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CREDIT AGREEMENT
among
PEGASUS MEDIA & COMMUNICATIONS, INC.
THE SEVERAL LENDERS FROM
TIME TO TIME PARTIES HERETO
and
BANKERS TRUST COMPANY
as Agent for such Lenders
Dated as of December 10, 1997
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TABLE OF CONTENTS
SECTION PAGE NO.
RECITALS ...................................................................... 1
I. GENERAL TERMS.................................................................... 2
1.01 Revolver Facilities................................................... 2
1.02 Letters of Credit..................................................... 3
1.03 Interest on the Notes................................................. 7
1.04 Loan Requests; Type of Loan........................................... 10
1.05 Loan Disbursements.................................................... 11
1.06 Payments, Prepayments and Termination or Reduction of the
Commitments........................................................... 11
1.07 Commitment Fee........................................................ 15
1.08 Requirements of Law................................................... 16
1.09 Limitations on LIBOR Loans; Illegality................................ 17
1.10 Taxes................................................................. 18
1.11 Indemnification....................................................... 19
1.12 Payments Under the Notes.............................................. 20
1.13 Set-Off, Etc.......................................................... 20
1.14 Pro Rata Treatment; Sharing........................................... 21
1.15 Non-Receipt of Funds by the Agent..................................... 22
1.16 Replacement of Notes.................................................. 23
II. SECURITY; SUBORDINATION; USE OF PROCEEDS......................................... 23
2.01 Security for the Obligations; Subordination; Etc...................... 23
2.02 Use of Proceeds....................................................... 25
III. CONDITIONS OF MAKING THE LOANS................................................... 25
3.01 Conditions to the First Loans and the First Issuance
of the Letters of Credit.............................................. 25
3.02 Acquisition Loans..................................................... 28
3.03 All Loans............................................................. 31
3.04 Lender Approvals...................................................... 32
IV. REPRESENTATIONS AND WARRANTIES................................................... 32
4.01 Financial Statements.................................................. 32
4.02 Organization, Qualification, Etc...................................... 33
4.03 Authorization; Compliance; Etc........................................ 33
4.04 Governmental and Other Consents, Etc.................................. 34
4.05 Litigation............................................................ 34
4.06 Compliance with Laws and Agreements................................... 34
4.07 Franchises............................................................ 35
4.08 Licenses.............................................................. 35
4.09 The Systems........................................................... 36
4.10 Rate Regulations...................................................... 38
4.11 The Stations.......................................................... 38
4.12 DBS Rights............................................................ 39
4.13 Title to Properties; Condition of Properties.......................... 40
4.14 Interests in Other Businesses......................................... 40
4.15 Solvency.............................................................. 40
4.16 Full Disclosure....................................................... 41
4.17 Margin Stock.......................................................... 41
4.18 Tax Returns........................................................... 41
4.19 Pension Plans, Etc.................................................... 41
4.20 Material Agreements................................................... 42
4.21 Projections........................................................... 42
4.22 Brokers, Etc.......................................................... 42
4.23 Capitalization........................................................ 42
4.24 Environmental Compliance.............................................. 43
4.25 Investment Company Act................................................ 44
4.26 Labor Matters......................................................... 44
4.27. Delaware Code Provisions.............................................. 44
V. FINANCIAL COVENANTS.............................................................. 44
5.01 Leverage.............................................................. 44
5.02 Interest Coverage..................................................... 45
5.03 Fixed Charge Coverage................................................. 45
5.04 Maximum Average Subscriber Acquisition Cost........................... 46
5.05 Restricted Payments................................................... 46
VI. AFFIRMATIVE COVENANTS............................................................ 47
6.01 Preservation of Assets; Compliance with Laws, Etc..................... 47
6.02 Insurance............................................................. 48
6.03 Taxes, Etc............................................................ 51
6.04 Notice of Proceedings, Defaults, Adverse Change, Etc.................. 51
6.05 Financial Statements and Reports...................................... 51
6.06 Inspection............................................................ 54
6.07 Accounting System..................................................... 55
6.08 Additional Assurances................................................. 55
6.09 Renewal of DBS Agreements, FCC Licenses and
CATV Franchises....................................................... 56
6.10 Compliance with Environmental Laws.................................... 56
6.11 Interest Rate Protection.............................................. 57
VII. NEGATIVE COVENANTS............................................................... 58
7.01 Indebtedness.......................................................... 58
7.02 Liens................................................................. 59
7.03 Disposition of Assets; etc............................................ 60
7.04 Fundamental Changes; Acquisitions..................................... 61
7.05 Local Marketing Agreements, Etc....................................... 61
7.06 Management............................................................ 61
7.07 Sale and Leaseback.................................................... 61
7.08 Investments........................................................... 62
7.09 Change in Business.................................................... 62
7.10 Accounts Receivable................................................... 62
7.11 Transactions with Affiliates.......................................... 62
7.12 Amendment of Certain Agreements, Etc.................................. 62
7.13 ERISA................................................................. 63
7.14 Margin Stock.......................................................... 63
7.15 Negative Pledges, etc................................................. 63
VIII. DEFAULTS ...................................................................... 63
IX. REMEDIES ON DEFAULT, ETC......................................................... 67
X. THE AGENT ...................................................................... 67
10.01 Appointment, Powers and Immunities.................................... 67
10.02 Reliance by Agent..................................................... 68
10.03 Events of Default..................................................... 69
10.04 Rights as a Lender.................................................... 69
10.05 Indemnification....................................................... 69
10.06 Non-Reliance on Agent and other Lenders............................... 69
10.07 Failure to Act........................................................ 70
10.08 Resignation of Agent.................................................. 70
10.09 Cooperation of Lenders................................................ 70
XI. DEFINITIONS...................................................................... 71
XII. ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS;
SEPARATE ACTIONS BY THE LENDERS.................................................. 98
XIII. BENEFIT OF AGREEMENT; ASSIGNMENTS AND
PARTICIPATIONS................................................................... 100
XIV. MISCELLANEOUS.................................................................... 102
14.01 Survival.............................................................. 102
14.02 Fees and Expenses; Indemnity; Etc..................................... 103
14.03 Notice................................................................ 104
14.04 Governing Law......................................................... 105
14.05 CONSENT TO JURISDICTION; WAIVER OF
JURY TRIAL............................................................ 106
14.06 Severability.......................................................... 106
14.07 Section Headings, Etc................................................. 106
14.08 Several Nature of Lenders' Obligations................................ 106
14.09 Counterparts.......................................................... 107
14.10 Knowledge and Discovery............................................... 107
14.11 Amendment of Other Agreements......................................... 107
14.12 FCC and Municipal Approvals........................................... 107
14.13 Disclaimer of Reliance................................................ 108
14.13 Disclaimer of Reliance................................................ 108
INDEX OF SCHEDULES
Schedule 1.01(a) Allocation of Loans and Commitments
Schedule 1.01(c) Reducing Revolving Credit Note
Schedule 1.02 Letter of Credit Request
Schedule 1.04(a) Loan Request
Schedule 1.04(d) Interest Rate Option Notice
Schedule 1.06 Commitment Reduction Notice
Schedule 2.01(a) Exceptions to Security
Schedule 2.01(b) Form of Seller Subordination Agreement
Schedule 2.02 Sources and Uses of Proceeds
Schedule 3.01 Omnibus Officer's Certificate(s) and
Compliance Certificate/Closing
Schedule 3.02(d) Officer's Certificate/Acquisition Loans
Schedule 3.02(g)(i) Form of General Counsel Opinion/Acquisition Loans
Schedule 3.02(g)(ii) Forms of FCC Counsel Opinion/Acquisition Loans
Schedule 3.02(g)(iii) Form of Local Counsel Opinion/Acquisition Loans
Schedule 4.01(a) Financial Statements
Schedule 4.01(b) Opening Balance Sheet
Schedule 4.02 Organization, Qualification, Etc.
Schedule 4.04 Governmental and Other Consents
Schedule 4.05 Litigation
Schedule 4.07 CATV Franchises
Schedule 4.08 FCC Licenses
Schedule 4.10 Rate Regulation
Schedule 4.12 DBS Agreements and Service Areas
Schedule 4.13 Head-End and Tower Site Leases, Etc.
Schedule 4.14 Interests in Other Businesses
Schedule 4.19 Pension Plans
Schedule 4.20 Material Agreements
Schedule 4.21 Projections
Schedule 4.23 Capitalization
Schedule 4.24 Environmental Compliance
Schedule 6.05 Compliance Certificate
Schedule 7.01 Indebtedness
Schedule 7.02 Liens
Schedule 11.01(a) Officer's Certificate/Permitted Acquisitions
Schedule 11.01(b) Form of General Counsel Opinion/Permitted Acquisitions
Schedule 11.01(c) Form of FCC Counsel Opinion/Permitted Acquisitions
Schedule 11.01(d) Form of Local Counsel Opinion/Permitted Acquisitions
Schedule 13 Form of Assignment and Acceptance
CREDIT AGREEMENT
AGREEMENT dated as of December 9, 1997, by and among the financial
institutions which are now, or in accordance with Article XIII hereafter become,
parties hereto (collectively, the "Lenders" and each individually, a "Lender");
BANKERS TRUST COMPANY, as agent for the Lenders (in such capacity, together with
its successors and assigns in such capacity, the "Agent"); and PEGASUS MEDIA &
COMMUNICATIONS, INC., a Delaware corporation (the "Borrower") and a wholly owned
subsidiary of Pegasus Communications Corporation, a Delaware corporation (the
"Parent"). Certain capitalized terms used herein without definition are defined
in Article XI of this Agreement.
RECITALS
A. The Borrower's various direct and indirect Subsidiaries (1) own the
rights to deliver direct broadcast satellite ("DBS") service in various
territories in the United States, (2) own and operate cable television systems
located in Connecticut, Massachusetts and Puerto Rico and (3) own and operate
broadcast television stations located in Florida, Maine, Mississippi,
Pennsylvania and Tennessee. Certain special purpose subsidiaries of the
Borrower, referred to herein as the License Subsidiaries, own the licenses for
each broadcast television station.
B. Certain of the foregoing DBS rights were acquired on October 21, 1997
pursuant to the transfer by Pegasus Satellite Holdings, Inc., an Affiliate of
the Borrower ("PSH"), to PST Holdings, Inc., a wholly owned Subsidiary of the
Borrower ("PSTH"), of all of the capital stock of the DBS Subsidiaries.
C. On October 21, 1997, the Parent offered (the "Offering") its 95/8%
Senior Notes due 2005 in the aggregate principal amount of $115,000,000 (the
"PCC Senior Notes"), issued pursuant to an Indenture dated as of such dated
between the Parent and First Union National Bank, as trustee (the "PCC
Indenture"). In connection with the sale of the PCC Senior Notes, the Parent
prepared and circulated an Offering Memorandum dated October 15, 1997, setting
forth information regarding the Parent, the Borrower and its Subsidiaries and
the PCC Senior Notes (the "Offering Memorandum").
D. $85,000,000 of the gross proceeds of the Offering were contributed
to the equity capital of the Borrower to retire existing indebtedness of the
Borrower, including indebtedness of PSH assumed by the Borrower in connection
with the DBS Transfer.
E. The Borrower desires to obtain additional funds (1) to support the
issuance of letters of credit, (2) for working capital, Capital Expenditures and
general corporate purposes and (3) subject to availability, to finance Permitted
Acquisitions.
F. The Lenders are willing to provide such funds, all subject to the
terms and conditions of this Agreement.
NOW THEREFORE, the parties hereto, intending to be legally bound, and in
consideration of the foregoing and the mutual covenants contained herein, hereby
agree as follows:
I. GENERAL TERMS.
Section 1.01. Revolver Facilities.
(a) On the Closing Date, subject to the terms and conditions contained in
this Agreement, the Lenders agree to establish in favor of the Borrower reducing
revolving credit facilities (the "Revolvers") in the aggregate principal amount
of $180,000,000, allocated among the Lenders as set forth in Schedule 1.01(a)
(collectively, in either case, as reduced pursuant to Section 1.01(e) and
subject to Section 1.01(b), the "Commitments" and, with respect to each Lender's
allocation of the Revolvers, its "Commitment"), which shall expire on December
31, 2003 (such date, or such earlier date as the Commitments shall expire or be
terminated hereunder, being referred to herein as the "Expiration Date").
(b) The Lenders shall have no obligation to make any loans under the
Commitments (the "Loans") if, after giving effect to such Loans, the sum of (A)
the aggregate amount of all outstanding Loans plus (B) the Letter of Credit
Exposure plus (C) that portion of the Permitted Seller Debt Outstandings not
secured by Letters of Credit (such sum being referred to herein as the
"Aggregate Exposure") would exceed the aggregate Commitments then in effect. For
purposes of this Agreement, the term "Available Commitments" shall mean, at any
time, the aggregate amount of the Commitments then in effect minus the Letter of
Credit Exposure minus that portion of the Permitted Seller Debt Outstandings not
secured by Letters of Credit.
(c) The borrowings under this Section 1.01 shall be evidenced by the
Borrower's Reducing Revolving Credit Notes, each in the form attached hereto as
Schedule 1.01(c) (together with any additional Reducing Revolving Credit Notes
issued to any assignee(s) of the Commitments under Article XIII or otherwise
issued in substitution therefor or replacement thereof, the "Notes"). The Notes
are hereby incorporated by reference herein and made a part hereof.
(d) The aggregate principal amount of Loans made by the Lenders as
requested in any Loan Request shall be (i) at least $1,000,000 and, if more, a
multiple of $100,000 in the case of LIBOR Loans, and $500,000, and, if more, a
multiple of $100,000, in the case of Base Rate Loans or (ii) such lesser amount
as equals the then unadvanced portion of the aggregate Available Commitments.
From the Closing Date to and including the Expiration Date and within the limits
of the aggregate Available Commitments, the Borrower may borrow, repay and
reborrow under this Section 1.01.
(e) The Commitments (i) shall be automatically permanently reduced on
September 30, 1999 and each Payment Date thereafter, on each of which dates the
Borrower shall repay such amount of the aggregate Loans as shall cause the
aggregate outstanding principal balance thereunder to be less than or equal to
the Available Commitments, as so reduced, and (ii) shall expire on the
Expiration Date, when all outstanding principal and accrued interest on the
Notes shall be due and payable in full. Such quarterly reductions of the
Commitments shall be in the amounts set forth below, without giving effect to
any other mandatory or optional Commitment reductions and, after giving effect
to such quarterly automatic reductions, the maximum aggregate amount of the
Commitments shall not exceed the levels set forth below:
Aggregate Amount of Automatic Permanent
---------------------------------------
Payment Date Reduction Maximum Commitments
------------ --------- -------------------
Closing Date $-0- $180,000,000
September 30, 1999 $ 2,700,000 $177,300,000
December 31, 1999 $ 2,700,000 $174,600,000
March 31, 2000 $ 3,600,000 $171,000,000
June 30, 2000 $ 3,600,000 $167,400,000
September 29, 2000 $ 3,600,000 $163,800,000
December 29, 2000 $ 3,600,000 $160,200,000
March 30, 2001 $ 9,000,000 $151,200,000
June 29, 2001 $ 9,000,000 $142,200,000
September 28, 2001 $ 9,000,000 $133,200,000
December 31, 2001 $ 9,000,000 $124,200,000
March 31, 2002 $ 14,400,000 $109,800,000
June 30, 2002 $ 14,400,000 $95,400,000
September 30, 2002 $ 14,400,000 $81,000,000
December 31, 2002 $ 14,400,000 $66,600,000
March 31, 2003 $16,650,000 $49,950,000
June 30, 2003 $16,650,000 $33,300,000
September 30, 2003 $16,650,000 $16,650,000
December 31, 2003 $16,650,000 -0-
Section 1.02. Letters of Credit. From time to time from the date of
this Agreement to but not including the date which is ten (10) Business Days
prior to the Expiration Date, and on the terms and subject to the conditions
contained in this Agreement, the Agent shall cause the Issuing Bank to issue
stand-by letters of credit in Dollar denominations for the account of the
Borrower (each a "Letter of Credit" and collectively, the "Letters of Credit")
as follows:
(a) Issuance of Letters of Credit. The obligation of the Issuing Bank
to issue any Letter of Credit requested by the Borrower is subject to the
following conditions:
(i) The Issuing Bank shall not issue any Letter of Credit if,
after giving effect to the issuance thereof, (A) the Aggregate Exposure
would exceed the aggregate Commitments then in effect, (B) the
aggregate NRTC Letter of Credit Exposure would exceed $20,000,000, (C)
the aggregate General Purpose Letter of Credit Exposure would exceed
$5,000,000, (D) the aggregate Seller Letter of Credit Exposure would
exceed $25,000,000 or (E) the sum of the aggregate General Purpose
Letter of Credit Exposure plus the aggregate Seller Letter of Credit
Exposure would exceed $25,000,000.
(ii) Each Letter of Credit shall be issued (i) in favor of the
NRTC, as beneficiary, to secure obligations of the Companies under the
NRTC Member Agreements, (ii) in favor of one or more Sellers, to secure
obligations of the Companies under Permitted Seller Debt or (iii) for
such other valid business purpose of the Companies or any of them as
the Borrower shall determine.
(iii) Letters of Credit shall be issued hereunder on a sight
basis only.
(iv) Each Letter of Credit and any related documentation shall
be in a form and scope and upon terms acceptable to the Issuing Bank,
in its sole discretion but, in any event, in accordance with its
customary practices (collectively with the Letters(s) of Credit issued
pursuant hereto, the "Letter of Credit Documents"). Whenever the
Borrower desires that a Letter of Credit be issued, the Borrower shall
give the Agent and the Issuing Bank a written notice requesting such
issuance at least three (3) Business Days (or such shorter period as
may be acceptable to the Issuing Bank) prior to the proposed issuance
date. Each such notice shall be in the form of Schedule 1.02 (each, a
"Letter of Credit Request").
(v) Each Letter of Credit shall have an expiry date occurring
not later than the earlier of the date which is one year from the date
of issuance and the date which is ten (10) Business Days prior to the
Expiration Date. The expiry date for any Letter of Credit may be
automatically extended for successive periods; each of up to one year,
but no such extension shall extend beyond the date which is ten (10)
Business Days prior to the Expiration Date.
(vi) The Issuing Bank will not issue any Letter of Credit after
it has received notice that any Default exists, until such time as the
Issuing Bank receives a notice of (i) the recession of such notice of
Default, provided by the party or parties originally delivering the
same, or (ii) the waiver of such Default, provided by the Lenders.
Notwithstanding the foregoing, in the event a Lender Default exists,
the Issuing Bank shall not be required to issue any Letter of Credit
unless the Issuing Bank has entered into arrangements satisfactory to
it and to the Borrower to eliminate the Issuing Bank's risk with
respect to the participation of the Defaulting Lender or Lenders in
Letters of Credit.
(b) Letter of Credit Fees. The Borrower shall pay (i) to the Issuing
Bank, for its own account, a non-refundable issuance fee computed at the rate of
.125% per annum amount of each Letter of Credit, (the "Issuance Fee") provided
that (A) in no event shall the annual Issuance Fee with respect to any Letter of
Credit be less than $500.00 and (B) in any instance where such minimum Issuance
Fee applies, such minimum shall be paid in full on the date of issuance of the
respective Letter of Credit and on each anniversary date thereof, if any, and
(ii) to the Agent, for the ratable account of each Lender, a non-refundable fee
(the "Letter of Credit Fee") which shall be computed at a per annum rate equal
to the Applicable Margin for LIBOR Loans in effect from time to time under the
Commitments. The Issuance Fee and Letter of Credit Fee shall accrue on the daily
stated amount of each Letter of Credit from and including the issuance date of
such Letter of Credit to and including the expiry date thereof and (except as
otherwise provided in clause (B) above) shall be payable quarterly in arrears on
each Quarterly Date and on the Expiration Date, without setoff, deduction or
counterclaim. The Issuance Fee and Letter of Credit Fee shall be calculated on
the basis of the actual number of days elapsed in a 360-day year. Upon receipt
from the Borrower of payment of the Letter of Credit Fee, the Agent will
promptly remit to each Lender such Lender's share of the Letter of Credit Fee.
In addition to the Issuance Fee and the Letter of Credit Fee, the Borrower will
pay the Issuing Bank, upon each issuance of, payment under and/or amendment to
each Letter of Credit, such amount as shall at such time be the administrative
charge which the Issuing Bank is customarily assessing for such operations.
(c) Obligation of Borrower to Repay Letter of Credit Disbursements,
etc. The Borrower assumes all risks in connection with the Letters of Credit and
the Borrower's obligation to repay any payments made by the Issuing Bank on a
demand presented under any Letter of Credit (each a "Letter of Credit
Disbursement") shall be absolute, unconditional and irrevocable under any and
all circumstances and irrespective of:
(i) any lack of validity or enforceability of any Letter
of Credit;
(ii) the existence of any claim, setoff, defense or other
right which the Borrower or any other person may at any time have
against the beneficiary under any Letter of Credit, the Agent, the
Issuing Bank, any Lender or any other Person, whether in connection
with this Agreement or otherwise;
(iii) any demand or other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any
respect, unless payment by the Issuing Bank under such Letter of Credit
(A) shall have been made against presentation of demands or documents
that, on their face, do not substantially conform to the requirements
of such Letter of Credit, or (B) shall have been the result of the
gross negligence or willful misconduct of the Issuing Bank, as finally
determined by a court of competent jurisdiction; and
(iv) any other circumstance or event whatsoever, whether or
not similar to any of the foregoing, provided that such circumstance or
event shall not have been the result of the gross negligence or willful
misconduct of the Issuing Bank.
(d) Participation by Lenders. Promptly after the issuance of or
amendment of any Letter of Credit, the Issuing Bank shall give the Agent and
each Lender written notice of such issuance and/or amendment, accompanied by a
copy of such Letter of Credit and/or amendment. By the issuance of a Letter of
Credit and without any further action, the Issuing Bank hereby grants to each
Lender, and each Lender hereby agrees to acquire from the Issuing Bank, a
participation in such Letter of Credit equal to such Lender's pro rata share of
the face amount thereof, determined as provided in Section 1.14, effective upon
the date of issuance. In furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Agent, for the account of
the Issuing Bank, the amount of such Lender's pro rata share of each Letter of
Credit Disbursement. Each Lender acknowledges and agrees that its obligation to
acquire participations pursuant to this Section 1.02(d) is absolute and
unconditional and shall not be affected by any circumstances whatsoever, and
that each payment obligation arising from a Letter of Credit Disbursement shall
be made promptly by each Lender to the Agent without any offset, abatement,
withholding or reduction whatsoever.
(e) Payments by Lenders to Issuing Bank. Upon notification by the Issuing
Bank to the Agent that a Letter of Credit Disbursement has been made and that
the Borrower has failed to meet its reimbursement obligations to the Issuing
Bank, the Agent shall promptly notify the Issuing Bank and each other Lender of
the amount of the Letter of Credit Disbursement and, in the case of each Lender,
its pro rata share thereof. Each Lender shall pay to the Agent, not later than
2:00 P.M., New York time, on such date, provided that such notice shall have
been provided by the Agent by 11:00 A.M., New York time, on such date (or,
otherwise, not later than 12:00 Noon, New York time, on the next following
Business Day), such Lender's pro rata share of such Letter of Credit
Disbursement, which the Agent shall promptly pay to the Issuing Bank. The Agent
will promptly remit to each Lender its share of any amounts subsequently
received by the Issuing Bank or the Agent from the Borrower in respect of all
Letter of Credit Disbursements.
(f) Cash Collateral.
(i) At any time and from time to time after the occurrence and
during the continuance of an Event of Default, upon notice from the Agent,
at the direction or with the consent of the Required Lenders (and, in the
case of any Event of Default referred to in paragraph (m) or (n) of Article
VIII, forthwith, without any demand or the taking of any other action by
the Agent or such Lenders), the Borrower shall immediately deliver to the
Agent, for deposit in the Collateral Account, such additional amount of
cash as is equal to the aggregate Letter of Credit Exposure (whether or not
any beneficiary under any Letter of Credit shall have drawn or be entitled
at such time to draw thereunder).
(ii) In addition, in the event of a mandatory prepayment under
Section 1.06 resulting in payment in full of all outstanding Loans, the
Agent will retain such amount as may then be required to be retained as
cover for the Letter of Credit Exposure, as contemplated by Section
1.06(g)(ii).
(iii) In the event of a drawing, and subsequent payment by the
Issuing Bank under any Letter of Credit at any time during which any
amounts are held in respect thereof in the Collateral Account, the Agent
will deliver to the Issuing Bank an amount equal to the Reimbursement
Obligation created as a result of such payment (or, if the amounts so held
are less than such Reimbursement Obligation, all of such amounts) to
reimburse the Issuing Bank therefor, in each case in the order in which
each such drawing is presented to the Issuing Bank.
(iv) Any such amounts remaining in the Collateral Account
after the expiration of all Letters of Credit and the reimbursement in full
of the Issuing Bank for all of its obligations thereunder shall be held by
the Agent, for the benefit of the Borrower, to be applied against the
Obligations in such order and manner as the Agent may direct.
(v) If the Borrower is required to provide cover for the
Letter of Credit Exposure pursuant to Section 1.06(g)(ii), such amount (to
the extent not applied as aforesaid) shall be returned to the Borrower on
demand, provided that, after giving effect to such return, (A) the
Aggregate Exposure at such time would not exceed the aggregate Commitments
at such time and (B) no Default shall have occurred and be continuing at
such time. If the Borrower is required to provide cover for the Letter of
Credit Exposure as a result of an Event of Default, as provided under
paragraph (i) above, such amount (to the extent not applied as aforesaid)
shall be returned to the Borrower within three (3) Business Days after (1)
any grace or cure periods applicable to unmatured Defaults shall have
expired and (2) all Events of Default shall have been cured or waived.
Section 1.03. Interest on the Notes.
(a) Interest Rate . Subject to the terms and conditions set forth in this
Section 1.03, the Borrower may elect an interest rate for the outstanding
principal balances from time to time of the Notes, or any portion thereof, based
on either the Base Rate or the applicable LIBOR Rate and determined as of any
date, as set forth in the Table below, as follows:
(i) the rate for any Base Rate Loan shall be the Base Rate plus
the Applicable Margin for Base Rate Loans then in effect; and
(ii) the rate for any LIBOR Loan shall be the applicable LIBOR
Rate plus the Applicable Margin for LIBOR Loans in effect on the first
day of the applicable Interest Period.
(b) Determination of Applicable Margin.
(i) The Applicable Margin for Loans during the period commencing
on the date hereof and ending on February 14, 1998 shall be 1.25%, with
respect to Base Rate Loans, and 2.50%, with respect to LIBOR Loans. The
Applicable Margin for Loans during the Pricing Period commencing on
February 15, 1998 and ending on May 14, 1998 and during each Pricing
Period thereafter shall be determined based upon the PCC Consolidated
Leverage Ratio as of the last day of the fiscal quarter immediately
preceding the first day of such Pricing Period (the "Pricing Ratio"), as
indicated in the following Table:
--------------------------------------------------------------------------------
Applicable Margin for Loans
--------------------------------------------------------------------------------
PCC Consolidated
Leverage Ratio Base Rate Loans LIBOR Loans
--------------------------------------------------------------------------------
Greater than or equal to 6.50:1.00
1.25% 2.50%
--------------------------------------------------------------------------------
Less than 6.50:1.00 but greater than
or equal to 6.00:1.00 1.00% 2.25%
--------------------------------------------------------------------------------
Less than 6.00:1.00 but greater than
or equal to 5.50:1.00 .75% 2.00%
--------------------------------------------------------------------------------
Less than 5.50:1.00 but greater than
or equal to 5.00:1.00 .50% 1.75%
--------------------------------------------------------------------------------
Less than 5.00:1.00 but greater than .25% 1.50%
or equal to 4.50:1.00
--------------------------------------------------------------------------------
Less than 4.50:1.00 .00 % 1.25%
--------------------------------------------------------------------------------
(c) Computations, Pricing Period, Etc.
(i) Nothing in Section 1.03(b) shall be deemed to constitute a
waiver of the requirements of Section 5.01, default under which will
result in an Event of Default and the application of the default rate of
interest specified in Section 1.03(e).
(ii) As used in Section 1.03, the first "Pricing Period" shall
commence on February 15, 1998 and end on May 14, 1998 and, thereafter,
the term "Pricing Period" shall mean each period commencing on (A) the
last date as of which the Borrower is required, under Section 6.05(b) and
Section 6.05(d), to deliver financial statements and a Compliance Report
indicating the applicable Pricing Ratio, being February 15, May 15,
August 15 and November 15 of each year (in each case, a "Compliance
Report Delivery Date"), and ending on (B) the next following Compliance
Report Delivery Date.
(iii) The determination of the Applicable Margin for any Pricing
Period shall be based on the quarterly financial statements and
Compliance Report required to be delivered on the first date of such
Pricing Period, as provided above. Notwithstanding the preceding
sentence, in the event of any discrepancy between the computation based
on such financial statements and Compliance Report and the related
audited financial statements furnished pursuant to Section 6.05(a) (the
"Audited Financial Statements") or any information disclosed in
connection therewith, the computation based upon the Audited Financial
Statements shall govern, retroactive to the first day of the applicable
Pricing Period. In the event of a retroactive correction in the
determination of the Applicable Margin in favor of the Borrower, the
amount of interest thereby refundable to the Borrower shall be applied on
the date of such retroactive correction, to prepay interest payable on
the Notes. If the retroactive correction is in favor of the Lenders, the
amount of interest due to the Lenders shall be paid in full to the Agent
within five (5) days after written notice of such correction is provided
to the Borrower.
(iv) Notwithstanding the foregoing, no downward adjustment of
the Applicable Margin hereunder shall be permitted (A) unless the
Compliance Report for the relevant fiscal period delivered to the Agent
includes a request by the Borrower for such adjustment or (B) during the
existence of any Default.
(v) Interest on Base Rate Loans shall be computed on the basis
of the actual number of days elapsed over a 365 or 366-day year, as
applicable (unless such interest is based upon the Federal Funds Rate, in
which case interest shall be computed on the basis of the actual number
of days elapsed over a 360-day year). Interest on LIBOR Loans shall be
computed on the basis of the actual number of days elapsed over a 360-day
year.
(d) Interest Payment Dates. Interest on the Loans shall be payable in
arrears, without setoff, deduction or counterclaim, as follows:
(i) Interest on each Base Rate Loan shall be due and payable on
the Quarterly Dates, commencing January 30, 1998, and at maturity,
whether by reason of acceleration, prepayment, payment or otherwise,
provided that interest accrued on any Base Rate Loan which is converted
to a LIBOR Loan shall be paid on the Quarterly Date following the date of
such conversion (or, if accrued on a Base Rate Loan which is so converted
on a Quarterly Date, on such Quarterly Date). The interest rate on Base
Rate Loans shall change on the date of any change in the applicable Base
Rate.
(ii) Interest on each LIBOR Loan shall be due and payable on the
last day of the Interest Period applicable to such Loan and, if such
Interest Period exceeds three (3) months, every three (3) months after
the beginning thereof, until and at maturity, whether by reason of
acceleration, prepayment, payment or otherwise.
(e) Effect of Defaults, Etc.
(i) During the existence of any Event of Default, the
outstanding principal under the Notes and, to the extent permitted by
applicable law, overdue interest, fees or other amounts payable hereunder
or under the other Loan Documents (including without limitation
Reimbursement Obligations) shall bear interest, from and including the
date such Event of Default occurred until such Event of Default is waived
in writing as provided herein, at a rate per annum (computed on the basis
of the actual number of days elapsed over a 360-day year) equal to two
percent (2.00%) above (a) the interest rate or rates then applicable to
Base Rate Loans and overdue interest, fees and other expenses, or (b)
with respect to any LIBOR Loans then in effect (and only until the end of
the Interest Period applicable to such LIBOR Loans) the interest rate or
rates then applicable to such LIBOR Loans.
(ii) Nothing in this Section 1.03(e) shall affect the rights of
the Agent or the Lenders to exercise any rights or remedies under the
Loan Documents or applicable law arising upon the occurrence of an Event
of Default.
Section 1.04. Loan Requests; Type of Loan.
(a) Loan Requests. Each request by the Borrower for Loans under the
Revolvers (other than the initial Loans, if made concurrently herewith) shall be
made not later than (i) 11:00 A.M. (New York time) on the Business Day prior to
the proposed Borrowing Date, if such Loans are Base Rate Loans, or (ii) 11:00
A.M. (New York time) on the third Business Day prior to the proposed Borrowing
Date, if any of such Loans are LIBOR Loans, by a written Loan Request, in the
form of Schedule 1.04(a) (each, a "Loan Request"), signed by a duly authorized
representative of the Borrower and indicating (i) the date of such Loans, (ii)
whether such Loans shall be Base Rate Loans or LIBOR Loans or a combination of
the two types of Loans and, if so, the Interest Period for such LIBOR Loans, and
(iii) the use of proceeds thereof, to the extent any such proceeds are not being
used for working capital purposes. The Agent shall promptly notify the Lenders
of such Loan Request and the information contained therein. Such Loan Request
shall be irrevocable and binding on the Borrower.
(b) Conversion to a Different Type of Loan. The Borrower may elect from
time to time to convert any outstanding Loans to Base Rate Loans or LIBOR Loans,
as the case may be, provided that (i) with respect to any such conversion of
LIBOR Loans to Base Rate Loans, the Borrower shall provide the appropriate
Interest Rate Option Notice by 11:00 A.M. (New York time) on the date of such
proposed conversion; (ii) with respect to any such conversion of Base Rate Loans
to LIBOR Loans, the Borrower shall provide the appropriate Interest Rate Option
Notice by 11:00 A.M. (New York time ) at least three Business Days' prior to the
date of such proposed conversion; (iii) with respect to any such conversion of
LIBOR Loans into Base Rate Loans, such conversion shall only be made on the last
day of the related Interest Period; (iv) no Loans may be converted into LIBOR
Loans when any Default has occurred and is continuing, unless the Required
Lenders shall consent to such conversion; (v) the Borrower may have no more than
six (6) LIBOR Loans outstanding at any time; (vi) any conversion of less than
all of the outstanding Base Rate Loans into LIBOR Loans shall be in a minimum
aggregate principal amount of $1,000,000 and, if greater, an integral multiple
of $100,000; and (vii) any conversion of less than all of the outstanding LIBOR
Loans into Base Rate Loans shall be in a minimum aggregate principal amount of
$1,000,000 and, if greater, an integral multiple of $100,000. The Agent shall
promptly notify the Lenders of such Interest Rate Option Notice and the
information contained therein.
