1996 TERM CREDIT AGREEMENT
This 1996 Term Credit Agreement (the "Agreement") is entered into as of
the 3rd day of May, 1996, among DATA TRANSMISSION NETWORK CORPORATION, a
Delaware corporation having its principal place of business at Suite 200, 0000
Xxxx Xxxxx Xxxx, Xxxxx, Xxxxxxxx 00000 (the "Borrower"), FIRST NATIONAL BANK OF
OMAHA, a national banking association having its principal place of business at
Xxx Xxxxx Xxxxxxxx Xxxxxx, Xxxxx, Xxxxxxxx 00000 ("FNB-O"), FIRST NATIONAL BANK,
WAHOO, NEBRASKA, a national banking association having its principal place of
business at Xxxxx, Xxxxxxxx 00000 ("FNB-W"), NBD BANK, a bank organized under
the laws of the State of Michigan and having its principal place of business at
000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 ("NBD"), NORWEST BANK NEBRASKA,
N.A., a national banking association having its principal place of business at
00xx xxx Xxxxxx Xxxxxxx, Xxxxx, Xxxxxxxx 00000 ("Norwest"), FARM CREDIT SERVICES
OF THE MIDLANDS, PCA, a production credit association ("Farm Credit") in care of
AGAMERICA, FCB, a farm credit bank doing business at 000 Xxxxx 00xx Xxxxxx,
Xxxxx, Xxxxxxxx 00000-0000 ("AgAmerica") and BROADCAST PARTNERS, a general
partnership having its principal place of business at 00000 Xxxxxx Xxxxxx, Xxx
Xxxxxx, Xxxx 00000 ("Broadcast Partners").
WITNESSETH:
WHEREAS, the Borrower desires to obtain a term credit facility for the
purpose of acquiring substantially all of the assets of Broadcast Partners; and
WHEREAS, the parties do not intend for this 1996 Term Credit Agreement
to be deemed to extinguish any existing indebtedness of the Borrower or to
release, terminate or affect the priority of any security therefor;
NOW, THEREFORE, in consideration of the premises, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, it is agreed as follows:
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I. DEFINITIONS
For purposes of this Agreement, the following definitions shall apply:
AgAmerica: AgAmerica, FCB, a farm credit bank doing business at 000 Xxxxx
00xx Xxxxxx, Xxxxx, Xxxxxxxx 00000-0000, and its successors
and assigns.
Agreement: This 1996 Term Credit Agreement Agreement dated as of May 3,
1996, between the Borrower and the Lenders.
Banks: FNB-O, FNB-W, NBD Norwest, Farm Credit, AgAmerica
and such additional banks as may be added hereto from
time to time by mutual written agreement of the
parties.
Boatmen's: The Boatmen's National Bank of St. Louis, a national banking
association having its principal place of business at One
Boatmen's Plaza, 800 Market Street, St. Louis, Missouri 63166-
0236, and its successors and assigns.
Borrower: Data Transmission Network Corporation, a Delaware
corporation having its principal place of business at
Xxxxx 000, 0000 Xxxx Xxxxx Xxxx, Xxxxx, Xxxxxxxx
00000.
Broadcast
Partners: Broadcast Partners, a general partnership having its
current principal place of business at 00000 Xxxxxx
Xxxxxx, Xxx Xxxxxx, Xxxx 00000. For purposes of
future notices or communications under this Agreement
Broadcast Partners address shall be: Broadcast
Partners, care of Xxxxxx X. Xxxxxxx, Pioneer Hi-Bred
International, Inc., 0000 X.X. 00xx Xxx., X.X. Xxx
000, Xxxxxxxx, Xxxx 00000-0000.
Business
Day: Any day other than a Saturday, Sunday or a legal holiday on
which banks in the State of Nebraska are not open for
business.
Change of
Control: (a) At any time when any of the equity securities of
the Borrower shall be registered under Section 12 of
the Securities Exchange Act of 1934 as amended from
time to time (the "Exchange Act"), (i) any person,
entity or "group" (within the meaning of Section
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13(d)(3) of the Exchange Act) (other than any person
which is a management employee, or any such "group"
which consists entirely of management employees, of
the Borrower) being or becoming the beneficial owner,
directly or indirectly, of more than 50% of the
voting stock of the Borrower, or (ii) a majority of
the members of the Borrower's board of directors (the
"Board") consisting of persons other than Continuing
Directors (as hereinafter defined); and (b) at any
other time, less than 50% of the voting stock of the
Borrower being owned beneficially, directly or
indirectly, by employees of the Borrower or its
subsidiaries. As used herein, the term "Continuing
Director" means any member of the Board on June 29,
1995 and any other member of the Board who shall be
recommended or elected to succeed a Continuing
Director by a majority of Continuing Directors who
are the members of the Board.
Collateral: All personal property of the Borrower described in the
Security Agreement, whether now owned or hereafter acquired,
including, without limitation:
(a) all of the Borrower's accounts, accounts
receivable, subscriber contract rights, chattel
paper, documents, instruments, goods, inventory,
equipment, general intangibles; and
(b) all proceeds and products of the
foregoing.
Existing
Term Notes: Those certain promissory notes from the Borrower to FNB-0,
FirsTier, FNB-W, NBD, Norwest and Boatmen's dated as of May 6,
1992, July 7, 1992, October 1, 1992, October 12, 1992, October
19, 1992, November 3, 1992, January 4, 1993, February 9, 1993,
April 16, 1993, July 8, 1993, August 30, 1994, November 29,
1994, and February 27, 1995.
Farm Credit Farm Credit Services of the Midlands, PCA, a production
credit association organized under the laws of United States,
and having its principal place of business at 000 Xxxxx 00xx
Xxxxxx, Xxxxx, Xxxxxxxx 00000.
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FirsTier: FirsTier Bank, National Association, Lincoln, Nebraska,
a national banking association having its principal place of
business at 13th and X Xxxxxxx, Xxxxxxx, Xxxxxxxx 00000, and
its successors and assigns (it being acknowledged that First
Bank is the successor in interest to FirsTier).
First Bank: First Bank, National Association, a national banking
association having its principal place of business at 13th and
X Xxxxxxx, Xxxxxxx, Xxxxxxxx 00000, and its successors and
assigns (it being acknowledged that First Bank is the
successor in interest to FirsTier).
FNB-O: First National Bank of Omaha, a national banking
association having its principal place of business at Xxx
Xxxxx Xxxxxxxx Xxxxxx, Xxxxx, Xxxxxxxx 00000, and its
successors and assigns.
FNB-W: First National Bank, Wahoo, Nebraska, a national banking
association having its principal place of business at Xxxxx,
Xxxxxxxx 00000, and its successors and assigns.
Lenders: The Banks and Broadcast Partners.
Make-Whole
Premium: An amount which shall be sufficient as determined by the rele-
vant Bank in good faith and on a reasonable basis and
certified to the Borrower in writing, to compensate the Bank
for any loss (including any lost yield), cost or expense
incurred by the Bank (i) in liquidating or redeploying
deposits or other funds acquired by the Bank to fund or
maintain the loan prepaid and (ii) in unwinding, amending,
cancelling or otherwise modifying or terminating any match
funding, swap or other arrangement entered into by the Bank in
connection with acquiring or maintaining the funding for the
loan prepaid.
NBD: NBD Bank, a bank organized under the laws of the State of
Michigan and having its principal place of business at 000
Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000.
Net Worth: The Borrower's net worth as determined in accordance with
generally accepted accounting principles plus subordinated
debt. For purposes of this definition, "subordinated debt"
means indebtedness of the Borrower which is subordinate, in a
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manner satisfactory to the Lenders, to the indebtedness due to
the Lenders, and the repayment of which is forbidden during
the existence of any Event of Default hereunder; provided
however, that any such indebtedness shall not be deemed
subordinated debt to the extent of the amount of principal
payments that are due thereon within one year from the date of
determination.
Norwest: Norwest Bank Nebraska, N.A., a national banking association
having its principal place of business at 20th and Xxxxxx
Xxxxxxx, Xxxxx, Xxxxxxxx 00000, and its successors and
assigns.
Notes: Those certain promissory notes from the Borrower to the
Lenders dated as of May 3, 1996 including, without limitation,
the Notes to the Banks and to Broadcast Partners as referenced
in Section 2.1 hereof, and such additional term notes as the
parties may hereafter agree to add hereto as Notes.
Operating
Cash Flow: The Borrower's average monthly earnings or loss before
interest, depreciation, amortization of goodwill and taxes,
less current tax expense and plus or minus any non-ordinary
non-cash charges or credits to earnings, which average shall
be based on the Borrower's actual financial results in the two
full calendar months preceding the date of determination. For
purposes of calculating Operating Cash Flow for this
Agreement, the Borrower shall not permit deferred commission
expenses to be capitalized for any period in excess of twelve
months.
Operative
Documents: This 1996 Loan Agreement, the Notes, the Security Agreement,
the financing statements regarding the Collateral and the
documents and certificates, other than the Purchase Agreement,
delivered pursuant to Article VI.
Purchase
Agreement: The Asset Purchase and Sale Agreement dated as of May 3, 1996
between the Borrower and Broadcast Partners.
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Quarterly
Compliance
Certificate: The certificate delivered to the Lenders by the Borrower
pursuant to Section 5.1(d).
