EXHIBIT 7(p)
REVOLVING CREDIT AGREEMENT, dated as of October 9, 1998
among
XXXX X. XXXXXX,
as Borrower
NATIONSBANK, N.A.,
as Agent,
SOCIETE GENERALE
and
TORONTO DOMINION SECURITIES (USA), INC.,
as Co-Agents,
and
NATIONSBANK, N.A.,
SOCIETE GENERALE, and
TORONTO DOMINION (TEXAS), INC.,
as Lenders
Page 13 of 112 Pages
TABLE OF CONTENTS
Page
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SECTION 1 DEFINITIONS......................................................................................... 1
1.1 Definitions............................................................................................ 1
1.2 Rules of Construction.................................................................................. 7
SECTION 2 THE REVOLVING CREDIT FACILITY....................................................................... 7
2.1 Commitment to Lend..................................................................................... 7
2.2 Method of Borrowing.................................................................................... 8
2.3 Notes.................................................................................................. 9
2.4 Interest Rate.......................................................................................... 9
2.5 Special Provisions for Eurodollar Advances; Taxes...................................................... 10
2.6 Payments of the Note................................................................................... 11
2.7 Fees................................................................................................... 12
2.8 Termination of Commitment.............................................................................. 12
2.9 Sharing of Payments, Etc............................................................................... 12
2.10 Set-off............................................................................................... 12
2.11 Capital Adequacy...................................................................................... 12
SECTION 3 COLLATERAL.......................................................................................... 13
3.1 Liens and Security Interests........................................................................... 13
SECTION 4 CONDITIONS PRECEDENT................................................................................ 13
4.1 Initial Advance........................................................................................ 13
4.2 All Advances........................................................................................... 13
SECTION 5 REPRESENTATIONS AND WARRANTIES...................................................................... 13
5.1 Taxes.................................................................................................. 13
5.2 Pledged Shares......................................................................................... 14
5.3 Authority and Compliance............................................................................... 14
5.4 Binding Agreement...................................................................................... 14
5.5 Litigation............................................................................................. 14
5.6 (a) Related Agreements................................................................................. 14
(b) No Conflicting Agreements.............................................................................. 14
(c) Conversion............................................................................................. 15
5.7 Financial Statements................................................................................... 15
5.8 Use of Proceeds; Margin Stock.......................................................................... 15
5.9 Representations and Warranties......................................................................... 15
5.10 Acquired Stock........................................................................................ 15
5.11 Share Ownership....................................................................................... 15
5.12 Survival of Representations and Warranties............................................................ 16
SECTION 6 COVENANTS........................................................................................... 16
6.1 Financial Statements................................................................................... 16
6.2 Compliance............................................................................................. 16
6.3 Adverse Conditions or Events........................................................................... 16
6.4 Taxes and Other Obligations............................................................................ 16
6.5 Transfer of Assets..................................................................................... 16
6.6 Liens.................................................................................................. 17
6.7 Other Covenants........................................................................................ 17
6.8 Indemnity by Borrower.................................................................................. 17
6.9 Removal of Legends..................................................................................... 17
6.10 Amendment to TCI Charter.............................................................................. 17
SECTION 7 EVENTS OF DEFAULT................................................................................... 17
7.1 Events of Default...................................................................................... 17
Revolving Credit Agreement
Page 14 of 112 Pages
7.2 Remedies Upon Event of Default............................................................................ 19
7.3 Performance by Agent...................................................................................... 19
7.4 Conversion and Voting Provisions.......................................................................... 19
SECTION 8 THE AGENT.............................................................................................. 19
8.1 The Agent................................................................................................. 19
8.2 Expenses.................................................................................................. 21
8.3 Proportionate Absorption of Losses........................................................................ 21
8.4 Delegation of Duties; Reliance............................................................................ 21
8.5 Limitation of Agent's Liability........................................................................... 22
8.6 Default................................................................................................... 23
8.7 Collateral Matters........................................................................................ 23
8.8 Limitation of Liability................................................................................... 23
8.9 Relationship of Lenders................................................................................... 24
8.10 Benefits of Agreement.................................................................................... 24
SECTION 9 MISCELLANEOUS.......................................................................................... 24
9.1 Accounting Reports........................................................................................ 24
9.2 Waiver.................................................................................................... 24
9.3 Payment of Expenses....................................................................................... 24
9.4 Notices................................................................................................... 24
9.5 Governing Law............................................................................................. 25
9.6 Choice of Forum; Consent to Service of Process and Jurisdiction........................................... 25
9.7 Invalid Provisions........................................................................................ 25
9.8 Maximum Interest Rate..................................................................................... 25
9.9 Nonliability of Lenders................................................................................... 25
9.10 Article 15.10(b)......................................................................................... 25
9.11 Successors and Assigns................................................................................... 26
9.12 Entirety................................................................................................. 28
9.13 Headings................................................................................................. 28
9.14 Survival................................................................................................. 28
9.15 Amendments, Etc.......................................................................................... 28
9.16 No Third Party Beneficiary............................................................................... 28
9.17 WAIVER OF JURY TRIAL..................................................................................... 29
9.18 Multiple Counterparts.................................................................................... 29
9.19 Confidentiality; No Publication.......................................................................... 29
9.20 Arbitration.............................................................................................. 29
Revolving Credit Agreement
Page 15 of 112 Pages
REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT (this "AGREEMENT"), dated as of October 9,
1998, is made among XXXX X. XXXXXX ("BORROWER"), each of the Persons listed on
the signature pages hereof (collectively called, together with each Person that
becomes a Lender pursuant to SECTION 9.11, the "LENDERS," and individually a
"LENDER"), and NATIONSBANK, N.A., a national banking association, as agent for
Lenders to the extent and in the manner provided in SECTION 8 (together with any
successors and assigns, "Agent"), Toronto Dominion Securities (USA), Inc. and
Societe Generale as Co-Agents for Lenders.
R E C I T A L S
1. Borrower has requested that Lenders provide to Borrower a revolving
credit facility of up to $345,000,000 to provide (a) funds of up to $311,000,000
for the purchase of 8,718,770 shares (the "ACQUIRED STOCK") of the Series B
Common Stock, $1.00 par value, of Tele-Communications, Inc. ("TCI"), and (b)
funds for other business purposes, including interest rate and equity hedging
products and paying accrued interest and commitment fees on the Loan.
2. Lenders are willing to provide such a facility to Borrower, upon the
terms, and subject to the conditions, hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises herein contained,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1 DEFINITIONS.
1.1 Definitions. As used in this Agreement, all exhibits and schedules
hereto and in any note, certificate, report, or other Loan Document made or
delivered pursuant to this Agreement, the following terms have the respective
meanings assigned to them in this SECTION 1, or in the section or recital
referred to below:
"Acquired Stock" has the meaning set forth in the recitals.
"Advance" means (a) each disbursement by Lenders of a sum or sums lent to
Borrower pursuant to this Agreement, (b) each conversion of an Advance to
another Type or Advance, and (c) each rollover of a Eurodollar Advance to a
successive Interest Period.
"Affiliate" of any Person means any other Person directly or indirectly,
controlling, controlled by, or under common control with, such Person.
"Agent" has the meaning set forth in the first paragraph of this Agreement.
"Agent's Lending Office" means Agent's lending office located at 000 Xxxx
Xxxxxx, Xxxxxx, Xxxxx 00000, or such other address as Agent may hereafter
designate in writing as Agent's Lending Office by notice to Borrower and
Lenders.
"Agreement" means this Revolving Credit Agreement, including the schedules
and exhibits hereto, as the same may be renewed, extended, or modified from time
to time.
Page 16 of 112 Pages
"Applicable Lending Office" means for each Lender and each Type of Advance,
the lending office of such Lender (or of an Affiliate of such Lender) designated
for such Type of Advance below its name on the signature pages hereof or an
Assignment and Acceptance, or such other office of such Lender (or of an
Affiliate of such Lender) as such Lender may from time to time specify to
Borrower and Agent by written notice in accordance with the terms of this
Agreement as the office by which its Advances of such Type are to be made and
maintained.
Applicable Margin means with respect to each Eurodollar Advance, (a) 1.00%
per annum, until both (i) the Merger has occurred, and (ii) the Pledged Shares
can be transferred (including pursuant to the Pledge Agreement) (A) without
registration under the Securities Act of 1933, as amended, in accordance with
the requirements of Rule 145 and (B) without restriction (except the Conversion
Provision) or delay under the Related Agreements or any other agreement or
understanding and (b) 0.75% per annum after ITEMS (i) and (ii) have occurred.
"Assignee" has the meaning set forth in SECTION 9.11(B).
"Assigning Lender" has the meaning set forth in SECTION 9.11(B).
"Assignment and Acceptance" means an assignment and acceptance entered into
by an Assigning Lender and its Assignee and accepted by Agent pursuant to
SECTION 9.11, in substantially the form of EXHIBIT A.
"Borrower" has the meaning set forth in the first paragraph of this
Agreement.
"Business Day" means (a) any day on which Agent is open for regular
business, and (b) with respect to all borrowings, payments, conversions,
continuations, Interest Periods, and notices in connection with Eurodollar
Advances, any day which is a Business Day described in clause (a) above and
which is also a day on which dealings in Dollar deposits are carried out in the
London interbank market.
"Co-Agent" means each of Toronto Dominion Securities (USA), Inc. and
Societe Generale.
"Code" means the Internal Revenue Code of 1986, as amended, and all
regulations promulgated and rulings issued thereunder.
"Collateral" has the meaning assigned to such term in the Pledge Agreement.
"Collateral Documents" means the Pledge Agreement and all security
agreements, pledge agreements, and other agreements or documents executed or
delivered to secure repayment of the Obligation, or any part thereof.
"Commitment" means, as to each Lender as of any date, the obligation of
such Lender on such date to make Advances hereunder in an aggregate principal
amount at any time outstanding up to but not exceeding the amount set forth
below its name on the signature pages hereof (or in an Assignment and
Acceptance) as its Commitment, as the same may be reduced pursuant to the terms
hereof.
"Commitments" means the Commitments of all Lenders in the original
aggregate principal amount of $345,000,000.
Page 17 of 112 Pages
"Contract Rate" means (a) with respect to a Prime Rate Advance, the Prime
Rate, and (b) with respect to a Eurodollar Advance, the Eurodollar Rate plus the
Applicable Margin.
"Default Rate" means a per annum rate of interest equal from day-to-day to
the lesser of (a) the sum of the Prime Rate plus three percent, and (b) the
Maximum Rate.
"Dollars" and "$" mean lawful money of the United States of America.
"Eligible Assignee" means any commercial bank, savings and loan
association, savings bank, finance company, insurance company, pension fund,
mutual fund, or other financial institution (whether a corporation, partnership,
or other entity) approved by Agent and, so long as no Potential Default or Event
of Default has occurred and is continuing, Borrower, such approvals not to be
unreasonably withheld.
"Eurodollar Advance" means any Advance that bears an interest rate
calculated by reference to the Eurodollar Rate for a particular Interest Period.
"Eurodollar Rate" means, for any Eurodollar Advance for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/16th of one percent) equal to the rate appearing on page "LIBO" on the Xxxxxx
Monitor System (or any successor page; or in the absence thereof, an equivalent
source obtained by Agent) as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest Period.
"Eurodollar Reserve Requirement" means, for any Lender on any day, that
percentage (expressed as a decimal fraction) that is in effect on such day, as
provided by the Board of Governors of the Federal Reserve System (or any
successor governmental body), applied for determining the reserve requirements
of such Lender (including basic, supplemental, marginal, and emergency reserves)
under Regulation D, with respect to "Eurocurrency liabilities" as currently
defined in Regulation D, or under any similar or successor regulation with
respect to Eurocurrency liabilities or Eurocurrency funding. Each determination
by any Lender of the Eurodollar Reserve Requirement shall, in the absence of
manifest error, be conclusive and binding.
"Event of Default" has the meaning set forth in Section 7.1.
"Federal Funds Rate" means, on any day, the annual rate (rounded upwards,
if necessary, to the nearest 0.01%) determined by Agent (which determination is
conclusive and binding, absent manifest error) to be equal to the weighted
average of the rates on overnight federal funds transactions with member banks
of the Federal Reserve System arranged by federal funds brokers as published by
the Federal Reserve Bank of New York on the next successive Business Day;
provided, however, that (a) if such determination date is not a Business Day,
the Federal Funds Rate for such day shall be the rate for such transactions on
the next preceding Business Day as published on the next successive Business
Day, or (b) if those rates are not published for any Business Day, the Federal
Funds Rate shall be the average of the quotations at approximately 10:00 a.m. on
such Business Day received by Agent from three federal funds brokers of
recognized standing selected by Agent in its sole discretion.
"Funding Loss" has the meaning set forth in EXHIBIT D.
"Governmental Authority" means any nation or government, any state or
political subdivision thereof, and any entity exercising executive, legislative,
judicial, regulatory, or administrative functions of
Page 18 of 112 Pages
or pertaining to government.
"Governmental Requirement" means any federal, state, local, municipal,
foreign, international, multinational, or other administrative order,
constitution, law, ordinance, principle of common law, regulation, statute, or
treaty as in effect on the date hereof.
"High Vote Stock" has the meaning assigned to such term in the Xxxxxx Call
Agreement.
"Initial Collateral" shall mean the shares of common stock more fully
described on SCHEDULE 5.2 attached hereto.
"Interest Period" means, with respect to a Eurodollar Advance, a period:
commencing (a) on the borrowing date of such Eurodollar Advance; or (b) on the
conversion date pertaining to such Eurodollar Advance, if made pursuant to a
conversion as described in SECTION 2.2(C); or (c) on the last day of the
preceding Interest Period, in the case of a rollover to a successive Interest
Period; and ending one, two, three, four, or six months thereafter, as Borrower
shall elect in accordance with SECTION 2.2(c); provided that: (i) any Interest
Period that would otherwise end on a day which is not a Business Day shall be
extended to the next succeeding Business Day, unless such Business Day falls in
another calendar month, in which case such Interest Period shall end on the next
preceding Business Day; (ii) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall, subject to CLAUSE (i) above, end on the last Business Day of a calendar
month; and (iii) if the Interest Period for any Eurodollar Advance would
otherwise end after the final maturity date of the Loan, then such Interest
Period shall end on the final maturity date of the Loan.
"June Option Agreement" means the Letter Agreement, dated as of June 16,
1997, between Borrower and TCI regarding Borrower's right to acquire the
Acquired Stock from TCI.
"Lender" and "Lenders" have the meanings set forth in the first paragraph
of this Agreement.
"Lien" means any lien, mortgage, security interest, tax lien, pledge,
negative pledge, encumbrance, conditional sale, or title retention arrangement,
or any other interest in property designed to secure the repayment of
indebtedness, whether arising by agreement, or under any statute, law, or
otherwise.
"Loan" means the revolving credit loan made or to be made hereunder to
Borrower by Lenders pursuant to SECTION 2.1.
"Loan Documents" means this Agreement, the Notes, the Collateral Documents,
and any agreements, documents (and with respect to this Agreement and such other
agreements and documents, any renewals, extensions, amendments, or supplements
thereto), or certificates at any time executed or delivered pursuant to the
terms of this Agreement.
"Low Vote Stock" means has the meaning assigned to such term in the Xxxxxx
Call Agreement.
"Xxxxxx Call Agreement" means that certain Call Agreement, dated as of
February 9, 1998, between TCI, Borrower, and Xxxxxx Xxxxxx, as it may be amended
or modified from time to time.
"Margin Requirements" means all statutes, regulations and interpretations
pertaining to
Page 19 of 112 Pages
extensions of credit to purchase or carry, or extensions of credit secured
(directly or indirectly) by, margin stock, including the certification, loan-to-
value, and other requirements of the Securities Exchange Act of 1934 and
Regulations U and X of the Board of Governors of the Federal Reserve System, and
any successor regulations.
"Material Adverse Effect" means any material adverse change in, or effect
upon, (a) the validity, performance, or enforceability of any Loan Document, (b)
the financial condition of Borrower, or (c) the ability of Borrower to fulfill
its obligations under the Loan Documents.
"Maximum Rate" means the highest nonusurious rate of interest (if any)
permitted from day-to- day by applicable law. Agent and Lenders hereby notify
and disclose to Borrower that, for purposes of Tex. Rev. Civ. Stat. Xxx. art.
5069-1.04, as it may from time to time be amended, the "applicable rate ceiling"
shall be the "indicated rate" ceiling from time to time in effect, as limited by
article 5069-1.04(b); provided, however, that to the extent permitted by
applicable law, Agent and Lenders reserve the right to change the "applicable
rate ceiling" from time to time by further notice and disclosure to Borrower.
"Merger" means the merger contemplated by the Agreement and Plan of
Restructuring and Merger, dated as of June 23, 1998, among AT&T Corp., Italy
Merger Corp, and TCI, pursuant to which TCI will become a wholly owned
subsidiary of AT&T Corp.
"Merger Shares" has the meaning given in SECTION 5.11.
"Notes" means the Revolving Credit Notes in substantially the form of
EXHIBIT B, executed by Borrower and delivered pursuant to the terms of this
Agreement, together with any renewals, extensions, or modifications thereof, and
"NOTE" means any one of the Notes.
"Notice of Borrowing" means, with respect to any Advance, a notice
substantially in the form of Exhibit C.
