v
030432:109398 #354844 v6
Loan Agreement
Fleet/Galaxy Telecom L.P.
LOAN AGREEMENT
BY AND AMONG
GALAXY TELECOM, L.P.,
GALAXY TELECOM CAPITAL CORP.,
AND
FLEET NATIONAL BANK, AS AGENT AND LENDER
AND
THE OTHER FINANCIAL INSTITUTIONS NOW OR
HEREAFTER PARTIES HERETO
$5,000,000 TERM LOAN
March 31, 2000
INDEX TO
LOAN AGREEMENT
Page
ARTICLE 1. DEFINITIONS AND ACCOUNTING AND OTHER TERMS 1
Section 1.1. Certain Defined Terms. 1
Section 1.2. Accounting Terms 12
Section 1.3. Other Terms 12
ARTICLE 2. AMOUNT AND TERMS OF THE LOANS 13
Section 2.1. The Loan 13
Section 2.1.1. The Loan 13
Section 2.1.2. Intentionally Omitted 13
Section 2.1.3. Intentionally Omitted 13
Section 2.2. Intentionally Omitted 13
Section 2.3. Interest and Fees on the Loan 13
Section 2.3.1. Interest 13
Section 2.3.2. Intentionally Omitted 13
Section 2.3.3. Fees 13
Section 2.3.4. Increased Costs - Capital 13
Section 2.4. Notations 14
Section 2.5. Computation of Interest and Fees 14
Section 2.6. Time of Payments and Prepayments in
Immediately Available Funds and Setoff 14
Section 2.6.1. Time 14
Section 2.6.2. Setoff, etc. 15
Section 2.6.3. Unconditional Obligations and No Deductions 16
Section 2.7. Prepayment and Certain Payments 16
Section 2.7.1. Mandatory Payments 16
Section 2.7.2. Voluntary Prepayments 16
Section 2.7.3. Intentionally Omitted 17
Section 2.7.4. Intentionally Omitted 17
Section 2.7.5. Intentionally Omitted 17
Section 2.8. Payment on Non-Business Days 17
Section 2.9. Use of Proceeds 17
ARTICLE 3. CONDITIONS OF LENDING 17
Section 3.1. Conditions Precedent to the Commitment and to the Loan 17
Section 3.1.1. The Commitment and the Loan 17
ARTICLE 4. REPRESENTATIONS AND WARRANTIES 19
Section 4.1. Representations and Warranties of the
Borrower 19
Section 4.1.1. Organization and Existence 19
Section 4.1.2. Authorization and Absence of Defaults 19
Section 4.1.3. Acquisition of Consents 19
Section 4.1.4. Validity and Enforceability 20
Section 4.1.5. Financial Information 20
Section 4.1.6. No Litigation 20
Section 4.1.7. Regulation U 20
Section 4.1.8. Absence of Adverse Agreements 21
Section 4.1.9. Taxes 21
Section 4.1.10. ERISA 21
Section 4.1.11. Ownership of Properties 22
Section 4.1.12. Accuracy of Representations and Warranties 22
Section 4.1.13. Senior Subordinated Note Representations
and Warranties 22
Section 4.1.14. No Investment Company 23
Section 4.1.15. Solvency, etc. 23
Section 4.1.16. Approvals 23
Section 4.1.17. Ownership Interests 23
Section 4.1.18. Licenses, Registrations, Compliance with
Laws, etc. 23
Section 4.1.19. Principal Place of Business; Books and
Records 24
Section 4.1.20. Subsidiaries 24
Section 4.1.21. Franchises, etc. 24
Section 4.1.22. Copyright 24
Section 4.1.23. Basic Subscribers 24
Section 4.1.24. Environmental Compliance 24
Section 4.1.25. Material Contracts 25
Section 4.1.26. Patents, Trademarks and Other Property
Rights 25
Section 4.1.27. Related Documents 25
Section 4.1.28. Transfer of Assets 25
ARTICLE 5. COVENANTS OF THE BORROWER 25
Section 5.1. Affirmative Covenants of the Borrower Other
than Reporting Requirements 25
Section 5.1.1. Payment of Taxes, etc. 26
Section 5.1.2. Maintenance of Insurance 26
Section 5.1.3. Preservation of Existence, etc. 26
Section 5.1.4. Compliance with Laws, etc. 26
Section 5.1.5. Visitation Rights 26
Section 5.1.6. Keeping of Records and Books of Account 27
Section 5.1.7. Maintenance of Properties, etc. 27
Section 5.1.8. Accounting System 27
Section 5.1.9. Other Documents, etc. 27
Section 5.1.10. Maximum Total Indebtedness and Maximum
Senior Indebtedness to Annualized Operating
Cash Flow 27
Section 5.1.11. Maximum Senior Indebtedness to Basic
Subscribers 27
Section 5.1.12. Minimum Ratio of Operating Cash Flow to
Interest Expense 27
Section 5.1.13. Intentionally Omitted 28
Section 5.1.14. Minimum Fixed Charge Coverage 28
Section 5.1.15. Intentionally Omitted 28
Section 5.1.16. Officer's Certificates and Requests 28
Section 5.1.17. Depository 28
Section 5.1.18. Chief Executive Officer 28
Section 5.1.19. Completion of Improvements 28
Section 5.1.20. Notice of Purchase of Real Estate and
Leases 28
Section 5.1.21. Additional Assurances 28
Section 5.1.22. Appraisals 29
Section 5.1.23. Environmental Compliance 29
Section 5.1.24. Remediation 29
Section 5.1.25. Site Assessments 29
Section 5.1.26. Indemnity 29
Section 5.1.27. Intentionally Omitted 29
Section 5.1.28. Intentionally Omitted 29
Section 5.2. Negative Covenants of the Borrower 29
Section 5.2.1. Liens, etc. 29
Section 5.2.2. Assumptions, Guaranties, etc. of
Indebtedness of Other Persons 31
Section 5.2.3. Sale of Assets Dissolution, etc. 31
Section 5.2.4. Change in Nature of Business 31
Section 5.2.5. Ownership 31
Section 5.2.6. Sale and Leaseback 31
Section 5.2.7. Sale of Accounts, etc. 31
Section 5.2.8. Indebtedness 32
Section 5.2.9. Other Agreements 32
Section 5.2.10. Payment or Prepayment of Equity 32
Section 5.2.11. Dividends, Payments and Distributions 32
Section 5.2.12. Investments in or to Other Persons 33
Section 5.2.13. Transactions with Affiliates 33
Section 5.2.14. Change of Fiscal Year 34
Section 5.2.15. Subordination of Claims 34
Section 5.2.16. Compliance with ERISA 34
Section 5.2.17. Capital Expenditures 34
Section 5.2.18. Hazardous Waste 34
Section 5.2.19. Payments on Senior Subordinated Notes 34
Section 5.3. Reporting Requirements 35
ARTICLE 6. EVENTS OF DEFAULT 37
Section 6.1. Events of Default 37
ARTICLE 7. REMEDIES OF LENDERS 41
ARTICLE 8. ADMINISTRATIVE AGENT 41
Section 8.1. Appointment 41
Section 8.2. Powers; General Immunity 42
Section 8.2.1. Duties Specified 42
Section 8.2.2. No Responsibility for Certain Matters 42
Section 8.2.3. Exculpatory Provisions 42
Section 8.2.4. Agent Entitled to Act as Lender 43
Section 8.3. Representations and Warranties; No
Responsibility for Appraisal of
Creditworthiness 43
Section 8.4. Right to Indemnity 43
Section 8.5. Payee of Note Treated as Owner 44
Section 8.6. Resignation by Agent 44
Section 8.7. Successor Agent 44
ARTICLE 9. MISCELLANEOUS 45
Section 9.1. Consent to Jurisdiction and Service of
Process 45
Section 9.2. Rights and Remedies Cumulative 45
Section 9.3. Delay or Omission Not Waiver 46
Section 9.4. Waiver of Stay or Extension Laws 46
Section 9.5. Amendments, etc. 46
Section 9.6. Addresses for Notices, etc. 47
Section 9.7. Costs, Expenses and Taxes 48
Section 9.8. Participations 48
Section 9.9. Binding Effect; Assignment 49
Section 9.10. Actual Knowledge 49
Section 9.11. Substitutions and Assignments 49
Section 9.12. Payments Pro Rata 51
Section 9.13. Governing Law 51
Section 9.14. Severability of Provisions 51
Section 9.15. Headings 51
Section 9.16. Counterparts 52
Section 9.17. Senior Indebtedness 52
Section 9.18. Joint and Several Obligations 52
Section 9.19. Pledge to Federal Reserve 52
Section 9.20. Replacement Documents 52
Section 9.21 Guaranty of Capital Corp. 52
SCHEDULE OF EXHIBITS
1.2 Franchises
1.3 Ownership Interests
1.5 Form of Note
1.7 Permitted Encumbrances
1.8 Pro Rata Shares
1.9 Form of Borrowing Request
2.6.1 Lenders' Wire Transfer Instructions
3.1.1.3 Opinion of Borrower's Counsel and Borrower's FCC
Counsel
4.1.1 Jurisdictions of Incorporation, Foreign
Qualifications
4.1.6 Litigation
4.1.11 Real Property
4.1.18 Governmental Permits
4.1.21 Licenses, Franchises
4.1.22 Copyrights
4.1.24 Hazardous Waste
4.1.25 Material Contracts
4.1.26 Intellectual Property
4.1.28 GTI Assets Not Transferred
5.2.2 Guaranties
5.3.5 Form of Compliance Certificate
9.11.1 Form of Substitution Agreement
Loan Agreement
Fleet/Galaxy $5 Million Term Loan
030432:109398 #354844 v6
Loan Agreement
Fleet/Galaxy $5 Million Term Loan
LOAN AGREEMENT
LOAN AGREEMENT dated as of March 31, 2000 by and among GALAXY TELECOM,
L.P., a Delaware limited partnership ("GTLP" and "Borrower"), and GALAXY TELECOM
CAPITAL CORP., a Delaware corporation ("Capital Corp."), each with a principal
place of business at 0000 Xxxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000, the
financial institutions party hereto from time to time (the "Lenders") and FLEET
NATIONAL BANK, a national banking association organized under the laws of the
United States and having an office at Xxx Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000 ("Fleet"), as agent for the Lenders (the "Agent") and as a Lender.
NOW THEREFORE, in consideration
of the premises and of the mutual covenants and agreements contained herein, the
parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS AND ACCOUNTING AND OTHER TERMS
Section 1.1. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Active Plant" shall mean coaxial and/or fiberoptic television cable
together with all amplifiers and electronics which has been connected to a
Headend, has been energized and is capable of carrying television signals to
Basic Subscribers with only the addition of a drop-line from such television
cable to the Unit in question.
"Affiliate" means singly and collectively, any Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with, the Borrower. For purposes of this definition,
a Person shall be deemed to be "controlled by" the Borrower if the Borrower
possesses, directly or indirectly, power either to (i) vote 10% or more of the
securities having ordinary voting power for the election of directors of such
Person or (ii) direct or cause the direction of the management and policies of
such Person whether by contract or otherwise, and the legal representative,
successor or assign of any such Person.
"Affiliate Subordination Agreement" means that certain Affiliate
Subordination Agreement between GTLP, GTI, LLC, the Manager, the Lenders, Xxxxx
X. Xxxxxxx, Xx., Xxxxx X. Xxxxxxx, J. Xxxxx Xxxxxxxx, Vantage, Vista, and the
Investors dated as of December 23, 1994, and any other affiliate subordination
agreement executed from time to time by any Affiliate of the Borrower, as
amended or otherwise modified from time to time.
"Affiliate Subordinated Indebtedness" means Indebtedness of the Borrower,
GTI and/or LLC to Affiliates of the Borrower which has been subordinated to the
Obligations pursuant to terms and conditions satisfactory in all respects to the
Majority Lenders and which contains terms and conditions which are satisfactory
in all respects to the Majority Lenders.
"Agent" means Fleet or any other Person which is at the time in question
serving as the agent under the terms of Article 8 hereof.
"Agreement" means this Loan Agreement, as the same may from time to time be
amended or otherwise modified.
"Alternate Base Rate" means the greater of (i) the Prime Rate per annum and
(ii) the Federal Funds Rate plus 0.50% per annum.
"A.M." means a time from and including 12 o'clock midnight to and excluding
12 o'clock noon on any Business Day using Eastern Standard (Daylight Savings)
time.
"Annualized Operating Cash Flow" means Operating Cash Flow for the most
recently ended calendar month and for the two immediately preceding calendar
months based on the Borrower's accurate monthly financial statements provided to
the Lenders in accordance with Sections 5.3.3(a) and 5.3.7 for the calendar
months in question times four.
"Asset Sale" means any sale or other transfer by the Borrower, GTI or any
of the Borrower's Subsidiaries of any interest in any of the assets or rights of
the Borrower, GTI or the Borrower's Subsidiaries out of the ordinary course of
business having an aggregate value, when combined with all prior such sales
during the term of this Agreement in excess of $500,000, other than a System
Asset Sale and the sale of obsolete or worn out equipment no longer used or
usable in the business of the Borrower, GTI or applicable Subsidiary which the
Borrower, GTI or applicable Subsidiary does not substantially contemporaneously
replace.
"Basic Service" shall mean the simultaneous delivery by the Borrower to
television receivers (or any other suitable audio- video communication receiver)
of Basic Subscribers of the basic level full cable television service offered by
the Borrower.
"Basic Subscriber" shall mean a Person located in a Unit Passed which is
connected by a drop line to the Borrower's cable television system, who has
contracted to pay for the right to receive Basic Service over the Borrower's
cable television system, who has paid at least one regular monthly payment in
addition to any initial deposits, and whose account is not more than 60 days
past due.
"Borrowed Money" means any obligation to repay funded Indebtedness, any
Indebtedness evidenced by notes, bonds, debentures, guaranties or similar
obligations including without limitation the Loan and any obligation under a
conditional sale or other title retention agreement, the net aggregate rentals
under any Capitalized Lease Obligation or any lease which is the substantial
equivalent of the financing of the property so leased, any reimbursement
obligation for any letter of credit and any obligations in respect of banker's
and other acceptances or similar obligations.
"Borrower" has the meaning assigned in the first paragraph of this
Agreement.
"Borrowing Request" has the meaning specified in Section 2.2 hereof.
"Budget" has the meaning assigned to such term in Section 5.3.9.
"Business Day" means any day on which banks in Boston, Massachusetts or New
York, New York are not authorized or required to close.
"Capital Corp." has the meaning specified in the recitals hereto.
"Capital Expenditures" means all expenditures paid or incurred by the
Borrower or any of its Subsidiaries in respect of (i) the acquisition,
construction, improvement or replacement of land, buildings, machinery,
equipment or any other fixed assets or leaseholds, and (ii) to the extent
related to and not included in (i) above, materials, contract labor and direct
labor, which expenditures have been or should be, in accordance with GAAP,
capitalized on the books of the Borrower or such Subsidiary. Where a fixed asset
is acquired by a lease which is required to be capitalized pursuant to statement
of financial accounting standards number 13 or any successor thereto, the amount
required to be capitalized in accordance therewith shall be considered to be an
expenditure in the year such asset is first leased.
"Capitalized Lease Obligations" means all lease obligations which have been
or should be, in accordance with GAAP, capitalized on the books of the lessee.
"Cash Equivalent Investments" means any Investment in (i) direct
obligations of the United States or any agency, authority or instrumentality
thereof, or obligations guaranteed by the United States or any agency, authority
or instrumentality thereof, whether or not supported by the full faith and
credit of, a right to borrow from or the ability to be purchased by the United
States; (ii) commercial paper rated in the highest grade by a nationally
recognized statistical rating agency or which, if not rated, is issued or
guaranteed by any issuer with outstanding long-term debt rated A or better by
any nationally recognized statistical rating agency; (iii) demand and time
deposits with, and certificates of deposit and bankers acceptances issued by,
any office of the Agent or any other bank or trust company which is organized
under the laws of the United States or any state thereof and has capital,
surplus and undivided profits aggregating at least $500,000,000, the outstanding
long-term debt of which is rated A or better by any nationally recognized
statistical rating agency; (iv) any short-term note which has a rating of MIG-2
or better by Xxxxx'x Investors Service Inc. or a comparable rating from any
other nationally recognized statistical rating agency; (v) any municipal bond or
other governmental obligation (including without limitation any industrial
revenue bond or project note) which is rated A or better by any nationally
recognized statistical rating agency; (vi) any other obligation of any issuer,
the outstanding long-term debt of which is rated A or better by any nationally
recognized statistical rating agency; or (vii) any repurchase agreement with any
financial institution described in clause (iii) above, relating to any of the
foregoing instruments and fully collateralized by such instruments. Each Cash
Equivalent Investment shall have a maturity of less than one year at the time of
purchase; provided that the maturity of any repurchase agreement shall be deemed
to be the repurchase date and not the maturity of the subject security and that
the maturity of any variable or floating rate note subject to prepayment at the
option of the holder shall be the period remaining (including any notice period
remaining) before the holder is entitled to prepayment.
"Change of Control" means any one of the following events: (i) Xxxxx X.
Xxxxxxx, Xx., Xxxxx X. Xxxxxxx and/or Xxxxx X. Xxxxxxx, Xx. own less than 51% of
the common equity interests in the Manager or Management LLC, respectively
(other than transfers to trusts for the benefit of their respective wives and/or
children for estate planning purposes so long as the transferor involved retains
effective control over the disposition and voting of such interests and other
than transfers to their respective executors and administrators following
death), (ii) Xxxxx X. Xxxxxxx, Xx., Xxxxx X. Xxxxxxx and/or Xxxxx X. Xxxxxxx,
Xx. own less than 51% of the common equity interests in LLC which they hold as
of the date hereof (other than transfers to trusts for the benefit of their
respective wives and/or children for estate planning purposes so long as the
transferor involved retains effective control over the disposition and voting of
such interests and other than transfers to their respective executors and
administrators following death), or (iii) any change in the ownership of GTI or
LLC such that the Investors own, collectively, beneficially and of record less
than 51% of the voting equity interests in GTI or LLC and less than 51% of the
notes which LLC is issuing to them as of the date hereof. Notwithstanding the
foregoing, no Change of Control shall be deemed to occur hereunder upon any sale
of the equity securities of the Borrower in an offering registered with the
Securities and Exchange Commission under the Securities Act of 1933 provided
that the Borrower receives for its own use the net (after expenses) proceeds
thereof.