(c) Continuance of an Interest Rate Option. The Borrower may continue any
LIBOR Loans as such upon the expiration of the related Interest Period by
providing to the Agent (i) an Interest Rate Option Notice in compliance with the
notice provisions set forth in Section 1.04(b) or (ii) standing written
instructions authorizing the automatic continuation of such Loans, which
instructions shall be effective until notice to the Agent by the Borrower
revoking the same (such notice to take effect no sooner than three Business Days
after receipt by the Agent); provided that no LIBOR Loans may be continued when
any Default has occurred and is continuing, but shall be automatically converted
to Base Rate Loans on the last day of the first applicable Interest Period which
ends during the continuance of such Default. Base Rate Loans shall be deemed to
continue as such until receipt of an Interest Rate Option Notice requesting
conversion thereof to LIBOR Loans.
(d) Form of Notice. Each Interest Rate Option Notice shall be
substantially in the form of Schedule 1.04(d) and shall specify: (i) the
aggregate principal amount of Loans to be continued or converted; (ii) the
proposed date thereof; (iii) the Interest Period for such LIBOR Loans; and (iv)
whether such Loans shall be LIBOR Loans or Base Rate Loans.
Section 1.05. Loan Disbursements. The Loans shall be made by the
applicable Lenders pro rata as provided in Section 1.14. Not later than 12:00
noon (New York time), in the case of LIBOR Loans, or 2:00 P.M. (New York time),
in the case of Base Rate Loans, on the date specified for any Loans, each
applicable Lender shall make available to the Agent the portion of the Loans to
be made by it on such date, in immediately available funds, for the account of
the Borrower. The amount so received by the Agent shall, subject to the terms
and conditions of this Agreement, be made available to the Borrower by
depositing the same in immediately available funds in the appropriate account or
accounts of the Borrower and by disbursing such funds as indicated in writing in
the related Loan Request prior to the date such Loans are proposed to be made.
Section 1.06. Payments, Prepayments and Termination or Reduction of the
Commitments.
(a) Voluntary Reductions of Commitments and Related Prepayments. At any
time prior to the Expiration Date, upon at least three (3) Business Days'
written notice to the Agent in the form of Schedule 1.06 (each, a "Commitment
Reduction Notice") signed by a duly authorized representative of the Borrower,
the Borrower may permanently terminate or permanently reduce any of the
Commitments, provided as follows:
(i) any such reduction shall be in an aggregate amount of not
less than $1,000,000 or, if greater, an integral multiple thereof;
(ii) after giving effect to any such reduction, the aggregate
unutilized portion of the aggregate Available Commitments shall equal or exceed
$15,000,000;
(iii) any such reduction shall apply to each Lender's
Commitment pro rata as provided in Section 1.14; and
(iv) simultaneously with each such reduction, the Borrower (A)
shall pay to the Agent, for the ratable account of each Lender, any then accrued
unpaid Commitment Fee on the terminated or reduced portion of the respective
Commitments, (B) shall pay any indemnification payments due in accordance with
Section 1.11 in respect of LIBOR Loans so prepaid and (C) shall repay such
amount of the aggregate principal amount of the Notes as shall cause the
outstanding principal balance thereunder to be less than or equal to the
aggregate Available Commitments, after giving effect to such reduction, provided
that any such prepayment shall be an aggregate amount of not less than
$1,000,000 or, if greater, an integral multiple of $250,000, in the case of
LIBOR Loans so prepaid, or $250,000 or, if greater, integral multiples thereof,
with respect to Base Rate Loans so prepaid.
Each Commitment Reduction Notice shall specify the date fixed for such
termination or reduction, the aggregate principal amount thereof and the
aggregate principal amount of the Notes required to be repaid hereunder on such
date.
(b) Mandatory Commitment Reductions and Prepayments; Casualty Events.
Subject to the provisions of Section 6.02, within one hundred eighty (180) days
following the receipt by the Borrower or any of the Subsidiaries of the proceeds
of insurance, condemnation award or other compensation in respect of any
Casualty Event (or upon such earlier date as the Borrower or any Subsidiary
shall have determined not to restore, repair or replace the asset or property
affected by such Casualty Event), which proceeds, together with all other such
proceeds theretofore received in respect of Casualty Events and not so applied,
exceed $500,000 in the aggregate, (i) the Commitments shall be automatically
reduced in an aggregate amount, if any, equal to the aggregate amount of such
proceeds not theretofore applied to the repair or replacement of such asset or
property under Section 6.02(b) and (ii) the Borrower shall prepay the Notes
accordingly, all as provided in Section 1.06(f) and (g), respectively. Nothing
in this Section 1.06(b) shall be deemed (i) to limit any obligation of the
Companies pursuant to the Security Agreements to remit to the Collateral Account
the proceeds of insurance, condemnation award or other compensation received in
respect of any Casualty Event, (ii) to obligate the Agent to release any of such
proceeds from the Collateral Account to the Borrower or any Subsidiary during
the existence of any Default or (iii) to apply to temporary prepayments of the
Notes from insurance proceeds pending completion of repairs, replacements and
restoration within the one hundred eighty (180) day period referred to above.
(c) Mandatory Commitment Reductions and Prepayments; Excess Cash Flow. On
or before May 1 of each year, commencing May 1, 2000, (i) the Commitments shall
be automatically reduced by an aggregate amount equal to fifty percent (50%) of
Excess Cash Flow for the immediately preceding fiscal year and (ii) the Borrower
shall prepay the Notes accordingly, all as provided in Sections 1.06(f) and (g).
(d) Mandatory Prepayments; Equity Issuances. Without limiting the
obligation of the Borrower to obtain any required consent thereto of the
Required Lenders under Section 7.04, upon any issuance of additional equity
securities of the Borrower, and any cash capital contribution made by the Parent
to the Borrower, the Borrower shall prepay the Notes in an aggregate amount
equal to the net cash proceeds thereof, as provided in Section 1.06(g).
(e) Mandatory Commitment Reductions and Prepayments; Dispositions of
Assets. Without limiting the obligation of the Borrower under Section 7.03 to
obtain the consent of the Required Lenders to any Disposition not otherwise
permitted hereunder, the Borrower agrees (i) two (2) Business Days prior to the
occurrence of any Disposition other than an Excluded Disposition, to deliver to
the Agent (in sufficient copies for each Lender) a statement, certified by the
chief executive officer or chief financial officer of the Borrower and in
reasonable detail, of the estimated amount of the Net Cash Proceeds of such
Disposition and (ii) that in the event such Disposition (other than an Excluded
Disposition) is completed, the Commitments shall be automatically reduced as
follows:
(A) on the date of such Disposition, in an aggregate
amount equal to 100% of the Net Cash Proceeds of such Disposition
received by the Borrower or any of the Subsidiaries on the date of such
Disposition; and
(B) thereafter, quarterly, on the date of the delivery
to the Agent pursuant to Section 6.05 hereof of the financial statements
for each fiscal quarter or (if earlier) the date which is forty-five (45)
days after the end of such fiscal quarter, to the extent the Borrower or
any Subsidiary shall receive Net Cash Proceeds during such fiscal quarter
under deferred payment arrangements or investments entered into or
received in connection with any Disposition, an amount equal to 100% of
the aggregate amount of such Net Cash Proceeds, provided that if, prior
to the date upon which the Borrower would otherwise be required to make a
prepayment under this paragraph (B) with respect to any fiscal quarter,
all such Net Cash Proceeds received in cash shall aggregate an amount
that will require a prepayment of $250,000 or more under this paragraph
(B) with respect to such fiscal quarter, then the Borrower shall
immediately make a prepayment under this paragraph (B) in an amount equal
to such required prepayment.
In connection with each such reduction of the Commitments, the Borrower shall
prepay the Notes accordingly, as provided in Section 1.06(g). Notwithstanding
the foregoing, provided that no Default exists as of the date of any such
Disposition, no reduction of the Commitments or prepayment of the Notes shall be
required under this Section 1.06(e) with respect to the first $25,000,000 in Net
Cash Proceeds from any such Disposition, or all Dispositions in the aggregate,
consummated after the date hereof in the event that the Borrower advises the
Agent at the time the Net Cash Proceeds from such Disposition (or the last in
any such series of Dispositions) are received that it intends to reinvest such
Net Cash Proceeds in replacement assets pursuant to one or more Permitted
Acquisitions, so long as:
(1) such Net Cash Proceeds are (x) held by the Agent in
the Collateral Account pending such reinvestment, in which event the
Agent need not release such Net Cash Proceeds except upon presentation of
evidence satisfactory to it that such Net Cash Proceeds are to be so
reinvested in compliance with the provisions of this Agreement, (y)
applied by the Borrower to the prepayment of the Notes without permanent
reduction of the Commitments in such amount (in which event the Borrower
agrees to advise the Agent in writing at the time of such prepayment of
Notes that such prepayment is being made from the proceeds of a
Disposition) or (z) held and applied in any combination of clauses (x)
and (y) above; and
(2) the Net Cash Proceeds from any such Disposition are
in fact so reinvested prior to the earlier to occur of (x) 180 days
following the date of such Disposition, unless one or more definitive
agreements with respect to such Permitted Acquisition(s) utilizing Net
Cash Proceeds shall have been entered into within such period, or (y) in
such event, 270 days following such Disposition, it being understood
that, in the event Net Cash Proceeds from more than one Disposition are
paid into the Collateral Account or applied to the prepayment of the
Notes as provided in subparagraph (1) above, such Net Cash Proceeds shall
be deemed to be released in the same order in which such Dispositions
occurred.
Accordingly, any such Net Available Proceeds so held for more than the 180 or
270 day period, as applicable, referred to in subparagraph (2) above shall be
forthwith applied to the prepayment of the Notes and the reduction of the
Commitments (by an amount equal to the portion of such prepayments applied to
the Notes) as provided above. Nothing in this Section 1.06 shall be deemed to
obligate the Agent to release any of such proceeds from the Collateral Account
to the Borrower or any Subsidiary for purposes of reinvestment as aforesaid
during the existence of any Default.
(f) Application of Reductions of the Commitments. Upon the occurrence of
any of the events described in the above paragraphs of this Section 1.06, the
amount of the proposed or required reduction of the Commitments, if any, shall
be applied to the reduction of the Lenders' respective Commitments on a pro rata
basis, as provided in Section 1.14. Each such reduction of the aggregate
Commitments shall be applied as follows:
(i) in the case of reductions made out of Excess Cash Flow under
Section 1.06(c), to subsequent scheduled automatic reductions of the
Commitments under Section 1.01(e) in the inverse order in which they
appear; and
(ii) in the case of all other reductions, to reduce the dollar
levels of each of the Commitments shown in the Table of scheduled
automatic reductions under Section 1.01(e) for reduction dates occurring
after the date of the applicable reduction ratably in accordance with the
dollar levels shown in such Table.
(g) Mandatory Prepayments; Applications of Prepayments.
(i) Simultaneously with the termination of the Commitments or
any mandatory automatic reduction of the Commitments under Section
1.01(e) or Section 1.06(c) or (e), the Borrower (A) shall pay to the
Agent, for the ratable account of each Lender, any then accrued unpaid
Commitment Fee on the reduced portion of the Commitments, (B) shall
repay such amount of the aggregate principal amount of the Notes as
shall cause the Aggregate Exposure to be less than or equal to the
aggregate Commitments, after giving effect to such termination or
reduction and (C) shall pay any indemnification payments due in
accordance with Section 1.11 in respect of LIBOR Loans so prepaid.
(ii) If and to the extent that the repayment in full of all
outstanding Loans is insufficient to cause the Aggregate Exposure to be
less than or equal to the aggregate Commitments, the Borrower shall,
without notice or demand, immediately make payment to the Agent, for
deposit in the Collateral Account, as cover for the Letter of Credit
Exposure, as described in Section 1.02(f).
(iii) All voluntary and mandatory prepayments of the Notes
under Sections 1.06(a), (c), (d) and (e) and Section 1.06(g)(i) above
(A) shall be made without set-off, deduction or counterclaim, and (B)
unless otherwise specified in this Section 1.06, shall be applied
first, to overdue interest, fees and expenses hereunder, second, to pay
principal of the Notes, and third, to the extent of any excess
remaining after application as provided above, to pay any outstanding
Reimbursement Obligations and, thereafter, to cash collateralize the
Letter of Credit Exposure as provided in Section 1.02(f), provided, in
each case, that (A) payments of principal of the Notes shall be applied
to the Lenders' respective Notes pro rata as provided in Section 1.14,
unless otherwise agreed to by the Lenders, and (B) applications of
prepayments to principal shall be made first to Base Rate Loans and
then to LIBOR Loans.
Section 1.07. Commitment Fee.
(a) The Borrower shall pay to the Agent, for the ratable account of each
Lender, a non-refundable fee (the "Commitment Fee") on the aggregate daily
unutilized portion of the Commitments from the Closing Date to and including the
earlier of the termination of the Commitments or the Expiration Date, at the
Commitment Fee Rate (computed on the basis of the actual number of days elapsed
over a 365 -366-day year), payable quarterly in arrears on each Quarterly Date,
commencing January 30, 1998, without setoff, deduction or counterclaim, with a
final payment at the maturity of the Notes, whether by payment, prepayment,
acceleration or otherwise.
(b) The Commitment Fee Rate during the period commencing on the date
hereof and ending on February 14, 1998 shall be .50%. The Commitment Fee Rate
during the Pricing Period commencing on February 15, 1998 and ending on May 14,
1998 and during each Pricing Period thereafter shall be determined based upon
the Pricing Ratio, as indicated in the following Table:
------------------------------------------------------------------
Pricing Ratio Commitment Fee Rate
------------------------------------------------------------------
Greater than 4.50:1.00 .500%
------------------------------------------------------------------
Less than or equal to 4.50:1.00 .375%
------------------------------------------------------------------
Section l.08. Requirements of Law.
(a) In the event that any Regulatory Change shall:
(i) change the basis of taxation of any amounts payable to any
Lender under this Agreement or any Notes in respect of any Loans,
including without limitation LIBOR Loans made by it or any Letters of
Credit issued or participated in by it (other than taxes imposed on the
overall net income of such Lender in its jurisdiction of organization
or in the jurisdiction where its lending office is located);
(ii) impose or modify any reserve, compulsory loan assessment,
special deposit or similar requirement relating to any extensions of
credit or other assets of, or any deposits with or other liabilities
of, any office of such Lender (including any of such Loans or any
deposits referred to in the definition of "LIBOR Base Rate" in Article
XI); or
(iii) impose any other conditions affecting this Agreement in
respect of Loans, including without limitation LIBOR Loans and Letters
of Credit (or any of such extensions of credit, assets, deposits or
liabilities);
and the result of any of the foregoing shall be to increase such Lender's costs
of making or maintaining any Loans, including without limitation LIBOR Loans, or
any Commitment or of issuing or maintaining (or participating in) any Letters of
Credit, or to reduce any amount receivable by such Lender hereunder in respect
of any of its LIBOR Loans or any Commitment, in each case only to the extent
that such additional amounts are not included in the LIBOR Base Rate or Base
Rate applicable to such Loans or the Letter of Credit Fee applicable to such
Letters of Credit, then the Borrower shall pay on demand to such Lender, through
the Agent, and from time to time as specified by such Lender, such additional
amounts as such Lender shall reasonably determine are sufficient to compensate
such Lender for such increased cost or reduced amount receivable.
(b) If at any time after the date of this Agreement any Lender shall
have determined that the applicability of any law, rule, regulation or guideline
adopted pursuant to or arising out of the July 1988 report of the Basle
Committee on Lending Regulations and Supervisory Practices entitled
"International Convergence of Capital Measurement and Capital Standards", or the
adoption or implementation of any Regulatory Change regarding capital adequacy,
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 (whether or not having the
force of law), has or will have the effect of reducing the rate of return on
such Lender's capital or on the capital of such Lender's holding company, if
any, as a consequence of the existence of its obligations hereunder (whether
with respect to the Commitments, the Loans, any Letter of Credit or any other
Obligation) to a level below that which such Lender or its holding company could
have achieved but for such adoption, change or compliance (taking into
consideration such Lender's policies with respect to capital adequacy) by an
amount reasonably deemed by such Lender to be material, then from time to time
following written notice by such Lender to the Borrower as provided in paragraph
(c) of this Section, within fifteen (15) days after demand by such Lender, the
Borrower shall pay to such Lender, through the Agent, such additional amount or
amounts as such Lender shall reasonably determine will compensate such Lender or
such corporation, as the case may be, for such reduction, provided that to the
extent that any or all of the Borrower's liability under this Section arises
following the date of the adoption of any such Regulatory Change (the "Effective
Date"), such compensation shall be payable only with respect to that portion of
such liability arising after notice of such Regulatory Change is given by such
Lender to the Borrower (unless such notice is given within sixty (60) days after
the Effective Date, in which case such compensation shall be payable in respect
of all periods before and after the Effective Date).
(c) If any Lender becomes entitled to claim any additional amounts
pursuant to this Section, it shall promptly notify the Borrower of the event by
reason of which it has become so entitled. A certificate setting forth in
reasonable detail the computation of any additional amounts payable pursuant to
this Section submitted by such Lender to the Borrower shall be delivered to the
Borrower and the other Lenders promptly after the initial incurrence of such
additional amounts and shall be conclusive in the absence of manifest error. The
covenants contained in this Section shall survive for six months following the
termination of this Agreement and the payment of the outstanding Notes. No
failure on the part of any Lender to demand compensation under paragraph (a) or
(b) above on any one occasion shall constitute a waiver of its rights to demand
compensation on any other occasion. The protection of this Section shall be
available to each Lender regardless of any possible contention of the invalidity
or inapplicability of any law, regulation or other condition which shall give
rise to any demand by such Lender for compensation thereunder.
Section 1.09. Limitations on LIBOR Loans; Illegality.
(a) Anything herein to the contrary notwithstanding, if, on or prior to
the determination of an interest rate for any LIBOR Loans for any applicable
Interest Period, the Agent shall determine (which determination shall be
conclusive absent manifest error) that:
(i) by reason of any event affecting United States money
markets or the London interbank market, quotations of interest rates
for the relevant deposits are not being provided in the relevant
amounts or for the relevant maturities for purposes of determining the
rate of interest for such Loans under this Agreement; or
(ii) the rates of interest referred to in the definition of
"LIBOR Base Rate" in Article XI, on the basis of which the rate of
interest on any LIBOR Loans for such period is determined, do not
accurately reflect the cost to the Lenders of making or maintaining
such LIBOR Loans for such period; then the Agent shall give the
Borrower prompt notice thereof (and shall thereafter give the Borrower
prompt notice of the cessation, if any, of such condition), and so long
as such condition remains in effect, the Lenders shall be under no
obligation to make LIBOR Loans or to convert Base Rate Loans into LIBOR
Loans and the Borrower shall, on the last day(s) of the then current
Interest Period(s) for any outstanding LIBOR Loans, either prepay such
LIBOR Loans in accordance with Sections 1.01 and 1.06 or convert such
Loans into Base Rate Loans in accordance with Section 1.04.
(b) Notwithstanding any other provision herein, if for any reason a
Lender shall be unable to make or maintain LIBOR Loans as contemplated by this
Agreement, such Lender shall provide prompt written notice to the Borrower and
(i) such Lender's commitment hereunder to make LIBOR Loans, continue LIBOR Loans
as such and convert Base Rate Loans to LIBOR Loans shall thereupon terminate and
(ii) such Lender's Loans then outstanding as LIBOR Loans, if any, shall be
converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a LIBOR Loan occurs on a
day which is not the last day of the then current Interest Period with respect
thereto, and if the reason for such Lender's inability to make or maintain LIBOR
Loans as contemplated by this Agreement is a Regulatory Change, then the
Borrower shall pay to such Lender such amounts, if any, as may be required
pursuant to Section 1.11.
Section 1.10. Taxes.
(a) All payments made by the Borrower under this Agreement and the
Notes shall be made free and clear of, and without deduction or withholding for
or on account of, any present or future income, stamp or other taxes, levies,
imposts, duties, charges, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any Governmental Authority
(all such taxes, levies, imposts, duties, charges, fees, deductions and
withholdings being hereinafter called "Taxes"); provided, however, that the term
"Taxes" shall not include net income taxes, franchise taxes (imposed in lieu of
net income taxes) and general intangibles taxes (such as those imposed by the
State of Florida) imposed on the Agent or any Lender, as the case may be, as a
result of a present or former connection or nexus between the jurisdiction of
the government or taxing authority imposing such tax (or any political
subdivision or taxing authority thereof or therein) and the Agent or such Lender
other than that arising solely from the Agent or such Lender having executed,
delivered or performed its obligations or received a payment under, or enforced,
this Agreement, the Notes or any of the Security Documents. If any Taxes are
required to be withheld from any amounts payable to the Agent or any Lender
hereunder or under the Notes or the Letter of Credit Documents, the amounts so
payable to the Agent or such Lender shall be increased to the extent necessary
to yield to the Agent or such Lender (after payment of all Taxes) interest or
any such other amounts payable hereunder at the rates or in the amounts
specified in this Agreement and the Notes or in the Letter of Credit Documents,
as the case may be. Whenever any Taxes are payable by the Borrower in respect of
this Agreement or the Notes or the Letter of Credit Documents, as promptly as
possible thereafter the Borrower shall send to the Agent for its own account or
for the account of such Lender, as the case may be, a certified copy of an
original official receipt received by the Borrower showing payment thereof. If
the Borrower fails to pay any Taxes when due to the appropriate taxing authority
or fails to remit to the Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Agent and the Lenders for
any incremental taxes, interest or penalties that may become payable by the
Agent or any Lender as a result of any such failure. If, after any payment of
Taxes by the Borrower under this Section, any part of any Tax paid by the Agent
or any Lender is subsequently recovered by the Agent or such Lender, the Agent
or such Lender shall reimburse the Borrower to the extent of the amount so
recovered. A certificate of an officer of the Agent or such Lender setting forth
the amount of such recovery and the basis therefor shall, in the absence of
manifest error, be conclusive. The Agent and the Lenders shall use reasonable
efforts to notify the Borrower of their attempts, if any, to obtain abatements
of any such Taxes and the receipt by the Agent or the Lenders of any funds in
connection therewith. The agreements in this subsection shall survive the
termination of this Agreement and the payment of the Notes and all other amounts
payable hereunder.
(b) Each Lender, if any, that is not incorporated under the laws of the
United States or a state thereof agrees that prior to the date any payment is
required to be made to it hereunder it will deliver to the Borrower and the
Agent (i) two duly completed copies of United States Internal Revenue Service
Form 1001 or 4224 or successor applicable form, as the case may be, and (ii) an
Internal Revenue Service Form W-8 or W-9 or successor applicable form. Each such
Lender also agrees to deliver to the Borrower and the Agent two further copies
of the said Form 1001 or 4224 and Form W-8 or W-9, or successor applicable forms
or other manner of certification, as the case may be, on or before the date that
any such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form previously delivered by it to the
Borrower, and such extensions or renewals thereof as may reasonably be requested
by the Borrower or the Agent, unless in any such case an event (including,
without limitation, any change in treaty, law or regulation) has occurred prior
to the date on which any such delivery would otherwise be required which renders
all such forms inapplicable or which would prevent such Lender from duly
completing and delivering any such form with respect to it and such Lender so
advises the Borrower and the Agent. Such Lender shall certify (x) in the case of
a Form 1001 or 4224, that it is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal income
taxes and (y) in the case of a Form W-8 or W-9, that it is entitled to an
exemption from United States backup withholding tax.
Section 1.11. Indemnification. The Borrower shall pay to the Agent, for
the account of each Lender, upon the request of such Lender delivered to the
Agent and thereafter delivered by the Agent to the Borrower, such amount or
amounts as shall compensate such Lender for any loss, cost or expense incurred
by such Lender (as reasonably determined by such Lender) as a result of:
(a) any payment or prepayment or conversion of any LIBOR Loan held by
such Lender on a date other than the last day of the Interest Period for such
LIBOR Loan (including without limitation any such payment, prepayment or
conversion required under Section 1.04 or 1.06); or
(b) any failure by the Borrower to borrow, convert into or continue a
LIBOR Loan on the date for such borrowing specified in the relevant Loan Request
or Interest Rate Option Notice under Section 1.04 or otherwise.
Such indemnification may include an amount equal to the excess, if any, of (i)
the amount of interest which would have accrued on the amount so prepaid, or not
so borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loans provided
for herein (excluding, however, the Applicable Margin included therein, if any)
over (ii) the amount of interest (as reasonably determined by such Lender) which
would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank eurodollar
market. This covenant shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder. The determination
by each such Lender of the amount of any such loss or expense, when set forth in
a written notice delivered to the Agent (and thereafter delivered by the Agent
to the Borrower), containing such Lender's calculation thereof in reasonable
detail, shall be conclusive in the absence of manifest error.
Section 1.12. Payments Under the Notes. All payments and prepayments
made by the Borrower of principal of, and interest on, the Notes and other sums
and charges payable under this Agreement, including without limitation the
Commitment Fee and any payments under Sections 1.08, 1.10 and 1.11, shall be
made in immediately available funds to the Agent (as specified in Section 14.03)
for the accounts of the Lenders as provided in Section 1.14 and otherwise herein
and, with respect to fees payable to the Agent and its affiliates, the Fee
Letter, not later than 2:00 P.M. (New York Time), on the date on which such
payment shall become due. The failure by the Borrower to make any such payment
by such hour shall not constitute a Default hereunder so long as payment is
received later that day, provided that any such payment made after 2:00 P.M.
(New York Time), on such due date shall be deemed to have been made on the next
Business Day for the purpose of calculating interest on amounts outstanding on
the Notes. The Borrower shall, at the time of making each payment under this
Agreement or the Notes, specify to the Agent the Notes or amounts payable by the
Borrower hereunder to which such payment is to be applied (and in the event that
it fails to so specify, or if an Event of Default has occurred and is
continuing, the Agent may distribute such payments in such manner as the
Required Lenders may direct or, absent such direction, as it determines to be
appropriate, subject to the provisions of Section 1.14). Except as otherwise
provided in the definition of "Interest Period" with respect to LIBOR Loans, if
any payment hereunder or under the Notes shall be due and payable on a day which
is not a Business Day, such payment shall be deemed due on the next following
Business Day and interest shall be payable at the applicable rate specified
herein through such extension period. The Agent, or any Lender for whose account
any such payment is made, may (but shall not be obligated to) debit the amount
of any such payment which is not made by such time to any deposit account of the
Borrower with the Agent or such Lender, as the case may be. Each payment
received by the Agent under this Agreement or any Note for the account of a
Lender shall be paid promptly to such Lender, in immediately available funds,
for the account of such Lender for the Note in respect to which such payment is
made.
Section 1.13. Set-Off, Etc. The Borrower agrees that, in addition to
(and without limitation of) any right of set-off, bankers' lien or counterclaim
a Lender may otherwise have and in addition to the debit right afforded in
Section 1.12, each Lender (and each subsequent holder of any Note) shall be
entitled, at its option, to offset balances held by it, or by any of its
respective branches or agencies, for the account of the Borrower at any of its
or their offices, in Dollars or in any other currency, against any principal of
or interest on the Notes held by such Lender (or subsequent noteholder) or other
fees or charges owed to such Lender (or subsequent noteholder) hereunder which
are not paid when due (regardless of whether such balances are then due to the
Borrower and regardless of whether the Lenders are otherwise fully secured), in
which case it shall promptly notify the Borrower and the Agent thereof, provided
that such Lender's (or subsequent noteholder's) failure to give such notice
shall not affect the validity thereof and (as security for any Indebtedness
hereunder) the Borrower hereby grants to the Agent and the Lenders a continuing
security interest in any and all balances, credit, deposits, accounts or moneys
of the Borrower maintained with the Agent and any Lender now or hereafter. If a
Lender (or subsequent noteholder) shall obtain payment of any principal,
interest or other amounts payable under this Agreement through the exercise of
any right of set-off, banker's lien or counterclaim or otherwise or pursuant to
the debit right provided in Section 1.12, it shall promptly purchase from the
other Lenders participations in (or, if and to the extent specified by such
Lender, direct interests in) the Note(s) held by the other Lenders in such
amounts, and make such other adjustments from time to time as shall be
equitable, to the end that all the Lenders shall share the benefit of such
payment (net of any expenses which may be incurred by such Lender in obtaining
or preserving such benefit) pro rata based upon with the unpaid principal
amounts of and interest on the Note(s) held by each of them. To such end, the
Lenders shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded or must otherwise
be restored. The Borrower agrees that any Lender or any other Person which
purchases a participation (or direct interest) in the Note(s) held by any or all
of the Lenders (each being hereinafter referred to as a "Participant") may
exercise all rights of set-off, bankers' lien, counterclaim or similar rights
with respect to such participation as fully as if such Participant were a direct
holder of Notes in the amount of such participation, provided that the Borrower
was notified of such purchase. Nothing contained herein shall be deemed to
require any Participant to exercise any such right or shall affect the right of
any Participant to exercise, and retain the benefits of exercising, any such
right with respect to any indebtedness or obligation of the Borrower, other than
the Borrower's indebtedness and obligations under this Agreement.
Section 1.14. Pro Rata Treatment; Sharing.
(a) Except to the extent otherwise provided herein and, with respect to
fees payable to the Agent and its affiliates, the Fee Letter, and except as
otherwise agreed by the Lenders: (i) each borrowing from the Lenders under the
Commitments shall be made from the Lenders and each payment of the Commitment
Fee under Section 1.07 shall be made to the Lenders pro rata according to the
amounts of their respective unutilized Commitments; (ii) the principal amount of
LIBOR Loans made by each Lender shall be determined on a pro rata basis in
accordance with its respective Commitment (when making Loans) or the outstanding
principal amount of the Loans owed to such Lender (in the case of conversions to
or continuations of Loans as LIBOR Loans); (iii) each Lender's share of each
Letter of Credit under Section 1.02 and of the Letter of Credit Fee shall be
determined pro rata according to the amounts of the Lenders' respective
Commitments; (iv) each payment and prepayment of principal of the Notes and
repayments of Letter of Credit Disbursements shall be allocated to the Lenders
pro rata in accordance with the unpaid principal amounts of the respective Notes
held by the Lenders; (v) each payment of interest on the Notes shall be
allocated to the Lenders pro rata in accordance with the unpaid principal
amounts of their respective Loans; (vi) each payment of any other sums and
charges payable for the Lenders' account under this Agreement (except for the
Issuance Fee which shall be retained by the Issuing Bank and the fees payable
under the Fee Letter, which are payable solely in accordance therewith) shall be
allocated to the Lenders pro rata in accordance with the respective unpaid
principal amounts of the aggregate Loans made by each of them; (vii) each
payment under Section 1.08, 1.10 or 1.11 shall be made to each Lender in the
amount required to be paid to such Lender to adequately indemnify or compensate
such Lender for losses suffered or costs incurred by such Lender as provided in
such Section; and (viii) notwithstanding the foregoing, after and during the
continuance of a Default, each distribution of cash, property, securities or
other value received by any Lender, directly or indirectly, in respect of the
Borrower's Indebtedness hereunder, whether pursuant to any attachment,
garnishment, execution or other proceedings for the collection thereof or
pursuant to any bankruptcy, reorganization, liquidation or other similar
proceeding or otherwise, after payment of collection and other expenses as
provided herein and in the Security Documents, shall be apportioned among the
Lenders pro rata based upon the respective aggregate unpaid principal amount of
all Loans owed to each of them and their respective shares of the aggregate
Letter of Credit Exposure.
(b) Notwithstanding the foregoing, if any Lender (a "Recovering Party")
shall receive any such distribution referred to in Section 1.14 (a)(viii) above
(a "Recovery") in respect thereof, such Recovering Party shall pay to the Agent
for distribution to the Lenders as set forth herein their respective pro rata
shares of such Recovery, based on the Lenders' pro rata shares of all Loans
outstanding at such time, unless the Recovering Party is legally required to
return any Recovery, in which case each party receiving a portion of such
Recovery shall return to the Recovering Party its pro rata share of the sum
required to be returned without interest. For purposes of this Agreement,
calculations of the amount of the pro rata share of each Lender shall be rounded
to the nearest whole dollar.
(c) The Borrower acknowledges and agrees that, if any Recovering Party
shall be obligated to pay to the other Lenders a portion of any Recovery
pursuant to Section 1.14(b) and shall make such recovery payment, the Borrower
shall be deemed to have satisfied its obligations in respect of Indebtedness
held by such Recovering Party only to the extent of the Recovery actually
retained by such Recovering Party after giving effect to the pro rata payments
by such Recovering Party to the other Lenders. The obligations of the Borrower
in respect of Indebtedness held by each other Lender shall be deemed to have
been satisfied to the extent of the amount of the Recovery distributed to each
such other Lender by the Recovering Party.
Section 1.15. Non-Receipt of Funds by the Agent. Unless the Agent shall
have been notified in writing by a Lender or the Borrower prior to the date on
which such Lender or the Borrower is scheduled to make payment to the Agent of
(in the case of a Lender) the proceeds of a Loan to be made by it hereunder or
(in the case of the Borrower) a payment to the Agent for the account of any or
all of the Lenders hereunder (such payment being herein referred to as a
"Required Payment"), which notice shall be effective upon actual receipt, that
it does not intend to make such Required Payment to the Agent, the Agent may
(but shall not be required to) assume that the Required Payment has been made
and may (but shall not be required to), in reliance upon such assumption, make
the amount thereof available to the intended recipient(s) on such date and, if
such Lender or the Borrower (as the case may be) has not in fact made the
Required Payment to the Agent, the recipient(s) of such payment shall, on
demand, or with respect to payment received by the Borrower, within three (3)
Business Days after such receipt repay to the Agent for the Agent's own account
the amount so made available together with interest thereon in respect of each
day during the period commencing on the date such amount was so made available
by the Agent until the date the Agent recovers such amount at a rate per annum
equal to (a) the Federal Funds Rate for such day, with respect to interest paid
by such Lender, or (b) the applicable rate provided under Section 1.03, with
respect to interest paid by the Borrower.
Section 1.16. Replacement of Notes. Upon receipt of evidence reasonably
satisfactory to the Borrower of the loss, theft, destruction or mutilation of
any Note and (a) in the case of any such loss, theft or destruction, upon
delivery of an indemnity agreement reasonably satisfactory to the Borrower
(provided, however, that if the holder of such Note is the original holder of
such Note or a financial institution with net capital, capital surplus and
undivided profits in excess of $50,000,000 its own agreement of indemnity shall
be deemed to be satisfactory), or (b) in the case of any such mutilation, upon
the surrender of such Note for cancellation, the Borrower will execute and
deliver, in lieu of such lost, stolen, destroyed, or mutilated Note, a new Note
of like tenor.