"Obligation" means all present and future indebtedness, obligations, and
liabilities, and all renewals and extensions thereof, or any part thereof, now
or hereafter owed to Agent or any Lender by Borrower arising pursuant to any of
the Loan Documents, and all renewals and extensions thereof, together with all
interest accruing thereon, and costs, expenses, and reasonable attorneys' fees
incurred in the enforcement or collection thereof.
"Permitted Class" has the meaning given to such term in the Pledge
Agreement.
"Person" includes an individual, corporation, joint venture, general or
limited partnership, limited liability company, trust, unincorporated
organization, or government, or any agency or political subdivision thereof.
"Pledge Agreement" means that certain Pledge Agreement, dated as of the
date hereof, executed by Borrower in favor of Agent, Co-Agents, and Lenders, and
any renewals, extensions, modifications, or restatements thereof.
"Pledged Shares" has the meaning assigned to such term in the Pledge
Agreement.
"Potential Default" means the occurrence of any event which with passage of
time, or giving of notice, or both, could become an Event of Default.
Page 20 of 112 Pages
"Prime Rate" means, at any time, the greater of (a) the variable rate of
interest established from time to time by Agent as its "prime rate" and set by
Agent as a general reference rate of interest charged by Agent, and (b) the
Federal Funds Rate plus one-half of one percent. Borrower acknowledges that
Agent may, from time to time, extend credit to other borrowers at rates of
interest varying from, and having no relationship to, such general reference
rate. Each change in the Prime Rate shall become effective without prior notice
to Borrower automatically as of the opening of business on the date of such
change in the Prime Rate.
"Prime Rate Advance" means any Advance hereunder with respect to which the
interest rate is calculated by reference to the Prime Rate.
"Principal Debt" means, at the time of any determination thereof, the
aggregate unpaid principal balance of all Advances.
"Pro Rata" and "Pro Rata Part" mean, on any date of determination thereof
for any Lender (a) at any time prior to the termination of the Commitments, the
proportion that such Lender's Commitment bears to the Commitments of all
Lenders, and (b) at any time on and after the termination of the Commitments,
the proportion that the Principal Debt owed to such Lender bears to the
Principal Debt owed to all Lenders (provided that for purposes of SECTIONS
2.6(E)(II) and 8.1(A)(VII), PRO RATA PART means the proportion that the
Principal Debt owed to a Lender bears to the Principal Debt owed to all
Lenders.)
"Register" has the meaning set forth in SECTION 9.11(D).
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System, from time to time in effect, and shall include any successor or
other regulation relating to reserve requirements applicable to member banks of
the Federal Reserve System.
"Related Agreements" means the Stockholders Agreement, the Xxxxxx Call
Agreement, the June Option Agreement, and the Voting Agreement (as it may be
amended or modified from time to time).
"Required Lenders" means, as of any date, any combination of Lenders who
collectively hold 51% of (i) the sum of the Commitments, or (ii) if the
Commitments have been terminated, then of the Principal Debt owed all Lenders.
"Rule 145" means Rule 145 promulgated pursuant to the Securities Act of
1933, and any successor regulations.
"Stockholders Agreement" means that certain Stockholders Agreement, dated
as of February 9, 1998, between TCI, Borrower, Xxxxxx Xxxxxx, Xxxx Xxxxxxx, Xxx
Xxxxxxx, the Estate of Xxx Xxxxxxx, and the Estate of Xxxxx Xxxxxxx, as it may
be amended or modified from time to time.
"T Stock" has the meaning assigned to such term in the Pledge Agreement
"TCI" means Tele-Communications, Inc., a Delaware Corporation.
"Taxes" means, for any Person, taxes, assessments, or other governmental
charges or levies imposed upon it, its income, or any of its properties,
franchises, or assets.
"Termination Date" means the earlier of (a) Xxxxx 00, 0000, (x) the date
Lenders' commitments to
Page 21 of 112 Pages
fund Advances hereunder are terminated pursuant to SECTION 7.2, and (c) the date
that Lenders' commitments to fund Advances hereunder are reduced to zero
pursuant to SECTION 2.1(B).
"Type" means any type of Advance (i.e., Prime Rate Advance or Eurodollar
Advance).
"Voting Agreement" means that certain Agreement, dated as of June 23, 1998,
as Amended and Restated as of October 9, 1998, among AT&T Corp., Borrower, and
Xxxxxx Xxxxxx.
"Waiver Letters" means (a) the letter dated October 9, 1998, to Agent and
Lenders from TCI, regarding the waiver of certain provisions of the Xxxxxx Call
Agreement, and (b) the letter dated October 9, 1998, to Agent and Lenders from
TCI, Xxx Xxxxxxx (in a representative capacity and individually), Xxxx Xxxxxxx
(in a representative capacity and individually), the Estate of Xxxxx Xxxxxxx,
and the Estate of Xxx Xxxxxxx, regarding the waiver of certain provisions of the
Stockholders Agreement.
1.2 RULES OF CONSTRUCTION. When used in this Agreement: (a) "or" is not
exclusive; (b) a reference to a law includes any amendment or modification to
such law; (c) a reference to a Person includes its permitted successors and
permitted assigns; (d) except as provided otherwise, all references to the
singular shall include the plural, and vice versa; (e) except as provided in
this Agreement, a reference to an agreement, instrument, or document shall
include such agreement, instrument, or document, as the same may be amended,
modified, or supplemented from time to time in accordance with its terms and as
permitted by the Loan Documents; (f) all references to SECTIONS, EXHIBITS, and
SCHEDULES shall be to sections of and exhibits and schedules to this Agreement,
unless otherwise indicated; (g) all EXHIBITS and SCHEDULES to this Agreement
shall be incorporated into this Agreement; (h) the words "include," "includes,"
and "including" shall be deemed to be followed by the phrase "without
limitation;" and (i) except as otherwise provided herein, in the computation of
time, from a specified date to a later specified date, the word "from" means
"from and including," and words "to" and "until" each mean "to but excluding."
SECTION 2 THE REVOLVING CREDIT FACILITY.
2.1 COMMITMENT TO LEND.
(A) COMMITMENT. Subject to and in reliance upon the terms, conditions,
representations, and warranties in the Loan Documents, including the provisions
in SECTION 2.1(c), each Lender severally and not jointly agrees to lend to
Borrower such Lender's Pro Rata Part of one or more Advances not to exceed such
Lender's Commitment, which, subject to the Loan Documents, Borrower may borrow,
repay, and reborrow under this Agreement; provided that each such Advance must
occur on a Business Day preceding the Termination Date.
(B) VOLUNTARY TERMINATION OF COMMITMENTS. Without premium or penalty, and
upon giving not less than five Business Days prior written and irrevocable
notice to Agent, Borrower may terminate in whole or in part the unused portion
of the Commitments; provided that: (i) each partial termination shall be in an
amount of not less than $500,000 or a greater integral multiple thereof; (ii)
the amount of the Commitments may not be reduced below the amount of the
Obligation at such time; and (iii) each reduction shall be allocated to each
Lender's Commitment Pro Rata among all Lenders in accordance with their
respective Pro Rata Parts. Promptly after receipt of such notice or termination
or reduction, Agent shall notify each Lender of the cancellation or reduction.
Page 22 of 112 Pages
(c) COLLATERAL REQUIREMENTS. As a condition to Lenders' obligation to make
any Advance hereunder, Borrower must be in compliance with the requirements of
SECTION 6 of the Pledge Agreement related to maintenance of Collateral and with
all Margin Requirements. In addition, Borrower shall be obligated to deliver
additional Collateral to Agent or prepay the Notes, on the terms set forth in
SECTION 6 of the Pledge Agreement, or as required to satisfy Margin
Requirements.
(d) USE OF PROCEEDS. Borrower shall use the proceeds of the Loan solely
for the purposes described in the recitals. Borrower shall not use proceeds of
any Advance (i) for any unlawful purpose, or (ii) for the purpose of making any
hostile tender offer to acquire shares of stock or other equity interests in
another Person.
2.2 METHOD OF BORROWING.
(a) APPLICATION FOR ADVANCE. Borrower shall deliver to Agent a Notice of
Borrowing at least one Business Day prior to any Prime Rate Advance and at least
three Business Days prior to any Eurodollar Advance. Each Notice of Borrowing
must be received by Agent no later than 1:00 p.m. (Dallas, Texas time) as of the
applicable date. Prior to making a Notice of Borrowing, Borrower may (without
specifying whether the Advance shall be a Prime Rate Advance or a Eurodollar
Advance) request that Agent provide Borrower with the most recent Eurodollar
Rate. Agent shall endeavor to provide such quoted rate to Borrower on the date
of such request.
(b) FUNDING.
(i) Promptly after receipt of a Notice of Borrowing under SECTION
2.2(A), Agent shall notify each Lender by telex or telecopy, or other
similar form of transmission, of the proposed Advance. Each Lender shall
deposit an amount equal to its Pro Rata Part of the Advance requested by
Borrower with Agent at its Lending Office, in immediately available funds
not later than 11:00 a.m. (Dallas, Texas time) on the date of such proposed
Advance. Upon fulfillment of all applicable conditions set forth herein,
Agent shall make available to Borrower at Agent's Lending Office, not later
than 2:00 p.m. (Dallas, Texas time) on the date of each Advance, the
proceeds of each Lender's Pro Rata Part of the Advance actually received by
Agent. The failure of any Lender to deposit the amount described above with
Agent shall not relieve any other Lender of its obligations hereunder to
make its Advance.
(ii) Unless Agent shall have been notified by any Lender that such
Lender will not make available to Agent such Lender's Pro Rata Part of a
proposed Advance, Agent may in its discretion assume that such Lender has
made such Advance available to Agent in accordance with this SECTION and
Agent may, if it chooses, in reliance upon such assumption, make such
Advance available to Borrower. If and to the extent such Lender shall not
so make its Pro Rata Part of the proposed Advance available to Agent, such
Lender severally agrees to pay or repay to Agent on demand the amount of
such Advance together with interest thereon, for each day from the date
such Advance is made available to Borrower until the date such amount is
paid or repaid to Agent at the Federal Funds Rate. If such Lender shall
repay to Agent such amount, such amount so repaid shall constitute such
Lender's Advance for purposes of this Agreement.
(c) SELECTION OF INTEREST OPTION PERIOD.
(i) Upon making a Notice of Borrowing under SECTION 2.2(A), Borrower
shall advise Agent as to whether the Advance shall be (A) a Eurodollar
Advance, in which case Borrower shall
Page 23 of 112 Pages
specify the applicable Interest Period therefor, or (B) a Prime Rate
Advance.
(ii) Subject to the dollar limits and denominations of SECTION 2.1,
Borrower may (A) convert a Eurodollar Advance on the last day of the
applicable Interest Period to a Prime Rate Advance, (B) convert a Prime
Rate Advance on any Business Day to a Eurodollar Advance, and (C) elect a
new Interest Period for a Eurodollar Advance, by giving a Notice of
Borrowing to Agent no later than 1:00 p.m. (Dallas, Texas time) on the
third (3rd) Business Day before the conversion date or the last day of the
Interest Period, as the case may be (for conversion to a Eurodollar Advance
or election of a new Interest Period), and no later than 1:00 p.m. (Dallas,
Texas time) one Business Day before the last day of the Interest Period
(for conversion to a Prime Rate Advance). Absent Borrower's Notice of
Borrowing, a Eurodollar Advance shall be deemed converted to a Prime Rate
Advance effective when the applicable Interest Period expires.
(iii) Notwithstanding anything to the contrary contained herein, (A)
no more than three Interest Periods shall be in effect at any one time with
respect to Eurodollar Advances, and (B) Borrower shall have no right to
request a Eurodollar Advance if the Interest Rate applicable thereto under
SECTION 2.4 would exceed the Maximum Rate in effect on the first day of the
Interest Period applicable to such Advance.
(iv) Each Notice of Borrowing shall be irrevocable and binding on
Borrower and, in respect of any Eurodollar Advance specified in such Notice
of Borrowing, Borrower shall indemnify Agent and Lenders against any
Funding Loss incurred by Agent or Lenders as a result of (A) any failure to
fulfill, on or before the date specified for such Advance, the conditions
to such Advance set forth herein, or (B) Borrower's requesting that an
Advance not be made on the date specified for such Advance in the Notice of
Borrowing. A certificate of Agent and each Lender establishing the amount
due from Borrower according to the preceding sentence, together with a
description in reasonable detail of the manner in which such amount has
been calculated, shall be presumed to be correct in the absence of manifest
error.
2.3 NOTES. The Loan made under SECTION 2.1 by Lenders shall be evidenced
by the Notes, one payable to each Lender in the stated amount of its Commitment,
in the aggregate principal amount of $345,000,000.
2.4 INTEREST RATE.
(a) ALL ADVANCES. The unpaid principal of each Prime Rate Advance shall
bear interest from the date of Advance to the date of repayment thereof at a
rate per annum that shall from day-to-day be equal to the lesser of (i) the
Prime Rate in effect from day-to-day, and (ii) the Maximum Rate. The unpaid
principal of each Eurodollar Advance shall bear interest from the date of
advance to the date of repayment thereof at a rate per annum that shall be equal
to the lesser of (i) the Eurodollar Rate plus the Applicable Margin, and (ii)
the Maximum Rate.
(b) DEFAULT RATE. All past due principal of, and to the extent permitted
by applicable law, interest on, the Note shall bear interest until paid at the
Default Rate.
(c) RECAPTURE RATE. If the applicable Contract Rate ever exceeds the
Maximum Rate, thereby causing the interest charged under the Notes to be limited
to the Maximum Rate, then, to the extent permitted by applicable law, any
subsequent reductions in the applicable Contract Rate shall not reduce the rate
of interest charged under the Notes below the Maximum Rate, until the total
amount of
Page 24 of 112 Pages
interest accrued on the Notes equals the amount of interest that would have
accrued thereon if the applicable Contract Rate had at all times been in effect.
(d) GENERAL PROVISIONS AS TO INTEREST.
(i) Interest will be calculated on the basis of actual number of days
(including the first day but excluding the last day) elapsed but computed:
(A) with respect to Eurodollar Advances, as if each calendar year consisted
of 360 days (unless the calculation would result in an interest rate
greater than the Maximum Rate, in which event interest will be calculated
on the basis of a year of 365 or 366 days, as the case may be); and (B)
with respect to Prime Rate Advances, on the basis of a year of 365 or 366
days, as the case may be. All interest rate determinations and
calculations by Agent are presumed to be correct in the absence of manifest
error.
(ii) The provisions of this Agreement relating to calculation of the
Prime Rate and the Eurodollar Rate are included only for the purpose of
determining the rate of interest or other amounts to be paid under this
Agreement that are based upon those rates. Each Lender may fund and
maintain its funding of all or any part of each Advance as it selects.
2.5 SPECIAL PROVISIONS FOR EURODOLLAR ADVANCES; TAXES.
(a) EURODOLLAR ADVANCES. With respect to Eurodollar Advances, the
provisions of EXHIBIT D (regarding inadequacy of pricing, illegality, increased
costs, and funding losses) shall apply.
(b) TAXES. Subject to SECTION 2.5(c), any Taxes payable by Agent or any
Lender or ruled (by a Governmental Authority) payable by Agent or any Lender in
respect of this Agreement or any other Loan Document shall, if permitted by
Governmental Requirement, be paid by Borrower, together with interest and
penalties, if any (except for Taxes imposed on or measured by the overall net
income of Agent or such Lender). Agent or such Lender (through Agent) shall
notify Borrower and deliver to Borrower a certificate setting forth in
reasonable detail the calculation of the amount of payable Taxes, which
certificate is presumed to be correct in the absence of manifest error, and
Borrower shall promptly pay that amount to Agent for its account or the account
of such Lender, as the case may be. If Agent or such Lender subsequently
receives a refund of the Taxes paid to it by Borrower, then the recipient shall
promptly pay the refund to Borrower.
(c) FOREIGN LENDERS. Each Lender that is organized under the Governmental
Requirements of any jurisdiction other than the United States of America or any
State thereof (i) represents to Agent and Borrower that (A) no Taxes are
required to be withheld by Agent or Borrower with respect to any payments to be
made to it in respect of the Obligation, and (B) it has furnished to Agent and
Borrower two (2) duly completed copies of U.S. Internal Revenue Service Form
4224, Form 1001, Form W-8, or any other tax form acceptable to the Agent
(wherein it claims entitlement to complete exemption from U.S. federal
withholding tax on all interest payments under the Loan Documents), and (ii)
covenants to (A) provide Agent and Borrower a new tax form upon the expiration
or obsolescence of any previously delivered form according to Governmental
Requirement, duly executed and completed by it, and (B) comply from time to time
with all Governmental Requirements with regard to the withholding tax exemption.
If any of the foregoing is not true or the applicable forms are not provided,
then Borrower or Agent (without duplication) may deduct and withhold from
interest payments under the Loan Documents United States federal income tax at
the full rate applicable under the Code.
Page 25 of 112 Pages
(d) SURVIVAL. Without prejudice to the survival of any other obligations
of Borrower hereunder, the obligations of Borrower under this SECTION 2.5 shall
survive the termination of this Agreement and/or the payment or assignment of
the Notes.
2.6 PAYMENTS OF THE NOTE.
(a) PAYMENT OF INTEREST ON THE NOTES. Interest on each Eurodollar Advance
shall be due and payable as it accrues on the last day of its respective
Interest Period; provided that if any Interest Period is a period greater than
three months, then accrued interest shall also be due and payable on the date
three months after the commencement of such Interest Period. Interest on each
Prime Rate Advance shall be due and payable as it accrues on the last day of
each calendar quarter, and on the Termination Date.