"Closing Costs" means the following costs incurred by the Borrower in
connection with the Loan: (i) the fees payable pursuant to Section 2.3.3 hereof,
(ii) all out-of-pocket expenses reimbursed to others by the Borrower in
connection with the closing of the Loan and (iii) any administrative fees
payable to the Agent in connection with the syndication of the Loan.
"Closing Date" means the date on which all of the conditions precedent set
forth in Section 3.1 of this Agreement have been satisfied.
"Code" means the Internal Revenue Code of 1986 as amended from time to
time.
"Commitment" means the Lenders' several commitments to make the Loan, as
set forth in Section 2.1.1 hereof.
"Commonly Controlled Entity" means a Person, whether or not incorporated,
which is under common control with the Borrower within the meaning of section
414(b) or (c) of the Code.
"Default" means an event or condition which with the giving of notice or
lapse of time or both would become an Event of Default.
"Discharged Rights and Obligations" shall have the meaning assigned to such
term in Section 9.11.4.
"Dollars" and the sign "$" mean lawful money of the United States of
America.
"Effective Rate" means, between the Closing Date and June 30, 2000, the
Alternate Base Rate plus 2% per annum and from July 1, 2000 through the
Repayment Date, the Alternate Base Rate plus 4% per annum
"Equity" means the investments by the Investors and the Management LLC in
GTI and LLC, and in turn by GTI and LLC in GTLP.
"Equity Documents" means, collectively, all material documents entered into
by the Borrower, any of its Subsidiaries, GTI, LLC, Management LLC and/or the
Investors in connection with the investment of the Equity or the Additional
Equity.
"ERISA" means the Employment Retirement Income Security Act of 1974 as
amended from time to time.
"Events of Default" has the meaning assigned to that term in Section 6.1 of
this Agreement.
"Exhibit" means, when followed by a letter, the exhibit attached to this
Agreement bearing that letter and by such reference fully incorporated in this
Agreement.
"FCC" shall mean the Federal Communications Commission and any successor
governmental agency performing functions similar to those performed by the
Federal Communications Commission on the date hereof.
"FCC License" means any license or permit issued by the FCC, including
without limitation licenses issued for the operation of community antenna
television systems, community antenna relay systems, microwave systems, earth
stations and business and other two-way radios.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/16th of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York, provided that (i) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next succeeding Business Day as so published, and (ii) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate quoted to the Agent on such
day on such transactions as determined by the Agent in its discretion.
"Financeable Interest" shall have the meaning assigned to such term in
Section 2.3.2.
"Financing Documents" means, collectively, this Agreement, the Notes, the
Security Documents, and each other agreement, instrument or document now or
hereafter executed in connection herewith or therewith.
"Fixed Charge Covenant Ratio" means, as of the last day of each calendar
month, a fraction, the numerator of which shall be an amount equal to Operating
Cash Flow for such month and each of the two immediately preceding calendar
months times four less (a) Capital Expenditures made by the Borrower (other than
those Capital Expenditures paid for with (i) purchase money Indebtedness, (ii)
Loans, (iii) cash (except to the extent that the Borrower's cash balance at the
end of such calendar month is less than $1,500,000), or (iv) Capitalized Lease
Obligations permitted to exist under this Agreement) and its Subsidiaries times
four and (b) Permitted Restricted Payments paid during such three calendar month
period in each case times four, and the denominator of which shall be an amount
equal to Total Debt Service (exclusive of voluntary prepayments of principal on
the Loans and exclusive of Closing Costs) for such three calendar month period
times four.
"Franchise" means any franchise, permit, license, right of entry agreement,
other authorization or other right granted by any governmental unit or authority
or any private association, incorporated or otherwise, for the construction and
operation of a cable television system or the reception and transmission of
signals by microwave, including without limitation any FCC License.
"Franchise Agreement" means the ordinance, agreement, contract or other
documents stating the terms and conditions of any Franchise, including without
limitation all exhibits and schedules thereto, all amendments thereof and
consents, waivers and extensions issued thereunder, any documents incorporated
therein by reference and any application upon which such Franchise was granted.
"Franchise Area(s)" means the communities listed on Exhibit 4.1.21 hereto.
"GAAP" means generally accepted accounting principles in effect from time
to time in the United States of America.
"Gross Revenues" means all revenues derived directly or indirectly from the
operation or use of the Systems (other than revenues from a refinancing or sale
of all or part of the Systems), including, without limitation, revenue from
subscriber service fees, auxiliary service fees, installation and reconnection
fees, leased channel fees, converter rentals, studio rentals, late fees,
production equipment and personnel fees and advertising revenues; provided,
however, that "Gross Revenues" shall not include (a) any taxes on services
furnished by the Borrower imposed directly upon any subscriber or user by any
governmental unit and collected by the Borrower on behalf of said governmental
unit, or (b) the amount of any discounts or rebates relating to any such fees or
revenues, or (c) interest actually earned on any such fees or revenues.
"GTI" means Galaxy Telecom, Inc., a Delaware corporation which is the sole
managing general partner and a limited partner of the Borrower.
"Hazardous Material" shall mean any substance or material defined or
designated as a hazardous or toxic waste, hazardous or toxic material, hazardous
or toxic substance, or other similar term, by any federal, state or local
environmental statute, regulation or ordinance.
"Headend" shall mean the antenna site, the tower and antenna, the microwave
communications equipment, the earth station and the head end facilities which
form a part of a cable television system.
"Indebtedness" means, for any Person, (i) all indebtedness or other
obligations of said Person for Borrowed Money or for the deferred purchase price
of property or services, (ii) all indebtedness or other obligations of any other
Person ("Other Person") for Borrowed Money or for the deferred purchase price of
property or services, the payment or collection of which said Person has
guaranteed (except by reason of endorsement for collection in the ordinary
course of business) or in respect of which said Person is liable, contingently
or otherwise, including, without limitation, liable by way of agreement to
purchase or lease, to provide funds for payment, to supply funds to purchase,
sell or lease property or services primarily to assure a creditor of such Other
Person against loss or otherwise to invest in or make a loan to the Other
Person, or otherwise to assure a creditor of such Other Person against loss,
(iii) all indebtedness or other obligations of any Person for Borrowed Money or
for the deferred purchase price of property or services secured by (or for which
the holder of such indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien upon or in any property owned by said Person, whether
or not said Person has assumed or become liable for the payment of such
indebtedness or obligations, (iv) Capitalized Lease Obligations of said Person,
(v) obligations of such Person under contracts pursuant to which such Person has
agreed to purchase interest rate protection or swap interest rate obligations
(including, without limitation, any such obligations purchased or maintained
under Section 2.7.5 hereof) and (vi) all other liabilities or obligations of
said Person which would, in accordance with GAAP, be classified as liabilities
of such a Person.
"Indenture" means that certain Indenture dated as of September 28, 1995 by
and among the Borrower and Capital Corp., as issuers, and Boatmen's Trust
Company, as trustee, pursuant to which the Senior Subordinated Notes were
issued.
"Interest Expense" means, with respect to any period, the aggregate amount
required to be paid in cash by the Borrower and its Subsidiaries for interest,
fees, charges and expenses, however characterized, on its Indebtedness,
including, without limitation, all such interest, fees, charges and expenses
accrued and required to be paid in cash with respect to Indebtedness under the
Financing Documents (but not including fees associated with the purchase of any
interest rate protection arrangement).
"Investment" means any investment in any Person whether by means of a
purchase of capital stock, notes, bonds, debentures or other evidences of
Indebtedness and/or by means of a capital or partnership contribution, loan,
deposit, advance or otherwise.
"Investors" means, collectively, the entities (other than Vantage, Vista
and Old Galaxy) listed on Exhibit 1.3 hereto.
"Lender" means any financial institution which is now a party to this
Agreement, or at any time hereafter becomes a party to this Agreement pursuant
to the terms of Section 9.11 hereof, each in their individual capacity, and
"Lenders" means each of such financial institutions.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other) or other security agreement
or preferential arrangement of any kind or nature whatsoever (including without
limitation any conditional sale or other title retention agreement and any
Capitalized Lease Obligation) having substantially the same economic effect as
any of the foregoing and the filing of any financing statement under the
applicable Uniform Commercial Code or comparable law of any jurisdiction in
respect of any of the foregoing.
"LLC" means Galaxy Telecom Investments, L.L.C., a Delaware limited
liability company which is a general and a limited partner of GTLP.
"Loan" means the term loan in the initial principal amount of $5,000,000
made by the Lenders pursuant to this Agreement.
"Loans" means, collectively, the Loan and the Loans, as such term is
defined in the 1995 Loan Agreement.
"Majority Lenders" means, when there are fewer than three Lenders, each of
the Lenders, and when there are three or more Lenders, Lenders holding an
aggregate Pro Rata Share of the outstanding principal balance of the Loan in an
amount equal to or in excess of 51% of the total outstanding principal balance
of the Loan but in no event less than three Lenders (or four Lenders if there
are seven or more Lenders).
"Management Agreement" means that certain Management Agreement dated
December 23, 1994 between GTLP and the Manager, in the form delivered to the
Lenders on or prior to the Closing Date.
"Management Fees" means the aggregate of all fees and other forms of
compensation paid or incurred by GTLP and/or any Subsidiary pursuant to the
Management Agreement.
"Management LLC" means Galaxy Telecom Management, L.L.C., a Texas limited
liability company.
"Manager" means Galaxy Systems Management, Inc., a Missouri corporation.
"Material Adverse Effect" shall have the meaning set forth in Section
4.1.1.
"Multiemployer Plan" means a multiemployer plan as defined in Title IV of
ERISA.
"Net Income" means, for any fiscal period, the net after tax income (loss)
of the Borrower and its Subsidiaries for such period determined on a combined
basis in accordance with GAAP.
"Note" means a Term Note of the Borrower payable to the order of a Lender
in the form of Exhibit 1.5 hereto evidencing the indebtedness of the Borrower to
such Lender with respect to the Loan, and "Notes" means all of the Notes,
collectively.
"Obligations" mean any and all Indebtedness, obligations and liabilities of
GTLP, GTI, LLC, Capital Corp. and/or any of their Subsidiaries to any one or
more of the Lenders and/or the Agent of every kind and description, absolute or
contingent, due or to become due, whether for payment or performance, now
existing or hereafter arising, including, without limitation, the Loan,
interest, taxes, fees, charges, and expenses under the Financing Documents,
fees, charges and expenses in connection with any interest protection
arrangement under Section 2.7.5 and attorneys' fees chargeable to GTLP, GTI,
LLC, Capital Corp. and/or any of their Subsidiaries or incurred by any of the
Lenders and/or the Agent hereunder or under any of the Financing Documents.
"Officer's Certificate" means a certificate signed by a duly authorized
officer of the Borrower, or signed by a duly authorized officer of the Manager
as duly authorized agent of the Borrower, and delivered to the Agent on behalf
of the Lenders.
"Old Galaxy" means Galaxy Cablevision, L.P., a Delaware limited partnership.
"Operating Cash Flow" means, for any fiscal period, the Borrower's Net
Income, plus Interest Expense for such fiscal period, plus the amount of
depreciation and amortization for such fiscal period, plus non-cash charges for
such fiscal period, plus any Subordinated Management Fees accrued and not paid
in cash during such fiscal period, minus the amount of extraordinary gains
during such fiscal period, plus the amount of extraordinary losses during such
fiscal period, plus the amount of Closing Costs for such fiscal period, in each
case to the extent deducted or (in the case of extraordinary gains) added in the
calculation of Net Income for such fiscal period and all determined on a
combined basis in accordance with GAAP; provided, however, that all operating
results attributable to any System sold during the fiscal period in question
shall be excluded from the calculation of Operating Cash Flow for such fiscal
period.
"Other Financing Documents" means, collectively, (i) that certain Amended
and Restated Loan Agreement dated as of September 28, 1995 among the Agent, the
Borrower and the therein defined Lenders, as amended from time to time (as
amended, the "1995 Loan Agreement") and (ii) the Financing Documents (as such
term is defined in the 1995 Loan Agreement).
"PBGC" means the Pension Benefit Guarantee Corporation established pursuant
to subtitle A of Title 4 of ERISA.
"P.M." means a time from and including 12 o'clock noon on any Business Day
to the end of such Business Day using Eastern Standard (Daylight Savings) time.
"Permitted Encumbrances" means those Liens, security interests and defects
in title listed on Exhibit 1.7 hereto.
"Permitted Restricted Payment" shall have the meaning set forth in Section
5.2.11 (i).
"Person" means an individual, corporation, partnership, joint venture,
trust, or unincorporated organization, or a government or any agency or
political subdivision thereof.
"Plan" means an employee benefit plan or other plan maintained for
employees of the Borrower or any Commonly Controlled Entity and covered by Title
IV of ERISA.
"Pledge and Assignment Agreement" means the Pledge and Assignment Agreement
dated as of September 28, 1995 among GTLP, Capital Corp. and Boatmen's Trust
Company, as trustee.
"Premises" has the meaning assigned to such term in Section 4.1.24.1.
"Prime Rate" means the floating rate of interest per annum designated from
time to time by the Agent as being its "prime rate" of interest, such interest
rate to be adjusted on the effective date of any change thereof by the Agent, it
being understood that such rate of interest may not be the lowest rate of
interest from time to time charged by the Agent.
"Pro Rata Share" means (i) with respect to the Commitment, each Lender's
percentage share of the Commitment as set forth immediately opposite such
Lender's name on Exhibit 1.8, and (ii) with respect to the Loan, each Lender's
percentage share of the aggregate outstanding principal balance of the Loan.
"Projections" means Borrower's written projections of its one-year future
performance dated March 23, 2000 delivered to the Agent and the Lenders prior to
the Closing Date and certified by the Borrower on the Closing Date as being the
Projections.
"Related Documents" means the Indenture, the Pledge and Assignment
Agreement, and any other documents executed in connection with the Senior
Subordinated Notes.
"Request" means a written request for the Loan in the form of Exhibit 1.9,
received by the Agent on behalf of the Lenders from the Borrower in accordance
with this Agreement, specifying the date on which the Borrower desires the Loan
and the disbursement instructions of the Borrower with respect thereto.
"Repayment Date" means the earlier to occur of (i) December 31, 2000, or
(ii) such earlier date on which the Obligations become immediately due and
payable pursuant to the terms hereof.
"Reportable Event" shall have the meaning assigned to that term in Title IV
of ERISA.
"Section" means, when followed by a number, the section or subsection of
this Agreement bearing that number.
"Security Documents" means any and all documents, instruments and
agreements now or hereafter providing security for the Loan and any other
Indebtedness of GTLP, GTI, LLC Capital Corp. or any of the Borrower's
Subsidiaries to the Lenders and/or the Agent, including without limitation the
following: (i) any mortgages on and collateral assignments of real property
interests (fee, leasehold and easement) of the Borrower and its Subsidiaries and
GTI granting first Liens thereon; (ii) security agreements granting first Liens
on all GTLP's, its Subsidiaries', GTI's, LLC's, and Capital Corp.'s fixtures and
tangible and intangible personal property; (iii) a collateral assignment of
Borrower's, its Subsidiaries' and GTI's contracts, licenses, permits and
Franchises; (iv) those certain partnership interest pledge agreements between
the Agent and Vantage, GTI and LLC; (v) the Affiliate Subordination Agreement;
(vi) those certain limited liability company interest pledge agreements between
the Investors, Management LLC and the Agent; (vii) that certain Stock Pledge
Agreement regarding the shares of GTI between the shareholders of GTI and the
Agent; (viii) those certain Unlimited Guaranties of GTI, LLC, and Capital Corp.
in favor of the Agent; (ix) title and casualty insurance policies providing
coverage to the Agent; and (x) UCC-1 financing statements or similar filings
perfecting the above-referenced security interests, all as executed, delivered
to and accepted by the Agent either in connection with the Original Loan
Agreement or on or prior to the Closing Date, as same may be amended or
otherwise modified from time to time in writing by the Agent (with the authority
of the requisite Lenders) and the parties thereto.
"Selling Lender" shall have the meaning assigned to such term in Section
9.11.1.
"Senior Indebtedness" means all Indebtedness of the Borrower to the Lenders
and/or the Agent from time to time outstanding including, without limitation,
the aggregate outstanding principal amount of the Notes and any accrued and
unpaid principal, interest, fees and other charges due under other Financing
Documents, plus the net aggregate rentals under any Capitalized Lease
Obligation.
"Senior Subordinated Notes" means the 12.375% Senior Subordinated Notes due
2005 issued by GTLP and Capital Corp. pursuant to the Indenture.
"Single Employer Plan" means any Plan which is not a Multiemployer Plan.
"Subordinated Management Fees" shall have the meaning assigned to such term
in Section 5.2.11 hereof.
"Subsidiary" means any corporation, if any, of which more than 50% of the
outstanding capital stock having ordinary voting power to elect a majority of
the board of directors or other managers of such entity (irrespective of whether
or not at the time capital stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence of any
contingency) is at the time directly or indirectly owned by the Borrower or by
the Borrower and/or one or more Subsidiaries or the management of which
corporation is under control of the Borrower and/or any other Subsidiary,
directly or indirectly through one or more Persons and any other Person which,
under GAAP, should at any time for financial reporting purposes be consolidated
or combined with the Borrower and/or any other Subsidiary.