II. SECURITY; SUBORDINATION; USE OF PROCEEDS.
Section 2.01. Security for the Obligations; Subordination; Etc.
(a) Collateral. Except as specified in Schedule 2.01(a) hereto, the
Borrower's obligations hereunder, under the Notes and in respect of any Rate
Hedging Obligations entered into with any Hedging Lenders shall be secured at
all times by:
(i) the unconditional guaranty of each of the Subsidiaries and
the Parent (provided that the Parent's guaranty shall be non-recourse,
except to the extent of the Collateral required to be provided by the
Parent under subparagraph (v) below);
(ii) a first priority perfected security interest in and lien
upon all presently owned and hereafter acquired tangible and intangible
personal property and fixtures of each of the Borrower and the
Subsidiaries, including without limitation the PCT-CONN Note Documents,
the MCT Note Documents and any other intercompany notes, obligations or
agreements, subject only to (A) any prior Permitted Liens and (B) the
exclusion of any FCC License or CATV Franchise, except to the extent (if
any) that such a security interest is permitted or not prohibited by the
Communications Act of 1934, as amended, and the rules, regulations and
policies of the FCC or the laws governing such CATV Franchise, as
applicable (but including, to the maximum extent permitted by law, all
rights incident or appurtenant to any such FCC License or CATV Franchise
including without limitation the right to receive all proceeds derived or
arising from or in connection with the sale, assignment or transfer
thereof);
(iii) first mortgages on all presently owned and hereafter
acquired real estate owned by each of the Borrower and the Subsidiaries,
subject only to any prior Permitted Liens, together with mortgagee's
title insurance policies acceptable to the Lenders;
(iv) first priority perfected collateral assignments of or
leasehold mortgages on all real estate leases in which any of the
Borrower and the Subsidiaries now has or may in the future have an
interest, subject only to any prior Permitted Liens, and such third party
consents, lien waivers, non-disturbance agreements and estoppel
certificates as the Agent shall reasonably require, together with
mortgagee's title insurance policies acceptable to the Agent;
(v) a first priority perfected collateral assignment and/or
pledge of all of the issued and outstanding ownership interests of each
of the Borrower and the Subsidiaries and all warrants, options and other
rights to purchase such ownership interests;
(vi) without limiting the generality of Section 2.01(a)(i), a
first priority perfected assignment of such of the related Acquisition
Documents as the Agent shall reasonably require, and, on a best efforts
basis, the written consent(s) thereto of the related Seller(s) and its
or their Affiliates, as necessary; and
(vii) without limiting the generality of Section 2.01(a)(i), first
priority perfected collateral assignments of (i) all NRTC Member
Agreements and any other satellite broadcasting distribution
agreements, (ii) all CATV Franchises and (iii) all such management
agreements, programming agreements, network affiliation agreements and
agreements as the Agent shall reasonably deem necessary to protect the
interests of the Lenders, together with such third party consents, lien
waivers and estoppel certificates as the Agent shall reasonably
require.
(b) Subordination.
(i) All existing and hereafter arising indebtedness of the
Borrower and the Subsidiaries, if any, to Sellers which constitutes
Permitted Seller Subordinated Debt shall be subordinated to any
Indebtedness of the Companies to the Agent or the Lenders pursuant to
subordination agreements substantially in the form of Schedule 2.01(b)
with any material changes thereto to be satisfactory to the Required
Lenders, in their sole discretion (each, a "Seller Subordination
Agreement", and collectively, the "Seller Subordination Agreements").
Notwithstanding the foregoing, the consent of the Agent (in its sole
discretion) shall be sufficient (without further approval by the Lenders)
to approve revisions to such form necessary (i) to permit the issuance to
any subordinated Seller of Junior Reorganization Securities and (ii) to
waive the requirement that the promissory notes evidencing such Seller's
Permitted Seller Subordinated Debt be pledged and delivered to the Agent
as security.
(ii) Without limiting the generality of Section 7.01, all
existing and hereafter arising indebtedness of the Borrower and the
Subsidiaries to the Parent and its other subsidiaries, including without
limitation the Manager, excluding the Parent Loans (provided the same are
repaid in full as required under Section 3.01(e)), shall be subordinated
to any Indebtedness of the Companies to the Lenders pursuant to
subordination agreements satisfactory in form and substance to the
Required Lenders (each, an "Affiliate Subordination Agreement", and
collectively, the "Affiliate Subordination Agreements").
(c) Security Documents. All agreements and instruments described or
contemplated in this Section 2.01, together with any and all other agreements
and instruments heretofore or hereafter securing the Notes, the Rate Hedging
Obligations and the other Obligations or otherwise executed in connection with
this Agreement, are sometimes hereinafter referred to collectively as the
"Security Documents" and each individually as a "Security Document". The
Borrower agrees to execute and deliver any and all Security Documents, in form
and substance satisfactory to the Agent, and take such action as the Lenders may
reasonably request from time to time in order to cause the Agent and the Lenders
to be secured at all times as described in this Section.
Section 2.02. Use of Proceeds. The proceeds of the Loans shall be used
(a) for the purposes specified in Section 5.05(b)(vii), (b) to repay the Parent
Loans, (c) to support the issuance of Letters of Credit, (d) for working
capital, Capital Expenditures and general corporate purposes and (e) subject to
availability, to finance Permitted Acquisitions, including Transaction Costs.
Attached as Schedule 2.02 hereto is the Borrower's current projection, as of the
date hereof, of its sources and uses of proceeds as of the Closing Date.
III. CONDITIONS OF MAKING THE LOANS.
Section 3.01. Conditions to the First Loans and the First Issuance of the
Letters of Credit. The obligations of the Lenders to enter into this Agreement,
to make Loans to the Borrower and to issue Letters of Credit on the Closing Date
are subject to the following conditions:
(a) Representations and Warranties. The representations and warranties of
the Borrower and its Affiliates set forth in this Agreement and in the other
Loan Documents shall be true and correct in all material respects on and as of
the date hereof and on the Closing Date and the Borrower shall have performed
all obligations which were to have been performed by it hereunder prior to the
Closing Date.
(b) Loan Documents and Organizational Documents. The Borrower shall have
executed and/or delivered to the Agent (or shall have caused to be executed and
delivered to the Agent by the appropriate Persons), the following:
(i) The Notes;
(ii) All of the Security Documents, including without limitation
all Uniform Commercial Code Financing Statements and Termination
Statements and all mortgages, deeds of trusts and amendments thereto,
lessor consents and waivers and related title insurance policies, if any,
required by the Agent or its counsel, in connection with the Borrower's
compliance with the provisions of Section 2.01;
(iii) Certified copies (attached as required in Part A of the
form attached as Schedule 3.01) of the resolutions of the Board of
Directors of each Company, or of each Company's stockholders, partners,
managers, officers and/or corporate general partner, as the case may be,
authorizing the execution and delivery of the Loan Documents to which it
is a party;
(iv) A copy of (A) the Certificate or Articles of Incorporation
of each corporate Company and each corporate general partner of each
partnership Company, with any amendments thereto, certified by the
appropriate Secretary of State and by the Secretary or an Assistant
Secretary of such Company or general partner, and (B) the Certificate of
Limited Partnership of each Company which is a limited partnership,
certified by the appropriate Secretary of State and the Secretary of the
corporate general partner of such Company (in each case, attached as
required in Part A of the form attached as Schedule 3.01);
(v) A copy of the By-Laws of each corporate Company, with any
amendments thereto, certified by such Company's Secretary (attached as
required in Part A of the form attached as Schedule 3.01);
(vi) A copy of the partnership agreement of each Company which
is a partnership, with any amendments thereto, certified by the Secretary
of such Company's corporate general partner (attached as required in Part
A of the form attached as Schedule 3.01);
(vii) For each Company, certificates of legal existence and good
standing (both as to corporate law, if applicable, and, if available, tax
matters) issued as of a reasonably recent date by such Company's state of
organization or formation and any other state in which such Company is
authorized or qualified to transact business;
(viii) No later than three (3) Business Days prior to the
Closing Date, to the extent requested by the Agent, true and correct
copies of all CATV Franchises, FCC Licenses, NRTC Member Agreements and
other DBS Agreements, all other material governmental licenses,
franchises and permits, all material CATV Franchise Consents, FCC
Consents, NRTC Consents and other third party consents and all other
material leases, contracts, agreements, instruments and other documents
specified in Schedules 4.04, 4.06, 4.07, 4.08, 4.12, 4.13, 4.20 and 4.23;
(ix) Such Uniform Commercial Code, Federal tax lien and judgment
searches with respect to the Companies, any Seller being paid with the
proceeds of any Loans (and the assets to be acquired under the related
Acquisition Agreement) and any other third parties as the Agent shall
require, the results thereof to be satisfactory to the Agent;
(x) The Opening Balance Sheet;
(xi) The Environmental Site Assessments and similar diligence
referenced to in Section 4.24 and Schedule 4.24;
(xii) Certificates of insurance evidencing the insurance
coverage and policy provisions required in this Agreement; and
(xiii) Such other supporting documents and certificates as the
Agent or the Lenders may reasonably request from time to time.
(c) The DBS Transfer. The Agent shall have received satisfactory evidence
of the consummation of the DBS Transfer, including without limitation true and
complete copies of all relevant documents.
(d) The Offering. The Agent shall have received satisfactory evidence of
the consummation of the Offering substantially in accordance with the Offering
Memorandum and the PCC Indenture and the Parent's cash capital contribution to
the Borrower of $85,000,000 from the proceeds thereof to the Borrower, including
without limitation true and complete copies of the PCC Indenture, the Senior
Notes and all other documents executed in connection therewith.
(e) Repayment of Parent Loans. On or before the date of the first Loans
hereunder, the Borrower shall repay the Parent Loans in full.
(f) Officer's Certificates as to Compliance, Documents, Etc. The Borrower
shall have provided to the Agent a compliance certificate substantially in the
form of Part B of the form attached as Schedule 3.01 hereto or such other form
as shall be satisfactory to the Agent, duly executed on behalf of the Borrower
by its chief executive officer or chief financial officer, certifying as to
satisfaction by the Borrower of the conditions to lending set forth in this
Section 3.01 and in Sections 3.02 and 3.03, if and as applicable, and,
specifically, as to certain matters specified therein.
(g) No Material Adverse Change. As of the date hereof and as of the
Closing Date, and since December 31, 1996, no event or circumstance shall have
occurred which could have a Material Adverse Effect.
(h) Company Counsel Opinions. The Agent shall have received:
(i) the favorable written opinion of Drinker Xxxxxx & Xxxxx LLP
(including opinions with respect to matters of local Pennsylvania law),
counsel to the Companies, dated as of the date hereof, addressed to the
Agent and the Lenders and reasonably satisfactory to the Agent in scope
and substance;
(ii) the favorable written opinions of special communications
counsel to the Companies with respect to both cable and broadcast
matters, each dated as of the date hereof, addressed to the Agent and
the Lenders and reasonably satisfactory to the Lenders in scope and
substance; and
(iii) the favorable written opinions of special local counsel to
the Companies in the States of Connecticut, Florida, Georgia, Maine and
Mississippi and the Commonwealth of Puerto Rico dated as of the date
hereof, addressed to the Agent and the Lenders and reasonably
satisfactory to the Lenders in scope and substance.
(i) Legal and Other Fees. As of the date hereof and as of the Closing
Date, all fees owed to the Agent, the Lenders and their respective Affiliates
under the Fee Letter and all legal fees and expenses of counsel to the Agent
incurred through such date shall have been paid in full.
(j) Review by Agent's Counsel. All legal matters incident to the
transactions hereby contemplated shall be reasonably satisfactory to counsel for
the Agent.
Section 3.02. Acquisition Loans. Without in any way limiting the
discretion of the Required Lenders to approve or withhold approval (if required
hereunder) of any Acquisition or to impose additional conditions upon their
consent (if required hereunder) to such Acquisitions, the obligations of the
Lenders to make any Loans to finance any Permitted Acquisition (collectively,
"Acquisition Loans") are subject to the following conditions:
(a) Revolver Availability. After giving effect to any such Acquisition
Loans, the unutilized portion of the aggregate Adjusted Available Commitments
shall equal or exceed $15,000,000.
(b) Acquisition Closings.
(i) The transactions contemplated by the applicable
Acquisition Agreement shall have been consummated (except for the payment
of that portion of the purchase price thereunder being paid with the
proceeds of Loans) substantially in accordance with the terms thereof
and, in any event, in a manner reasonably satisfactory to the Agent,
including without limitation the valid assumption by the Borrower or such
Subsidiary of all liabilities of the applicable Sellers in respect of the
assets and properties transferred under such Acquisition Agreement, other
than liabilities not subject to assumption under such Acquisition
Agreement which are otherwise addressed in a manner reasonably
satisfactory to the Agent.
(ii) The Agent shall have received evidence of the
issuance and receipt, or execution and delivery, as the case may be, of
(A) all CATV Franchises, FCC Licenses and NRTC Member Agreements, (B) all
CATV Franchise Consents, FCC Consents, NRTC Consents and (C) all other
licenses, permits, approvals and consents, if any, required with respect
to such Acquisition, the proposed Loans and any other related transaction
contemplated by this Agreement and any other consents or filings of or
with applicable Governmental Authorities or other third parties.
(iii) The Borrower shall have obtained from the applicable
Sellers, on a best efforts basis, such Sellers' consents to the
collateral assignment to the Agent of the rights of the Borrower or the
applicable Subsidiary under the Acquisition Agreement and any other agreements
executed thereunder, as required under Section 2.01(a).
(iv) The Agent shall have received copies of the legal
opinions delivered by the
Seller(s) pursuant to the applicable Acquisition Agreement in connection with
the Acquisition, and, on a best efforts basis, a letter from each Person
delivering an opinion (or authorization within the opinion) authorizing reliance
thereon by the Agent and the Lenders.
(v) Any other conditions imposed by the Required Lenders
in giving their consent (if
required hereunder) to such Permitted Acquisition shall have been satisfied.
(c) Due Diligence. The Agent and its counsel shall have completed their
due diligence review with respect to the proposed Permitted Acquisition,
including a review of all material agreements, and shall be reasonably satisfied
with the results of such review.
(d) Officer's Certificates as to Compliance, Documents, Etc. The Borrower
shall have provided to the Agent a compliance certificate, substantially in the
form of Schedule 3.02(d) hereto or such other form as shall be satisfactory to
the Agent, duly executed on behalf of the Borrower by its chief executive
officer or chief financial officer, certifying as to satisfaction by the
Borrower of the conditions to the consummation of such Acquisition as a
Permitted Acquisition under Section 7.04 and the conditions to lending set forth
in this Section 3.02 and in Section 3.03.
(e) Additional Compliance Certificate. If required by the Agent, the
Borrower shall have executed and delivered (or caused to be executed and
delivered by the appropriate Subsidiaries) to the Agent a certificate of
representations, warranties and compliance reasonably satisfactory in form and
substance to the Agent, together with updated versions of Schedules to this
Agreement and to any applicable Security Documents, to the extent appropriate in
connection with such Permitted Acquisition.
(f) Other Deliveries. The Companies shall have executed and/or delivered
to the Agent (or shall have caused to be executed and delivered to the Agent by
the appropriate persons), the following:
(i) With respect to the assets to be acquired pursuant to such
Acquisition, and the applicable Seller(s), all Uniform Commercial Code
Financing Statements and Termination Statements and all security
agreements, pledge agreements, mortgages, deeds of trusts (and amendments
thereto) and related title insurance policies and other Security
Documents necessary and required by the Agent or its counsel in
connection with the Borrower's compliance with the provisions of Section
2.01;
(ii) Certified copies of the resolutions of the Board of
Directors, stockholders, partners, managers, officers or corporate
general partner of each applicable Company authorizing such Permitted
Acquisition, which resolutions shall not be required, unless requested by
the Agent, if the opinion of general counsel required under Section
3.02(g) is provided;
(iii) Such certificates of public officials and copies of
material consents, agreements and other documents and such other
supporting documents and information as the Agent shall reasonably
request;
(iv) If reasonably requested by the Agent, Environmental Site
Assessments, Environmental Questionnaires and other information with
respect to owned and leased real properties being acquired, which shall
be reasonably satisfactory in all respects to the Required Lenders;
(v) Such Uniform Commercial Code, Federal tax lien and judgment
searches as the Agent shall reasonably require, the results thereof to
disclose no liens except liens permitted by this Agreement and liens to
be discharged upon completion of the Permitted Acquisition;
(vi) A consolidated balance sheet for the Companies, giving pro
forma effect to Permitted Acquisitions and the proposed Loans, reflecting
compliance with the provisions of Article V;
(vii) Updated Projections, giving pro forma effect to the
Permitted Acquisition and the proposed Loans;
(viii) If applicable, Subscriber Reports as of the Borrowing
Date for such Loans;
(ix) In connection with an Acquisition involving properties in a
new jurisdiction, or the purchase or formation of a new Subsidiary, or if
required by the Agent, updated certificates of insurance evidencing the
additional insurance coverage and policy provisions required in this
Agreement; and
(ix) Such other supporting documents and certificates as the
Agent or the Lenders may reasonably request. Such additional documents
shall include, in the event a new Subsidiary is formed or acquired, such
organizational and other documents as the Agent shall reasonably request
with respect thereto.
(g) General and Local Counsel Opinions.
(i) In connection with an Acquisition involving the purchase or
formation of a new Subsidiary and/or the execution of additional Security
Documents or any other Loan Document, or otherwise, if reasonably
required by the Agent, the Agent shall have received the favorable
written opinions of (A) Drinker Xxxxxx & Xxxxx LLP and (B) special FCC
counsel to the Companies (in the case of acquisitions of cable and
broadcast television properties), in each case dated the date of such
Loans, addressed to the Agent and the Lenders and substantially in the
forms attached as Schedules 3.02(g)(i) and (ii) (subject to changes
approved by the Agent), respectively.
(ii) Only if reasonably requested in connection with the
recording of any mortgages or similar instruments or any material issues
of state law raised in connection with such Loans or the related
Permitted Acquisition, the Agent shall have received the favorable
opinion of local counsel to the Companies, dated the date of such Loans,
addressed to the Agents and the Lenders and substantially in the form
attached as Schedule 3.02(g)(iii) (subject to changes approved by the
Agent).
(h) Legal Fees. All reasonable legal fees and expenses of counsel to the
Agent incurred through the date of such Loans shall have been paid in full.
(i) Review by Agent's Counsel. All legal matters incident to the
transactions hereby contemplated shall be reasonably satisfactory to counsel for
the Agent.
Section 3.03. All Loans. The obligations of the Lenders to make any Loans
(including Loans made on the Closing Date, if any, and in respect of Permitted
Acquisitions consummated thereafter) and the obligation of the Issuing Bank to
issue any Letters of Credit are, in each case, subject to the following
conditions:
(a) All warranties and representations set forth in this Agreement and
the other Loan Documents shall be true and correct in all material respects as
of the date such Loans are made or such Letter of Credit is issued (except to
the extent they expressly relate to an earlier specified date or are affected by
transactions or events occurring after the Closing Date and permitted or not
prohibited hereunder). Each telephonic or written request for Loans or for a
Letter of Credit shall constitute a representation to such effect as of the date
of such request and as of the date such Loans are made or such Letter of Credit
is issued.
(b) As of the date such Loans are made or such Letter of Credit is
issued, as the case may be, and since the Closing Date, no event or circumstance
shall have occurred which has had or could have a Material Adverse Effect. Each
telephonic or written request for Loans or for a Letter of Credit shall
constitute a representation to such effect as of the date of such request and as
of the date such Loans are made or such Letter of Credit is issued.
(c) After giving effect to such Loans or the issuance of such Letter of
Credit (both as of the proposed date thereof and, on a pro forma basis, the last
day of the most recent month for which financial statements have been delivered
to the Lenders under Section 6.05) and the use of proceeds thereof (whether for
a Permitted Acquisition or otherwise), no Default shall have occurred and be
continuing. Each telephonic or written request for Loans or for a Letter of
Credit shall constitute a representation to such effect as of the date of such
request and as of the date such Loans are made or such Letter of Credit is
issued.
(d) If applicable, the Agent shall have received a properly completed
Loan Request, together with all such financial and other information as the
Agent shall require to substantiate the current and pro forma certifications of
no Default contained therein.
(e) The Agent shall have received such other supporting documents and
certificates as the Agent and the Required Lenders may reasonably request.
Section 3.04. Lender Approvals. For purposes of determining compliance
with the conditions precedent referred to in Sections 3.01, 3.02 and 3.03, on
the date of the first Loans hereunder, each of the Lenders shall be deemed to
have consented to, approved or accepted or be satisfied with each document or
other matter which is the subject of such Lender's consideration under any of
the provisions of such Sections, unless an officer of the Agent responsible for
the transactions contemplated by the Loan Documents shall have received notice
from such Lender prior to the first Loans hereunder specifying its objection
thereto and such Lender shall have failed to make available to the Agent such
Lender's ratable share of the first Loans.
IV. REPRESENTATIONS AND WARRANTIES. The Borrower represents and warrants
to the Agent and the Lenders (which representations and warranties shall give
effect to the consummation of all of the transactions referred to in Section
3.01 and shall survive the delivery of the Notes, the making of the Loans and
the issuance of Letters of Credit) that:
Section 4.01. Financial Statements. The Borrower has heretofore furnished
to the Lenders:
(a) the audited and unaudited balance sheets and related statements of
operations, stockholders' equity and cash flow of the Parent, the Borrower and
its Subsidiaries listed on Schedule 4.01(a) (the "Financial Statements"); and
(b) the September 30, 1997 balance sheet of the Borrower and the
Subsidiaries showing their pro forma financial condition after the consummation
of any and all transactions contemplated to have occurred as of the Closing
Date, as if they occurred on September 30, 1997, attached as Schedule 4.01(b)
(the "Opening Balance Sheet").
The Financial Statements have been prepared in accordance with GAAP.
Since December 31, 1996, except for the Offering, there has been no material
adverse change in the assets, properties, business or condition (financial or
otherwise) of the Parent or any of the Companies and no dividends or
distributions have been declared or paid by the Parent or any of the Companies.
Neither the Parent nor any of the Companies has any contingent obligations,
liabilities for taxes or unusual forward or long-term commitments except as
specified in such Financial Statements and except for the Offering. The Opening
Balance Sheet fairly represents the pro forma financial condition of the
Companies as of its date. All financial projections submitted to the Lenders by
the Borrower (including all projections set forth in the Budget) are believed by
the Borrower to be reasonable in light of all information presently known by the
Borrower. Except as set forth on Schedule 4.01(c), as of the date of this
Agreement, neither the Parent nor any of the other Parent Affiliates has any
Indebtedness. (Notwithstanding the foregoing, the representations set forth
above with respect to the Parent and the other Parent Affiliates are made and,
shall be deemed made, solely as of the date hereof and the Closing Date.)
Section 4.02. Organization, Qualification, Etc. Each of the Companies (a)
is a corporation or limited partnership, duly organized or formed, validly
existing and in good standing under the laws of its state of organization or
formation, all as specified in Schedule 4.02, (b) has the power and authority to
own its properties and to carry on its business as now being conducted and as
presently contemplated, (c) has the power and authority to execute and deliver,
and perform its respective obligations under, this Agreement, the Notes and the
Security Documents and all other Loan Documents contemplated hereby and (d) is
duly qualified to transact business in the jurisdictions specified in such
Schedule 4.02 and in each other jurisdiction where the nature of its activities
requires such qualification. As of the date of this Agreement none of the
Companies has any Subsidiaries, except as described in Schedule 4.23.
Section 4.03. Authorization; Compliance; Etc. The execution and delivery
of, and performance by the Companies of their respective obligations under, this
Agreement, the Notes, the Security Documents, the Acquisition Agreements and the
other agreements and instruments relating thereto (all of the foregoing being
hereinafter referred to collectively as the "Transaction Documents") have been
duly authorized by all requisite corporate and partnership action and will not
violate any provision of law (including without limitation the Communications
Act of 1934, as amended, the Copyright Revisions Act of 1976, as amended, the
Rate Regulation Act, the Rate Regulation Rules and all other rules, regulations,
administrative orders and policies of the FCC, the FAA and the Copyright
Office), any order, judgment or decree of any court or other agency of
government, the corporate charter or by-laws or partnership agreement, as the
case may be, of any Company or any indenture, agreement or other instrument to
which any Company or the Parent is a party, or by which any Company or the
Parent is bound (including without limitation the PCC Indenture, the PCC Senior
Notes, the Subordinated Debt Documents, the PCC Preferred Stock Designation and
any DBS Agreement), or be in conflict with, result in a breach of, or constitute
(with due notice or lapse of time or both) a default under, or except as may be
permitted under this Agreement, result in the creation or imposition of any
lien, charge or encumbrance of any nature whatsoever upon any of the property or
assets of any Company or the Parent pursuant to, any such indenture, agreement
or instrument. Each of the Transaction Documents constitutes the valid and
binding obligation of each of the Companies and their Affiliates party thereto,
enforceable against such party in accordance with its terms, subject, however to
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
the rights and remedies of creditors generally or the application of principles
of equity, whether in any action in law or proceeding in equity, and subject to
the availability of the remedy of specific performance or of any other equitable
remedy or relief to enforce any right under any such agreement.
Section 4.04. Governmental and Other Consents, Etc.
(a) Except for filings and recordings required under Section 2.01 and
the Security Documents and except as set forth in Schedule 4.04, none of the
Companies or the Parent is required to obtain any consent, approval or
authorization from, to file any declaration or statement with or to give any
notice to, any Governmental Authority (including without limitation, any
Specified Authority), the NRTC, DirecTv or any other Person (including, without
limitation, any notices required under the applicable bulk sales law) in
connection with or as a condition to the execution, delivery or performance of
any of the Transaction Documents. Except as set forth in such Schedule 4.04, all
consents, approvals and authorizations described in such Schedule have been duly
granted and are in full force and effect on the date hereof and all filings
described in such Schedule have been properly and timely made.
(b) Notwithstanding the foregoing, (i) from time to time, the Companies
may be required to obtain certain authorizations of or to make certain filings
with the FCC and local franchising authorities which are required in the
ordinary course of business, (ii) copies of certain documents, including without
limitation certain Transaction Documents, may be required to be filed with the
FCC pursuant to 47 C.F.R. ss.73.3613 and with local franchising authorities,
(iii) the FCC must be notified of the consummation of any assignments or
transfers of control of FCC authorizations for any television broadcast stations
and ownership reports are required to be filed with the FCC after such
consummation pursuant to 47 C.F.R. ss.73.3615, and similar requirements of local
franchising authorities exist under state and local law, and (iv) prior to the
exercise of certain rights or remedies under the Loan Documents by the Agent or
the Lenders, FCC consents and notifications and similar actions with respect to
local franchising authorities with respect to such exercise may be required to
be timely obtained or made.
Section 4.05. Litigation. Except as specified in Schedule 4.05, there is
no action, suit or proceeding at law or in equity or by or before any
Governmental Authority (including without limitation any Specified Authority)
now pending or, to the knowledge of the Borrower, threatened (nor is any basis
therefor known to the Borrower), (a) which questions the validity of any of the
Transaction Documents, or any action taken or to be taken pursuant hereto or
thereto, in a manner or to an extent which could reasonably be expected to have
a Material Adverse Effect, or (b) against or affecting any Company or the Parent
which, if adversely determined, either in any case or in the aggregate, would
have a Material Adverse Effect.
Section 4.06. Compliance with Laws and Agreements. Except as disclosed
in this Agreement, none of the Companies is a party to any agreement or
instrument or subject to any corporate, partnership or other restriction which
could have a Material Adverse Effect. None of the Companies or the Parent is in
violation of any provision of its corporate charter or by-laws, certificate of
limited partnership or partnership agreement, as the case may be, or of any
material indenture, agreement or instrument to which it is a party or by which
it is bound (including without limitation the PCC Indenture, the PCC Senior
Notes, the Subordinated Debt Documents, the PCC Preferred Stock Designation and
any DBS Agreement) or, to the best of the Borrower's knowledge and belief, of
any provision of law (including without limitation the Communications Act of
1934, as amended, the Copyright Revisions Act of 1976, as amended, the Rate
Regulation Act, the Rate Regulation Rules and all other rules, regulations,
administrative orders and policies of the FCC, the FAA and the Copyright
Office), the violation of which could have a Material Adverse Effect, or any
order, judgment or decree of any court or other Governmental Authority
(including without limitation any Specified Authority). Without limiting the
generality of the foregoing, all of the Obligations (a) are permitted under, and
do not and will not violate, the PCC Preferred Stock Designation, the PCC
Indenture, the PCC Senior Notes and the Subordinated Debt Documents, (b)
constitute "Senior Debt" and, with the exception of Rate Hedging Obligations,
"Designated Senior Debt" under the Exchange Note Indenture (as defined in the
PCC Preferred Stock Designation) and the Subordinated Indenture, (c) constitute
"Permitted Debt" and "Eligible Indebtedness" under the PCC Indenture and (d)
with the exception of Rate Hedging Obligations, are hereby designated as
"Designated Senior Debt" under the Exchange Note Indenture and the Subordinate
Indenture.
Section 4.07. Franchises.
(a) Schedule 4.07 sets forth a complete and correct list of all CATV
Franchises (identified by issuing authority, Franchise Area, franchisee and
expiration date) granted, issued or assigned to any Company as of the Closing
Date. The Companies possess all such CATV Franchises and all copyrights,
licenses, trademarks, service marks, trade names and other contract rights,
including licenses and permits granted by the FCC, agreements with public
utilities and microwave transmission companies, pole or conduit attachment, use,
access or rental agreements, utility easements and agreements the delivery of
pay programming to subscribers that are necessary for the operation and planned
expansion of the Systems, free and clear of any Liens other than Permitted
Liens, except to the extent the absence thereof could not reasonably be expected
to have a Material Adverse Effect. Each of such CATV Franchises, copyrights,
licenses, patents, trademarks, service marks, trade names and other rights and
agreements is in full force and effect and no material default has occurred and
is continuing thereunder.
(b) No approval, application, filing, registration, consent or other
action of any Governmental Authority (including any Specified Authority) is
required to enable any Company to take advantage of the rights and privileges
intended to be conferred by the CATV Franchises, except for approvals,
applications, filings, registrations, consents or other actions that (if not
made or obtained) could not reasonably be expected to have a Material Adverse
Effect. None of the Companies has received any notice with respect to any breach
of any covenant under, or any default with respect to, any CATV Franchise.
Complete and correct copies of all CATV Franchises have heretofore been
delivered to the Agent.
Section 4.08. Licenses. Schedule 4.08 accurately and completely lists
all Licenses (identified by issuing authority, licensee, Station call letters
and expiration date) granted, issued or assigned to any Company as of the date
hereof. Each FCC License is held by a License Company. The Companies hold all
such Licenses and all copyrights, licenses, trademarks, service marks, trade
names and other contract rights, including agreements with public utilities,
use, access or rental agreements, utility easements, network affiliation
agreements, film rental agreements and talent employment agreements that are
necessary for the operation of the Stations, free and clear of any Liens other
than Permitted Liens, except to the extent the absence thereof could not
reasonably be expected to have a Material Adverse Effect. Each of such Licenses,
copyrights, licenses, patents, trademarks, service marks, trade names and other
rights and agreements is in full force and effect and no material default by any
Company has occurred and is continuing thereunder. As of the date hereof, except
as limited by the provisions of the Communications Act of 1934, as amended, and
the FCC's rules and regulations and as otherwise specified on the face of any
FCC License, none of the FCC Licenses is subject to any restriction or condition
that would limit in any material respect the operation of the business as it is
now conducted. Except as specified in Schedule 4.08, (a) there is not, as of the
date hereof, pending or to, the knowledge of the Borrower threatened any action
by or before the FCC to revoke, cancel, rescind or modify (including a reduction
in coverage area) any of the FCC Licenses (other than proceedings to amend FCC
rules of general applicability) or refuse to renew the FCC Licenses, and (b)
there is not now issued or outstanding, pending or, to the knowledge of the
Borrower threatened by or before the FCC, any order to show cause, notice of
violation, notice of apparent liability, or notice of forfeiture or complaint
against Borrower and or any of its Subsidiaries with respect to any of the FCC
Licenses. Except as specified in Schedule 4.08, none of the FCC Licenses is the
subject of a pending license renewal application and the Borrower has no reason
to believe that any of the FCC Licenses will be revoked or will not be renewed
in the ordinary course.
Section 4.09. The Systems.
(a) Each of the Companies and the Systems are in compliance with all
applicable federal, state and local laws, rules and regulations, including
without limitation the Telecommunications Act of 1996, the Communications Act of
1934, as amended, the Cable Communications Policy Act of 1984, the Cable
Television Consumer Protection and Competition Act of 1992, the Copyright
Revisions Act of 1976, and the rules and policies of the FCC, the FAA and the
Copyright Office, including without limitation rules, regulations and laws
governing system registration, use of aeronautical frequencies and signal
carriage, equal employment opportunity, cumulative leakage index testing and
reporting, signal leakage and subscriber privacy, except to the extent that the
failure to so comply could not (either individually or in the aggregate)
reasonably be expected to have a Material Adverse Effect. Without limiting the
generality of the foregoing (except to the extent that the failure to comply
with any of the following could not, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect):
(i) the communities included in the Franchise Areas have been
registered with the FCC;
(ii) all of the annual performance tests on the Systems
required under the rules and policies of the FCC have been performed
and the results of such tests demonstrate satisfactory compliance with
the applicable requirements being tested in all material respects;
(iii) the Companies have filed all material reports and other
submissions required to be filed with the FCC with respect to the
Systems and their operations;
(iv) the Systems currently meet or exceed the technical
standards set forth in the rules and policies of the FCC, including,
without limitation, the leakage limits contained in 47 C.F.R. Section
76.605(a)(11);
(v) the channel capacities of the New England Systems range
from 36 to 62 channels; the MCT Systems have a capacity of 60-channels;
the San German System has a capacity of 50 channels; and each System is
fully addressable or capable thereof and delivers picture quality that
complies in all material respects with applicable FCC requirements and
the requirements of the applicable CATV Franchises;
(vi) the Systems are being operated in compliance with the
provisions of 47 C.F.R. Sections 76.610 through 76.619 (mid-band and
super-band signal carriage), including 47 C.F.R. Section 76.611
(compliance with the cumulative signal leakage index);
(vii) the Systems are being operated in compliance with the
requirements of the applicable CATV Franchises;
(viii) where required, appropriate authorizations from the FCC
have been obtained for the use of all aeronautical frequencies in use
in the Systems and the Systems are presently being operated in
compliance with such authorizations;
(ix) all of the existing towers used in the operation of the
Systems are obstruction-marked and lighted to the extent required by,
and in accordance with, the rules and regulations of the FAA and
appropriate notification to the FAA has been filed for each such tower
where required by the Rules and policies of the FCC, and all other
required certificates, permits and clearances from Governmental
Authorities, including the FAA, with respect to all towers, earth
stations, business radios and frequencies utilized and carried by the
Systems have been obtained; and
(x) all notices to subscribers of the Systems required by the
rules and policies of the FCC have been provided.