Related
Bank Debt: The aggregate unpaid balance of all indebtedness, now or here-
after existing (including future advances) under the Related
Loan Agreements, including without limitation, the amounts
outstanding under those certain promissory notes from the
Borrower to FNB-O, FirsTier and FNB-W dated as of October 13,
1992 and December 7, 1992, the amounts outstanding under the
Existing Term Notes, and the amounts outstanding under the
revolving credit notes issued under the 1995 Restated Loan
Agreement referenced below and dated as of June 29, 1995 and
under any term notes issued to convert such revolving credit
notes or any portion thereof to a term obligation, and all
extensions, renewals, and substitutions of or for the
foregoing.
Related
Loan
Agreements: The Loan Agreement dated as of October 9, 1992, between the
Borrower and FNB-O, FirsTier and FNB-W and the 1995 Restated
Loan Agreement dated as of June 29, 1995 between the Borrower
and FNB-O, FirsTier, FNB-W, NBD, Norwest, AgAmerica and
Boatmen's and any loan agreements issued in extension,
renewal, replacement, or restatement of the foregoing (the
"1995 Restated Loan Agreement").
Restricted
Quarter: Has the meaning set forth in Section 2.2 hereof.
Revolving
Credit Rate: Has the same meaning as is defined for such term in the 1995
Restated Loan Agreement.
Security
Agreement: The 1996 Restated Security Agreement dated as of May 3, 1996
between the Borrower and FNB-O, as agent for the Lenders and
others, as amended from time to time.
Total
Indebtedness: All loans and other obligations of the Borrower for borrowed
money (including, without limitation, the indebtedness due to
the Lenders)
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regardless of the maturity thereof but such term shall
not include subordinated debt, as such term is defined in the
definition of Net Worth up to $15,000,000 if such subordinated
debt is existing on the date of this Agreement. It is
understood and agreed by the parties that, for purposes
hereof, Borrower has no obligations for borrowed money to
Broadcast Partners other than as is evidenced by the Notes
payable to Broadcast Partners. It is understood that the
Borrower does have other obligations to Broadcast Partners
under the Purchase Agreement.
Triggering
Event: Has the meaning set forth in Section 2.2 hereof.
All accounting terms not otherwise defined herein shall have the meaning
ordinarily applied under generally accepted accounting principles.
II. TERM FACILITY
2.1. Term Credit. Upon the date of this Agreement, the Banks agree to
advance $29,458,000 to the Borrower for the purchase of substantially all of the
assets of Broadcast Partners. Such advances shall be made on a pro rata basis by
the Banks, based on the following maximum advance limits for each Bank: (1) as
to FNB-O, $10,780,000; (ii) as to FNB-W, $245,000; (iii) as to NBD, $6,223,000;
(iv) as to Norwest, $1,822,000; and (v) as to Farm Credit, $10,388,000. In
addition, Broadcast Partners will receive a note for $18,732,000, representing a
portion of the purchase price consideration due to Broadcast Partners under the
Purchase Agreement.
2.2 Notes. The Notes shall bear interest on the principal loan amount
thereof outstanding through June 30, 1999, at the rate of 8.25% per annum;
thereafter the interest rate for the balance of the term shall be set on June
30, 1999, at two percent (2.00%) above the yield on constant maturity Treasury
Bonds with maturities of three years, as quoted for the Business Day immediately
preceding June 30, 1999 in the applicable Release; provided, however, that after
an Event of Default has occurred, interest shall accrue on the entire
outstanding balance of principal and interest at a fluctuating rate equal to the
Revolving Credit Rate plus four percent (4.00%). Interest shall be calculated on
actual days elapsed and a year of 360 days. If the Borrower's most recent
Quarterly Compliance Certificate shows that, as of the end of the prior quarter,
Total Indebtedness was in excess of 300% of Net Worth, the current quarter shall
be deemed a "Restricted
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Quarter." If, any time during a Restricted Quarter (including, without
limitation, during any period in such quarter prior to delivery of the Quarterly
Compliance Certificate), the interest rate accruing on any Note is less than
seven and one-half percent (7.50%), a "Trigger Event" shall be deemed to have
occurred. Upon the occurrence of a Trigger Event, the Borrower shall be
obligated to pay the Lenders the following fees: (i) three-eighths of one
percent (.375%) of the outstanding principal balance of such Note as of the date
preceding the Trigger Event, which amount shall be payable promptly upon
invoicing by FNB-O; (ii) the same amount as computed in clause (i), payable on
the six-month anniversary of the Trigger Event; and (iii) the same amount as
computed in clause (i), payable on the twelve-month anniversary of the Trigger
Event.
2.3. Payments. Interest on the unpaid balance of the Notes shall be due
on the last day of each month beginning May 31, 1996. The principal amount of
each respective Note shall become due and payable in seventy-two equal monthly
installments, with the first such installment due on January 31, 1997, and
subsequent installments due on the last day of each consecutive month
thereafter. The total amount of all unpaid principal and accrued interest
hereunder shall be due and payable no later than December 31, 2002. In the event
that a payment day is not a Business Day, the payment shall be due on the next
succeeding Business Day. Interest shall continue to accrue on the full unpaid
balance hereunder notwithstanding any permitted or unpermitted failure of the
Borrower to make a scheduled payment or the fact that a scheduled payment day
falls on a day other than a Business Day.
2.4. Fees. The Borrower will pay to FNB-O an initial fee equal to
$14,729, payable at closing. Such fee will be paid to FNB-O and allocated by
FNB-O pro rata among the Banks based on their respective commitments as shown in
Section 2.1 above. Furthermore, the Borrower will pay to FNB-O at closing an
agenting fee equal to $25,500.
2.5 Payment. The Borrower's obligation to make payments of principal
and interest hereunder shall be further evidenced by the Notes, the form of
which is attached hereto as Exhibit A. All obligations of the Borrower under the
Notes and the other Operative Documents shall be payable in immediately
available funds in lawful money of the United States of America at the principal
office of FNB-O in Omaha, Nebraska or at such other address as may be designated
by FNB-O in writing.
2.6 Prepayment. The Borrower may prepay without penalty the principal
loan amount outstanding under all Notes in full, but only if such prepayment
occurs on June 30, 1999 and the Borrower has given the Banks at least 30 days
prior written notice of its intention to make such prepayment. Prepayments of
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less than all the Notes in full will not be permitted without the prior written
consent of FNB-O. If a prepayment occurs on any date other than June 30, 1999,
the Borrower shall pay to each Bank, at each Bank's option, either: (1) the
Make-Whole Premium due in respect of such prepayment; or (2) a prepayment fee
equal to one and one-half percent (1.50%) of the amount of such prepayment. The
Borrower shall not be obligated to pay a Make-Whole Premium or prepayment fee to
Broadcast Partners.
2.6A Permitted Prepayments to Broadcast Partners. Notwithstanding the
provisions of Section 2.6, so long as no Event of Default exists hereunder and
so long as no Event of Default will exist after the prepayment, the Borrower
shall be permitted to prepay Broadcast Partners in the event that: (i) the Banks
or any of them agree, in their sole and absolute discretion, to increase their
commitment under Section 2.1 for the purposes of funding such prepayment; (ii)
the revolving credit facility provided for in the 1995 Restated Loan Agreement
is increased above $46,500,000 (excluding notes converted to term obligations
thereunder); (iii) another lender agrees to become a Lender hereunder, with a
commitment sufficient to fund such prepayment, and such Lender is acceptable to
the other Lenders in their sole and absolute discretion, it being agreed that
such other approved Lenders will be entitled to same terms and conditions and
pari passu status as the other Lenders hereunder; or (iv) the Borrower raises
additional equity capital in a manner reasonably acceptable to the Banks and
that results in corresponding increase (less offering costs) in the Borrower's
Net Worth as of the date thereof.
2.7 Security. All obligations of the Borrower hereunder and under the
Operative Documents, including, without limitation, the Borrower's obligations
to make payments of principal and interest shall be secured by a first security
interest in the Collateral, as more specifically described in the Security
Agreement.
2.8 Related Loan Agreements. Nothing herein shall be deemed to alter or
amend the Borrower's obligations under the Related Loan Agreements, the Related
Bank Debt or any collateral security therefor, all of which shall continue in
full force and effect in accordance with the terms thereof.
III. [INTENTIONALLY OMITTED]
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IV. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that as of the date hereof the
following are and shall be true and correct:
4.1 Corporate Existence. It is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and duly
qualified and in good standing in all states except Alaska, Hawaii and Rhode
Island, and it has full power and authority to own and operate its properties
and to carry on its business.
4.2 Corporate Authority. It has full corporate power, authority and
legal right to execute, deliver and perform the Operative Documents to which it
is a party, and all other instruments and agreements contemplated hereby and
thereby, and to perform its obligations hereunder and thereunder; and such
actions have been duly authorized by all necessary corporate action, and are not
in conflict with any applicable law or regulation, or any order, judgment or
decree of any court or other governmental agency or instrumentality or its
articles of incorporation or bylaws, or with any provisions of any indenture,
contract or agreement to which it is a party or by which it or any of its
property may be bound.
4.3 Validity of Agreements. Its Operative Documents have been duly
authorized, executed and delivered and constitute its legal, valid and binding
agreements, enforceable against the Borrower in accordance with their respective
terms (except to the extent that enforcement thereof may be limited by any
applicable bankruptcy, reorganization, moratorium or similar laws now or
hereafter in effect, or by principles of equity).