"Substituted Lender" has the meaning set forth in Section 9.11 hereof.
"Substitution Agreement" has the meaning assigned to such term in Section
9.11.1.
"Systems" means (i) the cable television systems owned by the Borrower, and
"System" means any one of them.
"System Asset Sale" means the sale by the Borrower, GTI or one of their
Subsidiaries to a third party which is not an Affiliate of the Borrower of one
or more Franchises and the assets related to such Franchise.
"Total Cash Interest Expense" means, with respect to any period, Interest
Expense for such period.
"Total Debt Service" means, for any period, the sum of the Borrower's and
its Subsidiaries' Total Cash Interest Expense for such period (exclusive of any
Closing Costs), plus the amount necessary to meet the regularly scheduled
principal amortization on the Loans, plus regularly scheduled payments on other
Indebtedness and Capitalized Lease Obligations of the Borrower and its
Subsidiaries for such period.
"Unit" means a single residential dwelling or commercial building which can
be connected by a single drop line. In the case of multiple residential
dwellings, such as apartment houses, mobile home parks and multi-family homes,
which do not obtain reduced bulk service rates, each separate dwelling unit
shall be counted as one Unit. The number of Units in a multiple residential
dwelling which does obtain a reduced bulk service rate shall be obtained by
dividing (x) the aggregate dollar amount of monthly subscriber's fees paid by
all individual subscribers within such dwelling for Basic Service by (y) the
maximum monthly subscriber's fee charged by the Borrower to a single residential
dwelling connected by a single drop line for Basic Service. The term "Passed" as
applied to a Unit shall mean a Unit which can be connected by a single drop line
from Active Plant.
"Vantage" means Vantage Cable Associates, L.P., an Iowa limited partnership.
"Vista" means Vista Communications Limited Partnership III, a Delaware
limited partnership.
Section 1.2. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP, calculations of
amounts for the purposes of calculating any financial covenants or ratios
hereunder shall be made in accordance with GAAP applied on a basis consistent
with those used in the prior financial statements delivered by the Borrower to
the Agent in connection with the Other Financing Documents (other than
departures therefrom not material in their impact), and all financial data
submitted pursuant to this Agreement shall be prepared in accordance with GAAP,
including, without limitation, that items of trade or barter shall be excluded.
Section 1.3. Other Terms. The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
ARTICLE 2
AMOUNT AND TERMS OF THE LOAN
Section 2.1. The Loan.
Section 2.1.1. The Loan. Each of the Lenders agrees to make, subject
to the terms and conditions of this Agreement, a term loan to the Borrower in
the amount of their respective Pro Rata Share of $5,000,000. In addition to
payments of interest due pursuant to Section 2.3.1 below, the outstanding
balance of principal, interest and fees due in connection with the Loan shall be
repaid on the Repayment Date.
Section 2.1.2. Intentionally Omitted.
Section 2.1.3. Intentionally Omitted.
Section 2.2. Intentionally Omitted.
Section 2.3. Interest and Fees on the Loan.
Section 2.3.1. Interest. Interest shall accrue and be paid currently
on the principal balances of the Loan at the Effective Rate, subject to and in
accordance with the terms and conditions of this Agreement and the Notes. The
Borrower shall pay such interest to the Agent for the pro rata account of each
Lender in arrears on the Loan outstanding from time to time after the date
hereof monthly on the last Business Day of each month of each year commencing
April 30, 2000.
Section 2.3.2. Intentionally Omitted.
Section 2.3.3. Fees. The Borrower shall pay to the Agent, on the
earlier of (i) the date upon which the Loan is repaid in full or (ii) the
Repayment Date, for the pro rata account of each Lender, a facility fee equal to
$800,000; provided, however, that such fee shall be reduced to $400,000 if the
Loans are repaid in full on or before June 30, 2000; and provided further that
such fee shall be reduced to $600,000 in the event that the Loans are not repaid
in full by June 30, 2000 but are repaid in full by September 15, 2000. This
facility fee shall be deemed earned in full upon the Closing Date.
Section 2.3.4. Increased Costs - Capital. If, after the date hereof,
any Lender shall have reasonably determined that the adoption after the date
hereof of any applicable law, governmental rule, regulation or order regarding
capital adequacy of banks or bank holding companies, or any change therein, or
any change 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 such Lender with any policy, guideline,
directive or request regarding capital adequacy (whether or not having the force
of law and whether or not failure to comply therewith would be unlawful) of any
such authority, central bank or comparable agency, has or would have the effect
of reducing the rate of return on the capital of such Lender as a consequence of
the obligations hereunder of such Lender to a level below that which such Lender
could have achieved but for such adoption, change or compliance (taking into
consideration the policies of such Lender with respect to capital adequacy
immediately before such adoption, change or compliance and assuming that the
capital of such Lender was fully utilized prior to such adoption, change or
compliance) by an amount reasonably deemed by such Lender to be material, then
such Lender shall notify the Agent and the Borrower thereof and the Borrower
shall pay to the Agent for the account of such Lender from time to time as
specified by such Lender such additional amounts as shall be sufficient to
compensate such Lender for such reduced return, each such payment to be made by
the Borrower within five Business Days after each demand by such Lender,
provided that the liability of the Borrower to pay such costs shall only accrue
with respect to costs accruing from and after the 90th day prior to the date of
each such demand. A certificate in reasonable detail of one of the officers of
such Lender describing the event giving rise to such reduction and setting forth
the amount to be paid to such Lender hereunder shall accompany any such demand
and shall, in the absence of manifest error, be presumed correct. In determining
such amount, such Lender may use any reasonable averaging and attribution
methods.
Section 2.4. Notations. At the time of (i) the making of the Loan evidenced
by any of the Notes; and (ii) each payment or prepayment of any of the Notes,
each Lender may enter upon its records an appropriate notation evidencing (a)
such Lender's Pro Rata Share of the Loan or (b) such payment or prepayment of
principal and (c) in the case of payments or prepayments of principal, the
portion of the Loan which was paid or prepaid. No failure to make any such
notation shall affect the Borrower's unconditional obligations to repay the Loan
and all interest, fees and other sums due in connection with this Agreement
and/or any of the Notes in full, nor shall any such failure, standing alone,
constitute grounds for disproving a payment of principal by the Borrower.
However, in the absence of manifest error, such notations and each Lender's
records containing such notations shall constitute presumptive evidence of the
facts stated therein, including, without limitation, the outstanding amount of
such Lender's Pro Rata Share of the Loan and all amounts due and owing to such
Lender at any time. Any such notations and such Lender's records containing such
notations may be introduced in evidence in any judicial or administrative
proceeding relating to this Agreement, the Loan or any of the Notes.
Section 2.5. Computation of Interest and Fees. Interest and fees due under
this Agreement and under the Notes shall be computed on the basis of a year of
360 days for the actual number of days elapsed.
Section 2.6. Time of Payments and Prepayments in Immediately Available
Funds and Setoff.
Section 2.6.1. Time. All payments and prepayments of principal, fees,
interest and any other amounts owed from time to time under this Agreement
and/or under any of the Notes shall be made to the Agent for the pro rata
account of each Lender at the address referred to in Section 9.6 in Dollars and
in immediately available funds prior to 12:00 o'clock P.M. on the Business Day
that such payment is due, provided that the Borrower hereby authorizes and
instructs the Agent to charge against the Borrower's accounts with the Agent on
each date on which a payment is due hereunder and/or under any of the Notes an
amount up to the principal, interest and fees due and payable to the Lenders,
the Agent or any Lender hereunder and/or under any of the Notes and such charge
shall be deemed payment hereunder and under the Notes in question to the extent
that immediately available funds are then in such accounts. In addition, the
Borrower hereby irrevocably authorizes the Agent, if and to the extent payment
of any installment of principal, interest and/or fees hereunder and/or under any
of the Notes is not made when due, to charge against the Borrower's accounts
with the Agent an amount equal to the amount thereof not paid when due. Any such
payment or prepayment which is received by the Agent in Dollars and in
immediately available funds after 12 o'clock P.M. on a Business Day shall be
deemed received for all purposes of this Agreement on the next succeeding
Business Day except that solely for the purpose of determining whether a Default
has occurred under Section 6.1.1, any such payment or prepayment if received by
the Agent prior to the close of the Agent's business on a Business Day shall be
deemed received on such Business Day. All payments of principal, interest, fees
and any other amounts which are owing to any or all of the Lenders or the Agent
hereunder and/or under any of the Notes that are received by the Agent in
immediately available Dollars prior to 12:00 o'clock P.M. on any Business Day
shall, to the extent owing to the Lenders other than the Agent, be sent by wire
transfer by the Agent (in each case, without deduction for any claim, defense or
offset of any type) before 3:00 o'clock P.M. on the same Business Day. Each such
wire transfer shall be addressed to each Lender in accordance with the wire
instructions set forth in Exhibit 2.6.1 hereto. The amount of each payment wired
by the Agent to each such Lender shall be such amount as shall be necessary to
provide such Lender with its Pro Rata Share of such payment (without
consideration or use of any contra accounts of any Lender), or with such other
amount as may be owing to such Lender in accordance with this Agreement (in each
case, without deduction for any claim, defense or offset of any type). Each such
wire transfer shall be sent by the Agent only after the Agent has received
immediately available Dollars from or on behalf of the Borrower and each such
wire transfer shall provide each Lender receiving same with immediately
available Dollars on receipt by such Lender. Any such payments of immediately
available Dollars received by the Agent after 12:00 o'clock P.M. and before 3:00
o'clock P.M. on any Business Day shall be forwarded in the same manner by the
Agent to such Lenders as soon as practicable on said Business Day, and if any
such payments of immediately available Dollars are received by the Agent after
3:00 o'clock P.M. on a Business Day, the Agent shall so forward same to such
Lenders before 10:00 o'clock A.M. on the immediately succeeding Business Day.
Section 2.6.2. Setoff, etc. Upon the occurrence and during the
continuance of any Event of Default, each Lender and the Agent is hereby
authorized at any time and from time to time, without notice to the Borrower
(any such notice being expressly waived by the Borrower), to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and any other Indebtedness at any time owing by such Lender to
or for the credit or the account of the Borrower against any and all of the
Obligations of the Borrower irrespective of whether or not such Lender shall
have made any demand under this Agreement or any of its Notes and although such
obligations may be unmatured. Each such Lender agrees to promptly notify the
Borrower and the Agent after any such setoff and application; provided that the
failure to give such notice shall not affect the validity of such setoff and
application. Promptly following any notice of setoff received by the Agent from
a Lender pursuant to the foregoing, the Agent shall notify each other Lender
thereof. The rights of each Lender under this Section 2.6.2 are in addition to
all other rights and remedies (including, without limitation, other rights of
setoff) which such Lender may have and are subject to Section 9.12.
Section 2.6.3. Unconditional Obligations and No Deductions. The
Borrower's obligation to make all payments provided for in this Agreement and
the other Financing Documents shall be unconditional. Each such payment shall be
made without deduction for any claim, defense or offset of any type, including
without limitation any withholdings and other deductions on account of income or
other taxes and regardless of whether any claims, defenses or offsets of any
type exist.
Section 2.7. Prepayment and Certain Payments.
Section 2.7.1. Mandatory Payments.
Section 2.7.1.1. In addition to each other principal payment
required hereunder, the outstanding principal balance of the Loan shall be
repaid on the Repayment Date.
Section 2.7.1.2. Intentionally Omitted.
Section 2.7.1.3. Simultaneously with the receipt by the
Borrower of the cash proceeds of any Asset Sale or any System Asset Sale, the
Borrower shall prepay to the Agent for the pro rata accounts of the Lenders the
outstanding principal balance of the Loans on a pari passu basis (as hereinafter
described) in an amount equal to the net (after reasonable expenses) cash
proceeds thereof. The Borrower, the Agent and the Lenders acknowledge and agree
that the Loans shall be treated on a pari passu basis with respect to any
payments, prepayments or proceeds of the collateral for the Loans so that any
such amounts are applied to the Loan, i.e., in proportion to the relative
amounts of Indebtedness owing on the Loan, so that, for example, the amount to
be applied to the Loan is equal to: total payment received multiplied by a
fraction, the numerator of which is the amount of outstanding Indebtedness of
the Loan and the denominator is the sum of the numerator and the amount of
outstanding Indebtedness of the Loans.
Section 2.7.1.4. In the event that the Borrower, GTI, or any of
their Subsidiaries receives, collectively, proceeds from any insurance policies
maintained by any of them (including, without limitation, casualty policies and
key man policies), which proceeds are in an aggregate amount during the terms of
this Agreement or of the 1995 Loan Agreement in excess of $500,000, the Borrower
shall prepay the Loans on a pari passu basis (as described in Section 2.7.1.3
above) in an amount equal to such proceeds.
Section 2.7.2. Voluntary Prepayments. All or any portion of the
unpaid principal balance of the Loan may be prepaid at any time, without premium
or penalty, by a payment to the Agent for the account of each Lender of such
prepayment in immediately available Dollars by the Borrower; provided that each
such partial payment or prepayment of principal of the Loan shall be in a
principal amount of at least $100,000 or an integral multiple of $100,000 in
excess thereof.
Section 2.7.3. Intentionally Omitted.
Section 2.7.4. Intentionally Omitted.
Section 2.7.5. Intentionally Omitted.
Section 2.8. Payment on Non-Business Days. Whenever any payment to be made
hereunder or under one of the Notes shall be stated to be due on a day other
than a Business Day, such payment may be made on the next succeeding Business
Day, and such extension of time shall in such case be included in the
computation of payment of fees, if any, and interest under this Agreement and
under such Note.
Section 2.9. Use of Proceeds. The Borrower shall use the proceeds of the
Loan solely to partially fund the April 1, 2000 interest payment due in
connection with the Senior Subordinated Notes.
ARTICLE 3
CONDITIONS OF LENDING
Section 3.1. Conditions Precedent to the Commitment and to the Loan.
Section 3.1.1. The Commitment and the Loan. The effectiveness of this
Agreement and the obligations hereunder of the Lenders to make the Loan are
subject to performance by the Borrower of all of its obligations under this
Agreement, and to the satisfaction of the conditions precedent that all legal
matters incident to the transactions contemplated hereby or incidental to the
Loan shall be satisfactory to counsel for the Agent, and the Lenders shall have
received on or before the Closing Date all of the following, each dated the
Closing Date or another date acceptable to the Lenders and each to be in form
and substance satisfactory to the Agent in the Agent's sole and complete
discretion:
Section 3.1.1.1. The Notes, the Security Documents, and each of
the other Financing Documents, including, without limitation, those hereinafter
set forth.
Section 3.1.1.2. Certificates from GTI, LLC and Capital Corp.
certifying as to the resolutions authorizing and approving such of the Financing
Documents to which GTLP, LLC, GTI or Capital Corp. is a party and other matters
contemplated hereby and certifying as to the names and signatures of each
officer and manager of GTI, LLC and Capital Corp. authorized to sign each
Financing Document to be executed and delivered by or on behalf of GTLP, LLC,
GTI or Capital Corp. The Lenders may conclusively rely on each such certificate
until the Lenders shall receive a further certificate of GTI, LLC and Capital
Corp. canceling or amending the prior certificate and submitting the signatures
of the officers named in such further certificate.
Section 3.1.1.3. Favorable opinions of Messrs. Xxxxxxxx Xxxxxx
LLP and Xxxxxxx, Procter & Xxxx LLP, counsel for the Borrower, substantially in
the forms of Exhibit 3.1.1.3 hereto.
Section 3.1.1.4. An Officer's Certificate stating that:
(a) The
representations and warranties contained in Section 4.1 are correct on and as of
the Closing Date as though made on and as of such date; and
(b) No Default or Event of Default has occurred and is
continuing, or would result from the making of the Loan.
Section 3.1.1.5. Certificates of good standing of the
Secretaries of State of all states listed on Exhibit 4.1.1, dated reasonably
near the Closing Date.
Section 3.1.1.6. Receipt by the Agent of a deposit by the
Borrower of $2,425,000, which, when combined with the proceeds of the Loan, will
be sufficient to pay the April 1, 2000 interest payment due in connection with
the Senior Subordinated Notes, along with written instructions, including wire
transfer instructions, instructing the Agent to make such interest payment on
behalf of the Borrower.
Section 3.1.1.7. A completed Borrowing Request.
Section 3.1.1.8. Payment to the Agent and the Lenders of the
fees specified in this Agreement as being payable on the Closing Date and all
reasonable out-of-pocket costs and expenses incurred by the Agent in connection
with the transactions contemplated hereby, including, but not limited to,
outside legal expenses, accounting fees, auditing fees, appraisal fees, and
other fees associated with any independent analyses of the Borrower.
Section 3.1.1.9. Such other information about the Borrower
and/or its assets, business and/or financial condition as the Lenders may
request.
Section 3.1.1.10. Certificates of fire, liability and extended
coverage insurance policies, each such policy to name the Agent as mortgagee and
loss payee and as additional insured on all liability policies.
Section 3.1.1.11. True descriptions of any pending or
threatened litigation against or by the Borrower.
Section 3.1.1.12. Evidence that all necessary third party
consents have been obtained.
Section 3.1.1.13. The fact that the representations and
warranties of the Borrower contained in Article 4, infra, are true and correct
in all material respects on and as of the date of the Loan except as altered
hereafter by actions not prohibited hereunder. The Borrower's delivery of the
Notes to the Lenders and the Borrower's Borrowing Request shall be deemed to be
a representation and warranty by the Borrower as of the date thereof to such
effect.
