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$125,000,000
CREDIT AGREEMENT
DATED AS OF OCTOBER 8, 1996
AMONG
ON COMMAND CORPORATION
AS THE BORROWER
AND
THE LENDERS NAMED HEREIN
AND
NATIONSBANK OF TEXAS, N.A.
AS THE ADMINISTRATIVE AGENT
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EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A - Form of Administrative Questionnaire
Exhibit B - Form of Assignment and Acceptance
Exhibit C - Form of Borrowing Request
Exhibit D-1 - Form of Competitive Bid Request
Exhibit D-2 - Form of Notice of Competitive Bid Request
Exhibit D-3 - Form of Competitive Bid
Exhibit D-4 - Form of Competitive Accept/Reject Letter
Exhibit E - Form of Application for a Letter of Credit
Exhibit F - Form of Compliance Certificate
SCHEDULES
Schedule 2.01(a) - Short Term Commitments
Schedule 2.01(b) - Long Term Commitments
Schedule 3.08 - Subsidiaries
Schedule 3.09 - Litigation
Schedule 3.10 - Restrictive Material Agreements
Schedule 3.14 - Taxes Owed by Spectradyne and SpectraVision
Schedule 3.16 - ERISA Disclosure
Schedule 3.18 - Insurance
Schedule 3.20 - Environmental Matters
Schedule 4.02(h) - Certain Spectradyne FCC Licenses not Transferred
Schedule 6.01 - Subsidiary Indebtedness
Schedule 6.02 - Liens
Schedule 6.04 - Investments
Schedule 7.0 - Modification of the Reorganization Plan
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Terms Generally . . . . . . . . . . . . . . . . . . . . 20
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.02. Loans . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.03. Competitive Bid Procedure . . . . . . . . . . . . . . . 23
SECTION 2.04. Borrowing Procedure . . . . . . . . . . . . . . . . . . 25
SECTION 2.05. Evidence of Debt; Repayment of Loans. . . . . . . . . . 26
SECTION 2.06. Fees. . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 2.07. Interest on Loans . . . . . . . . . . . . . . . . . . . 28
SECTION 2.08. Default Interest. . . . . . . . . . . . . . . . . . . . 29
SECTION 2.09. Alternate Rate of Interest. . . . . . . . . . . . . . . 29
SECTION 2.10. Termination and Reduction of Commitments; Extension of
the Short Term Revolving Loan Maturity Date . . . . . . 30
SECTION 2.11. Conversion and Continuation of Borrowings . . . . . . . 31
SECTION 2.12. Prepayment. . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 2.13. Reserve Requirements; Change in Circumstances . . . . . 35
SECTION 2.14. Change in Legality. . . . . . . . . . . . . . . . . . . 36
SECTION 2.15. Indemnity . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 2.16. Pro Rata Treatment. . . . . . . . . . . . . . . . . . . 38
SECTION 2.17. Sharing of Setoffs. . . . . . . . . . . . . . . . . . . 38
SECTION 2.18. Payments. . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 2.19. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 2.20. Assignment of Commitments Under Certain Circumstances;
Duty to Mitigate. . . . . . . . . . . . . . . . . . . . 43
SECTION 2.21. Letters of Credit . . . . . . . . . . . . . . . . . . . 44
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Organization; Powers. . . . . . . . . . . . . . . . . . 48
SECTION 3.02. Authorization . . . . . . . . . . . . . . . . . . . . . 48
SECTION 3.03. Enforceability. . . . . . . . . . . . . . . . . . . . . 49
SECTION 3.04. Governmental Approvals. . . . . . . . . . . . . . . . . 49
SECTION 3.05. Financial Statements. . . . . . . . . . . . . . . . . . 49
SECTION 3.06. No Material Adverse Change. . . . . . . . . . . . . . . 49
SECTION 3.07. Title to Properties; Possession Under Leases. . . . . . 49
SECTION 3.08. Subsidiaries. . . . . . . . . . . . . . . . . . . . . . 50
SECTION 3.09. Litigation; Compliance with Laws. . . . . . . . . . . . 50
SECTION 3.10. Agreements. . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 3.11. Federal Reserve Regulations . . . . . . . . . . . . . . 51
SECTION 3.12. Investment Company Act; Public Utility Holding Company
Act . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 3.13. Use of Proceeds . . . . . . . . . . . . . . . . . . . . 51
SECTION 3.14. Tax Returns . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 3.15. No Material Misstatements . . . . . . . . . . . . . . . 51
SECTION 3.16. Employee Benefit Plans. . . . . . . . . . . . . . . . . 52
SECTION 3.17. Solvency. . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 3.18. Insurance . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 3.19. Labor Matters . . . . . . . . . . . . . . . . . . . . . 53
SECTION 3.20. Environmental Matters . . . . . . . . . . . . . . . . . 53
SECTION 3.21. Acquisition of Spectradyne. . . . . . . . . . . . . . . 54
SECTION 3.22. Survival of Representations and Warranties, etc.. . . . 54
ARTICLE IV
CONDITIONS OF LENDING
SECTION 4.01. All Credit Events . . . . . . . . . . . . . . . . . . . 55
SECTION 4.02. First Credit Event. . . . . . . . . . . . . . . . . . . 55
SECTION 4.03. Increase of Long Term . . . . . . . . . . . . . . . . . 58
ARTICLE V
AFFIRMATIVE COVENANTS
SECTION 5.01. Existence; Businesses and Properties. . . . . . . . . . 59
SECTION 5.02. Insurance . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 5.03. Obligations and Taxes . . . . . . . . . . . . . . . . . 59
SECTION 5.04. Financial Statements, Reports, etc. . . . . . . . . . . 60
SECTION 5.05. Litigation and Other Notices. . . . . . . . . . . . . . 61
SECTION 5.06. Employee Benefits . . . . . . . . . . . . . . . . . . . 61
SECTION 5.07. Maintaining Records; Access to Properties and
Inspections . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 5.08. Use of Proceeds . . . . . . . . . . . . . . . . . . . . 62
SECTION 5.09. Compliance with Environmental Laws. . . . . . . . . . . 62
SECTION 5.10. Compliance with Material Contracts. . . . . . . . . . . 62
ii
ARTICLE VI
NEGATIVE COVENANTS
SECTION 6.01. Indebtedness of the Subsidiaries of the Borrower. . . . 63
SECTION 6.02. Liens . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 6.03. Sale and Lease Back Transactions; Off-Balance Sheet
Financings. . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 6.04. Investments, Acquisitions, Loans and Advances . . . . . 65
SECTION 6.05. Mergers, Consolidations and Sales of Assets . . . . . . 65
SECTION 6.06. Dividends and Distributions; Restrictions on Ability of
Subsidiaries to Pay Dividends . . . . . . . . . . . . . 66
SECTION 6.07. Transactions with Affiliates. . . . . . . . . . . . . . 67
SECTION 6.08. Limitation on Restrictive Agreements. . . . . . . . . . 67
SECTION 6.09. Leverage Ratio. . . . . . . . . . . . . . . . . . . . . 67
SECTION 6.10. Coverage Ratio. . . . . . . . . . . . . . . . . . . . . 68
SECTION 6.11. Amendments to Organizational Documents. . . . . . . . 68
ARTICLE VII
EVENTS OF DEFAULT
ARTICLE VIII
THE ADMINISTRATIVE AGENT
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 9.02. Survival of Agreement . . . . . . . . . . . . . . . . . 76
SECTION 9.03. Binding Effect. . . . . . . . . . . . . . . . . . . . . 76
SECTION 9.04. Successors and Assigns. . . . . . . . . . . . . . . . . 76
SECTION 9.05. Expenses; Indemnity . . . . . . . . . . . . . . . . . . 80
SECTION 9.06. Right of Setoff . . . . . . . . . . . . . . . . . . . . 81
SECTION 9.07. Applicable Law. . . . . . . . . . . . . . . . . . . . . 81
SECTION 9.08. Waivers; Amendment. . . . . . . . . . . . . . . . . . . 81
SECTION 9.09. Interest Rate Limitation. . . . . . . . . . . . . . . . 82
SECTION 9.10. ENTIRE AGREEMENT. . . . . . . . . . . . . . . . . . . . 82
SECTION 9.11. WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . 83
iii
SECTION 9.12. Severability. . . . . . . . . . . . . . . . . . . . . . 83
SECTION 9.13. Counterparts. . . . . . . . . . . . . . . . . . . . . . 83
SECTION 9.14. Headings. . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 9.15. Jurisdiction; Consent to Service of Process . . . . . . 83
SECTION 9.16. Confidentiality . . . . . . . . . . . . . . . . . . . . 84
iv
ON COMMAND CORPORATION
$125,000,000
CREDIT AGREEMENT
This CREDIT AGREEMENT (this "AGREEMENT"), dated as of October 8, 1996,
among ON COMMAND CORPORATION, a Delaware corporation (the "BORROWER"), the
Lenders (as defined in Article I hereof), and NATIONSBANK OF TEXAS, N.A., a
national banking association, as issuing bank (in such capacity, the "ISSUING
BANK"), and as administrative agent (in such capacity, the "ADMINISTRATIVE
AGENT") for the Lenders.
The Borrower has requested the Lenders to extend credit in the form of
revolving loans, competitive bid rate loans, and letters of credit (such letters
of credit in an aggregate face amount not to exceed $10,000,000), in a maximum
aggregate principal amount for all such facilities at any time outstanding not
in excess of $125,000,000. The proceeds of the Loans are to be used to
refinance existing indebtedness and for general corporate purposes of the
Borrower and its Subsidiaries, including, without limitation, working capital
and strategic acquisitions permitted under the terms hereof.
The Lenders are willing to extend a $125,000,000 aggregate credit facility
to the Borrower in the form of either revolving loans, competitive bid rate
loans or letters of credit, as elected by the Borrower, in each case on the
terms and subject to the conditions set forth herein. Accordingly, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINED TERMS. As used in this Agreement, the following
terms shall have the meanings specified below:
"ABR BORROWING" shall mean a Borrowing comprised of ABR Loans.
"ABR LOAN" shall mean any Loan bearing interest at the Alternate Base Rate
in accordance with the provisions of Article II hereof.
"ACQUISITION" shall mean the acquisition made by the Borrower in accordance
with the terms of the Acquisition Agreement.
"ACQUISITION AGREEMENT" shall mean that certain Acquisition Agreement by
and among the Borrower, Ascent, the Official Creditors' Committee for
SpectraVision, Inc. and Certain of its Subsidiaries, SpectraVision, Spectradyne
and other Debtors named therein, dated as of August 13, 1996, as amended through
the Closing Date.
"ADJUSTED LIBO RATE" shall mean, with respect to any Eurodollar Borrowing
for any Interest Period, a simple per annum interest rate equal to the lesser of
(a) the Highest Lawful Rate and (b) the sum of (i) the quotient of (x) the LIBO
Rate divided by (y) one minus the LIBOR Reserve Percentage, stated as a decimal,
plus (ii) the Applicable Percentage. The Adjusted LIBO Rate shall apply to
Interest Periods of one, two, three or six months, or, if determined available
by the Administrative Agent, twelve months. The Adjusted LIBO Rate shall be
subject to availability with respect to the Lenders and to Section 2.14 hereof.
Once determined, the Adjusted LIBO Rate shall remain unchanged during the
applicable Interest Period, except for changes to reflect adjustments in the
LIBOR Reserve Percentage.
"ADMINISTRATIVE AGENT FEES" shall have the meaning assigned to such term in
Section 2.06(b) hereof.
"ADMINISTRATIVE QUESTIONNAIRE" shall mean an Administrative Questionnaire
in the form of EXHIBIT A hereto.
"AFFILIATE" shall mean, when used with respect to a specified Person,
another Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control with
the Person specified.