4.4 Litigation. It is not a party to any pending lawsuit or proceeding
before or by any court or governmental body or agency, which is likely to have a
materially adverse effect on the Borrower's ability to perform its obligations
under its Operative Documents; nor is the Borrower aware of any threatened
lawsuit or proceeding, to which it may become a party or of any investigation of
any Court or governmental body or agency into its affairs, which if instituted
would have a material adverse effect upon the Borrower's ability to perform its
obligations under its Operative Documents.
4.5 Governmental Approvals. The execution, delivery and performance by
the Borrower of the Operative Documents or the Purchase Agreement do not require
the consent or approval of, the giving of notice to, the registration with, or
the taking of any other action in respect of, any federal, state or other
governmental authority or agency other than as contemplated herein and therein.
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4.6 Defaults Under Other Documents. The Borrower is not in default or
in violation (nor has any event occurred which, with notice or lapse of time or
both, would constitute a default or violation) under any document or any
agreement or instrument to which it may be a party or under which it or any of
its properties may be bound and the result of which would have a material
adverse effect upon the Borrower's ability to perform its obligations under its
Operative Documents.
4.7 Judgments. There are no outstanding or unpaid judgments (which are
not adequately bonded) of the Borrower which would have a material adverse
effect upon the Borrower's ability to perform its obligations under its
Operative Documents.
4.8 Compliance with Laws. It is not in violation of any laws,
regulations or judicial or governmental decrees in any respect which could have
any material adverse effect upon the validity or enforceability of any of the
terms of its Operative Documents or which could have a material adverse effect
upon its ability to perform its obligations under its Operative Documents.
4.9 Taxes. All its tax returns for material taxes required to be filed
have been filed or extensions permitted by law have been obtained; all taxes of
a material nature and which are due and payable as reflected on such returns
have been paid, other than taxes which are due but for which only a nominal late
payment penalty is payable and for which the taxing authority is not yet
entitled to enforce its remedies for payment thereof and other than taxes being
contested in good faith and with respect to which adequate reserves have been
established; and no material amounts of taxes not reflected on such returns are
payable.
4.10 Collateral. The Borrower has good and marketable title to the
Collateral and the Collateral is free from all liens, encumbrances or security
interests, except as disclosed on Schedule A attached hereto. The Borrower's
principal place of business, chief executive office, and the place where it
keeps its records concerning the Collateral is Suite 200, 0000 Xxxx Xxxxx Xxxx,
Xxxxx, Xxxxxxxx 00000.
4.11 Pension Benefits. The Borrower does not maintain a "Plan" as
defined in Section 3 of the Employees Retirement Income Security Act of 1974
("ERISA") or is in compliance with the minimum funding requirements with respect
to any such "Plan" maintained by the Borrower and the Borrower has not incurred
any material liability to the Pension Benefit Guaranty Corporation ("PBGC") or
otherwise under ERISA in connection with any such Plan.
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4.12 Margin Regulations. No part of the proceeds of any advance
hereunder shall be used to purchase or carry any "margin stock" (within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
of the United States) or any "margin security" (within the meaning of Regulation
G of said Board of Governors), or to extend credit to others for the purpose of
purchasing or carrying any such margin stock or margin security. No part of the
proceeds of any advance hereunder shall be used for any purpose that violates,
or which is inconsistent with, the provisions of Regulation G, T, U or X of said
Board of Governors.
4.13 Financial Condition. The financial condition of the Borrower is
truly and accurately set forth in the most recent financial statement which has
been provided to the Lenders and no material adverse change has occurred which
would make such financial statement inaccurate or misleading.
V. COVENANTS
The Borrower hereby covenants that:
5.1 Financial Reports.
(a) Within forty-five (45) days after the end of each month,
the Borrower, at its sole expense, shall furnish the Lenders a balance
sheet and statement of earnings of the Borrower, prepared in accordance
with generally accepted accounting principles consistently applied and
certified as completed and correct, subject to normal changes resulting
from year-end audit adjustments, by the chief financial officer of the
Borrower.
(b) Within ninety (90) days after the close of the Borrower's
fiscal year, the Borrower, at its sole expense, shall furnish the
Lenders: (i) a balance sheet and statement of earnings of the Borrower,
certified by Deloitte & Touche, or other independent certified public
accountants acceptable to the Lenders, that such financial reports
fairly present the financial condition of the Borrower and have been
prepared in accordance with generally accepted accounting principles
consistently applied; and (ii) a certificate from such accountants
certifying that in making the requisite audit for certification of the
Borrower's financial statements, the auditors either (1) have obtained
no knowledge, and are not otherwise aware of, any condition or event
which constitutes an Event of Default or which with the passage of time
or the giving of notice would constitute an Event of Default under
Sections 5.3, 5.4, 5.7, 5.9(b), 5.9(d) or 5.11; or (2) have discovered
such condition or event, as
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specifically set forth in such certificate, which constitutes an Event
of Default or which with the passage of time or the giving of notice
would constitute an Event of Default under such Sections. The auditors
shall not be liable to the Lenders by reason of the auditors' failure
to obtain knowledge of such event or condition in the ordinary course
of their audit unless such failure is the result of negligence or
willful misconduct in the performance of the audit.
(c) Within 30 days after submission to the Securities and
Exchange Commission, the Borrower shall provide to the Lenders copies
of its Forms 10K and 10Q, as submitted to the Securities and Exchange
Commission during the term of this Agreement.
(d) Within twenty (20) days after the end of each quarter, the
Borrower, at its expense, shall furnish the Lenders a certificate of
the chief financial officer of the Borrower in the form of Exhibit B,
setting forth such information (including detailed calculations)
sufficient to verify the conclusions of such officer after due inquiry
and review, that:
(i) The Borrower, either (y) is in compliance with
the requirements set forth in this Agreement or (z) is NOT in
compliance with the foregoing for reasons specifically set
forth therein; and
(ii) The chief financial officer of the Borrower has
reviewed or caused to be reviewed all of the terms of the
Operative Documents of the Borrower and that such review
either (1) has NOT disclosed the existence of any condition or
event which constitutes an event of default or any condition
or event which with the passage of time or the giving of
notice would constitute an event of default under the
Operative Documents or (2) has disclosed the existence of a
condition or event which constitutes an event of default, or a
condition or event which with the passage of time or the
giving of notice would constitute an event of default, under
the aforesaid instrument or instruments and the specific
condition or event is specifically set forth.
(e) The Borrower shall provide the Lenders with such other
financial reports and statements as the Lenders may reasonably request.
5.2 Corporate Structure and Assets. The Borrower shall not merge or
consolidate with any other corporation or entity unless the Borrower shall be
the surviving entity, nor sell any assets except items that are obsolete or no
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longer necessary for operation of the business, other than in the ordinary
course of business without the prior written consent of the Lenders. The Lenders
shall be entitled to receive as a prepayment on the Notes the proceeds of any
sale of assets of the Borrower which are prohibited by the preceding sentence.
Notwithstanding the foregoing prepayment requirements, any such prohibited sale
shall remain a violation of this Agreement. In addition, the Borrower shall not
engage in any business materially different from that in which it is presently
engaged without the prior written consent of the Lenders, which consent shall
not be unreasonably withheld. The foregoing restrictions on mergers and
consolidations shall not apply if: (i) in the case of a merger, the Borrower is
the surviving entity and expressly reaffirms its obligations hereunder; (ii) in
the case of a consolidation, the resulting corporation expressly assumes the
obligations of the Borrower hereunder; (iii) the surviving or resulting
corporation is organized under the laws of the United States or a jurisdiction
thereof; (iv) after giving effect to such merger or consolidation, the surviving
or resulting corporation will be engaged in substantially the same lines of
business as are now engaged in by the Borrower; and (v) immediately after giving
effect to such merger or consolidation, no Event of Default will exist
hereunder.
5.3 Net Worth. The Borrower shall maintain a minimum Net Worth during
the term of this Agreement of at least $23,500,000; provided, however, solely
for purposes of determining compliance with the provisions of this Section 5.3,
"Net Worth" shall not include any subordinated debt.
5.4 Indebtedness.
(a) The Borrower shall not at any time permit the sum of the
Total Indebtedness to the Lenders to exceed forty-eight times Operating
Cash Flow.
(b) The Borrower shall not at any time permit Total
Indebtedness to exceed 350% of Net Worth.
(c) On the day the Borrower becomes liable with respect to any
debt and immediately after giving effect thereto and to the concurrent
retirement of any other debt, the sum of Total Indebtedness, plus the
amount of any outstanding subordinated debt, plus the Borrower's
contingent obligations under any guaranty of the debt of any other
person or entity (other than unsecured debt of a subsidiary incurred in
the ordinary course of business for other than borrowed money or to
finance the purchase price of any property or business) shall not
exceed an amount equal to sixty times Operating Cash Flow at such date.
