-
89
DEUTSCHE BANK SHARPS ▇▇▇▇▇▇ INC.
By: Golden Tree Asset Management, L.P.,
as Agent
By:
---------------------------------------
Name:
Title:
Notice Address:
Attention:
Telephone:
Telecopy:
GOLDENTREE HY OPPORTUNITIES I, L.P.
By:
---------------------------------------
Name:
Title:
Notice Address:
Attention:
Telephone:
Telecopy:
-83-