"ALTERNATE BASE RATE" shall mean, for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/100 of 1%) equal to the lesser of (a)
the Highest Lawful Rate and (b) sum of (i) the Applicable Percentage, plus
(ii) the greater of (A) the Prime Rate in effect on such day, and (B) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. If for
any reason the Administrative Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is unable to
ascertain the Federal Funds Effective Rate for any reason, including the
inability or failure of the Administrative Agent to obtain sufficient
quotations in accordance with the terms of the definition thereof, the
Alternate Base Rate shall be determined without regard to clause (B) of the
preceding sentence, until the circumstances giving rise to such inability no
longer exist. Any change in the Alternate Base Rate due to a change in the
Prime Rate or the Federal Funds Effective Rate shall be effective on the
effective date of such change in the Prime Rate or the Federal Funds
Effective Rate, respectively. The term "PRIME RATE" shall mean the rate of
interest per annum publicly announced from time to time by the Administrative
Agent as its prime rate in effect at its
2
office in Dallas, Texas; each change in the Prime Rate shall be effective on
the date such change is publicly announced as being effective. The term
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any day, the weighted average
of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of Dallas, Texas or,
if such rate is not so published for any day that is a Business Day, the
average of the quotations for the day for such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.
"APPLICABLE LAW" shall mean (a) in respect of any Person, all provisions
of Laws of tribunals applicable to such Person, and all orders and decrees of
all courts and arbitrators in proceedings or actions to which the Person in
question is a party and (b) in respect of contracts made or performed in the
State of Texas, "Applicable Law" also means the laws of the United States of
America, including, without limiting the foregoing, 12 USC Sections 85 and
86, as amended to the date hereof and as the same may be amended at any time
and from time to time hereafter, and any other statute of the United States
of America now or at any time hereafter prescribing the maximum rates of
interest on loans and extensions of credit, and the laws of the State of
Texas, including, without limitations, Articles 5069-1.04 and 5069-1.07(a),
Title 79, Revised Civil Statutes of Texas, 1925, as amended ("ART. 1.04"),
and any other statute of the State of Texas now or at any time hereafter
prescribing maximum rates of interest on loans and extensions of credit;
PROVIDED HOWEVER, that pursuant to Article 5069-15.10(b), Title 79, Revised
Civil Statutes of Texas, 1925, as amended, the Borrower agrees that the
provisions of Chapter 15, Title 79, Revised Civil Statutes of Texas, 1925, as
amended, shall not apply to the Loans hereunder.
"APPLICABLE PERCENTAGE" shall mean, for any day, with respect to any
Eurodollar Loan or ABR Loan (other than any Eurodollar Competitive Loan), the
applicable percentage set forth below under the caption "Eurodollar Margin" or
"ABR Margin", as the case may be, based upon the Leverage Ratio, then in effect
for purposes hereof:
Eurodollar ABR
Leverage Ratio Margin Margin
-------------- ---------- ------
CATEGORY 1 0.625% 0%
Greater than or equal
to 2.00 to 1.00
3
Category 2 0.500% 0%
----------
Greater than or equal to
1.00 to 1.00 but less than
2.00 to 1.00
Category 3 0.375% 0%
----------
Less than 1.00 to 1.00
Except as set forth below, the Leverage Ratio utilized for purposes of
determining the Eurodollar Margin and ABR Margin shall be that in effect as
of the last day of the most recent fiscal quarter of the Borrower in respect
of which financial statements have been delivered pursuant to this Agreement.
From the date hereof until the earliest to occur of the initial delivery of
financial statements pursuant to Section 5.04(a) or (b) hereof, the
Borrower's failure to timely deliver such financial statements or the
occurrence of an Event of Default, the Leverage Ratio shall be deemed to be
within Category 1 above. The Applicable Percentage from time to time in
effect shall be based on the Leverage Ratio from time to time in effect, and
each change in the Applicable Percentage resulting from a change in (or the
initial establishment of) the Leverage Ratio shall be effective with respect
to all Loans, Commitments and Letters of Credit outstanding on and after the
date of delivery to the Administrative Agent of the financial statements and
certificates required by Section 5.04(a) or (b) hereof indicating such change
to and including the date immediately preceding the next date of delivery of
such financial statements and certificates indicating another such change.
Notwithstanding the foregoing, (a) at any time during which the Borrower has
failed to deliver the financial statements and certificates required by
Section 5.04(a) or (b) hereof, or (b) at any time after the occurrence and
during the continuance of an Event of Default, the Leverage Ratio shall be
deemed to be in Category 1 above for purposes of determining the Applicable
Percentage.
"APPLICATION" shall mean any stand-by letter of credit application
delivered to the Administrative Agent for or in connection with any Letter of
Credit pursuant to Section 2.21 hereof, in the Administrative Agent's
standard form for stand-by letters of credit, the form of which, on the
Closing Date, is attached as EXHIBIT E hereto.
"ART. 1.04" has the meaning specified in the definition of "Applicable
Law".
"ASCENT" shall mean Ascent Entertainment Group, Inc., a Delaware
corporation and majority owner of the Borrower.
"ASCENT AGREEMENTS" shall mean the Services Agreement, the Corporate
Agreement and the Tax Sharing Agreement, in each case between the Borrower
and Ascent, in the forms
4
delivered to the Administrative Agent, as such agreements may hereafter be
amended as permitted by, and in accordance with, the provisions of this
Agreement.
"ASCENT LOAN FACILITY" shall mean that certain loan facility to Ascent
pursuant to that certain Amended and Restated Credit Agreement, dated the
Closing Date from a group of financial institutions with the Administrative
Agent as the administrative agent thereunder.
"ASSET DISPOSITION" shall have the meaning assigned to it in Section
6.05(b) hereof.
"ASSIGNMENT AND ACCEPTANCE" shall mean an assignment and acceptance entered
into by a Lender and an assignee, and accepted by the Administrative Agent, in
the form of EXHIBIT B hereto or such other form as shall be approved by the
Administrative Agent.
"ATTRIBUTABLE DEBT" shall mean as of any date of determination, the
present value (discounted semiannually at the interest rate set forth or
implicit in the terms of such transaction, as determined by the principal
accounting or financial officer of the Borrower) of the obligation of a
lessee for rental payments pursuant to any Equipment Lease Transaction during
the remaining term of such Equipment Lease Transaction (including any period
for which the lease relating thereto has been extended), such rental payments
not to include amounts payable by the lessee for maintenance and repairs,
insurance, taxes, assessments and similar charges.
"BOARD" shall mean the Board of Governors of the Federal Reserve System
of the United States of America.
"BORROWING" shall mean Loans of a single Type made by the Lenders in
accordance with the terms hereof (or, in the case of a Competitive Borrowing,
by the Lender or Lenders whose Competitive Bids have been accepted pursuant
to Section 2.03 hereof) on a single date and as to which a single Interest
Period is in effect.
"BORROWING REQUEST" shall mean a request by the Borrower in accordance
with the terms of Section 2.04 hereof and substantially in the form of
EXHIBIT C hereto.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or day on
which banks in Dallas, Texas or New York, New York are authorized or required
by Law to close; provided, however, that when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.
"CAPITAL LEASE OBLIGATIONS" of any Person shall mean the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be
5
classified and accounted for as capital leases on a balance sheet of such
Person under GAAP, and the amount of such obligations shall be the
capitalized amount thereof determined in accordance with GAAP.
"CAPITAL STOCK" shall mean, as to any Person, the equity interests in
such Person, including, without limitation, the shares of each class of
capital stock of any Person that is a corporation and each class of
partnership interests (including without limitation, general, limited and
preference units) in any Person that is a partnership.
A "CHANGE IN CONTROL" shall be deemed to have occurred if (a) Ascent
fails to own directly or indirectly, beneficially or of record, shares of
Capital Stock of the Borrower representing 50.1% or more of the aggregate
ordinary voting power of the Borrower, or (b) Ascent shall fail to control a
majority of the seats on the Board of Directors of the Borrower.
"CLOSING DATE" shall mean the date of the first Credit Event.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"COMMITMENT" shall mean, with respect to each Lender, such Lender's Short
Term Commitment and Long Term Commitment.
"COMMITMENT FEE" shall have the meaning assigned to such term in Section
2.06(d) hereof.
"COMPETITIVE BID" shall mean an offer by a Lender to make a Competitive
Loan pursuant to Section 2.03(b) hereof in the form of EXHIBIT D-3 hereto.
"COMPETITIVE BID ACCEPT/REJECT LETTER" shall mean a notification made by
the Borrower pursuant to Section 2.03(d) hereof in the form of EXHIBIT D-4
hereto.
"COMPETITIVE BID RATE" shall mean, as to any Competitive Bid, (i) in the
case of a Eurodollar Loan, the Margin, and (ii) in the case of a Fixed Rate
Loan, the fixed rate of interest offered by the Lender making such
Competitive Bid.
"COMPETITIVE BID REQUEST" shall mean a request made by the Borrower
pursuant to Section 2.03(a) hereof in the form of EXHIBIT D-1 hereto.
"COMPETITIVE BORROWING" shall mean a Borrowing consisting of a
Competitive Loan or concurrent Competitive Loans from the Lender or Lenders
whose Competitive Bids for such Borrowing have been accepted by the Borrower
under the bidding procedure described in Section 2.03 hereof.
6
"COMPETITIVE LOAN" shall mean a Loan from a Lender to the Borrower pursuant
to the bidding procedure described in Section 2.03 hereof. Each Competitive
Loan shall be a Eurodollar Competitive Loan or a Fixed Rate Loan.
"COMPLIANCE CERTIFICATE" shall mean a compliance certificate, substantially
in the form of EXHIBIT F hereto, and certifying that there exists no Default or
Event of Default at the time of delivery thereof.
"CONSOLIDATED ASSETS" shall mean, with respect to the Borrower and its
Subsidiaries, at any date, the consolidated total assets of the Borrower and its
Subsidiaries at such date, as determined in accordance with GAAP.
"CONSOLIDATED CASH INTEREST EXPENSE" shall mean, for any period of
determination, the gross interest expense of the Borrower and its Subsidiaries
for such period determined on a consolidated basis in accordance with GAAP,
excluding any amounts not paid or not required (whether during or after such
period) to be paid in cash. For purposes of the foregoing, gross interest
expense shall be determined after giving effect to any net cash payments made or
received by the Borrower with respect to rate protection agreements entered into
as a hedge against interest rate exposure. Gross interest expense shall be
calculated in accordance with GAAP as in effect and applied by the Borrower on
the date of this Agreement and, accordingly, shall exclude the effects of any
changes in GAAP or its application by the Borrower after the date hereof.
"CONSOLIDATED LIABILITIES" shall mean, with respect to the Borrower and its
Subsidiaries, at any date, the consolidated total liabilities of the Borrower
and its Subsidiaries at such date, as determined in accordance with GAAP.
"CONSOLIDATED TANGIBLE NET WORTH" shall mean, at any date, with respect to
the Borrower and its Subsidiaries on a consolidated basis, the excess of the
Consolidated Assets over Consolidated Liabilities excluding, however, from the
determination of Consolidated Assets (a) except as otherwise provided in the
provision hereto, all assets which would be classified as intangibles under
GAAP, including goodwill (whether representing the excess of cost over book
value of assets acquired or otherwise), organizational expenses, trademarks,
trade names, copyrights, patents, patent applications, licenses and rights in
any thereof and (b) treasury stock held as an asset.
"CONSOLIDATED TOTAL INDEBTEDNESS" shall mean, for any Person, all
Indebtedness of such Person and its consolidated subsidiaries (other than
Indebtedness referred to in clause (h) of the definition of such term),
determined on a consolidated basis in accordance with GAAP.
"CONTROL" shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ownership
7
of voting securities, by contract or otherwise, and "Controlling and
"Controlled" shall have meanings correlative thereto.
"CORPORATE RESTRUCTURING" shall mean that series of transactions consisting
of the Merger, the Acquisition and the Reorganization Plan, and the related
issuance of the Borrower's Capital Stock and Warrants for the Capital Stock of
the Borrower, as each is described in the S-4 Registration Statement.
"COVERAGE RATIO" shall mean, on any date for the Borrower and its
Subsidiaries on a consolidated basis, the ratio of (a) EBITDA for the four most
recently completed consecutive fiscal quarters, to (b) Consolidated Cash
Interest Expense of the Borrower and its Subsidiaries for the four most recently
completed consecutive fiscal quarters.