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5.5 Use of Proceeds. The Borrower shall not use the proceeds of the
advances hereunder to purchase or carry any "margin stock" (within the meaning
of Regulation U of the Board of Governors of the Federal Reserve System of the
United States) or any "margin security" (within the meaning of Regulation G of
said Board of Governors), or to extend credit to others for the purpose of
purchasing or carrying any such margin stock or margin security. No part of such
proceeds shall be used for any purpose that violates, or which is inconsistent
with, the provisions of Regulation G, T, U or X of said Board of Governors. This
section shall not preclude the Borrower from repurchasing any of its own issued
and outstanding common stock; provided, however, that such repurchase does not
result in the occurrence of any other Event of Default hereunder.
5.6 Notice of Default. The Borrower shall give to the Lenders prompt
written notification of the existence or occurrence of:
(a) any fact or event which results, or which with notice or
the passage of time, or both, would result in an Event of Default
hereunder;
(b) any proceedings instituted by or against the Borrower in
any federal, state or local court or before any governmental body or
agency, or before any arbitration board, or any such proceedings
threatened against the Borrower by any governmental agency, which is
likely to have a material adverse effect upon the Borrower's ability to
perform its obligations under its Operative Documents;
(c) any default or event of default involving the payment of
money under any agreement or instrument which is material to the
Borrower to which the Borrower is a party or by which it or any of its
property may be bound, and which default or event of default would have
a material adverse effect upon the Borrower's ability to perform its
obligations under its Operative Documents; and
(d) the Borrower shall give immediate notice of the
commencement of any proceeding under the Federal Bankruptcy Code by or
against the Borrower.
5.7 Distributions.
(a) The Borrower shall not declare any dividends or make any
cash distribution in respect of any shares of its capital stock or
warrants of its capital stock, without the prior written consent of the
Lenders; provided, however, that the Borrower may declare stock
dividends; provided, further, that the Borrower need not obtain the
Lenders'
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consent with respect to dividends in any one year which are, in
aggregate, less than 25% of the Borrower's net operating profit after
taxes in the previous four quarters, as reported to the Lenders
pursuant to Section 5.1.
(b) The Borrower shall not purchase, redeem, or otherwise
retire any shares of its capital stock or warrants of its capital stock
if, immediately after the making of such purchase or redemption, the
Borrower will be in default of any other covenant or provision of this
Agreement (including, without limitation, the covenants and provisions
pertaining to minimum net worth and limitations on indebtedness).
5.8 Compliance with Law and Regulations. The Borrower shall comply in
all material respects with all applicable federal and state laws and
regulations.
5.9 Maintenance of Property; Accounting; Corporate Form; Taxes;
Insurance.
(a) The Borrower shall maintain its property in good condition
in all material respects, ordinary wear and tear excepted, and make all
renewals, replacements, additions, betterments and improvements thereto
necessary for the efficient operation of its business.
(b) The Borrower shall keep true books of record and accounts
in which full and correct entries shall be made of all its business
transactions, all in accordance with generally accepted accounting
principles consistently applied.
(c) The Borrower shall do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate
form of existence as is necessary for the continuation of its business
in substantially the same form.
(d) The Borrower shall pay all taxes, assessments and
governmental charges or levies imposed upon it or its property;
provided, however, that the Borrower shall not be required to pay any
of the foregoing taxes which are being diligently contested in good
faith by appropriate legal proceedings and with respect to which
adequate reserves have been established.
(e) The Borrower shall maintain liability insurance and
casualty insurance upon the Collateral (excluding equipment or
inventory provided to subscribers in the ordinary course of business)
16
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and other tangible assets. The Borrower shall name the Lenders as the
loss payee on all such casualty insurance, and as an additional insured
on all such liability insurance and shall provide the Lenders with
evidence of such insurance upon request.
5.10 Inspection of Properties and Books. The Borrower shall recognize
and honor the right of the Lenders, upon request to an officer of the Borrower,
to visit and inspect any of the properties of, to examine the books, accounts,
and other records of, and to take extracts therefrom and to discuss the affairs,
finances, loans and accounts of, and to be advised as to the same by the
officers of, the Borrower at all such times, in such detail and through such
agents and representatives as the Lenders may reasonably desire.
5.11 Guaranties.cThe Borrower shall not guaranty or become responsible
for the indebtedness of any other person or entity.
5.12 Collateral. The Borrower shall not incur or permit to exist any
mortgage, pledge, lien, security interest or other encumbrance on the
Collateral, except as permitted in the Security Agreement. Subject to Section
5.4(b), the foregoing shall not be construed to prohibit the Borrower from
acquiring leased equipment in the ordinary course of business. Without limiting
the generality of the foregoing, the Borrower covenants and agrees that it shall
on request enforce for the benefit of the Banks, but at the sole expense of the
Borrower, any and all rights and remedies (including, without limitation, rights
to indemnity), that it may have with respect to the existence of any liens,
security interests or other encumbrances that may exist on the property of the
Borrower acquired from Broadcast Partners under the Purchase Agreement.
Notwithstanding anything else to the contrary herein or in the Operative
Documents, Broadcast Partners shall have no right to share in the proceeds of
any such recovery which constitutes the proceeds of any indemnity claim by the
Borrower under the Purchase Agreement.
5.13 Name; Location. The Borrower shall give the Lenders ninety (90)
days notice prior to changing its name, identity or corporate structure, moving
its principal place of business, chief executive office or place where it keeps
its records concerning the Collateral.
5.14 Notice of Change in Ownership or Management. During the term of
this Agreement, the Borrower shall give the Lenders notice of the occurrence of
any of the following described events, which notice shall be given as soon as
the Borrower obtains notice or knowledge thereof:
(a) any change, directly or indirectly, in the existing
controlling interest in the Borrower; or
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(b) any material adverse change in its management personnel. A
material adverse change in the Borrower's management personnel shall be
deemed to have occurred if any one of the following has occurred with
respect to three individuals who are both officers and members of the
Board of Directors of the Borrower: (i) the resignation, retirement, or
voluntary or involuntary termination of employment and/or status of
such person as an officer and director of the Borrower; (ii) any
announcement, notice of intent, resolution or similar advance notice
with respect to the matters referenced in the foregoing clause; or
(iii) the death, disability or legal incompetence of such person.
5.15. Interest Coverage. The ratio of Operating Cash Flow to interest
expense (as determined in accordance with generally accepted accounting
principles but excluding amortization of deferred offering costs and any fees
related to the Trigger Event in Section 2.2 of this Agreement) at the end of
each quarter during the term of this Agreement, as shown on the Quarterly
Compliance Report, shall not be less than 2.25 to 1.0.
5.16 Subordinated Debt. The Borrower shall not incur any subordinated
debt or issue any preferred stock or warrants for preferred stock except upon
the prior written consent of the Lenders. The Borrower shall not make any
voluntary or optional prepayment on any subordinated debt without the prior
written consent of the Lenders. Similarly, the Borrower shall not amend its
articles of incorporation or any other documents or agreements relating to the
issuance of subordinated debt, preferred stock or warrants for preferred stock
without the prior written consent of the Lenders. The indebtedness to Broadcast
Partners under the Notes shall not be considered subordinated debt.
VI. CONDITIONS PRECEDENT
6.1 Closing Conditions. Any and all obligations of the Lenders
hereunder are subject to satisfaction of the following conditions precedent:
(a) FNB-O, as agent, shall have received an opinion of counsel
to the Borrower covering such matters as the Lenders may request
(including, without limitation, corporate existence and good standing,
corporate authority, due authorization, execution and delivery of the
Operative Documents, the legal, valid, binding and enforceable nature
of the Operative Documents, the perfection and priority of the security
interest in the Collateral granted to the Lenders, and the Borrower's
compliance with applicable state and federal laws in connection with
the equity offering specified in Section 6.1(f) below), such opinion
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to be satisfactory in form and substance to counsel to FNB-O. To the
extent that FNB-O agrees to accept a post closing opinion from the
Borrowers' counsel as to security interest issues, the same shall be
delivered no later than ten days after completion of the necessary UCC
searches, which shall be ordered promptly after recording any UCC
terminations received by the Borrower upon closing of the Purchase
Agreement and in any event, such opinion shall be delivered no later
than 30 days after closing;
(b) FNB-O, as agent, shall have received such certificates and
documents as the Lenders may reasonably request from the Borrower,
including articles of incorporation and bylaws, certificates regarding
good standing, incumbency, copies of other corporate documents, and
appropriate authorizing resolutions;
(c) the Operative Documents shall have been duly authorized
and executed and shall be in full force and effect, and such UCC
financing statements shall have been executed and filed in such offices
as may be appropriate to perfect the security interest of FNB-O, as
agent for the Lenders, in the Collateral, it being understood, however,
that certain UCC amendments and terminations will be filed after
closing as directed by FNB-O;
(d) FNB-O, as agent, shall have received copies of the
Purchase Agreement, satisfactory in form and substance to FNB-O;
(e) the closing of the Purchase Agreement shall occur prior
to or simultaneously with the closing of this Agreement; and
(f) the Borrower shall have completed an offering of its
common stock and received proceeds therefrom in the approximate amount
of $15,010,000, satisfactory in form and substance to the Banks.
VII. DEFAULTS AND REMEDIES
7.1 Events of Default. Any of the following shall be deemed an event of
default under this Agreement (an "Event of Default"):
(a) Any payment of principal required by any of the Operative
Documents shall not be paid when due.
(b) Any payment of interest or other fees due hereunder or
under any of the Operative Documents shall not be paid within 15
calendar days after the date on which such payment was invoiced or due.