(b) All notices, statements of account, supplements and other documents
required under Section 111 of the Copyright Act of 1976 and under the rules of
the Copyright Office with respect to the carriage of off-air signals by the
Systems have been duly filed, and the proper amount of copyright fees have been
paid on a timely basis, and each System qualifies for the compulsory license
under Section 111 of the Copyright Act of 1976, except to the extent that the
failure to so file or pay could not (either individually or in the aggregate)
reasonably be expected to have a Material Adverse Effect.
(c) The carriage of all off-air signals by the Systems to be owned by
the Companies is permitted by valid transmission consent agreements or by
must-carry elections by broadcasters, except to the extent the failure to obtain
any of the foregoing could not (either individually or in the aggregate)
reasonably by expected to have a Material Adverse Effect.
(d) Each of the Companies has complied with its respective obligations
with regard to protecting the privacy rights of any past or present customers of
the Systems, except to the extent that the failure to so comply could not
(either individually or in the aggregate) reasonably be expected to have a
Material Adverse Effect.
(e) None of the Companies which owns the Systems has been denied EEO
certification by the FCC, and no FCC proceedings against any such Company in
respect of EEO violation are pending or, to the Borrower's best knowledge,
threatened, which, if resolved adversely to the Companies, could reasonably be
expected (either individually or in the aggregate) to have a Material Adverse
Effect.
(f) The assets of the Systems are adequate and sufficient in all
material respects for all of the current operations of the Systems.
Section 4.10. Rate Regulation. Each of the Companies has reviewed and
evaluated in detail the FCC rules currently in effect (the "Rate Regulation
Rules") implementing the rate regulation provisions of the Cable Television
Consumer Protection and Competition Act of 1992 as amended by the
Telecommunications Act of 1996 (as so amended, the "Rate Regulation Act"). Based
upon such review and completion by the Companies of all applicable worksheets
contemplated by the Rate Regulation Rules for each System, and except as set
forth in Schedule 4.10:
(a) The Systems are in material compliance with the Rate Regulation Act
and the Rate Regulation Rules applicable to them; and
(b) The Systems are owned by Companies which are "small cable
operators" as defined by the Telecommunications Act of 1996. As such, the Cable
Programming Services Tier rates of the Systems have been deregulated and the
Basic Service Tier rates of the Systems with Basic-only rates have likewise been
deregulated. Schedule 4.10 lists all pending rate proceedings before the FCC and
any local franchising authorities that have jurisdiction over the Company.
Schedule 4.10 also sets forth FCC and local franchising authority orders
approving the Companies' rates.
Section 4.11. The Stations.
(a) Each of the Companies and the Stations is in compliance with all
applicable federal, state and local laws, rules and regulations, including
without limitation, the Telecommunications Act of 1996, the Communications Act
of 1934, as amended, and the rules and policies of the FCC and all rules and
laws governing equal employment opportunity, except to the extent that the
failure to so comply could not (either individually or in the aggregate)
reasonably be expected to have a Material Adverse Effect. Without limiting the
generality of the foregoing (except to the extent that the failure to comply
with any of the following could not, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect):
(i) the Companies have filed all material reports and other
submissions required to be filed with the FCC by the Companies or any
of them with respect to the Stations and their operations;
(ii) the operation of the Stations is in compliance in all
material respects with ANSI Standards C95.1-1982 to the extent required
under applicable rules and regulations;
(iii) all of the existing towers used in the operation of the
Stations are obstruction-marked and lighted to the extent required by,
and in accordance with, the rules and regulations of the FAA and
appropriate notification to the FAA has been filed for each such tower
where required by the rules and policies of the FCC;
(iv) the Stations are in compliance with Part V of Title VI of
the Communications Act of 1934, as amended, as well as any and all
rules and policies adopted by the FCC to implement said Part V;
(v) the Stations are being operated in compliance with the
applicable Licenses; and
(vi) the Stations are in compliance with the provisions of the
Communications Decency Act of 1996 in effect, as well as any and all
FCC rules and policies in effect to implement such Act.
(b) No FCC proceedings against any of the Companies in respect of EEO
violations are pending or, to the Borrower's best knowledge, threatened.
(c) The assets of the Stations are adequate and sufficient for all of
the current operations of the Stations as contemplated as of the date hereof.
Section 4.12. DBS Rights. Schedule 4.12 accurately and completely lists
all DBS Agreements, including without limitation all NRTC Member Agreements, to
which any Company is a party as of the date hereof, and all areas in which any
Company distributes DIRECTV and other DBS services thereunder. The DBS
Subsidiaries possess all such DBS Agreements, all exclusive DBS Rights and all
copyrights, licenses, trademarks, service marks, trade names and other contract
rights necessary for the operation of the Companies' DBS businesses, including
the distribution of DBS services, free and clear of any Liens other than
Permitted Liens, except to the extent the absence of such rights could not
reasonably be expected to have a Material Adverse Effect. Each of such DBS
Agreements, copyrights, licenses, trademarks, service marks, trade names and
other contract rights is in full force and effect and no material default has
occurred and is continuing thereunder.
Section 4.13. Title to Properties; Condition of Properties.
(a) Except as set forth on Schedule 4.13, the Companies have good title
to all of their properties and assets free and clear of all mortgages, security
interests, restrictions (other than FCC restrictions on the transfer of equity
interests or FCC Licenses), liens and encumbrances of any kind, including
without limitation liens or encumbrances in respect of unpaid taxes
(collectively, "Liens"), except liens and encumbrances permitted under Section
7.02 of this Agreement ("Permitted Liens"). Such Schedule 4.13 also sets forth a
description of all real properties owned or leased by the Companies.
(b) Schedule 4.13 accurately and completely lists, and sets forth a
description of, all agreements between any Company and any Person relating to
the location of (i) headend sites used in the operation of the Systems (the
"Headend Site Leases"), (ii) tower and transmitter sites used in the operation
of the Stations (the "Tower Site Leases") and (iii) offices, studios and other
facilities, and the same constitute the only Headend Site Leases, Tower Site
Leases and other leases necessary in connection with the conduct by the
Companies of their businesses as presently conducted. Each of the Companies
enjoys quiet possession under all leases (including without limitation the
Headend Site Leases and the Tower Site Leases) to which it is a party as lessee,
and all of such leases are valid, subsisting and in full force and effect. None
of such leases contains any provision restricting the incurrence of indebtedness
by the lessee.
(c) Except as specified in such Schedule 4.13, none of the improved real
property owned or leased by any Company that is required to be mortgaged under
Section 2.01(a) is situated in a flood zone designated as type "A", "B" or "V"
by the U.S. Department of Housing and Urban Development.
Section 4.14. Interests in Other Businesses. Except as reflected in
Schedule 4.14 or Schedule 4.23 hereto, none of the Companies holds or owns any
of the issued and outstanding capital stock, partnership interests or similar
equity interests, or any rights to acquire the same, of any corporation,
partnership, firm or entity other than as specified or permitted in this
Agreement.
Section 4.15. Solvency.
(a) The aggregate amount of the full saleable value of the assets and
properties of each Company exceeds the amount that will be required to be paid
on or in respect of such Company's existing debts and other liabilities
(including contingent liabilities) as they mature.
(b) No Company's assets and properties constitute unreasonably small
capital for such Company to carry out its business as now conducted and as
proposed to be conducted, including such Company's capital needs, taking into
the account the particular capital requirements of such Company's business and
the projected capital requirements and capital availability thereof.
(c) The Companies do not intend to, nor will the Companies, incur debts
beyond their ability to pay such debts as they mature, taking into account the
timing and amounts of cash reasonably anticipated to be received by each Company
and the amounts of cash reasonably anticipated to be payable on or in respect of
each Company's obligations. The Companies' aggregate cash flow, after taking
into account all anticipated sources and uses of cash, will at all times be
sufficient to pay all such amounts on or in respect of their indebtedness when
such amounts are required to be paid.
(d) The Borrower believes that no reasonably anticipated final judgment
in a pending action or, to its knowledge, any threatened actions for money
damages will be rendered at a time when, or in an amount such that, any Company
will be unable to satisfy such judgments promptly in accordance with their terms
(taking into account the maximum reasonable amount thereof and the earliest
reasonable time at which such judgments might be rendered). The cash available
to each Company, after taking into account all other anticipated uses of cash
(including the payment of all such Company's indebtedness) is anticipated to be
sufficient to pay any such judgments promptly in accordance with their terms.
(e) No Company is contemplating either the filing of a petition by it
under any state or federal bankruptcy or insolvency laws or the liquidating of
all or a substantial portion of its property, and the Borrower has no knowledge
of any Person contemplating the filing of any such petition against any Company.
Section 4.16. Full Disclosure. No statement of fact made by or on behalf
of any Person other than the Lenders in this Agreement, the Security Documents
or in any certificate or schedule furnished to the Lenders pursuant hereto or
thereto contains any untrue statement of a material fact or omits to state any
material fact necessary to make statements contained therein or herein not
misleading. There is no fact presently known to the Borrower which has not been
disclosed to the Lenders in writing which materially affects adversely, or, as
far as the Borrower can reasonably foresee, could have a Material Adverse
Effect, other than facts and circumstances generally known within the cable
television, broadcast television and DBS industries.
Section 4.17. Margin Stock. The Companies do not own or have any present
intention of acquiring any "margin stock" within the meaning of Regulation U (12
CFR Part 221), of the Board of Governors of the Federal Reserve System (herein
called "Margin Stock").
Section 4.18. Tax Returns. Each of the Companies has filed all federal,
state and local tax and information returns required to be filed, and has paid
or made adequate provision for the payment of all material federal, state and
local taxes, franchise fees, charges and assessments shown thereon.
Section 4.19. Pension Plans, Etc.
(a) Except as described in Schedule 4.19, neither the Borrower nor any
member of the Controlled Group has any pension, profit sharing or other similar
plan providing for a program of deferred compensation to any employee.
(b) Neither the Borrower nor any member of the Controlled Group has any
material liability (i) under Section 412 of the Code for failure to satisfy the
minimum funding requirements for pension plans, (ii) as the result of the
termination of a defined benefit plan under Title IV of ERISA, (iii) under
Section 4201 of ERISA for withdrawal or partial withdrawal from a multiemployer
plan, or (iv) for participation in a prohibited transaction with an employee
benefit plan as described in Section 406 of ERISA and Section 4975 of the Code.
Section 4.20. Material Agreements. Except for matters disclosed in
Schedule 4.07, 4.08, 4.12, 4.13 and 4.23, Schedule 4.20 hereto accurately and
completely lists all agreements, if any, among the stockholders or partners of
the Borrower or any of the Subsidiaries and all material construction,
engineering, management, consulting and other agreements, if any, which are in
effect on the date hereof in connection with the conduct of the business of the
Borrower and the Subsidiaries, including without limitation the acquisition,
construction, extension and/or operation of the Systems and the Stations and the
distribution of DBS services.
Section 4.21. Projections. Attached as Schedule 4.21 are projections of
the operation of the Companies' businesses through December 31, 2004 (the
"Projections").
Section 4.22. Brokers, Etc. None of the Companies has dealt with any
broker, finder, commission agent or other similar Person in connection with the
Loans or the transactions contemplated by this Agreement or is under any
obligation to pay any broker's fee, finder's fee or commission in connection
with such transactions.
Section 4.23. Capitalization. Attached as Schedule 4.23 is a schematic
diagram of the ownership relationships among the Companies, the Parent and the
other Parent Affiliates, showing, as to the Companies, accurate ownership
percentages of the equityholders of record and accompanied by a statement of
authorized and issued equity securities for each such entity as of the date
hereof. Such Schedule 4.23 also includes a narrative indicating, as of the date
hereof (a) which securities, if any, carry preemptive rights; (b) to the best of
the Borrower's knowledge whether there are any outstanding subscriptions,
warrants or options to purchase any securities; (c) whether any Company is
obligated to redeem or repurchase any of its securities, and the details of any
such committed redemption or repurchase; and (d) any other agreement,
arrangement or plan to which any Company is a party or participant or of which
any Company has knowledge which will directly or indirectly affect the capital
structure of the Companies. All such equity securities of the Companies are
validly issued and fully paid and non-assessable, and owned as set forth on such
Schedule 4.23. All such equity securities of the Companies are owned, legally
and beneficially, free of any assignment, pledge, lien, security interest,
charge, option or other encumbrance, except for Permitted Liens and restrictions
on transfer imposed by applicable securities laws, indicated on the certificates
evidencing such shares or as may be imposed by the FCC or local franchising
authorities.
Section 4.24. Environmental Compliance.
(a) To the best of the Borrower's knowledge, all real property leased,
owned, controlled or operated by the Companies (the "Properties") and their
existing and, to the best of the Borrower's knowledge, prior uses and activities
thereon, including, but not limited to, the use, maintenance and operation of
each of the Properties and all activities in conduct of business related thereto
comply and have at all times complied in all material respects with all
Environmental Laws.
(b) None of the Companies, and to the best of the Borrower's knowledge,
no previous owner, tenant, occupant or user of any of the Properties or any
other Person, has engaged in or permitted any operations or activities upon any
of the Properties for the purpose of or in any way involving the handling,
manufacture, treatment, storage, use, generation, release, discharge, refining,
dumping or disposal of a material amount of any Hazardous Materials the removal
of which is required or the maintenance of which is prohibited or penalized.
(c) To the best of the Borrower's knowledge, no Hazardous Material has
been or is currently located in, on, under or about any of the Properties in a
manner which materially violates any Environmental Law or which requires cleanup
or corrective action of any kind under any Environmental Law.
(d) No notice of violation, lien, complaint, suit, order or other
notice or communication concerning any alleged violation of any Environmental
Law in, on, under or about any of the Properties has been received by any
Company or, to the best of the Borrower's knowledge, any prior owner or occupant
of any of the Properties which has not been fully satisfied and complied with in
a timely fashion so as to bring such Property into full compliance with all
Environmental Laws.
(e) The Companies have all permits and licenses required under any
Environmental Law to be issued to them by any Governmental Authority on account
of any or all of its activities on any of the Properties, except to the extent
that the absence of any such permit or license could have a Material Adverse
Effect, and are in material compliance with the terms and conditions of such
permits and licenses. To the best of the Borrower's knowledge, no change in the
facts or circumstances reported or assumed in the application for or granting of
such permits or licenses exist, and such permits and licenses are in full force
and effect.
(f) No portion of any of the Properties has been listed, designated or
identified in the National Priorities List (NPL) or the CERCLA information
system (CERCLIS), both as published by the United States Environmental
Protection Agency, or any similar list of sites published by any Federal, state
or local authority proposed for or requiring cleanup, or remedial or corrective
action under any Environmental Law.
(g) The Borrower, at its expense, has provided to the Agent and the
Lenders a "Phase One" site assessment for each of the Properties designated by
the Lenders (including those designated on Schedule 4.24 and required as a
condition to the execution of this Agreement under Section 3.01), including all
owned Properties (collectively the "Environmental Site Assessments"), prepared
by an environmental consulting firm of national reputation reasonably
satisfactory to the Lenders, together with a letter from such firm to the Agent
authorizing the Agent and the Lenders to rely thereon. Each of the Environmental
Site Assessments provided to the Agent and the Lenders is, to the best of the
Borrower's knowledge, true and accurate in all material respects. In addition,
the Borrower has provided to the Agent and the Lenders true and accurate
responses to the Agent's Environmental Questionnaire (each an "Environmental
Questionnaire") as to each of the other Properties.
Section 4.25. Investment Company Act. None of the Companies is an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company," or of a "subsidiary company"
of a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
Section 4.26. Labor Matters. No Company is experiencing any strike, labor
dispute, slow down or work stoppage due to labor disagreements which could
reasonably be expected to have a Material Adverse Effect; there is no such
strike, dispute, slow down or work stoppage threatened against any Company; none
of the Companies is subject to any collective bargaining or similar
arrangements.
Section 4.27. Delaware Code Provisions. None of the charter documents,
partnership agreements, the operating agreements or other organizational
documents of the Borrower and its Companies contain any provision similar to
those set forth in Section 102(b)(2) of Title 8 of the Delaware Code.
V. FINANCIAL COVENANTS. The Borrower covenants and agrees that, so long
as any Lender has any obligation to extend credit to the Borrower hereunder, and
for so long thereafter as there remains outstanding any portion of any
Obligation, whether now existing or arising hereafter, the Borrower and its
Subsidiaries will (on a consolidated basis):
Section 5.01. Leverage.
(a) At all times, maintain a PCC Consolidated Leverage Ratio not
exceeding 7.00:1.00.
(b) At all times during each period indicated below, maintain a ratio of
(i) Total Funded Debt to Annualized EBITDA for the most recently ended fiscal
quarter for which financial statements have been, or are required to have been,
delivered under Section 6.05(b) of not more than the following:
Maximum Ratio of Total
Funded Debt to Annualized EBITDA
Period for Most Recently Ended Fiscal Quarter
------ --------------------------------------
The date hereof through June 29, 1999 6.00:1.00
June 30, 1999 through December 30, 1999 5.50:1.00
December 31, 1999 through June 29, 2000 5.00:1.00
June 30, 2000 through December 30, 2000 4.50:1.00
December 31, 2000 through June 29, 2001 4.00:1.00
June 30, 2001 through December 30, 2001 3.50:1.00
December 31, 2001 through June 29, 2002 3.00:1.00
June 30, 2002 through December 30, 2002 2.75:1.00
December 31, 2002 and thereafter 2.50:1.00
For purposes of this covenant, Annualized EBITDA shall be determined on a pro
forma basis after giving effect to all Acquisitions and Dispositions made by the
Companies at any time during the applicable fiscal periods, in each case as if
such Acquisitions and Dispositions had occurred at the beginning of such fiscal
period.
Section 5.02. Interest Coverage. For each fiscal quarter ending on the
dates indicated below, maintain a ratio of EBITDA to Total Interest Expense of
at least the following:
Quarter End Minimum Ratio
----------- -------------
December 31, 1997 through September 30, 1998 1.50:1.00
December 31, 1998 through September 30, 1999 1.75:1.00
December 31, 1999 through September 30, 2000 2.25:1.00
December 31, 2000 through September 30, 2001 3.00:1.00
December 31, 2001 and each Quarterly Date 5.00:1.00
thereafter
Section 5.03. Fixed Charge Coverage. For each period of four (4) fiscal
quarters ended on the dates indicated below, maintain a ratio of Adjusted EBITDA
to Adjusted Fixed Charges of at least the following:
Quarter End Minimum Ratio
----------- -------------
December 31, 1998 and March 31, 1999 1.00:1.00
June 30, 1999 through September 30, 1999 1.05:1.00
December 31, 1999 through March 31, 2000 1.15:1.00
June 30, 2000 through September 30, 2000 1.20:1.00
December 31, 2000 and each quarter end 1.25:1.00
thereafter
Section 5.04. Maximum Average Subscriber Acquisition Cost. For the period
of four (4) consecutive fiscal quarters ended December 31, 1997, not permit the
Average Subscriber Acquisition Cost to exceed $500; and for each period of four
(4) consecutive fiscal quarters ended on March 31, June 30, and September 30,
1998, not permit the Average Subscriber Acquisition Cost to exceed $535.
Section 5.05. Restricted Payments. Not directly or indirectly declare,
order, pay or make any Restricted Payment or set aside any sum or property
therefor except as follows:
(a) The Companies may pay monthly Management Fees to the Manager;
provided that (i) such payments shall be subject to the applicable Affiliate
Subordination Agreement and (ii) such payments shall not exceed, during any
period of twelve (12) consecutive months, the actual cost of providing
management and administrative support services to the Companies for such period.
(b) Subject to the provisions of the Affiliate Subordination Agreements:
(i) The Subsidiaries may (A) pay dividends and make
distributions to the Borrower or other Subsidiaries holding equity
interests in the payor, (B) repay indebtedness owed to the Borrower or
to Subsidiaries other than PCT-CONN, MCT and MCT Cablevision, Ltd. and
(C) make intercompany loans to one another subject to the limitations
set forth in Section 7.01.
(ii) The Subsidiaries may repay indebtedness owed to the
Borrower or to Subsidiaries.
(iii) The Subsidiaries may pay lease payments to Pegasus Towers,
Inc. in respect of the tower leases in effect on the date hereof, and
any renewals thereof, provided that such payments shall be subject to
the applicable Affiliate Subordination Agreement.
(iv) The Borrower may make regularly scheduled payments (but not
prepayments) of interest under the Subordinated Notes unless an Event of
Default shall have occurred and be continuing.
(v) From and after the date audited financial statements are
delivered pursuant to Section 6.05(a) for the year ended December 31,
2001 and each year thereafter, the Borrower may pay annual or
semi-annual dividends or distributions to the Parent solely for the
purpose of financing dividends due or interest due and payable under the
PCC Preferred Stock Designation in respect of the PCC Preferred Stock or
the PCC Subordinated Notes, respectively (collectively, the "PCC
Preferred Stock Dividends"), provided that (A) no Default shall exist as
of the date of the proposed payment or after giving effect thereto, (B)
the Excess Cash Flow prepayment, if any, due on the May 1 preceding such
payment pursuant to Section 1.06(c) shall have been paid, and (C) the
aggregate amount of such dividends paid in any fiscal year shall not
exceed the lesser of (1) fifty percent (50%) of Excess Cash Flow for the
prior fiscal year or (2) the aggregate PCC Preferred Stock Dividends due
and payable in such fiscal year. For purposes of the preceding sentence,
a dividend or distribution paid to the Parent in respect of the PCC
Preferred Stock Dividend Payment due January 1 of any fiscal year shall
be treated as having been paid in the preceding fiscal year.
(vi) The Borrower may pay annual or semi-annual dividends or
distributions to the Parent solely for the purpose of financing interest
due and payable under the PCC Senior Notes, provided that no Default
shall exist as of the date of the proposed payment or after giving
effect thereto.
(vii) The Borrower may pay dividends or distributions to the
Parent to reimburse the Parent for cash capital contributions previously
made to the Borrower and its Subsidiaries by the Parent from and after
the date hereof in connection with Acquisitions (including for purposes
hereof the cash portion of the purchase price paid for any assets
contributed by the Parent to any of the Companies after such date, free
and clear of Liens other than Permitted Liens), provided that (i) no
Default shall exist as of the date of the proposed payment or after
giving effect thereto and (ii) the aggregate amount of all such
dividends paid during the term of this Agreement shall not exceed
$50,000,000.
(viii) The Borrower may repay the Parent Loans, as required
under Section 3.01(e).
VI. AFFIRMATIVE COVENANTS. The Borrower hereby covenants and agrees to
and with each of the Lenders that, so long as any Lender has any obligation to
extend credit to the Borrower hereunder, and for so long thereafter as there
remains outstanding any portion of any Obligation, whether now existing or
hereafter arising, the Borrower and each of the Subsidiaries shall:
Section 6.01. Preservation of Assets; Compliance with Laws, Etc.
(a) Do or cause to be done all things necessary to preserve, renew and
keep in full force and effect its corporate or partnership existence, as the
case may be, all material rights, licenses, permits and franchises (including
all material CATV Franchises, FCC Licenses and DBS Agreements) and comply in
every material respect with all laws and regulations applicable to it (including
without limitation the Communications Act of 1934, as amended, the Copyright
Revisions Act of 1976, as amended, the Rate Regulation Act, the Rate Regulation
Rules and all other rules, regulations, administrative orders and policies of
the FCC, the FAA and the Copyright Office) and all material agreements to which
it is a party, including without limitation all material CATV Franchises and DBS
Agreements, and all agreements with its stockholders or partners, as the case
may be, the violation of which could have a Material Adverse Effect;
(b) at all times maintain, preserve and protect all material trade names
and proprietary rights;
(c) at all times maintain in full force and effect a License Agreement
between each Subsidiary holding Station assets and the related License
Subsidiary, and provide a true and complete copy thereof to the Agent; and
(d) preserve all the remainder of its material property used or useful in
the conduct of its business and keep the same in good repair, working order and
condition (reasonable wear and tear and damage by fire or other casualty
excepted), and from time to time, make or cause to be made all needful and
proper repairs, renewals, replacements, betterments and improvements thereto, so
that the business carried on in connection therewith may be conducted at all
times in the ordinary course in a manner substantially consistent with past
practices.
Section 6.02. Insurance.
(a) Keep all of its insurable properties now or hereafter owned
adequately insured at all times against loss or damage by fire or other casualty
to the extent customary with respect to like properties of companies conducting
similar businesses; maintain public liability, business interruption,
broadcasters' liability and workers' compensation insurance insuring such
Company to the extent customary with respect to companies conducting similar
businesses, all by financially sound and reputable insurers and furnish to the
Lenders satisfactory evidence of the same (including certification by the chief
executive officer or chief financial officer of the Borrower of timely renewal
of, and timely payment of all insurance premiums payable under, all such
policies, which certification shall be included in the next succeeding
Compliance Report delivered pursuant to Section 6.05(d)); notify each of the
Lenders of any material change in the insurance maintained on its properties
after the date hereof and furnish each of the Lenders satisfactory evidence of
any such change; maintain insurance with respect to its headend, tower,
transmission and/or studio facilities and related equipment in an amount equal
to the full replacement cost thereof; provide that each insurance policy
pertaining to any of its insurable properties shall:
(i) name the Agent, on behalf of the Lenders, (A) as loss
payee pursuant to a so-called "standard mortgagee clause" or "Lender's
loss payable endorsement", with respect to property coverage, or (B) as
additional insured, with respect to general liability coverage;
(ii) provide that no action of any Company shall void any such
policy as to the Agent or the Lenders, and
(iii) provide that the insurer(s) shall notify the Agent of
any proposed cancellation of such policy at least thirty (30) days in
advance thereof (unless such proposed cancellation arises by reason of
non-payment of insurance premiums in which case such notice shall be
given at least ten (10) days in advance thereof) and that the Agent or
the Lenders will have the opportunity to correct any deficiencies
justifying such proposed cancellation.
(b) Promptly following the occurrence of any Casualty Event affecting any
asset or property of any Company (whether or not such property constitutes
Collateral) (the "Damaged Property") resulting in Insurance Proceeds aggregating
$500,000 or more, give prompt notice thereof to the Agent and cause such
Insurance Proceeds to be paid to the Agent for deposit into the Collateral
Account, as additional collateral security for the payment of the Obligations,
pending disbursement thereof as hereinafter provided. If, on or before the last
day of the applicable Restoration Period, the Borrower or any Subsidiary shall
not have restored, repaired or replaced the Damaged Property (or, if earlier, on
the date such Company shall have determined not to restore, repair or replace
the Damaged Property) the Insurance Proceeds so deposited in the Collateral
Account shall be applied to repay the Notes, to the extent required in Section
1.06(b).
(c) In the event of a Casualty Event affecting any Damaged Property,
whether or not subject to Section 6.02(b), and provided that no Event of Default
shall have occurred and be
continuing, the Agent or the Lenders will deliver to the Borrower (for the
benefit of such Company) any Insurance Proceeds therefrom, if the Borrower so
elects following notice thereof provided by the Agent, provided that (i) such
Company shall use such proceeds for the restoration or replacement of the
Damaged Property within the applicable Restoration Period, (ii) the Borrower
shall have demonstrated to the reasonable satisfaction of the Lenders that the
Damaged Property will be restored to substantially its previous condition or
will be replaced by substantially identical property or assets and (iii) if the
Agent, on behalf of the Lenders, had a security interest in and lien upon the
Damaged Property, the Lenders shall have received, at their request, a favorable
opinion from the Borrower's counsel, in form and substance satisfactory to the
Agent, as to the perfection of the Agent's security interest in and lien upon
such restored or replaced property or asset and such evidence satisfactory to
the Agent as to the priority of such security interest and liens. If the
Borrower fails to elect the disbursement of such Insurance Proceeds as provided
in the foregoing sentence within thirty (30) days following receipt of the
Agent's notice, the Borrower shall be deemed to have elected that such Insurance
Proceeds be applied to the prepayment of the Loans and, if the related Casualty
Event was subject to Section 6.02(b), the permanent reduction of the Commitments
provided in such Section and in Section 1.06.
(d) If the Borrower receives any disbursements of Insurance Proceeds as
contemplated by Section 6.02(c), but fails to restore or replace the Damaged
Property within the applicable Restoration Period, as required under Section
6.02(c), then the Borrower shall return all such disbursements to the Agent for
application, together with the balance of any related Insurance Proceeds not so
disbursed, to the prepayment of the Loans and, if the related Casualty Event was
subject to Section 6.02(b), the permanent reduction of the Commitments provided
in such Section and in Section 1.06.
(e) The Agent may, if directed by the Required Lenders upon the
occurrence and during the existence of any Default, elect to apply any Insurance
Proceeds paid into the Collateral Account or otherwise received by the Agent
pursuant to this Section 6.02 to the replacement, restoration and/or repair of
the Damaged Property, in lieu of effecting the prepayment of the Loans required
under Section 1.06(b) or 6.02(d).
(f) If the Borrower or the Agent elects to replace, restore and/or repair
the Damaged Property as provided in Section 6.02(c) or (e), the related
Insurance Proceeds (and any earnings thereon) held in the Collateral Account
shall be applied to the replacement, restoration and repair of the Damaged
Property and advanced by the Agent in periodic installments upon compliance by
the Borrower with such reasonable conditions to disbursement as may be imposed
by the Agent, including, but not limited to, reasonable retention amounts and
receipt of lien releases and, if a Casualty Event results in the Agent's receipt
of Insurance Proceeds aggregating $500,000 or more, disbursement of such
Insurance Proceeds jointly to the Borrower and any contractors, subcontractors
and materialmen to whom payment is owed in connection with such repair,
replacement and/or restoration.
(g) Following the occurrence and the continuance of any Default, the
Agent shall have no obligation to release any proceeds from the Collateral
Account to the Borrower as provided above and all such proceeds shall be subject
to the provisions of the Security Agreements. All Insurance Proceeds remaining
in the Collateral Account after application to the repair, replacement and/or
restoration of Damaged Property pursuant to this Section may, at the option of
the Agent, be applied to the prepayment of the Loans or (if consented to by the
Required Lenders) released to the Borrower.
(h) With respect to any Casualty Event resulting in Insurance Proceeds
aggregating $500,000 or more, the Agent shall be entitled at its option to
participate in any compromise, adjustment or settlement in connection with any
claims for damage or destruction under any policy or policies of insurance, and
the Borrower shall, within five (5) Business Days after request therefor,
reimburse the Agent for all reasonable out-of-pocket expenses (including
reasonable attorneys' fees and disbursements) incurred by the Agent in
connection with such participation. None of the Companies shall make any
compromise, adjustment or settlement in connection with any such claim without
the approval of the Agent.
(i) To the extent, if any, that any improved real property (whether owned
or leased) of the Companies that is mortgaged as required under Section 2.01(a)
is situated in a flood zone designated as type "A", "B" or "V" by the U.S.
Department of Housing and Urban Development, obtain and maintain flood insurance
in coverage and amount satisfactory to the Agent.
Section 6.03. Taxes, Etc. Pay and discharge or cause to be paid and
discharged all taxes, assessments and governmental charges or levies imposed
upon it or upon its income and profits or upon any of its property, real,
personal or mixed, or upon any part thereof, before the same shall become in
default, as well as all lawful claims for labor, materials and supplies or
otherwise, which, if unpaid, might become a lien or charge upon such properties
or any part thereof; provided that no Company shall be required to pay and
discharge or cause to be paid and discharged any such tax, assessment, charge,
levy or claim so long as the validity thereof shall be contested in good faith
by appropriate proceedings and it shall have set aside on its books adequate
reserves with respect to any such tax, assessment, charge, levy or claim, so
contested; and provided, further that, in any event, payment of any such tax,
assessment, charge, levy or claim shall be made before any of its property shall
be seized or sold in satisfaction thereof.
Section 6.04. Notice of Proceedings, Defaults, Adverse Change, Etc.
Promptly (and in any event within five (5) days after the discovery by the
Borrower thereof) give written notice to each of the Lenders of (a) any
proceedings instituted or threatened against it by or in any federal, state or
local court or before any commission or other regulatory body, whether federal,
state or local (including without limitation any Specified Authority), which, if
adversely determined, could have a Material Adverse Effect; (b) any notices of
default received by any Company (together with copies thereof, if requested by
any Lender) with respect to (i) any alleged default under or violation of any of
its material licenses, permits or franchises, including any FCC License or CATV
Franchise, or under any DBS Agreement or other material agreement to which it is
a party, or (ii) any alleged default with respect to, or redemption or
acceleration or other action under, the PCC Preferred Stock Designation, the
Subordinated Debt Documents, any Permitted Seller Debt or Permitted Seller
Subordinated Debt, any material Acquisition Agreement or any evidence of
material Indebtedness of any Company or any mortgage, indenture or other
agreement relating thereto; (c) (i) any notice of any material violation or
administrative or judicial complaint or order filed or to be filed against any
Company and/or any real property owned or leased by it alleging any violations
of any law, ordinance and/or regulation or requiring it to take any action in
connection with the release and/or clean-up of any Hazardous Materials, or (ii)
any notice from any governmental body or other Person alleging that any Company
is or may be liable for costs associated with a release or clean-up of any
Hazardous Materials or any damages resulting from such release; (d) any change
in the condition, financial or otherwise, of any Company or any Parent Affiliate
which could have a Material Adverse Effect; or (e) the occurrence of any Default
or the occurrence of any event which, upon notice or lapse of time or both,
would constitute such a Default.