(b) PAYMENT OF PRINCIPAL OF THE NOTES. The Notes shall mature, and the
principal amount thereof shall be due and payable, on the Termination Date.
(c) OPTIONAL PREPAYMENTS. Upon three Business Days' notice for Eurodollar
Advances and one Business Day's notice for Prime Rate Advances, Borrower may
prepay the principal of any of the Notes then outstanding, in whole or in part,
at any time or from time to time; provided, however, that (i) each prepayment of
less than the full outstanding principal balance of a Note shall be in an amount
equal to at least $250,000, and (ii) if Borrower prepays the principal of any
Eurodollar Advance on any date other than the last day of the Interest Period
applicable thereto, Borrower shall pay any Funding Loss with respect to such
payment. Any optional prepayment of the principal of the Notes shall be applied
to the Notes on a pro rata basis based upon the outstanding principal balances
of the Notes as of the date of payment.
(d) MANDATORY PREPAYMENTS. Borrower shall be obligated to make mandatory
prepayments on the Notes, in accordance with Section 2.1(c).
(e) GENERAL PROVISIONS AS TO PAYMENTS.
(i) All payments of principal of, and interest on, any Note to or for
the account of any Lender shall be made by Borrower to Agent before 12:00
p.m. (Dallas, Texas time), in Federal or other immediately available funds
at Agent's Lending Office. If the principal of, or interest on, a Note, or
any other amount payable hereunder, becomes due and payable on a day other
than a Business Day, then the maturity thereof shall be extended to the
next succeeding Business Day. Each payment received by Agent hereunder for
the account of a Lender shall be promptly distributed by Agent to such
Lender. Except as otherwise provided, all payments made on any Note shall
be credited, to the extent of the amount thereof, in the following manner:
(A) first, against the amount of interest accrued and unpaid on such Note
as of the date of such payment; (B) second, against all principal (if any)
due and owing on such Note as of the date of such payment; (C) third, as a
prepayment of outstanding Prime Rate Advances under such Note; and (D)
fourth, as a prepayment of outstanding Eurodollar Advances under such Note.
Subject to the foregoing, so long as no Potential Default or Event of
Default exists, payments and prepayments of principal of any Note shall be
applied to such outstanding Prime Rate Advances and Eurodollar Advances
under such Note as Borrower shall select; provided, however, that Borrower
shall select Prime Rate Advances and Eurodollar Advances to be repaid in a
manner designed to minimize the Funding Loss, if any, resulting from such
payments; and provided further that, if Borrower shall fail to select the
Prime Rate Advance or Eurodollar Advance to which such payments are to be
applied, or if a Potential Default or Event of Default exists at the time
of such payment, then
Page 26 of 112 Pages
Agent shall be entitled to apply the payment to such Prime Rate Advances
and Eurodollar Advances in the manner it shall deem appropriate.
(ii) Each payment received by Agent hereunder for the account of
Lenders or any of them on the Notes shall be distributed to each Lender
entitled to share in such payment, Pro Rata in proportion to the Pro Rata
Parts of each Lender (less any taxes, levies, imposts, deductions, charges
or withholdings excluded from the definition of Taxes). Unless Agent shall
have received notice from Borrower prior to the date on which any payment
is due to Lenders hereunder that Borrower will not make such payment in
full, Agent may assume that Borrower has made such payment in full to Agent
on such date and Agent may, in reliance upon such assumption, cause to be
distributed to each Lender on such due date an amount equal to the amount
then due such Lender. If and to the extent Borrower shall not have so made
such payment in full to Agent, each Lender shall repay to Agent forthwith
on demand such amount distributed to such Lender together with interest
thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to Agent, at the
Federal Funds Rate.
2.7 FEES. Borrower shall pay to Agent, for the ratable benefit of
Lenders, in accordance with their respective Pro Rata Parts, a commitment fee
equal to $517,500 (i.e., 15 basis points on the Commitment). Borrower
acknowledges that such fee is a bona fide commitment fee and is intended as
reasonable compensation to Lenders for committing to make funds available to
Borrower as described herein, and for no other purposes. In addition, Borrower
shall pay to Agent, for its own account, an administrative fee of $15,000 per
year for the first year, payable on the date hereof, and $10,000 per year for
each subsequent year, payable on each anniversary of the date hereof (pro rated
with any excess for the final year refundable after the Termination Date).
2.8 TERMINATION OF COMMITMENT. The Commitments shall terminate on the
Termination Date, and any Advances then outstanding (together with accrued
interest thereon) shall be due and payable on such date.
2.9 SHARING OF PAYMENTS, ETC. If any Lender obtains any amount (whether
voluntary, involuntary, or otherwise, including as a result of exercising any
rights under SECTION 2.10) that exceeds the part of that payment that such
Lender is entitled to receive under the Loan Documents, then such Lender shall
purchase from the other Lenders participations that will cause the purchasing
Lender to share the excess amount ratably with each other Lender. If all or any
portion of any excess amount is subsequently recovered from the purchasing
Lender, then the purchase shall be rescinded and the purchase price restored to
the extent of the recovery. Borrower agrees that any Lender purchasing a
participation from another Lender under this SECTION, may, to the fullest extent
permitted by applicable law, exercise all of its rights of payment with respect
to that participation as fully as if such Lender were the direct creditor of
Borrower in the amount of that participation.
2.10 SET-OFF. If an Event of Default exists, each Lender is entitled, but
not obligated, to exercise (for the benefit of all Lenders in accordance with
SECTION 2.9) the right of off-set and banker's Lien against each and every
account and other property, or any interest therein, that Borrower may now or
hereafter have with, or which is now or hereafter in the possession of, such
Lender to the extent of the amount of the Obligation owed to it.
2.11 CAPITAL ADEQUACY. If a Lender shall have reasonably determined that,
after the date hereof, either (i) the adoption of any applicable law, rule,
regulation, or guideline regarding capital adequacy, or any change therein, or
any change in the interpretation or administration thereof by any
Page 27 of 112 Pages
Governmental Authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or (ii) compliance by such Lender (or
any lending office of such Lender) with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank, or comparable agency, has or would have the effect of reducing the
rate of return on such Lender's capital as a consequence of its or Borrower's
obligations hereunder to a level below that which such Lender could have
achieved but for such adoption, change, or compliance by an amount reasonably
deemed by such Lender to be material, then from time to time, within ten days
after demand by such Lender, Borrower shall pay to such Lender such additional
amount as will adequately compensate such Lender for such reduction. Each Lender
will notify Borrower of any event of which it has actual knowledge, occurring
after the date thereof, which will entitle such Lender to compensation pursuant
to this Section 2.11. No failure by a Lender to immediately demand payment of
any additional amounts payable hereunder shall constitute a waiver of such
Lender's right to demand payment of such amounts at any subsequent time.
SECTION 3 COLLATERAL.
3.1 LIENS AND SECURITY INTERESTS. To secure the performance by Borrower of
the payment and performance of the Obligation, pursuant to the Collateral
Documents, Borrower grants to Lenders a perfected, first priority, security
interest and lien in the Pledged Shares and other Collateral, including the
Initial Collateral.
SECTION 4 CONDITIONS PRECEDENT.
4.1 INITIAL ADVANCE. The obligation of each Lender to make its initial
Advance hereunder is subject to the conditions precedent that, on or before the
date of such Advance, (a) Borrower shall have paid to Agent (i) all fees to be
received pursuant to this Agreement or any other Loan Document and (ii) an
amount equal to the estimated costs and out-of-pocket expenses of Agent's
counsel incurred in connection with the preparation, execution, and delivery of
the Loan Documents and the consummation of the transactions contemplated
thereby, and (b) Agent shall have received duly executed copies of each of the
documents listed on SCHEDULE 4.1, each dated as of the date of such Advance, and
each in form and substance satisfactory to Agent.
4.2 ALL ADVANCES. The obligation of each Lender to make any Advance under
this Agreement (including the initial Advance but excluding any Advance which
does not increase the outstanding Principal Debt) shall be subject to the
conditions precedent that, as of the date of such Advance and after giving
effect thereto: (a) there exists no Potential Default or Event of Default; (b)
no change that would cause a Material Adverse Effect has occurred since the date
of the financial statements referenced in SECTION 5.7; (c) Agent shall have
received from Borrower a Notice of Borrowing dated as of the date of such
Advance and all of the statements contained in such Notice of Borrowing shall be
true and correct; (d) the representations and warranties contained in each of
the Loan Documents shall be true in all respects as though made on the date of
such Advance; (e) the Maximum Rate exceeds the Contract Rate; and (f) Borrower
has satisfied the condition precedent contained in SECTION 2.1(c).
SECTION 5 REPRESENTATIONS AND WARRANTIES.
Borrower hereby represents and warrants to Lenders as follows:
5.1 TAXES. All tax returns required to be filed by Borrower in any
jurisdiction have been filed and all taxes, assessments, fees, and other
governmental charges upon Borrower, or upon any of his
Page 28 of 112 Pages
properties, or income, have been paid, except for taxes being contested in good
faith by appropriate proceedings diligently prosecuted and as to which adequate
reserves have been established. Borrower has no knowledge of any proposed tax
assessment against Borrower that will have, or is reasonably likely to have, a
Material Adverse Effect.
5.2 PLEDGED SHARES. The Pledged Shares constituting the Initial
Collateral, as described on SCHEDULE 5.2, were acquired by Borrower, and held by
Borrower, for a period of at least two years prior to the date hereof, for
purposes of determining the holding period of such Pledged Shares under Rule 144
promulgated under the Securities Act of 1933, as amended, and Borrower has borne
the full economic risk of such Pledged Shares since their respective dates of
acquisition. None of the Pledged Shares were purchased by Borrower by giving TCI
or an Affiliate of TCI a promissory note or other obligation to pay the purchase
price of such Pledged Shares, and none of the Pledged Shares were purchased
under an installment purchase contract. Borrower is the lawful owner and holder
of such Pledged Shares, free and clear of all Liens, except for security
interests and liens granted to Lenders. Under the laws of the State of Colorado
and other applicable laws and under the Related Agreements, Borrower has full
right, power, and authority to pledge such Pledged Shares to Lenders, and the
pledge contemplated by the Pledge Agreement does not violate or contravene any
law, agreement (including the Related Agreements), or order to which Borrower is
subject.
5.3 AUTHORITY AND COMPLIANCE. Borrower has full power and authority to
execute and deliver the Loan Documents and to incur and perform the obligations
provided for therein. No consent or approval of any public authority or other
third party is required as a condition to the validity of any Loan Document, and
Borrower is in compliance with all laws and regulatory requirements to which he
is subject.
5.4 BINDING AGREEMENT. This Agreement and the other Loan Documents
executed by Borrower constitute valid and legally binding obligations of
Borrower, enforceable in accordance with their terms.
5.5 LITIGATION. There is no proceeding against Borrower pending or, to the
knowledge of Borrower, threatened by or before any court or Governmental
Authority in which Borrower is a party in his individual capacity except as
disclosed on SCHEDULE 5.5 attached hereto. There are no outstanding judgments
against Borrower.
5.6 (A) RELATED AGREEMENTS. Borrower has delivered to Agent true and
correct copies of the Related Agreements, together with any amendments or
modifications of any of the Related Agreements. To the best of Borrower's
knowledge, the Related Agreements are in full force and effect and have not been
terminated. Borrower is not in material default under any of the Related
Agreements. Except for the Related Agreements, Borrower is not a party to any
agreement, contract, or understanding, and the Pledged Shares (including any
Merger Shares issued in exchange for Pledged Shares) are not subject to any
agreement, contract, or understanding, in each case which (i) affects Borrower's
ownership and control of the Pledged Shares (including any Merger Shares issued
in exchange for Pledged Shares), or (ii) the pledge, transfer, or disposition by
Borrower of the Pledged Shares (including any Merger Shares issued in exchange
for Pledged Shares).
(B) NO CONFLICTING AGREEMENTS. Assuming Lenders' compliance with the
terms of the Waiver Letters, there is no provision of any existing agreement
(including the Related Agreements), mortgage, indenture, or contract binding on
Borrower or affecting Borrower's property including the Collateral, which would
conflict with, in any way prevent or delay, the execution, delivery, or carrying
out
Page 29 of 112 Pages
of the terms of or violate this Agreement and the other Loan Documents,
including Lenders' foreclosure upon or disposition of the Pledged Shares,
including any Merger Shares issued in exchange for Pledged Shares. Assuming
Lenders' compliance with the terms of the Waiver Letters, Borrower has obtained
all consents and approvals (including any consents or approvals required under
the Related Agreements and consents of the Federal Communications Commission and
other Governmental Authorities) necessary or appropriate to permit or authorize
Borrower's pledge of the Pledged Shares (including any Merger Shares issued in
exchange for Pledged Shares) and Lenders' foreclosure upon or disposition of
Pledged Shares (including any Merger Shares issued in exchange for Pledged
Shares).
(C) CONVERSION. The Xxxxxx Call Agreement, the Stockholders
Agreement, and the Agreement restrict Borrower's transfer of certain shares of
the common stock of TCI. Pursuant to and assuming Lenders' compliance with the
terms of the Waiver Letters, the Xxxxxx Call Agreement, the Stockholders
Agreement, and the Agreement permit Borrower's pledge of the Pledged Shares and
Lenders' foreclosure upon, and disposition of, such Pledged Shares.
5.7 FINANCIAL STATEMENTS. The personal financial statements of Borrower
heretofore delivered to Lenders, and dated September 23, 1998, properly reflect
Borrower's financial position as of the date thereof, and there has been no
material adverse change in Borrower's financial condition since the date of the
financial statements. Borrower has good title to all assets reflected on such
financial statements, except as disclosed in such financial statements.
Borrower has no material indebtedness or liabilities, including guaranties and
other contingent liabilities, which are not reflected in such financial
statements. To the best of Borrower's knowledge, all factual information
furnished by Borrower to Lenders in connection with this Agreement is and will
be accurate and complete on the date as of which such information is delivered
to Lenders and is not incomplete by the omission of any material fact necessary
to make such information not misleading.
5.8 USE OF PROCEEDS; MARGIN STOCK. The proceeds of the Loan will be used
by Borrower solely for the purposes specified in SECTION 2.1(d). If requested by
Agent or a Lender, Borrower will from time to time furnish to Agent or Lenders a
statement in conformity with the requirements of Federal Reserve Form U-1
referred to in Regulation U of the Board of Governors of the Federal Reserve
System. No Advance will be used for any purpose which violates, or is
inconsistent with, the Margin Requirements.
5.9 REPRESENTATIONS AND WARRANTIES. Each Notice of Borrowing (other than a
Notice of Borrowing which requests an Advance that would not increase the
Principal Debt) shall constitute, without the necessity of specifically
containing a written statement, a representation and warranty by Borrower that
no Potential Default or Event of Default exists, and that all representations
and warranties contained in this SECTION 5 or in any other Loan Document are
true and correct on and as of the date the requested Advance is to be made.
5.10 ACQUIRED STOCK. Borrower's acquisition of the Acquired Stock, pursuant
to the June Option Agreement, complies with all applicable laws, regulations,
agreements (including the Related Agreements), contracts and orders, and is not
subject to, and does not require, the consent or approval of any Person.
5.11 SHARE OWNERSHIP. After giving effect to Borrower's acquisition of the
Acquired Stock, Borrower's ownership of the Pledged Shares is accurately
described on SCHEDULE 5.11; such SCHEDULE accurately describes the nature of
Borrower's ownership of the Pledged Shares, and the interest (if any) of any
other Person in, or with respect to, the Pledged Shares. SCHEDULE 5.11 also
accurately describes the shares (the "MERGER SHARES") of the capital stock of
AT&T Corp. into which the Pledged Shares would be
Page 30 of 112 Pages
converted pursuant to the Merger and the expected interest (if any) of any other
Person in, or with respect to, the Merger Shares. Borrower's rights to pledge,
transfer, or dispose of the Merger Shares will not be restricted by, or subject
to, any agreement, contract, or understanding, except, with respect to Merger
Shares that consist of High Vote Stock, the Related Agreements. Pursuant to the
Merger, the Merger Shares will be issued in a transaction registered under the
Securities Act of 1933, as amended.
5.12 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties by Borrower herein shall survive delivery of the Notes and the making
of the Loan, and any investigation at any time made by or on behalf of Agent or
any Lender shall not diminish Agent's or Lenders' right to rely thereon.
SECTION 6 COVENANTS. Until full payment and performance of all obligations of
Borrower under the Loan Documents, Borrower will:
6.1 FINANCIAL STATEMENTS. Furnish to Agent, or cause to be furnished to
Agent:
(a) Annual financial statements of Borrower within 30 days after the
anniversary date of the most recent financial statement provided to Agent,
in form and substance satisfactory to Agent, and including a listing of all
assets and liabilities, a listing of all sources of income, a listing of
the uses of income, the amount and sources of contingent liabilities, and
identification of joint or community owners as to listed assets.
(b) A Compliance Certificate for Borrower, concurrently with and dated as
of the date of delivery of each financial statement as required by this
SECTION 6.1, stating: "This financial statement is being submitted to
NationsBank, N.A., Agent, for the purpose of obtaining credit and
constitutes the true and correct statement of my/our financial condition."
The certification must be executed and dated by Borrower.
(c) Promptly following Agent's reasonable request, which request (whether
one or more) may be made from time to time, additional information,
reports, and statements respecting the financial condition of Borrower.
6.2 COMPLIANCE. Maintain Borrower's compliance with all Governmental
Requirements applicable to Borrower or to any of Borrower's property, including
the Collateral, business operations, and transactions.