"CREDIT EVENT" shall have the meaning assigned to such term in Section 4.01
hereto.
"DEBTOR RELIEF LAWS" shall mean applicable bankruptcy, reorganization,
moratorium, or similar Laws, or principles of equity affecting the enforcement
of creditors' rights generally.
"DEFAULT" shall mean any event or condition which upon notice, lapse of
time or both would constitute an Event of Default.
"DOLLARS" or "$" shall mean lawful money of the United States of America.
"EBITDA" shall mean, with respect to any Person and its subsidiaries on a
consolidated basis for any period, the consolidated net income of such Person
and its subsidiaries for such period, computed in accordance with GAAP, plus, to
the extent deducted in computing such consolidated net income and without
duplication, the sum of (a) income tax expense, (b) interest expense, (c)
depreciation and amortization expense, (d) allocation of income to minority
interests in earnings of consolidated subsidiaries and (e) extraordinary losses
(including restructuring provisions) during such period minus, to the extent
added in computing such consolidated net income and without duplication, (y)
extraordinary gains during such period and (z) allocation of losses to minority
interests in earnings of consolidated subsidiaries. EBITDA shall be calculated
in accordance with GAAP as in effect and applied by the Borrower on the date of
this Agreement and, accordingly, shall exclude the effects of any changes in
GAAP or its application by the Borrower after the date hereof.
"EDS AGREEMENT" shall mean the Agreement among SpectraVision, Electronic
Data Systems Corporation and EDS Technical Products Corporation, dated as of
August 5, 1996.
8
"ENVIRONMENT" shall mean ambient air, surface water and groundwater
(including potable water, navigable water and wetlands), the land surface or
subsurface strata, the workplace or as otherwise defined in any Environmental
Law.
"EQUIPMENT LEASE TRANSACTION" shall mean any transaction or arrangement
(other than (a) a Capital Lease Obligation reflected as such on the consolidated
financial statements of the Borrower or (b) an operating lease) (i) pursuant to
which the Borrower or any of its Subsidiaries sells or transfers any equipment
or fixtures used or useful in its business, whether now owned or hereafter
acquired, to any other Person, and thereafter rents or leases such property or
other property which it intends to use for substantially the same purpose or
purposes as the property being sold or transferred or (ii) pursuant to which the
Borrower or any of its Subsidiaries rents or leases from any other Person any
equipment or fixtures used or useful in its business and which, although not
required to be accounted for as a Capital Lease Obligation, in substance
represents the financing of the acquisition of such property by the Borrower or
such Subsidiary.
"ENVIRONMENTAL CLAIM" shall mean any written accusation, allegation, notice
of violation, claim, demand, order, directive, consent decree, cost recovery
action or other cause of action by, or on behalf of, any Governmental Authority
or any Person for damages, injunctive or equitable relief, personal injury
(including sickness, disease or death), Remedial Action costs, tangible or
intangible property damage, natural resource damages, nuisance, pollution, any
adverse effect on the Environment caused by any Hazardous Material, or for
fines, penalties or restrictions, resulting from or based upon: (a) the
existence, or the continuation of the existence, of a Release (including sudden
or non-sudden, accidental or non-accidental Releases); (b) exposure to any
Hazardous Material; (c) the presence, use, handling, transportation, storage,
treatment or disposal of any Hazardous Material; or (d) the violation or alleged
violation of any Environmental Law or Environmental Permit.
"ENVIRONMENTAL LAW" shall mean any and all applicable present and future
treaties, Laws, codes, judgments, injunctions, notices or binding agreements
issued, promulgated or entered into by any Governmental Authority, relating in
any way to the Environment, preservation or reclamation of natural resources,
the management, Release or threatened Release of any Hazardous Material or to
health and safety matters, including the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986, 42 U.S.C. Sections 9601 ET SEQ. (collectively
"CERCLA"), the Solid Waste Disposal Act, as amended by the Resource Conservation
and Recovery Act of 1976 and Hazardous and Solid Waste Amendments of 1984, 42
U.S.C. Sections 6901 ET SEQ., the Federal Water Pollution Control Act, as
amended by the Clean Water Act of 1977, 33 U.S.C. Sections 1251 ET SEQ., the
Clean Air Act of 1970, 42 U.S.C. Sections 7401 ET SEQ., as amended, the Toxic
Substances Control Act of 1976, 15 U.S.C. Sections 2601 ET SEQ., the
Occupational Safety and Health Act of 1970, as amended by 29 U.S.C. Sections 651
ET SEQ., the Emergency Planning and Community Right-to-Know Act of 1986, 42
U.S.C. Sections
9
11001 ET SEQ., the Safe Drinking Water Act of 1974, as amended by 42 U.S.C.
Sections 300(f) ET SEQ., the Hazardous Materials Transportation Act, 49 U.S.C.
Sections 5101 ET SEQ., and any similar or implementing state or local law, and
all amendments or regulations promulgated thereunder.
"ENVIRONMENTAL PERMIT" shall mean any permit, approval, authorization,
certificate, license, variance, filing or permission required by or from any
Governmental Authority pursuant to any Environmental Law.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
the same may be amended from time to time.
"ERISA AFFILIATE" shall mean any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code, or solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA EVENT" shall mean (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder, with respect to a Plan; (b)
the adoption of any amendment to a Plan that would require the provision of
security pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA; (c)
the existence with respect to any Plan of an "accumulated funding deficiency"
(as defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (d) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (e) the incurrence of any liability under Title IV of ERISA
upon the termination of any Plan or the withdrawal or partial withdrawal of the
Borrower or any of its ERISA Affiliates from any Plan or Multiemployer Plan; (f)
the receipt by the Borrower or any ERISA Affiliate from the PBGC of any notice
relating to the intention to terminate any Plan or Plans or to appoint a trustee
to administer any Plan; (g) the receipt by the Borrower or any ERISA Affiliate
of any notice concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization, within the meaning of Title IV of ERISA; and (h) the
occurrence of a "prohibited transaction" with respect to which the Borrower or
any of its Subsidiaries is a "disqualified person" (within the meaning of
Section 4975 of the Code) or with respect to which the Borrower or any such
Subsidiary could otherwise be liable.
"EURODOLLAR BORROWING" shall mean a Borrowing comprised of Eurodollar
Loans.
"EURODOLLAR COMPETITIVE BORROWING" shall mean a Borrowing comprised of
Eurodollar Competitive Loans.
"EURODOLLAR COMPETITIVE LOAN" shall mean any Competitive Loan bearing
interest at a rate determined by reference to the LIBO Rate in accordance with
the provisions of Article II.
10
"EURODOLLAR LOAN" shall mean any Eurodollar Revolving Loan or Eurodollar
Competitive Loan.
"EURODOLLAR REVOLVING LOANS" shall mean Revolving Loans bearing interest at
a rate determined by reference to the Adjusted LIBO Rate in accordance with the
provisions of Article II hereof.
"EVENT OF DEFAULT" shall have the meaning assigned to such term in Article
VII hereof.
"FACILITY FEE" shall have the meaning assigned to such term in Section
2.06(a) hereof.
"FEE LETTERS" shall mean that certain Fee Letter dated October 8, 1996,
between the Borrower and the Administrative Agent, and any other fee letters
executed from time to time among the Borrower, the Administrative Agent and the
Lenders, as each may be amended, extended, increased, revised or substituted
from time to time.
"FEES" shall mean the Facility Fees, the Commitment Fees, the
Administrative Agent Fees, the L/C Participation Fees and the Issuing Bank Fees.
"FINANCIAL OFFICER" of any corporation shall mean the chief financial
officer, principal accounting officer, Treasurer or Controller of such
corporation.
"FIXED RATE BORROWING" shall mean a Borrowing, comprised of Fixed Rate
Loans.
"FIXED RATE LOAN" shall mean any Competitive Loan bearing interest at a
fixed percentage rate per annum (expressed in the form of a decimal to no more
than four decimal places) specified by the Lender making such Loan in its
Competitive Bid.
"GAAP" shall mean generally accepted accounting principles.
"GOVERNMENTAL AUTHORITY" shall mean any Federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body.
"GUARANTEE" of or by any Person shall mean any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person (the "PRIMARY OBLIGOR") in any
manner, whether directly or indirectly, and including any obligation of such
Person, direct or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or to purchase (or to advance
or supply funds for the purchase of) any security for the payment of such
Indebtedness, (b) to purchase or lease property, securities or services for the
purpose of assuring the owner of such Indebtedness of the payment of such
Indebtedness, (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the
11
primary obligor so as to enable the primary obligor to pay such Indebtedness
or (d) to guaranty the obligations, payments by or performance of, a Person
that is not a wholly owned direct or indirect subsidiary of the Borrower;
PROVIDED, HOWEVER, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.
"GUARANTORS" shall mean all Wholly Owned Subsidiaries of the Borrower,
except those Subsidiaries of the Borrower which are foreign organized
Subsidiaries.
"HAZARDOUS MATERIALS" shall mean all explosive or radioactive substances or
wastes, hazardous or toxic substances or wastes, pollutants, solid, liquid or
gaseous wastes, including petroleum or petroleum distillates, asbestos or
asbestos-containing materials, polychlorinated biphenyls ("PCBS") or
PCB-containing materials or equipment, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"HIGHEST LAWFUL RATE" shall mean at the particular time in question the
maximum rate of interest which, under Applicable Law, any Lender is then
permitted to charge on the Obligations. If the maximum rate of interest which,
under Applicable Law, any Lender is permitted to charge on the Obligations shall
change after the date hereof, the Highest Lawful Rate shall be automatically
increased or decreased, as the case may be, from time to time as of the
effective time of each change in the Highest Lawful Rate without notice to the
Borrower. For purposes of determining the Highest Lawful Rate under Applicable
Law, the applicable rate ceiling shall be (a) the indicated rate ceiling
described in and computed in accordance with the provisions of Section (a)(1) of
Art. l.04; or (b) provided notice is given as required in Section (h)(1) of Art.
1.04, either the annualized ceiling or quarterly ceiling computed pursuant to
Section (d) of Art. 1.04; PROVIDED, HOWEVER, that at any time the indicated rate
ceiling, the annualized ceiling or the quarterly ceiling, as applicable, shall
be less than 18% per annum or more than 24% per annum, the provisions of
Sections (b)(1) and (2) of said Art. 1.04 shall control for purposes of such
determination, as applicable.
"INDEBTEDNESS" of any Person shall mean, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits with
such Person or advances to such Person of any kind, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property or assets purchased by such Person, (d) all
obligations of such Person issued or assumed as the deferred purchase price of
property or services (excluding trade accounts payable and accrued obligations
incurred in the ordinary course of business, and excluding any obligations
relating to operating leases), (e) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the obligations secured thereby have been assumed, (f)
all Guarantees by such Person, (g) all Capital Lease Obligations of such Person,
(h) all net
12
obligations of such Person in respect of interest rate protection agreements,
foreign currency exchange agreements or other interest or exchange rate
hedging arrangements and (i) all obligations of such Person as an account
party in respect to letters of credit and bankers' acceptances. The
Indebtedness of any Person shall include the Indebtedness of any partnership
in which such Person is a general partner.
"INTEREST PAYMENT DATE" shall mean the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurodollar Borrowing with an Interest Period of more than three months'
duration, each day that would have been an Interest Payment Date had successive
Interest Periods of three months' duration been applicable to such Borrowing,
and, in addition, the date of any prepayment of such Borrowing or conversion of
such Borrowing to a Borrowing of a different Type.
"INTEREST PERIOD" shall mean (a) as to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the last
day) in the calendar month that is 1, 2, 3 or 6 months thereafter, or if
determined available by the Administrative Agent, 12 months thereafter, as the
Borrower may elect, (b) as to any ABR Borrowing, the period commencing on the
date of such Borrowing and ending on the earliest of (i) the next succeeding
March 31, June 30, September 30 or December 31, (ii) the Short Term Revolving
Loan Maturity Date or the Long Term Revolving Loan Maturity Date, as applicable,
and (iii) the date such Borrowing is converted to a Borrowing of a different
Type in accordance with Section 2.11 hereof or repaid or prepaid in accordance
with Section 2.12 hereof and (c) as to any Fixed Rate Borrowing, the period
commencing on the date of such Borrowing and ending on the date specified in the
Competitive Bids in which the offers to make the Fixed Rate Loans comprising
such Borrowing were extended, which shall not be earlier than seven days after
the date of such Borrowing or later than 360 days after the date of such
Borrowing; PROVIDED, HOWEVER, that if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless, in the case of a Eurodollar Borrowing only, such
next succeeding Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding Business Day.