Section 6.05. Financial Statements and Reports. Furnish to the Agent
(with multiple copies for each of the Lenders, which the Agent shall promptly
provide to the respective Lenders):
(a) Within one hundred twenty (120) days after the end of each fiscal
year, the consolidated and consolidating balance sheets and statements of
income, stockholders' or partners' equity (as applicable) and cash flows of (i)
PCC and (ii) the Borrower and its Subsidiaries, together with supporting
schedules in form and substance satisfactory to the Lenders (and accompanied by
an unaudited breakdown of revenues, expenses and EBITDA for each Company),
audited by, and delivered with the opinion of, independent certified public
accountants selected by the Borrower and reasonably acceptable to the Required
Lenders (the "Accountants"), which opinion (A) shall not be qualified as to
going concern or scope of audit, (B) shall be to the effect that such financial
statements present fairly the consolidated financial condition and results of
operation of PCC or the Companies, as the case may be, as of the dates and for
the periods indicated, in accordance with GAAP applied on a basis consistent
with that of the preceding year, and shall otherwise be in form reasonably
satisfactory to the Required Lenders, and (C) shall be accompanied by a report
by the Accountants to the effect that the Accountants have examined the
provisions of this Agreement and that, to the best of their knowledge, no Event
of Default has occurred under Article V (or, if such an event has occurred, a
statement explaining its nature and extent); provided, however, that in issuing
such statement, the Accountants shall not be required to exceed the scope of
normal auditing procedures conducted in connection with their opinion referred
to above;
(b) Within forty-five (45) days after the end of each quarter in each
fiscal year, the consolidated balance sheets and statements of income, equity
and cash flows (i) PCC and (ii) of the Borrower and its Subsidiaries, together
with supporting schedules, setting forth in each case in comparative form the
corresponding figures from the preceding fiscal period of the same duration,
prepared by PCC or the Borrower, as the case may be, in accordance with GAAP
(except for the absence of notes) and certified by the chief financial officer
of PCC or the Borrower, as the case may be, such balance sheets to be as of the
close of such quarter, and such statements of income, stockholders' equity and
cash flow to be for the quarter then ended and the period from the beginning of
the then current fiscal year to the end of such quarter (in each case subject to
normal audit and year-end adjustments) and to include, in the case of the
Companies' financial statements, (i) a comparison of actual results to results
for the comparable period of the preceding fiscal year (if available) and
projected results set forth in the Budget for such period, (ii) a breakdown of
Location Cash Flow for the DBS Subsidiaries and for the Borrower's other
Subsidiaries and (iii) if and to the extent prepared by the Borrower, a
breakdown of revenues, expenses and EBITDA for each Company;
(c) Within forty-five (45) days after the end of each month, the
consolidated balance sheets and statements of income of the Borrower and its
Subsidiaries, together with supporting schedules, prepared by the Borrower in
accordance with GAAP (except for the absence of notes) and certified by an
authorized representative of the Borrower, such balance sheets to be as of the
end of such month and such income statements to be for the period from the
beginning of the then current fiscal year to the end of such month (subject to
normal audit and year-end adjustments);
(d) Concurrently with the delivery of any annual financial statements
required by Section 6.05(a) and any quarterly financial statements required by
Section 6.05(b), a certified report (hereafter, a "Compliance Report") in the
form of Schedule 6.05 attached hereto (or otherwise in a form otherwise
satisfactory to the Agent), with appropriate calculations, including a detailed
breakout of Subscriber Acquisition Costs, signed on behalf of the Borrower by
the chief financial officer or chief executive officer of the Borrower, setting
forth the calculations contemplated in Article V of this Agreement and
certifying as to the fact that such Person has examined the provisions of this
Agreement and that no Default has occurred and is continuing (or if a Default
exists, a statement explaining its nature and extent);
(e) (i) On or before February 15 of each fiscal year, an updated
quarterly budget approved by the Board of Directors of the Parent, including
planned Capital Expenditures and projected borrowings for such fiscal year, with
updated Projections showing financial covenant compliance (collectively, the
"Budget"), for the operation of the Companies' businesses during the current
fiscal year, setting forth in detail reasonably satisfactory to the Lenders the
projected results of operations of the Companies and stating underlying
assumptions, and (ii) within five (5) days after the effective date thereof,
notice of any material changes or modifications in the Budget (which shall not
include changes resulting from non-material adjustments to the timing of any
proposed borrowings);
(f) As soon as reasonably possible and in any event within forty-five
(45) days after the end of each fiscal quarter and each month, one or more
certificates of a responsible officer of the Borrower (collectively, the
"Subscriber Reports"), setting forth in reasonable detail, the following:
(i) as to each of the Systems, (A) the numbers of basic
subscribers, as at the end of such month, (B) net changes in numbers of
each such category of basic subscribers (including numbers of disconnects
and connects within each such category), (C) the average monthly revenues
per subscriber as at the end of such month, (D) rate changes, if any, and
(E) the numbers of subscribers more than forty-five (45) days delinquent
measured from the date of original billing; and
(ii) as to the operations of the DBS Subsidiaries, (A) each
of the DBS Subscriber Areas and the number of homes, subscribers and
Paying Subscribers in each, as of the most recent month end, (B) the
penetration percentage and Churn for the most recently ended month and
the most recently ended period of six (6) consecutive months for which
such information is available, (C) the average monthly aggregate revenues
per subscriber as at the end of such month, (D) rate changes, if any, on
core programming packages and (E) the number of subscribers more than
forty-five (45) days delinquent measured from the date of original
billing;
(g) Promptly upon their becoming available, and in any event within ten
(10) Business Days after receipt thereof, all Xxxxxxx and other rating reports,
if any, received by any Company;
(h) Within ten (10) days after the receipt or filing thereof by any
Company, as applicable, copies of any periodic or special reports filed by any
Company with the FCC or any state or local governmental body having jurisdiction
over any System, Station, CATV Franchise or FCC License, and copies of any
material notices and other material communications from the FCC or any such
state or local governmental body which specifically relate to any Company, any
System or Station or any CATV Franchise or FCC License, but in each case only if
such reports or communications indicate any material adverse change in such
Company's standing before the FCC, in the Franchise Areas or in respect of any
CATV Franchise or FCC License or if copies thereof are requested by the Agent;
(i) Promptly, and in any event within five (5) days, after the Borrower
or any member of the Controlled Group (i) is notified by the Internal Revenue
Service of its liability for the tax imposed by Section 4971 of the Code, for
failure to make required contributions to a pension, or Section 4975 of the
Code, for engaging in a prohibited transaction, (ii) notifies the PBGC of the
termination of a defined benefit pension plan, if there are or may not be
sufficient assets to convert the plan's benefit liabilities as required by
Section 4041 of ERISA, (iii) is notified by the PBGC of the institution of
pension plan termination proceedings under Section 4042 of ERISA or that it has
a material liability under Section 4063 of ERISA, or (iv) withdraws from a
multiemployer pension plan and is notified that it has withdrawal liability
under Section 4202 of ERISA which is material, copies of the notice or other
communication given or sent;
(j) Promptly upon receipt or issuance thereof, and in any event within
five (5) Business Days after such receipt, copies of all audit reports submitted
to any Company by its accountants in connection with each yearly, interim or
special audit of the books of any Company made by such accountants, including
any material related correspondence between such accountants and the Borrower's
management;
(k) Promptly upon circulation thereof, and in any event within five (5)
Business Days after such circulation, copies of any material written reports
issued by the Borrower or any Subsidiary to any of its stockholders, partners or
material creditors relating to the Notes or any material change in any Company's
financial condition;
(l) Within ten (10) days after the receipt or filing thereof by any
Company, the Parent or any other Affiliate of the Borrower, copies of (i) any
registration statements, prospectuses and any amendments and supplements
thereto, and any regular and periodic reports (including without limitation
reports on Form 10-K, Form 10-Q or Form 8-K), if any, filed by any Company, the
Parent or such Affiliate with any securities exchange or with the United States
Securities and Exchange Commission (the "SEC"); and (ii) any letters of comment
or correspondence with respect to filings or compliance matters sent to any
Company, the Parent or such Affiliate by any such securities commission or the
SEC in relation to any Company, the Parent or such Affiliate and its respective
affairs; and
(m) As soon as reasonably possible after request therefor, such other
information regarding its operations, assets, business, affairs and financial
condition or regarding any of the Companies or (to the extent available to the
Borrower without undue effort and expense) their stockholders, partners or other
Affiliates (including without limitation the Parent Affiliates) as any Lender
may reasonably request, including without limitation copies of any and all
material agreements to which any Company is a party from time to time.
Section 6.06. Inspection. Permit employees, agents and representatives of
the Lenders to inspect, during normal business hours, its premises and its books
and records and to make abstracts or reproductions thereof. In connection with
any such inspections, the Lenders will use reasonable efforts to avoid an
unreasonable disruption of the Companies' businesses and, to the extent possible
or appropriate absent any Default, will give reasonable notice thereof.
Section 6.07. Accounting System. Maintain a system of accounting in
accordance with generally accepted accounting principles and maintain a fiscal
year ending December 31 for each of the Companies.
Section 6.08. Additional Assurances. From time to time hereafter:
(a) without limiting the generality of Section 2.01(a), execute and
deliver or cause to be executed and delivered, such additional instruments,
certificates and documents, and take all such actions, as the Agent or the
Lenders shall reasonably request for the purpose of implementing or effectuating
the provisions of this Agreement and the other Loan Documents, including without
limitation (i) the items set forth in Schedule 2.01(a) which require action
after the date hereof, as stated in such Schedule, and (ii) only if reasonably
requested by the Agent, the execution and delivery to the Agent of a mortgage or
deed of trust or collateral assignment of lease or leasehold mortgage in form
and substance satisfactory to the Agent (in a recordable form and in such number
of copies as the Agent shall have requested) covering any real properties
acquired by the Companies, together with any necessary consents relating
thereto;
(b) without limiting the generality of Section 2.01, at the request and
direction of the Agent, cooperate with the Agent and the Lenders from time to
time in preparing, executing and/or filing and recording such (i) timely
continuation statements under the Uniform Commercial Code with respect to
financing statements filed under Section 2.01(a), (ii) new financing statements
and (iii) conforming amendments to the Security Documents as shall be necessary
from time to time to reflect the passage of time and other changed circumstances
and to assure continued compliance with the Loan Documents and with Section
2.01; and
(c) upon the exercise by the Agent or the Lenders of any power, right,
privilege or remedy pursuant to this Agreement or any other Loan Document which
requires any consent, approval, registration, qualification or authorization of
any Governmental Authority (including any Specified Authority), execute and
deliver all applications, certifications, instruments and other documents and
papers that the Agent or Lenders may be so required to obtain; and
(d) use reasonable efforts to obtain any consents from any Governmental
Authorities (including any Specified Authority), the NRTC and other Persons
necessary to create and perfect a valid and enforceable first priority lien on
the CATV Franchises, NRTC Member Agreements and other applicable contracts and
agreements not so encumbered as of the Closing Date as specified in Schedule
4.04, so that, to the maximum extent practicable, the lien of the Agent and the
Lenders created therein pursuant to the Security Documents will be a valid and
enforceable first priority lien on all CATV Franchises, NRTC Member Agreements
and other DBS Agreements of the Companies.
Nothing contained in this Section 6.08 shall constitute a waiver of any Event of
Default arising from the Borrower's failure to locate, deliver and/or file or
record any Security Document, any consent of any Governmental Authority or other
Person or any other document required under Section 2.01, Article III or
otherwise under this Agreement.
Section 6.09. Renewal of DBS Agreements, FCC Licenses, and CATV
Franchises.
(a) Renew the DBS Agreements and the FCC Licenses in a timely manner and
in accordance with all applicable provisions thereof.
(b) Comply with the provisions of all applicable federal and local laws
relating to the renewal of Significant Franchises, including without limitation
pursuing proceedings for the renewal of such Significant Franchises in
accordance with those procedures customarily followed by holders of similar
franchises. Without limiting the foregoing, the Companies will seek renewal of
all Significant Franchises within the time periods prescribed by, and otherwise
in compliance with, Section 546 of the Cable Communications Policy Act of 1984
(47 U.S.C. Section 546).
Section 6.10. Compliance with Environmental Laws.
(a) Comply, and cause all tenants or other occupants of any of the
Properties to comply in all material respects with all Environmental Laws and
not generate, store, handle, process, dispose of or otherwise use and not permit
any tenant or other occupant of any of the Properties to generate, store,
handle, process, dispose of or otherwise use Hazardous Materials in, on, under
or about the Property in a manner that could lead or potentially lead to
imposition on any Company or the Agent or any Lender or any of the Properties of
any liability or lien of any nature whatsoever under any Environmental Law.
(b) Notify the Agent promptly in the event of any spill or other release
of any Hazardous Material in, on, under or about any of the Properties which is
required to be reported to a Governmental Authority under any Environmental Law,
promptly forward to the Agent copies of any notices received by any Company
relating to any alleged violation of any Environmental Law and promptly pay when
due any fine or assessment against the Lenders, any Company or any of the
Properties relating to any Environmental Law.
(c) If at any time it is determined that the operation or use of any of
the Properties violates any applicable Environmental Law or that there is any
Hazardous Material located in, on, under or about the Properties which under any
Environmental Law requires special handling in collection, treatment, storage or
disposal or any other form of cleanup or remedial or corrective action, then,
within thirty (30) days after receipt of notice thereof from a Governmental
Authority (or such other time period as may be specified in the notice sent by
such Governmental Authority) or from the Lenders, take, at its sole cost and
expense, such actions as may be necessary to fully comply in all respects with
all Environmental Laws, provided, however, that if such compliance cannot
reasonably be completed within such thirty (30) day period, the Borrower shall
commence such necessary action within such thirty (30) day period and shall
thereafter diligently and expeditiously proceed to fully comply in all respects
and in a timely fashion with all Environmental Laws. Nothing herein shall
prohibit the Borrower from asserting any good faith defenses against the
government in any governmental demands.
(d) If a lien is filed against any of the Properties by any Governmental
Authority resulting from the need to expend or the actual expending of monies
arising from an action or omission, whether intentional or unintentional, of any
Company or for which any Company is responsible, resulting in the releasing,
spilling, leaking, leaching, pumping, emitting, pouring, emptying or dumping of
any Hazardous Material, then, within thirty (30) days from the date that such
Company is first given notice such lien has been placed against the Properties,
either (i) pay the claim and remove the lien or (ii) furnish a cash deposit,
bond or such other security with respect thereto as is satisfactory in all
respects to the Lenders and is sufficient to effect a complete discharge of such
lien on the Properties.
(e) At the Borrower's expense, if reasonably requested by the Agent in
connection with any Property acquired or leased by any Company after the date
hereof (whether pursuant to a Permitted Acquisition or otherwise), (i) conduct
and deliver to the Agent and the Lenders, an Environmental Site Assessment
prepared by an environmental consulting firm of national reputation reasonably
satisfactory to the Agent, together with a letter from such firm to the Agent
authorizing the Agent and the Lenders to rely thereon, or (ii) prepare and
deliver to the Agent and the Lenders true and accurate responses to the Agent's
Environmental Questionnaire as to such Property. Each Environmental Site
Assessment and completed Environmental Questionnaire shall be, to the best of
the Borrower's knowledge, true and accurate in all material respects.
(f) Conduct any further diligence recommended under any Environmental
Site Assessment and perform any and all Remedial Work necessary under all
Environmental Laws applicable (now or in the future) to the Companies or their
businesses, whether as recommended under any Environmental Site Assessment or
otherwise.
Section 6.11. Interest Rate Protection.
(a) Within thirty (30) days after the date outstanding Loans first equal
or exceed $25,000,000 in aggregate principal amount, enter into, and,
thereafter, maintain in full force and effect, one or more Rate Hedging
Agreements sufficient to ensure that at least fifty percent (50%) of the
aggregate principal amount of the Loans then outstanding is protected at all
times against increases in the applicable Base Rate or LIBOR Rate for a term
extending for at least three (3) years.
(b) Thereafter, within thirty (30) days after each date as of which the
outstanding principal amount of the Loans shall have increased by an incremental
amount of $25,000,000, but only if the ratio of Total Funded Debt on any day
during such thirty (30) day period to Annualized EBITDA for the most recently
ended fiscal quarter shall equal or exceed 3.00:1.00, increase the Borrower's
interest protection in amounts sufficient to ensure that at least fifty percent
(50%) thereof remains protected at all times against increases in the applicable
Base Rate or LIBOR Rate for a term extending for at least three (3) years or, if
shorter, through December 31, 2003.
(c) Each Rate Hedging Agreement entered into as required under Section
6.11(a) or (b) shall contain terms and conditions reasonably satisfactory to the
Agent.
(d) Deliver to the Agent copies of each such Rate Hedging Agreement,
including any and all amendments thereto and substitutions thereof, and such
other documentation relating thereto as the Agent or the Lenders may from time
to time request.
VII. NEGATIVE COVENANTS. The Borrower covenants and agrees that, so long
as any Lender has any obligation to extend credit to the Borrower hereunder, and
for so long thereafter as there remains outstanding any portion of any
Obligation, whether now existing or arising hereafter, unless the Required
Lenders shall otherwise consent in writing in accordance with the terms of
Article XII, none of the Companies will, directly or indirectly:
Section 7.01. Indebtedness. Incur, create, assume, become or be liable,
directly, indirectly or contingently, in any manner with respect to, or permit
to exist, any Indebtedness or liability, except:
(a) Indebtedness of the Borrower to the Lenders hereunder, under the
Notes and under the Letters of
Credit;
(b) the guaranties of the Subsidiaries required under Section 2.01;
(c) any Rate Hedging Obligation with terms and conditions reasonably
acceptable to the Agent;
(d) Indebtedness existing on the date hereof and described in Part A of
Schedule 7.01, provided however, that the terms of such indebtedness shall not
be modified or amended in any material respect, nor shall payment thereof be
modified, without the prior written consent of the Required Lenders;
(e) Indebtedness in respect of endorsements of negotiable instruments
for collection in the ordinary course of business;
(f) Indebtedness under Capital Leases and purchase money Indebtedness
relating to the purchase price of real estate and equipment to be used in the
Companies' businesses (i) which is specified in Part B of Schedule 7.01 hereto
or (ii) if not so specified, does not exceed $2,000,000 in the aggregate
outstanding at any time;
(g) Permitted Seller Debt not exceeding $25,000,000 in the aggregate
outstanding at any time, including without limitation all such Indebtedness
specified in Part C of Schedule 7.01;
(h) Permitted Seller Subordinated Debt, not exceeding $10,000,000 in
the aggregate outstanding at any time;
(i) solely from the date hereof until the date as of which the first
Loans are made hereunder, the Parent Loans;
(j) Indebtedness to the Subordinated Noteholders under the Subordinated
Debt Documents;
(k) Indebtedness among the Borrower and its Subsidiaries (including
Indebtedness under the PCT-CONN Note Documents and the MCT Note Documents),
provided that (i) not more than $400,000 in the aggregate in additional loans to
PCT-CONN, (ii) not more than $1,000,000 in the aggregate of additional loans to
Pegasus San German and MCT and (iii) no additional loans to any Specified
Subsidiary shall be permitted under this Section 7.01; and
(l) Unsecured Indebtedness of the Borrower and the Subsidiaries of a
type not covered by any of the other provisions of this Section 7.01 and which
does not exceed $1,000,000 in the aggregate outstanding at any time.
Section 7.02. Liens. Create, incur, assume, suffer or permit to exist any
mortgage, pledge, lien, charge or other encumbrance of any nature whatsoever on
any of its assets or ownership interests, now or hereafter owned, other than:
(a) liens securing the payment of taxes, assessments or government
charges or levies either not yet due or the validity of which is being contested
in good faith by appropriate proceedings, and as to which it shall have set
aside on its books adequate reserves;
(b) deposits under workers' compensation, unemployment insurance and
social security laws, or to secure the performance of bids, tenders, contracts
(other than for the repayment of borrowed money) or leases, or to secure
statutory obligations or surety or appeal bonds, or to secure indemnity,
performance or other similar bonds arising in the ordinary course of business;
(c) liens existing on the date hereof and described on Schedule 7.02
attached hereto;
(d) liens against the Companies imposed by law, such as vendors',
carriers', lessors', warehouser's or mechanics' liens, incurred by it in good
faith in the ordinary course of business;
(e) liens arising out of a prejudgment attachment, a judgment or award
against it with respect to which it shall currently be prosecuting an appeal, a
stay of execution pending such appeal having been secured, except any such lien
arising in connection with a judgment, attachment or proceeding which gives rise
to an Event of Default under paragraph (m) or (n) of Article VIII;
(f) liens in favor of the Agent or the Lenders (and any Hedging Lenders)
securing the Notes or the other obligations of the Companies to the Lenders
hereunder or under Rate Hedging Obligations entered into with any Lender or any
Lender's Affiliate;
(g) liens against the Companies arising under or securing Capital Leases
and liens or mortgages securing purchase money Indebtedness described in Section
7.01(f), provided that the obligation secured by any such lien shall not exceed
one hundred percent (100%) of the lesser of cost or fair market value as of the
time of the acquisition of the property covered thereby and that each such lien
or mortgage shall at all times be limited solely to the item or items of
property so acquired; and
(h) restrictions, easements and minor irregularities in title which do
not and will not interfere with the occupation, use and enjoyment by any Company
of such properties and assets in the normal course of its business as presently
conducted or materially impair the value of such properties and assets for the
purpose of such business.
Section 7.03. Disposition of Assets; etc. Sell, lease, transfer or
otherwise dispose of its properties, assets, rights, licenses and franchises to
any Person (including without limitation dispositions in exchange for similar
assets and properties and commonly referred to as "asset swaps") (all of the
foregoing being referred to herein as a "Disposition"), except as follows:
(a) Dispositions made in the ordinary course of business (including the
Disposition, without replacement, of equipment which is obsolete or no longer
needed by the Companies in the conduct of their businesses and the replacement
of equipment with other equipment of at least equal utility and value (provided
that the Agent's or the Lenders' lien upon such newly acquired equipment shall
have the same priority as the Agent's or the Lenders' lien upon the replaced
equipment subject to any prior liens permitted by Sections 7.01(f) and 7.02(g));
(b) the Disposition of the New England Systems and the Disposition of
other assets having a fair market value of not more than $25,000,000 in the
aggregate (all of which Dispositions may be made free from the liens of the
Security Documents); provided, however, that (i) the selling Subsidiaries shall
have received payment in cash or cash equivalents of at least eighty-five
percent (85%) of gross proceeds from any such disposition of assets (other than
like-kind exchanges under Section 1031 of the Code), (ii) all rights of the
Companies under any escrow or similar agreements entered into in connection with
like-kind exchanges under Section 1031 of the Code shall have been collaterally
assigned to the Agent and (iii) the Borrower shall have complied with the
provisions of Section 1.06(e), if applicable; and
(c) The Companies may dispose of additional properties made outside the
ordinary course of business (free and clear of the liens of the Security
Documents) with the prior written consent of the Required Lenders, in their sole
and absolute discretion, which consent, if given, shall in any event be
contingent upon satisfaction of the threshold conditions set forth in clauses
(i) and (ii) above unless the Required Lenders shall otherwise agree.
Section 7.04. Fundamental Changes; Acquisitions.
(a) Form any subsidiary or otherwise change the corporate structure or
organization of the Borrower or the Subsidiaries from that set forth in Schedule
4.23, except in connection with, and in accordance with the conditions to, any
Permitted Acquisition;
(b) Permit or suffer any amendment of its charter or partnership
documents which could have a Material Adverse Effect (it being expressly agreed
that the inclusion in any such charter documents of any provision similar to
those set forth in Section 102(b)(2) of Title 8 of the Delaware Code is
prohibited under this Section);
(c) Dissolve, liquidate, consolidate with or merge with, or otherwise
acquire any Systems, Stations, DBS Rights or all or any substantial portion of
the ownership interests or assets or properties of any corporation, partnership
or other entity or any other material assets, other than pursuant to (i)
Permitted Acquisitions and Capital Expenditures by the Companies (other than
Specified Subsidiaries) permitted hereunder and (ii) purchases of inventory and
supplies in the ordinary course of business;
(d) Transfer any assets or properties to any Specified Subsidiary;
(e) Repurchase or redeem any shares of capital stock, partnership
interests or other ownership interests, except as permitted by Section 5.05; or
(f) Issue any additional shares of capital stock, partnership interests
or other ownership interests, except for Permitted Preferred Stock with an
aggregate liquidation value not exceeding $10,000,000, and securities (i) in
respect of which the issuing Company has no obligation to redeem or to pay cash
distributions or dividends, (ii) the issuance of which does not result in an
Event of Default and (iii) which shall have been collaterally assigned or
pledged and delivered to the Agent as required hereunder.
Notwithstanding the foregoing, the Borrower and one or more Subsidiaries may
merge or consolidate with each other if the surviving or resulting corporation
is either the Borrower or a Subsidiary and if all actions required by Section
2.01 shall have been taken.
Section 7.05. Local Marketing Agreements, Etc. Enter into any LMA or
other similar arrangement, other than Permitted LMAs.
Section 7.06. Management. Turn over the management of its properties,
assets, rights, licenses and franchises to any Person other than the Manager or
a full-time employee of the Companies.
Section 7.07. Sale and Leaseback. Enter into any arrangements, directly
or indirectly, with any Person whereby it shall sell or transfer any property,
real, personal or mixed, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property; provided,
however, that the Borrower and the Subsidiaries may engage in such transactions
to the extent structured as Capital Leases and subject to the limitations in
Section 7.01(f).
Section 7.08. Investments. Except for Permitted Investments, purchase,
invest in or otherwise acquire or hold securities, including without limitation
capital stock, partnership interests, membership interests and other equity
interests and evidences of indebtedness of, or make loans or advances to, or
enter into any arrangement for the purpose of providing funds or credit to, any
other Person.
Section 7.09. Change in Business. Engage, directly or indirectly, in any
business other than the businesses in which it is currently engaged. Without
limiting the generality of the foregoing, no Specified Subsidiary shall
undertake any transactions or hold any assets or properties in addition to its
existing assets, if any, until it shall have executed and delivered to the Agent
all Security Documents required under Section 2.01 (without giving effect to any
exceptions to such requirements set forth in Schedule 2.01(a)).
Section 7.10. Accounts Receivable. Sell, assign, discount or dispose in
any way of any accounts receivable, promissory notes or trade acceptances held
by any Company, with or without recourse, except for collection (including
endorsements) in the ordinary course of business.
Section 7.11. Transactions with Affiliates. Except for the payment of
permitted Management Fees and the License Agreements, enter into any
transaction, including, without limitation, the purchase, sale or exchange of
property or assets or the rendering or accepting of any service with or to any
Affiliate of any Company, except in the ordinary course of business and pursuant
to the reasonable requirements of its business and upon terms not less favorable
to such Company than it could obtain in a comparable arm's-length transaction
with a third party other than such Affiliate.
Section 7.12. Amendment of Certain Agreements, Etc.
(a) Amend, modify or terminate any CATV Franchise or FCC License, the
PCT-CONN Note Documents, the MCT Note Documents, any DBS Agreement, the
Subordinated Debt Documents, any agreement or instrument evidencing Permitted
Seller Debt, Permitted Seller Subordinated Debt or other Subordinated Debt or
any material agreement to which any Company is a party, or enter into any
material agreement, in each case, if the effect thereof would be (i) to confer
additional rights upon the other parties thereto which could have a Material
Adverse Effect, (ii) to increase materially the obligations of any Company
thereunder or (iii) with respect to Subordinated Debt, to effect any material
change to the terms or conditions thereof which is adverse to the obligor
thereunder or to the Lenders or the Agent; or
(b) in any event, subject to applicable law, elect to terminate or amend
any License Agreement.
Section 7.13. ERISA. (a) Fail to make contributions to pension plans
required by Section 412 of the Code, (b) fail to make payments required by Title
IV of ERISA as the result of the termination of a single employer pension plan
or withdrawal or partial withdrawal from a multiemployer pension plan, or (c)
fail to correct a prohibited transaction with an employee benefit plan with
respect to which it is liable for the tax imposed by Section 4975 of the Code.
Section 7.14. Margin Stock. Use or permit the use of any of the proceeds
of the Loans, directly or indirectly, for the purpose of purchasing or carrying,
or for the purpose of reducing or retiring any indebtedness which was originally
incurred to purchase or carry, any Margin Stock or for any other purpose which
might constitute the transactions contemplated hereby a "purpose credit" within
the meaning of Regulation U (12 CFR Part 221) of the Board of Governors of the
Federal Reserve System, or cause any Loan, the application of proceeds thereof
or this Agreement to violate Regulation G, Regulation U, Regulation T or
Regulation X of the Board of Governors of the Federal Reserve System or any
other regulation of such Board or the Securities Exchange Act of 1934, as
amended, or any rules or regulations promulgated under such statutes.
Section 7.15. Negative Pledges, etc. Enter into any agreement (excluding
this Agreement or any other Transaction Document) prohibiting (a) any Company
from amending or otherwise modifying this Agreement or any other Transaction
Document, or (b) the creation or assumption of any Lien upon the properties,
revenues or assets of any Company, whether now owned or hereafter acquired.
VIII. DEFAULTS. In each case of happening of any of the following events
(each of which is herein sometimes called an "Event of Default"):
(a) any representation or warranty made by or on behalf of any Company or
any of its Affiliates (including without limitation the Parent Affiliates) in
this Agreement or any other Loan Documents, or in any report, certificate,
financial statement or other instrument furnished in connection with this
Agreement or the borrowings hereunder, shall prove to be false or misleading in
any material respect when made or reconfirmed;
(b) default in the payment or mandatory prepayment of any installment of
the principal of any Note or any payment of any installment of the principal of
any other indebtedness of any Company to the Agent or any Lender, or any payment
in respect of any Reimbursement Obligation, or any payment in respect of any
Rate Hedging Obligations entered into with the Agent or any Lender, when the
same shall become due and payable, whether at the due date thereof or at a date
fixed for prepayment or by acceleration or otherwise;
(c) default in the payment of any interest on any Note, or any premium,
fee or other indebtedness of any Company to the Agent or any Lender for more
than five (5) calendar days after the date when the same shall become due and
payable, whether at the due date thereof or at a date fixed for prepayment or by
acceleration or otherwise;
(d) default by any Person other than the Agent or any Lender in the due
observance or performance of, or compliance with, any covenant or agreement
contained in Article III or V, Sections 6.02, 6.03 (but only if the same
involves any seizure or property), 6.04, 6.05, 6.06, 6.07, 6.09 and 6.11 or
Article VII of this Agreement; provided, however, that a default in the delivery
of financial or other information under paragraphs (b) through (e) of Section
6.05 shall not constitute an Event of Default unless and until the same
continues unremedied for thirty (30) days after the earlier to occur of (i) the
occurrence thereof or (ii) written notice thereof from the Agent or any Lender
to the Borrower (provided that such thirty (30) day period shall be available
for the remedy of any such default only once in any period of twelve (12)
consecutive months and three (3) times during the term of this Agreement);
(e) default by any Person other than the Agent or any Lender in the due
observance or performance of, or compliance with, any other covenant, condition
or agreement to be observed or performed pursuant to the terms of this Agreement
or pursuant to the terms of any Security Document or any Rate Hedging Obligation
entered into with the Agent or any Hedging Lender, which default is not referred
to in paragraphs (a) through (d), inclusive, of this Article VIII and which
default shall continue unremedied for thirty (30) days after the earlier to
occur of (i) the Borrower's discovery of such default, or (ii) written notice
thereof from the Agent or any Lender to the Borrower, provided, however, that if
any such default cannot be remedied, then such default shall be deemed to be an
Event of Default as of the date of the occurrence thereof;
(f) (i) any Subordinated Indenture Default or (ii) any default with
respect to any Indebtedness of any Company (other than to the Lenders hereunder)
for borrowed money, or default under any agreement giving rise to monetary
remedies, in each case which, when aggregated with all other such defaults of
the Companies, exceeds $2,000,000, if the effect of such default is to permit
the holder of such Indebtedness to accelerate the maturity of such Indebtedness,
unless such holder shall have permanently waived the right to accelerate the
maturity of such Indebtedness on account of such default;
(g) (i) any Company shall lose, fail to keep in force, suffer the
termination, suspension or revocation of or terminate, forfeit or suffer a
material adverse amendment to any CATV Franchise at any time held by it, the
loss, termination, suspension, revocation or amendment of which could adversely
affect the Borrower's ability to perform its obligations under this Agreement or
the Notes, including without limitation the obligations set forth in Section
5.01 (a "Significant Franchise") or any material FCC License; (ii) any
governmental regulatory authority shall conduct a hearing on the renewal of any
Significant Franchise or any material FCC License and the result thereof is
reasonably likely to be the termination, revocation, suspension or material
adverse amendment of such Significant Franchise or FCC License; or (iii) any
governmental regulatory authority shall commence an action or proceeding seeking
the termination, suspension, revocation or material adverse amendment of any
Significant Franchise or any material FCC License and the result thereof is
likely to be the termination, suspension, revocation or material adverse
amendment of such Significant Franchise or FCC License;
(h) the cable television operations of any System(s) served pursuant to
one or more Significant Franchises or the on-the-air television operation of any
Stations(s) shall be interrupted at any time for more than (x) seventy-two (72)
consecutive hours, unless such interruption occurs by reasons of force majeure,
or (y) in the event of force majeure, fourteen (14) days, in each case, unless
(and only so long as) all damages, liabilities and other effects of such
interruption of service (including any adverse effect on the Borrower's ability
to perform its obligations under this Agreement and the Notes) are fully covered
by business interruption insurance;
(i) (i) any NRTC Member Agreement or other DBS Agreement shall be
terminated, shall expire or shall be amended in a manner reasonably likely to
have a Material Adverse Effect, (ii) any DirecTv Agreement (including the HCG
Agreement) shall terminate, shall expire or shall be amended in a manner
reasonably likely to have a Material Adverse Effect or (iii) any default shall
occur under the HCG Agreement, and NRTC shall take action to terminate the HCG
Agreement;
(j) the loss, termination, suspension, revocation or amendment (in a
manner reasonably likely to have a Material Adverse Effect) of any license
issued to HCG, any Company or DirecTv or any other party by the FCC in
connection with the delivery of DIRECTV or other DBS Rights under any DirecTv
Agreement or any NRTC Member Agreement;
(k) DBS services provided to any of the Subscribers shall be interrupted
or terminated, whether due to satellite damage or destruction or other
circumstances, if the same has or could have a Material Adverse Effect;
(l) any default with respect to any Funded Debt of the Parent which, when
aggregated with all other such defaults of the Parent, exceeds $15,000,000, if
the effect of such default is to permit the holder of such Indebtedness to
accelerate the maturity of such Indebtedness, unless such holder shall have
permanently waived the right to accelerate the maturity of such Indebtedness on
account of such default;
(m) any Company or group of Companies generating in the aggregate more
than five percent (5%) of EBITDA for any period shall discontinue its or their
respective business(es) or the Parent, any Company or the Manager shall (i)
apply for or consent to the appointment of a receiver, trustee, custodian or
liquidator of it or any of its property, (ii) be unable, or admit in writing its
inability, to pay its debts as they mature, (iii) make a general assignment for
the benefit of creditors, (iv) be adjudicated a bankrupt or insolvent or be the
subject of an order for relief under Title 11 of the United States Code or (v)
file a voluntary petition in bankruptcy, or a petition or an answer seeking
reorganization or an arrangement with creditors or to take advantage of any
bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or
liquidation law or statute, or an answer admitting the material allegations of a
petition filed against it in any proceeding under any such law or corporate
action shall be taken for the purpose of effecting any of the foregoing;
(n) there shall be filed against any Company, the Parent or the Manager
an involuntary petition seeking reorganization of such company or the
appointment of a receiver, trustee, custodian or liquidator of such company or a
substantial part of its assets, or an involuntary petition under any bankruptcy,
reorganization or insolvency law of any jurisdiction, whether now or hereafter
in effect and such involuntary petition shall not have been dismissed within
sixty (60) days thereof;
(o) final judgment for the payment of money which, when aggregated with
all other outstanding judgments against any of the Companies, exceeds $2,000,000
(exclusive of amounts covered by insurance or actually contributed in cash by
third party obligors with respect to such judgments) shall be rendered against
any Company, and the same shall remain undischarged (unless fully bonded upon
terms satisfactory to the Required Lenders) for a period of thirty (30)
consecutive days, during which execution shall not be effectively stayed;
(p) the occurrence of any attachment of any deposits or other property of
any Company in the hands or possession of the Agent or any of the Lenders, or
the occurrence of any attachment of any other property of any Company in an
amount which, when aggregated with all other attachments against the Companies,
exceeds $1,000,000 and which shall not be discharged within sixty (60) days of
the date of such attachment;
(r) for any reason, (i) the Borrower shall cease to own directly or
indirectly all of the issued and outstanding capital stock of each of its
Subsidiaries (other than the Permitted Preferred Stock); (ii) the Parent shall
cease to own at least fifty-one percent (51%) of the aggregate economic value of
the Borrower's issued and outstanding capital stock; (iii) the Parent shall
cease to own at least eighty percent (80%) of the combined voting power of all
issued and outstanding shares of capital stock of the Borrower; or (iv) a
"Change of Control" (as defined in the Subordinated Indenture, the PCC Preferred
Stock Designation or the PCC Indenture) shall occur;
(s) for any reason, PCT-CONN shall retain more than $500,000 in cash
balances, after the payment of all operating expenses and the distribution of
excess cash to PCT; or
(t) for any reason (other than the gross negligence of the Agent or the
Lenders, but without limiting in any way the Borrower's obligations under
Section 6.08(b), any material Security Document or other Loan Document shall not
be in full force and effect in all material respects or shall not be enforceable
in all material respects in accordance with its terms, or any security
interest(s) or lien(s) granted pursuant thereto which is, or are in the
aggregate, material shall fail to be perfected, or any party thereto other than
the Agent or the Lenders shall contest the validity of any material lien(s)
granted under, or shall disaffirm its obligations under, any material Security
Document or other Loan Document;
then and upon every such Event of Default and at any time thereafter during the
continuance of such Event of Default, at the election of the Required Lenders as
provided in Article XII, the Commitments shall terminate and the Notes and any
and all other Indebtedness of the Borrower to the Lenders shall immediately
become due and payable, both as to principal and interest, without presentment,
demand, prior notice, or protest, all of which are hereby expressly waived,
anything contained herein or in the Notes or other evidence of such indebtedness
to the contrary notwithstanding (except in the case of an Event of Default under
paragraph (m) or (n) of this Article VIII which, under applicable law, would
result in the automatic acceleration of the Borrower's Indebtedness, in which
event the Commitments shall automatically terminate and such Indebtedness shall
automatically become due and payable).