6.3 ADVERSE CONDITIONS OR EVENTS. Promptly advise Agent in writing of (a)
any condition, event or act which comes to Borrower's attention that would or
might materially adversely affect Borrower's financial condition, the
Collateral, or Lenders' rights under the Loan Documents; (b) any litigation
filed by or against Borrower which could reasonably be expected to have a
Material Adverse Effect; (c) any default under the Loan Documents; and (d) any
default under the Related Agreements or any agreement, mortgage, indenture, or
contract binding on Borrower which could reasonably be expected to have a
Material Adverse Effect, or any such default which affects the Collateral.
6.4 TAXES AND OTHER OBLIGATIONS. File on a timely basis all tax returns,
and pay all of Borrower's taxes and other obligations as the same become due and
payable, except to the extent being contested in good faith by appropriate
proceedings.
6.5 TRANSFER OF ASSETS. Not sell, lease, assign, transfer or otherwise
dispose of assets, during
Page 31 of 112 Pages
the term of this Agreement, having an aggregate value in excess of $300,000,000.
6.6 LIENS. Not grant, suffer, or permit any Lien on any Collateral, except
in favor of Lenders; or take any action (including entering into any agreement
or amending any Related Agreement or other agreement) which would adversely
affect or impair Lenders' Liens in Collateral or right to dispose of Collateral
following an Event of Default; or fail to promptly pay when due all lawful
claims, whether for labor, materials, or otherwise.
6.7 OTHER COVENANTS. Not violate or fail to comply with any covenants or
agreements regarding other indebtedness which could reasonably be expected to
have a Material Adverse Effect.
6.8 INDEMNITY BY BORROWER. Indemnify, defend, and hold harmless Agent,
each Lender, and their respective directors, officers, agents, attorneys, and
employees (individually, an "INDEMNITEE" and collectively, the "INDEMNITEES")
from and against any and all loss, liability, damage, judgment, claim, and
expense (including attorneys' fees and amounts paid in settlement) to which the
Indemnitees may become subject arising out of this Agreement and the other Loan
Documents, the business of Borrower, or the use of proceeds of the Loan, other
than those which arise by reason of the gross negligence or willful misconduct
of Lenders. This indemnification shall survive the satisfaction and payment of
the Obligation and termination of this Agreement.
6.9 REMOVAL OF LEGENDS. In the event Lenders decide to foreclose upon or
dispose of the Pledged Shares, use commercially reasonable efforts (subject to
the requirements of applicable Law) to assist Lender in expeditiously removing
any legends on the Pledged Shares that consist of Low Vote Stock which, in
Lenders' sole judgment, would or could delay Lenders' foreclosure upon or
disposition of such Pledged Shares.
6.10 AMENDMENT TO TCI CHARTER. Without the written consent of Lenders,
vote against any amendment to TCI's Restated Certificate of Incorporation, as
amended, that would modify the conversion rights or adversely affect the other
rights of any holder of any Pledged Shares; provided that the foregoing shall
not restrict Borrower from voting (a) in accordance with the Voting Agreement
(as it may be amended from time to time, so long as such amendment is in
accordance with the terms of the Loan Documents), or (b) in favor of amendments
to the Restated Certificate of Incorporation relating to a combination of TCI
Ventures Group and Liberty Media Group and reclassification of TCI Ventures
Group Common Stock into Liberty Media Group Common Stock.
SECTION 7 EVENTS OF DEFAULT.
7.1 EVENTS OF DEFAULT. An "EVENT OF DEFAULT" shall exist if any one or
more of the following events (herein collectively called "EVENTS OF DEFAULT")
shall occur and be continuing:
(a) Borrower shall fail to pay when due the Obligation or any part
thereof; and solely with respect to payments of interest on the Notes, such
failure or refusal continues for three Business Days;
(b) any representation or warranty made under this Agreement, or any
of the other Loan Documents, shall prove to be untrue or inaccurate in any
material respect as of the date on which such representation or warranty is
made;
(c) default shall occur in the performance of any of the covenants or
agreements of
Page 32 of 112 Pages
Borrower contained herein (other than SECTION 7.1(A)), or in any of the
other Loan Documents, which default is not remedied within 10 days after
written notice thereof to Borrower from Lender; provided, that such 10 day
grace period shall not apply to covenants and agreements contained in
ARTICLE 2, or SECTIONS 6.3, 6.5, or 6.6 of this Agreement, or in the Pledge
Agreement, or in the Rule 144 Rider attached to the Pledge Agreement;
(d) an "Event of Default" under the Pledge Agreement (as defined
therein) shall occur;
(e) default shall occur in the payment of the unpaid balance of, or
any installment of principal or interest of, indebtedness of Borrower
(other than the Obligation) having an aggregate principal balance exceeding
the sum of $1,000,000, or default shall occur in respect of any note or
credit agreement relating to any such indebtedness and such default shall
continue for more than the period of grace, if any, specified therein the
effect of which is to cause, or to permit any holder of such indebtedness
to cause (whether or not such holder elects to cause) any of that
indebtedness to become due before its stated maturity;
(f) any of the Loan Documents shall cease to be legal, valid, and
binding agreements enforceable against the Person executing the same in
accordance with its terms, shall be terminated, become or be declared
ineffective or inoperative or cease to provide the respective liens,
security interests, rights, titles, interests, remedies, powers or
privileges intended to be provided thereby;
(g) Borrower shall (i) apply for or consent to the appointment of a
receiver, trustee, custodian, intervenor, or liquidator of himself or of
all or a substantial part of Borrower's assets, (ii) file a voluntary
petition in bankruptcy, admit in writing that Borrower is unable to pay
Borrower's debts as they become due or generally not pay Borrower's debts
as they become due, (iii) make a general assignment for the benefit of
creditors, (iv) file a petition or answer seeking reorganization of an
arrangement with creditors or to take advantage of any bankruptcy or
insolvency laws, (v) file an answer admitting the material allegations of,
or consent to, or default in answering, a petition filed against Borrower
in any bankruptcy, reorganization, or insolvency proceeding, or (vi) take
any action for the purpose of effecting any of the foregoing;
(h) An involuntary proceeding shall be commenced against Borrower
seeking bankruptcy or reorganization of Borrower or the appointment of a
receiver, custodian, trustee, liquidator, or other similar official of
Borrower, or all or substantially all of Borrower's assets, and such
proceeding shall not have been dismissed within 60 days of the filing
thereof; or an order, order for relief, judgment or decree shall be entered
by any court of competent jurisdiction or other competent authority
approving a petition or complaint seeking reorganization of Borrower, or
appointing a receiver, custodian, trustee, liquidator or other similar
official of Borrower, or of all or substantially all of Borrower's assets;
(i) any final judgment(s) for the payment of money in excess of the
sum of $1,000,000 in the aggregate shall be rendered against Borrower, and
such judgment(s) shall not be satisfied or discharged at least 10 days
prior to the date on which any of Borrower's assets could be lawfully sold
to satisfy such judgment; or
(j) Sixty days after the death of Borrower.
Page 33 of 112 Pages
7.2 Remedies Upon Event of Default. If any Event of Default shall occur,
Agent may, at the request of the Required Lenders, without notice, exercise any
one or more of the following rights and remedies, and any other remedies
provided in any of the Loan Documents, as Agent, at the request of Required
Lenders, in their discretion may deem necessary or appropriate: (a) terminate
the commitment to lend hereunder, (b) declare the Obligation, or any part
thereof, to be forthwith due and payable, whereupon the same shall forthwith
become due and payable without presentment, demand, protest, notice of default,
notice of acceleration or of intention to accelerate, or other notice of any
kind, all of which Borrower hereby expressly waives, anything contained herein
or in the Notes to the contrary notwithstanding, (c) reduce any claim to
judgment, or (d) without notice of default or demand, pursue and enforce any of
Agent's or Lenders' rights and remedies under the Loan Documents, or otherwise
provided under or pursuant to any applicable law or agreement; provided,
however, that if any Event of Default specified in Sections 7.1(g) or (h) shall
occur, the Obligation shall thereupon become due and payable concurrently
therewith, and Lenders' obligation to lend shall immediately terminate
hereunder, without any further action by Agent or Lenders and without
presentment, demand, protest, notice of default, notice of acceleration or of
intention to accelerate, or other notice of any kind, all of which Borrower
hereby expressly waives.
7.3 Performance by Agent. Should Borrower fail to perform any covenant,
duty, or agreement contained in any of the Loan Documents, Agent may perform or
attempt to perform such covenant, duty, or agreement on behalf of Borrower. In
such event, Borrower shall, at the request of Agent, promptly pay any amount
expended by Agent in such performance or attempted performance to Agent at its
principal office in Dallas, Texas, together with interest thereon at the Maximum
Rate from the date of such expenditure until paid. Notwithstanding the
foregoing, it is expressly understood that Agent shall not assume any liability
or responsibility for the performance of any duties of Borrower hereunder or
under any of the Loan Documents, and none of the covenants or other provisions
contained in this Agreement shall, or shall be deemed to, give Agent the right
or power to exercise control over the management and affairs of Borrower.
7.4 Conversion and Voting Provisions. Neither Lenders nor Agent nor their
respective nominees shall sell or dispose of Pledged Shares consisting of High
Vote Stock without first having such Pledged Shares converted into Low Vote
Stock. If Lenders or Agent or their respective nominees become the record and
beneficial owner(s) of Pledged Shares consisting of High Vote Stock and are
entitled to vote such Pledged Shares in connection with the Merger, then Lenders
or Agent or their respective nominees shall vote such Pledged Shares (a) in the
case of any matter covered by the Voting Agreement, in accordance with
Borrower's voting obligations under the Voting Agreement or (b) in the case of
any other matter, in the manner recommended by the Board of Directors of TCI.
SECTION 8 THE AGENT.
8.1 The Agent.
(a) Appointment. Each Lender appoints Agent (including each successor
Agent in accordance with this Section 8) as its nominee and agent to act in its
name and on its behalf (and Agent and each such successor accepts that
appointment): (i) to act as its nominee and on its behalf in and under all Loan
Documents; (ii) to arrange the means whereby its funds are to be made available
to Borrower under the Loan Documents; (iii) to take any action that it properly
requests under the Loan Documents (subject to the concurrence of other Lenders
as may be required under the Loan Documents); (iv) to receive all documents and
items to be furnished to it under the Loan Documents; (v) to be the secured
party, mortgagee, beneficiary, recipient, and similar party in respect of any
Collateral, for the benefit of
Page 34 of 112 Pages
Lenders; (vi) to promptly distribute to it all financial statements, compliance
certificates, notices received hereunder, and other items specifically required
to be delivered to it hereunder, and, upon request, such other material
information, requests, documents, and items received under the Loan Documents;
(vii) to promptly distribute to it its Pro Rata Part of each payment or
prepayment (whether voluntary, as proceeds of Collateral upon or after
foreclosure, as proceeds of insurance thereon, or otherwise) in accordance with
the terms of the Loan Documents; and (viii) to deliver to the appropriate
Persons requests, demands, approvals, and consents received from it. However,
Agent may not be required to take any action that exposes it to personal
liability or that is contrary to any Loan Document or applicable Governmental
Requirement.
(b) Successor. Agent may assign all of its rights and obligations as Agent
under the Loan Documents to any of its Affiliates, which Affiliate shall then be
the successor Agent under the Loan Documents. Agent may also voluntarily resign
by notice to Borrower and Lenders, and shall resign upon the request of the
Required Lenders for cause. If the initial or any successor Agent ever ceases to
be a party to this Agreement or if the initial or any successor Agent ever
resigns (whether voluntarily or at the request of the Required Lenders), then
the Required Lenders shall (which, if no Potential Default or Event of Default
exists, is subject to Borrower's approval that may not be unreasonably withheld)
appoint the successor Agent from among Lenders (other than the resigning Agent).
If the Required Lenders fail to appoint a successor Agent within 30 days after
the resigning Agent has given notice of resignation or the Required Lenders have
removed the resigning Agent, then the resigning Agent may, on behalf of Lenders,
appoint a successor Agent (which, if no Potential Default or Event of Default
exists, is subject to Borrower's approval that may not be unreasonably
withheld), which must be a commercial bank having a combined capital and surplus
of at least $1,000,000,000 (as shown on its most recently published statement of
condition) and whose debt obligations (or whose parent's debt obligations) are
rated not less than Baa1 by Xxxxx'x or BBB+ by S & P. Upon its acceptance of
appointment as successor Agent, the successor Agent succeeds to and becomes
vested with all of the rights, duties, and responsibilities of the prior Agent,
and the prior Agent is discharged from its duties and obligations of the Agent
under the Loan Documents, and each Lender shall execute the documents that any
Lender, the resigning or removed Agent, or the successor Agent reasonably
request to reflect the change. After any Agent's resignation or removal as Agent
under the Loan Documents, the provisions of this Section inure to its benefit as
to any actions taken or not taken by it while it was the Agent under the Loan
Documents.
(c) Rights as Lender. Agent, in its capacity as a Lender, has the same
rights under the Loan Documents as any other Lender and may exercise those
rights as if it were not acting as an Agent. The term "Lender," unless the
context otherwise indicates, includes the Agent. Agent's resignation or removal
does not impair or otherwise affect any rights that it has or may have in its
capacity as an individual Lender. Each Lender and Borrower agree Agent is not a
fiduciary for Lenders or for Borrower but is simply acting in the capacity
described in this Agreement to alleviate administrative burdens for Borrower and
Lenders, that Agent has no duties or responsibilities to Lenders or Borrower
except those expressly set forth in the Loan Documents, and that Agent in its
capacity as a Lender has the same rights as any other Lender.
(d) Other Activities. Agent or any Lender may now or in the future be
engaged in one or more loan, letter of credit, leasing, or other financing
transactions with Borrower, act as trustee or depositary for Borrower, or
otherwise be engaged in other transactions with Borrower (collectively, the
"other activities") not the subject of the Loan Documents. Without limiting the
rights of Lenders specifically set forth in the Loan Documents, neither Agent
nor any Lender is responsible to account to the other Lenders for those other
activities, and no Lender shall have any interest in any other Lender's
activities, any present or future guaranties by or for the account of Borrower
that are not contemplated by
Page 35 of 112 Pages
or included in the Loan Documents, any present or future offset exercised by
Agent or any Lender in respect of those other activities, any present or future
property taken as security for any of those other activities, or any property
now or hereafter in Agent's or any other Lender's possession or control that may
be or become security for the obligations of Borrower arising under the Loan
Documents by reason of the general description of indebtedness secured or of
property contained in any other agreements, documents, or instruments related to
any of those other activities (but, if any payments in respect of those
guaranties or that property or the proceeds thereof is applied by Agent or any
Lender to reduce the Obligation, then each Lender is entitled to share ratably
in the application as provided in the Loan Documents).
(e) Additional Pledged Shares. The Pledge Agreement contemplates that,
under certain circumstances, Borrower may provide additional, or substituted,
Collateral as security for the Obligation. Without the prior written or oral
approval of (i) Lenders whose aggregate Pro Rata Parts equal at least 67% of the
Commitment, for Collateral in the categories described in Section 6.B. clauses
i, ii, iii, and iv of the Pledge Agreement, and (ii) all Lenders, for Collateral
in the category described in Section 6.B. clause v of the Pledge Agreement,
Agent shall not approve as satisfactory additional or substitute Collateral,
unless such Collateral consists of shares of common stock of the same series and
issue as the Collateral. This paragraph (e) shall not prevent Borrower's pledge,
or Agent's acceptance, of shares of Permitted Classes. Each Lender authorizes
and directs Agent, without further consent or request of Lenders, to take such
actions (including release of Collateral) as may reasonably be required to
tender Pledged Shares in compliance with Section 6.D.ii of the Pledge Agreement.
8.2 Expenses. Should Agent commence any proceeding or in any way seek to
enforce its rights under the Loan Documents, irrespective of whether as a result
thereof Agent shall acquire title to any Collateral, either through foreclosure,
deed in lieu of foreclosure, or otherwise, each Lender, upon demand therefor
from time to time, shall contribute its share (based on its Pro Rata Part) of
the reasonable costs and/or expenses of any such enforcement or acquisition,
including fees of receivers or trustees, court costs, title company charges,
filing and recording fees, appraisers' fees, and fees and expenses of attorneys
to the extent not otherwise reimbursed by Borrower. Without limiting the
generality of the foregoing, each Lender shall contribute its share (based on
its Pro Rata Part) of all reasonable costs and expenses incurred by Agent
(including reasonable attorneys' fees and expenses) if Agent employs counsel for
advice or other representation (whether or not any suit has been or shall be
filed) with respect to any Collateral or any part thereof, or any of the Loan
Documents, or the attempt to enforce any Lien in any of the Collateral, or to
enforce any rights of Agent or any of Borrower's obligations under any of the
Loan Documents, but not with respect to any dispute between Agent and any other
Lender(s). Any loss of principal and interest resulting from any Potential
Default or Event of Default shall be shared by Lenders in accordance with their
respective Pro Rata Parts. It is understood and agreed that if Agent determines
that it is necessary to engage counsel for Lenders from and after the occurrence
of a Potential Default or an Event of Default, then said counsel shall be
selected by Agent and written notice of the same shall be delivered to Lenders.