Interest shall accrue from and including the first day of an Interest Period to
but excluding the last day of such Interest Period.
"ISSUING BANK" shall mean NationsBank (or any Affiliate thereof) or any
other Lender that may become an Issuing Bank pursuant to Section 2.21(i) hereof,
in each case with respect to Letters of Credit issued by it.
"ISSUING BANK FEES" shall have the meaning assigned to such term in Section
2.06(c) hereof.
13
"LAW" shall mean any constitution, statute, law, ordinance, regulation,
rule, order, writ, injunction, or decree of any tribunal.
"L/C COMMITMENT" shall mean the commitment of the Issuing Bank to issue
Letters of Credit pursuant to Section 2.21 hereof.
"L/C DISBURSEMENT" shall mean a payment or disbursement made by the Issuing
Bank pursuant to a Letter of Credit.
"L/C EXPOSURE" shall mean at any time the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time PLUS (b) the aggregate
principal amount of all L/C Disbursements that have not yet been reimbursed at
such time. The L/C Exposure of any Lender at any time shall mean its Pro Rata
Percentage of the aggregate L/C Exposure at such time.
"L/C PARTICIPATION FEE" shall have the meaning assigned to such term in
Section 2.06(c) hereof.
"LENDERS" shall mean (a) the financial institutions listed on SCHEDULE 2.01
hereto (other than any such financial institution that has ceased to be a party
hereto pursuant to an Assignment and Acceptance) and (b) any financial
institution that has become a party hereto pursuant to an Assignment and
Acceptance.
"LETTER OF CREDIT" shall mean any letter of credit issued pursuant to
Section 2.21 hereof.
"LEVERAGE RATIO" shall mean, on any date for the Borrower and its
Subsidiaries on a consolidated basis, the ratio of (a) the Borrower's and its
Subsidiaries' Consolidated Total Indebtedness to (b) EBITDA of the Borrower and
its consolidated Subsidiaries for the most recently completed four fiscal
quarters.
"LIBO RATE" shall mean, for any Eurodollar Borrowing for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest one-one hundredth (1/100th) of one percent (1%)) appearing on Telerate
Page 3750 (or any successor page) as the London interbank offered rate for
deposits in United States dollars at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period. If for any reason
such rate is not available, the term "LIBO Rate" shall mean, for any Eurodollar
Borrowing for any Interest Period therefor, the rate per annum (rounded upwards,
if necessary, to the nearest one-one hundredth (1/100th) of one percent (1%))
appearing on Reuters Screen LIBO page as the London interbank offered rate for
deposits in United States dollars at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; PROVIDED, HOWEVER, if more
14
than one rate is specified on Reuters Screen LIBO Page, the applicable rate
shall be the arithmetic mean of all such rates.
"LIBOR RESERVE PERCENTAGE" shall mean, with respect to any Interest Period,
the percentage which is in effect on the first day of such period under
Regulation D of the Board of Governors of the Federal Reserve System, as such
regulation may be amended from time to time, as the maximum reserve requirement
(including, without limitation, any basic, supplemental, emergency or marginal
reserves) with respect to eurocurrency liabilities (as that term is defined in
Regulation D), applicable to any Lender. The Adjusted LIBO Rate for any
Eurodollar Borrowing shall be adjusted for any change in the LIBOR Reserve
Percentage.
"LIEN" shall mean, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
"LOANS" shall mean the Short Term Revolving Loans, Competitive Loans and
the Long Term Revolving Loans made in accordance with the terms of this
Agreement, and "Loan" shall mean any of the above, as applicable in the context
used.
"LOAN PAPERS" shall mean this Agreement, the promissory notes evidencing
the Loans, all guaranties executed by the Guarantors, Fee Letters, all Letters
of Credit, all Applications and all other agreements between the Borrower or any
Subsidiary of the Borrower and the Administrative Agent related to any Letter of
Credit, Assignment and Acceptances, post-closing letters, and all other
documents, instruments, agreements, or certificates executed or delivered from
time to time by any Person in connection with this Agreement or as security for
the Obligations hereunder, as each such agreement may be amended, modified,
substituted, replaced or extended from time to time.
"LONG TERM COMMITMENT" shall mean, with respect to each Lender, the
commitment of such Lender to make Long Term Revolving Loans hereunder as set
forth on SCHEDULE 2.01(b) hereto, or in the Assignment and Acceptance pursuant
to which such Lender assumed its Long Term Commitment, as applicable, as the
same may be (a) increased from time to time pursuant to the terms of Section
4.03 hereof, (b) reduced from time to time pursuant to (i) Section 2.10 hereof,
(ii) Section 2.20 hereof, (iii) the amount of Letters of Credit issued under the
Long Term Commitment in accordance with Section 2.21 hereof, and (iv) the amount
of Competitive Loans issued under the Long Term Commitment in accordance with
Sections 2.02 and 2.03 hereof and (c) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to Section 9.04 hereof.
15
"LONG TERM REVOLVING LOAN MATURITY DATE" shall mean, the date that is five
years after the date hereof, or such earlier date as the Obligations are due and
payable in full (whether by scheduled reduction, acceleration, termination or
otherwise).
"LONG TERM REVOLVING LOANS" shall mean the long term revolving Loans made
available by the Lenders to the Borrower pursuant to the Long Term Commitments
and Section 2.01(b) hereof. Each Long Term Revolving Loan shall be a Eurodollar
Revolving Loan or an ABR Revolving Loan.
"MARGIN" shall mean, as to any Eurodollar Competitive Loan, the margin
(expressed as a percentage rate per annum in the form of a decimal to no more
than four decimal places) to be added to or subtracted from the LIBO Rate in
order to determine the interest rate applicable to such Loan, as specified in
the Competitive Bid relating to such Loan.
"MARGIN STOCK" shall have the meaning assigned to such term in
Regulation U.
"MATERIAL ADVERSE EFFECT" shall mean (a) a materially adverse effect on the
business, assets, operations, or financial condition of the Borrower and its
Subsidiaries taken as a whole, (b) material impairment of the ability of the
Borrower to perform any of its obligations under this Agreement or under any
other Loan Paper or (c) material impairment of the enforceability of this
Agreement, any other Loan Paper or the Loans.
"MAXIMUM AMOUNT" means the maximum amount of interest which, under
Applicable Law, Administrative Agent or any Lender is permitted to charge on the
Obligations.
"MERGER AGREEMENT" shall mean that certain Agreement and Plan of Merger, by
and among the Borrower, On Command Merger Corporation and OCV, dated as of
August 13, 1996.
"MERGER" shall mean the merger of On Command Merger Corporation with and
into OCV, in accordance with the terms of the Merger Agreement.
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"NATIONSBANK" shall mean NationsBank of Texas, N.A., a national banking
association.
"NET CASH PROCEEDS" shall mean with respect to any Asset Disposition (i)
the gross amount of any cash paid to or received by the Borrower or any of its
Subsidiaries in respect of such Asset Disposition (including (a) payments of
principal or interest, or cash proceeds from the sale or other disposition in
respect of noncash consideration permitted under Section 6.05
16
hereof, and (b) insurance proceeds, condemnation awards and payments from
time to time in respect of installment obligations, if applicable), less (ii)
the amount, if any, of (x) the Borrower's good faith best estimate of all
taxes attributable to such Asset Disposition which it in good faith expects
to be paid in the taxable year in which such Asset Disposition shall occur or
in the next taxable year, (y) reasonable and customary fees, discounts,
commissions, costs and other expenses (other than those payable to the
Borrower or any Affiliate of the Borrower), which are incurred in connection
with such Asset Disposition and are payable by the Borrower or any of its
Subsidiaries and (z) in the case of an Asset Disposition that is a sale,
transfer or other disposition of assets or properties, proceeds required to
discharge Liens in respect of such assets or properties permitted by Section
6.02 hereof.
"OBLIGATIONS" shall mean all present and future obligations, indebtedness
and liabilities, and all renewals and extensions of all or any part thereof, of
the Borrower and each Obligor to the Lenders and the Administrative Agent
arising from, by virtue of, or pursuant to this Agreement, any of the other Loan
Papers and any and all renewals and extensions thereof or any part thereof, or
future amendments thereto, all interest accruing on all or any part thereof and
reasonable attorneys' fees incurred by the Administrative Agent for the
preparation of this Agreement and consummation of this credit facility,
execution of waivers, amendments and consents, and in connection with the
enforcement or the collection of all or any part thereof, and reasonable
attorneys' fees incurred by the Lenders in connection with the enforcement or
the collection of all or any part of the Obligations during the continuance of
an Event of Default, in each case whether such obligations, indebtedness and
liabilities are direct, indirect, fixed, contingent, joint, several or joint and
several. Without limiting the generality of the foregoing, "Obligations"
includes all amounts which would be owed by the Borrower, each other Obligor and
any other Person (other than the Administrative Agent or the Lenders) to the
Administrative Agent or the Lenders under any Loan Paper, but for the fact that
they are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Borrower, any other Obligor
or any other Person (including all such amounts which would become due or would
be secured but for the filing of any petition in bankruptcy, or the commencement
of any insolvency, reorganization or like proceeding of the Borrower, any other
Obligor or any other Person under any Debtor Relief Law).
"OBLIGOR" shall mean (a) the Borrower, (b) each Guarantor, (c) each other
Person liable for performance of any of the Obligations and (d) each other
Person the Property of which hereafter secures the performance of any of the
Obligations.
"OCV" shall mean On Command Video Corporation, a Delaware corporation.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.
17
"PERMITTED INVESTMENTS" shall mean:
(a) direct obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), in each case maturing within one year
from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the date
of acquisition thereof and having, at such date of acquisition, the highest
credit rating obtainable from Standard & Poor's Ratings Group, a Division of
XxXxxx-Xxxx, Inc. or from Xxxxx'x Investors Service, Inc.;
(c) investments in certificates of deposit, banker's acceptances and time
deposits maturing within one year from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank which bank or office is
organized under the Laws of the United States of America or any State thereof
which has a combined capital and surplus and undivided profits of not less than
$250,000,000; and
(d) fully collateralized repurchase agreements with a term of not more than
30 days for underlying securities of the type described in clause (a) above
entered into with any institution meeting the qualifications specified in clause
(c) above.
"PERSON" shall mean any natural person, corporation, business trust, joint
venture, association, company, partnership or government, or any agency or
political subdivision thereof.
"PLAN" shall mean any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
112 of the Code or Section 307 of ERISA and in respect of which the Borrower or
any ERISA Affiliate is (or if such plan were terminated would under Section 4069
of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"PREFERRED STOCK", as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution or assets
upon any voluntary or involuntary liquidation or dissolution of any such
corporation, over shares of Capital Stock of any other class of such
corporation.
"PRO FORMA FINANCIALS" shall mean those pro forma financial statements of
the Borrower and its Subsidiaries set forth in the S-4 Registration Statement.
18
"PRO RATA PERCENTAGE" of any Lender at any time shall mean the percentage
of such Lender set forth opposite its signature line on the signature pages
hereof and designated as such, as such percentage may be hereafter be adjusted
pursuant to any Assignment and Acceptance or amendment to this Agreement.
"REGISTER" shall have the meaning given such term in Section 9.04(d)
hereof.
"REGULATION G" shall mean Regulation G of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"REGULATION U" shall mean Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"REGULATION X" shall mean Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"RELEASE" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing,
depositing, dispersing, emanating or migrating of any Hazardous Material in,
into, onto or through the Environment.