19
(c) Any representation or warranty of the Borrower under any
of the Operative Documents, or any financial reports or statements or
certificates submitted pursuant to this Agreement, shall prove to have
been false in any material respect when made.
(d) A failure of the Borrower to comply with any requirement
or restriction contained in Sections 5.1, 5.2, 5.3, 5.4, 5.7, 5.11,
5.12, 5.13, 5.14, 5.15 or 5.16 of this Agreement.
(e) A failure of the Borrower to comply with any requirement
or restriction contained in any provision of the Operative Documents
not otherwise specified in this Article VII, which failure remains
unremedied for ten days following receipt of notice from the Lenders.
(f) The occurrence of a default or a breach of any of the
Borrower's obligations under any note, loan agreement, preferred stock,
subordinated debt instrument or agreement, or any other agreement
evidencing an obligation to repay borrowed money.
(g) The entry of a final judgment against the Borrower for the
payment of money, which is not covered by insurance, and the expiration
of 30 days from the date of such entry during which the judgment is not
discharged in full or stayed.
(h) The occurrence of any one or more of the following:
(1) The Borrower shall file a voluntary petition in
bankruptcy or an order for relief shall be entered in a
bankruptcy case as to such entity or shall file any petition
or answer seeking or acquiescing in any reorganization,
arrangement, composition, readjustment, liquidation,
dissolution or similar relief for itself under any present or
future federal, state or other statute, law or regulation
relating to bankruptcy, insolvency or other relief for
debtors; or shall seek or consent to or acquiesce in the
appointment of any trustee, receiver or liquidator of the
Borrower or of all or any part of its property, or of any or
all of the royalties, revenues, rents, issues or profits
thereof, or shall make any general assignment for the benefit
of creditors, or shall admit in writing its inability to pay
its debts or shall generally not pay its debts as they become
due; or
20
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(2) A court of competent jurisdiction shall enter an
order, judgment or decree approving a petition filed against
the Borrower seeking any reorganization, dissolution or
similar relief under any present or future federal, state or
other statute, law or regulation relating to bankruptcy,
insolvency or other relief for debtors, and such order,
judgment or decree shall remain unvacated and unstayed for an
aggregate of thirty (30) days (whether or not consecutive)
from the first date of entry thereof; or any trustee, receiver
or liquidator of the Borrower or of all or any part of its
property, or of any or all of the royalties, revenues, rents,
issues or profits thereof, shall be appointed without the
consent or acquiescence of the Borrower and such appointments
shall remain unvacated and unstayed for an aggregate of thirty
(30) days (whether or not consecutive); or
(3) A writ of execution or attachment or any similar
process shall be issued or levied against all or any part of
or interest in the Collateral, or any judgment involving
monetary damages shall be entered against the Borrower which
shall become a lien on the Collateral or any portion thereof
or interest therein and such execution, attachment or similar
process or judgment is not released, bonded, satisfied,
vacated or stayed within thirty (30) days after its entry or
levy.
(i) Any event of default shall occur under any Operative
Document.
(j) A change shall occur after November 8, 1993, directly or
indirectly, in the ownership or control of the Borrower; provided,
however, that changes in the ownership or control of, or new issuances
of, voting common stock which do not exceed, cumulatively, 50% of the
total issued and outstanding shares of the Borrower as of September 30,
1993 shall not be deemed an Event of Default under this Section 7.1(j);
provided further, that acquisitions of additional shares by members of
the existing executive management group of the Borrower shall not be
counted as changes in the ownership or control of the Borrower under
this Section 7.1(j). For purposes of computing the total issued and
outstanding shares as of September 30, 1993, warrants and options for
such shares shall be included.
(k) An Event of Default shall occur under any Related Loan
Agreement and the expiration of any applicable cure period thereunder.
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(l) The Borrower shall be obligated to prepay all or any
portion of its subordinated debt as a result of a Change of Control.
(m) The Borrower pays, or is determined to be obligated to
pay, any indemnity to Broadcast Partners under the Purchase Agreement
in excess of $1,000,000 in the aggregate.
7.2 Remedies. If an Event of Default occurs and is continuing, upon the
election of the Lenders holding two-thirds of the then outstanding aggregate
Total Indebtedness of the Borrower to the Lenders (including under the Notes,
the Related Bank Debt and any similar indebtedness but excluding amounts due
under the Purchase Agreement), the entire unpaid principal amount under the
Notes and all Related Bank Debt, together with interest accrued thereon, shall
become immediately due and payable without presentment, demand, protest or
notice of any kind, all of which are hereby expressly waived, and the Lenders
may exercise their rights under the other Operative Documents and the Related
Loan Agreements (and the operative documents with respect thereto), including,
without limitation, under the Security Agreement. For purposes of this Article
VII, the term Lenders includes First Bank, Boatmen's and AgAmerica. In addition,
the Lenders shall have such other remedies as are available at law and in
equity. Remedies under this Agreement, the Operative Documents, the Related Loan
Agreements (and the operative documents with respect thereto) are cumulative.
Any waiver must be in writing by the Lenders and no waiver shall constitute a
waiver as to any other occurrence which constitutes an Event of Default or as to
any party not specifically included in such written waiver.
ARTICLE VIII. INTER-CREDITOR AGREEMENTS
8.1 FNB-O as Servicer. FNB-O will act as sole servicer of the loans
evidenced by the Notes issued hereunder and the Related Bank Debt. For purposes
of this Article VIII, the term Lenders includes First Bank, Boatmen's and
AgAmerica and the term Event of Default means any Event of Default hereunder or
under any Related Bank Debt. FNB-O will enforce, administer and otherwise deal
with the loans made by the Lenders in accordance with safe and prudent banking
standards employed by FNB-O in the case of the loan made by FNB-O. Without
limiting the generality of the foregoing, FNB-O will, on its own behalf and on
behalf of the Lenders: (i) maintain originals of the Operative Documents and the
operative documents in connection with the Related Loan Agreements; (ii) receive
requests for advances from the Borrower under the Related Loan Agreements and
make such advances on behalf of the revolving lenders in such agreements
(provided that FNB-O is assured of reimbursement therefor by the other revolving
lenders for their
22
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pro rata shares); (iii) receive payments and prepayments from the Borrower and
apply such payments as provided in Section 8.2; (iv) receive notices from the
Borrower and send copies thereof to the Lenders if FNB-O has reasonable cause to
believe that such Lenders have not received such notice from another source; and
(v) advise the Lenders of the occurrence of any material Event of Default which
FNB-O obtains actual knowledge of. The Lenders agree not to attempt to take any
action against the Borrower under the Operative Documents, Related Bank Debt or
with respect to the indebtedness evidenced thereby without FNB-O's consent
unless holders of two-thirds of the then outstanding aggregate Total
Indebtedness of the Borrower to the Lenders (including under the Notes, the
Related Bank Debt and any similar indebtedness but excluding amounts due under
the Purchase Agreement) shall have requested FNB-O to take specific action
against the Borrower and FNB-O shall have failed to do so within a reasonable
period after receipt of such request. All actions, consents, waivers and
approvals by the Lenders shall be deemed taken or given and amendments hereto
deemed agreed to if the holders of more than two-thirds of the outstanding
aggregate Total Indebtedness of the Borrower to the Lenders shall have indicated
their consent thereto. Notwithstanding the foregoing, any reduction or
compromise of the principal loan amount of the Notes or any Related Bank Debt or
the amount or rate of interest accrued or accruing thereon or extension of the
date of any scheduled payment shall require the unanimous approval of the
Lenders.
8.2 Application of Payments. Until the earlier of the occurrence of an
Event of Default or any Lender's giving of notice to the others that it deems
itself insecure, payments or prepayments made by the Borrower may be applied to
the indebtedness designated by the Borrower or otherwise applied as follows:
(a) first, to pay interest to date on the revolving
credit due under the 1995 Restated Loan Agreement between the Borrower
and certain of the Banks;
(b) second, to make payments due but unpaid under any of
the Notes and Related Bank Debt; and
(c) third, pro rata to the Lenders, such pro rata share to be
determined as set forth below in subsection (bb) of this Section 8.2.
After the occurrence of an Event of Default or any Lender's giving of notice
that it deems itself insecure, payments or prepayments on the Notes and Related
Bank Debt received by FNB-O or any of the Lenders and funds realized upon the
disposition of any of the Collateral shall be applied as follows:
23
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(aa) first, to reimburse FNB-O for any costs, expenses, and
disbursements (including attorneys' fees) which may be incurred or made
by FNB-0: (i) in connection with its servicing obligations; (ii) in the
process of collecting such payments or funds; or (iii) as advances made
by FNB-O to protect the Collateral (provided, however, that FNB-O shall
have no obligation to make such protective advances); and
(bb) second, pari passu among the Lenders, based on their
respective pro rata shares of the funds to be applied. Each Lender's
pro rata share shall be equal to a fraction, (x) the numerator of which
shall be total principal loan amount then outstanding which is owing to
each such Lender under its Notes and under its share, if any, of the
Related Bank Debt, and (y) the denominator of which shall be the total
principal loan amount then outstanding which is owing to the Lenders
under all Notes and Related Bank Debt.