8.3 Proportionate Absorption of Losses. Except as otherwise provided in
the Loan Documents, nothing in the Loan Documents gives any Lender any advantage
over any other Lender insofar as the Obligation is concerned or relieves any
Lender from ratably absorbing any losses sustained with respect to the
Obligation (except to the extent unilateral actions or inactions by any Lender
result in Borrower or any other obligor on the Obligation having any credit,
allowance, setoff, defense, or counterclaim solely with respect to all or any
part of that Lender's Pro Rata Part of the Obligation).
8.4 Delegation of Duties; Reliance. Lenders may perform any of their
duties or exercise any
Page 36 of 112 Pages
of their rights under the Loan Documents by or through Agent, and Lenders and
Agent may perform any of their duties or exercise any of their rights under the
Loan Documents by or through their respective officers, agents, or other
representatives. Agent, Lenders, and their respective officers, agents, or other
representatives (a) are entitled to rely upon (and shall be protected in relying
upon) any written or oral statement believed by it or them to be genuine and
correct and to have been signed or made by the proper Person and, with respect
to legal matters, upon opinion of counsel selected by Agent or that Lender (but
nothing in this clause (a) permits Agent to rely on (i) oral statements if a
writing is required by this Agreement or (ii) any other writing if a specific
writing is required by this Agreement), (b) are entitled to deem and treat each
Lender as the owner and holder of its portion of the Obligation for all purposes
until, written notice of the assignment or transfer is given to and received by
Agent (and any request, authorization, consent, or approval of any Lender is
conclusive and binding on each subsequent holder, assignee, or transferee of or
participant in that Lender's portion of the Obligation until that notice is
given and received), (c) are not deemed to have notice of the occurrence of a
Potential Default or Event of Default unless a responsible officer of Agent, who
handles matters associated with the Loan Documents and transactions thereunder,
has actual knowledge or Agent has been notified by a Lender or Borrower, and (d)
are entitled to consult with legal counsel (including counsel for Borrower),
independent accountants, and other experts selected by Agent and are not liable
for any action taken or not taken in good faith by it in accordance with the
advice of counsel, accountants, or experts.
8.5 Limitation of Agent's Liability.
(a) Exculpation. Neither Agent nor any of its Affiliates or their
respective officers, agents, or other representatives will be liable for any
action taken or omitted to be taken by it or them under the Loan Documents in
good faith and believed by it or them to be within the discretion or power
conferred upon it or them by the Loan Documents or be responsible for the
consequences of any error of judgment (except for fraud, gross negligence, or
willful misconduct), and neither Agent nor any of its Affiliates or their
respective officers, agents, or other representatives has a fiduciary
relationship with any Lender by virtue of the Loan Documents (but nothing in
this Agreement negates the obligation of Agent to account for funds received by
it for the account of any Lender).
(b) Indemnity. Unless indemnified to its satisfaction against loss, cost,
liability, and expense, Agent may not be compelled to do any act under the Loan
Documents or to take any action toward the execution or enforcement of the
powers thereby created or to prosecute or defend any suit in respect of the Loan
Documents. If Agent requests instructions from Lenders, or the Required Lenders,
as the case may be, with respect to any act or action in connection with any
Loan Document, then Agent is entitled to refrain (without incurring any
liability to any Person by so refraining) from that act or action unless and
until it has received instructions. In no event, however, may Agent or any of
its officers, agents, or other representatives be required to take any action
that it or they determine could incur for it or them criminal or onerous civil
liability. Without limiting the generality of the foregoing, no Lender has any
right of action against Agent as a result of Agent's acting or refraining from
acting under this Agreement in accordance with instructions of the Required
Lenders.
(c) Reliance. Agent is not responsible to any Lender or any participant
for, and each Lender represents and warrants that it has not relied upon any
Agent in respect of, (i) the creditworthiness of Borrower and the risks involved
to that Lender, (ii) the effectiveness, enforceability, genuineness, validity,
or the due execution of any Loan Document (except by Agent), (iii) any
representation, warranty, document, certificate, report, or statement made
therein (except by Agent) or furnished thereunder or in connection therewith,
(iv) the adequacy of any Collateral now or hereafter securing the Obligation or
the existence, priority, or perfection of any Lien now or hereafter granted or
purported to be granted on the
Page 37 of 112 Pages
Collateral under any Loan Document, or (v) observation of or compliance with any
of the terms, covenants, or conditions of any Loan Document on the part of
Borrower. EACH LENDER AGREES TO INDEMNIFY AGENT AND ITS OFFICERS, AGENTS, AND
OTHER REPRESENTATIVES AND HOLD THEM HARMLESS FROM AND AGAINST (BUT LIMITED TO
SUCH LENDER'S PRO RATA PART) ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, REASONABLE EXPENSES, AND
REASONABLE DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER THAT MAY BE IMPOSED
ON, ASSERTED AGAINST, OR INCURRED BY THEM IN ANY WAY RELATING TO OR ARISING OUT
OF THE LOAN DOCUMENTS OR ANY ACTION TAKEN OR OMITTED BY THEM UNDER THE LOAN
DOCUMENTS IF SUCH AGENT AND ITS OFFICERS, AGENTS OR OTHER REPRESENTATIVES ARE
NOT REIMBURSED FOR SUCH AMOUNTS BY BORROWER; THE FOREGOING INDEMNIFICATION OF
AGENT AND ITS OFFICERS, AGENTS, AND OTHER REPRESENTATIVES INCLUDES THE RIGHT TO
BE INDEMNIFIED UNDER THIS AGREEMENT FOR ITS OR THEIR OWN ORDINARY NEGLIGENCE,
BUT AGENT AND ITS OFFICERS, AGENTS, AND OTHER REPRESENTATIVES DO NOT HAVE THE
RIGHT TO BE INDEMNIFIED UNDER THIS AGREEMENT FOR ITS OR THEIR OWN FRAUD, GROSS
NEGLIGENCE, OR WILLFUL MISCONDUCT.
8.6 Default. While an Event of Default exists, Lenders agree to promptly
confer in order that the Required Lenders or Lenders, as the case may be, may
agree upon a course of action for the enforcement of the rights of Lenders.
Agent is entitled to act or refrain from taking any action (without incurring
any liability to any Person for so acting or refraining) unless and until it has
received instructions from Required Lenders or all Lenders, as the case may be.
In actions with respect to any of Borrower's property, Agent is acting for the
ratable benefit of each Lender.
8.7 Collateral Matters.
(a) Each Lender authorizes and directs Agent to enter into the Loan
Documents and agrees that any action taken by Agent concerning any Collateral
(with the consent or at the request of the Required Lenders) in accordance with
any Loan Document, that Agent's exercise (with the consent or at the request of
the Required Lenders) of powers concerning the Collateral in any Loan Document,
and that all other reasonably incidental powers are authorized and binding upon
all Lenders.
(b) Agent is authorized on behalf of all Lenders, without the necessity of
any notice to or further consent from any Lender, from time to time before a
Potential Default or Event of Default, to take any action with respect to any
Collateral or Loan Documents related to Collateral that may be necessary to
perfect and maintain Agent's Liens in the Collateral.
(c) Except to use the same standard of care that it ordinarily uses for
collateral for its sole benefit, Agent has no obligation whatsoever to any
Lender or to any other Person to assure that the Collateral exists or is owned
by Borrower or is cared for, protected, or insured or has been encumbered or
that Agent's Liens have been properly or sufficiently or lawfully created,
perfected, protected, or enforced or are entitled to any particular priority.
(d) Agent shall exercise the same care and prudent judgment with respect
to the Collateral and the Loan Documents as it normally and customarily
exercises in respect of similar collateral and security documents.
8.8 Limitation of Liability. No Lender or any Participant will incur any
liability to any other Lender or Participant except for acts or omissions in bad
faith, and neither Agent nor any Lender or Participant will incur any liability
to any other Person for any act or omission of any other Lender or any
Page 38 of 112 Pages
Participant.
8.9 Relationship of Lenders. The Loan Documents do not create a
partnership or joint venture among Agent and Lenders or among Lenders.
8.10 Benefits of Agreement. None of the provisions of this Section inure
to the benefit of Borrower or any other Person except Agent and Lenders.
Therefore, neither Borrower nor any other Person is responsible or liable for,
entitled to rely upon, or entitled to raise as a defense -- in any manner
whatsoever -- the failure of Agent or any Lender to comply with these
provisions.
SECTION 9 MISCELLANEOUS.
9.1 Accounting Reports. All financial reports or projections furnished by
any Person to Agent and Lenders pursuant to this Agreement shall be prepared in
such form and such detail as shall be satisfactory to Agent and shall be
prepared on the same basis as those prepared by such Person in prior years .
9.2 Waiver. No failure to exercise, and no delay in exercising, on
the part of Agent or Lenders, any right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right. The rights of
Agent and Lenders under the Loan Documents shall be in addition to all other
rights provided by law. No modification or waiver of any provision of any Loan
Document, nor consent to departure therefrom, shall be effective unless in
writing, and no such consent or waiver shall extend beyond the particular case
and purpose involved. No notice or demand given in any case shall constitute a
waiver of the right to take other action in the same, similar, or other
instances without such notice or demand.
9.3 Payment of Expenses. Borrower hereby agrees to pay on demand: (a) all
reasonable costs and expenses of Agent in connection with the preparation,
negotiation, execution, and delivery of this Agreement and the other Loan
Documents including the reasonable legal fees and expenses of legal counsel for
Agent; (b) all reasonable costs and expenses of Agent in connection with any and
all amendments, modifications, renewals, extension, and supplements of any of
the Loan Documents; (c) all reasonable costs and expenses of Agent and Lenders
in connection with any Event of Default and the enforcement of this Agreement or
any other Loan Document, including the fees and expenses of legal counsel for
Agent and Lenders; (d) all transfer, stamp, documentary, or other similar taxes,
assessments, or charges levied by any Governmental Authority in respect of this
Agreement or any of the other Loan Documents; (e) all costs, expenses,
assessments, and other charges incurred in connection with any filing,
registration, recording, or perfection of any security interest or Lien
contemplated by this Agreement or any other Loan Document; and (f) all other
reasonable costs and expenses incurred by Agent in connection with this
Agreement or any other Loan Document.
9.4 Notices. Any communications required or permitted to be given by
any of the Loan Documents must be (a) in writing and personally delivered or
mailed by prepaid certified or registered mail or by reputable overnight
courier, or (b) made by facsimile transmission delivered or transmitted, to the
party to whom such notice of communication is directed, to the address of such
party shown opposite its name on the signature pages hereof. Any such
communication shall be deemed to have been given (whether actually received or
not) on the day it is personally delivered or, if transmitted by facsimile
transmission, on the day that such communication is transmitted as aforesaid
subject to telephone confirmation of receipt; provided, however, that any notice
received by Agent after 1:00 p.m. Dallas, Texas time on any day from Borrower
pursuant to Section 2.2 or 2.3 (with respect to a Notice of
Page 39 of 112 Pages
Borrowing) shall be deemed for the purposes of such section to have been given
by Borrower on the next succeeding day, or if mailed, on the third day after it
is marked as aforesaid. Any party may change its address for purposes of this
Agreement by giving notice of such change to the other parties pursuant to this
Section 9.4.
9.5 Governing Law. This Agreement has been prepared, is being executed and
delivered, and is intended to be performed in the State of Texas, and the
substantive laws of such state and the applicable federal laws of the United
States of America shall govern the validity, construction, enforcement, and
interpretation of this Agreement, the Notes, and all of the other Loan
Documents.
9.6 Choice of Forum; Consent to Service of Process and Jurisdiction. Any
suit, action, or proceeding against Borrower with respect to this Agreement, the
Notes, or any judgment entered by any court in respect thereof, may be brought
in the courts of the State of Texas, County of Dallas, or in the United States
courts located in the State of Texas, as Agent and Lenders in their sole
discretion may elect and Borrower hereby irrevocably submits to the nonexclusive
jurisdiction of such courts for the purpose of any such suit, action, or
proceeding .
9.7 Invalid Provisions. Any provision of any Loan Document held by a court
of competent jurisdiction to be illegal, invalid, or unenforceable shall not
invalidate the remaining provisions of such Loan Document, which shall remain in
full force, and the effect thereof shall be confined to the provision held
invalid or illegal.
9.8 Maximum Interest Rate. Regardless of any provision contained in
any of the Loan Documents, neither Agent nor any Lender shall ever be entitled
to receive, collect, or apply as interest on the Notes any amount in excess of
interest calculated at the Maximum Rate, and, in the event that any Agent or any
Lender ever receives, collects, or applies as interest any such excess, the
amount which would be excessive interest shall be deemed to be a partial
prepayment of principal, and treated hereunder as such; and, if the principal
amount of the Obligation is paid in full, any remaining excess shall forthwith
be paid to Borrower. In determining whether or not the interest paid or payable
under any specific contingency exceeds interest calculated at the Maximum Rate,
Borrower and Lenders shall, to the maximum extent permitted under applicable
law, (a) characterize any nonprincipal payment as an expense, fee, or premium,
rather than as interest; (b) exclude voluntary prepayments and the effects
thereof; and (c) amortize, prorate, allocate, and spread, in equal parts, the
total amount of interest throughout the entire contemplated term of the Note;
provided that, if the Notes are paid and performed in full prior to the end of
the full contemplated term thereof, and if the interest received for the actual
period of existence thereof exceeds interest calculated at the Maximum Rate,
Agent and Lenders shall refund to Borrower the amount of such excess, or credit
the amount of such excess against the principal amount of the Notes, and, in
such event, Agent and Lenders shall not be subject to any penalties provided by
any laws for contracting for, charging, taking, reserving, or receiving interest
in excess of interest calculated at the Maximum Rate.
9.9 Nonliability of Lenders. The relationship between Borrower and Lenders
is, and shall at all times remain, solely that of Borrower and Lenders, and
Lenders have no fiduciary or other special relationship with Borrower.
9.10 Article 15.10(b). Borrower, Agent, and Lenders hereby agree that,
except for Section 15.10(b) thereof, the provisions of Art. 5069-15.01 et seq.
of the Revised Civil Statutes of Texas, 1925, as amended (regulating certain
revolving credit loans and revolving tri-party accounts) shall not apply to the
Loan Documents.
Page 40 of 112 Pages
9.11 Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. Borrower may not
assign or transfer any of its rights or obligations hereunder without the prior
written consent of Agent and all Lenders. Any purported assignment or transfer
in contravention of this Section shall be null and void. Any Lender may sell
participations to one or more banks or other institutions in or to all or a
portion of its rights and obligations under this Agreement and the other Loan
Documents (including all or a portion of its Commitments and the Advances owing
to it); provided, however, that (i) such Lender's obligations under this
Agreement and the other Loan Documents (including its Commitments) shall remain
unchanged, (ii) such Lender shall remain solely responsible to Borrower for the
performance of such obligations, (iii) such Lender shall remain the holder of
its Notes for all purposes of this Agreement, (iv) Borrower shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and the other Loan Documents, and
(v) such Lender shall not sell a participation that conveys to the participant
the right to vote or give or withhold consents under this Agreement or any other
Loan Document, other than the right to vote upon or consent to (A) any increase
of such Lender's Commitments, (B) any reduction of the principal amount of, or
interest to be paid on, the Advances of such Lender, (C) any reduction of any
commitment fee or other amount payable to such Bank under any Loan Document, or
(D) any postponement of any date for the payment of any amount payable in
respect of the Advances of such Lender.
(b) Borrower and Lenders agree that any Lender (an "Assigning Lender") may
at any time assign to one or more Eligible Assignees all, or a portion of all,
of its rights and obligations under this Agreement and the other Loan Documents
(including its Commitment and Advances) (each an "Assignee"); provided, however,
that (i) unless Borrower has consented in writing, such consent not to be
unreasonably withheld, the amount of the remaining Commitment of any Assigning
Lender that is also an Agent or Co-Agent shall in no event be less than
$60,000,000, (ii) the parties to each such assignment shall execute and deliver
to Agent for its acceptance and recording in the Register (as defined below), an
Assignment and Acceptance, together with the Note subject to such assignment,
and a processing and recordation fee of $3,000; and (iii) Agent and Borrower
consent to the assignment (and with respect to Borrower, Borrower furnishes
written evidence of its consent to Agent), which consent shall not be
unreasonably withheld. Upon such execution, delivery, acceptance, and recording,
from and after the effective date specified in each Assignment and Acceptance,
which effective date shall be at least five Business Days after the execution
thereof, or, if so specified in such Assignment and Acceptance, the date of
acceptance thereof by Agent, (x) the assignee thereunder shall be a party hereto
as a "Lender" and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and under the Loan Documents and (y) the
Lender that is an assignor thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under
this Agreement and the other Loan Documents (and, in the case of an Assignment
and Acceptance covering all or the remaining portion of a Lender's rights and
obligations under the Loan Documents, such Lender shall cease to be a party
thereto).
(c) By executing and delivering an Assignment and Acceptance, the
Assigning Lender and its Assignee confirm to and agree with each other and the
other parties hereto as follows: (i) other than as provided in such Assignment
and Acceptance, such Assigning Lender makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties, or
representations made in or in connection with the Loan Documents or the
execution, legality, validity, and enforceability, genuineness, sufficiency, or
value of the Loan Documents or any other instrument or document furnished
pursuant
Page 41 of 112 Pages
thereto; (ii) such Assigning Lender makes no representation or warranty and
assumes no responsibility with respect to Borrower of its obligations under the
Loan Documents; (iii) the Assignee confirms that it has received copies of the
Loan Documents, together with copies of the financial statements referred to in
Section 5.7 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) the Assignee will, independently and without
reliance upon Agent or such assignor and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement and the other Loan
Documents; (v) the Assignee confirms that it is an Eligible Assignee; (vi) the
Assignee appoints and authorizes Agent to take such action as Agent on its
behalf and exercise such powers under the Loan Documents as are delegated to
Agent by the terms thereof, together with such powers as are reasonably
incidental thereto; and (vii) the Assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.