"REMEDIAL ACTION" shall mean (a) "remedial action" as such term is defined
in CERCLA, 42 U.S.C. Section 9601(24), and (b) all other actions required by any
Governmental Authority or voluntarily undertaken to: (i) cleanup, remove, treat,
xxxxx or in any other way address any Hazardous Material in the Environment;
(ii) prevent the Release or threat of Release, or minimize the further Release
of any Hazardous Material so it does not migrate or endanger or threaten to
endanger public health, welfare or the Environment; or (iii) perform studies and
investigations in connection with, or as a precondition to, (i) or (ii) above.
"REORGANIZATION PLAN" shall mean the Debtors' First Amended Joint Plan of
Reorganization, dated August 2, 1996, as supplemented on August 27, 1996 and
modified on September 11, 1996.
"REQUIRED LENDERS" shall mean, at any time, (i) Lenders having Commitments
representing at least 51% of the sum of all Commitments at such time, (ii) for
purposes of acceleration pursuant to clause (ii) of the last paragraph of
Article VII, Lenders having Loans, L/C Exposures and unused Commitments
representing at least 51% of the sum of all Loans outstanding, L/C Exposure and
unused Commitments or (iii) if the Commitments have terminated, Lenders having
Loans and L/C Exposure representing at least 51% of the sum of all Loans
outstanding and L/C Exposure; and, in each case, if there is more than one
Lender party hereto, at least two Lenders.
19
"RESPONSIBLE OFFICER" of any corporation shall mean any executive officer
or Financial Officer of such corporation and any other officer or similar
official thereof responsible for the administration of the obligations of such
corporation in respect of this Agreement and the other Loan Papers.
"REVOLVING LOANS" shall mean the Short Term Revolving Loans and the Long
Term Revolving Loans made available by the Lenders to the Borrower pursuant to
the Short Term Commitments, the Long Term Commitments and Section 2.01 hereof.
Each Revolving Loan shall be a Eurodollar Revolving Loan or an ABR Revolving
Loan.
"S-4 REGISTRATION STATEMENT" shall mean that certain Form S-4 Registration
Statement, as filed by the Borrower with the Securities and Exchange Commission
on August 16, 1996, as amended on September 4, 1996, September 26, 1996 and as
further amended on October 7, 1996.
"SHORT TERM COMMITMENT" shall mean, with respect to each Lender, the
commitment of such Lender to make Short Term Revolving Loans hereunder as set
forth on SCHEDULE 2.01(a) hereto, or in the Assignment and Acceptance pursuant
to which such Lender assumed its Commitment, as applicable, as the same may be
(a) reduced from time to time pursuant to (i) Section 2.10 hereof, (ii) Section
2.20 hereof, (iii) the amount of Letters of Credit issued under the Short Term
Commitment in accordance with Section 2.21 hereof, (iv) Section 4.03 hereof, and
(iv) the amount of Competitive Loans issued under the Short Term Commitment in
accordance with Sections 2.02 and 2.03 hereof, and (b) reduced or increased from
time to time pursuant to assignments by or to such Lender pursuant to Section
9.04 hereof.
"SHORT TERM REVOLVING LOAN MATURITY DATE" shall mean, subject to Section
2.10(g) hereof, the date that is 364 days after the date hereof, or such earlier
date as the Obligations are due and payable in full (whether by scheduled
reduction, acceleration, termination or otherwise).
"SHORT TERM REVOLVING LOANS" shall mean the short term revolving Loans made
available by the Lenders to the Borrower pursuant to the Short Term Commitments
and Section 2.01(a) hereof. Each Revolving Loan shall be a Eurodollar Revolving
Loan or an ABR Revolving Loan.
"SPECTRADYNE" shall mean Spectradyne, Inc., a Texas corporation and wholly
owned Subsidiary of SpectraVision.
"SPECTRAVISION" shall mean SpectraVision, Inc., a Delaware corporation.
"SUBSIDIARY" shall mean, with respect to any Person (herein referred to as
the "parent"), any corporation, partnership, association or other business
entity of which securities
20
or other ownership interests representing more than 50% of the equity or more
than 50% of the ordinary voting power or more than 50% of the general
partnership interests are, at the time any determination is being made,
owned, controlled or held, by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent.
"TOTAL COMMITMENT" shall mean, at any time, the aggregate amount of the
Lenders' Commitments, as in effect at such time.
"TOTAL EXPOSURE" shall mean, with respect to the Lenders at any time, the
aggregate principal amount at such time of the sum of (a) all outstanding
Revolving Loans, plus (b) the aggregate amount at such time of all Lenders'
L/C Exposure, plus (c) the amount by which the outstanding Competitive
Borrowings shall be deemed to have utilized all Lenders' Commitments in
accordance with Section 2.16 hereof.
"TRANSACTIONS" shall have the meaning assigned to such term in Section
3.02 hereof.
"TYPE", when used in respect of any Loan or Borrowing, shall refer to the
Rate by reference to which interest on such Loan or on the Loans comprising
such Borrowing is determined. For purposes hereof, the term "Rate" shall
include the Adjusted LIBO Rate and the Alternate Base Rate.
"WHOLLY OWNED SUBSIDIARY" of any Person shall mean a subsidiary of such
Person of which securities (except for directors' qualifying shares) or other
ownership interests representing 100% of the outstanding Capital Stock or
partnership interests, as the case may be, are, at the time any determination
is being made, owned by such Person or one or more Wholly Owned Subsidiaries
of such Person or by such Person and one or more Wholly Owned Subsidiaries of
such Person.
"WITHDRAWAL LIABILITY" shall mean liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. TERMS GENERALLY. The definitions in Section 1.01 shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without
limitation". All references herein to Articles, Sections, Exhibits and
Schedules shall be deemed references to Articles and Sections of, and
Exhibits and Schedules to, this Agreement unless the context shall otherwise
require. Except as otherwise expressly provided herein, all terms of an
accounting or financial nature shall be construed in accordance with GAAP, as
in effect from time to time; provided, however, that for purposes of
determining compliance with the covenants contained in Article VI hereof, all
accounting terms herein shall
21
be interpreted and all accounting determinations hereunder shall be made in
accordance with GAAP as in effect on the date of this Agreement and applied
on a basis consistent with the application used in the financial statements
referred to in Section 3.05 hereof.
ARTICLE II
THE CREDITS
SECTION 2.01. COMMITMENTS.
(a) SHORT TERM REVOLVING LOANS. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Lender
agrees, severally and not jointly, to make Short Term Revolving Loans to the
Borrower, at any time and from time to time on or after the date hereof, and
until the earlier of (a) the Short Term Revolving Loan Maturity Date, and (b)
the termination of the Short Term Commitment of such Lender in accordance
with the terms hereof, in an aggregate principal amount at any time up to
such Lender's Short Term Commitment, provided that, the Borrower agrees that,
notwithstanding anything in this Agreement or in any other Loan Paper to the
contrary, no Lender shall at any time be obligated to make any Loan if such
Loan would result in such Lender's Total Exposure exceeding such Lender's
Commitment. Within the limits set forth in the preceding sentence and subject
to the terms, conditions and limitations set forth herein, the Borrower may
borrow, pay or prepay and reborrow Short Term Revolving Loans.
(b) LONG TERM REVOLVING LOANS. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Lender
agrees, severally and not jointly, to make Long Term Revolving Loans to the
Borrower, at any time and from time to time on or after the date hereof, and
until the earlier of (a) the Long Term Revolving Loan Maturity Date, and (b)
the termination of the Long Term Commitment of such Lender in accordance with
the terms hereof, in an aggregate principal amount at any time up to such
Lender's Long Term Commitment, provided that, the Borrower agrees that,
notwithstanding anything in this Agreement or in any other Loan Paper to the
contrary, no Lender shall at any time be obligated to make any Loan if such
Loan would result in such Lender's Total Exposure exceeding such Lender's
Commitment. Within the limits set forth in the preceding sentence and
subject to the terms, conditions and limitations set forth herein, the
Borrower may borrow, pay or prepay and reborrow Long Term Revolving Loans.
SECTION 2.02. LOANS.
(a) Each Loan (other than Competitive Loans) shall be made as part of a
Borrowing consisting of Loans made by the Lenders ratably in accordance with
their respective Pro Rata Percentages; PROVIDED, HOWEVER, that the failure of
any Lender to make any Loan shall not in
22
itself relieve any other Lender of its obligation to lend hereunder (it being
understood, however, that no Lender shall be responsible for the failure of
any other Lender to make any Loan required to be made by such other Lender).
Each Competitive Loan shall be made in accordance with the procedures set
forth in Section 2.03 hereof, and shall reduce the Short Term Commitment or
the Long Term Commitment as designated by the Borrower in accordance with the
terms of Section 2.03 below, provided that, if the Borrower fails to
designate, then such Competitive Loan shall reduce (i) first, the Short Term
Commitment, and if the Short Term Commitment is zero, then the Long Term
Commitment, by the amount of each such outstanding Competitive Loan. If the
Total Commitment has been reduced to zero, Competitive Loans shall not be
available hereunder. Except for Loans deemed made pursuant to Section
2.02(f) hereof, the Loans comprising any Borrowing shall be in an aggregate
principal amount that is (i) (x) with respect to any Competitive Borrowing,
an integral multiple of $1,000,000 and not less than $3,000,000 and (y) with
respect to any other Borrowing, an integral multiple of $1,000,000 and not
less than $3,000,000 or (ii) equal to the remaining available balance of the
Total Commitments.
(b) Subject to Sections 2.09 and 2.14 hereof, each Competitive Borrowing
shall be comprised entirely of Eurodollar Competitive Loans or Fixed Rate
Loans, and each other Borrowing shall be comprised entirely of ABR Loans or
Eurodollar Loans as the Borrower may request pursuant to Section 2.03 or 2.04
hereof, as applicable; PROVIDED, HOWEVER, that Borrowings on the Closing Date
shall be comprised entirely of ABR Loans. Each Lender may at its option make
any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of
such Lender to make such Loan; provided that any exercise of such option
shall not affect the obligation of the Borrower to repay such Loan in
accordance with the terms of this Agreement. Borrowings of more than one
Type may be outstanding at the same time; PROVIDED, HOWEVER, that the
Borrower shall not be entitled to request any Borrowing that, if made, would
result in more than twelve Eurodollar Borrowings outstanding hereunder at any
time. For purposes of the foregoing, Borrowings having different Interest
Periods, regardless of whether they commence on the same date, shall be
considered separate Borrowings.
(c) Each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds to such
account in Dallas, Texas as the Administrative Agent may designate not later
than 12:00 noon, Dallas, Texas time, and the Administrative Agent shall by
3:00 p.m., Dallas, Texas time, credit the amounts so received to an account
in the name of the Borrower, maintained with the Administrative Agent and
designated by the Borrower in the applicable Borrowing Request or Competitive
Bid Request or, if a Borrowing shall not occur on such date because any
condition precedent herein specified shall not have been met, return the
amounts so received to the respective Lenders.
(d) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative
23
Agent such Lender's portion of such Borrowing, the Administrative Agent may
assume that such Lender has made such portion available to the Administrative
Agent on the date of such Borrowing in accordance with paragraph (c) above
and the Administrative Agent may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount. If the
Administrative Agent shall have so made funds available then, to the extent
that such Lender shall not have made such portion available to the
Administrative Agent, such Lender and the Borrower severally agree to repay
to the Administrative Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is
made available to the Borrower until the date such amount is repaid to the
Administrative Agent at (i) in the case of the Borrower, the interest rate
applicable at the time to the Loans comprising such Borrowing and (ii) in the
case of such Lender, a rate determined by the Administrative Agent to
represent its cost of overnight or short-term funds (which determination
shall be conclusive absent manifest error). If such Lender shall repay to
the Administrative Agent such corresponding amount, such amount shall
constitute such Lender's Loan as part of such Borrowing for purposes of this
Agreement.
(e) The Borrower acknowledges that if the Borrower requests any
Borrowing with an Interest Period that would end after the Short Term
Revolving Loan Maturity Date or the Long Term Revolving Loan Maturity Date,
as applicable, a Breakage Event (as defined in Section 2.15 hereof) will
occur on the Short Term Revolving Loan Maturity Date or the Long Term
Revolving Loan Maturity Date, as applicable, and the Borrower will be
obligated to indemnify the Lenders in accordance with the terms of Section
2.15 hereof.