Prepayments made pursuant to Section 2.6A and payments under the Purchase
Agreement shall not be subject to this Section 8.2, it being understood,
however, that prepayments under Section 2.6A shall not be permitted after the
occurrence of an Event of Default without the prior written consent of the
Banks. Except as specifically provided in this Section 8.2, FNB-O shall have no
obligation to repay or prepay any amount due from the Borrower to any of the
other Lenders nor shall FNB-O have any obligation to purchase all or a part of
any Note hereunder or any Note evidencing any Related Bank Debt or any advance
made by any Lenders, nor shall the Lenders have any recourse whatsoever against
FNB-O with respect to any failure of the Borrower to repay the indebtedness
referenced herein.
8.3 Liability of FNB-O. FNB-O shall not be liable to the Lenders for
any error of judgment or for any action taken or omitted to be taken by it
hereunder, except for gross negligence or willful misconduct. Without limiting
the generality of the foregoing, FNB-O, except as expressly set forth herein,
(a) may consult with legal counsel, independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (b) makes no representation or warranty with respect to,
and shall not be responsible for, the accuracy, completeness, execution,
legality, validity, legal effect or enforceability of this 1996 Term Credit
Agreement, the Notes, the Related Loan Agreements or the Related Bank Debt or
the other Operative Documents or the operative documents under any Related Bank
Debt or the value or sufficiency of any Collateral given by the Borrower or the
priority of the Lenders' security interest therein or the financial condition
24
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of the Borrower; and (c) shall not be responsible for the performance or
observance of any of the terms, covenants or conditions of the Operative
Documents or the operative documents under any Related Bank Debt on the part of
the Borrower and shall not have any duty to inspect the property (including,
without limitation, the books and records) of the Borrower.
8.4 Transfers. No Lender shall subdivide, transfer or grant a
participation in its respective Notes or notes evidencing any Related Bank Debt,
or in any advance hereunder or under any Related Bank Debt, without the prior
written consent of FNB-O which consent shall not be unreasonably withheld.
Notwithstanding the foregoing, Broadcast Partners shall be permitted to
subdivide, transfer or grant a participation in its respective Notes to any of:
Pioneer Hi-Bred International, Inc., Farmland Industries, Inc., Illinois
Agricultural Service Company, or the majority-owned or controlled subsidiaries
or affiliates of any of them.
8.5 Reliance. The Lenders acknowledge that they have been advised that
none of the Notes, the notes evidencing any Related Bank Debt nor any interest
therein or related thereto has been (i) registered under the Securities Act of
1933, as amended, nor (ii) insured by the Federal Deposit Insurance Corporation.
The Lenders acknowledge that they have received from the Borrower all financial
information and other data relevant to their decision to extend credit to the
Borrower and that they have independently approved the credit quality of the
Borrower.
8.6 Relationship of Lenders. The Lenders intend for the relationships
created by this Agreement to be construed as concurrent direct loans from each
Lender respectively to the Borrower. Nothing herein shall be construed as a loan
from any Lender to FNB-O or as creating a partnership or joint venture
relationship among them.
8.7 New Lenders. In the event that new Lenders are added to this
Agreement or to the Related Loan Agreements, such Lenders shall be required to
agree to the inter-creditor provisions of this Article VIII.
8.8 Broadcast Partners. Broadcast Partners is added to this Agreement
and: (i) except as otherwise expressly provided in this Agreement or the 1996
Restated Security Agreement, shall have the same rights as Lender hereunder and
under the 1996 Restated Security Agreement as the other Lenders; and (ii) the
Financing Statements filed in Nebraska and Iowa naming FNB-O as secured party
and the Borrower as debtor shall be in favor of FNB-O as agent for itself and
the other Lenders, including Broadcast Partners.
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ARTICLE IX. MISCELLANEOUS
9.1 Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and may not
be effectively amended, changed, modified or altered, except in writing executed
by all parties. Notwithstanding the foregoing, it is understood that the
purchase and sale transaction between the Borrower and Broadcast Partners is
governed by the Purchase Agreement.
9.2 Governing Law. The Operative Documents shall be governed by and
construed pursuant to the laws of the State of Nebraska.
9.3 Notices. Until changed by written notice from one party hereto to
the other, all communications under the Operative Documents shall be in writing
and shall be hand delivered or mailed by registered mail to the parties as
follows:
If to the Borrower:
DATA TRANSMISSION NETWORK CORPORATION
Suite 200
0000 Xxxx Xxxxx Xxxx
Xxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
If to the Lenders:
FIRST NATIONAL BANK OF OMAHA
One First National Center
Xxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxx
Notices shall be deemed given when mailed, except that any notice by the
Borrower under Section 2.6 shall not be deemed given until received by FNB-O.
9.4 Headings. The captions and headings herein are for convenience only
and in no way define, limit or describe the scope or intent of any provisions or
sections of this Agreement.
9.5 Counterparts. This Agreement may be executed in several
counterparts and such counterparts together shall constitute one and the same
instrument.
9.6 Survival; Successors and Assigns. The covenants, agreements,
representations and warranties made herein, and in the certificates delivered
pursuant hereto, shall survive the execution and delivery to the Lenders of this
Agreement and shall continue in full force and effect so long as any Note or
26
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any obligation to the Lenders under any of the Operative Documents is
outstanding and unpaid. Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
assigns of such party, and all covenants, promises and agreements by or on
behalf of the Borrower which are contained in this Agreement shall bind the
successors and assigns of the Borrower and shall inure to the benefit of the
successors and assigns of the Lenders.
9.7 Severability. If any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity without invalidating
the remainder of such provision or the remaining provisions of this Agreement.
9.8 Assignment. The Borrower may not assign its rights or obligations
hereunder and any assignment in contravention of the terms hereof shall be void.
9.9 Amendments. Any amendment, modification or supplement to this
Agreement must be in writing and must be signed by the parties hereto.
IN WITNESS WHEREOF, the Borrower and the Lenders have caused this 1996
Term Credit Agreement to be executed by their duly authorized corporate officers
as of the day and year first above written.
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DATA TRANSMISSION NETWORK CORPORATION
By
Title:
28
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FIRST NATIONAL BANK OF OMAHA
By
Title:
NOTICE: A credit agreement must be in writing to be enforceable under Nebraska
law. To protect you and us from any misunderstandings or disappointments, any
contract, promise, undertaking, or offer to forebear repayment of money or to
make any other financial accommodation in connection with this loan of money or
grant or extension of credit, or any amendment of, cancellation of, waiver of,
or substitution for any or all of the terms or provisions of any instrument or
document executed in connection with this loan of money or grant or extension of
credit, must be in writing to be effective.
INITIALED:
Borrower
4866E
29
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BROADCAST PARTNERS
By
Title:
NOTICE: A credit agreement must be in writing to be enforceable under Nebraska
law. To protect you and us from any misunderstandings or disappointments, any
contract, promise, undertaking, or offer to forebear repayment of money or to
make any other financial accommodation in connection with this loan of money or
grant or extension of credit, or any amendment of, cancellation of, waiver of,
or substitution for any or all of the terms or provisions of any instrument or
document executed in connection with this loan of money or grant or extension of
credit, must be in writing to be effective.
INITIALED:
Borrower
4866E
30
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FIRST NATIONAL BANK, WAHOO, NEBRASKA
By
Title:
NOTICE: A credit agreement must be in writing to be enforceable under Nebraska
law. To protect you and us from any misunderstandings or disappointments, any
contract, promise, undertaking, or offer to forebear repayment of money or to
make any other financial accommodation in connection with this loan of money or
grant or extension of credit, or any amendment of, cancellation of, waiver of,
or substitution for any or all of the terms or provisions of any instrument or
document executed in connection with this loan of money or grant or extension of
credit, must be in writing to be effective.
INITIALED:
Borrower
4866E
31
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NBD BANK
By
Title:
NOTICE: A credit agreement must be in writing to be enforceable under Nebraska
law. To protect you and us from any misunderstandings or disappointments, any
contract, promise, undertaking, or offer to forebear repayment of money or to
make any other financial accommodation in connection with this loan of money or
grant or extension of credit, or any amendment of, cancellation of, waiver of,
or substitution for any or all of the terms or provisions of any instrument or
document executed in connection with this loan of money or grant or extension of
credit, must be in writing to be effective.
INITIALED:
Borrower
4866E
32
- 134 -
NORWEST BANK NEBRASKA, N.A.
By
Title:
NOTICE: A credit agreement must be in writing to be enforceable under Nebraska
law. To protect you and us from any misunderstandings or disappointments, any
contract, promise, undertaking, or offer to forebear repayment of money or to
make any other financial accommodation in connection with this loan of money or
grant or extension of credit, or any amendment of, cancellation of, waiver of,
or substitution for any or all of the terms or provisions of any instrument or
document executed in connection with this loan of money or grant or extension of
credit, must be in writing to be effective.
INITIALED:
Borrower
4866E
33
- 135 -
FARM CREDIT SERVICES OF THE MIDLANDS,
PCA
By
Title:
NOTICE: A credit agreement must be in writing to be enforceable under Nebraska
law. To protect you and us from any misunderstandings or disappointments, any
contract, promise, undertaking, or offer to forebear repayment of money or to
make any other financial accommodation in connection with this loan of money or
grant or extension of credit, or any amendment of, cancellation of, waiver of,
or substitution for any or all of the terms or provisions of any instrument or
document executed in connection with this loan of money or grant or extension of
credit, must be in writing to be effective.