Section 3.1.1.14. That there has been no enactment of any law
by any governmental authority having jurisdiction over any Lender which would
make it unlawful in any respect for such Lender to make its Pro Rata Share of
the Loan.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.1. Representations and Warranties of the Borrower. The Borrower
represents and warrants to the Lenders that, after giving effect to the Loan and
the application of the proceeds thereof (which representations and warranties
shall survive the making of the Loan):
Section 4.1.1. Organization and Existence. GTLP, GTI, LLC, Capital
Corp. and each Subsidiary is a limited partnership, corporation or limited
liability company, duly organized, validly existing and in good standing under
the laws of the state of its incorporation or organization and is duly qualified
to do business in all jurisdictions in which such qualification is required, all
as noted on Exhibit 4.1.1, except where failure to so qualify would not have a
material adverse effect on the financial condition or business of the Borrower
and its Subsidiaries, on a combined basis (a "Material Adverse Effect"), and has
all requisite power and authority to conduct its business, to own its properties
and to execute and deliver, and to perform all of its obligations under the
Financing Documents.
Section 4.1.2. Authorization and Absence of Defaults. The execution,
delivery to the Lenders and performance by GTLP, GTI, LLC, Capital Corp. and any
Subsidiaries of the Financing Documents have been duly authorized by all
necessary corporate, partnership, limited liability company and governmental
action and do not and will not (i) require any consent or approval of the
partners, shareholders, members or board of directors of the Borrower or any
Subsidiary which has not been obtained, (ii) violate any provision of any law,
rule, regulation (including, without limitation, Regulations U and X of the
Board of Governors of the Federal Reserve System), order, writ, judgment,
injunction, decree, determination or award presently in effect having
applicability to the Borrower and/or any Subsidiary and/or the Certificates and
Agreements of Limited Partnership, operating agreements, articles of
incorporation or by-laws, where applicable, of GTLP, GTI, LLC, Capital Corp.
and/or any Subsidiary, (iii) result in a material breach of or constitute a
material default under any indenture or loan or credit agreement or any other
agreement, lease or instrument to which GTLP, GTI, LLC, Capital Corp. and/or any
Subsidiary is or are a party or parties or by which it or they or its or their
properties may be bound or affected; or (iv) result in, or require, the creation
or imposition of any Lien on any of its or their respective properties or
revenues other than Liens granted to the Agent by the Security Documents
securing the Obligations. Each of GTLP, GTI, LLC, Capital Corp. and its
Subsidiaries are in compliance with any such law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award or any such indenture,
agreement, lease or instrument, except where the failure to be in compliance
would not have a Material Adverse Effect.
Section 4.1.3. Acquisition of Consents. No authorization, consent,
approval, license, exemption of or filing or registration with any court or
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, other than those which have been obtained, is or will be
necessary to the valid execution and delivery to the Lenders or performance by
GTLP, GTI, LLC, Capital Corp. or any Subsidiary of any Financing Documents.
Section 4.1.4. Validity and Enforceability. Each of the Financing
Documents when delivered hereunder will constitute the legal, valid and binding
obligations of GTLP, GTI, LLC, Capital Corp. and the Subsidiaries enforceable
against such Persons in accordance with their respective terms.
Section 4.1.5. Financial Information. The following information
with respect to the Borrower has heretofore been furnished to the Lenders:
Section 4.1.5.1. Audited Financials. Audited annual financial
statements of the Borrower for the period ended December 31, 1998;
Section 4.1.5.2. Unaudited Financials. Unaudited internally
prepared financial statements of the Borrower for the fiscal period ended
December 31, 1999.
Section 4.1.5.3. The Projections. Each of the financial
statements referred to above in Sections 4.1.5.1 and 4.1.5.2 was prepared in
accordance with GAAP (subject, in the case of Section 4.1.5.2, to the absence of
footnotes and normal year-end adjustments) applied on a consistent basis, except
as stated therein. The financial statements referred to above in Sections
4.1.5.1 and 4.1.5.2 fairly present the financial condition of the Borrower on at
such dates and are complete and correct in all material respects and no Material
Adverse Effect has occurred since the date thereof. The Projections have been
prepared by the Borrower in light of the past business of the Borrower, based on
certain assumptions, those assumptions believed by the Borrower to be material
being attached to the Projections. The Borrower believes that those assumptions
are reasonable in all material respects as of the Closing Date. The Projections
have been prepared in good faith and represent the best opinion of the Borrower
as of the Closing Date as to the most probable course of Borrower's businesses.
The Projections were prepared in accordance with practices usually followed in
the preparation of accounting projections in good faith and the regular course
of an ongoing business.
Section 4.1.6. No Litigation. There are no actions, suits or
proceedings pending or, to the knowledge of the Borrower, threatened against or
affecting the Borrower, any Affiliate and/or any Subsidiary or any of their
properties before any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, which if determined
adversely to the Borrower, any Affiliate and/or any Subsidiary would draw into
question the legal existence of the Borrower and/or any such Subsidiary and/or
the validity, authorization and/or enforceability of the Financing Documents
and/or any provision thereof and/or could reasonably be expected to have a
Material Adverse Effect, except those matters, if any, described on Exhibit
4.1.6 none of which, in Borrower's good faith opinion, will have such a Material
Adverse Effect.
Section 4.1.7. Regulation U. The Borrower is not engaged in the
business of extending credit for the purpose of purchasing or carrying "margin
stock" within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System (12 CFR Part 221), does not own and has no present
intention of acquiring any such margin stock or a "margin security" within the
meaning of Regulation G of the Board of Governors of the Federal Reserve System
(12 CFR, Part 207). None of the proceeds of the Loan will be used directly or
indirectly by the Borrower for the purpose of purchasing or carrying, or for the
purpose of reducing or retiring any Indebtedness which was originally incurred
to purchase or carry, any such margin security or margin stock or for any other
purpose which might constitute the transaction contemplated hereby a "purpose
credit" within the meaning of said Regulation G or Regulation U, or cause this
Agreement to violate any other regulation of the Board of Governors of the
Federal Reserve System or the Securities and Exchange Act of 1934, as amended,
or any rules or regulations promulgated under either said statute.
Section 4.1.8. Absence of Adverse Agreements. Neither the Borrower
nor any Subsidiary is a party to any indenture, loan or credit agreement or any
lease or other agreement or instrument (other than the Equity Documents) or
subject to any corporate, limited liability company or partnership restriction
which would have a Material Adverse Effect on the ability of the Borrower or any
Subsidiary to carry out its obligations under the Financing Documents.
Section 4.1.9. Taxes. The Borrower and each Subsidiary has filed all
tax returns (federal, state and local) required to be filed and paid all taxes
shown thereon to be due, including interest and penalties, or provided adequate
reserves for payment thereof.
Section 4.1.10. ERISA. The Borrower and any Commonly Controlled
Entity do not maintain or contribute to any Single Employer Plan which is not in
substantial compliance with ERISA and Title X of the Consolidated Omnibus Budget
Reconciliation Act of 1986, as amended, or which has incurred any accumulated
funding deficiency within the meaning of section 412 and 418 of the Code, or
which has applied for or obtained a waiver from the Internal Revenue Service of
any minimum funding requirement under section 412 of the Code. The Borrower and
any Commonly Controlled Entity have not incurred any liability to the PBGC in
connection with any Plan covering any employees of The Borrower or any Commonly
Controlled Entity in amount exceeding $50,000 in the aggregate or ceased
operations at any facility or withdrawn from any Plan in a manner which could
subject any of them to liability under section 4062(e), 4063 or 4064 of ERISA in
amount exceeding $50,000 in the aggregate, and know of no facts or circumstance
which might give rise to any liability of the Borrower or any Commonly
Controlled Entity to the PBGC under Title IV of ERISA in amount exceeding
$50,000 in the aggregate. The Borrower and any Commonly Controlled Entity have
not incurred any withdrawal liability in amount exceeding $50,000 in the
aggregate (including but not limited to any contingent or secondary withdrawal
liability) within the meaning of sections 4201 and 4202 of ERISA, to any
Multiemployer Plan, and no event has occurred, and there exists no condition or
set of circumstances, which presents a risk of the occurrence of any withdrawal
from or the partition, termination, reorganization or insolvency of any
Multiemployer Plan which could result in any liability to a Multiemployer Plan
in amount exceeding $50,000 in the aggregate.
Except for payments for which the minimum funding requirement has
been waived under section 412 of the code, full payment has been made of all
amounts which the Borrower and any Commonly Controlled Entity are required to
have paid as contributions to any Plan under applicable law or under any Plan or
any agreement relating to any Plan to which the Borrower or any Commonly
Controlled Entity is a party. The Borrower and each Commonly Controlled Entity
have made adequate provision for reserves to meet contributions that have not
been made because they are not yet due under the terms of any Plan or related
agreements.
Neither the Borrower nor any Commonly Controlled Entity has any
knowledge, nor do any of them have any reason to believe that any Reportable
Event which could result in a liability or liabilities of $50,000 or more in the
aggregate has occurred with respect to any Plan.
Section 4.1.11. Ownership of Properties.
Section 4.1.11.1. Except for Permitted Encumbrances and Liens
permitted under Section 5.2.1 hereof, each of the Borrower, GTI and each
Subsidiary has good title to all of their respective properties and assets free
and clear of all mortgages, security interests, restrictions, Liens and
encumbrances of any kind.
Section 4.1.11.2. Exhibit 4.1.11 accurately and completely
lists the location of all real property owned or leased by the Borrower, GTI or
any Subsidiary. The Borrower, GTI and each Subsidiary enjoys quiet possession
under all material leases to which it is a party as a lessee, and all of such
leases are valid, subsisting in full force and effect. No other such leases
contain any provision restricting the incurrence of indebtedness by the lessee.
Section 4.1.11.3. To the Borrower's knowledge, except as
specified in Exhibit 4.1.11, none of the real property owned by the Borrower,
GTI or any Subsidiary is located within any federal, state or municipal flood
plain zone.
Section 4.1.11.4. Except as set forth in Exhibit 4.1.11, all of
the material properties used in the conduct of the Borrower's, GTI's and each
Subsidiary's business (i) are in good repair, working order and condition
(reasonable wear and tear accepted) and suitable for use in the operation of the
Borrower's, GTI's and each Subsidiary's business; and (ii) are currently
operated and maintained, in all material respects, in accordance with the
requirements of the National Electrical Safety Code on Engineering and the FCC
and other standards generally accepted in the cable television industry.
Section 4.1.12. Accuracy of Representations and Warranties. None of
the Borrower's representations or warranties set forth in this Agreement or in
any document or certificate taken together with any related document or
certificate furnished pursuant to this Agreement or in connection with the
transactions contemplated hereby contains or will contain any untrue statement
of a material fact or omits or will omit to state a material fact necessary to
make any statement of fact contained herein or therein, in light of the
circumstances under which it was made, not misleading; except that unless
provided otherwise any such document or certificate which is dated speaks as of
the date stated and not the present.
Section 4.1.13. Senior Subordinated Note Representations and
Warranties. No default or event of default exists under any of the Senior
Subordinated Notes or the Related Documents, and no default or event of default
will be caused by the Borrower entering into or performing or obligations
hereunder or under any of the other Financing Documents. The Borrower further
represents and warrants that the entire principal balance of the Loan qualifies
as "Permitted Indebtedness" under subpart (i) of the definition of the term
Permitted Indebtedness in Section 1.01 of the Indenture, and that the entire
principal balance of Loan qualifies as "Senior Indebtedness", as such term is
defined in Section 12.02 of the Indenture.
Section 4.1.14. No Investment Company. Neither the Borrower nor any
Subsidiary is an "investment company" or a company "controlled" by an
"investment company" as such terms are defined in the Investment Company Act of
1940, as amended, which is required to register thereunder.
Section 4.1.15. Solvency, etc. After giving effect to the
consummation of the Loan to be made under this Agreement as of the time this
representation and warranty is given, the Borrower (a) will be able to pay its
debts as they become due, (b) will have funds and capital sufficient to carry on
its business and all businesses in which it is about to engage, and (c) will own
property having a value both at fair valuation and at fair saleable value in the
ordinary course of the Borrower's business greater than the amount required to
pay its Indebtedness, including for this purpose unliquidated and disputed
claims. The Borrower will not be rendered insolvent by the execution and
delivery of this Agreement and the consummation of any transactions contemplated
herein.
Section 4.1.16. Approvals. All approvals required from all Persons
including without limitation all governmental authorities with respect to the
Financing Documents have been obtained.
Section 4.1.17. Ownership Interests. The schedule of ownership
interests in the Borrower and its Subsidiaries set forth in Exhibit 1.3 is true,
accurate and complete and the Investments to be made for all ownership interests
disclosed therein have in fact been fully paid in immediately available Dollars.
Section 4.1.18. Licenses, Registrations, Compliance with Laws, etc.
Exhibit 4.1.18 accurately and completely describes all permits, governmental
licenses, registrations and approvals, material to carrying out of the
Borrower's and each of the Subsidiaries' businesses as presently conducted and
as required by law or the rules and regulations of any federal, foreign
governmental, state, county or local association, corporation or governmental
agency, body, instrumentality or commission having jurisdiction over the
Borrower or any of the Subsidiaries, including but not limited to the FCC, the
United States Environmental Protection Agency, the United States Department of
Labor, the United States Occupational Safety and Health Administration, the
United States Equal Employment Opportunity Commission, the Federal Trade
Commission and the United States Department of Justice and analogous and related
state and foreign agencies and each community which has granted the Borrower a
Franchise, each of which is listed on Exhibit 1.2 hereto. There is no material
violation or material failure of compliance or, to the Borrower's knowledge,
allegation of such violation or failure of compliance on the part of the
Borrower or any of the Subsidiaries with any of the foregoing permits, licenses,
registrations, approvals, rules or regulations and there is no action,
proceeding or investigation pending or to the knowledge of the Borrower
threatened nor has the Borrower or any Subsidiary received any notice of such
which might result in the termination or suspension of any such permit, license,
registration or approval which in any case could have a Material Adverse Effect.
Section 4.1.19. Principal Place of Business; Books and Records. The
Borrower's chief executive office is located at Borrower's address set forth in
Section 9.6. All of the Borrower's books and records are kept at one or more of
its addresses set forth in Section 9.6.
Section 4.1.20. Subsidiaries. GTLP has no Subsidiaries other than
Capital Corp. Capital Corp. has no Subsidiaries.
Section 4.1.21. Franchises, etc. Exhibit 4.1.21 attached hereto
accurately and completely lists all material authorizations, licenses, permits
and Franchises granted or assigned to the Borrower 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 in the Franchise Areas,
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 conduct by the Borrower of its business as
presently conducted or proposed to be conducted. Except as disclosed on Exhibit
4.1.21, all existing Franchises are in full force and effect, are duly issued in
the name of, or validly assigned to, GTI, the Borrower or one of its
Subsidiaries and the Borrower or one of its Subsidiaries has full power and
authority to operate thereunder. Except as set forth in Exhibit 1.2, no cable
television Franchise issued with respect to a Franchise Area has a term which
will expire prior to the scheduled maturity of the Notes. Exhibit 1.2 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 Systems.
Section 4.1.22. Copyright. The Borrower has not violated any of the
provisions of the Copyright Act of 1976, 17 U.S.C. 101, et seq. The Borrower has
filed all notices and statements of account with United States Copyright Office
and has made all payments to the United States Copyright Office that are
required in connection with the secondary transmission by the Borrower of any
broadcast television, radio or other signals. Exhibit 4.1.22 accurately and
completely sets forth all copyrights held by the Borrower or any of the
Subsidiaries.
Section 4.1.23. Basic Subscribers. As of December 31, 1999, the
Borrower had not less than 125,500 Basic Subscribers, and Operating Cash Flow
for the fiscal year ended December 31, 1999 of not less than $21,000,000.
Section 4.1.24. Environmental Compliance. Neither the Borrower nor,
to the best knowledge of the Borrower after due inquiry, any other Person:
Section 4.1.24.1. has ever caused, permitted, or suffered to
exist any Hazardous Material to be spilled, placed, held, located or disposed of
on, under, or about, nor are any now existing on, under, or about, the
Borrower's facilities (the "Premises"), or into the atmosphere, any body of
water, any wetlands, or on any other real property legally or beneficially owned
by any Borrower, other than as disclosed on Exhibit 4.1.24, or in respect of
Hazardous Material used or disposed of in compliance with law,
Section 4.1.24.2. has any knowledge after due inquiry that
either the Premises or any other real property legally or beneficially owned by
the Borrower has ever been used (whether by the Borrower or, to the best
knowledge of the Borrower after due inquiry, by any other Person) as a
treatment, storage (except for its own material in the ordinary course of
business) or disposal (whether permanent or temporary) site for any Hazardous
Material, and
Section 4.1.24.3. has any knowledge after due inquiry of any
notice of violation, lien or other notice issued by any governmental agency with
respect to the environmental condition of the Premises, any other property owned
by the Borrower, or any other property which was included in the property
description of the Premises or such other real property within the preceding
three years.
Section 4.1.25. Material Contracts. Exhibit 4.1.25 attached hereto
accurately and completely lists all material agreements to which the Borrower
and any of the Subsidiaries are a party including, without limitation, all
Franchises and all material construction, programming, engineering, consulting,
employment, management, operating and related agreements, if any, which are
presently in effect. All of the foregoing agreements, including without
limitation the Franchises, are legally valid, binding, subsisting and in full
force and effect and neither the Borrower, any of the Subsidiaries nor any other
parties are in material default thereunder.
Section 4.1.26. Patents, Trademarks and Other Property Rights. Except
as set forth in Exhibit 4.1.26 attached hereto, each of the Borrower and the
Subsidiaries own, possess, or have licenses to use all the patents, trademarks,
service marks, tradenames, copyrights and non-governmental licenses, and all
rights with respect to the foregoing, necessary for the conduct of their
respective businesses as now conducted, without any conflict with the rights of
others with respect thereto.
Section 4.1.27. Related Documents. The Borrower has, prior to the
date hereof, delivered to the Lenders true copies of the Related Documents and
each and every amendment or modification thereto.
Section 4.1.28. Transfer of Assets. Except as set forth in Exhibit
4.1.28, GTI has transferred all assets related to cable television systems
(including but not limited to any Franchise) to the Borrower.