(f) If the Issuing Bank shall not have received from the Borrower the
payment required to be made by Section 2.21(e) hereof within the time
specified in such Section, the Issuing Bank will promptly notify the
Administrative Agent of the L/C Disbursement and the Administrative Agent
will promptly notify each Lender of such L/C Disbursement and its Pro Rata
Percentage thereof. Each Lender shall pay by wire transfer of immediately
available funds to the Administrative Agent not later than 2:00 p.m., Dallas,
Texas time, on such date (or, if such Lender shall have received such notice
later than 12:00 (noon), Dallas, Texas time, on any day, not later than 10:00
a.m., Dallas, Texas time, on the immediately following Business Day), an
amount equal to such Lender's Pro Rata Percentage of such L/C Disbursement
(it being understood that such amount shall be deemed to constitute an ABR
Loan of such Lender and such payment shall be deemed to have reduced the L/C
Exposure), and the Administrative Agent will promptly pay to the Issuing Bank
amounts so received by it from the Lenders. The Administrative Agent will
promptly pay to the Issuing Bank any amounts received by it from the Borrower
pursuant to Section 2.21(e) hereof prior to the time that any Lender makes
any payment pursuant to this paragraph (f); any such amounts received by the
Administrative Agent thereafter will be promptly remitted by the
Administrative Agent to the Lenders that shall have made such payments and to
the Issuing Bank, as their interests may appear. If any Lender shall not
have made its Pro Rata Percentage of such L/C Disbursement available to the
Administrative Agent as provided above, such Lender and the
24
Borrower severally agree to pay interest on such amount, for each day from
and including the date such amount is required to be paid in accordance with
this paragraph to but excluding the date such amount is paid, to the
Administrative Agent at (i) in the case of the Borrower, a rate per annum
equal to the interest rate applicable to ABR Loans pursuant to Section 2.07
hereof, and (ii) in the case of such Lender, for the first such day, the
Federal Funds Effective Rate, and for each day thereafter, the Alternate Base
Rate.
SECTION 2.03. COMPETITIVE BID PROCEDURE.
(a) In order to request Competitive Bids, the Borrower shall hand
deliver or telecopy to the Administrative Agent a duly completed Competitive
Bid Request (i) in the case of a Eurodollar Competitive Borrowing, not later
than 10:00 a.m., Dallas, Texas time, four Business Days before the proposed
date of such Borrowing and (ii) in the case of a Fixed Rate Borrowing, not
later than 10:00 a.m., Dallas, Texas time, one Business Day before the
proposed date of such Borrowing. A Competitive Bid Request shall not be made
within five Business Days after the date of any previous Competitive Bid
Request. No ABR Loan shall be requested in, or made pursuant to, a
Competitive Bid Request. A Competitive Bid Request that does not conform
substantially to the format of EXHIBIT D-1 hereto may be rejected by the
Administrative Agent and the Administrative Agent shall notify the Borrower
of such rejection as promptly as practicable. Each Competitive Bid Request
shall refer to this Agreement and specify (i) whether the Borrowing being
requested is to be a Eurodollar Borrowing or a Fixed Rate Borrowing; (ii) the
date of such Borrowing (which shall be a Business Day); (iii) the number and
the location of the account to which funds are to be disbursed (which shall
be an account that complies with the requirements of Section 2.02(c) hereof);
(iv) the aggregate principal amount of such Borrowing, which shall be a
minimum of $3,000,000 and an integral multiple of $1,000,000; (v) the
Interest Period with respect thereto and (vi) whether such Competitive Loan
is being made under the Short Term Commitment or under the Long Term
Commitment. Promptly after its receipt of a Competitive Bid Request that is
not rejected, the Administrative Agent shall by telecopy in the form set
forth in EXHIBIT D-2 invite the Lenders to bid to make Competitive Loans
pursuant to the Competitive Bid Request. Each Competitive Loan may only be
made in an amount equal to or less than (i) the amount by which the Total
Commitment exceeds the Total Exposure on such date, (ii) if such Competitive
Loan was made under the Short Term Revolving Commitment, the amount by which
the Short Term Commitment exceeds the sum of (A) the aggregate outstanding
Short Term Revolving Loans, (B) the L/C Exposure attributable to the Short
Term Commitment and (C) the aggregate outstanding Competitive Loans
attributable to the Short Term Commitment, and (iii) if such Competitive Loan
was made under the Long Term Revolving Commitment, the amount by which the
Long Term Commitment exceeds the sum of (A) the aggregate outstanding Long
Term Revolving Loans, (B) the L/C Exposure attributable to the Long Term
Commitment and (C) the aggregate outstanding Competitive Loans attributable
to the Long Term Commitment.
25
(b) Each Lender may make one or more Competitive Bids to the Borrower
responsive to a Competitive Bid Request. Each Competitive Bid by a Lender
must be received by the Administrative Agent by telecopy, (i) in the case of
a Eurodollar Competitive Borrowing, not later than 9:30 a.m., Dallas, Texas
time, three Business Days before the proposed date of such Competitive
Borrowing, and (ii) in the case of a Fixed Rate Borrowing, not later than
9:30 a.m., Dallas, Texas time, on the proposed date of such Competitive
Borrowing. Competitive Bids that do not conform substantially to the format
of EXHIBIT D-3 may be rejected by the Administrative Agent, and the
Administrative Agent shall notify the applicable Lender as promptly as
practicable. Each Competitive Bid shall refer to this Agreement and specify
(x) the principal amount (which shall be a minimum of $3,000,000 and an
integral multiple of $1,000,000 and which may equal the entire principal
amount of the Competitive Borrowing requested by the Borrower) of the
Competitive Loan or Loans that the Lender is willing to make, (y) the
Competitive Bid Rate or Rates at which the Lender is prepared to make such
Loan or Loans and (z) the Interest Period applicable to such Loan or Loans
and the last day thereof.
(c) The Administrative Agent shall promptly notify the Borrower by
telecopy of the Competitive Bid Rate and the principal amount of each
Competitive Loan in respect of which a Competitive Bid shall have been made
and the identity of the Lender that shall have made each bid.
(d) The Borrower may, subject only to the provisions of this paragraph
(d), accept or reject any Competitive Bid. The Borrower shall notify the
Administrative Agent by telephone, confirmed by telecopy in the form of a
Competitive Bid Accept/Reject Letter, whether and to what extent it has
decided to accept or reject each Competitive Bid, (x) in the case of a
Eurodollar Competitive Borrowing, not later than 10:30 a.m., Dallas, Texas
time, three Business Days before the date of the proposed Competitive
Borrowing, and (y) in the case of a Fixed Rate Borrowing, not later than
10:30 a.m., Dallas, Texas time, on the proposed date of the Competitive
Borrowing; PROVIDED, HOWEVER, that (i) the failure of the Borrower to give
such notice shall be deemed to be a rejection of each Competitive Bid, (ii)
the Borrower shall not accept a Competitive Bid made at a particular
Competitive Bid Rate if the Borrower has decided to reject a Competitive Bid
made at a lower Competitive Bid Rate, (iii) the aggregate amount of the
Competitive Bids accepted by the Borrower shall not exceed the principal
amount specified in the Competitive Bid Request, (iv) if the Borrower shall
accept a Competitive Bid or Bids made at a particular Competitive Bid Rate
but the amount of such Competitive Bid or Bids would cause the total amount
to be accepted by the Borrower to exceed the amount specified in the
Competitive Bid Request, then the Borrower shall accept a portion of such
Competitive Bid or Bids in an amount equal to the amount specified in the
Competitive Bid Request less the amount of all other Competitive Bids so
accepted, which acceptance, in the case of multiple Competitive Bids at such
Competitive Bid Rate, shall be made pro rata in accordance with the amount of
each such Bid, and (v) except pursuant to clause (iv) above, no Competitive
Bid shall be accepted for a Competitive Loan unless such
26
Competitive Loan is in a minimum principal amount of $3,000,000 and an
integral multiple of $1,000,000; PROVIDED FURTHER, HOWEVER, that if a
Competitive Loan must be in an amount less than $3,000,000 because of the
provisions of clause (iv) above, such Competitive Loan may be for a minimum
of $1,000,000 or any integral multiple thereof, and in calculating the pro
rata allocation of acceptances of portions of multiple Competitive Bids at a
particular Competitive Bid Rate pursuant to clause (iv) the amounts shall be
rounded to integral multiples of $1,000,000 in a manner determined by the
Borrower. A notice given by the Borrower pursuant to this paragraph (d)
shall be irrevocable.
(e) The Administrative Agent shall promptly notify each bidding Lender
by telecopy whether or not its Competitive Bid has been accepted (and, if so,
in what amount and at what Competitive Bid Rate), and each successful bidder
will thereupon become bound, upon the terms and subject to the conditions
hereof, to make the Competitive Loan in respect of which its Competitive Bid
has been accepted.
(f) If the Administrative Agent shall elect to submit a Competitive Bid
in its capacity as a Lender, it shall submit such Competitive Bid directly to
the Borrower at least one quarter of an hour earlier than the time by which
the other Lenders are required to submit their Competitive Bids to the
Administrative Agent pursuant to paragraph (b) above.
SECTION 2.04. BORROWING PROCEDURE. In order to request a Borrowing
(other than a Competitive Borrowing or a deemed Borrowing pursuant to Section
2.02(f) hereof, as to which this Section 2.04 shall not apply), the Borrower
shall hand deliver or telecopy to the Administrative Agent a duly completed
Borrowing Request (a) in the case of a Eurodollar Borrowing, not later than
11:00 a.m., Dallas, Texas time, three Business Days before a proposed
Borrowing, and (b) in the case of an ABR Borrowing, not later than 10:00
a.m., Dallas, Texas on the date (which shall be a Business Day) of a proposed
Borrowing. Each Borrowing Request shall be irrevocable, shall be signed by
or on behalf of the Borrower and shall specify the following information: (i)
whether the Borrowing then being requested is to be a Eurodollar Borrowing or
an ABR Borrowing (it being understood that the Borrowing on the Closing Date
shall be an ABR Borrowing); (ii) the date of such Borrowing (which shall be a
Business Day); (iii) the number and location of the account to which funds
are to be disbursed (which shall be an account that complies with the
requirements of Section 2.02(c)) hereof; (iv) the amount of such Borrowing;
(v) if such Borrowing is to be a Eurodollar Borrowing, the Interest Period
with respect thereto; and (vi) if the Borrower has complied with each
condition set forth in Section 2.02(b) hereof and Section 4.03 hereof,
whether such Borrowing is to be a Short Term Revolving Loan or a Long Term
Revolving Loan; provided, however, that, notwithstanding any contrary
specification in any Borrowing Request, each requested Borrowing shall comply
with the requirements set forth in Section 2.03 hereof. If no election as to
the Type of Borrowing is specified in any such notice, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period with respect to
any Eurodollar Borrowing is specified in any such notice, then the Borrower
shall be deemed to have selected
27
an Interest Period of one month's duration. The Administrative Agent shall
promptly advise the Lenders of any notice given pursuant to this Section 2.04
hereof (and the contents thereof), and of each Lender's portion of the
requested Borrowing.
SECTION 2.05. EVIDENCE OF DEBT; REPAYMENT OF LOANS.
(a) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of the Lenders (i) the then unpaid
principal amount of each Competitive Loan, on the last day of the Interest
Period applicable to such Loan or, if earlier, on the Short Term Revolving
Loan Maturity Date or the Long Term Revolving Loan Maturity Date, (ii) the
then unpaid principal amount of each Short Term Revolving Loan on the Short
Term Revolving Loan Maturity Date, and (iii) the then unpaid principal amount
of each Long Term Revolving Loan on the Long Term Revolving Loan Maturity
Date.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such
Lender resulting from each Loan made by such Lender from time to time,
including the amounts of principal and interest payable and paid such Lender
from time to time under this Agreement.