(d) Agent shall maintain at its principal office a copy of each Assignment
and Acceptance delivered to and accepted by it and a register for the
recordation of the names and addresses of Lenders and the Commitment of, and
principal amount of the Advances owing to, each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and Borrower, Agent, and Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes under the Loan Documents. The Register shall be available for
inspection by Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
Assigning Lender and Assignee representing that it is an Eligible Assignee (or
other assignee permitted hereunder), together with any Note subject to such
assignment, Agent shall, if such Assignment and Acceptance has been completed
and is in substantially the form of Exhibit A, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register, and
(iii) give prompt written notice thereof to Borrower. Within five Business Days
after its receipt of such notice, Borrower shall execute and deliver to Agent in
exchange for the surrendered Note a new Note to the order of such Eligible
Assignee (or other assignee permitted hereunder) in an amount equal to the
portion of the Commitments assumed by it pursuant to such Assignment and
Acceptance and, if the Assigning Lender has retained a portion of the
Commitments, a new Note to the order of the Assigning Lender in an amount equal
to the portion of the Commitments retained by it hereunder (each such promissory
note shall constitute a "Note" for purposes of the Loan Documents). Such new
Notes shall be in an aggregate principal amount of the surrendered Note, shall
be dated the effective date of such Assignment and Acceptance, and shall
otherwise be in substantially the form of Exhibit B.
(f) Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section, disclose to the
Assignee or participant or proposed Assignee or participant, any information
relating to Borrower furnished to such, Lender by or on behalf of Borrower,
subject to the confidentiality requirements in Section 9.19.
(g) Notwithstanding any other term of this Agreement to the contrary, any
Lender may (without requesting the consent of either Agent or Borrower) pledge
its Note to a Federal Reserve Bank in support of borrowings made by such Lender
from such Federal Reserve Bank.
(h) Notwithstanding any other term of this Agreement to the contrary, any
Lender may assign
Page 42 of 112 Pages
all, or a portion of all, of its rights and obligations under this Agreement and
the other Loan Documents (including its Commitment and Advances) to an Affiliate
of such Lender or any other Lender, provided that:
(i) such assignor Lender has obtained the written consent of Agent
(which consent shall not be unreasonably delayed or withheld) if the effect
of such assignment or delegation shall entitle such Affiliate or other
Lender to claim compensation from Borrower pursuant to Section 2.6 and
Exhibit D; and
(ii) in every other case, such assignor Lender has furnished notice
to, but not obtained the consent of, Agent.
9.12 Entirety. THIS AGREEMENT, THE NOTES, AND THE OTHER LOAN DOCUMENTS
REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO,
AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF,
AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO
ORAL AGREEMENTS AMONG THE PARTIES HERETO. THE PROVISIONS OF THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS TO WHICH BORROWER IS A PARTY MAY BE AMENDED OR WAIVED
ONLY BY AN INSTRUMENT IN WRITING, SIGNED BY THE PARTIES HERETO.
9.13 Headings. Section headings are for convenience of reference
only, and shall in no way affect the interpretation of this Agreement.
9.14 Survival. All representations and warranties made by Borrower
herein shall survive delivery of the Note and the making of the Loan.
9.15 Amendments, Etc. No amendment or waiver of any provision of
this Agreement, the Notes, or any other Loan Document to which Borrower is a
party, nor any consent to any departure by Borrower therefrom, shall in any
event be effective unless the same shall be agreed or consented to by the
Required Lenders and Borrower, and each such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, that no amendment, waiver, or consent shall, unless in writing
and signed by all of Lenders and Borrower, do any of the following: (a) increase
Commitments of Lenders or subject Lenders to any additional obligations; (b)
reduce the principal of, or interest on, the Notes or any fees or other amounts
payable to Lenders (but not Agent) hereunder; (c) postpone any date fixed for
any payment of principal of, or interest on, the Notes or any fees or other
amounts payable to Agent or Lenders hereunder; (d) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Notes or the
number of Lenders which shall be required for Lenders or any of them to take any
action under this Agreement; (e) change any provision contained in Section
2.1(c), this Section 9.15, or Section 6 of the Pledge Agreement; or (f) release
any portion of the Collateral, except in accordance with the relevant Loan
Document. Notwithstanding anything to the contrary contained in this Section,
no amendment, waiver, or consent shall be made with respect to Section 8 without
the prior written consent of Agent.
9.16 No Third Party Beneficiary. The parties do not intend the benefits of
this Agreement to inure to any third party, nor shall any Loan Document or any
course of conduct by any party hereto be construed to make or render Agent or
Lenders, or any of their officers, directors, agents, or employees
Page 43 of 112 Pages
liable (i) to any materialman, supplier, contractor, subcontractor, purchaser or
lessee of any property owned by Borrower, or (ii) for debts or claims accruing
to any such Persons against Borrower.
9.17 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, BORROWER HEREBY IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT TO A TRIAL BY
JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT,
TORT, OR OTHERWISE) ARISING OUT OF, OR RELATING TO ANY OF THE LOAN DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF LENDER IN THE
NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT THEREOF.
9.18 Multiple Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same agreement, and any of the parties hereto may execute this Agreement by
signing any such counterpart.
9.19 Confidentiality; No Publication. Subject to Sections 9.11 and
9.16, Agent and Lenders (a) shall hold all nonpublic information (the "nonpublic
information") obtained pursuant to the requirements of this Agreement in
confidence in accordance with Agent's and Lenders' customary procedures for
handling confidential information of this nature, and in accordance with safe
and sound banking practices; (b) will limit access to the nonpublic information
to any Affiliate, agent, officer, director, employee, advisor, attorney, or
representative who needs to know such information for purposes of evaluating the
information or administering the transactions contemplated by this Agreement;
(c) will not make any public announcement or issue any press release or issue
(i) a description of the transactions contemplated by this Agreement, or (ii) a
statement of the consummation of such transactions, in each case in a manner
which reveals the identity of Borrower; and (d) will not provide any nonpublic
information with respect to the transaction contemplated by this Agreement to
any other Person (including Gold Sheets Loan Pricing Corp. or the publishers of
trade publications which disseminate such information) which could reasonably be
expected to result in revealing that Borrower has entered into the transactions
contemplated by this Agreement; provided, however, that Agent or Lenders may
make any disclosure thereof as is reasonably required by a bona fide potential
assignee or participant, as required by any law, rule, or regulation, as
required or requested by any Governmental Authority, any auditor of Agent or any
Lender in connection with its auditing function, or representative thereof, or
pursuant to legal process, or as may be necessary in order to properly enforce
Agent's or Lenders' rights and remedies following an Event of Default.
9.20 Arbitration. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES
HERETO, INCLUDING THOSE ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
RELATED AGREEMENTS OR INSTRUMENTS, INCLUDING ANY CLAIM BASED ON OR ARISING FROM
AN ALLEGED TORT, SHALL BE DETERMINED BY BINDING ARBITRATION IN ACCORDANCE WITH
THE FEDERAL ARBITRATION ACT (OR IF NOT APPLICABLE, THE APPLICABLE STATE LAW),
THE RULES OF PRACTICE AND PROCEDURE FOR THE ARBITRATION OF COMMERCIAL DISPUTES
OF J.A.M.S. D/B/A ENDISPUTE, INC. ("J.A.M.S."), AND THE "SPECIAL RULES" SET
FORTH BELOW. IN THE EVENT OF ANY INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL.
JUDGMENT UPON ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING
JURISDICTION. ANY PARTY TO THIS AGREEMENT MAY BRING AN ACTION, INCLUDING A
SUMMARY OR EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR
CLAIM TO WHICH THIS AGREEMENT APPLIES, IN ANY COURT HAVING JURISDICTION OVER
SUCH ACTION.
Page 44 of 112 Pages
(a) SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN A LOCATION
MUTUALLY AGREEABLE TO AGENT AND BORROWER (AND FAILING AGREEMENT, IN NEW
YORK, NEW YORK) AND ADMINISTERED BY J.A.M.S., WHO WILL APPOINT AN
ARBITRATOR; IF J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED FROM ADMINISTERING
THE ARBITRATION, THEN THE AMERICAN ARBITRATION ASSOCIATION WILL SERVE. ALL
ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90 DAYS OF THE DEMAND FOR
ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING OF CAUSE,
BE PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH HEARING FOR UP TO AN
ADDITIONAL 60 DAYS.
(b) RESERVATION OF RIGHTS. NOTHING IN THIS AGREEMENT SHALL BE DEEMED
TO (i) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES OF
LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS AGREEMENT; OR (ii)
BE A WAIVER BY LENDER OF THE PROTECTION AFFORDED TO IT BY 12 U.S.C. (S) 91
OR ANY SUBSTANTIALLY EQUIVALENT STATE LAW; OR (iii) LIMIT THE RIGHT OF
LENDER HERETO (A) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT LIMITED
TO) SET-OFF, OR (B) TO FORECLOSE AGAINST ANY REAL OR PERSONAL PROPERTY
COLLATERAL, OR (C) TO OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES
SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF OR THE APPOINTMENT OF A
RECEIVER. LENDER MAY EXERCISE SUCH SELF HELP RIGHTS, FORECLOSE UPON SUCH
PROPERTY, OR OBTAIN SUCH PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING,
OR AFTER THE PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT PURSUANT TO
THIS AGREEMENT. AT AGENT'S OR LENDERS' OPTION, FORECLOSURE UNDER A DEED OF
TRUST OR MORTGAGE MAY BE ACCOMPLISHED BY ANY OF THE FOLLOWING: THE EXERCISE
OF A POWER OF SALE UNDER THE DEED OF TRUST OR MORTGAGE, OR BY JUDICIAL SALE
UNDER THE DEED OF TRUST OR MORTGAGE, OR BY JUDICIAL FORECLOSURE. NEITHER
THIS EXERCISE OF SELF HELP REMEDIES, NOR THE INSTITUTION OR MAINTENANCE OF
AN ACTION FOR FORECLOSURE OR PROVISIONAL OR ANCILLARY REMEDIES SHALL,
CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN
ANY SUCH ACTION, TO ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM
OCCASIONING RESORT TO SUCH REMEDIES.
[Remainder of Page Intentionally Left Blank; Signature Pages to Follow]
Page 45 of 112 Pages
SIGNATURE PAGES TO REVOLVING CREDIT AGREEMENT
DATED AS OF OCTOBER 9, 1998, EXECUTED BY
XXXX X. XXXXXX, NATIONSBANK, N.A.,
AS AGENT FOR THE LENDERS DEFINED THEREIN,
SOCIETE GENERALE AND TORONTO DOMINION
SECURITIES (USA), INC., AS CO-AGENTS, AND THE LENDERS
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first above written.
Address for Notice:
Terrace Tower II
0000 XXX Xxxxxxx /s/ Xxxx X. Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000 ----------------------------------
XXXX X. XXXXXX
STATE OF COLORADO (S)
(S)
COUNTY OF ARAPAHOE (S)
Before me, a Notary Public, on this day personally appeared XXXX X. XXXXXX,
known to me to be the person whose name is subscribed to the foregoing
instrument and acknowledged to me that he executed the same for the purposes and
consideration therein expressed.
Given under my hand and seal of office this 9th day of October,
1998.
Notary Public Signature
(PERSONALIZED SEAL)
/s/ Xxxxx X. Xxxxxxx
---------------------------
Page 46 of 112 Pages
SIGNATURE PAGES TO REVOLVING CREDIT AGREEMENT
DATED AS OF OCTOBER 9, 1998, EXECUTED BY
XXXX X. XXXXXX, NATIONSBANK, N.A.,
AS AGENT FOR THE LENDERS DEFINED THEREIN,
SOCIETE GENERALE AND TORONTO DOMINION
SECURITIES (USA), INC., AS CO-AGENTS, AND THE LENDERS
Address for Notice: NATIONSBANK, N.A., as Agent and as a Lender
000 Xxxx Xxxxxx, 00xx Xxxxx By: /s/ Xxxxxxxx Xxxxx, III
X.X. Xxx 000000 ------------------------------
Dallas, Texas 75283-1000 Xxxxxxxx Xxxxx, III
Attn.: Xxxxxxxx Xxxxx, III Senior Vice President
Telecopy No.: (000) 000-0000
Commitment: $205,000,000
Applicable Lending Office
for Prime Rate Advances:
000 Xxxx Xxxxxx, 00xx Xxxxx
X.X. Xxx 000000
Xxxxxx, Xxxxx 00000-0000
Applicable Lending Office
for Eurodollar Advances:
000 Xxxx Xxxxxx, 00xx Xxxxx
X.X. Xxx 000000
Xxxxxx, Xxxxx 00000-0000
Page 47 of 112 Pages
SIGNATURE PAGES TO REVOLVING CREDIT AGREEMENT
DATED AS OF OCTOBER 9, 1998, EXECUTED BY
XXXX X. XXXXXX, NATIONSBANK, N.A.,
AS AGENT FOR THE LENDERS DEFINED THEREIN,
SOCIETE GENERALE AND TORONTO DOMINION
SECURITIES (USA), INC., AS CO-AGENTS, AND THE LENDERS
Address for Notice: TORONTO DOMINION SECURITIES (USA), INC.
as Co-Agent
c/o The Toronto-Dominion Bank
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 By:/s/ Xxxxxxx Bandzierz
Attn: Xxxxxx Xxxxx ---------------------------
Telecopy: (000) 000-0000 Name: Xxxxxxx Bandzierz
--------------------
Title: Managing Director
-------------------
Commitment: $0.00
Address for Notice: TORONTO DOMINION (TEXAS), INC.,
as a Lender
c/o The Toronto-Dominion Bank
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 By:/s/ Xxxxx Xxxxxx
Attn: Xxxxxx Xxxxx ---------------------------
Telecopy: (000) 000-0000 Name: Xxxxx Xxxxxx
--------------------
Title: Vice President
-------------------
Applicable Lending Office for Commitment: $70,000,000
Prime Rate Advances:
The Toronto-Dominion Bank
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Applicable Lending Office for
Eurodollar Advances:
The Toronto-Dominion Bank
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Page 48 of 112 Pages
SIGNATURE PAGES TO REVOLVING CREDIT AGREEMENT
DATED AS OF OCTOBER 9, 1998, EXECUTED BY
XXXX X. XXXXXX, NATIONSBANK, N.A.,
AS AGENT FOR THE LENDERS DEFINED THEREIN,
SOCIETE GENERALE AND TORONTO DOMINION
SECURITIES (USA), INC., AS CO-AGENTS, AND THE LENDERS
Address for Notice: SOCIETE GENERALE,
as Co-Agent and as a Lender
Societe Generale
1221 Avenue of the Americas By:/s/ Xxxx Xxxxx
12th Floor ---------------------
Xxx Xxxx, XX 00000 Name: Xxxx Xxxxx
Attn.: Xxxx Xxxxx -------------------
Telecopy: (000)000-0000 Title: Director
------------------
Commitment: $70,000,000
Applicable Lending Office
for Prime Rate Advances:
Societe Generale
1221 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Applicable Lending Office
for Eurodollar Advances:
Societe Generale
1221 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Page 49 of 112 Pages
SCHEDULES AND EXHIBITS
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Revolving Credit Note
Exhibit C - Form of Notice of Borrowing
Exhibit D - Eurodollar Requirements
Schedule 4.1 - Closing List
Schedule 5.2 - Initial Collateral
Schedule 5.5 - Litigation
Schedule 5.11 - Share Ownership
Page 50 of 112 Pages
EXHIBIT A
FORM OF ASSIGNMENT AND ACCEPTANCE
---------------------------------
This Assignment and Acceptance (the "ASSIGNMENT AND ACCEPTANCE") is made as
of ______________, 199___ (the "EFFECTIVE DATE"), between
("ASSIGNOR") and ("ASSIGNEE").
Reference is made to that certain Revolving Credit Agreement dated as of
October 9, 1998 (the "CREDIT AGREEMENT") among Xxxx X. Xxxxxx ("BORROWER"),
certain Lenders defined therein (the "LENDERS"), NationsBank, N.A., a national
banking association, as Agent for the Lenders, and Toronto Dominion Securities
(USA), Inc., and Societe Generale as Co-Agents for the Lenders. This Assignment
and Acceptance is executed and delivered pursuant to, and as contemplated in,
the Credit Agreement. Capitalized terms used but not defined herein shall have
the meanings assigned thereto in the Credit Agreement.
Assignor and Assignee hereby covenant and agree as follows:
1. Assignor hereby sells and assigns to Assignee, and Assignee hereby
purchases and assumes from Assignor, $ of Assignor's Commitment and
Principal Debt, representing a Pro Rata Part of the Commitments and Principal
Debt of % as of the Effective Date. The foregoing interest for all events
and circumstances shall be deemed such Assignee's Pro Rata Part (in addition to
any other Pro Rata Part of Assignee, if any) in the Commitments, the Principal
Debt, the Loan Documents, and all payments made to or received from Borrower
pursuant to the Loan Documents and is subject to the terms and conditions
provided in the Loan Documents.
2. Assignor hereby (a) represents and warrants to Assignee that Assignor
is the legal and beneficial owner of the Pro Rata Part being assigned by it
hereunder and such interest is free and clear of any adverse claim, and (b)
represents and warrants that as of the date hereof the Pro Rata Part in the
Commitments and the Principal Debt being assigned hereunder is %
without giving effect to assignments that are not yet effective.