IX. REMEDIES ON DEFAULT, ETC. In case any one or more Events of Default
shall occur and be continuing, the Agent and the Lenders may proceed to protect
and enforce their rights by an action at law, suit in equity or other
appropriate proceeding, whether for the specific performance of any agreement
contained in this Agreement, any Security Document or the Notes, or for an
injunction against a violation of any of the terms hereof or thereof or in and
of the exercise of any power granted hereby or thereby or by law, all subject to
the provisions of Article XII. IN THE EVENT THAT THE AGENT SHALL APPLY FOR THE
APPOINTMENT OF, OR TAKING POSSESSION BY, A TRUSTEE, RECEIVER OR LIQUIDATOR OF
THE BORROWER OR ANY OF ITS SUBSIDIARIES OR OF ANY OTHER SIMILAR OFFICIAL, TO
HOLD OR LIQUIDATE ALL OR ANY SUBSTANTIAL PART OF THE PROPERTIES OR ASSETS OF THE
BORROWER OR SUCH SUBSIDIARY FOLLOWING THE OCCURRENCE OF A DEFAULT IN PAYMENT OF
ANY AMOUNT OWED TO THE AGENT OR ANY LENDER HEREUNDER, THE BORROWER, FOR ITSELF
AND ON BEHALF OF ITS SUBSIDIARIES (WITH ALL DUE AND PROPER AUTHORIZATION OF THE
BOARDS OF DIRECTORS OR PARTNERS, AS THE CASE MAY BE, OF EACH OF THE
SUBSIDIARIES), HEREBY JOINTLY AND SEVERALLY CONSENT TO SUCH APPOINTMENT AND
TAKING OF POSSESSION AND AGREE TO EXECUTE AND DELIVER ANY AND ALL DOCUMENTS
REQUESTED BY THE AGENT RELATING THERETO (WHETHER BY JOINING IN A PETITION FOR
THE VOLUNTARY APPOINTMENT OF, OR ENTERING NO CONTEST TO A PETITION FOR THE
APPOINTMENT OF, SUCH AN OFFICIAL OR OTHERWISE, AS APPROPRIATE UNDER APPLICABLE
LAW). No right conferred upon the Agent or the Lenders hereby or by any Security
Document or the Notes shall be exclusive of any other right referred to herein
or therein or now or hereafter available at law, in equity, by statute or
otherwise.
X. THE AGENT.
Section 10.01. Appointment, Powers and Immunities.
(a) Each Lender hereby irrevocably (subject to Section 10.08)
designates and appoints Bankers Trust Company, which designation and appointment
is coupled with an interest, as the Agent of such Lender under this Agreement
and the other Loan Documents, and each such Lender irrevocably authorizes
Bankers Trust Company as the Agent of such Lender, to take such action on its
behalf under the provisions of this Agreement and the other Loan Documents and
to exercise such powers and perform such duties as are expressly delegated to
the Agent by the terms of this Agreement and the other Loan Documents, together
with such other powers as are reasonably incidental thereto.
(b) The Agent (which term as used in this sentence and in Section 10.05
and the first sentence of Section 10.06 shall include reference to its
affiliates and its own and such affiliates' officers, directors, employees and
agents) shall not: (i) have any duties or responsibilities to be a trustee for
any Lender; (ii) be responsible to the Lenders for any recitals, statements,
representations or warranties contained in this Agreement, or in any certificate
or other document referred to or provided for in, or received by either of them
under, this Agreement, or for the value, validity, effectiveness, genuineness,
enforceability, perfection or sufficiency of this Agreement, any Note, any
Security Document or any other document referred to or provided for herein or
for any failure by any Company or any other Person to perform any of its
obligations hereunder or thereunder; (iii) be required to initiate or conduct
any litigation or collection proceedings hereunder except to the extent
requested by the Required Lenders; and (iv) be responsible for any action taken
or omitted to be taken by it hereunder or under any other document or instrument
referred to or provided for herein or in connection herewith, except for its own
gross negligence or willful misconduct.
(c) The Agent may employ agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact it selects with reasonable care.
(d) Subject to the foregoing, to Article XII and to the provisions of
any intercreditor agreement among the Lenders in effect from time to time, the
Agent shall, on behalf of the Lenders, (i) hold and apply any and all
Collateral, and the proceeds thereof, at any time received by it, in accordance
with the provisions of the Security Documents and this Agreement; (ii) exercise
any and all rights, powers and remedies of the Lenders under this Agreement, the
Security Documents and the other Loan Documents, including the giving of any
consent or waiver or the entering into of any amendment, subject to the
provisions of Article XII; (iii) execute, deliver and file UCC Financing
Statements, mortgages, deeds of trust, lease assignments and other such
agreements, and possess instruments on behalf of any or all of the Lenders; and
(iv) in the event of acceleration of the Borrower's Indebtedness hereunder, sell
or otherwise liquidate or dispose of any portion of the Collateral held by it
and otherwise exercise the rights of the Lenders hereunder and under the
Security Documents.
(e) The Lenders hereby authorize the Agent, at its option and in its
discretion, to release any Lien granted to or held by the Agent upon any
Collateral (i) upon termination of the Commitments and payment in full of all of
the Obligations, (ii) constituting property sold or to be sold or disposed of as
part of or in connection with any Disposition expressly permitted hereunder or
under any other Loan Document or to which the Required Lenders have consented or
(iii) otherwise pursuant to and in accordance with the provisions of any
applicable Loan Document. Upon request by the Agent at any time, the Lenders
will confirm in writing the Agent's authority to release Collateral pursuant to
this Section.
Section 10.02. Reliance by Agent. The Agent shall be entitled to rely
upon any certification, notice or other communication (including any
communication by telephone, telex, telegram or cable) believed by it to be
genuine and correct and to have been signed or sent by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by the Agent. As to any
matters not expressly provided for by this Agreement, the Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder in
accordance with instructions signed by the Required Lenders or the Lenders, as
the case may be, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on the Lenders.
Section 10.03. Events of Default. The Agent shall not be deemed to have
knowledge of the occurrence of an Event of Default (other than the non-payment
of principal of or interest on the Notes) unless it has received written notice
from any Lender or the Borrower specifying such Event of Default and stating
that such notice is a "Notice of Default". In the event that the Agent receives
such a notice of the occurrence of an Event of Default, the Agent shall give
prompt notice thereof to the Lenders (and shall give each Lender prompt notice
of each such non-payment). The Agent shall (subject to Section 10.07) take such
action with respect to such Event of Default as shall be directed by the
Required Lenders, as provided under Article XII, provided that, unless and until
the Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action on behalf of the Lenders, or refrain from taking
such action, with respect to such Event of Default as it shall deem advisable in
the best interest of the Lenders.
Section 10.04. Rights as a Lender. With respect to its Commitments and
the Loans made by Bankers Trust Company hereunder, Bankers Trust Company shall
have the same rights and powers hereunder as any other Lenders and may exercise
the same as though it were not acting as the Agent. The Agent and its affiliates
may, without having to account therefor to the Lenders and without giving rise
to any fiduciary or other similar duty to any Lender, accept deposits from, lend
money to and generally engage in any kind of banking, trust or other business
with the Borrower and any of its Affiliates as if it were not acting as an Agent
and as if it were not a Lender, and the Agent may accept fees and other
consideration from any Company, the Parent or any other Parent Affiliate for
services in connection with this Agreement or otherwise without having to
account for the same to the Lenders.
Section 10.05. Indemnification. The Lenders agree to indemnify the Agent
(to the extent not reimbursed under Section l4.02, but without limiting the
obligations of the Borrower under such Section l4.02), ratably in accordance
with the aggregate principal amount of the Notes and Commitments held by the
Lenders (or, if no such principal or interest is outstanding, ratably in
accordance with their respective Commitments), for any and all liabilities,
obligations, losses, damages, penalties, action, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever which may be imposed
on, incurred by or asserted against the Agent any way relating to or arising out
of this Agreement or any other Loan Document contemplated by or referred to
herein or the transactions contemplated by or referred to herein or therein
(including, without limitation, the costs and expenses which the Borrower is
obligated to pay under Section 14.02) or the enforcement of any of the terms of
this Agreement or of any other Loan Document or of any such other documents,
provided that no Lender shall be liable for any of the foregoing to the extent
they arise from the gross negligence or willful misconduct of the party to be
indemnified.
Section 10.06. Non-Reliance on Agent and other Lenders. Each Lender
agrees that it has, independently and without reliance on the Agent or any other
Lenders, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Companies and its own decision
to enter into this Agreement and that it will, independently and without
reliance upon the Agent or any other Lenders, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under this Agreement. The
Agent shall not be required to keep itself informed as to the performance or
observance by the Companies of this Agreement or any other Loan Document or to
inspect the properties or books of the Companies. Except for notices, reports
and other documents and information expressly required to be furnished to the
Lenders by the Agent hereunder, the Agent shall have no duty or responsibility
to provide any Lender with any credit or other information concerning the
affairs, financial condition or businesses of the Companies (or any of their
Affiliates) which may come into the possession of the Agent or any of its
affiliates. Notwithstanding the foregoing, the Agent will provide to the Lenders
any and all information reasonably requested by them and reasonably available to
the Agent promptly upon such request.
Section 10.07. Failure to Act. Except for action expressly required of
the Agent hereunder, the Agent shall in all cases be fully justified in failing
or refusing to act hereunder unless it shall be indemnified to its satisfaction
by the Lenders against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action.
Section 10.08. Resignation of Agent. Bankers Trust Company (or any other
Agent hereunder), may resign as the Agent at any time by giving ten (10) days'
prior written notice thereof to the Lenders and the Borrower. Any such
resignation shall take effect at the end of such ten (10) day period or upon the
earlier appointment of a successor Agent by the Required Lenders as provided
below. Upon any resignation of Bankers Trust Company (or any other Agent
hereunder), and subject to the Borrower's approval (which approval shall not be
unreasonably withheld or delayed and shall not be required with respect to any
such appointment made during the existence of any Event of Default) the Required
Lenders shall appoint a successor agent from among the Lenders or, if such
appointment is deemed inadvisable or impractical by the Required Lenders,
another financial institution with a combined capital and surplus of at least
$500,000,000. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent.
After the effective date of the resignation of an Agent hereunder, the retiring
Agent shall be discharged from its duties and obligations hereunder, provided
that the provisions of this Article X shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as the Agent. In the event that there shall not be a duly appointed and acting
Agent, the Borrower agrees to make each payment due to the Agent hereunder and
under the Notes, and the other Loan Documents if any, directly to each Lender
entitled thereto, pursuant to written instructions provided by the resigning
Agent or, after such resignation, the Lenders, and to provide copies of each
certificate or other document required to be furnished to the Agent hereunder,
if any, directly to each Lender.
Section 10.09. Cooperation of Lenders. Each Lender shall (a) promptly
notify the other Lenders and the Agent of any Event of Default known to such
Lender under this Agreement and not reasonably believed to have been previously
disclosed to the other Lenders; (b) provide the other Lenders and the Agent with
such information and documentation as such other Lenders or the Agent shall
reasonably request in the performance of their respective duties hereunder,
including, without limitation, all information relative to the outstanding
balance of principal, interest and other sums owed to such Lender by the
Borrower; and (c) cooperate with the Agent with respect to any and all
collections and/or foreclosure procedures at any time commenced against the
Borrower or otherwise in respect of the Collateral by the Agent in the name and
on behalf of the Lenders.
XI. DEFINITIONS.
As used herein the following terms have the following respective
meanings:
Accountants. See Section 6.05.
Acquisition. The acquisition by the Borrower or any Subsidiary, whether by
way of the purchase of assets or stock, by merger or consolidation or otherwise,
of (i) exclusive DBS Rights for the delivery of DIRECTV, (ii) any broadcast
television business or (iii) any cable television business, including without
limitation a swap of any such existing DBS Rights or business for any other such
DBS Rights or any other such business or an equity contribution of any such DBS
Rights or business to a Subsidiary by any Affiliate of any Company.
Acquisition Agreements. With respect to any Permitted Acquisition, the
respective acquisition, purchase or other agreement which sets forth the
terms and conditions of such acquisition.
Acquisition Loans. See Section 3.02.
Adjusted Available Commitments. As of any date, the aggregate amount of
the Commitments then in effect minus the Letter of Credit Exposure, minus that
portion of the Permitted Seller Debt Outstandings not secured by Letters of
Credit plus the amount by which the NRTC Letter of Credit Exposure as of such
date exceeds the actual amount then owed to the NRTC by the Companies under the
NRTC Member Agreements.
Adjusted EBITDA. For any period of four (4) fiscal quarters, (a) Location Cash
Flow derived from the DBS Subsidiaries for the last fiscal quarter in
such period, after restoring thereto amounts deducted for Subscriber
Acquisition Costs, multiplied by four (4), plus (b) Location Cash Flow
derived from the Borrower's other Subsidiaries for such four (4) quarter
period, minus (c) corporate overhead charges for the Borrower and all of
its Subsidiaries for such four (4) quarter period; all determined on a
consolidated basis, after eliminating intercompany items, in accordance
with GAAP.
Adjusted Fixed Charges. For any period of four (4) fiscal quarters, the
sum of (a) Subscriber Acquisition Costs for such period, (b) Total Debt
Service for such period; (c) Capital Expenditures made by the Companies
during such period; and (d) all other distributions and other payments
made to the Parent under Section 5.05 or otherwise.
Affiliate(s). Any Person that directly or indirectly controls, or is
under common control with, or is controlled by, the Borrower and, if such
Person is an individual, any member of the immediate family (including
parents, spouse, children and siblings) of such individual and any trust
whose principal beneficiary is such individual or one or more members of
such immediate family and any Person who is controlled by any such member
or trust. As used in this definition, "control", including, its
correlative meanings, "controlled by" and "under common control with",
shall mean possession, directly or indirectly, of power to direct or
cause the direction of management or policies (whether through ownership
or securities or partnership or other ownership interests, by contract or
otherwise), provided that, in any event, any Person that owns directly or
indirectly securities having ten percent (10%) or more of the voting
power for the election of directors or other governing body of a
corporation or ten percent (10%) or more of the partnership or other
ownership interests of any other Person (other than as a limited partner
of such other Person) will be deemed to control such corporation or other
Person. Notwithstanding the foregoing, no individual shall be an
Affiliate solely by reason of his or her being a director, officer or
employee of the Borrower or any Subsidiary.
Affiliate Subordination Agreements. See Section 2.01.
Agent. See the Preamble.
Aggregate Exposure. See Section 1.01.
Annualized EBITDA. For any fiscal quarter, (a) Location Cash Flow derived
from the DBS Subsidiaries for such fiscal quarter, multiplied by four
(4), plus (b) Location Cash Flow derived from the other Subsidiaries for
such fiscal quarter and the immediately preceding three (3) fiscal
quarters minus (c) corporate overhead charges for all of the Borrower's
Subsidiaries for such fiscal quarter and the immediately preceding three
(3) fiscal quarters, all determined on a consolidated basis, after
eliminating intercompany items, in accordance with GAAP.
Applicable Margin. See Section 1.03.
Assignment and Acceptance. See Article XIII.
Audited Financial Statements. See Section 1.03.
Available Commitments. See Section 1.01.
Average Subscriber Acquisition Cost. For any period, Subscriber
Acquisition Costs divided by Net Subscriber Additions.
Bankers Trust Company. See the Preamble.
Base Rate. As of any date, the fluctuating interest rate per annum equal
to the greater of (a) the rate established by Bankers Trust Company from
time to time at its office in New York City as its "Base Rate" for
commercial loans in United States Dollars, and (b) the Federal Funds Rate
plus 1.00%; in each case, including any applicable adjustments for
reserves or Federal Deposit Insurance Corporation requirements. The Base
Rate is not necessarily intended to be the lowest rate of interest
determined by Bankers Trust Company in connection with extensions of
credit.
Base Rate Loans. Loans bearing interest at a rate determined on the basis
of the Base Rate.
Borrower. See the Preamble.
Borrowing Date. With respect to any Loans requested hereunder, the date
such Loans are to be made.
Budget. See Section 6.05.
Business Day. (a) For all purposes other than as provided in clause (b)
below, any day other than a Saturday, Sunday or legal holiday on which
banks in New York, New York are open for the transaction of a substantial
part of their commercial banking business; and (b) with respect to all
notices and determinations in connection with, and payments of principal
and interest on, LIBOR Loans, any day that is a Business Day described in
clause (a) and that is also (i) a day when on which banks in London,
England are open for the transaction of a substantial part of their
commercial banking business and (ii) a day for trading by and between
banks in U.S. Dollar deposits in the London interbank market.
Capital Expenditures. For any period, expenditures, (including, without
duplication, the aggregate amount of Capital Lease Obligations incurred
during such period) made by any of the Companies to acquire or construct
fixed assets, plant or equipment (including renewals, improvements and
replacements, but excluding repairs and acquisitions permitted hereunder)
during such period, computed in accordance with GAAP.
Capital Lease. Any lease of property (real, personal or mixed) which, in
accordance with GAAP and Statement No. 13 of the Financial Accounting
Standards Board, would be permitted or required to be capitalized on the
lessee's balance sheet.
Capital Lease Obligations. All obligations of the Companies to pay rent
or other amounts under a lease of (or other agreement conveying the right
to use) property (real, personal or mixed) to the extent such obligations
are required to be classified and accounted for as a capital lease on any
such Company's balance sheet under GAAP, and, for purposes of this
Agreement, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP.
Casualty Event. Any loss of, or damages to, or any condemnation or other
taking of any assets or property of the Companies for which any Company
receives insurance proceeds, proceeds of a condemnation award or other
compensation.
CATV Franchise. All franchises, licenses, authorizations or rights by
contract or otherwise to construct, own, operate, promote, extend and/or
otherwise exploit any System operated or granted by any state, county,
city, town, village or other local or state government authority or by
the FCC. The term "Franchise" shall include each of the CATV Franchises
set forth on Schedule 4.07.
CATV Franchise Consents. In connection with any Acquisition of cable
television properties, all consents of the applicable franchising
authorities to the collateral assignment of the related CATV Franchises
to the Agent, on behalf of the Lenders, the grant of security interests
in such cable television properties and the execution and delivery of the
related Security Documents required hereunder.
CERCLA. The Comprehensive Environmental Response, Compensation and
Liability Act of 1989 (42 USC 9601,
et. seq.).
Churn. For any period, subscribers to the DBS services offered by the DBS
Subsidiaries as of the first day of such period which cease to be
subscribers during such period (including any such subscribers whose
service has been discontinued for non-payment, but excluding any such
subscribers discontinued in connection with a Disposition) minus any
subscribers which resubscribe to such DBS services during such period.
Closing Date. The date on which the this Agreement becomes effective and
the first Loans are made or the first Letters of Credit are issued.
Code. The Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.
Collateral. Collectively, any and all collateral referred to herein and
in the Security Documents.
Collateral Account. The "Collateral Account", as defined in the Security
Agreements.
Commitment Fee. See Section 1.07.
Commitment Fee Rate. See Section 1.07.
Commitment Reduction Notice. See Section 1.06.
Commitments. See Section 1.01.
Companies. Collectively, the Borrower and its Subsidiaries.
Compliance Report. See Section 6.05.
Compliance Report Delivery Date. See Section 1.03.
Controlled Group. All trades or businesses (whether or not incorporated)
under common control that, together with the Borrower, are treated as a
single employer under Section 414(b) or 414(c) of the Code or Section
40001 of ERISA.
Copyright Office. The United States Copyright and Trademark Office or any
other federal government agency which may hereafter perform its
functions.
Current Assets. On any date, all assets of the Companies on such date
which, in accordance with GAAP, would be classified on a consolidated
balance sheet of the Companies as "current assets".
Current Liabilities. On any date, all liabilities of the Companies on
such date which, in accordance with GAAP, would be classified on a
consolidated balance sheet of the Companies as "current liabilities"
(other than the current portion of long-term Indebtedness).
Damaged Property. See Section 6.02.
DBS. See the Recitals.
DBS Agreements. The NRTC Member Agreements and any and all other
agreements entered into by the Borrower or any of the Subsidiaries from
time to time (as amended from time to time with the Lenders' consent, if
required under this Agreement), to license the right to deliver DBS
Services.
DBS Rights. Any rights to market, sell, deliver and retain revenues from
direct broadcast television programming initially transmitted over
satellite frequencies, and all rights to distribute services of the type
known as "DBS Services" under the NRTC Member Agreements, including
without limitation all such rights with respect to DIRECTV and DBS under
the DirecTv Agreements or the NRTC Member Agreements.
DBS Subscriber Areas. On any date, all of the geographic areas in which
the Companies, or any of them, have the right to distribute DIRECTV and
other DBS services, as described in the NRTC Member Agreements.
DBS Subsidiaries. Any Subsidiary of the Borrower which now or hereafter
holds DBS Rights.
DBS Transfer. The purchase by PSTH from PSH of all of the issued and
outstanding shares of capital stock of PSH's subsidiaries (except for
certain outstanding shares of preferred stock constituting Permitted
Preferred Stock) in exchange for (i) a cash payment of $84,593,794, (ii)
the return to PSH of 2,780 shares of the Series A Preferred Stock, $1.00
par value, of PSH, (iii) the assumption by the Borrower of the
outstanding indebtedness of PSH under its then existing senior credit
facilities, including without limitation PSH's obligations to make
reimbursement payments in respect of outstanding NRTC Letters of Credit,
as defined and outstanding thereunder, in the aggregate face amount of
$100,639,130, and (iv) the assumption by the Borrower of certain
scheduled debts of PSH not exceeding $6,000,000 in the aggregate and
principally related to seller financing permitted under its then existing
senior credit facilities.
Default. (a) An Event of Default or (b) an event or condition that, but
for the requirement that time elapse or notice be given, or both, would
constitute an Event of Default.
Defaulting Lender. Any Lender with respect to which a Lender Default is
in effect.
DirecTv. DirecTv, Inc., an affiliate of HCG, and any successor thereof.
DIRECTV. The video, audio and data services provided over satellite
frequencies by DirecTv.
DirecTv Agreements. The HCG Agreement (as defined in the NRTC Member
Agreements) whether or not assigned to DirecTv by HCG, and any other
material agreements under which NRTC has obtained rights to distribute
DBS services covered by any of the NRTC Member Agreements or has obtained
any other DBS Rights granted to any of the Companies by NRTC.
Disposition. See Section 7.03.
Dollars and $. Lawful money of the United States of America.
EBITDA. For any period, Net Income for such period, plus, to the extent
deducted in the determination of Net Income and not otherwise restored in
accordance with the definition of such term, (a) Total Interest Expense,
(b) depreciation, (c) amortization, (d) taxes in respect of income and
profits expensed during such period, including without limitation but
without duplication payments owed under the Tax Sharing Agreement, (e)
Transaction Costs, and (f) other non-cash expenses (including the
amortization of television program license and rental fees) minus (g)
television program license and rental fees actually paid in cash; all
determined on a consolidated basis, after eliminating intercompany items,
in accordance with GAAP.
Effective Date. See Section 1.08.
Environmental Laws. Any and all present and future Federal, state, local
and foreign laws, rules or regulations, and any orders or decrees, in each case
as now or hereafter in effect, relating to the regulation or protection of human
health, safety or the environment or to emissions, discharges, releases or
threatened releases of pollutants, contaminants, chemicals or toxic or hazardous
substances or wastes into the indoor or outdoor environment, including, without
limitation, ambient air, soil, surface water, ground water, wetlands, land or
subsurface strata, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, chemicals or toxic or hazardous substances or wastes.
Environmental Questionnaire. See Section 4.24.
Environmental Site Assessment. See Section 4.24.
ERISA. The Employee Retirement Security Act of 1974, as amended.
Excess Cash Flow. For any period, EBITDA for such period minus (a) Fixed
Charges for such period, minus (b) voluntary prepayments of the Notes
made in connection with voluntary permanent reductions of the Commitments
during such period, as provided in Section 1.06(a), minus (c) Restricted
Payments made under Sections 5.05(a), 5.05(b)(v) and 5.05(b)(vi) during
such period minus (d) any increase in Working Capital during such period,
measured as of the last day of such period by comparison with Working
Capital on the first day of such period, plus (e) any decrease in Working
Capital during such period, measured as of the last day of such period by
comparison with Working Capital on the first day of such period.
Excluded Disposition. A Disposition permitted under Section 7.03(a) or
Section 7.03(b), so long as no Default has occurred and is continuing on
the date such Disposition is consummated.
Expiration Date. See Section 1.01.
Event of Default. See Article VIII.
FAA. The Federal Aviation Administration or any other federal
governmental agency which may hereafter perform its functions.
FCC. The Federal Communications Commission or any other federal
governmental agency which may hereafter
perform its functions.
FCC Consents. In connection with any Acquisition of broadcast television
properties, all consents of the FCC to such Acquisition and to the
execution and delivery of the related Security Documents required
hereunder.
FCC Licenses. Any Licenses issued by the FCC; including those listed on
Schedule 4.08.
Federal Funds Rate. For any period, a fluctuating interest rate per annum
(based on a 360 day year) equal for each day during such period to the
weighted average of the rates of interest charged on overnight Federal
funds transactions with member banks of the Federal Reserve System
arranged by Federal funds brokers on such day, as published for any day
which is a Business Day by the Federal Reserve Bank of New York (or, in
the absence of such publication, as reasonably determined by the Agent).
Fee Letter. The Fee Letter entered into as of October 8, 1997, between
the Borrower and Bankers Trust Company, individually and as Agent, as
amended from time to time in accordance with the respective terms
thereof.
Financial Statements. See Section 4.01.
Fixed Charges. For any fiscal year, the sum of (a) capitalized Subscriber
Acquisition Costs for such fiscal year, (b) Total Debt Service for such
period; (b) Capital Expenditures made by the Companies during such fiscal
year and (c) taxes paid or payable by the Companies during such fiscal
year in respect of income and profits, including without limitation
payments owed under the Tax Sharing Agreement.
Franchise Areas. The communities listed in Schedule 4.07.
Funded Debt. Without duplication, all Indebtedness with respect to any of
the following: (a) money borrowed (whether recourse or non-recourse),
including principal and overdue interest and premiums, (b) Rate Hedging
Obligations, (c) obligations evidenced by a bond, debenture, note or
other like written obligation to pay money, (d) Capital Lease
Obligations, (e) obligations under conditional sales or other title
retention agreements or secured by any Lien, (f) any letters of credit,
bankers acceptances or similar instruments (including reimbursement
obligations with respect thereto), (g) the deferred unpaid purchase price
of property or services, except trade payables and accrued expenses
incurred in the ordinary course of business, or (h) any guaranty of any
or all of the foregoing.
GAAP. Generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
entity as may be approved by a significant segment of the accounting
profession, as in effect on December 31, 1996, applied on a basis
consistent with (a) the application of the same in prior fiscal periods,
(b) that employed by the Accountants in preparing the financial
statements referred to in Section 6.05(a) and (c) the accounting
principles generally utilized in the cable television, broadcast
television or direct broadcast satellite industry, as the case may be.
General Purpose Letters of Credit. Any and all Letters of Credit issued
pursuant hereto, other than NRTC Letters of Credit and Seller Letters of
Credit, provided that no such Letter of Credit may be issued for the
purpose of supporting any Indebtedness constituting "antecedent debt" (as
such term is used in Section 547 of the United States Bankruptcy Code).
General Purpose Letter of Credit Exposure. The portion of the aggregate
Letter of Credit Exposure arising from General Purpose Letters of Credit.
Governmental Authority. Any nation or government, any state or other
political subdivision thereof and any entity exercising any executive,
legislative, judicial, regulatory or administrative functions of, or
pertaining to, government.
Gross Subscriber Additions. For any period, the total amount of Paying
Subscribers for DBS services of the DBS Subsidiaries added in the
ordinary course of operations of such Companies, excluding (a) any Paying
Subscribers which resubscribe to the Companies' DBS services during such
period, (b) any Paying Subscribers purchased, acquired or swapped during
such period and (c) any Paying Subscribers sold or otherwise disposed of
during such period.
Hazardous Materials. (a) any petroleum or petroleum products, flammable
materials, explosives, radioactive materials, asbestos, urea formaldehyde
foam insulation, and transformers or other equipment that contain
polychlorinated biphenyls ("PCB's"), (b) any chemicals or other materials
or substances that are now or hereafter become defined as or included in
the definition of "hazardous substances", "hazardous wastes", "hazardous
materials", "extremely hazardous wastes", "restricted Hazardous wastes",
"toxic substances", "toxic pollutants", "contaminants", "pollutants" or
words of similar import under any Environmental Law and (c) any other
chemical or other material or substance, exposure to which is now or
hereafter prohibited, limited or regulated under any Environmental Law.
Headend Site Leases. See Section 4.13.
HCG. Xxxxxx Communications Galaxy, Inc. and any successor thereof.
Hedging Lender. Any Lender, or any affiliate of any Lender, which from
time to time enters into a Rate Hedging Agreement with any Company.
Indebtedness or indebtedness. As applied to any Person, (a) all items
(except items of capital stock, capital or paid-in surplus or of retained
earnings) which, in accordance with GAAP, would be included in
determining total liabilities as shown on the liability side of a balance
sheet of such Person as at the date as of which Indebtedness is to be
determined, including Capital Lease Obligations but excluding
Indebtedness of the Companies with respect to trade obligations and other
normal accruals in the ordinary course of business not yet due and
payable or not more than ninety (90) days in arrears measured from the
date of billing; (b) all indebtedness secured by any mortgage, pledge,
lien or conditional sale or other title retention agreement to which any
property or asset owned or held by such Person is subject, whether or not
the indebtedness secured thereby shall have been assumed; and (c) all
indebtedness of others which such Person has directly or indirectly
guaranteed, endorsed (otherwise than for collection or deposit in the
ordinary course of business), discounted or sold with recourse or agreed
(contingently or otherwise) to purchase or repurchase or otherwise
acquire, or in respect of which such Person has agreed to supply or
advance funds (whether by way of loan, stock or equity purchase, capital
contribution, makewell or otherwise) or otherwise to become directly or
indirectly liable.
Indemnified Liabilities. See Section 14.13.
Indemnified Parties. See Section 14.13.
Insurance Proceeds. With respect to any Casualty Event, any proceeds of
insurance, condemnation award or other compensation in respect thereof.
Interest Expense. For any period, the aggregate amount (determined on a
consolidated basis, after eliminating intercompany items, in accordance
with GAAP) of interest, commitment fees and letter of credit fees accrued
(whether or not paid) during such period (including without limitation
the Commitment Fee, the Issuance Fee and the Letter of Credit Fee and the
interest component of Capital Lease Obligations, but excluding
non-recurring structuring and facility fees payable under the Fee Letter
and interest in respect of overdue trade payables) by the Companies in
respect of all Indebtedness for borrowed money.