(c) The Administrative Agent shall maintain accounts in which it will
record (i) whether such Loan is a Short Term Revolving Loan or a Long Term
Revolving Loan, the amount of each Loan made hereunder, the Type thereof and
the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to
each Lender hereunder and (iii) the amount of any sum received by the
Administrative Agent hereunder from the Borrower and each Lender's share
thereof.
(d) The entries made in the accounts maintained pursuant to paragraphs
(b) and (c) above shall be prima facie evidence of the existence and amounts
of the obligations therein recorded; provided however, that the failure of
any Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligations of the Borrower to
repay the Loans in accordance with their terms.
(e) As evidence of the Loans hereunder, on the Closing Date the Borrower
shall deliver to each Lender one promissory note evidencing its Pro Rata
Percentage of the Loans made hereunder. Such promissory note will evidence
each Lenders' Pro Rata Percentage of each Revolving Loan, L/C Exposure and
each Lenders' exposure under any Competitive Loan, if any.
28
SECTION 2.06. FEES.
(a) The Borrower agrees to pay to each Lender, through the
Administrative Agent, such Facility Fees as are set forth in any Fee Letters
(the "FACILITY FEES") in accordance with such terms set forth in the Fee
Letters.
(b) The Borrower agrees to pay to the Administrative Agent, for its own
account, the administrative fees set forth in its Fee Letter at the times and
in the amounts specified therein (the "ADMINISTRATIVE AGENT FEES").
(c) The Borrower agrees to pay (i) to each Lender, through the
Administrative Agent, on the last day of March, June, September and December
of each year and on the date on which the Short Term Commitment and Long Term
Commitment of such Lender shall be terminated as applicable and as provided
herein, a fee (an "L/C PARTICIPATION FEE") calculated on such Lender's Pro
Rata Percentage of the average daily aggregate L/C Exposure (excluding the
portion thereof attributable to unreimbursed L/C Disbursements) during the
preceding quarter (or shorter period commencing with the date hereof or
ending with the Short Term Revolving Loan Maturity Date, or the Long Term
Revolving Loan Maturity Date, as applicable, or the date on which all Letters
of Credit have been canceled or have expired and the Commitments of all
Lenders shall have been terminated) at a rate equal to the Applicable
Percentage from time to time used to determine the interest rate on
Borrowings comprised of Eurodollar Loans pursuant to Section 2.07 hereof, and
(ii) to the Issuing Bank with respect to each Letter of Credit the standard
fronting, issuance and drawing fees specified from time to time by the
Issuing Bank (the "ISSUING BANK FEES"). Subject to Section 9.09 hereof and
Applicable Law, all L/C Participation Fees and Issuing Bank Fees shall be
computed on the basis of the actual number of days elapsed in a year of 365
or 366 days, as applicable.
(d) Subject to Section 9.09 hereof, commencing on December 31, 1996 and
continuing on the last day of March, June, September and December of each
year on and until the date on which the Commitments of such Lender shall be
terminated as provided herein, the Borrower shall pay to the Administrative
Agent for the account of Lenders commitment fees (the "COMMITMENT FEES") on
the average daily amount of the difference between (A) the Total Commitment
and (B) the Total Exposure, at a per annum rate (the "Commitment Fee Rate")
based on the Leverage Ratio for the most recently completed full fiscal
quarter as set forth below:
29
LEVERAGE RATIO PER ANNUM COMMITMENT FEE RATE
-------------- -----------------------------
CATEGORY 1
Greater than or
equal to 1.50 to 1.00 0.2500%
CATEGORY 2
Less than 1.50 to 1.00 0.1875%
Notwithstanding anything in this Agreement to the contrary, in each
determination of the Total Commitment in connection with this Section
2.06(d), the amount of all Competitive Loans deducted from the Total
Commitment in accordance with the definitions of both the Short Term
Commitment and Long Term Commitment shall be added back to the Total
Commitment. Except as set forth below, the Leverage Ratio utilized for
purposes of determining the Commitment Fee Rate shall be that in effect as of
the last day of the most recent fiscal quarter of the Borrower in respect of
which financial statements have been delivered pursuant to this Agreement.
From the date hereof until the earliest to occur of the initial delivery of
financial statements pursuant to Section 5.04(a) or (b) hereof, the
Borrower's failure to timely deliver such financial statements or the
occurrence of an Event of Default, the Leverage Ratio shall be deemed to be
within Category 1 above. The Commitment Fee Rate from time to time in effect
shall be based on the Leverage Ratio from time to time in effect, and each
change in the Commitment Fee Rate resulting from a change in (or the initial
establishment of) the Leverage Ratio shall be effective with respect to the
Commitment Fee Rate outstanding on and after the date of delivery to the
Administrative Agent of the financial statements and certificates required by
Section 5.04(a) or (b) hereof indicating such change to and including the
date immediately preceding the next date of delivery of such financial
statements and certificates indicating another such change. Notwithstanding
the foregoing, (a) at any time during which the Borrower has failed to
deliver the financial statements and certificates required by Section 5.04(a)
or (b) hereof, or (b) at any time after the occurrence and during the
continuance of an Event of Default, the Leverage Ratio shall be deemed to be
in Category 1 above for purposes of determining the Commitment Fee Rate.
Subject to Section 9.09 hereof and Applicable Law, all Commitment Fees shall
be computed on the basis of the actual number of days elapsed in a year of
365 or 366 days, as applicable.
(e) All Fees shall be paid on the dates due, in immediately available
funds, to the Administrative Agent for distribution, if and as appropriate,
among the Lenders, except that the Issuing Bank Fees shall be paid directly
to the Issuing Bank. Once paid, none of the Fees shall be refundable, except
in accordance with the provisions of Section 9.09 hereof.
SECTION 2.07. INTEREST ON LOANS.
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(a) Subject to the provisions of Section 2.08 hereof, the Loans
comprising each ABR Borrowing shall bear interest (computed on the basis of
the actual number of days elapsed over a year of 365 or 366 days, as the case
may be, when the Alternate Base Rate is determined by reference to the Prime
Rate and over a year of 360 days at all other times) at a rate per annum
equal to the Alternate Base Rate. If the amount of interest payable in
respect of any interest computation period is limited to the Highest Lawful
Rate in accordance with the definition of Alternate Base Rate, and the amount
of interest payable in respect of any subsequent interest computation period
would be less than the Maximum Amount, then the amount of interest payable in
respect of such subsequent interest computation period shall be automatically
increased to the Maximum Amount; PROVIDED that at no time shall the aggregate
amount by which interest paid has been increased pursuant to this sentence
exceed the aggregate amount by which interest has been reduced had the
Alternate Base Rate not been limited to the Highest Lawful Rate.
(b) Subject to the provisions of Section 2.08 hereof, the Loans
comprising each Eurodollar Borrowing shall bear interest (computed on the
basis of the actual number of days elapsed over a year of 360 days) at a rate
per annum equal to (i) in the case of each Revolving Loan, the Adjusted LIBO
Rate for the Interest Period in effect for such Borrowing plus the Applicable
Percentage in effect from time to time, and (ii) in the case of each
Competitive Loan, the LIBO Rate for the Interest Period in effect for such
Borrowing plus the Margin offered by the Lender making such Loan and accepted
by the Borrower pursuant to Section 2.03 hereof.
(c) Subject to the provisions of Section 2.08 hereof, each Fixed Rate
Loan shall bear interest (computed on the basis of the actual number of days
elapsed over a year of 360 days) at a rate per annum equal to the fixed rate
of interest offered by the Lender making such Loan and accepted by the
Borrower pursuant to Section 2.03 hereof.
(d) Interest on each Loan shall be payable on the Interest Payment Dates
applicable to such Loan except as otherwise provided in this Agreement. The
applicable Alternate Base Rate or Adjusted LIBO Rate for each Interest Period
or day within an Interest Period, as the case may be, shall be determined by
the Administrative Agent, and such determination shall be conclusive absent
manifest error.
SECTION 2.08. DEFAULT INTEREST. Notwithstanding any other provision of
this Agreement and the other Loan Papers except Section 9.09 hereof to the
contrary, if there shall exist any Event of Default hereunder, at the
election of the Required Lenders by written notice to the Borrower, the
Borrower shall pay interest on the Obligations to but excluding the date of
actual payment (after as well as before judgment) at a rate per annum equal
to the lesser of (a) the Highest Lawful Rate and (b) a rate per annum
(computed on the basis of the actual number of days elapsed over a year of
365 or 366 days, as the case may be, when determined
31
by reference to the Prime Rate and over a year of 360 days at all other
times) equal to the sum of the Alternate Base Rate plus 1.00%.
SECTION 2.09. ALTERNATE RATE OF INTEREST. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing the Administrative Agent shall
have determined that dollar deposits in the principal amounts of the Loans
comprising such Borrowing are not generally available in the London interbank
market, or that the rates at which such dollar deposits are being offered
will not adequately and fairly reflect the cost to the Required Lenders of
making or maintaining Eurodollar Loans during such Interest Period, or that
reasonable means do not exist for ascertaining the Adjusted LIBO Rate, the
Administrative Agent shall, as soon as practicable thereafter, give written
or telecopy notice of such determination to the Borrower and the Lenders. In
the event of any such determination, until the Administrative Agent shall
have advised the Borrower and the Lenders that the circumstances giving rise
to such notice no longer exist, any request by the Borrower for a Eurodollar
Borrowing pursuant to Section 2.04 hereof shall be deemed to be a request for
an ABR Borrowing provided that, any request by the Borrower for a Eurodollar
Competitive Borrowing pursuant to Section 2.03 hereof shall be of no force
and effect and shall be denied by the Administrative Agent. Each
determination by the Administrative Agent hereunder shall be conclusive
absent manifest error.
SECTION 2.10. TERMINATION AND REDUCTION OF COMMITMENTS; EXTENSION OF THE
SHORT TERM REVOLVING LOAN MATURITY DATE.
(a) MATURITY DATES. The Short Term Commitments shall automatically
terminate on the Short Term Revolving Loan Maturity Date (and the same may be
extended pursuant to paragraph (g) of this Section 2.10). The Long Term
Commitments shall automatically terminate on the Long Term Revolving Loan
Maturity Date. The L/C Commitment shall terminate upon the termination of
the Total Commitments.
(b) VOLUNTARY REDUCTION OF THE COMMITMENTS. Upon at least three
Business Days' prior irrevocable written or telecopy notice to the
Administrative Agent (specifying whether such reduction or termination shall
be applied to the Short Term Commitments or the Long Term Commitments, and
the amount of reduction), the Borrower may at any time in whole permanently
terminate, or from time to time in part permanently reduce, the either or
both of the Commitments; PROVIDED, HOWEVER, that (i) each partial reduction
shall be in an integral multiple of $1,000,000 and in a minimum amount of
$5,000,000 and (ii) the Total Commitment shall not be reduced to an amount
that is less than the Total Exposure.
(c) REDUCTION OF SHORT TERM COMMITMENT BY INCREASE OF LONG TERM
COMMITMENT. The Short Term Commitments shall be reduced immediately and
automatically dollar for dollar on the date and in the amount of each
increase of the Long Term Commitments, as further described in Section 4.03
hereof.
32
(d) TOTAL EXPOSURE IN EXCESS OF TOTAL COMMITMENTS. If, as a result of
any reduction of the Commitments, the Total Exposure exceeds the Total
Commitments, then the Borrower shall, on the date of such reduction, repay
Loans in accordance with this Agreement in an aggregate principal amount
sufficient to eliminate such excess. If, as a result of any reduction of the
Short Term Commitments, the aggregate outstanding Short Term Revolving Loans
exceeds the aggregate Short Term Commitments, then the Borrower shall, on the
date of such reduction, repay Short Term Revolving Loans in accordance with
this Agreement in an aggregate principal amount sufficient to eliminate such
excess. If, as a result of any reduction of the Long Term Commitments, the
aggregate outstanding Long Term Revolving Loans exceeds the aggregate Long
Term Commitments, then the Borrower shall, on the date of such reduction,
repay Long Term Revolving Loans in accordance with this Agreement in an
aggregate principal amount sufficient to eliminate such excess.