ARTICLE 5
COVENANTS OF THE BORROWER
Section 5.1. Affirmative Covenants of the Borrower Other than Reporting
Requirements. From the date hereof and thereafter for so long as any portion of
the Commitment is outstanding or the Borrower is indebted to any Lender and/or
the Agent under any of the Financing Documents, the Borrower will, with respect
to itself and, unless noted otherwise below, with respect to each of its
Subsidiaries, ensure that each Subsidiary will, unless the Majority Lenders
shall otherwise consent in writing:
Section 5.1.1. Payment of Taxes, etc. Pay and discharge all taxes and
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any properties belonging to it, prior to the date on
which penalties attach thereto, and all lawful claims for the same which, if
unpaid, might become a Lien upon any of its properties; provided that (unless
and until foreclosure, restraint, sale or any similar proceeding shall have been
commenced) the Borrower shall not be required to pay any such tax, assessment,
charge, levy or claim which is being contested in good faith and by proper
proceedings and for which proper reserve or other provision has been made in
accordance with GAAP, unless failure to pay is not material.
Section 5.1.2. Maintenance of Insurance. Maintain insurance in
accordance with the Security Documents, including without limitation, liability
insurance reasonably acceptable to the Lenders and, to the extent not covered by
any of the Security Documents, with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties
and in accordance with the requirements of any governmental agency having
jurisdiction over the Borrower and/or any Subsidiary. The Borrower shall provide
the Lenders with such evidence as the Agent may request from time to time as to
the maintenance of all such insurance.
Section 5.1.3. Preservation of Existence, etc. Preserve and maintain
in full force and effect its legal existence, rights, Franchises and privileges
in the jurisdiction of its organization, preserve and maintain all licenses,
governmental approvals, trademarks, patents, trade secrets, copyrights and trade
names owned or possessed by it and which are necessary or, in its reasonable
business judgment, desirable in view of its business and operations or the
ownership of its properties and qualify or remain qualified as a foreign
corporation or partnership in each jurisdiction in which such qualification is
necessary or, in its reasonable business judgment, desirable in view of its
business and operations and ownership of the properties.
Section 5.1.4. Compliance with Laws, etc. Comply with the
requirements of all present and future applicable laws, rules, regulations and
orders of any governmental authority having jurisdiction over it and/or its
business, except where the failure to comply would not have a Material Adverse
Effect.
Section 5.1.5. Visitation Rights. Permit, during normal business
hours, and, prior to the occurrence of a Default or an Event of Default, upon
prior notice, the Lenders or any agents or representatives thereof, to examine
and make copies of and abstracts from the records and books of account of, and
visit the properties of the Borrower and any Subsidiary to discuss the affairs,
finances and accounts of the Borrower or any Subsidiary with any or their
partners, officers or employees and/or any independent certified public
accountant of the Borrower and/or any Subsidiary.
Section 5.1.6. Keeping of Records and Books of Account. Keep adequate
records and books of account, in which complete entries will be made in
accordance with GAAP and with applicable requirements of any governmental
authority having jurisdiction over the Borrower and/or any Subsidiary in
question, reflecting all financial transactions.
Section 5.1.7. Maintenance of Properties, etc. Maintain and preserve
all of its properties necessary or useful in the proper conduct of its business,
in good working order and condition, ordinary wear and tear excepted, and in
accordance with each of the Security Documents.
Section 5.1.8. Accounting System. Maintain a standard system of
accounting in accordance with GAAP and in accordance with the requirements of
any governmental authority having jurisdiction over the Borrower and/or any
Subsidiary.
Section 5.1.9. Other Documents, etc. Except as otherwise required by
this Agreement, pay, perform and fulfill all of its obligations and covenants
under each material document, instrument or agreement to which it is a party
including, without limitation, the Related Documents, the Equity Documents and
the Affiliate Subordination Agreement.
Section 5.1.10. Maximum Total Indebtedness and Maximum Senior
Indebtedness to Annualized Operating Cash Flow. Maintain at all times ratios of
(i) total Indebtedness for Borrowed Money to Annualized Operating Cash Flow and
(ii) total Senior Indebtedness to Annualized Operating Cash Flow of not greater
than the respective ratio set forth below for each period set forth below:
Total Senior
Indebtedness Indebtedness
Period Ratio
Ratio____
Closing Date through 7.65:1.001.65:1.00
August 30, 2000
September 1, 2000 and thereafter 7.35:1.00 1.65:1.00
The Borrower shall be in compliance with the foregoing covenant as of the
last day of each calendar month.
Section 5.1.11. Maximum Senior Indebtedness to Basic Subscribers.
Maintain at the last day of each calendar month a ratio of (i) total
Indebtedness for Borrowed Money (in dollars) to (ii) the number of Basic
Subscribers of not greater than $1,299:1.
Section 5.1.12. Minimum Ratio of Operating Cash Flow to Interest
Expense. Maintain at all times a ratio of (i) Operating Cash Flow to (ii) Total
Cash Interest Expense (exclusive of Closing Costs) of not less than 1.05:1.00.
The Borrower shall be in compliance with the foregoing covenant on an annualized
basis as of the last day of each calendar month so that Operating Cash Flow,
Total Cash Interest Expense and each component of each of said terms are
calculated for the calendar month in question and for the two immediately
preceding calendar months and the results of said calculation are multiplied by
four.
Section 5.1.13. Intentionally Omitted.
Section 5.1.14. Minimum Fixed Charge Coverage. Maintain at the last
day of each calendar month a Fixed Charge Coverage for such fiscal quarter of
not less than 1.05:1.00.
Section 5.1.15. Intentionally Omitted.
Section 5.1.16. Officer's Certificates and Requests. Provide each
Officer's Certificate required under this Agreement and each Request so that the
statements contained therein are accurate and complete in all respects.
Section 5.1.17. Depository. Use the Agent as a depository of the
Borrower's funds.
Section 5.1.18. Chief Executive Officer. Maintain Xxxxx X. Xxxxxxx,
Xx. and/or Xxxxx X. Xxxxxxx as the Person with principal executive, operating
and management responsibility for the Systems or obtain a replacement of
comparable experience and training in the cable television industry reasonably
satisfactory to the Majority Lenders within 90 days of his ceasing to act in
such capacity.
Section 5.1.19. Completion of Improvements. Complete all improvements
by such date as may be necessary to comply with applicable Franchise and other
regulatory or contractual requirements, and, within 30 days after the request of
the Majority Lenders, supply the Lenders with such documentation as the Majority
Lenders shall reasonably request evidencing such completion.
Section 5.1.20. Notice of Purchase of Real Estate and Leases.
Promptly notify the Lenders in the event that the Borrower shall purchase any
real estate or enter into any lease of real estate or of equipment material to
the operation of the Systems, supply the Lenders with a copy of the related
purchase agreement or of such lease, as the case may be, and if requested by the
Lenders, execute and deliver, or cause to be executed and delivered, to the
Agent for the benefit of the Lenders a deed of trust or mortgage or assignment,
together with landlord consents, in the case of leased property, satisfactory in
form and substance to the Agent, granting a valid first Lien (subject to any
Liens permitted under Section 5.2.1 hereof) on such real property or leasehold
as security for the Financing Documents.
Section 5.1.21. Additional Assurances. From time to time hereafter,
execute and deliver or cause to be executed and delivered, such additional
instruments, certificates and documents, and take all such actions, as the Agent
shall reasonably request for the purpose of implementing or effectuating the
provisions of the Financing Documents, and upon the exercise by the Agent of any
power, right, privilege or remedy pursuant to the Financing Documents which
requires any consent, approval, registration, qualification or authorization of
any governmental authority or instrumentality, exercise and deliver all
applications, certifications, instruments and other documents and papers that
the Agent may be so required to obtain.
Section 5.1.22. Appraisals. Permit the Agent and its agents, at any
time and in the sole discretion of the Agent or at the request of the Majority
Lenders, to conduct appraisals of the Systems, the cost of which appraisals
shall be borne by the Borrower following a Default or Event of Default.
Section 5.1.23. Environmental Compliance. Comply strictly and in all
respects with the requirements of all federal, state, and local environmental
laws; notify the Lenders promptly in the event of any spill, Hazardous Material
affecting the premises occupied by the Borrower from time to time; forward to
the Lenders promptly any notices relating to such matters received from any
governmental agency; and pay promptly when due any uncontested fine or
assessment against the Premises.
Section 5.1.24. Remediation. Immediately contain and remove any
Hazardous Material found on the Premises in compliance with applicable laws and
at the Borrower's expense, subject however, to the right of the Agent, at the
Agent's option but at the Borrower's expense, to have an environmental engineer
or other representative review the work being done.
Section 5.1.25. Site Assessments. Promptly upon the request of the
Agent, based upon the Agent's reasonable belief that a material hazardous waste
or other environmental problem exists with respect to the Premises, provide the
Agent with an environmental site assessment report or an update of any existing
report, all in scope, form and content and performed by such company as may be
reasonably satisfactory to the Agent.
Section 5.1.26. Indemnity. Indemnify, defend, and hold each of the
Lenders and the Agent harmless from and against any claim, cost, damage
(including without limitation consequential damages), expense (including without
limitation reasonable attorneys' fees and expenses), loss, liability, or
judgment now or hereafter arising as a result of any claim for environmental
cleanup costs, any resulting damage to the environment and any other
environmental claims against the Borrower, the Lenders and/or the Agent arising
out of the transactions contemplated by this Agreement, or the Premises. The
provisions of this Section shall continue in effect and shall survive (among
other events) any termination of this Agreement, foreclosure, a deed in lieu
transaction, payment and satisfaction of the Note and other obligations of the
Borrower hereunder, and release of any collateral for the Loan.
Section 5.1.27. Intentionally Omitted.
Section 5.1.28. Intentionally Omitted.
Section 5.2. Negative Covenants of the Borrower. From the date hereof and
thereafter for so long as any portion of the Commitment is outstanding or the
Borrower is indebted to any Lender and/or the Agent under any of the Financing
Documents, each of the Borrower and GTI will not, with respect to itself and,
unless noted otherwise below, with respect to each of its Subsidiaries, will
ensure that each such Subsidiary will not, without the prior written consent of
the Majority Lenders:
Section 5.2.1. Liens, etc. Create, incur, assume or suffer to exist
any Lien of any nature, upon or with respect to any of its properties, now owned
or hereafter acquired, or assign as collateral or otherwise convey as
collateral, any right to receive income, except that the foregoing restrictions
shall not apply to any Liens:
Section 5.2.1.1. For taxes, assessments or governmental charges
or levies on property if the same shall not at the time be delinquent or
thereafter can be paid without penalty or interest, or (if foreclosure,
distraint, sale or other similar proceedings shall not have been commenced) are
being contested in good faith and by appropriate proceedings diligently
conducted and for which proper reserve or other provision has been made in
accordance with GAAP;
Section 5.2.1.2. Imposed by law, such as carriers',
warehousemen's and mechanics' liens, bankers' set off rights and other similar
liens arising in the ordinary course of business for sums not yet due or being
contested in good faith and by appropriate proceedings diligently conducted and
for which proper reserve or other provision has been made in accordance with
GAAP;
Section 5.2.1.3. Arising in the ordinary course of business out
of pledges or deposits under worker's compensation laws, unemployment insurance,
old age pensions, or other social security or retirement benefits, or similar
legislation;
Section 5.2.1.4. Arising from or upon any judgment or award,
provided that such judgment or award is being contested in good faith by proper
appeal proceedings and only so long as execution thereon shall be stayed;
Section 5.2.1.5. Set forth on Exhibit 1.7;
Section 5.2.1.6. Now or hereafter granted pursuant to the
Security Documents or otherwise now or hereafter granted to the Agent for the
benefit of the Lenders as collateral for the Loan and/or the Borrower's other
Obligations arising in connection with or under this Agreement or the Other
Financing Documents;
Section 5.2.1.7. Consisting of deposits to secure the
performance of bids, trade contracts (other than for borrowed money), leases,
statutory obligations, surety bonds, performance bonds and other obligations of
a like nature incurred in the ordinary course of the Borrower's or any
Subsidiary's business;
Section 5.2.1.8. Consisting of easements, rights of way,
restrictions and other similar encumbrances incurred in the ordinary course of
business which, in the aggregate, are not substantial in amount, and which do
not in any case materially detract from the value of the property subject
thereto or interfere with the ordinary conduct of business by the Borrower or
any Subsidiary;
Section 5.2.1.9. Securing Indebtedness permitted to exist
under Section 5.2.8.5 hereof; and
Section 5.2.1.10. Granted pursuant to the Pledge and Assignment
Agreement for the sole purpose of securing the obligations of the Borrower under
Section 11.01(b) of the Indenture.
Section 5.2.2. Assumptions, Guaranties, etc. of Indebtedness of
Other Persons. Assume, guarantee, endorse or otherwise become directly or
contingently liable in connection with any obligation or Indebtedness of any
other Person, except:
Section 5.2.2.1. Guaranties by endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business;
Section 5.2.2.2. Assumptions, guaranties, endorsements and
contingent liabilities within the definition of Indebtedness and permitted by
Section 5.2.8; and
Section 5.2.2.3. Those set forth on Exhibit 5.2.2.
Section 5.2.3. Sale of Assets, Dissolution, etc. Dissolve, liquidate,
wind up, merge or consolidate or combine with another Person or sell, assign,
lease or otherwise dispose of (whether in one transaction or in a series of
transactions) all or a substantial part of its assets (whether now owned or
hereafter acquired), or any of GTI's, the Borrower's or any Subsidiary's
interests in real property other than (i) Asset Sales involving assets having an
aggregate fair salable value of less than $500,000 during the term of this
Agreement, (ii) Asset Sales having an aggregate fair salable value in excess of
$500,000 during the term of this Agreement and as to which all of the Lenders
have given their prior written consent, and (iii) System Asset Sales in
accordance with Section 2.6.1.3.
Section 5.2.4. Change in Nature of Business. Make any material
change in the nature of its business.
Section 5.2.5. Ownership. Cause or permit (i) the occurrence of any
Change in Control, or (ii) any change in the ownership interests of the Borrower
which would cause GTI or LLC to cease to be the managing general partner of the
Borrower holding at least a 1% ownership interest in the Borrower.
Section 5.2.6. Sale and Leaseback. Enter into any sale and leaseback
arrangement with any lender or investor, or enter into any leases except in the
normal course of business at reasonable rents comparable to those paid for
similar leasehold interests in the area.
Section 5.2.7. Sale of Accounts, etc. Sell, assign, discount or
dispose in any way of any accounts receivable, promissory notes or trade
acceptances held by the Borrower or any Subsidiary, with or without recourse,
except in the ordinary course of the Borrower's or any Subsidiary's business.
Section 5.2.8. Indebtedness. Incur, create, become or be liable
directly or indirectly in any manner with respect to or permit to exist any
Indebtedness except:
Section 5.2.8.1. Indebtedness under the Financing Documents or
the Other Financing Documents;
Section 5.2.8.2. Indebtedness with respect to trade obligations
and other normal accruals and customer deposits in the ordinary course of
business not yet due and payable in accordance with customary trade terms or
with respect to which the Borrower or any Subsidiary is contesting in good faith
the amount or validity thereof by appropriate proceedings and then only to the
extent such Person has set aside on its books adequate reserves therefor;
Section 5.2.8.3. Intentionally Omitted.
Section 5.2.8.4. Any Affiliate Subordinated Indebtedness from
time to time outstanding, all upon terms and conditions satisfactory to the
Majority Lenders, and provided that the Majority Lenders, in their sole
discretion, have consented to the incurrence thereof;
Section 5.2.8.5. Intentionally Omitted;
Section 5.2.8.6. Indebtedness with respect to interest rate
protection obligations under Section 2.7.5.
Section 5.2.8.7. Indebtedness with respect to the Senior
Subordinated Notes and the Related Documents not exceeding $120,000,000 in the
aggregate.
Section 5.2.9. Other Agreements. Amend any of the terms or conditions
of the documents evidencing the Related Documents, the Equity Documents, the
Affiliate Subordination Agreement, or any material term of the Management
Agreement, or any indenture, agreement, document, note or other instrument
evidencing, securing or relating to any other Indebtedness permitted under
Section 5.2.8.
Section 5.2.10. Payment or Prepayment of Equity. Except for Permitted
Restricted Payments, make any payment or prepayment of any principal of or
interest on or any payment, prepayment, redemption, defeasance, sinking fund
payment, other repayment of principal or deposit for the purpose of any of the
foregoing on or in connection with the Equity.
Section 5.2.11. Dividends, Payments and Distributions. Declare or pay
any dividends, management fees or like fees or make any other distribution of
cash or property or both to any of the Manager, GTI or LLC or use any of its
assets for payment, purchase, retention, acquisition or retirement of any
beneficial interest in the Borrower or GTI or LLC or set aside or reserve assets
for sinking or like funds for any of the foregoing purposes, make any other
distribution by reduction of capital or otherwise in respect of any beneficial
interest in the Borrower or GTI or LLC or permit any Subsidiary which is not a
wholly-owned Subsidiary so to do; provided, that the Borrower (i) may make
distributions (A) to GTI and LLC (but only so long as no Default or Event of
Default then exists or would be created thereby) not more frequently than once
per Borrower fiscal year to enable GTI, LLC and its members to pay federal and
state income taxes payable by GTI, LLC and its members as a result of the
taxable income of the Borrower for federal income tax purposes to the extent
that such taxable income cannot be offset by previously generated taxable losses
of the Borrower, and (B) to LLC in an aggregate annual amount not to exceed
$45,000 to enable LLC to pay managers' fees to the managers appointed by the
Investors (collectively, the "Permitted Restricted Payments"), and (ii) may pay
Management Fees to the Manager only in accordance with and subject to the
Management Agreement and the Affiliate Subordination Agreement, as those
agreements are in effect on the date hereof, but in no event may the amount of
Management Fees paid with respect to any fiscal quarter of the Borrower ending
in any of the periods set forth below exceed an amount equal to the percentage
of the Gross Revenues of the Borrower (other than from the sale or other
disposition of a capital asset) for any fiscal quarter ending during the period
set forth below opposite each such percentage.