3. Assignee hereby confirms and acknowledges that, except as specifically
set forth herein, Assignor: (a) makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties, or representations
made in or in connection with the Loan Documents, or the execution, legality,
validity, enforceability, genuineness, sufficiency, or value of the Loan
Documents, or any other instrument or document furnished pursuant thereto; (b)
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of Borrower or any other person or entity which is a
party to any of the Loan Documents (collectively, "Other Party"); and (c) makes
no representation or warranty and assumes no responsibility with respect to the
performance or observance by Borrower or any Other Party of any of its
obligations under any of the Loan Documents or any other instrument or document
furnished pursuant thereto.
4. Assignee hereby: (a) confirms that it has received a copy of the Loan
Documents, together with such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; and (b) agrees that it will, independently and
without reliance upon Assignor or any other counterparty and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Loan
Documents.
Page 51 of 112 Pages
5. Assignee hereby: (a) appoints and authorizes Agent under the Loan
Documents to take such action as agent on its behalf and to exercise such powers
under the Loan Documents as are delegated to Agent by the terms of the Loan
Documents; and (b) agrees with Assignor for the benefit of Agent and Borrower
that it will perform all of the obligations which by the terms of the Loan
Documents are required to be performed by it as a counterparty (including the
obligation to make payments pursuant to the Loan Documents) and that it shall be
liable directly to Assignor, Agent, Borrower, and, as provided in the Credit
Agreement, to each Lender for the performance of such obligations.
6. If Assignee is organized under the laws of a jurisdiction outside the
United States, it hereby represents and agrees that it has delivered or will
within three days after the date of the execution of this Agreement deliver to
Assignor and the Agent completed and signed copies of any forms that may be
required by the United States Internal Revenue Service in order to certify
Assignee's exemption from United States withholding taxes with respect to any
payment or distributions made or to be made to Assignee with respect to the Loan
Documents.
7. As of the Effective Date, (a) Assignee shall be a party to the Loan
Documents and, to the extent provided in this Assignment and Acceptance, have
the rights and obligations of a counterparty thereunder, and (b) Assignor shall,
to the extent provided in this Assignment and Acceptance, relinquish its rights
and be released from its obligations in the Loan Documents with respect to the
Pro Rata Part being assigned hereunder.
8. Assignee hereby represents and warrants as of the Effective Date: (a)
Assignee has all necessary corporate power and authority to purchase and own the
interest being assigned to it hereunder, and has all necessary corporate power
and authority to perform all its obligations with respect to this Assignment and
Acceptance; (b) the execution and delivery of this Assignment and Acceptance and
all other instruments and documents executed in connection herewith have been
duly authorized by all requisite corporate action of Assignee; and (c) no
approval, authorization, order, license, or consent of, or registration or
filing with, any Governmental Authority or other person is required in
connection with this Assignment and Acceptance.
9. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of Texas, without giving effect to the
conflict of laws principles thereof.
10. This Agreement may be executed in two or more counterparts each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument.
11. Assignee's address for notices and payments under the Agreement and
this Assignment and Acceptance are set forth in Schedule 1 attached hereto and
made a part hereof. Assignee may by notice in accordance with the Credit
Agreement to Assignor, the Agent, and Borrower change the address or telex
number or facsimile number at which notices, communications, and payments are to
be given to it.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGES TO FOLLOW]
Page 52 of 112 Pages
SIGNATURE PAGE TO FORM OF ASSIGNMENT AND ACCEPTANCE
DATED AS OF _____________, 1998, EXECUTED BY
___________________________, AS ASSIGNOR,
AND ___________________, AS ASSIGNEE
ASSIGNOR:
By:
Name:
Title:
ASSIGNEE:
By:
Name:
Title:
ACCEPTED BY AGENT
THIS _____ DAY OF ___________________
AGENT:
NATIONSBANK, N.A.
By:
Name:
Title:
Page 53 of 112 Pages
SCHEDULE 1
TO
ASSIGNMENT AND ACCEPTANCE
ADDRESS FOR NOTICES AND ACCOUNTS FOR PAYMENTS
Address:
Account for Payments:
Account No.:
Attention:
Reference:
Depositary:
Applicable Lending
Office - Prime Rate
Advances:
Applicable Lending
Office - Eurodollar
Advances:
Page 54 of 112 Pages
EXHIBIT B
FORM OF REVOLVING CREDIT NOTE
-----------------------------
XXXX X. XXXXXX
$___________________ Dallas, Texas October 9, 1998
1. FOR VALUE RECEIVED, XXXX X. XXXXXX ("MAKER"), hereby unconditionally
promises to pay to the order of ____________________________ ("PAYEE"), at the
address reflected on the signature page of the Loan Agreement (as defined
below), the sum of $ ___________________________ (or, if less, so much thereof
as may be advanced and is outstanding), in lawful money of the United States of
America.
2. This Revolving Credit Note (this "NOTE") has been executed and
delivered pursuant to the Revolving Credit Agreement (as renewed, extended,
amended, or restated, the "LOAN AGREEMENT") dated as of the date hereof, between
Maker, Payee, certain other "Lenders," and NationsBank, N.A. as "Agent" for
Lenders, and is the "NOTE" referred to therein. Capitalized terms not defined
herein shall have the meaning assigned to those terms in the Loan Agreement. The
holder of this Note is entitled to the benefits provided in the Loan Agreement.
Reference is hereby made to the Loan Agreement for a statement of (i) the
obligation of Payee to advance funds hereunder, (ii) the prepayment rights and
obligations of Maker, and (iii) the events on which the maturity of this Note
may be accelerated.
3. The unpaid principal amount of, and accrued unpaid interest on, this
Note is payable in accordance with the Loan Agreement, but not later than the
Termination Date.
4. The unpaid principal balance advanced and outstanding hereunder shall
bear interest from the date of Advance until maturity at the rate per annum
provided in the Loan Agreement. The interest rate specified in this section is
subject to adjustment under the circumstances described in the Loan Agreement.
Interest shall be computed in the manner provided in the Loan Agreement.
5. Notwithstanding any provision contained in this Note or any other
document executed or delivered in connection with this Note or in connection
with the Loan Agreement, Payee shall never be deemed to have contracted for or
be entitled to receive, collect, or apply as interest on this Note, any amount
in excess of the maximum rate of interest permitted to be charged by applicable
law, and, if Payee ever receives, collects, or applies as interest any such
excess, then the amount that would be excessive interest shall be applied to
reduce the unpaid principal balance of this Note, and, if the principal balance
of this Note is paid in full by that application, then any remaining excess
shall promptly be paid to Maker. In determining whether the interest paid or
payable under any specific contingency exceeds the highest lawful rate, Maker
and Payee shall, to the maximum extent permitted under applicable law, (i)
characterize any non-principal payment (other than payments expressly designated
as interest payments hereunder) as an expense or fee rather than as interest,
(ii) exclude voluntary prepayments and the effect thereof, and (iii) spread the
total amount of interest throughout the entire contemplated term of this Note so
that the interest rate is uniform throughout that term.
6. If the principal of, or any installment of interest on, this Note
becomes due and payable on a day other than a Business Day, then the maturity
thereof shall be extended to the next succeeding Business Day. If this Note, or
any installment or payment due hereunder, is not paid when due, whether at
Page 55 of 112 Pages
maturity or by acceleration, or if it is collected through a bankruptcy,
probate, or other court, whether before or after maturity, then Maker shall pay
all costs of collection, including attorney's fees incurred by the holder of
this Note. All past due principal of, and to the extent permitted by applicable
law, interest on this Note shall bear interest until paid at the rate provided
in the Loan Agreement.
7. Maker and all sureties, endorsers, guarantors, and other parties ever
liable for payment of any sums payable pursuant to the terms of this Note,
jointly and severally waive demand, presentment for payment, protest, notice of
protest, notice of acceleration, notice of intent to accelerate, diligence in
collection, the bringing of any suit against any party and any notice of or
defense on account of any extensions, renewals, partial payments, or changes in
any manner of or in this Note or in any of its terms, provisions, and covenants,
or any releases or substitutions of any security, or any delay, indulgence, or
other act of any trustee or any holder hereof, whether before or after maturity.
8. This Note is being executed and delivered, and is intended to be
performed in the State of Texas. Except to the extent that the laws of the
United States may apply to the terms hereof, the substantive laws of the State
of Texas shall govern the validity, construction, enforcement, and
interpretation of this Note.
MAKER:
Xxxx X. Xxxxxx
Page 56 of 112 Pages
EXHIBIT C
NOTICE OF BORROWING
-------------------
1. SUBMISSION PURSUANT TO CREDIT AGREEMENT. This Notice of Borrowing is
executed and delivered by Xxxx X. Xxxxxx ("BORROWER"), to NationsBank, N.A., as
Agent (the "AGENT"), pursuant to SECTION 2.3 of the Revolving Credit Agreement
(the "AGREEMENT") dated as of October 9, 1998, between Borrower, certain Lenders
defined therein (the "LENDERS"), NationsBank, N.A., a national banking
association, as Agent for the Lenders, and Toronto Dominion Securities (USA),
Inc., and Societe Generale as Co-Agents for the Lenders. Any capitalized terms
used and not defined herein shall have the meanings assigned to them in the
Agreement.
2. REQUEST FOR ADVANCE. Borrower hereby requests that Lenders make an
Advance to Borrower pursuant to the Agreement as follows:
A. PRIME RATE BORROWING.
(i) Amount of Prime Rate Borrowing:
[_] Borrowing
[_] Rollover/Conversion
(ii) Date of Borrowing or Rollover/Conversion
of Existing Borrowing:
B. EURODOLLAR BORROWING.
(i) Amount of Eurodollar Borrowing:
[_] Borrowing
[_] Rollover/Conversion
(ii) Date of Borrowing or Rollover/Conversion
of Existing Borrowing:
(iii) Interest Period: day/months
(one, two, three, four, or six months).
3. Representations, Warranties and Certifications. Borrower hereby
represents, warrants, and certifies to Agent and Lenders that, as of the date of
the Advance requested herein:
(a) there exists no Potential Default or Event of Default;
(b) the Borrower has performed and complied with all agreements and
conditions
Page 57 of 112 Pages
contained in the Agreement that are required to be performed or
complied with by the Borrower; and
(c) the representations and warranties of a continuing nature
contained in the Agreement and each of the other Loan Documents
are true and correct in all material respects (except to the
extent that they speak to a specific date or are based on facts
which have changed by transactions expressly contemplated or
permitted by the Credit Agreement), with the same force and
effect as though made on and as of the date of the Advance.
4. PROCEEDS OF BORROWING. Agent is authorized to deposit the proceeds of
the Advance requested hereby, other than an Advance constituting a rollover or
conversion of an existing Advance, to:
5. EXECUTION AUTHORIZED. This Notice of Borrowing is executed on
________, 19__ . The undersigned hereby certifies the accuracy of the foregoing.
Xxxx X. Xxxxxx
Page 58 of 112 Pages
EXHIBIT D
EURODOLLAR ADVANCES
-------------------
(a) INADEQUACY OF EURODOLLAR PRICING. If with respect to an Interest
Period for any Eurodollar Advance:
(i) Agent determines that the basis for determining the Eurodollar
Rate is not available; or
(ii) a Lender reasonably determines that the Eurodollar Rate as
determined by Agent will not adequately and fairly reflect the cost to such
Lender of maintaining or funding the Eurodollar Advance for such Interest
Period;
then (A) in the case of (i), Agent shall forthwith give notice thereof to
Borrower and Lenders of that determination (which is presumed to be correct in
the absence of manifest error), all Advances shall be Prime Rate Advances, and
until Agent notifies Borrower and Lenders that such circumstances no longer
exist, Lenders' commitments under this Agreement to make, or convert to,
Eurodollar Advances shall be suspended, and (B) in the case of (ii), such Lender
shall forthwith give notice thereof to Agent and Borrower, the obligation of
such Lender to make Eurodollar Advances shall be suspended, Borrower shall, at
its option, either (I) repay in full the then-outstanding principal amount of
all Eurodollar Advances, together with accrued interest thereon on the last day
of the then current Interest Period applicable to such Eurodollar Advances, or
(II) convert such Eurodollar Advances to Prime Rate Advances in accordance with
Section 2.3(c) of this Agreement on the last day of the then-current Interest
Period applicable to each such Eurodollar Advance, and until such Lender
notifies Agent and Borrower that such circumstances no longer exist, such
Lender's commitment under this Agreement to make, or convert to, Eurodollar
Advances shall be suspended.
(b) ILLEGALITY OF EURODOLLAR ADVANCES. If, after the date of this
Agreement, the adoption of any applicable law, rule, or regulation, 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 Agent or any Lender
with any request or directive (whether or not having the force of law) of any
such authority, central bank, or comparable agency shall make it unlawful or
impossible for any Lender to make, maintain, or fund its Eurodollar Advances,
then such Lender shall forthwith give notice thereof to Agent and Borrower.
Before giving any notice pursuant to this subsection, such Lender shall
designate a different Eurodollar lending office if such designation will avoid
the need for giving such notice and will not be otherwise disadvantageous to any
non-trivial extent to such Lender (as determined in good faith by such Lender).
Upon receipt of such notice, Borrower shall either (i) repay in full the then-
outstanding principal amount of any of such Lender's Eurodollar Advances,
together with accrued interest thereon, or (ii) convert such Lender's Eurodollar
Advances to Prime Rate Advances, on either (A) the last day of the then current
Interest Period applicable to such Eurodollar Advance, if such Lender may
lawfully continue to maintain and fund such Eurodollar Advance to such day, or
(B) immediately, if such Lender may not lawfully continue to fund and maintain
such Eurodollar Advance to such day.
(c) INCREASED COSTS FOR EURODOLLAR ADVANCES. If, after the date hereof,
any Governmental Authority, central bank, or other comparable authority, shall
at any time impose, modify, or deem applicable any reserve (including any
reserve imposed by the Board of Governors of the Federal Reserve System, and any
reserve requirement included in the Eurodollar Reserve Requirement), special
deposit or
Page 59 of 112 Pages
similar requirement against assets of, deposits with, or for the account of, or
credit extended by, any Lender, or shall impose on any Lender (or its Applicable
Lending Office) or the interbank Eurodollar market any other condition affecting
its Eurodollar Advances, the Notes or such Lender's obligation to make
Eurodollar Advances; and the result of any of the foregoing is to increase the
cost to such Lender of making or maintaining its Eurodollar Advances, or to
reduce the amount of any sum received or receivable by such Lender under this
Agreement, or under such Lender's Note, by an amount deemed by such Lender to be
material, then, within five days after demand by such Lender, Borrower shall pay
to Agent, for the account of such Lender, such additional amount or amounts as
will compensate such Lender for such increased reserve, cost or reduction. Such
Lender will (i) notify Agent and Borrower of any event occurring after the date
of this Agreement which will entitle such Lender to compensation pursuant to
this Section, as promptly as practicable (but in any event within 120 days)
after such Lender obtains actual knowledge of such event, and Borrower shall not
be liable for any such increased costs that accrue between the date such
notification is required to be given and the date it was actually given, and
(ii) use good faith and reasonable efforts to designate an Applicable Lending
Office for Eurodollar Advances of such Lender, if such designation will avoid
the need for, or reduce the amount of, such compensation, and will not, in the
sole opinion of such Lender, be disadvantageous to such Lender (provided that
such Lender shall have no obligation to so designate a lending office located in
the United States of America). A certificate of such Lender claiming
compensation under this Section and setting forth in reasonable detail the
calculation of the additional amount or amounts to be paid to it hereunder shall
be presumed to be correct in the absence of manifest error. If a Lender demands
compensation under this Section, then Borrower may at any time, upon at least
five Business Days' prior notice to such Lender and Agent, either (i) repay in
full the then outstanding Eurodollar Advances to such Lender, together with
accrued interest thereon to the date of prepayment, or (ii) convert such
Eurodollar Advances to Prime Rate Advances in accordance with the provisions of
this Agreement; provided, however, that Borrower shall be liable for any Funding
Loss arising pursuant to such actions.
(d) EFFECT ON PRIME RATE ADVANCES. If notice has been given pursuant to
PARAGRAPH (A) or (B) above, requiring the Eurodollar Advances to be repaid or
converted, then unless and until Agent notifies Borrower that the circumstances
giving rise to such repayment no longer apply, all Advances shall be Prime Rate
Advances. If Agent notifies Borrower that the circumstances giving rise to such
repayment no longer apply, Borrower may thereafter select Advances to be
Eurodollar Advances in accordance with Section 2.2(c) of this Agreement.