Interest Period. With respect to each LIBOR Loan, the period commencing
on the date such Loan is made or converted from a Base Rate Loan, or the
last day of the immediately preceding Interest Period, as to LIBOR Loans
being continued as such, and ending one (1), two (2), three (3) or six
(6) months thereafter, as the Borrower may elect in the applicable Loan
Request or Interest Rate Option Notice, provided that:
(a) any Interest Period (other than an Interest Period
determined pursuant to clause (d) below) that would otherwise end on a
day that is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in the next calendar month,
in which case such Interest Period shall end on the immediately preceding
Business Day;
(b) if the Borrower shall fail to give notice as provided in
Section 1.04, the Borrower shall be deemed to have requested a conversion
of the affected LIBOR Loan to a Base Rate Loan on the last day of the
then current Interest Period with respect thereto;
(c) any Interest Period relating to a LIBOR Loan 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 (d) below, end on the last
Business Day of a calendar month;
(d) any Interest Period related to a LIBOR Loan that would
otherwise end after the final maturity date of the Loans shall end on
such final maturity date;
(e) no Interest Period shall include a principal repayment date
for the Loans unless an aggregate principal amount of Loans at least
equal to the principal amount due on such principal repayment date shall
be Base Rate Loans or LIBOR Loans having Interest Periods ending on or
before such date; and
(f) notwithstanding clauses (d) and (e) above, no Interest
Period shall have a duration of less than one (1) month.
Interest Rate Option Notice. A notice given by the Borrower to the Agent
of the Borrower's election to convert Loans to a different type or
continue Loans as the same type, in accordance with Section 1.04(c).
Issuance Fee. See Section 1.02.
Issuing Bank. Bankers Trust Company, any affiliate thereof designated by
Bankers Trust Company or any other Lender which may serve as the "Issuing
Bank" in the event that Bankers Trust Company elects to cease providing
letter of credit services hereunder.
Junior Reorganization Securities. With respect to any Seller
Subordination Agreement, debt or equity securities of the Company
obligated under the applicable Permitted Seller Subordinated Debt, or of
any successor corporation provided for by a plan of reorganization, that
are subordinated at least to the same extent that such Permitted Seller
Subordinated Debt is subordinated to the payment of the Obligations then
outstanding (including all limitations on rights of action set forth in
such Seller Subordination Agreement and all other obligations and
restrictions imposed thereunder); provided that (a) if a new corporation
results from such reorganization, such corporation shall have assumed all
Obligations not paid in full in cash in connection with such
reorganization and (b) no such debt or equity securities shall be
permitted if the issuance thereof causes or could cause the applicable
Permitted Seller Subordinated Debt to be treated in any bankruptcy,
reorganization or similar proceeding as part of (i) the same class of
claims as any of the Obligations or (ii) any class of claims pari passu
with, or senior to, any of the Obligations with respect to any payment or
distribution.
Lender Default. (a) The refusal (which has not been retracted) of a
Lender to make available its portion of any Loan or, if applicable, to
fund its portion of any Letter of Credit Disbursement, or (b) a Lender
having notified the Borrower and/or the Agent in writing that it does not
intend to lend under this Agreement or comply with its obligation, if
any, with respect to any Letter of Credit Disbursement; in either case
other than by reason of any failure of the Borrower to meet any material
condition precedent thereto hereunder.
Lenders. See the Preamble.
Letter of Credit and Letters of Credit. See Section 1.02.
Letter of Credit Disbursement. See Section 1.02.
Letter of Credit Documents. See Section 1.02.
Letter of Credit Exposure. The sum of (a) the aggregate amount of all
Reimbursement Obligations and (b) the aggregate undrawn amount under all
outstanding Letters of Credit. The Letter of Credit Exposure of any
Lender at any time shall mean its pro rata percentage of the aggregate
Letter of Credit Exposure, based on the aggregate Commitments.
Letter of Credit Fee. See Section 1.02.
Letter of Credit Request. See Section 1.02.
LIBOR Base Rate. With respect to each day during each Interest Period
pertaining to any LIBOR Loan, the rate per annum determined by the Agent
to be the arithmetic mean of the offered rates for deposits in Dollars
with a term comparable to such Interest Period that appears on the
Telerate British Bankers Assoc. Interest Settlement Rates Page (as
defined below) at approximately 11:00 A.M., London time, on the second
full Business Day preceding the first day of such Interest Period;
provided, however, that if there shall at any time no longer exist a
Telerate British Bankers Assoc. Interest Settlement Rates Page, the term
"LIBOR Base Rate" shall mean, with respect to each day during each
Interest Period pertaining to any LIBOR Loan, the rate per annum equal to
the rate at which the Agent is offered Dollar deposits at or about 10:00
A.M., New York City time, two (2) Business Days prior to the beginning of
such Interest Period in the London interbank deposit market where the
eurodollar and foreign currency and exchange operations in respect of its
LIBOR Loans are then being conducted for delivery on the first day of
such Interest Period for the number of days comprised therein and in an
amount comparable to the amount of its LIBOR Loan to be outstanding
during such Interest Period. As used herein, the "Telerate British
Bankers Assoc. Interest Settlement Rates Page" means the display
designated as Page 3750 on the Telerate System Incorporated Service (or
such other page as may replace such page on such service for the purpose
of displaying the rates at which Dollar deposits are offered by leading
banks in the London interbank deposit market).
LIBOR Loans. Loans bearing interest at a rate determined on the basis of
the LIBOR Rate.
LIBOR Rate. With respect to each day during each Interest Period
pertaining to a LIBOR Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward, if necessary, to
the nearest 1/16th of 1%):
LIBOR Base Rate
1.00 - LIBOR Reserve Requirements
LIBOR Reserve Requirements. For any day as applied to a LIBOR Loan, the
aggregate (without duplication) of the rates (expressed as a decimal
fraction) of reserve requirements in effect on such day (including
without limitation basic, supplemental, marginal and emergency reserves)
under any regulations of the Board of Governors of the Federal Reserve
System (or other Governmental Authority having jurisdiction with respect
thereto) prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of such Board) maintained by a
member bank of the Federal Reserve System.
License Agreements. The several Operating Agreements dated as of October
31, 1994 between PBT and each of the License Subsidiaries, as the same
are in effect as of the date hereof, and all similar Operating Agreements
entered into after the date hereof in connection with the acquisition of
new Stations..
Licenses. A license, authorization or permit to construct, own or operate
any Station granted by the FCC or any other Governmental Authority. The
term "License" shall include each of the Licenses set forth on Schedule
4.07(b).
License Subsidiaries. WDBD License Corp., WDSI License Corp., HMW, Inc.,
Pegasus Broadcast Associates, L.P., and WOLF License Corp., each a
Subsidiary of Pegasus Broadcast Television, Inc. formed for the sole
purpose of owning one or more FCC Licenses.
Liens. See Section 4.13.
LMA. A local marketing agreement, program service agreement or time
brokerage agreement between a broadcaster and a television station
licensee pursuant to which the broadcaster provides programming to, and
retains the advertising revenues of, such station in exchange for fees
paid to licensee.
LMA Purchase Option. With respect to any Permitted LMA, any option to
purchase the broadcast station or assets subject thereto which is binding
upon any one or more of the Companies.
Loan Documents. This Agreement, the Notes, the Security Documents and all
other agreements, instruments and certificates contemplated hereby and
thereby, including without limitation any Rate Hedging Agreements entered
into with any of the Lenders or their Affiliates.
Loan Request. See Section 1.04.
Loans. See Section 1.01.
Location Cash Flow. With respect to any Subsidiary or Subsidiaries of the
Borrower, for any fiscal period, EBITDA for such period derived from such
segment(s), after restoring thereto amounts deducted for corporate
overhead charges, determined on a consolidated basis, in accordance with
GAAP.
Maintenance Capital Expenditures. For any period, Capital Expenditures
incurred by the Companies during such period, excluding any portion of
Subscriber Acquisition Costs which would otherwise be capitalized in
accordance with GAAP.
Management Fees. Amounts due and payable by the Companies to the Manager
in consideration for management and administrative support services.
Manager. Pegasus Communications Management Company, a Pennsylvania
corporation which is wholly owned by the Parent.
Margin Stock. See Section 4.17.
Material Adverse Effect. (a) An adverse effect on the validity or
enforceability of this Agreement or any of the other Loan Documents in
any material respect, (b) an adverse effect on the condition (financial
or other), business, results of operations, prospects or properties of
the Borrower and its Subsidiaries, taken as a whole, in any material
respect or (c) an impairment of the ability of the Companies to fulfill
their obligations under this Agreement or any other Loan Document to
which any Company is a party, in any material respect.
MCT. MCT Cablevision Limited Partnership, a Delaware limited partnership
which is a Subsidiary of Pegasus Cable Television, Inc.
MCT Note Documents. The $15,000,000 Second Amended and Restated
Promissory Note dated March 12, 1993, issued to Philips Credit
Corporation by MCT; endorsed by Philips Credit Corporation to the
Borrower and by the Borrower to the Agent; the $9,074,135.13 Second
Amended and Restated Promissory Note dated March 12, 1993, issued to
Philips Credit Corporation by MCT, endorsed by Philips Credit Corporation
to the Borrower and by the Borrower to the Agent; and any and all other
instruments, documents, certificates and agreements executed and
delivered in connection therewith.
MCT Systems. The Systems serving Mayaguez, Puerto Rico and certain
contiguous communities and owned and operated by MCT.
Net Cash Proceeds. With respect to any Disposition, the aggregate amount
of all cash payments received by (a) any Company or (b) any Qualified
Intermediary, as defined in the United States Treasury Regulations
promulgated under Section 1031 of the Code and as used in connection with
a like-kind exchange under such Section 1031, directly or indirectly, in
connection with such Disposition, whether at the time thereof or after
such Disposition under deferred payment arrangements or investments
entered into or received in connection with such Disposition, minus the
aggregate amount of any legal, accounting, regulatory, title and
recording tax expenses, commissions and other fees and expenses paid by
any Company in connection with such Disposition, and minus any income
taxes payable by any Company in connection with such Disposition.
Net Income. For any period, net income of the Companies from their
respective operations, after deducting all operating expenses, provisions
for all taxes and reserves (including Management Fees and reserves for
deferred income taxes) and all other proper deductions (including
Interest Expense), but excluding (a) any gains or losses derived from any
sales of assets made during such period, to the extent such gains or
losses are properly includable in the determination of Net Income such
period, (b) the effect of Trades, (c) write-offs of deferred financing
costs incurred by the Borrower and PSH under their most recently existing
senior credit facilities and (d) non-cash restructuring charges, provided
that subsequent cash payments made in respect of such charges shall be
deducted in determining Net Income for the relevant period, all
determined on a consolidated basis, after eliminating intercompany items,
in accordance with GAAP
Net Subscriber Additions. For any period, Gross Subscriber Additions for
such period minus Churn during such period.
New England Systems. The Systems located in Connecticut and
Massachusetts.
Notes. See Section 1.01.
NRTC. The National Rural Telecommunications Cooperative, a District of
Columbia corporation, and any successor thereto under the NRTC Member
Agreements.
NRTC Consents. In connection with any Acquisition of DBS Rights, all NRTC
or DirecTv consents to the collateral assignment of any related NRTC
Member Agreements and any other DBS Agreements to the Agent, on behalf of
the Lenders.
NRTC Letter of Credit Exposure. That portion of the aggregate Letter of
Credit Exposure arising from NRTC Letters of Credit.
NRTC Letters of Credit. Any and all Letters of Credit issued in favor of
the NRTC, as beneficiary.
NRTC Member Agreements. (a) The NRTC/Member Agreements for Marketing and
Distribution of DBS Services between any Company and the NRTC listed as
such on Schedule 4.07, as amended through the date hereof (including
without limitation the amendment described on Schedule 4.07 providing for
certain letter of credit requirements in connection with the delivery of
DBS by the Subsidiaries to certain households in the DBS Subscriber
Areas), and (b) the NRTC/Member DBS Product Retail Agreements listed on
Schedule 4.07, in each case as originally executed and delivered and as
amended in accordance with Section 7.11, pursuant to which the DBS
Subsidiaries hold the exclusive rights to provide cable programming
services and all other video, audio and data packages transmitted by
DirecTv over the DirecTv frequencies (as defined therein) to residential
and commercial subscribers in specified service areas, and any other
NRTC/Member Agreements for Marketing and Distribution of DBS Services,
NRTC/Member DBS Product Retail Agreements or other agreements between any
Company and the NRTC for the provision of DBS services in any other
specified service areas not covered by the existing NRTC Member
Agreements referred to above.
Obligations. The Loans, the Borrower's obligations to repay Letter of
Credit Disbursements and the other obligations of the Companies under
this Agreement and the other Loan Documents, including without limitation
any and all future loans, advances, debts, liabilities, obligations,
covenants and duties owing by the Companies to the Agent and the Lenders,
or any of them, of any kind or nature, whether or not evidenced by any
note, mortgage or other instrument, whether arising by reason of an
extension of credit, loan, guarantee, letter of credit, indemnification
or in any other manner, whether direct or indirect (including those
acquired by assignment), absolute or contingent, due or to become due,
now existing or hereafter arising and however acquired. The term
"Obligations" also includes, without limitation, all interest, charges,
expenses, fees (including attorneys', accountants', appraisers',
consultants' and other fees) and any other sums chargeable to the
Companies under this Agreement or any other Loan Documents.
Offering. See the Recitals.
Offering Memorandum. See the Recitals.
Opening Balance Sheet. See Section 4.01.
Parent. See the Preamble.
Parent Loans. Any and all unsecured loans made by the Parent to the
Borrower prior to the date of the first Loans under this Agreement up to
an aggregate principal amount outstanding at any time not exceeding
$47,000,000.
Participant. See Section 1.13.
Paying Subscriber. Any subscriber to DBS services provided by a DBS
Subsidiary (a) from whom such DBS Subsidiary has received at least one
payment for programming service, (b) whose account balance is not more
than sixty (60) days past due, measured from the invoice due date
thereof, without giving effect to any extensions thereof, and (c) who
shall not have disconnected service.
Payment Date. The last Business Day of each March, June, September and
December of each year.
PBT. Pegasus Broadcast Television, Inc., a Pennsylvania corporation
wholly owned by the Borrower.
PCC Consolidated Leverage Ratio. The meaning given to the term
"Indebtedness to Adjusted Operating Cash Flow Ratio" in the PCC
Indenture, as in effect on the date hereof, without giving effect to any
amendment thereto after the date hereof (unless the Required Lenders
agree in writing, in their sole discretion, that any such amendment shall
be given effect for purposes of this Agreement).
PCC Indenture. See the Recitals.
PCC Preferred Stock. The Parent's Series A Cumulative Exchangeable
Preferred Stock issued on January 27, 1997, on the terms and conditions
set forth in the PCC Preferred Stock Designation.
PCC Preferred Stock Designation. The Certificate of Designation,
Preferences and Relative, Participating, Optional and Other Special
Rights of Preferred Stock and Qualifications, Limitations and
Restrictions thereof of 12.75% Series A Cumulative Exchangeable Preferred
Stock of Pegasus Communications Corporation filed with the office of the
Secretary of State of the State of Delaware on January 24, 1997.
PCC Preferred Stock Dividends. See Section 5.05.
PCC Senior Notes. See the Recitals.
PCC Subordinated Notes. The Parent's 12.75% Senior Subordinated Exchange
Notes due 2007 issuable in exchange for PCC Preferred Stock pursuant to
the PCC Preferred Stock Designation.
PCT. Pegasus Cable Television, Inc., a Massachusetts corporation wholly
owned by the Borrower.
PCT-CONN. Pegasus Cable Television of Connecticut, Inc., a Connecticut
corporation wholly owned by PCT.
PCT-CONN Note Documents. The following documents: (a) that certain
Promissory Note and Loan Agreement dated as of February 18, 1993 by and
between Pegasus Cable Television of Connecticut, L.P., a Pennsylvania
limited partnership ("PCTOCLP"), and Pegasus Cable Television, L.P., a
Pennsylvania limited partnership ("PCTLP"), as (i) assigned and assumed
to and by PCT-CONN pursuant to (A) that certain Assignment and Assumption
Agreement dated as of October 31, 1994 among PCTOCLP, as assignor,
PCT-CONN, as assignee, and PCTLP, as lender and (B) that certain Xxxx of
Sale, General Assignment and Assumption Agreement dated October 31, 1994
between PCT-CONN, as buyer, and PCTOCLP, as seller, and (ii) assigned and
assumed to and by PCT pursuant to (A) that certain Assignment, Assumption
and Modification Agreement dated as of October 31, 1994 among PCT-CONN
(as assignee of PCTOCLP), PCTLP, as assignor, and PCT, as assignee, and
recorded with the Winchester, Connecticut Land Records on November 15,
1994 in Volume 254 at Page 508, and (B) that certain Xxxx of Sale,
General Assignment and Assumption Agreement dated October 31, 1994
between PCT, as buyer, and PCTLP, as seller, (b) that certain Amended and
Restated Security Agreement dated as of August 29, 1996 by and between
PCT-CONN and PCT; (c) that certain Amended and Restated Mortgage Deed
from PCT-CONN to PCT dated as of August 29, 1996 and recorded with the
Winchester, Connecticut Land Records on September 9, 1996 in Volume 264
at Page 780; (d) that certain Mortgage Deed from PCT-CONN to PCT dated as
of even date herewith; and (e) all related UCC-1 financing.
Pegasus San German. Pegasus Cable Television of San German, Inc., a
Delaware corporation wholly owned by PCT.
Permitted Acquisitions. An Acquisition by the Borrower or any Subsidiary
(including the transfer of assets by the Parent to the Borrower, for
further transfer to a Subsidiary, in each case as a capital contribution,
free and clear of any Liens, other than Permitted Liens), subject to the
fulfillment of the following conditions:
(a) If any such Acquisition involves consideration in excess
of $25,000,000 in the aggregate, such Acquisition shall require the prior
written approval of the Required Lenders, in their sole and absolute
discretion.
(b) If such Acquisition involves the purchase of stock or
other ownership interests, the same shall be effected in such a manner as
to assure that the acquired entity becomes a direct or indirect
Subsidiary of the Borrower and that the parent of such Subsidiary shall
own (i) all of such ownership interests or (ii) solely if such subsidiary
is a DBS Subsidiary, at least eighty percent (80%) of all such ownership
interests, including at least eighty percent (80%) of all voting
ownership interests, or such greater percentage thereof as shall be
necessary, under applicable law or contract, to control (legally and
beneficially) such Subsidiary.
(c) If such Acquisition involves the acquisition of broadcast
television properties, each of the related FCC Licenses shall be held
after the Acquisition in a License Subsidiary and each such License
Subsidiary shall enter into an appropriate License Agreement with the
Subsidiary holding the operating assets for the related Station.
(d) No later than (1) thirty (30) days (or such shorter period
as may be reasonably practicable, if approved by the Agent) prior to the
consummation of any such Acquisition or, if earlier, ten (10) business
days after the execution and delivery of the related Acquisition
Agreement, the Borrower shall have delivered to the Agent (in sufficient
copies for all the Lenders) copies of executed counterparts of such
Acquisition Agreement, together with all Schedules thereto, the forms of
any additional agreements or instruments to be executed at the closing
thereunder (to the extent available), and all applicable financial
information, including new Projections, through December 31, 2003,
updated to reflect such Acquisition and any related transactions, and
Subscriber Reports, (2) promptly following a request therefor, copies of
such other information or documents relating to such Acquisition as any
Lender shall have reasonably requested, and (3) promptly following the
consummation of such Acquisition, certified copies of the agreements,
instruments and documents referred to above to the extent the same has
been executed and delivered at the closing under such Acquisition
Agreement.
(e) The aggregate amount of all consideration payable by the
Borrower or any Subsidiary or Subsidiaries in connection with such
Acquisition (other than noncompetition and consulting agreements,
earn-outs and customary post-closing adjustments, escrows, holdbacks and
indemnities and Indebtedness permitted under Section 7.01) shall be
payable on the date of such Acquisition.
(f) Neither the Borrower nor any Subsidiary shall, in
connection with any such Acquisition, assume or remain liable with
respect to any indebtedness (including any material tax or ERISA
liability) of the related Seller, except (i) to the extent permitted
under Section 7.01 and (ii) obligations of such Seller incurred in the
ordinary course of business and necessary or desirable to the continued
operation of the underlying properties, and any other such liabilities or
obligations not permitted to be assumed or otherwise supported by any of
the Companies hereunder shall be paid in full or released as to the
assets being so acquired on or before the consummation of such
Acquisition.
(g) All other assets and properties acquired in connection
with any such Acquisition shall be free and clear of any liens, charges
and other encumbrances, other than Permitted Liens.
(h) The Borrower shall have complied as applicable with all of
the provisions in Section 2.01, including the execution and delivery of
such additional agreements, instruments, certificates, documents,
consents, environmental site assessments, opinions and other papers as
the Agent may reasonably require.
(i) Immediately prior to any such Acquisition and after giving
effect thereto, the Adjusted Available Commitments shall not be less than
$15,000,000 and no Default shall have occurred and be continuing.
(j) Without limiting the generality of the foregoing, after
giving effect to such Acquisition the Borrower shall be in compliance
with the provisions of Article V, (i) calculated on a pro forma basis as
of the end of and for the fiscal quarter most recently ended prior to the
date of such Acquisition for which financial statements are required to
be provided (and have been so delivered) under Section 6.05 and (ii)
under the Borrower's updated Projections referred to above. The Borrower
shall provide to the Agent a certificate signed on behalf of the Borrower
by its Chief Financial Officer demonstrating such compliance in
reasonable detail.
(k) On or before the consummation of each such Acquisition,
the Borrower shall deliver to the Agent (in sufficient copies for all the
Lenders) and to the Agent's counsel a compliance certificate,
substantially in the form of Schedule 11.01(a) hereto or such other form
as shall be satisfactory to the Agent, duly executed by the Borrower's
chief executive officer or chief financial officer, certifying as to the
matters set forth above with respect to such Acquisition. In the event
that such Acquisition is financed, in whole or in part, with the proceeds
of Loans hereunder, the foregoing requirement shall be deemed satisfied
upon delivery of the compliance certificate required under Section 3.02,
in the form of Schedule 3.02(d), in connection with such Loans.
(l) On or before the consummation of each such Acquisition
involving the purchase or formation of a new Subsidiary and/or the
execution of additional Security Documents or any other Loan Document, or
otherwise, if reasonably required by the Agent, the Agent shall have
received the favorable written opinions of (i) general counsel or
regularly employed outside counsel to the Companies and (ii) special FCC
counsel to the Companies (in the case of Acquisitions of cable television
and broadcast television properties), in each case dated the date of such
Loans, addressed to the Agent and the Lenders and substantially in the
forms attached as Schedules 11.01(b) and (c) hereto.
(m) Only if reasonably requested in connection with the
recording of any mortgages or similar instruments or any material issues
of state law raised in connection with such Acquisition, the Agent shall
have received the favorable opinion of local counsel to the Companies,
dated the date of such Acquisition, addressed to the Agent and the
Lenders and substantially in the form attached as Schedule 11.01(d)
hereto.
Permitted Investments. (a) Investments in property to be used by the
Subsidiaries in the ordinary course of business; (b) current assets
arising from the sale of goods and services in the ordinary course of
business; (c) investments (of one year or less) in direct or guaranteed
obligations of the United States, or any agency thereof; (d) investments
(of 90 days or less) in certificates of deposit of the Lenders or any
other domestic commercial bank of recognized standing having capital,
surplus and undivided profits in excess of $100,000,000, membership in
the Federal Deposit Insurance Corporation ("FDIC") and senior debt rated
carrying one of the two highest ratings of Standard & Poor's Ratings
Service, A Division of McGraw Hill, Inc., or Xxxxx'x Investors Service,
Inc. (an "Approved Institution"); (e) investments (of 90 days or less) in
commercial paper given one of the two highest ratings by Standard and
Poor's Ratings Service, A Division of McGraw Hill, Inc., or by Xxxxx'x
Investors Service, Inc.; (f) investments redeemable at any time without
penalty in money market instruments placed through a Lender or an
Approved Institution; (g) existing investments by the Companies in
Subsidiaries; (h) loans between the Borrower and the Subsidiaries which
are permitted under Section 7.01(k); (i) repurchase agreements fully
collateralized by United States government securities; (j) deposits fully
insured by the FDIC; (k) short-term loans to employees and advances to
employees in the ordinary course of business for the payment of bona
fide, properly documented, business expenses to be incurred on behalf of
the Companies, provided that the aggregate outstanding amount of all such
loans and advances shall not exceed $50,000 in the aggregate at any time;
and (l) investments made in connection with Acquisitions permitted
hereunder.
Permitted Liens. See Section 4.13.
Permitted LMA. An LMA which meets the following criteria:
(a) The LMA is entered into between an FCC television station
licensee or permittee and a Subsidiary.
(b) Excess cash flow of each such Subsidiary which is a
special purpose Subsidiary formed for the purpose of operating under the
LMA shall be dividended to the Borrower on a periodic basis as reasonably
required by the Agent, but, in any event, at least once in each fiscal
year.
(c) No LMA shall bind any Company to purchase the broadcast
station or assets subject thereto (unless such Acquisition is otherwise
permitted hereunder).
(d) The Borrower will provide to the Agent at least ten (10)
Business Days' notice prior to the execution and delivery of any LMA
entered into after the date hereof, together with updated Projections
showing calculations of covenant ratios and demonstrating compliance
therewith, and any other information or documents reasonably requested by
the Agent or any Lender.
Permitted Preferred Stock. (a) The Series A Preferred Stock of Pegasus
Satellite Television of Virginia, Inc. having a liquidation preference of
$3,000,000, issued in connection with a prior acquisition, and (b) any
other preferred stock of any of the Companies issued to Sellers in
connection with Permitted Acquisitions which (i) has terms and conditions
satisfactory to the Agent and (ii) without limiting the generality of the
foregoing, (A) will have no redemption or other exit rights which arise
earlier than one year after the scheduled maturity of the Notes, (B) will
not be redeemable, in any event (other than with shares of the common
stock of the Companies or securities of the Parent issued without any
resulting Event of Default), until all of the Obligations have been paid
in full in cash, (C) will not carry any dividend rights (other than
dividends paid in shares of Permitted Preferred Stock or common stock of
the Companies or the Parent issued without any resulting Event of
Default), and (D) will otherwise conform with the meaning of "Qualified
Subsidiary Stock", as such term is defined in the PCC Preferred Stock
Designation.
Permitted Seller Debt. Indebtedness of the Companies (other than
Indebtedness described in Schedule 7.01) to Sellers incurred in
connection with Permitted Acquisitions which (a) has terms and conditions
satisfactory to the Agent and (b) is not secured other than by a Seller
Letter of Credit.
Permitted Seller Debt Outstandings. As of any date, all principal,
overdue interest and other amounts then outstanding in respect of
Permitted Seller Debt, but excluding accrued interest which is not yet
overdue.
Permitted Seller Subordinated Debt. Indebtedness of the Companies to
Sellers which is incurred in connection with Permitted Acquisitions and
(a) is subordinated to any Indebtedness of the Companies to the Agent or
the Lenders pursuant to one or more Seller Subordination Agreements and
(b) is unsecured.
Person or person. Any individual, corporation, partnership, limited
liability company, joint venture, trust, business unit, unincorporated
organization, or other organization, whether or not a legal entity, or
any government or any agency or political subdivision thereof.
Pricing Period. See Section 1.03.
Pricing Ratio. See Section 1.03.
Projections. See Section 4.21.
Properties. See Section 4.24.
PSH. Pegasus Satellite Holdings, Inc., a Delaware corporation and the
former parent of the DBS Subsidiaries, immediately prior to the DBS
Transfer.
PSTH. PST Holdings, Inc., a Delaware corporation which is wholly owned by
the Borrower and is the parent of the DBS Subsidiaries.
Quarterly Dates. The last Business Day of each January, April, July and
October of each fiscal year.
Rate Hedging Agreements. Any written agreements evidencing Rate Hedging
Obligations, including without limitation the LIBOR provisions of this
Agreement.
Rate Hedging Obligations. Any and all obligations of the Borrower,
whether direct or indirect and whether absolute or contingent, at any
time created, arising, evidenced or acquired (including all renewals,
extensions, modifications and amendments thereof and all substitutions
therefor), in respect of: (a) any and all agreements, arrangements,
devices and instruments designed or intended to protect at least one of
the parties thereto from the fluctuations of interest rates, exchange
rates or forward rates applicable to such party's assets, liabilities or
exchange transactions, including without limitation dollar-denominated or
cross currency interest rate exchange agreements, forward currency
exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts and warrants and
so-called "rate swap" agreements; and (b) any and all cancellations,
buy-backs, reversals, terminations or assignments of any of the
foregoing.
Rate Regulation Act. See Section 4.10.
Rate Regulation Rules. See Section 4.10.
Recovering Party. See Section 1.14.
Recovery. See Section 1.14.
Regulation D. Regulation D of the Board of Governors of the Federal
Reserve System, as the same may be amended or supplemented from time to
time.
Regulatory Change. With respect to any Lender, any change after the date
of this Agreement in any law, rule or regulation (including without
limitation Regulation D) of the United States, any state or any other
nation or political subdivision thereof, including without limitation the
issuance of any final regulations or guidelines, or the adoption or
making after the date of this Agreement of any interpretation, directive
or request, applying to a class of banks in which such Lender is included
under any such law, rule or regulation (whether or not having the force
of law and whether or not failure to comply therewith would be unlawful)
by any court or governmental or monetary authority charged with the
interpretation thereof.
Reimbursement Obligations. As of any date, all then outstanding
obligations of the Companies to repay Letter of Credit Disbursements.
Related Lender Party. With respect to any Lender, such Lender's parent
company and/or any affiliate of such Lender which is at least fifty
percent (50%) owned by such Lender or its parent company or, in the case
of any Lender which is a fund investing in bank loans, any other fund
that invests in bank loans and is managed by the same investment advisor
of such Lender or by a controlled affiliate of such investment advisor.
Remedial Work. All activities, including, without limitation, cleanup
design and implementation, removal activities, investigation, field and
laboratory testing and analysis, monitoring and other remedial and
response actions, taken or to be taken, arising out of or in connection
with Hazardous Materials, including without limitation all activities
included within the meaning of the terms "removal," "remedial action" or
"response," as defined in 42 U.S.C. Section 9601(23), (24) and (25).
Required Lenders. At any time, Lenders, excluding Defaulting Lenders,
holding at least sixty-six and two-thirds percent (66 2/3%) of the sum of
(a) the aggregate outstanding principal amount of the Loans, (b) the
aggregate Letter of Credit Exposure and (c) the aggregate amount of the
unutilized Commitments; provided, however, that, solely with respect to
consents required in connection with an Acquisition or Disposition, the
term "Required Lenders" shall mean Lenders, excluding Defaulting Lenders,
holding more than fifty percent (50%) of such sum.
Required Payment. See Section 1.15.
Replacement Lender. Any entity which becomes a Lender in accordance with
the provisions of Article XIII.
Restoration Period. With respect to any Casualty Event resulting in the
proceeds of insurance, condemnation award or other compensation, one
hundred eighty (180) days following receipt by the Borrower, or any other
Company, of such proceeds.
Restricted Payment. Any distribution or payment of cash or property, or
both, directly or indirectly (a) in respect of any Subordinated Debt, or
(b) to any partner, stockholder or other equityholder of any of the
Companies, any of the Parent Affiliates or of any of their respective
Affiliates for any reason whatsoever, including without limitation,
salaries, loans, debt repayment, consulting fees, Management Fees,
expense reimbursements and dividends, distributions, put, call or
redemption payments and any other payments in respect of equity
interests; provided, however, that Restricted Payments shall not include:
(i) reasonable Transaction Costs;
(ii) payments under the Tax Sharing Agreement arising solely as
a result of the operations of the Companies; and
(iii) transactions that comply with Section 7.11.
Revolvers. See Section 1.01.
Revolving Credit Period. The period from the date of this Agreement to
the Expiration Date.
San German Systems. The Systems serving San German, Puerto Rico, and
certain contiguous communities and owned and operated by Pegasus San
German.
Scheduled Principal Payments. For any fiscal period, (a) the aggregate
principal amount of Loans outstanding on the first day of such period
minus (b) the aggregate Commitments at the close of business on the first
Business Day following the end of such period, as reduced as provided
under Section 1.01(e), but in no event less than zero.
SEC. See Section 6.05.
Security Agreements. The Security and Pledge Agreement signed by the
Borrower and the Guaranty, Security and Pledge Agreement signed by each
of the Subsidiaries (a) as of the Closing Date or (b) with respect to
Subsidiaries formed or acquired after the date hereof, by joinder
thereto, in connection with their formation or Acquisition as required
under Section 2.01.
Security Document(s). See Section 2.01.
Seller. With respect to any Acquisition permitted hereunder, the owner of
the stock (or other ownership interests) to be acquired, or the entity
the assets and properties of which are to be acquired by the related
respective Company pursuant to such Acquisition.
Seller Letters of Credit. (a) Any and all Letters of Credit issued to
replace letters of credit previously provided by Canadian Imperial Bank
of Commerce to secure Indebtedness permitted under Schedule 7.01 and
designated therein as so secured and (b) any and all Letters of Credit
issued in favor of Sellers, as beneficiaries, in connection with
Permitted Acquisitions.
Seller Letter of Credit Exposure. The portion of the aggregate Letter of
Credit Exposure arising from Seller Letters of Credit.
Seller Subordination Agreements. See Section 2.01.
Significant Franchise. See paragraph (g) of Article VIII.
Specified Authorities. (a) With respect to cable television properties,
the communities included in the related Franchise Areas, the FCC, the
Copyright Office, the FAA, the Commonwealth of Puerto Rico, the
Department of Public Utilities of the State of Connecticut and all other
Governmental Authorities having jurisdiction over the Companies and/or
any CATV Franchise; (b) with respect to broadcast television properties,
the FCC, the FAA and all other Governmental Authorities having
jurisdiction over the Companies and/or any FCC License; and (c) with
respect to DBS Rights, all Governmental Authorities, if any, having
jurisdiction over the Companies and/or any such DBS Rights.
Specified Subsidiaries. (a) WTLH, Inc. and WTLH License Corp., until such
time as the $3,050,000 promissory note owed by WTLH License Corp. to
General Management Consultants, Inc. and all related indebtedness is paid
in full and each such Subsidiary has complied in full with the
requirements of Section 2.01, and (b) Pegasus Cable Television of Anasco,
Inc. and Pegasus Anasco Holdings, Inc., until each such Subsidiary has
complied in full with the requirements of Section 2.01.