Period Percentage of Gross Revenues
January 1, 2000 through 3.00%
June 30, 2000
July 1, 2000 and thereafter 2.50%
The Management Fees shall be fully subordinated to the payment of the
Obligations pursuant to the terms of the Affiliate Subordination Agreement.
Notwithstanding anything to the contrary set forth herein or in the Management
Agreement, during the existence of a Default or an Event of Default, Management
Fees shall accrue at the percentages permitted above, but no amount of
Management Fees shall be permitted to be paid in excess of 40% of the amount
which would otherwise be permitted to be paid pursuant to the terms of this
Section (any such Management Fees accruing but not permitted to be paid pursuant
to this sentence being herein referred to as "Subordinated Management Fees"). No
Subordinated Management Fees may be paid until one day following the Repayment
Date and Subordinated Management Fees shall not bear interest.
Section 5.2.12. Investments in or to Other Persons. (a) Make or
commit to make any Investment in or to any other Person (including without
limitation any Subsidiary) other than (i) advances to employees for business
expenses not to exceed $10,000 in the aggregate outstanding for any one employee
and not to exceed $25,000 in the aggregate outstanding at any one time to all
such employees, (ii) Cash Equivalent Investments and (iii) Investments in
accounts, contract rights and chattel paper (as defined in the Uniform
Commercial Code) and notes receivable, arising or acquired in the ordinary
course of business.
Section 5.2.13. Transactions with Affiliates. Except as contemplated
by the Equity Documents, engage in any transaction or enter into any agreement
with an Affiliate, or in the case of Affiliates or Subsidiaries, with the
Borrower or another Affiliate or Subsidiary, on other than an arm's length
basis.
Section 5.2.14. Change of Fiscal Year. Change its fiscal year.
Section 5.2.15. Subordination of Claims. Subordinate or permit to be
subordinated any present or future claim against or obligation of another
Person, except as ordered in a bankruptcy or similar creditors' remedy
proceeding of such other Person.
Section 5.2.16. Compliance with ERISA. With respect to Borrower and
any Commonly Controlled Entity (a) terminate, or cease to have an obligation to
contribute to, any Multiemployer Plan so as to result in any material liability
of the Borrower or any Commonly Controlled Entity to PBGC or to any
Multiemployer Plan, (b) engage in any "prohibited transaction" (as defined in
section 4975 of the Code) involving any Plan which would result in a material
liability of the Borrower or any Commonly Controlled Entity for an excise tax or
civil penalty in connection therewith, (c) except for any deficiency caused by a
waiver of the minimum funding requirement under section 412 of the code, as
described above, incur or suffer to exist any material "accumulated funding
deficiency" (as defined in section 302 of ERISA and sections 412 and/or 418 of
the Code) of the Borrower or any Commonly Controlled Entity, whether or not
waived, involving any Single Employer Plan, (d) incur or suffer to exist any
Reportable Event or the appointment of a trustee or institution of proceedings
for appointment of a trustee for any Single Employer Plan if, in the case of a
Reportable Event, same continues unremedied for 10 days after notice of such
Reportable Event pursuant to section 4043(a), (c) or (d) of ERISA is given, if
in the reasonable opinion of the Lenders any of the foregoing is likely to
result in a material liability of the Borrower or any Commonly Controlled
Entity. The assets held under these Plans being sufficient to protect all
accrued benefits, (e) allow or suffer to exist any event or condition, which
presents a material risk of incurring a material liability of the Borrower or
any Commonly Controlled Entity to PBGC by reason of termination of any such Plan
or (f) cause or permit any Plan maintained by Borrower and/or any Commonly
Controlled Entity to be out of compliance with ERISA and/or Title X of the
Consolidated Omnibus Budget Reconciliation Act of 1986, as amended. For purposes
of this Section 5.2.16 "material liability" shall be deemed to mean any
liability of $50,000 or more in the aggregate.
Section 5.2.17. Capital Expenditures. Incur or make Capital
Expenditures during any fiscal year of the Borrower set forth below in an amount
in excess of the amount set forth below opposite the fiscal year of the Borrower
ending at the date set forth below:
Fiscal Year Ending Maximum Capital Expenditure
December 31, 2000 $ 8,000,000
Section 5.2.18. Hazardous Waste. Become involved, or permit any
tenant of its real property to become involved, in any operations at such real
property generating, storing, disposing, or handling Hazardous Material or any
other activity that could lead to the imposition on the Borrower or the Agent or
any Lender, or any such real property of any material liability or Lien under
any environmental laws.
Section 5.2.19. Payments on Senior Subordinated Notes. Make any
payment or prepayment of any principal of, interest on or fees and other charges
with respect to, or any payment, prepayment, redemption, defeasance, sinking
fund payment, other repayment of principal or deposit (including, without
limitation, any deposit under the terms of the Pledge and Assignment Agreement
other than the deposit of the initial net proceeds of the Senior Subordinated
Notes) for the purpose of any of the foregoing on or in connection with the
Senior Subordinated Notes, except for payments permitted to be made to the
holders of the Senior Subordinated Notes under the terms of Article 12 of the
Indenture, provided that in no event may the Borrower exercise its right to
make, or make defeasance payments under Article 4 of the Indenture or make any
optional or discretionary payment or prepayment of any principal of, interest
on, or fees and other charges with respect to, the Senior Subordinates Notes or
any payment, prepayment, redemption, defeasance, sinking fund payment, repayment
of principal or deposit (including, without limitation, any deposit under the
terms of the Pledge and Assignment Agreement other than the deposit of the
initial net proceeds of the Senior Subordinated Notes) for the purpose of the
foregoing on or with respect to the Senior Subordinated Notes.
Section 5.3. Reporting Requirements. From the date hereof and thereafter
for so long as any portion of the Commitment is outstanding or the Borrower is
indebted to any Lender and/or the Agent under any of the Financing Documents,
the Borrower will, unless the Majority Lenders shall otherwise consent in
writing, furnish or cause to be furnished to the Agent for distribution to the
Lenders:
Section 5.3.1. As soon as possible and in any event upon acquiring
knowledge of an Event of Default or Default, continuing on the date of such
statement, the written statement of an officer of the Borrower setting forth
details of such Event of Default or Default and the action which the Borrower
proposes to take with respect thereto;
Section 5.3.2. As soon as practicable after the end of each fiscal
year of Borrower and in any event within 105 days after the end of each fiscal
year of the Borrower, a balance sheet of the Borrower and each of its
Subsidiaries as at the end of such year, and a statement of income and cash
flows and partners' capital of the Borrower and each of its Subsidiaries for
such year setting forth in each case the corresponding figures for the preceding
fiscal year, such statements to be certified by a firm of independent certified
public accountants selected by Borrower and reasonably acceptable to the
Majority Lenders, and to contain a statement to the effect that such accountants
have examined Sections 5.1.10 through 5.1.14 and 5.2.17 and that in the scope of
their review nothing has come to their attention to indicate that a Default or
Event of Default exists on account of Borrower's failure to have been in
compliance therewith on the date of such statements;
Section 5.3.3. As soon as is practicable after the end of each of
each fiscal quarter of each Borrower fiscal year and in any event within 45 days
thereafter, a balance sheet of the Borrower and the Subsidiaries as of the end
of such period and a statement of income and cash flows of the Borrower and the
Subsidiaries for such period and the fiscal year to that date, subject to
changes resulting from year-end adjustments, together with a comparison to the
Budget for the applicable period, such balance sheet to be prepared and
certified by GTI in an Officer's Certificate as having been prepared in
accordance with GAAP except for footnotes and year-end adjustments, and to be in
form satisfactory to the Agent;
Section 5.3.3A. As soon as is practicable after the end of each of
each month of each Borrower fiscal year and in any event within 30 days
thereafter, a balance sheet of the Borrower and the Subsidiaries as of the end
of such month and a statement of income and cash flows of the Borrower and the
Subsidiaries for such period and the fiscal year to that date, subject to
changes resulting from year-end adjustments, together with a comparison to the
Budget for the applicable period, such balance sheet to be prepared and
certified by GTI in an Officer's Certificate as having been prepared in
accordance with GAAP except for footnotes and year-end adjustments, and to be in
form satisfactory to the Agent;
Section 5.3.4. As soon as practicable after the end of each fiscal
year the management letter for the Borrower and the Subsidiaries (when and if
issued) prepared with respect to such fiscal year by the certified public
accounting firm which certified the financial statements in question;
Section 5.3.5. Simultaneously with the furnishing of each of the
year-end financial statements of the Borrower and the Subsidiaries to be
delivered pursuant to Section 5.3.2 and each of the monthly statements of the
Borrower and the Subsidiaries to be delivered pursuant to Section 5.3.3 an
Officer's Certificate of an officer of GTI which shall contain a statement in
the form of Exhibit 5.3.5 to the effect that no Event of Default or Default has
occurred, without having been waived in writing, or if there shall have been an
Event of Default not previously waived in writing pursuant to the provisions
hereof, or a Default, such Officer's Certificate shall disclose the nature
thereof. Each such Officer's Certificate shall also calculate, set forth and
certify to the accuracy of the amounts required to be calculated in the
financial covenants of the Borrower contained in this Agreement and described in
Exhibit 5.3.5;
Section 5.3.6. Promptly after the commencement thereof, notice of all
material actions, suits and proceedings before any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, affecting the Borrower, GTI and/or any Subsidiary;
Section 5.3.7. As soon as reasonably possible and in any event within
30 days after the end of each month, a certificate of an authorized
representative of the Borrower setting forth in reasonable detail and compared
to Budget, as to each of the Systems, (i) the numbers and types of Basic
Subscribers and other subscribers (including tier and pay subscribers) as at the
end of such month, (ii) changes in numbers of each such category of subscribers
(including numbers of disconnects and connects within each such category), (iii)
the numbers and types of Basic Subscribers more than 60 days delinquent measured
from the date of original billing, and (iv) the average basic and pay rates;
Section 5.3.8. On or before January 31 of each fiscal year of the
Borrower commencing hereafter, an updated proposed budget, prepared on a monthly
basis, and updated financial projections (together, the "Budget") for the next
four fiscal years, setting forth in detail reasonably satisfactory to the Agent
the projected results of operations of the Borrower, including without
limitation, projected revenues and expenses, detailed Capital Expenditures plan
and subscriber levels, stating underlying assumptions and, if required by the
Lender, accompanied by a written statement of an authorized representative of
the Borrower certifying as to the approval of such Budget by GTI;
Section 5.3.9. Such other information respecting the business,
properties or the condition or operations, financial or otherwise, of the
Borrower, GTI or any of their Subsidiaries as any Lender may from time to time
reasonably request;
Section 5.3.10. Written notice of the fact and of the details of any
sale or transfer of any ownership interest in GTI, or any ownership interest
owned by the Borrower, GTI or LLC in the Borrower or any Subsidiary or by the
Investors, Old Galaxy, Vista, Vantage or Management LLC in GTI or LLC given
promptly after Borrower acquires knowledge thereof except that notice with
regard to sales or transfers of Limited Partner's interests may be provided
annually within 30 days after preparation of Borrower's limited partnership
federal tax return; provided, however, that this clause shall not be deemed to
constitute or imply any consent to any such sale or transfer;
Section 5.3.11. Prompt written notice of loss of any key personnel,
termination of or default under the Management Agreement or any material adverse
change in the Borrower's, GTI's, Manager's or any Subsidiary's condition,
financial or otherwise, and an explanation thereof and of the actions the
Borrower, GTI, LLC, the Manager and/or such Subsidiary propose to take with
respect thereto; and
Section 5.3.12. Written notice of the following events, as soon as
possible and in any event within 15 days after the Borrower knows or has reason
to know thereof: (i) the occurrence or expected occurrence of any Reportable
Event with respect to any Plan, or (ii) the institution of proceedings or the
taking or expected taking of any other action by PBGC or the Borrower or any
Commonly Controlled Entity to terminate, withdraw or partially withdraw from any
Plan and, with respect to any Multiemployer Plan, the Reorganization (as defined
in Section 4241 of ERISA) or Insolvency (as defined in Section 4245 of ERISA) of
such Plan and in addition to such notice, deliver to the Lender whichever of the
following may be applicable: (a) an Officer's Certificate setting forth details
as to such Reportable Event and the action that the Borrower or Commonly
Controlled Entity proposes to take with respect thereto, together with a copy of
any notice of such Reportable Event that may be required to be filed with PBGC,
or (b) any notice delivered by PBGC evidencing its intent to institute such
proceedings or any notice to PBGC that such Plan is to be terminated, as the
case may be.
ARTICLE 6
EVENTS OF DEFAULT
Section 6.1. Events of Default. The Borrower shall be in default under each
of the Financing Documents, upon the occurrence of any one or more of the
following events ("Events of Default"):
Section 6.1.1. If Borrower shall fail to make due and punctual
payment of any principal, fees, interest and/or other amounts payable under this
Agreement as provided in any of the Notes and/or in this Agreement when the same
is due and payable, whether at the due date thereof or at a date fixed for
prepayment or if Borrower shall fail to make any such payment of fees, interest,
principal and/or any other amount under this Agreement and/or under any of the
Notes on the date when such payment becomes due and payable by acceleration;
Section 6.1.2. If GTLP, GTI, LLC, Capital Corp., Management LLC, the
Manager or any Subsidiary shall make an assignment for the benefit of creditors,
or shall fail generally to pay its or their debts as they become due, or shall
admit in writing its or their inability to pay its debts as they become due or
shall file a voluntary petition in bankruptcy, or shall file any petition or
answer seeking any reorganization, arrangement, composition, adjustment,
liquidation, dissolution or similar relief under the present or any future
federal bankruptcy laws or other applicable federal, state or other statute, law
or regulation, or shall seek or consent to or acquiesce in the appointment of
any trustee, receiver or liquidator of it or of all or any substantial part of
its properties, or if partnership or corporate action shall be taken for the
purpose of effecting any of the foregoing; or
Section 6.1.3. To the extent not described in Section 6.1.2, (i) if
GTLP, GTI, LLC, Capital Corp., Management LLC, the Manager or any Subsidiary
shall be the subject of a bankruptcy proceeding, or (ii) if any proceeding
against any of them seeking any reorganization, arrangement, composition,
adjustment, liquidation, dissolution, or similar relief under the present or any
future federal bankruptcy law or other applicable federal, foreign, state or
other statute, law or regulation shall be commenced, or (iii) if any trustee,
receiver or liquidator of any of them or of all or any substantial part of any
or all of their properties shall be appointed without their consent or
acquiescence; provided that in any of the cases described above in this Section
6.1.3, such proceeding or appointment shall not be an Event of Default if GTI,
GTLP, LLC, Capital Corp., Management LLC, the Manager or the Subsidiary in
question shall cause such proceeding or appointment to be discharged, vacated,
dismissed or stayed within 30 days after commencement thereof; or
Section 6.1.4. If final judgment or judgments aggregating more than
$100,000 shall be rendered against GTLP, GTI, LLC, Capital Corp., Management
LLC, the Manager or any Subsidiary and shall remain undischarged, unstayed or
unpaid for an aggregate of 30 days (whether or not consecutive) after entry
thereof; or
Section 6.1.5. If GTLP, GTI, LLC, Capital Corp., Management LLC, the
Manager or any Subsidiary shall default (after giving effect to any applicable
grace period) in the due and punctual payment of the principal of or interest on
any Indebtedness exceeding in the aggregate $250,000 (other than the Loan), or
if any default shall have occurred and be continuing after any applicable grace
period under any mortgage, note or other agreement evidencing, securing or
providing for the creation of such Indebtedness, which results in the
acceleration of such Indebtedness or which permits, or with the giving of notice
would permit, any holder or holders of any such Indebtedness to accelerate the
stated maturity thereof; or
Section 6.1.6. If there shall be a default in the performance of the
Borrower's obligations under Section 5.1.3 (insofar as such Section requires the
preservation of the limited partnership or limited liability company existence
of the Borrower or the corporate existence of any Subsidiaries), Sections
5.1.10, 5.1.11, 5.1.12, 5.1.14, or 5.1.27 or Section 5.2 of this Agreement; or
Section 6.1.7. If there shall be any default in the performance of
any covenant or condition contained in this Agreement or in any of the other
Financing Documents to be observed or performed pursuant to the terms hereof or
any Financing Document, as the case may be, other than a covenant or condition
referred to in any other subsection of this Section 6.1 and such default shall
continue unremedied or unwaived, (i) in the case of any covenant or condition
contained in Section 5.3, for 20 Business Days, or (ii) in the case of any other
covenant or condition for which no other grace period is provided, for 30 days,
or (iii) if any of the representations and warranties made or deemed made by
Borrower to the Lenders pursuant to this Agreement proves to have been false or
misleading in any material respect when made; or
Section 6.1.8. If there shall be any attachment of any deposits or
other property of GTLP, GTI, LLC, Capital Corp., Management LLC, the Manager
and/or any Subsidiary in the possession of any Lender or any attachment of any
other property of GTLP, GTI, LLC, Capital Corp., Management LLC, the Manager
and/or any Subsidiary in an amount exceeding $50,000, which shall not be
discharged within 30 days of the date of such attachment; or
Section 6.1.9. Any certification of the financial statements,
furnished to the Agent pursuant to Section 5.3.2, shall contain any
qualification; provided, however, that such qualifications will not be deemed an
Event of Default if in each case (i) such certification shall state that the
examination of the financial statements covered thereby was conducted in
accordance with generally accepted auditing standards, including but not limited
to all such tests of the accounting records as are considered necessary in the
circumstances by the independent certified public accountants preparing such
statements, (ii) such financial statements were prepared in accordance with GAAP
and (iii) such qualification does not involve the "going concern" status of the
entity being reported upon; or
Section 6.1.10. The on-the-air cable television operations affecting
more than 10% of the Basic Subscribers of the Borrower shall be interrupted at
any time for more than 10 consecutive days or more than 15 days in a 12-month
period unless such interruptions are covered by business interruption insurance;
or
Section 6.1.11. (i) the Borrower or GTI shall lose, fail to keep in
force, suffer the termination, suspension or revocation of or terminate, forfeit
or suffer an amendment to any Franchise or group of Franchises at any time held
by it covering 10% or more of the Basic Subscribers of the Borrower or which
would have a Material Adverse Effect, which circumstance shall continue for a
period of 30 days after the Borrower or GTI discovers such circumstance; (ii)
any governmental regulatory authority shall schedule or conduct a hearing on the
renewal of any Franchise held by the Borrower and the Majority Lenders shall
reasonably believe that the result thereof shall be the termination, revocation,
suspension, or material amendment of such Franchise and that such event would be
likely to have a material adverse effect on the Borrower; (iii) any governmental
regulatory authority shall commence an action or proceeding seeking the
termination, suspension, revocation or material adverse amendment of any
Franchise held by the Borrower or GTI or any such termination, revocation,
suspension or amendment which is reasonably likely to result in a reduction of
Gross Revenues on an annual basis in excess of 5% of the Gross Revenues of the
Borrower for the most recent fiscal year; or (iv) any governmental or regulatory
authority shall order a refund or rollback in Borrower's cable television rates
which will reduce Borrower's Projected Gross Revenues by 2.5% or more; or
Section 6.1.12. For any reason (i) Xxxxx X. Xxxxxxx, Xx. and/or Xxxxx
X. Xxxxxxx shall cease to actively serve in his present management capacity with
the Borrower or shall be released from such obligations, unless a successor with
comparable experience and training in the cable television industry reasonably
satisfactory to the Majority Lenders is appointed within 90 days after such
cessation, or (ii) GTI shall cease to be a general partner of the Borrower; or
Section 6.1.13. The termination, for any reason, of the Management
Agreement or the occurrence of a material default by the Manager thereunder
unless a successor with comparable experience and training in the cable
television industry reasonably satisfactory to the Majority Lenders is appointed
pursuant to the terms of a management agreement satisfactory to the Majority
Lenders within 90 days after such termination or the occurrence of such Default;
or
Section 6.1.14. The occurrence of a Change of Control; or
Section 6.1.15. The dissolution or termination of existence of GTI,
LLC or GTLP, Capital Corp., the revocation by GTI or LLC of its Unlimited
Guaranty in favor of the Agent of even date herewith or withdrawal by GTI or LLC
as a General Partner of the Borrower; or
Section 6.1.16. The occurrence of a default or event of default
under the Related Documents, the Equity Documents or the Other Financing
Documents;
Section 6.1.17. A definitive agreement for the sale of the Borrower
and Galaxy Telecom X.X. XX or System Asset Sales of substantially all the
Systems owned by the Borrower and Galaxy Telecom X.X. XX has not been executed
and delivered on or before, or is not in full force and effect on May 31, 2000
between the Borrower, Galaxy Telecom X.X. XX and/or the owners of each of said
entities and an unaffiliated third party buyer in form and substance reasonably
satisfactory in all respects to the Majority Lenders including without
limitation (i) that any such agreement and transaction shall contain sufficient
provision for repayment of the Loans and any Indebtedness of Galaxy Telecom X.X.