INITIALED:
Borrower
4866E
34
- 136 -
EXHIBIT A
TO 1996 TERM CREDIT AGREEMENT
BETWEEN
FIRST NATIONAL BANK OF OMAHA,
FIRST NATIONAL BANK, WAHOO, NEBRASKA,
NBD BANK,
NORWEST BANK NEBRASKA, N.A.,
FARM CREDIT SERVICES OF THE MIDLANDS, PCA,
BROADCAST PARTNERS AND
DATA TRANSMISSION NETWORK CORPORATION
FORM OF NOTES
1
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SECURED BUSINESS PROMISSORY NOTE
Omaha, Nebraska $
May 3, 1996 December 31, 2002
(Note Date) (Maturity Date)
DATA TRANSMISSION NETWORK CORPORATION ("Maker") promises to pay to the
order of ("Lender") at the offices of First National Bank of Omaha in Omaha,
Nebraska, the principal sum of . Interest on the unpaid principal balance shall
be due on the last day of each month, beginning May 31, 1996. The principal sum
shall become due and payable in seventy-two equal monthly installments, with the
first such installment due on January 31, 1997, or if such day is not a Business
Day, on the next succeeding Business Day, and subsequent installments due on the
last day of each consecutive month thereafter, or, if such day is not a Business
Day, on the next succeeding Business Day. In any event, the total amount of all
unpaid principal and accrued interest hereunder shall be due and payable no
later than December 31, 2002. All capitalized terms not defined herein shall
have the meanings set forth in that certain 1996 Term Credit Agreement dated as
of May 3, 1996 among Maker, Lender and others (the "Agreement".)
Interest shall accrue on the principal outstanding through June 30,
1999, from time to time at the rate of % per annum; thereafter the interest rate
for the balance of the term shall be set on June 30, 1999, at two percent
(2.00%) above the yield on constant maturity Treasury Bonds with maturities of
three years, as quoted for the immediately preceding Business Day in the
applicable Release. Notwithstanding the foregoing, after an Event of Default has
occurred interest shall accrue on the entire outstanding balance of principal
and interest at a fluctuating rate equal to the Revolving Credit Rate, plus
4.00%. Interest shall be calculated on the basis of the actual number of days
outstanding and a 360-day year. Interest shall continue to accrue on the full
unpaid balance hereunder notwithstanding any permitted or unpermitted failure of
the Borrower to make a scheduled payment or the fact that a scheduled payment
day falls on a day other than a Business Day. If, any time during a Restricted
Quarter (including, without limitation, during any period in such quarter prior
to delivery of the Quarterly Compliance Certificate), the interest rate accruing
on this Note is less than seven and one-half percent (7.50%), a "Trigger Event"
shall be deemed to have occurred. Upon the occurrence of a Trigger Event, the
Maker shall be obligated to pay the following fees: (i) three-eighths of one
percent (.375%) of the outstanding principal balance of the Note as of the date
preceding the Trigger Event, which amount shall be payable promptly upon
invoicing; (ii) the same amount as computed in clause (i), payable on the
six-month anniversary of the Trigger Event; and (iii) the same amount as
computed in clause (i), payable on the twelve-month anniversary of the Trigger
Event.
Maker may prepay in full without penalty the unpaid balance hereunder,
provided that the Borrower contemporaneously prepays in full all other Notes (as
such term is defined in the Agreement), but only if such prepayment occurs on
June 30, 1999 and the Borrower has given
2
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Lender at least 30 days prior written notice of its intention to make such
prepayment. In the event of any other prepayment (regardless of whether such
prepayment occurs before or after June 30, 1999), the Borrower shall pay to
Lender, at Lender's option, either: (1) the Make-Whole Premium (as such term is
defined in the Agreement) due in respect of such prepayment; or (2) a prepayment
fee equal to one and one-half percent (1.50%) of the amount of such prepayment.
Payment of this Note and the performance of Maker's obligations under
the Agreement ("Obligations") are secured by a security interest granted to
First National Bank of Omaha, as agent for the Lenders and others ("Agent"),
under a 1996 Restated Security Agreement dated as of May 3, 1996 (the "Restated
Security Agreement") in:
All of Debtor's accounts, accounts receivable, chattel paper,
documents, instruments, goods, inventory, equipment, general
intangibles, contract rights, all rights of Debtor in deposits and
advance payments made to Debtor by its customers and subscribers,
accounts due from advertisers and all ownership, proprietary,
copyright, trade secret and other intellectual property rights in and
to computer software (and specifically including, without limitation,
all such rights in DTN transmission computer software used in the
provision of the Basic DTN Subscription Service and Farm Dayta Service
to Debtor's subscribers) and all documentation, source code,
information and works of authorship pertaining thereto, all now owned
or hereafter acquired and all proceeds and products thereof; and such
additional collateral as is more specifically described in the Restated
Security Agreement.
Maker's liability under its Obligations shall not be affected by any of
the following:
Acceptance or retention by Lender or Agent of other property
or interests as security for the Obligations, or for the liability of
any person other than a Maker with respect to the Obligations;
The release of all or any of the Collateral or other security
for any of the Obligations to any Maker;
Any release, extension, renewal, modification or compromise of
any of the Obligations or the liability of any obligor thereon; or
Failure by Lender or Agent to resort to other security or any
person liable for any of the Obligations before resorting to the
Collateral.
Neither Lender nor Agent is required to take any action whatsoever in
respect of the Collateral. Impairment or destruction of the Collateral shall not
release Maker of its liability hereunder.
Maker represents, warrants and covenants as follows:
3
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Maker is authorized to grant to Agent a security interest in
the Collateral;
This Note, the Agreement and the Security Agreement have been
duly authorized, executed and delivered by the Maker and constitute
legal, valid and binding obligations of Maker;
This Note evidences a loan to acquire substantially all of the
assets of Broadcast Partners, a general partnership, with its principal
place of business at 00000 Xxxxxx Xxxxxx, Xxx Xxxxxx, Xxxx 00000; and
Maker agrees to pay all costs of collection in connection with
this Note, the Agreement and the Security Agreement, including
reasonable attorneys' fees and legal expenses.
Upon the failure of Maker to make any payment of principal or interest
when due hereunder or the occurrence of any Event of Default, all of the
Obligations shall, at the option of Agent and without notice or demand, mature
and become immediately due and payable; and Agent shall have all rights and
remedies for default provided by the Uniform Commercial Code, any other
applicable law and/or the Obligations.
All costs and expenses incurred by Lender or Agent in enforcing its
rights under this Note or any mortgage, endorsement, surety agreement, guaranty
relating thereto are the obligation of Maker and are immediately due and
payable. Interest shall accrue on such costs and expenses from the date of
incurrence at the rate specified herein for delinquent Note payments. Each
Maker, endorser, surety and guarantor hereby waives presentment, protest,
demand, notice of dishonor, and the defense of any statute of limitations.
Without affecting the liability of any Maker, endorser, surety or
guarantor, the holder or Agent may, without notice, renew or extend the time for
payment, accept partial payments, release or impair any Collateral or other
security for the payment of this Note or agree to xxx any party liable on it.
Neither Lender nor Agent shall be deemed to have waived any of its
rights upon or under this Note, or under any mortgage, endorsement, surety
agreement or guaranty, unless such waivers be in writing and signed by Lender or
Agent, as the case may be. No delay or omission on the part of Lender or Agent
in exercising any right shall operate as a waiver of such right or any other
right. A waiver on any one occasion shall not be construed as a bar to or waiver
of any right on any future occasion. All rights and remedies of Lender or Agent
on liabilities or the Collateral, whether evidenced hereby or by any other
instrument or papers, shall be cumulative and may be exercised singularly or
concurrently.
Maker, if more than one, shall be jointly and severally liable
hereunder and all provisions hereof regarding the liabilities or security of
Maker shall apply to any liability or any security of any or all of them. This
Note shall be binding upon the heirs, executors, administrators, assigns or
successors of Maker; shall constitute a continuing agreement, applying to all
future as well as
4
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existing transactions, whether or not of the character contemplated at the date
of this Note, and if all transactions between Lender and Maker shall be at any
time closed, shall be equally applicable to any new transactions thereafter,
provided that Lender's interest in the Collateral shall be limited to the extent
provided in the Security Agreement; shall benefit Lender, its successors and
assigns; and shall so continue in force notwithstanding any change in any
partnership party hereto, whether such change occurs through death, retirement
or otherwise.
All obligations of Maker hereunder shall be payable in immediately
available funds in lawful money of the United States of America at the principal
office of First National Bank of Omaha in Omaha, Nebraska or at such other
address as may be designated by Bank in writing.
This Note shall be construed according to the laws of the State of
Nebraska.
Unless the content otherwise requires, all terms used herein which are
defined in the Uniform Commercial Code shall have the meanings therein stated.
Any provision of this Note 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.
Executed as of this 3rd day of May, 1996.