Stations. All of the television stations owned or programmed by the
Companies, where each such station consists of all of the properties and
operating rights constituting a complete, fully integrated system for
transmitting broadcast television signals from a transmitter licensed by
the FCC, together with any subsystem ancillary thereto, without payment
of any fee by the Persons receiving such signals.
Subordinated Debt. (a) Indebtedness of the Borrower and any of its
Subsidiaries to the Subordinated Noteholders under the Subordinated
Indenture and the Subordinated Notes, (b) Seller Subordinated Debt and
(c) any Indebtedness which is subject to an Affiliate Subordination
Agreement.
Subordinated Debt Documents. The Subordinated Indenture, the Subordinated
Notes, the Subsidiary Guarantees executed as required under the
Subordinated Indenture, the Stockholders Agreement executed by the
Subordinated Noteholders in connection with the issuance to them of 8,500
shares of the Borrower's Class B Common Stock and any and all other
agreements and instruments executed pursuant thereto.
Subordinated Indenture. The Indenture dated as of July 7, 1995 among the
Borrower, as Issuer, certain of the Subsidiaries, as Guarantors, and
First Union National Bank (successor to First Fidelity Bank, National
Association), as Trustee, providing for the issuance of the Subordinated
Notes, as amended pursuant to the First Supplemental Indenture dated as
of September 26, 1997.
Subordinated Indenture Default. Any "Event of Default", as defined in the
Subordinated Indenture.
Subordinated Noteholders. The registered holders from time to time of the
Subordinated Notes.
Subordinated Notes. The 12 1/2% Series B Senior Subordinated Notes due
2005 of the Borrower, in the aggregate principal amount of $85,000,000,
issued to the Subordinated Noteholders under the Subordinated Indenture
on November 14, 1995, in exchange for the 12 1/2% Series A Senior
Subordinated Note due 2005 of the Borrower in the same aggregate
principal amount issued under the Subordinated Indenture on July 7, 1995.
Subscriber Acquisition Costs. For any period, those expenses and
capitalized costs incurred in the generation of Gross Subscriber
Additions, such as sales commissions, advertising expenses and
promotional expenses, including the amount, if any, by which the cost of
equipment sold to subscribers to the DBS services offered by the DBS
Subsidiaries (including rebates, subsidies and the like) exceeds the
revenue generated from such sale(s).
Subscriber Reports. See Section 6.05(f).
Subsidiary. (a) Any corporation, association, joint stock company,
business trust or other similar organization of which more than 50% of
the ordinary voting power for the election of a majority of the members
of the board of directors or other governing body of such entity is held
or controlled by the Borrower or a Subsidiary of the Borrower; (b) any
other such organization the management of which is directly or indirectly
controlled by the Borrower or a Subsidiary of the Borrower through the
exercise of voting power or otherwise; or (c) any joint venture,
association, partnership, limited liability company or other entity in
which the Borrower or a Subsidiary of the Borrower has a 50% equity
interest. All of the Borrower's Subsidiaries as of the date hereof are
listed on Schedule 4.02 and such term shall include each new Subsidiary
formed after the date hereof in compliance with the terms of the
foregoing definition and this Agreement.
Systems. All of the cable television systems owned or managed by the
Companies, where each such system consists of a cable distribution system
that receives broadcast signals by antennae, microwave transmissions,
satellite transmission or any other form of transmission and that
amplifies such signals and distributes them to Persons who pay to receive
such signals.
Tax Sharing Agreement. The Amended and Restated Tax Sharing Agreement
dated as of July 1, 1997 among the Parent and its subsidiaries.
Taxes. See Section 1.10.
Third Parties. See Section 14.02.
Total Debt Service. For any period, the aggregate amount (determined on a
consolidated basis, after eliminating intercompany items, in accordance
with GAAP) of principal and premium, if any, and cash interest,
commitment fees and agency fees and other amounts required to be paid
during such period in respect of Total Funded Debt. For purposes of this
definition, the aggregate amount of all principal required to be paid in
respect of the Loans shall be limited to Scheduled Principal Payments.
Total Funded Debt. At any time, all outstanding Funded Debt of the
Borrower and its Subsidiaries plus the aggregate amount payable (whether
or not due) in respect of any and all LMA Purchase Options, determined on
a consolidated basis, after eliminating intercompany items, in accordance
with GAAP.
Total Interest Expense. For any period, Interest Expense for such period
which is payable, or currently paid, in cash.
Tower Site Leases. See Section 4.13.
Trades. Those items of income and expense of the Companies which do not
represent the right to receive payment in cash or the obligation to make
payment in cash and which arise pursuant to so-called trade or barter
transactions.
Transaction Costs. For any period, nonrecurring out-of-pocket expenses
(including attorneys' fees, investment banking fees and facility fees,
but excluding recurring costs such as commitment and agency fees) accrued
by the Borrower and the Subsidiaries to Persons who are not Affiliates of
any Company during such period in connection with the closing of the
transactions under this Agreement, the DBS Transfer, any Permitted
Acquisition and any other transactions occurring after the Closing Date
which are consented to in writing by the Required Lenders.
Transaction Documents. See Section 4.03.
Working Capital. On any date, Current Assets minus Current Liabilities on
such date.
XII. ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS; SEPARATE ACTIONS BY THE
LENDERS.
(a) This Agreement (including the Schedules hereto) and the other Loan
Documents constitute the entire agreement of the parties herein and supersede
any and all prior agreements, written or oral, as to the matters contained
herein, and no modification or waiver of any provision hereof or of the Notes or
any other Loan Document, nor consent to the departure by any Company therefrom,
shall be effective unless the same is in writing, and then such waiver or
consent shall be effective only in the specific instance, and for the purpose,
for which given. Except as hereafter provided, the consent of the Required
Lenders shall be required and sufficient (i) to amend, with the consent of the
Borrower, any term of this Agreement, the Notes or any other Loan Document or to
waive the observance of any such term (either generally or in a particular
instance or either retroactively or prospectively); (ii) to take or refrain from
taking any action under this Agreement, the Notes, any other Loan Document or
applicable law, including, without limitation, (A) the acceleration of the
payment of the Notes, (B) the termination of the Commitments, (C) the exercise
of the Agent's and the Lenders' remedies hereunder and under the Security
Documents and (D) the giving of any approvals, consents, directions or
instructions required under this Agreement or the Security Documents; provided
that no such amendment, waiver, consent or other action shall, without the prior
written consent of each Lender (other than a Defaulting Lender and, with respect
to matters addressed in clause (1) below, only such Lenders holding Obligations
directly affected thereby),
(1) extend the final scheduled maturity of any Loan or Note or
extend the stated maturity of any Letter of Credit beyond the Expiration
Date (it being understood that no waiver or modification of any
condition precedent, covenant or Default shall constitute any such
extension), or reduce the rate or extend the time of payment of interest
or fees thereon, or reduce the principal amount thereof (it being
understood that no amendment or modification to the financial
definitions in this Agreement and no waiver or modification of any
condition precedent, covenant or Default shall constitute a reduction in
any rate of interest or fees for purposes of this clause (1));
(2) release all or substantially all of the Collateral (except
as expressly provided in the Security Documents) under all of the
Security Documents;
(3) amend, modify or waive any provision of this Article XII;
(4) reduce any percentage specified in the definition of
Required Lenders (it being understood that, with the consent of the
Required Lenders, additional extensions of credit pursuant to this
Agreement may be included in the determination of the Required Lenders
on substantially the same basis as the Commitments are included on the
Closing Date); or
(5) consent to the assignment or transfer by the Borrower of any
of its rights and obligations under this Agreement;
and provided, further, that no such amendment, waiver, consent or other action
shall
(x) increase the Commitment of any Lender over the amount
thereof then in effect without the consent of such Lender (it being
understood that (aa) no waiver or modification of any condition
precedent, covenant or Default or of any mandatory reduction in the
aggregate Commitments shall constitute an increase in the Commitment of
any Lender and (bb) an increase in the available portion of any
Commitment of any Lender shall not constitute an increase in the
Commitment of such Lender);
(y) without the consent of the Issuing Bank, amend, modify or
waive any provision of Section 1.02 or alter its rights or obligations
with respect to Letters of Credit;
(z) without the consent of the Agent, amend, modify or waive any
provision of Article X as same applies to the Agent or any other
provision of any Loan Document as same relates to the rights or
obligations of the Agent;
and provided, further, that neither notice to, nor the consent of, the Borrower
shall be required for any modification, amendment or waiver of the provisions of
this Article XII governing the number of Lenders required to consent to any act
or omission under the Loan Documents or, subject to Article XIII, of the
definition of "Required Lenders".
(b) If, in connection with any such proposed amendment, waiver, consent
or other action under any of the provisions of this Agreement as contemplated by
clauses (1) through (5), of subsection (a) above, the consent of the Required
Lenders is obtained but the consent of one or more of such other Lenders whose
consent is required is not obtained, then the Borrower shall have the right (so
long as all non-consenting Lenders whose individual consent is required are
treated as described in either clause (i) or (ii) below), to either (i) replace
such non-consenting Lender or Lenders with one or more Replacement Lenders, so
long as at the time of such replacement each such Replacement Lender consents to
the proposed amendment, waiver, consent or other action or (ii) terminate such
non-consenting Lender's Commitment (if such Lender's consent is required as a
result of its Commitment) and repay all outstanding Loans of such Lender which
gave rise to the need to obtain such Lender's consent and/or cash collateralize
its Letter of Credit Exposure, in accordance with Sections 1.02(f) and 1.06(g),
provided that, unless the Commitment which is terminated and the Loans which are
repaid pursuant the preceding clause (ii) are immediately replaced in full at
such time through the addition of one or more new Lenders or the increase of the
Commitments and/or outstanding Loans of existing Lenders (which in each case
must specifically consent thereto), then in the case of any action pursuant to
the foregoing clause (ii), the Required Lenders (determined after giving effect
to the proposed action) shall specifically consent thereto, and provided,
further, that the Borrower shall not have the right to replace a Lender,
terminate its Commitment or repay its Loans solely as a result of the exercise
of such Lender's rights (and the withholding of any required consent by such
Lender) pursuant to the second proviso to subsection (a) of this Article XII.
(c) Any amendment or waiver effected in accordance with this Article XII
shall be binding upon each holder of any Note at the time outstanding, each
future holder of any Note and the Borrower. The Lenders' failure to insist
(directly or through the Agent) upon the strict performance of any term,
condition or other provision of this Agreement, any Note, or any of the Security
Documents or other Loan Documents, or to exercise any right or remedy hereunder
or thereunder, shall not constitute a waiver by the Lenders of any such term,
condition or other provision or default or Event of Default in connection
therewith, nor shall a single or partial exercise of any such right or remedy
preclude any other or future exercise, or the exercise of any other right or
remedy; and any waiver of any such term condition or other provision or of any
such default or Event of Default shall not affect or alter this Agreement, any
Note or any of the Security Documents or other Loan Documents, and each and
every term, condition and other provision of this Agreement, the Notes and the
Security Documents or other Loan Documents shall, in such event, continue in
full force and effect and shall be operative with respect to any other then
existing or subsequent default or Event of Default in connection therewith. An
Event of Default hereunder and a default under any Note or under any of the
Security Documents shall be deemed to be continuing unless and until cured or
waived in writing by the applicable Lenders, as provided in subsection (a)
above.
XIII. BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders and the Agent and their respective successors and
permitted assigns, and all subsequent holders of any of the Notes or any portion
thereof.
(b) Each Lender may assign its rights and interests under this Agreement,
the Notes and the Security Documents and/or delegate its obligations hereunder
and thereunder, in whole or in part, and sell participations in the Notes and
the Security Documents as security therefor, provided as follows:
(i) Any such assignment, other than an assignment in whole, made
other than to (A) another Lender, (B) a separately organized branch of a
Lender or (C) a Related Lender Party, shall reflect an assignment of such
assigning Lender's Notes and Commitments which is in an aggregate
principal amount of at least $5,000,000, and if greater, shall be an
integral multiple of $1,000,000.
(ii) Notwithstanding any provision of this Agreement to the
contrary, (A) each Lender may at any time pledge all or any portion of
its rights under this Agreement and each of the other Loan Documents,
including without limitation its Loans and the Notes held by such Lender,
to a Federal Reserve Bank (or equivalent thereof in the case of Lenders
chartered outside of the United States) in support of borrowings made by
such Lender from such Federal Reserve Bank and (B) with the consent of
the Agent, any Lender which is a fund may pledge all or any portion of
its Notes or Loans to its trustee in support of its obligations to its
trustee. No pledge pursuant to this subsection (ii) shall release the
transferor Lender from any of its obligations and liabilities under the
Loan Documents.
(iii) Any assignments and/or delegations made hereunder shall be
pursuant to an instrument of assignment and acceptance (the "Assignment
and Acceptance") substantially in the form of Schedule 13 and the parties
to each such assignment shall execute and deliver to the Agent for its
acceptance the Assignment and Acceptance together with any Note or Notes
subject thereto. Upon such execution and delivery, from and after the
effective date specified in each Assignment and Acceptance, which
effective date shall be at least five (5) Business Days after the
execution thereof, (A) the assignee thereunder shall become a party
hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder with applicable
Commitments as set forth therein and (B) the assigning Lender thereunder
shall, to the extent provided in such assignment, be released from its
obligations under this Agreement as to that portion of its obligation
being so assigned and delegated. The Assignment and Acceptance shall be
deemed to amend this Agreement to the extent, and only to the extent,
necessary to reflect the addition of the assignee as a Lender and the
resulting adjustment of Commitments arising from the purchase by and
delegation to such assignee of all or a portion of the rights and
obligations of such assigning Lender under this Agreement.
(iv) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and the assignee together with the Note or Notes
subject to such assignment (or a standard indemnity letter from the
respective assigning Lender in respect of any lost Note or Notes) and
payment by the assignee to the Agent of a registration and processing fee
of $3,500, the Agent shall accept such Assignment and Acceptance.
Promptly upon delivering such Assignment and Acceptance to the Agent, the
assigning Lender shall give notice thereof to the Borrower and the Agent.
Within five (5) Business Days after receipt of such notice, the Borrower
shall execute and deliver to the Agent in exchange for each such
surrendered Note a new Note payable to the order of such assignee in an
amount equal to the portion of the applicable Commitment(s) assumed by
such assignee pursuant to such Assignment and Acceptance and a new Note
payable to the order of the assigning Lender in an amount equal to the
portion of the applicable Commitment(s) retained by it hereunder. Such
new Notes shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form provided in
Section 1.01. Canceled Notes shall be returned to the Borrower upon the
execution and delivery of such new Notes.
(v) Each Lender may sell participations in all or a portion of
its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments and the Notes held by
it); provided, however, that, no Lender shall transfer or grant any
participation under which the participant shall have rights to approve
any amendment to or waiver of this Agreement or any other Loan Document,
except to the extent such amendment or waiver would (A) extend the final
scheduled maturity of any Loan, Note or Letter of Credit (unless such
Letter of Credit is not extended beyond the Expiration Date) in which
such participant is participating, or reduce the rate or extend the time
of payment of interest or fees thereon (except in connection with a
waiver of applicability of any post-default increase in interest rates)
or reduce the principal amount thereof, or increase the amount of the
participant's participation over the amount thereof, or increase the
amount of the participant's participation over the amount thereof then in
effect (it being understood that no waiver or modification of any
condition precedent, covenant or Default or of any mandatory reduction in
the aggregate Commitments shall constitute a change in the terms of such
participation, that an increase in any Commitment or Loan shall be
permitted without the consent of any participant if the participant's
participation is not increased as a result thereof and that any amendment
or modification to the financial definitions in this Agreement shall not
constitute a reduction in any rate of interest or fees for purposes of
this clause (A)), (B) consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this Agreement or (C)
release all or substantially all of the Collateral under all of the
Security Documents (except as expressly provided in the Security
Documents) supporting the Loans hereunder in which such participant is
participating. In the case of any such participation, the participant
shall not have any rights under this Agreement or any of the other Loan
Documents (the participant's rights against such Lender in respect of
such participation to be those set forth in the agreement executed by
such Lender in favor of the participant relating thereto) and all amounts
payable by the Borrower hereunder shall be determined as if such Lender
had not sold such participation.
(vi) Except for an assignment made to (i) another Lender, (ii) a
separately organized branch of a Lender or (iii) a Related Lender Party,
and except during the existence of a Default, no assignment referred to
above shall be permitted without the prior written consent of the Agent
and the Borrower, which consent shall not be unreasonably withheld or
delayed.
(vii) The Borrower may not assign any of its rights or delegate
any of its duties or obligations hereunder.
(viii) To the extent that an assignment of all or any portion of
a Lender's Commitment and outstanding Loans pursuant to subsection (b) of
Article XII or this Article XIII would, due to circumstances existing at
the time of such assignment, result in costs under Sections 1.08, 1.10 or
1.11 which are increased from those being charged by the respective
assigning Lender prior to such assignment, then the Borrower shall not be
obligated to pay such increased costs (although the Borrower shall be
obligated to pay any other increased costs of the type described above
resulting from changes after the date of the respective assignment).
(ix) Any Lender may, in connection with any assignment or
participation pursuant to this Section, disclose to the assignee or
participant any information relating to the Companies and the Parent
Affiliates furnished to such Lender by or on behalf of the Borrower and
such assignee or participant shall treat such information as
confidential.
XIV. MISCELLANEOUS
Section 14.01. Survival. This Agreement and all covenants, agreements,
representations and warranties made herein and in the certificates delivered
pursuant hereto, shall survive the making by the Lenders of the Loans and shall
continue in full force and effect so long as any Obligation is outstanding and
unpaid or any Lender has any obligation to advance funds to the Borrower or any
other Company hereunder. In addition, notwithstanding anything herein or under
applicable law to the contrary, the provisions of this Agreement and the other
Loan Documents relating to indemnification or payment of fees, costs and
expenses, including without limitation the provisions of Sections 1.08, 1.10,
1.11, 10.05, 14.02 and 14.14, shall survive the payment in full of all Loans,
the termination or expiration of the Commitments and any termination of this
Agreement or of any other Loan Document.
Section 14.02. Fees and Expenses; Indemnity; Etc. The Borrower agrees (a)
to pay or reimburse the Agent for all its reasonable out-of-pocket costs and
expenses incurred in connection with the development, preparation, negotiation,
interpretation and execution of, and any amendment, supplement or modification
to, this Agreement, the Notes and any other Loan Documents and the consummation
and administration of the transactions contemplated hereby, including without
limitation the reasonable fees and disbursements of (i) counsel to the Agent,
and (ii) such agents of the Agent not regularly in its employ, and accountants,
other auditing services, consultants and appraisers engaged by or on behalf of
the Agent or by the Borrower at the request of the Agent (collectively, "Third
Parties"); (b) to pay or reimburse the Agent for all its reasonable costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the Notes and any other Loan Documents, including,
without limitation, the reasonable fees and disbursements of (i) counsel to the
Agent and (ii) Third Parties; (c) following the occurrence of an Event of
Default hereunder, to pay or reimburse the Lenders for the reasonable fees and
disbursements of counsel for the respective Lenders engaged for the preservation
or enforcement of such Lender's rights under this Agreement or any other Loan
Documents relating to such Event of Default; (d) to pay, indemnify, and hold
each Lender and the Agent harmless from, any and all recording and filing fees
and taxes, lien discharge fees and taxes, intangible taxes and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any, which may be payable or determined to be payable
in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the Notes and any other Loan Documents; and (e) to pay,
indemnify, and hold each Lender and the Agent (and their respective directors,
officers, employees, agents and other affiliates) harmless from and against any
and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of, or any transaction contemplated by, any Loan Document or the
use or proposed use of the proceeds of the Loans or the refinancing or
restructuring of the credit arrangement provided under this Agreement in the
nature of a "work-out" or any proceedings with respect to the bankruptcy,
reorganization, insolvency, readjustment of debt, dissolution or liquidation of
any Company or any other party other than the Lender or the Agent to any Loan
Document (all the foregoing in this clause (e), collectively, the "indemnified
liabilities"), provided, that the Borrower shall have no obligation hereunder to
the Agent or any Lender with respect to indemnified liabilities arising from the
gross negligence or willful misconduct of the Agent or any such Lender. The
agreements in this Section shall survive repayment of the Notes and all other
amounts payable hereunder.
Section 14.03. Notice.
(a) All notices, requests, demands and other communications provided for
hereunder (including without limitation Loan Requests) shall be in writing
(including telecopied communication) and mailed or telecopied or delivered to
the applicable party at the addresses indicated below.
If to the Agent:
Bankers Trust Company
One Bankers Trust Plaza
000 Xxxxxxx Xxxxxx - 34th Floor
New York, New York 10006
Attention: Mr. David X. Xxxx, Vice President,
Structured Finance Portfolio Group
Telecopy No.: (000) 000-0000
and
Bankers Trust Company
One Banker Trust Plaza
000 Xxxxxxx Xxxxxx - 37th Floor
New York, New York 10006
Attention: Loan Syndications
Telecopy No.: (000) 000-0000
and if to any Lender, at the address set forth on the appropriate signature page
hereto or, with respect to any assignee of the Notes under Article XIII, at the
address designated by such assignee in a written notice to the other parties
hereto.;
in each case (except for routine communications), with a copy to:
Xxxxxxxxx X. Xxxxxxx, Esquire
Xxxxxxx & Xxxxxx
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopy No.: (000) 000-0000
If to the Borrower:
Xx. Xxxxxxxx X. Xxxxx
Pegasus Media & Communications, Inc.
c/o Pegasus Communications Management Company
5 Radnor Corporate Center, Xxxxx 000
000 Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxx 00000
Telecopy No.: (000) 000-0000
with a required copy to Xxx X. Lodge, Esq. at the immediately
foregoing address
and
with a copy (except for routine communications) to:
Xxxxxxx X. Xxxxxx, Esq.
Drinker Xxxxxx & Xxxxx LLP
Philadelphia National Bank Building
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Telecopy No.: (000) 000-0000
or, as to each party, at such other address as shall be designated by
such parties in a written notice to the other party complying as to delivery
with the terms of this Section. All such notices, requests, demands and other
communication shall be deemed given upon receipt by the party to whom such
notice is directed.
(b) The address of the Agent for payment hereunder is as follows:
Bankers Trust Company
One Bankers Trust Plaza
000 Xxxxxxx Xxxxxx - 14th Floor
New York, New York 10006
ABA: 000000000
For credit to Commercial Loan Division,
Account No.: 00000000
Re: Pegasus Media & Communications, Inc.
Telecopy No.: (000) 000-0000
Attention: Xx. Xxxxxx Xxxxxxxx
Section 14.04. Governing Law. This Agreement and the Notes shall be
construed in accordance with and governed by the internal laws of the State of
New York.
Section 14.05. CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.
(a) THE BORROWER, TO THE EXTENT THAT IT MAY LAWFULLY DO SO, HEREBY
CONSENTS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AS
WELL AS TO THE JURISDICTION OF ALL COURTS TO WHICH AN APPEAL MAY BE TAKEN FROM
SUCH COURTS, FOR THE PURPOSE OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT
OF ANY OF ITS OBLIGATIONS ARISING HEREUNDER OR UNDER THE NOTES OR THE SECURITY
DOCUMENTS OR WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY, AND EXPRESSLY
WAIVES ANY AND ALL OBJECTIONS IT MAY HAVE AS TO VENUE, INCLUDING, WITHOUT
LIMITATION, THE INCONVENIENCE OF SUCH FORUM, IN ANY OF SUCH COURTS. IN ADDITION,
TO THE EXTENT THAT IT MAY LAWFULLY DO SO, THE BORROWER CONSENTS TO THE SERVICE
OF PROCESS BY PERSONAL SERVICE OR U.S. CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED, ADDRESSED TO THE BORROWER AT THE ADDRESS PROVIDED HEREIN. TO
THE EXTENT THAT THE BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE BORROWER HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS TO THE MAXIMUM EXTENT PERMITTED BY LAW.
(b) WAIVER OF JURY TRIAL. EACH OF THE BORROWERS, THE AGENT AND THE
LENDERS HEREBY VOLUNTARILY AND IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION
BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT, THE NOTES, THE SECURITY DOCUMENTS
OR ANY OTHER AGREEMENTS EXECUTED IN CONNECTION HEREWITH.
Section 14.06. Severability. Any provision of this Agreement, the Notes
or any of the Security Documents or other Loan Documents which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.
Section 14.07. Section Headings, Etc. Any Article and Section headings in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose.
Section 14.08. Several Nature of Lenders' Obligations. Notwithstanding
anything in this Agreement, the Notes or any of the Security Documents to the
contrary, all obligations of the Lenders hereunder shall be several and not
joint in nature, and in the event any Lender fails to perform any of its
obligations hereunder, the Borrower shall have no recourse against any other
Lender(s) who has (have) performed its (their) obligations hereunder. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement, subject to the provisions of Article XII,
and it shall not be necessary for any other Lender to be joined as an additional
party in any proceeding for such purpose.
Section 14.09. Counterparts. This Agreement may be executed by the
parties hereto in several counterparts hereof and by the different parties
hereto on separate counterparts hereof, each of which shall be an original and
all of which counterparts shall together constitute one and the same agreement.
Delivery of an executed signature page of this Agreement by facsimile
transmission shall be effective as an in-hand delivery of an original executed
counterpart hereof.
Section l4.10. Knowledge and Discovery. All references in this Agreement
to "knowledge" of, or "discovery" by, the Borrower shall be deemed to include,
without limitation, any such knowledge of, or discovery by, the Borrower or any
executive officer of the Borrower.
Section 14.11. Amendment of Other Agreements. All references in this
Agreement to other documents and agreements to which the Lenders are not parties
(including without limitation the Acquisition Agreements, the PCC Preferred
Stock Designation, the Management Agreement, the Affiliate Agreements, the
Subordinated Debt Documents, the NRTC Member Agreements and any other DBS
Agreements) shall be deemed to refer to such documents and agreements as
presently constituted and, except for any amendments and modifications not
prohibited under Section 7.11, not as hereafter amended or modified unless the
Lenders shall have expressly consented in writing to such amendment(s) or
modification(s).
Section 14.12. FCC and Municipal Approvals. Notwithstanding anything
herein or in any of the Security Documents to the contrary, but without limiting
or waiving in any way the Borrower's obligations under Section 2.01, the Agent's
and the Lenders' rights hereunder and under the Security Documents are subject
to all applicable rules and regulations of the FCC and other Specified
Authorities. The Agent and the Lenders will not take any action pursuant to this
Agreement or the Security Documents which would constitute or result in any
assignment or transfer control of any FCC License or CATV Franchise, whether de
jure or de facto, if such assignment or transfer of control would require under
then existing law (including the written rules and regulations promulgated by
the FCC), the prior approval of the FCC or other Specified Authority, without
first obtaining such approval. The Agent and the Lenders specifically agree that
(a) voting rights in the ownership interests of the Companies will remain with
the holders thereof even in an Event of Default unless any required prior
consent of the FCC or other Specified Authority shall be obtained to the
transfer of such voting rights; (b) in an Event of Default, there will be either
a private or public sale of the ownership interests of the Companies; and (c)
prior to the exercise of member or other equityholder rights by a purchaser at
such sale, the prior consent of the FCC, pursuant to 47 U.S.C. ss. 310(d), in
each case only if required, will be obtained prior to such exercise. The
Borrower agrees to take any action which the Agent or any Lender may reasonably
request in order to cause the Agent and the Lenders to obtain and enjoy the full
rights and benefits granted to by this Agreement and the other Loan Documents,
including specifically, at the cost and expense of the Borrower, the use of its
best efforts to assist in obtaining approval of the FCC or any state or
municipality or other governmental authority for any action or transaction
contemplated by this Agreement or any Security Document which is then required
by law, and specifically, without limitation, upon request following an Event of
Default, to prepare, sign and file (or cause to be filed) with the FCC or such
state or municipality or other governmental authority the assignor's,
transferor's or controlling person's portion of any application or applications
for consent to (i) the assignment of any FCC License or transfer or control
thereof, (ii) any sale or sales of property constituting any Collateral by or on
behalf of the Lenders or (iii) any assumption by the Agent or the Lenders or
their designees of voting rights or management rights in property constituting
any Collateral effected in accordance with the terms of this Agreement.
Section 14.13. Disclaimer of Reliance. The Borrower has not relied on any
oral representations concerning any of the terms or conditions of the Loans, the
Notes, this Agreement or any of the Security Documents in entering into the
same. The Borrower acknowledges and agrees that none of the officers of the
Agent or any Lender has made any representations that are inconsistent with the
terms and provisions of this Agreement, the Notes and the Security Documents,
and neither the Borrower nor any of its Affiliates has relied on any oral
promises or representations in connection therewith.
Section 14.14. Environmental Indemnification. Without limiting the
generality of Section 14.02, in consideration of the execution and delivery of
this Agreement by the Lenders and the making of the Loans, the Borrower hereby
indemnifies, exonerates and holds the Lenders and each of their respective
officers, directors, employees and agents (collectively, the "Indemnified
Parties") free and harmless from and against any and all actions, causes of
action, suits, losses, costs, liabilities and damages, and expenses incurred in
connection therewith (irrespective of whether any such Indemnified Party is a
party to the action for which indemnification hereunder is sought), including
reasonable attorneys' fees and disbursements (collectively, the "Indemnified
Liabilities"), incurred by the Indemnified Parties or any of them as a result
of, or arising out of, or relating to:
(a) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to the
protection of the environment or the release by any Company of any Hazardous
Material; or
(b) the presence on or under, or the escape, seepage, leakage, spillage,
discharge, emission, discharging or releases from, any real property owned or
operated by any Company of any Hazardous Material (including any losses,
liabilities, damages, injuries, costs, expense or claims asserted or arising
under any Environmental Law), regardless of whether caused by, or within the
control of, any Company;
except, in each case, for any such Indemnified Liabilities arising for the
account of a particular Indemnified Party by reason of the relevant Indemnified
Party's negligence or misconduct, and if and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Borrower agrees to make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. Notwithstanding anything
to the contrary herein contained, the obligations and liabilities under this
Section shall survive and continue in full force and effect and shall not be
terminated, discharged or released in whole or in part irrespective of whether
all the Obligations have been paid in full or the Commitments have been
terminated and irrespective of any foreclosure of any mortgage, deed of trust or
collateral assignment on any real property or acceptance by any Lender of a deed
or assignment in lieu of foreclosure.
1 BOS 65821 IN WITNESS WHEREOF, the Agent, the Lenders and the
Borrower have caused this Agreement to be duly executed
by their duly authorized representatives, as a sealed instrument, all as of the
day and year first above written.
BORROWER:
PEGASUS MEDIA & COMMUNICATIONS, INC.
By:/s/ Xxxxxx X. Xxxxxxxxxx
------------------------------------------------
Xxxxxx X. Xxxxxxxxxx, Senior Vice President
AGENT:
BANKERS TRUST COMPANY
By:/s/ Xxxxx X. Xxxx
------------------------------------------------
Xxxxx X. Xxxx, Vice President
LENDER:
BANKERS TRUST COMPANY
By:/s/ Xxxxx X. Xxxx
------------------------------------------------
Xxxxx X. Xxxx, Vice President
Address for Notice to Bankers Trust Company:
Bankers Trust Company
One Bankers Trust Plaza
000 Xxxxxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxx, Vice President
Structured Finance Portfolio Group
LENDER:
BANKBOSTON, N.A.
By:/s/ Xxxxx X. Xxxx
------------------------------------------------
Xxxxx X. Xxxx, Director
Address for Notices:
BankBoston, N.A.
000 Xxxxxxx Xxxxxx
Mail Stop: MA BOS 01-08-08
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxx X. Xxxx, Director
LENDER:
BANQUE PARIBAS
By:/s/ Xxxxx X. Xxxxxxx
------------------------------------------------
Xxxxx X. Xxxxxxx, Vice President
By:/s/ Xxxxxxx X. Xxxxxx
------------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Director
Address for Notices:
Banque Paribas
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Vice President
LENDER:
BANK OF MONTREAL, CHICAGO BRANCH
By:/s/ Xxx Xxxxxx
------------------------------------------------
Xxx Xxxxxx, Director
Address for Notices:
Bank of Montreal
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxxx, Director
LENDER:
FLEET NATIONAL BANK
By:/s/ Xxxxxxx X. Xxxxxx
------------------------------------------------
Xxxxxxx X. Xxxxxx, Senior Vice President
Address for Notices:
Fleet National Bank
One Federal Street
Mail Stop: MAOFD03D
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx,
Senior Vice President
LENDER:
IBJ XXXXXXXX BANK & TRUST COMPANY
By:/s/ J. Xxxxxxxxxxx Xxxxxx
------------------------------------------------
J. Xxxxxxxxxxx Xxxxxx, Managing Director
Address for Notices:
IBJ Xxxxxxxx Bank & Trust Company
Xxx Xxxxx Xxxxxx Xxxxx - 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
Attention: J. Xxxxxxxxxxx Xxxxxx,
Managing Director
LENDER:
MEESPIERSON CAPITAL CORP.
By:/s/ Xxxxxxx X. Xxxxxx
------------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
By: /s/ Xxxx X. Xxxxxxx
------------------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Executive Vice President
Address for Notices:
MeesPierson Capital Corp.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Vice President
LENDER:
STATE STREET BANK AND TRUST COMPANY
By:/s/ Xxxxxxxx X. Xxxx, Xx.
------------------------------------------------
Xxxxxxxx X. Xxxx, Xx., Vice President
Address for Notices:
State Street Bank and Trust Company
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxxxx X. Xxxx, Xx.,
Vice President
LENDER:
COMPAGNIE FINANCIERE DE CIC
ET DE L'UNION EUROPEENNE
By:/s/ Xxxxxx Xxxxxx
------------------------------------------------
Xxxxxx Xxxxxx, Vice President
By:/s/ Xxxxx X'Xxxxx
------------------------------------------------
Xxxxx X'Xxxxx, Vice President
Address for Notices:
Compagnie Financiere de CIC et
de l'Union Europeenne
000 Xxxxxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxx Xxxxxx, Vice President
LENDER:
UNION BANK OF CALIFORNIA
By:/s/ Xxxxxxxxx X. Xxxx
------------------------------------------------
Xxxxxxxxx X. Xxxx, Vice President
Address for Notices:
Union Bank of California
000 Xxxxx Xxxxxxxx Xxxxxx - 15th Floor
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxxxxx X. Xxxx, Vice President