XX to the Agent and each of the Lenders and all interest, fees and expenses in
connection therewith in full and (ii) that any such agreement and any related
documents, instruments or agreements contain no contingencies allowing the
purchaser to terminate such agreement or any such related document, instrument
or agreement (a) arising from the failure of such purchaser to obtain the
financing necessary for such purchase, (b) arising from the failure of such
purchaser to obtain the approvals necessary for such purchase other than
approvals customarily not obtained until after signing of such agreement in like
transactions or (c) relating to the completion of any due diligence review by
such purchaser other than completion of reasonable due diligence customarily to
be completed in such transactions after signing such an agreement; it shall also
be considered "Event of Default" hereunder if said purchase agreement fails to
be in full force and effect at any time after being entered into; or
Section 6.1.18. If the Borrower, GTLP, GTI, LLC or Capital Corp. or
any Subsidiary thereof shall, without the prior written consent of all of the
Lenders, become liable for Indebtedness for Borrowed Money which the Borrower
would not be permitted to have outstanding under the terms of Section 5.2.8.
ARTICLE 7
REMEDIES OF LENDERS
Upon the occurrence of any one or more of the Events of Default, the Agent,
at the request of the Majority Lenders, shall, by notice to the Borrower,
declare the obligation of the Lenders to make the Loan to be terminated,
whereupon the same and the Commitment shall forthwith terminate, and the Agent,
at the request of the Majority Lenders, shall, by notice to the Borrower,
declare the entire unpaid principal amount of the Notes and all fees and
interest accrued and unpaid thereon and/or under this Agreement, and/or any of
the Security Documents and any and all other Indebtedness under this Agreement,
the Notes and/or any of the Security Documents of GTLP, LLC GTI or Capital Corp.
and/or any Subsidiary to any of the Lenders and/or to any holder of all or any
portion of each Note to be forthwith due and payable, whereupon all such Notes,
and all such accrued fees and interest and other such Indebtedness shall become
and be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Borrower; provided, however that upon the occurrence of an Event of Default
under Section 6.1.2 or 6.1.3, all of the unpaid principal amounts of the Notes,
all fees and interest accrued and unpaid thereon and/or under this Agreement
and/or under the Security Documents and any and all other such Indebtedness of
the Borrower to any of the Lenders and/or to any such holder shall thereupon be
due and payable in full without any need for the Agent and/or any Lender to make
any such declaration or take any action and the Lenders' obligations to make the
Loan shall simultaneously terminate. The Agent shall, in accordance with the
votes of the Majority Lenders, exercise all remedies on behalf of and for the
account of each Lender and on behalf of its respective Pro Rata Share of the
Loan, its Note and Indebtedness of the Borrower owing to it or any of the
foregoing, including without limitation all remedies available under or as a
result of this Agreement, the Notes or any of the Security Documents or any
other document, instrument or agreement now or hereafter securing any of the
Notes without any such exercise being deemed to modify in any way the fact that
each Lender shall be deemed a separate creditor of the Borrower to the extent of
its Note and Pro Rata Share of the Loan and any other amounts payable to such
Lender under this Agreement and/or the Security Documents and the Agent shall be
deemed a separate creditor of the Borrower to the extent of any amounts owed by
the Borrower to the Agent.
ARTICLE 8
ADMINISTRATIVE AGENT
Section 8.1. Appointment. The Agent is hereby appointed as agent hereunder
and each Lender hereby authorizes the Agent to act hereunder and under the
Security Documents as its agent hereunder and thereunder. The Agent agrees to
act as such upon the express conditions contained in this Article 8. The
provisions of this Article 8 are solely for the benefit of the Agent, and
neither the Borrower nor any third party shall have any rights as a third party
beneficiary of any of the provisions hereof. In performing its functions and
duties under this Agreement, the Agent shall act solely as agent of the Lenders
and does not assume and shall not be deemed to have assumed any obligation
towards or relationship of agency or trust with or for the Borrower.
Section 8.2. Powers; General Immunity.
Section 8.2.1. Duties Specified. Each Lender irrevocably authorizes
the Agent to take such action on such Lender's behalf, including, without
limitation, to execute and deliver the Security Documents to which the Agent is
a party and to exercise such powers hereunder and under the Security Documents
and other instruments and agreements referred to herein as are specifically
delegated to the Agent by the terms hereof and thereof, together with such
powers as are reasonably incidental thereto. The Agent shall have only those
duties and responsibilities which are expressly specified in this Agreement or
in any of the Security Documents and it may perform such duties by or through
its agents or employees. The duties of the Agent shall be mechanical and
administrative in nature; and the Agent shall not have by reason of this
Agreement or any of the Security Documents a fiduciary relationship in respect
of any Lender; and nothing in this Agreement or any of the Security Documents,
expressed or implied, is intended to or shall be so construed as to impose upon
the Agent any obligations in respect of this Agreement or any of the Security
Documents or the other instruments and agreements referred to herein except as
expressly set forth herein or therein.
Section 8.2.2. No Responsibility for Certain Matters. The Agent shall
not be responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement, the
Notes, the Security Documents or any other document, instrument or agreement now
or hereafter executed in connection herewith or therewith, or for any
representations, warranties, recitals or statements made herein or therein or
made in any written or oral statement or in any financial or other statements,
instruments, reports, certificates or any other documents in connection herewith
or therewith by or on behalf of the Borrower and/or any Subsidiary to the Agent
or any Lender, or be required to ascertain or inquire as to the performance or
observance of any of the terms, conditions, provisions, covenants or agreements
contained herein or therein or as to the use of the proceeds of the Loan or of
the existence or possible existence of any Default or Event of Default.
Section 8.2.3. Exculpatory Provisions. Neither the Agent nor any of
its officers, directors, employees or agents shall be liable to any Lender for
any action taken or omitted hereunder or in connection herewith unless caused by
its or their gross negligence or willful misconduct. If the Agent shall request
instructions from Lenders with respect to any act or action (including the
failure to take an action) in connection with any of the Financing Documents,
the Agent shall be entitled to refrain from such act or taking such action
unless and until the Agent shall have received instructions from the Majority
Lenders (or all of the Lenders if the action requires their consent). Without
prejudice to the generality of the foregoing, (i) the Agent shall be entitled to
rely, and shall be fully protected in relying, upon any communication,
instrument or document believed by it to be genuine and correct and to have been
signed or sent by the proper person or persons, and shall be entitled to rely
and shall be protected in relying on opinions and judgments of attorneys (who
may be attorneys for the Borrower), accountants, experts and other professional
advisors selected by it; and (ii) no Lender shall have any right of action
whatsoever against the Agent as a result of the Agent acting or (where so
instructed) refraining from acting under this Agreement or the other instruments
and agreements referred to herein in accordance with the instructions of the
Majority Lenders (or all of the Lenders if the action requires their consent).
The Agent shall be entitled to refrain from exercising any power, discretion or
authority vested in it under this Agreement or the other instruments and
agreements referred to herein unless and until it has obtained the instructions
of the Majority Lenders (or all of the Lenders if the action requires their
consent).
Section 8.2.4. Agent Entitled to Act as Lender. The agency hereby
created shall in no way impair or affect any of the rights and powers of, or
impose any duties or obligations upon, Fleet in its individual capacity as a
Lender hereunder. With respect to its participation in the Loan and the
Commitment, Fleet shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not performing the duties and
functions delegated to it hereunder, and the term "Lender" or "Lenders" or any
similar term shall, unless the context clearly otherwise indicates, include
Fleet in its individual capacity. The Agent and its affiliates may accept
deposits from, lend money to and generally engage in any kind of banking, trust,
financial advisory or other business with the Borrower or any Affiliate or
Subsidiary as if it were not performing the duties specified herein, and may
accept fees and other consideration from the Borrower for services in connection
with this Agreement and otherwise without having to account for the same to
Lenders.
Section 8.3. Representations and Warranties; No Responsibility for
Appraisal of Creditworthiness. Each Lender represents and warrants that it has
made its own independent investigation of the financial condition and affairs of
the Borrower, GTI, the Manager and any Subsidiaries of any of them in connection
with the making of the Loan hereunder and has made and shall continue to make
its own appraisal of the creditworthiness of the Borrower and the Subsidiaries.
The Agent shall not have any duty or responsibility either initially or on a
continuing basis to make any such investigation or any such appraisal on behalf
of Lenders or to provide any Lender with any credit or other information with
respect thereto whether coming into its possession before the making of any Loan
or any time or times thereafter (except for information received by the Agent
under Section 5.3 hereof which the Agent will promptly forward to the Lenders),
and the Agent shall further not have any responsibility with respect to the
accuracy of or the completeness of the information provided to Lenders.
Section 8.4. Right to Indemnity. Each Lender severally agrees to indemnify
the Agent proportionately to its Pro Rata Share of the Loan, to the extent the
Agent shall not have been reimbursed by the Borrower, GTI and/or any Subsidiary,
for and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including, without
limitation, counsel fees and disbursements) or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against the
Agent in performing its duties hereunder or in any way relating to or arising
out of this Agreement and/or any of the other Financing Documents; provided that
no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agent's gross negligence or willful misconduct.
If any indemnity furnished to the Agent for any purpose shall, in the opinion of
the Agent, be insufficient or become impaired, the Agent may call for additional
indemnity and cease, or not commence, to do the acts indemnified against until
such additional indemnity is furnished.
Section 8.5. Payee of Note Treated as Owner. The Agent may deem and treat
the payee of any Note as the owner thereof for all purposes hereof unless and
until a written notice of the assignment or transfer thereof shall have been
filed with the Agent. Any request, authority or consent of any person or entity
who, at the time of making such request or giving such authority or consent, is
the holder of any Note shall be conclusive and binding on any subsequent holder,
transferee or assignee of that Note or of any Note or Notes issued in exchange
for such Note.
Section 8.6. Resignation by Agent.
Section 8.6.1. The Agent may resign from the performance of all its
functions and duties hereunder at any time by giving 30 days' prior written
notice to the Borrower and each of the Lenders. Such resignation shall take
effect upon the acceptance by a successor Agent of appointment pursuant to
clauses 8.6.2 and 8.6.3 below or as otherwise provided below.
Section 8.6.2. Upon any such notice of resignation, the Majority
Lenders shall appoint a successor agent who shall be a Lender and who shall be
satisfactory to the Borrower and shall be an incorporated bank or trust company
with a combined surplus and undivided capital of at least $400,000,000.
Section 8.6.3. If a successor agent shall not have been so appointed
within said 30 day period, the resigning agent, with the consent of the
Borrower, shall then appoint a successor agent who shall be a Lender and who
shall serve as the Agent until such time, if any, as the Majority Lenders, with
the consent of the Borrower, appoint a successor agent as provided above.
Section 8.6.4. If no successor agent has been appointed pursuant to
clause 8.6.2 or 8.6.3 by the 40th day after the date such notice of resignation
was given by the resigning agent, the resigning agent's resignation shall become
effective and the Majority Lenders shall thereafter perform all the duties of
the resigning agent hereunder until such time, if any, as the Majority Lenders,
with the consent of the Borrower, appoint a successor agent as provided above.
Section 8.7. Successor Agent. The Agent may resign at any time as provided
in Section 8.6. Upon any such notice of resignation, the Majority Lenders shall
have the right, upon five days notice to and the approval of (which approval
shall not be unreasonably withheld) the Borrower, to appoint a successor agent.
Upon the acceptance of any appointment as the agent hereunder by a successor
agent, that successor agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring agent, and the
retiring agent shall be discharged from its duties and obligations as the agent
under this Agreement. After any retiring agent's resignation hereunder as the
agent the provisions of this Article 8 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was the agent under this
Agreement.
ARTICLE 9
MISCELLANEOUS
Section 9.1. Consent to Jurisdiction and Service of Process.
Section 9.1.1. Except to the extent prohibited by applicable law, the
Borrower irrevocably:
Section 9.1.1.1. agrees that any suit, action, or other legal
proceeding arising out of this Agreement or the Loan may be brought in the
courts of record of the State of Rhode Island or New York or the Commonwealth of
Massachusetts or the courts of the United States located in the States of Rhode
Island or New York or the Commonwealth of Massachusetts;
Section 9.1.1.2. consents to the jurisdiction of each such
court in any such suit, action or proceeding; and
Section 9.1.1.3. waives any objection which it may have to the
laying of venue of such suit, action or proceeding and/or any claim of
inconvenient forum in any of such courts.
Section 9.1.2. For such time as any of the Indebtedness of the
Borrower to any Lender shall be unpaid in whole or in part and/or the Commitment
is in effect, the Borrower irrevocably designates Xxxxxxx, Procter & Xxxx LLP as
its agent to accept and acknowledge on its behalf service of any and all process
in any such suit, action or proceeding brought in any such court, and agrees and
consents that any such service of process upon such agent and written notice of
such service to the Borrower by registered or certified mail shall be taken and
held to be valid personal service upon the Borrower regardless of where the
Borrower shall then be doing business and that any such service of process shall
be of the same force and validity as if service were made upon it according to
the laws governing the validity and requirements of such service in each such
state and waives any claim of lack of personal service or other error by reason
of any such service. Any notice, process, pleadings or other papers served upon
the aforesaid designated agent shall, within three Business Days after such
service, be sent by certified or registered mail to the Borrower at its address
set forth in this Agreement.
The Borrower, the Agent and the Lenders mutually hereby knowingly,
voluntarily and intentionally waive the right to a trial by jury in respect of
any claim based hereon, arising out of, under or in connection with this
Agreement, any Note or any of the other Financing Documents or any course of
conduct, course of dealings, statements (whether verbal or written) or actions
of any party. This waiver constitutes a material inducement for the Agent and
the Lenders to accept the Notes and make the Loan.
Section 9.2. Rights and Remedies Cumulative. No right or remedy conferred
upon or reserved to the Lenders in this Agreement is intended to be exclusive of
any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given under this Agreement or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy under this
Agreement, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 9.3. Delay or Omission Not Waiver. No delay in exercising or
failure to exercise by the Lenders of any right or remedy accruing upon any
Event of Default shall impair any such right or remedy or constitute a waiver of
any such Event of Default or an acquiescence therein. Every right and remedy
given by this Agreement or by law to the Lenders may be exercised from time to
time, and as often as may be deemed expedient, by the Lenders.