(e) FUNDING LOSSES. Borrower shall indemnify Agent and each Lender against
any loss or reasonable expense (such loss or expense is referred to herein as a
"FUNDING LOSS," such term including any loss or reasonable expense sustained or
incurred or to be sustained or incurred in liquidating or reemploying deposits
from third parties acquired to effect or maintain such Advance or any part
thereof as a Eurodollar Advance) which Agent or any Lender may sustain or incur
as a consequence of (i) any failure by Borrower to fulfill on the date of any
Advance hereunder the applicable conditions set forth in SECTION 4, (ii) any
failure by Borrower to borrow hereunder or to convert Advances hereunder after a
Notice of Borrowing has been given, (iii) any payment, prepayment, or conversion
of a Eurodollar Advance required or permitted by any other provisions of this
Agreement, including payments made due to the acceleration of the maturity of
Advances pursuant to SECTION 7.2, or otherwise made on a date other than the
last day of the applicable Interest Period other than pursuant to SECTION
(A)(II) of this Exhibit, (iv) any default in the payment or prepayment of the
principal amount of any Advance or any part thereof or interest accrued thereon,
as and when due and payable (at the due date thereof, by notice of prepayment or
otherwise), or (v) the occurrence of an Event of Default. The term "FUNDING
LOSS" includes an amount equal to the excess, if any, as determined by Agent or
any Lender of (A) its cost of obtaining the funds for the Advance being paid,
prepaid, or converted or not borrowed or converted (based on the Adjusted
Eurodollar Rate applicable thereto) for the period from the date of such
payment, prepayment, or conversion or failure to
Page 60 of 112 Pages
borrow or convert to the last day of the Interest Period for such Advance (or,
in the case of a failure to borrow or convert, the Interest Period for the
Advance which would have commenced on the date of such failure to borrow or
convert) over (B) the amount of interest (as estimated by Agent or such Lender)
that would be realized by Agent or such Lender in reemploying the funds so paid,
prepaid, or converted or not borrowed or converted for such period or Interest
Period, as the case may be. A certificate of Agent or such Lender setting forth
any amount or amounts which Agent or such Lender is entitled to receive pursuant
to this PARAGRAPH (E), together with a description in reasonable detail of the
manner in which such amounts have been calculated, shall be delivered to
Borrower and shall be presumed to be correct in the absence of manifest error.
Borrower shall pay to Agent, for itself or for the account of any such Lender,
the amount shown as due on any certificate within five days after its receipt of
the same. Notwithstanding the foregoing, in no event shall Lender be permitted
to receive any compensation hereunder constituting interest in excess of the
Maximum Rate.
Page 61 of 112 Pages
SCHEDULE 4.1
CLOSING CONDITIONS
------------------
Unless otherwise specified, all dated as of
October 9, 1998, or a date (a "Current Date")
within 30 days before the Closing Date.
H&B 1. REVOLVING CREDIT AGREEMENT (the "LOAN AGREEMENT") dated as of
October 9, 1998, between XXXX X. XXXXXX, ("BORROWER"), certain
Lenders defined therein (the "LENDERS"), NATIONSBANK, N.A., as
Agent for the Lenders, and TORONTO DOMINION SECURITIES (USA),
INC., and SOCIETE GENERALE as Co-Agents for the Lenders -- all
the terms of which are incorporated and which have the same
meanings when used in this schedule -- to which must be attached:
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Revolving Credit Note
Exhibit C - Form of Notice of Borrowing
Exhibit D - Eurodollar Requirements
Schedule 4.1 - Closing List
Schedule 5.2 - Initial Collateral
Schedule 5.5 - Litigation
Schedule 5.11 - Share Ownership
H&B 2. REVOLVING CREDIT NOTE in the total stated principal amount of
$150,000,000, executed by Borrower, payable to NationsBank, N.A.,
in substantially the form of Exhibit B to the Loan Agreement.
H&B 3. REVOLVING CREDIT NOTE in the total stated principal amount of
$55,000,000, executed by Borrower, payable to NationsBank, N.A.,
and substantially the form of Exhibit B to the Loan Agreement
H&B 4. REVOLVING CREDIT NOTE in the total stated principal amount of
$70,000,000, executed by Borrower, payable to Toronto Dominion
(Texas), Inc., in substantially the form of Exhibit B to the Loan
Agreement.
H&B 5. REVOLVING CREDIT NOTE in the total stated principal amount of
$70,000,000, executed by Borrower, payable to Societe Generale,
and substantially the form of Exhibit B to the Loan Agreement
H&B 6. PLEDGE AGREEMENT executed by Borrower and Agent.
Borrower Schedule I - Pledged Shares
Schedule II - Collateral Characteristics, Margin Call
Percentage, and Original Advance Percentage
Schedule III - Form of Pledge Certificate
Rule 144 Rider
Page 62 of 112 Pages
H&B 7. RULE 144 RIDER executed by Borrower, substantially in the form of
RIDER 1 to the Pledge Agreement.
Borrower 8. STOCK CERTIFICATES for 17,157,952 shares of Tele-Communications,
Inc. Series B TCI Group Common Stock, in the name of "Xxxx X.
Xxxxxx," CUSIP Number 00000X000, as evidenced by the following
(all shares are Class B Common Stock -- as defined in Issuer's
Restated Certificate of Incorporation, as amended -- par value of
$1 per share):
----------------------------------------------------------------------------
CERTIFICATE NUMBER ISSUE DATE NUMBER OF SHARES
----------------------------------------------------------------------------
TB6735 January 12, 1996 2,100,000
----------------------------------------------------------------------------
TB0460 September 29, 1994 45,000
----------------------------------------------------------------------------
TB6729 October 7, 1998 8,650,000
----------------------------------------------------------------------------
TB6730 October 7, 1998 2,050,000
----------------------------------------------------------------------------
TB6492 September 17, 1997 763,869
----------------------------------------------------------------------------
TB6732 October 7, 1998 100,000
----------------------------------------------------------------------------
TB6733 October 7, 1998 100,000
----------------------------------------------------------------------------
TB6734 October 7, 1998 100,000
----------------------------------------------------------------------------
TB6369 May 29, 1997 3,249,083
----------------------------------------------------------------------------
Borrower 9. STOCK POWERS, executed in blank, with signatures guaranteed.
H&B 10. UCC-1 FINANCING STATEMENTS executed by Borrower in form suitable
for filing with the Office of the Secretary of State for
Colorado.
H&B 11. PURPOSE STATEMENT on Form U-1.
S&H 12. OPINION OF COUNSEL for Borrower in a form satisfactory to Agent.
CR&B 13. OPINION OF FCC COUNSEL for Borrower in a form satisfactory to
Agent.
Borrower 14. FINANCIAL STATEMENTS for Borrower, dated as of September 23,
1998.
Borrower 15. NOTICE OF BORROWING, dated as of October 9, 1998, executed by
Borrower.
Borrower 16. XXXXXX CALL AGREEMENT, dated as of February 9, 1998, among Tele-
Communications, Inc. ("TCI"), Borrower, and Xxxxxx Xxxxxx,
together with amendments, if any, and a waiver letter from TCI
satisfactory to Agent.
Borrower 17. JUNE OPTION AGREEMENT, dated as of June 16, 1997, between
Borrower and TCI.
Page 63 of 112 Pages
Borrower 18. STOCKHOLDERS AGREEMENT, dated as of February 9, 1998, among TCI,
Borrower, Xxxxxx Xxxxxx, Xxxx Xxxxxxx, Xxx Xxxxxxx, the Estate of
Xxx Xxxxxxx, and the Estate of Xxxxx Xxxxxxx, together with
amendments, if any, and a waiver letter satisfactory to Agent.
Borrower 19. VOTING AGREEMENT, dated as of June 23, 1998, as Amended and
Restated as of October 9, 1998, among AT&T Corp., Borrower, and
Xxxxxx Xxxxxx, together with further amendments, if any.
Borrower 20. AGREEMENT AND PLAN OF RESTRUCTURING AND MERGER, 23, 1998, among
AT&T Corp., Italy Merger dated as of June Corp, and TCI.
Borrower 21. Certified copy of TCI's most current RESTATED CERTIFICATE OF
INCORPORATION.
Borrower 22. Such other documents and items as Lender may reasonably request.
Page 64 of 112 Pages
SCHEDULE 5.2
INITIAL COLLATERAL
------------------
17,157,952 shares of Tele-Communications, Inc. Series B TCI Group Common Stock,
in the name of "Xxxx X. Xxxxxx," CUSIP Number 00000X000, as evidenced by the
following:
----------------------------------------------------------------------------
CERTIFICATE NUMBER /1/ ISSUE DATE /2/ NUMBER OF SHARES /3/
----------------------------------------------------------------------------
TB6735 January 12, 1996 2,100,000
----------------------------------------------------------------------------
TB0460 September 29, 1994 45,000
----------------------------------------------------------------------------
TB6729 October 7, 1998 8,650,000
----------------------------------------------------------------------------
TB6730 October 7, 1998 2,050,000
----------------------------------------------------------------------------
TB6492 September 17, 1997 763,869
----------------------------------------------------------------------------
TB6732 October 7, 1998 100,000
----------------------------------------------------------------------------
TB6733 October 7, 1998 100,000
----------------------------------------------------------------------------
TB6734 October 7, 1998 100,000
----------------------------------------------------------------------------
TB6369 May 29, 1997 3,249,083
----------------------------------------------------------------------------
/1/ TB = TCI Group Series B Common Stock
/2/ As of October 9, 1998, all pledged shares represented herein have been
beneficially owned by Borrower for 2 years or more.
/3/ Each share of TCI Group Series B Common Stock will be converted to .8533
shares of AT&T Common stock pursuant to the Merger. The total number of as-
converted AT&T Corp. Common Shares will be 14,415,721 (as rounded to the
nearest share).
Page 65 of 112 Pages
SCHEDULE 5.5
LITIGATION
----------
I. AT&T MERGER LITIGATION
----------------------
Between June 24 and July 1, 1998, thirteen substantially similar purported class
action complaints were filed by stockholders of Tele-Communications, Inc.
("TCI") in the Court of Chancery of the State of Delaware (the "Delaware
Chancery Court") under the captions Xxxxx x. Xxxxxx, et al., C.A. No. 16470;
----------------------
Xxxxxx, et al. X. Xxxxxx, et al., C.A. No. 16471; Xxxx x. Xxxxxx, et al., C.A.
------------------------------- ---------------------
No. 16473; Xxxxxxx x. Xxxxxx, et al., C.A. No. 16474; Great Neck Capital
------------------------ ------------------
Appreciation Investment Partnership, X.X. x. Xxxxxx, et al., C.A. No. 16477;
----------------------------------------------------------
Xxxxx x. Xxxxxx, et al., C.A. No. 16478; Xxxxxxx x. Xxxxxx, et al., C.A. No.
---------------------- ------------------------
16479; Xxxx Xxxxxx Profit Sharing Trust x. Xxxxxx, et al. , C.A. No. 16482; Satz
------------------------------------------------- ----
x. Xxxxxx, et al., C.A. No. 16489; Xxxxxxxxx, et al. x. Xxxxxx, et al., C.A. No.
---------------- ----------------------------------
16490; Hushing x. Xxxxxx, et al., C.A. No.16491; Krim x. Xxxxxx, et al., C.A.
------------------------ ---------------------
No.16495; Xxxxxx x. Xxxxxx, et al., C.A. No.16501. All thirteen complaints name
-----------------------
as defendants TCI and the following directors of TCI: Xxxxx X. Xxxxxx, Xxxx X.
Xxxxxxxx, Xxxx X. Xxxxx, Xxx X. Xxxxxxx, Xx., Xxxxxx X. Xxxx, Xxx Xxxxxxx, Xxxx
X. Xxxxxx, Xxxxxx X. Xxxxx and X.X. Xxxxxxxx. The complaints in C.A. Nos.
16470, 16471, 16474, 16478, 16479, 16495, and 16501 also name AT&T Corporation
("AT&T") as a defendant. The complaints were filed in response to the
announcement on June 24, 1998 of a proposed merger between TCI and AT&T and
allege substantially similar claims.
On June 25 and July 1, 1998, two other substantially similar purported class
action complaints alleging claims arising from the proposed TCI-AT&T merger were
filed in the Delaware Chancery Court under the captions Landau x. Xxxxxx, et
--------------------
al., C.A. No. 16492, and Getfinger x. Xxxxxx, et al., C.A. No. 16502,
-- --------------------------
respectively. Named as defendants in both complaints are TCI, AT&T and the TCI
board of directors: Xxxxx X. Xxxxxx, Xxxx X. Xxxxxxxx, Xxxx X. Xxxxx, Xxx X.
Xxxxxxx, Xx., Xxxxxx X. Xxxx, Xxx Xxxxxxx, Xxxx X. Xxxxxx, Xxxxxx X. Xxxxx and
X.X. Xxxxxxxx.
In addition to the above complaints, the complaint in an existing derivative
action against TCI and the TCI board of directors in the Delaware Chancery
Court, In re Tele-Communications, Inc. Shareholder Litigation, Consolidated
------------------------------------------------------
C.A. No. 16128, was amended on June 26, 1998 to include claims arising from the
proposed TCI-AT&T merger substantially similar to those alleged in the thirteen
actions above.
II. XXXXXXX ESTATE SETTLEMENT LITIGATION
------------------------------------
The following actions were filed in the Court of Chancery of the State of
Delaware In and For New Castle County in response to the settlement of In the
------
Matter of the Estate of Xxx Xxxxxxx, Case Xx. 00 XX 000, Xxxxxxxx Xxxxx for the
-----------------------------------
County of Arapahoe in the State of Colorado: Xxxxxx, et al. v. Tele-
----------------------
Communications, Inc. et al., Civil Action No. 16128-NC; Xxxxxxx v. Tele-
-------------------------- ---------------
Communications, Inc. et al., Civil Action No. 16130-NC; Xxxxxxxx v. Tele-
-------------------------- ----------------
Communications, Inc., et al., Civil Action No. 16131-NC; Pan v. Tele-
-------------------------- -----------
Communications, Inc., et al., Civil Action No. 16133; Xxxxx v. Tele-
-------------------------- -------------
Communications, Inc., et al., Civil Action No. 16135; Crandon Capital Partners
-------------------------- ------------------------
v. Tele-Communications, Inc., et al., Civil Action No.16136; and Deutsch v.
----------------------------------- ---------
Tele-Communications, Inc., et al., Civil Action No.16148. Also named as
--------------------------------
defendants in these cases are Xxxx X. Xxxxxx, Xxxx X. Xxxxxxxx, Xxxxx X. Xxxxxx,
Xxx X. Xxxxxxx, Xx., X.X. Xxxxxxxx, Xxxx X. Xxxxx, Xxxxxx X. Xxxx, Xxx Xxxxxxx,
and Xxxxxx X. Xxxxx. The complaints in the above-named cases were amended on
June 26, 1998 to add claims arising from the proposed TCI-AT&T merger which are
substantially similar to those alleged by plaintiffs in the litigation
referenced under Section I, above.
Page 66 of 112 Pages
III. OTHER TELE-COMMUNICATIONS, INC. STOCKHOLDER LITIGATION
------------------------------------------------------
Xxxxx Xxxxxx et al. filed suit in District Court for Arapahoe County, Colorado,
Case No. 97-CV421, against Tele-Communications, Inc. ("TCI") and certain current
and former officers of TCI and its subsidiary, TCI Communications, Inc. (Xxxx X.
Xxxxxx, Xxxxxxx X. Xxxxxxxx, Xxxxx X. Xxxxxxxx, Xxxxxxx X. Xxxxx, Xxxxx X.
Xxxxxx, Xxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxxxxx, XX) and Xxxxxx
X. Xxxxxxx and Xxxxx X. Xxxxxx, in their capacity as co-personal representatives
of the Estate of Xxx Xxxxxxx.
IV. TELE-COMMUNICATIONS INTERNATIONAL, INC. STOCKHOLDER LITIGATION
--------------------------------------------------------------
On July 13, 1998, two putative class action complaints were filed be certain
stockholders of Tele-Communications International, Inc. ("TINTA") in the Court
of Chancery of the State of Delaware. The actions, which have identical claims
and allegations, are styled as Xxxxxxxxx x. Xxxxxxx, et al., C.A. No. 16533, and
----------------------------
Chetkov x. Xxxxxxx, et al., C.A. No. 16534, respectively. The complaints were
--------------------------
filed following the announcement of a proposed business combination in which
Liberty Media Group would acquire all outstanding public shares of TINTA not
already owned by TCI Ventures Group. The defendants named in both complaints
are Tele-Communications, Inc., TINTA, and the Board of Directors of TINTA: Xxx
X. Xxxxxxx, Xxxx X. Xxxxxx, Xxxx X. Xxxxxx, Xxxxx X. Xxxxx, Xxxxxx Xxxxxxx, Xxxx
X. Xxxxx, Xxxx X. Xxxxxx, and Xxxxxx X. Xxxx.
Page 67 of 112 Pages
SCHEDULE 5.11
SHARE OWNERSHIP
---------------
----------------------------------------------------------------------------
CERTIFICATE NUMBER /1/ ISSUE DATE /2/ NUMBER OF SHARES /3/
----------------------------------------------------------------------------
TB6735 January 12, 1996 2,100,000
----------------------------------------------------------------------------
TB0460 September 29, 1994 45,000
----------------------------------------------------------------------------
TB6729 October 7, 1998 8,650,000
----------------------------------------------------------------------------
TB6730 October 7, 1998 2,050,000
----------------------------------------------------------------------------
TB6492 September 17, 1997 763,869
----------------------------------------------------------------------------
TB6732 October 7, 1998 100,000
----------------------------------------------------------------------------
TB6733 October 7, 1998 100,000
----------------------------------------------------------------------------
TB6734 October 7, 1998 100,000
----------------------------------------------------------------------------
TB6369 May 29, 1997 3,249,083
----------------------------------------------------------------------------
/1/ TB = TCI Group Series B Common Stock
/2/ As of October 9, 1998, all pledged shares represented herein have been
beneficially owned by Borrower for 2 years or more.
/3/ Each share of TCI Group Series B Common Stock will be converted to .8533
shares of AT&T Common stock pursuant to the Merger. The total number of as-
converted AT&T Corp. Common Shares will be 14,415,721 (as rounded to the
nearest share).
Page 68 of 112 Pages