DATA TRANSMISSION NETWORK CORPORATION
By:
Title:
4866E/34-38
5
- 141 -
EXHIBIT B
TO 1996 TERM CREDIT AGREEMENT
BETWEEN
FIRST NATIONAL BANK OF OMAHA,
FIRST NATIONAL BANK, WAHOO, NEBRASKA,
NBD BANK,
NORWEST BANK NEBRASKA, N.A.,
FARM CREDIT SERVICES OF THE MIDLANDS, PCA,
BROADCAST PARTNERS AND
DATA TRANSMISSION NETWORK CORPORATION
OFFICER'S CERTIFICATE
- 142 -
COMPLIANCE CERTIFICATE
DATA TRANSMISSION NETWORK CORPORATION
First National Bank of Omaha Date
Attn: Xxxxx Xxxxxx
00xx & Xxxxx Xxxxxxx
Xxxxx, Xxxxxxxx 00000
I certify that Data Transmission Network Corporation is in compliance with the
requirements set forth in the 1996 Term Credit Agreement (the "Agreement") dated
as of May 3, 1996, between First National Bank of Omaha, First National Bank,
Wahoo, Nebraska, NBD Bank, Norwest Bank Nebraska, N.A., Farm Credit Services of
the Midlands, PCA in care of AgAmerica, FCB, Broadcast Partners and Data
Transmission Network Corporation.
The following calculations are as of (statement date) as required by
section 5.1(d) of said
Agreement:
Evaluations:
Total Indebtedness/Net Worth = / = %
(for the purposes of this document this calculation will be abbreviated by
TI/NW).
Operating Cash Flow: most recent month previous month
ending ending
Net Income (loss)
Interest Expense
Depreciation
Goodwill Amortization
Deferred Income Taxes
Non-Ordinary Non-Cash
Charges (Credits)
Total a) b)
Operating Cash Flow = OCF = (a+b)/2 =
Section 2.2
o Trigger Fee: If TI/NW exceeds 300%, then a one time fee is
due, paid in three installments of 3/8% of the then
outstanding principal balances, on any of Notes which have
an interest rate less than 7.5%.
Position: A Trigger Event has/has not occurred.
1
- 143 -
Section 5.3
o Net Worth: A minimum Net Worth (exclusive of subordinated debt) of
$23,500,000 is required.
Position: Net Worth (exclusive of subordinated debt)= $ .
-----------
Section 5.4
o Indebtedness: At no time will Total Indebtedness exceed 48 x OCF.
Position: (48 x OCF) - Total Indebtedness =
- =
o Indebtedness: At no time will TI/NW exceed 350%.
Position: TI/NW = %
o Total At no time will Adjusted Total Indebtedness
Indebtedness exceed 60 x OCF
plus
subordinated
debt plus
guaranty
contingencies
(Adjusted
Total
Indebtedness or
ATI):
Position: Adjusted Total Indebtedness = $
(60 x OCF) - (ATI) = $
Section 5.15
o Interest The ratio of OCF to Interest Expense ("IE")
Coverage: at the end of each quarter will not be less than
2.25 to 1.0 (225%).
Position: OCF = $
IE = $
OCF/IE = %
Additional Representations:
2
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There have/have not been any sale(s) of assets which would require
prepayment of the Notes under Section 5.2.
There has/has not been:
(i) a Change of Control or a material adverse change in
management personnel as defined in Section 5.14 of the
Agreement; or
(ii) a default under Section 7.1(j) or 7.1(l) regarding a
change in ownership or control of the Company.
(iii) an indemnity claim by Broadcast Partners under Section
7.1(m).
Name of Borrower: Data Transmission Network Corporation
Signature:
Title:
3
1
- 145 -
SCHEDULE A
TO 1996 TERM CREDIT AGREEMENT
BETWEEN
FIRST NATIONAL BANK OF OMAHA,
FIRST NATIONAL BANK, WAHOO, NEBRASKA,
NBD BANK,
NORWEST BANK NEBRASKA, N.A.,
FARM CREDIT SERVICES OF THE MIDLANDS, PCA,
BROADCAST PARTNERS AND
DATA TRANSMISSION NETWORK CORPORATION
PERMITTED ENCUMBRANCES
Secured Party Financing Statements
Nebraska Secretary of State
First National Bank of Omaha 12/28/87 #401690
10/13/92 #564918 Amendment
11/13/92 #568176 Continued
5/ /96 Amendment
FirsTier, Lincoln 6/24/87 #384782
First National Bank of Omaha 2/03/88 #405477 Amendment
First National Bank, Wahoo 5/28/92 #553205 Continued
NBD, Detroit 10/13/92 #564919 Amendment
2/05/93 #576038 Amendment
11/10/93 #603168 Amendment
FirsTier, Lincoln 2/10/88 #406144
First National Bank of Omaha 10/13/92 #564917 Amendment
First National Bank, Wahoo 1/07/93 #572981 Continued
NBD, Detroit 2/05/93 #576039 Amendment
11/10/93 #603169 Amendment
First Bank of Minneapolis 11/25/91 #534665
(Norstan) 8/24/92 #561090 Assignment
Xxxxxxx County Clerk, Nebraska
1
- 146 -
FirsTier, Lincoln 2/11/88 #000534
First National Bank of Omaha 10/15/92 #000534 Amendment
First National Bank, Wahoo 1/08/93 #0000054 Continued
NBD, Detroit 2/05/93 #000253 Amendment
11/17/93 #54 Amendment
2
- 147 -
Iowa Secretary of State
FirsTier, Lincoln 2/10/88 H842023
First National Bank of Omaha 10/15/92 K395184 Amendment
First National Bank, Wahoo 1/08/93 K424887 Continued
NBD, Detroit 2/08/93 K434908 Amendment
11/15/93 K503145 Amendment
Kansas Secretary of State
FirsTier, Lincoln 2/10/88 #1286572
First National Bank of Omaha 10/15/92 #1842986 Amendment
First National Bank, Wahoo 1/08/93 #1868482 Continued
NBD, Detroit 2/11/93 #1879069 Amendment
11/12/93 #1964342 Amendment
Illinois Secretary of State
FirsTier, Lincoln 3/18/88 #2402370
First National Bank of Omaha 10/21/92 #3043202 Amendment
First National Bank, Wahoo 2/11/93 #3084199 Amendment
NBD, Detroit 2/25/93 #3089132 Continued
12/09/93 #3197498 Amendment
Michigan Secretary of State
FirsTier, Lincoln 2/12/88 #C034473
First National Bank of Omaha 10/16/92 #C646856 Amendment
First National Bank, Wahoo 1/08/93 #C672590 Continued
NBD, Detroit 3/01/93 #C689434 Amendment
11/15/93 #C778208 Amendment
Wisconsin Secretary of State
FirsTier, Lincoln 2/18/88 #968701
First National Bank of Omaha 10/21/92 #1309942 Amendment
First National Bank, Wahoo 01/15/93 #1326550 Continued
NBD, Detroit 2/08/93 #1331412 Amendment
11/23/93 #1393268 Amendment
3
- 148 -
Indiana Secretary of State
FirsTier, Lincoln 2/11/88 #1454192
First National Bank of Omaha 10/21/92 #1808780 Amendment
First National Bank, Wahoo 1/11/93 #1822115 Continued
NBD, Detroit 2/08/93 #187451 Amendment
11/12/93 #1878806 Amendment
4
- 149 -
Minnesota Secretary of State
FirsTier, Lincoln 2/17/88 1#121648#00
First National Bank of Omaha 10/16/92 #1537269 Amendment
First National Bank, Wahoo 01/19/93 #1557397 Continued
NBD, Detroit 2/08/93 #1562125 Amendment
11/23/93 #1632156 Amendment
South Dakota Secretary of State
FirsTier, Lincoln 2/10/88 880410802864
First National Bank of Omaha 10/16/92 #22901003596 Amendment
First National Bank, Wahoo 1/08/93 #30081001734 Continued
NBD, Detroit 2/09/93 #30391203308 Amendment
11/22/93 #33261003899 Amendment
Missouri Secretary of State
FirsTier, Lincoln 2/11/88 #1555991
First National Bank of Omaha 10/16/92 #2184193 Amendment
First National Bank, Wahoo 1/08/93 #2212473 Continued
NBD, Detroit 2/08/93 #2224113 Amendment
11/15/93 #2331876 Amendment
Ohio Secretary of State
FirsTier, Lincoln 2/12/88 #Y00095612
First National Bank of Omaha 10/19/92 #01097336 Amendment
First National Bank, Wahoo 1/11/93 #01119343901 Continued
NBD, Detroit 2/09/93 #02099338901 Amendment
11/12/93 #0000000000 Amendment
Kentucky Secretary of State
First National Bank of Omaha 11/12/93 134318
Pennsylvania Department of State
First National Bank of Omaha 11/12/93 22571277
5
- 150 -
Oklahoma Secretary of State
First National Bank of Omaha 11/12/93 059782
6
- 151 -
Mississippi Secretary of State
First National Bank of Omaha 11/12/93 0756092--
Colorado Secretary of State
First National Bank of Omaha 11/12/93 932082461
California Secretary of State
First National Bank of Omaha 11/12/93 93229491
Washington Secretary of State
First National Bank of Omaha 11/15/93 933190075
Montana Secretary of State
First National Bank of Omaha 11/15/93 419540
Arizona Secretary of State
First National Bank of Omaha 11/15/93 765359
North Carolina Secretary of State
First National Bank of Omaha 11/15/93 050742
North Dakota Secretary of State
First National Bank of Omaha 11/16/93 93-380331
Florida Secretary of State
First National Bank of Omaha 11/17/93 930000236992
7
Texas Secretary of State
First National Bank of Omaha 11/29/93 227591--
8
2
- 152 -