Section 9.4. Waiver of Stay or Extension Laws. The Borrower covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, which may affect the covenants or the performance of this Agreement; and
the Borrower (to the extent that it may lawfully do so) hereby expressly waives
all benefit and advantage of any such law and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Lenders, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
Section 9.5. Amendments, etc. No amendment, modification, termination, or
waiver of any provision of this Agreement or of the Notes nor consent to any
departure by the Borrower therefrom shall in any event be effective unless the
same shall be in a written notice given to the Borrower by the Agent and
consented to in writing by the Majority Lenders (or by the Agent acting alone if
any specific provision of this Agreement provides that the Agent may grant such
amendment, modification, termination, waiver or departure) and the Agent shall
give any such notice if the Majority Lenders so consent or direct Agent to do
so; provided, however, that any such amendment, modification, termination,
waiver or consent shall require a written notice given to the Borrower by the
Agent and consented to in writing by all of the Lenders if the effect thereof is
to (i) change any of the provisions affecting the interest rate on the Loan or
the fees set forth in Section 2.3 or amend, modify or waive any of the
provisions of Sections 2.7 or 2.1, (ii) extend or modify the Commitment, (iii)
discharge or release the Borrower from its obligation to repay any or all
principal or interest due under the Loan or any indemnity or reimbursement
payable to any Lender hereunder or release any collateral or guaranty for the
Loan, (iv) change any Lender's Pro Rata Share of the Commitment or the Loan
(except in connection with assignments thereof), (v) modify this Section 9.5 of
this Agreement, (vi) change the definition of Majority Lenders, (vii) extend any
due date for payment of principal, interest or fees, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given, (viii) modify, amend or terminate any material
agreement or any Franchise, (ix) approve or consent to the amendment of any
change in the subordination provisions of the Related Documents, (x) waive,
amend or depart from the provisions of Section 6.1.12, (xi) waive, amend or
depart from the provisions of Section 6.1.17 or (xii) waive, amend or depart
from the provisions of Section 6.1.18. Any amendment or modification of this
Agreement must be signed by the Borrower, the Agent and at least all of the
Lenders consenting thereto who shall then hold the Pro Rata Shares of the Loan
required for such amendment or modification under this Section 9.5 and the Agent
shall sign any such amendment if such Lenders so consent or direct the Agent to
do so; provided that any Lender dissenting therefrom shall be given an
opportunity to sign any such amendment or modification. No notice to or demand
on the Borrower and no consent, waiver or departure from the terms of this
Agreement granted by the Lenders in any case shall entitle the Borrower to any
other or further notice or demand in similar or other circumstances.
Section 9.6. Addresses for Notices, etc. All notices, requests, demands and
other communications provided for hereunder (other than those which, under the
terms of this agreement, may be given by telephone, which shall be effective
when received verbally) shall be in writing (including telegraphic, telexed or
telecopied communication) and mailed, telegraphed, telexed, telecopied or
delivered to the applicable party at the addresses indicated below:
If to the Borrower:
0000 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Xx.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With copies to:
Xxxxxxx, Procter & Xxxx LLP
Exchange Place
Boston, Massachusetts 02109
Attention: Xxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and
Xxxxxxxx Xxxxxx LLP
Xxx Xxxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. XxXxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Agent:
Fleet National Bank
Media & Communications
One Federal Street
Mail Stop: MA OF D03D
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. XxXxxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
With copies to:
Xxxxxxxx, Xxxxx & Xxxxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxx III
Xxxxx X. Xxxxxx
Telephone: 000-000-0000
Facsimile: 617-345-9020
Section 9.7. Costs, Expenses and Taxes. The Borrower agrees to pay on
demand the reasonable fees and out-of-pocket expenses of Messrs. Xxxxxxxx, Xxxxx
& Xxxxxx LLP, counsel for the Agent, and the Lenders in connection with the
preparation, execution and delivery of the Financing Documents and the Loan. The
Borrower agrees to pay on demand up to $10,000 of reasonable costs and expenses
(including without limitation reasonable attorneys' fees) incurred by the Agent
in connection with assignments made by Lenders pursuant to Section 9.11. The
Borrower agrees to pay on demand all reasonable costs and expenses (including
without limitation reasonable attorneys' fees) incurred by the Agent in
connection with any amendment hereto or to any of the Financing Documents. The
Borrower agrees to pay on demand all reasonable costs and expenses (including
without limitation reasonable attorneys' fees) incurred by the Agent and any
Lender, upon or after an Event of Default, if any, in connection with the
enforcement of any of the Financing Documents. The Borrower agrees to pay on
demand all reasonable costs and expenses (including without limitation
reasonable attorneys' fees of one law firm representing the Agent and of a
second law firm representing the Lenders as a group) incurred by the Agent and
the Lenders upon or within the occurrence of an Event of Default, if any, in
connection with any amendment, waiver or consent with respect thereto. In
addition, the Borrower shall pay on demand any and all stamp and other taxes and
fees payable or determined to be payable in connection with the execution and
delivery of the Financing Documents, and agrees to save the Lenders and the
Agent harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes or fees, except
those resulting from the Lenders' gross negligence or willful misconduct.
Section 9.8. Participations. Any Lender may sell participations in all or
part of the Loan made by it and/or its Commitment or any other interest herein,
in which event the participant shall not have any rights under any Financing
Document (the participant's rights against such Lender in respect of that
participation to be those set forth in the agreement executed by such Lender in
favor of the participant relating thereto) and all amounts payable by the
Borrower hereunder or thereunder shall be determined as if such Lender had not
sold such participation. Such Lender may furnish any information concerning the
Borrower and any Subsidiary in the possession of such Lender from time to time
to participants (including prospective participants).
Section 9.9. Binding Effect; Assignment. This Agreement shall be binding
upon and inure to the benefit of the Borrower, the Agent and the Lenders and
their respective successors and assigns, except that the Borrower shall not have
the right to assign its rights hereunder or any interest herein without the
prior written consent of the Majority Lenders. This Agreement and all covenants,
representations and warranties made herein and/or in any of the other Financing
Documents shall survive the making of the Loan, the execution and delivery of
the Financing Documents and shall continue in effect so long as any amounts
payable under or in connection with any of the Financing Documents or any other
Indebtedness of the Borrower to any Lender remains unpaid or the Commitment
remains outstanding; provided, however, that Sections 2.3.4 and 9.7 shall
survive and remain in full force and effect after expiration of the Commitment
and for 90 days following repayment in full of all amounts payable under or in
connection with all of the Financing Documents and any other such Indebtedness.
Section 9.10. Actual Knowledge. For purposes of this Agreement, no Lender
shall be deemed to have actual knowledge of any fact or state of facts unless
the senior loan officer or any other officer responsible for the Borrower's
account established pursuant to this Agreement at such Lender, shall, in fact,
have actual knowledge of such fact or state of facts or unless written notice of
such fact shall have been received by such Lender in accordance with Section
9.6.
Section 9.11. Substitutions and Assignments. Upon the request of any
Lender, the Agent and such Lender may, subject to the terms and conditions
hereinafter set forth, take the actions set forth below to substitute one or
more financial institutions (a "Substituted Lender") as a Lender or Lenders
hereunder having an amount of the Loan as specified in the relevant Substitution
Agreement executed in connection therewith.
Section 9.11.1. In connection with any such substitution the
Substituted Lender and the Agent shall enter into a Substitution Agreement in
the form of Exhibit 9.11.1 hereto (a "Substitution Agreement") pursuant to which
such Substituted Lender shall be substituted for the Lender requesting the
substitution in question (any such Lender being hereinafter referred to as a
"Selling Lender") to the extent of the reduction in the Selling Lender's portion
of the Loan specified therein. In addition, to that extent such Substituted
Lender shall assume such of the obligations of each Selling Lender under this
Agreement, the Security Documents and the Notes as may be specified therein and
this Agreement shall be amended by execution and delivery of each Substitution
Agreement to include such Substituted Lender as a Lender for all purposes under
this Agreement, the Security Documents and the Notes, and to substitute for the
then existing Exhibit 1.8 to this Agreement a new Exhibit 1.8 in the form of
Schedule A to such Substitution Agreement setting forth the portion of the Loan
belonging to each Lender following execution thereof. Each Lender and the
Borrower hereby appoint the Agent as agent on its behalf to countersign and
accept delivery of each Substitution Agreement and, to the extent applicable,
the provisions of Article 8 hereof shall apply mutatis mutandis with respect to
such appointment and anything done or omitted to be done by the Agent in
pursuance thereof.
Section 9.11.2. Without prejudice to any other provision of this
Agreement, each Substituted Lender shall, by its execution of a Substitution
Agreement, agree that neither the Agent nor any Lender is any way responsible
for or makes any representation or warranty as to: (a) the accuracy and/or
completeness of any information supplied to such Substituted Lender in
connection therewith, (b) the financial condition, creditworthiness, affairs,
status or nature of the Borrower and/or any of the Subsidiaries or the
observance by the Borrower, or any other party of any of its obligations under
this Agreement, any of the Notes or any of the Security Documents or (c) the
legality, validity, effectiveness, adequacy or enforceability of this Agreement,
any of the Notes or any of the other Security Documents.
Section 9.11.3. The Agent shall be entitled to rely on any
Substitution Agreement delivered to it pursuant to this Section 9.11 which is
complete and regular on its face as to its contents and appears to be signed on
behalf of the Substituted Lender which is a party thereto, and the Agent shall
have no liability or responsibility to any party as a consequence of relying
thereon and acting in accordance with and countersigning any such Substitution
Agreement. The effective date of each Substitution Agreement shall be the date
specified as such therein and each Lender prior to such effective date shall,
for all purposes hereunder, be deemed to have and possess all of their
respective rights and obligations hereunder up to 12:00 o'clock P.M. on the
effective date thereof.
Section 9.11.4. Upon delivery to the Agent of any Substitution
Agreement pursuant to and in accordance with this Section 9.11 and acceptance
thereof by the Agent (which delivery shall be evidenced and accepted exclusively
and conclusively by the Agent's countersignature thereon pursuant to the terms
hereof without which such Substitution Agreement shall be ineffective): (i)
except as provided hereunder, the respective rights of each Selling Lender and
the Borrower against each other under this Agreement, the Notes and the Security
Documents with respect to the portion of the Loan being assigned or delegated
shall be terminated and each Selling Lender and the Borrower shall each be
released from all further obligations to the other hereunder with respect
thereto (all such rights and obligations to be so terminated or released being
referred to in this Section 9.11 as "Discharged Rights and Obligations"); and
(ii) the Borrower and the Substituted Lender shall each acquire rights against
each other and assume obligations towards each other which differ from the
Discharged Rights and Obligations only in so far as the Borrower and the
Substituted Lender have assumed and/or acquired the same in place of the Selling
Lender in question; and (iii) the Agent, the Substituted Lender and the other
Lenders shall acquire the same rights and assume the same obligations between
themselves as they would have acquired and assumed had such Substituted Lender
been an original party to this Agreement as a Lender possessing the Discharged
Rights and Obligations acquired and/or assumed by it in consequence of the
delivery of such Substitution Agreement to the Agent.
Section 9.11.5. Discharged Rights and Obligations shall not include,
and there shall be no termination or release pursuant to this Section 9.11 of
(i) any rights or obligations arising pursuant to this Agreement in respect of
the period or in respect of payments hereunder made during the period prior to
the effective date of the relevant Substitution Agreement, (ii) any rights or
obligations relating to the payment of any amount which has fallen due and not
been paid hereunder prior to such effective date or rights or obligations for
the payment of interest, damages or other amounts becoming due hereunder as a
result of such nonpayment, any rights or claims of the Borrower against the
Seller hereunder arising prior to the effective date of the Substitution
Agreement.
Section 9.11.6. With respect to any substitution of a Substituted
Lender taking place after the Closing Date, the Borrower shall issue to such
Substituted Lender and to such Selling Lender, new Notes reflecting the
inclusion of such Substituted Lender as a Lender and the reduction in the
respective portion of the Loan of such Selling Lender, such new Notes to be
issued against receipt by the Borrower of the existing Notes of such Selling
Lender. The Selling Lender or the Substituted Lender shall pay to the Agent for
its own account an assignment fee in the amount of $4,000 for each assignment
hereunder, which shall be payable at or before the effective date of the
assignment.
Section 9.11.7. Each Lender may furnish to any financial institution
which such Lender proposes to make a Substituted Lender or to a Substituted
Lender any information concerning such Lender, the Borrower and any Subsidiary
in the possession of that Lender from time to time; provided that any Lender
providing any confidential information about the Borrower and/or any Subsidiary
to any such financial institution shall obtain such financial institution's
agreement to keep confidential any such confidential information.
Section 9.12. Payments Pro Rata. The Agent agrees that promptly after its
receipt of each payment from or on behalf of the Borrower in respect of any
Obligations of the Borrower hereunder it shall distribute such payment to the
Lenders pro rata based upon their respective Pro Rata Shares, if any, of the
Obligations with respect to which such payment was received. Each of the Lenders
agrees that, if it should receive any amount hereunder (whether by voluntary
payment, by realization upon security, by the exercise of the right of setoff or
banker's lien, by counterclaim or cross action, by the enforcement of any right
under the Financing Documents, or otherwise), which is applicable to the payment
of the Obligations of a sum which with respect to the related sum or sums
received by other Lenders is in a greater proportion than the total amount of
such Obligation then owed and due to such Lender bears to the total amount of
such Obligation then owed and due to all of the Lenders immediately prior to
such receipt, except for any amounts received pursuant to Section 2.3.3, then
such Lender receiving such excess payment shall purchase for cash without
recourse or warranty from the other Lenders an interest in the Obligations of
the Borrower to such Lenders in such amount as shall result in a proportional
participation by all the Lenders in such amount; provided, however, that if all
or any portion of such excess amount is thereafter recovered from such Lender,
such purchase shall be rescinded and the purchase price restored to the extent
of such recovery, but without interest.
Section 9.13. Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of The Commonwealth of
Massachusetts.
Section 9.14. Severability of Provisions. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 9.15. Headings. Article and Section 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.
Section 9.16. Counterparts. This Agreement may be executed and delivered in
any number of counterparts each of which shall be deemed an original, and this
Agreement shall be effective when at least one counterpart hereof has been
executed by each of the parties hereto. Delivery of an executed counterpart of a
signature page to this Agreement by telecopier shall be effective as delivery of
a manually executed counterpart of this Agreement.
Section 9.17. Senior Indebtedness. The parties hereto agree that the
Indebtedness under this Agreement shall be "Senior Indebtedness" as that term is
defined in the Indenture.
Section 9.18. Joint and Several Obligations. The Obligations of GTLP and
Capital Corp. are joint and several.
Section 9.19. Pledge to Federal Reserve. Each Lender may at any time
pledge all or any portion of its rights under the Financing Documents including
any portion of its Note to any of the 12 Federal Reserve Banks organized under
Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341. No such pledge or
enforcement thereof shall release such Lender from its obligations under any of
the Financing Documents.
Section 9.20. Replacement Documents. Upon receipt of an affidavit of an
officer of the Agent or any Lender as to the loss, theft, destruction or
mutilation of this Agreement, any Note or any other Financing Document which is
not of public record, and, in the case of any such loss, theft, destruction or
mutilation, upon cancellation of such Agreement, Note or other Financing
Document, the Borrower will issue, in lieu thereof, a replacement Agreement,
Note or other Financing Document in the same principal amount thereof and
otherwise of like tenor.
{TC "Section 9.21. Guaranty of Capital Corp."}Section 9.21. Guaranty of
Capital Corp. Capital Corp. hereby guarantees to the Lenders and the Agent the
full and punctual payment when due (whether at maturity, by acceleration or
otherwise) and the performance of all of the Obligations. This guaranty is an
absolute, unconditional and continuing guaranty of the full and punctual payment
and performance of the Obligations and not of their collectibility only and is
in no way conditioned upon any requirement that the Lenders and/or the Agent
first attempt to collect any of the Obligations from the Borrower or resort to
any security or other means of obtaining their payment. Should the Borrower
default in the payment or performance of any of the Obligations, or in the event
that the Borrower or any one or more of the guarantors of the Obligations shall
(a) apply for or consent to the appointment of a receiver, trustee or liquidator
of its or any of its or their property, (b) admit in writing its or their
inability to pay or fail generally to pay its or their debts as they mature, (c)
make a general assignment for the benefit of creditors, (d) be adjudicated a
bankrupt or (e) file a voluntary petition in bankruptcy or a petition or an
answer seeking reorganization or an arrangement with creditors or to take
advantage of any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debts, dissolution or liquidation statute, or an answer
admitting the material allegations of a petition filed against it or any of them
in a proceeding under any such law, the obligations of Capital Corp. hereunder
shall become immediately due and payable to the Lenders and the Agent, without
demand or notice of any nature, all of which are expressly waived by Capital
Corp. Payments by Capital Corp. hereunder may be required by the Agent on any
number of occasions.
Signatures Appear on Next Page
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as a sealed instrument by their respective officers thereunto duly
authorized, as of the date first above written.
In the presence of: GALAXY TELECOM, L.P.
_________________________ By:
General Partner
_________________________ By:
Name:
Title:
In the presence of: GALAXY TELECOM CAPITAL CORP.
_________________________ By:
Name:
Title:
In the presence of: FLEET NATIONAL BANK, as Agent and
as a Lender
_________________________ By:
Xxxxxxx X. XxXxxxxxxx
Senior Vice President
In the presence of: CITIZENS BANKOF MASSACHUSETTS (as
assignee of State Street Bank and Trust
Company)
_________________________ By:
Xxxxx X. Xxxxxx, Senior Vice President
Address: 000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
In the presence of: UNION BANK OF CALIFORNIA, N.A.
_________________________ By:
Xxxxx Xxxxxxxxx, Vice President
Address: 000 Xxxxx Xxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
In the presence of: BANK ONE, NA (as successor to The First
National Bank of Chicago)
_________________________ By:
Xxxx X. Xxxxxx, Vice President
Address: 1 Bank One Plaza
Mail Suite: IL1-0363
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx Xxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