(e) COMMITMENT REDUCTION DUE TO ASSET DISPOSITIONS. The Short Term
Commitments or the Long Term Commitments (as specified by the Borrower)
relating to any Loan prepaid pursuant to Section 2.12(c) hereof shall be
automatically and permanently reduced, on the date of such prepayment, in an
amount equal to the amount of such prepayment.
(f) COMMITMENT REDUCTION, GENERALLY. Each reduction in the Commitments
hereunder shall be made ratably among the Lenders in accordance with their
respective Commitments. The Borrower shall pay, to the Administrative Agent
for the account of the applicable Lenders, on the date of each termination or
reduction, the Commitment Fees on the amount of the Commitments so terminated
or reduced accrued to but excluding the date of such termination or
reduction.
(g) EXTENSION OF SHORT TERM COMMITMENTS. The Borrower may, by giving
written notice to the Administrative Agent (which shall promptly deliver a
copy to each of the Lenders) not fewer than 15 days prior to the then current
Short Term Revolving Loan Maturity Date (the "EXISTING MATURITY DATE"),
extend the Short Term Revolving Loan Maturity Date to the date that occurs
364 days after the Existing Maturity Date (or if such 364th day is not a
Business Day, the immediately preceding Business Day); PROVIDED, HOWEVER,
that the Borrower may effect only four extensions pursuant to this Section
2.10(g) hereof. Notwithstanding the foregoing, the extension of the Existing
Maturity Date shall not be effective with respect to any Lender unless (i) no
Default or Event of Default shall have occurred and be continuing on both the
date of the notice requesting such extension and on the Existing Maturity
Date and (ii) each of the representations and warranties set forth in Article
III hereof (including, without limitation, those set forth in Section 3.06
hereof and Section 3.09 hereof) shall be true and correct in all material
respects on and as of each of the date of the notice requesting such
extension and the Existing Maturity Date with the same force and effect as if
made on and as of each such date, except to the extent such representations
and warranties expressly relate to an earlier date.
33
SECTION 2.11. CONVERSION AND CONTINUATION OF BORROWINGS.
(a) The Borrower shall have the right at any time upon prior irrevocable
notice to the Administrative Agent (x) not later than 12:00 (noon), Dallas,
Texas time, one Business Day prior to conversion, to convert any Eurodollar
Borrowing into an ABR Borrowing, (y) not later than 10:00 a.m., Dallas, Texas
time, three Business Days prior to conversion or continuation, to convert any
ABR Borrowing into a Eurodollar Borrowing or to continue any Eurodollar
Borrowing as a Eurodollar Borrowing for an additional Interest Period, and
(z) not later than 10:00 a.m., Dallas, Texas time, three Business Days prior
to conversion, to convert the Interest Period with respect to any Eurodollar
Borrowing to another permissible Interest Period, subject in each case to the
following:
(i) each conversion or continuation shall be made pro rata among
the Lenders in accordance with the respective principal amounts of the
Loans comprising the converted or continued Borrowing;
(ii) if less than all the outstanding principal amount of any
Borrowing shall be converted or continued, then each resulting Borrowing
shall satisfy the limitations specified in Sections 2.02(a) and 2.09(b)
hereof regarding the principal amount and maximum number of Borrowings
of the relevant Type;
(iii) each conversion shall be effected by each Lender and the
Administrative Agent by recording for the account of such Lender the new
Loan of such Lender resulting from such conversion and reducing the Loan
(or portion thereof) of such Lender being converted by an equivalent
principal amount; accrued interest on any Eurodollar Loan (or portion
thereof) being converted shall be paid by the Borrower at the time of
conversion;
(iv) if any Eurodollar Borrowing is converted at a time other than
the end of the Interest Period applicable thereto, the Borrower shall pay,
upon demand, any amounts due to the Lenders pursuant to Section 2.15 hereof;
(v) any portion of a Borrowing maturing or required to be repaid in
less than one month may not be converted into or continued as a Eurodollar
Borrowing;
(vi) any portion of a Eurodollar Borrowing that cannot be converted
into or continued as a Eurodollar Borrowing by reason of the immediately
preceding clause shall be automatically converted at the end of the
Interest Period in effect for such Borrowing into an ABR Borrowing; and
34
(vii) after the occurrence and during the continuance of a Default
or an Event of Default, no outstanding Loan may be converted into, or
continued for an additional interest period as, a Eurodollar Loan.
(b) Each notice pursuant to this Section 2.11 shall be irrevocable and
shall refer to this Agreement and specify (i) the identity and amount of the
Borrowing that the Borrower requests be converted or continued, (ii) whether
such Borrowing is to be converted to or continued as a Eurodollar Borrowing or
an ABR Borrowing, (iii) if such notice requests a conversion, the date of such
conversion (which shall be a Business Day), (iv) if such Borrowing is to be
converted to or continued as a Eurodollar Borrowing, the Interest Period with
respect thereto, and (v) whether such Borrowing is made under the Short Term
Revolving Loans or the Long Term Revolving Loans. If no Interest Period is
specified in any such notice with respect to any conversion to or continuation
as a Eurodollar Borrowing, the Borrower shall be deemed to have selected an
Interest Period of one month's duration. The Administrative Agent shall advise
the Lenders of any notice given pursuant to this Section 2.11 and of each
Lender's portion of any converted or continued Borrowing. If the Borrower shall
not have given notice in accordance with this Section 2.11 to continue any
Borrowing into a subsequent Interest Period (and shall not otherwise have given
notice in accordance with this Section 2.11 to convert such Borrowing), such
Borrowing shall, at the end of the Interest Period applicable thereto (unless
repaid pursuant to the terms hereof), automatically be continued into a new
Interest Period as an ABR Borrowing. The Borrower shall not have the right to
continue or convert the Interest Period with respect to any Competitive
Borrowing pursuant to this Section 2.11.
SECTION 2.12. PREPAYMENT.
(a) VOLUNTARY PREPAYMENT. The Borrower shall have the right at any time
and from time to time to prepay any Borrowing, whether such Borrowing is a Short
Term Revolving Loan or a Long Term Revolving Loan, in whole or in part, upon at
least two Business Days' prior written or telecopy notice (or telephone notice
promptly confirmed by written or telecopy notice) to the Administrative Agent
before 11:00 a.m., Dallas, Texas time; provided, however, that each partial
prepayment shall be in an amount that is an integral multiple of $1,000,000 and
not less than $3,000,000.
(b) MANDATORY PREPAYMENT AND CASH COLLATERALIZATION. In the event of any
termination of the Commitments, the Borrower shall repay or prepay all its
outstanding Borrowings (and irrevocably cash collateralize the L/C Exposure in
the manner contemplated by Section 2.21(j) hereof) on the date of such
termination. In the event of any partial reduction of the Commitments, then (i)
at or prior to the effective date of such reduction or termination, the
Administrative Agent shall notify the Borrower and the Lenders of the aggregate
amount of outstanding Revolving Loans or Total Exposure, as the case may be,
after giving effect thereto and (ii) if the sum of the aggregate amount of
outstanding Revolving
35
Loans or Total Exposure, as the case may be, and the aggregate outstanding
principal amount of the Competitive Loans, at the time would exceed the Total
Commitments, after giving effect to such reduction or termination, then the
Borrower shall, on the date of such reduction or termination, repay or prepay
Borrowings in an amount sufficient to eliminate such excess.
(c) ASSET DISPOSITIONS. Whenever and on each occasion that the Borrower
or any Subsidiary of the Borrower receives Net Cash Proceeds from an Asset
Disposition (not including any transaction in which the Borrower transfers
control through a sale, corporate transaction or other disposition, of the hotel
contracts and related assets for its hotel customers outside of the United
States) which, when taken together with all such Net Cash Proceeds theretofore
received, exceeds $25,000,000 (any such Net Cash Proceeds in excess of such
amount being referred to as "Excess Proceeds"), the Borrower will, substantially
simultaneously with (and in any event not later than the Business Day next
following) the receipt of such Excess Proceeds, pay to the Administrative Agent
(for application to the prepayment of the Loans as designated by the Borrower,
however, upon the failure of the Borrower to designate, application shall be
made to reduce Short Term Revolving Loans first, and then to the Long Term
Revolving Loans) an amount equal to such Excess Proceeds. To the extent such
prepayment is applied to the Short Term Revolving Loans, the Short Term
Commitment relating to the Short Term Revolving Loans so prepaid will
automatically be permanently reduced in an amount equal to the amount of such
prepayment. When all Short Term Revolving Loans have been prepaid to zero and
the Short Term Commitment is zero, the remaining amounts shall repay amounts
owed under the Long Term Revolving Loans. To the extent such prepayment is
applied to the Long Term Revolving Loans, the Long Term Commitment relating to
the Long Term Revolving Loans so prepaid will automatically be permanently
reduced in an amount equal to the amount of such prepayment.
(d) ESCROW AMOUNTS FOR REPAYMENT OF FIXED RATE BORROWINGS AND EURODOLLAR
BORROWINGS. In the event the amount of any prepayment required to be made above
shall exceed the aggregate principal amount of the applicable outstanding ABR
Loans (the amount of any such excess being called the "ESCROW AMOUNT"), the
Borrower shall have the right, in lieu of making such prepayment in full, to
prepay all the outstanding applicable ABR Loans and to deposit an amount equal
to the Escrow Amount with the Administrative Agent in a cash collateral account
maintained by and in the sole dominion and control of the Administrative Agent.
Any amounts so deposited shall be held by the Administrative Agent as collateral
for the Obligations and applied to the prepayment of outstanding Eurodollar
Loans at the end of the current Interest Periods applicable thereto. On any
Business Day on which (x) collected amounts remain on deposit in or to the
credit of such cash collateral account after giving effect to the payments made
on such day and (y) the Borrower shall have delivered to the Administrative
Agent a written request or telephonic request (which shall be promptly confirmed
in writing) that such remaining collected amounts be invested in the Permitted
Investments specified in such request, the Administrative Agent shall use its
reasonable efforts to invest such remaining collected amounts in such Permitted
Investments; PROVIDED, HOWEVER,
36
that the Administrative Agent shall have continuous dominion and full control
over any such investments (and over any interest that accrues thereon) to the
same extent that it has dominion and control over such cash collateral account
and no Permitted Investment shall mature after the end of the Interest Period
for which it is to be applied. The Borrower shall NOT have the right to
withdraw any amount from such cash collateral account until such Eurodollar
Loans and accrued interest thereon are paid in full or if a Default or Event
of Default then exists or would result.
(e) NOTICE OF VOLUNTARY PREPAYMENT. Each notice of prepayment shall
specify the prepayment date, the principal amount of each Borrowing (or portion
thereof) to be prepaid and whether such amount is to prepaid under the Short
Term Revolving Loan or the Long Term Revolving Loan. Each such notice shall be
irrevocable and shall commit the Borrower to prepay such Borrowing by the amount
stated therein on the date stated therein. All prepayments under this Section
2.12 shall be subject to Section 2.15 hereof but otherwise without premium or
penalty. All prepayments under this Section 2.12 shall be accompanied by
accrued interest on the principal amount being prepaid to the date of payment.
(f) PREPAYMENT AS A RESULT OF THE TOTAL EXPOSURE IN EXCESS OF TOTAL
COMMITMENTS. Whenever and on each occasion that the Total Exposure exceeds the
Total Commitments, the Borrower will immediately prepay the Revolving Loans by
the amount necessary to reduce the Total Exposure to an amount less than or
equal to the Total Commitments. Any such prepayment shall be applied as
directed by the Borrower, however, upon failure of the Borrower to so direct,
such amounts shall first be applied to prepay Short Term Revolving Loans and
then to prepay Long Term Revolving Loans. Whenever and on each occasion that
the aggregate outstanding Short Term Revolving Loans exceeds the Short Term
Commitments, the Borrower will immediately prepay the Short Term Revolving Loans
by the amount necessary to reduce the aggregate outstanding Short Term Revolving
Loans to an amount less than or equal to the Short Term Commitments. Whenever
and on each occasion that the aggregate outstanding Long Term Revolving Loans
exceeds the Long Term Commitments, the Borrower will immediately prepay the Long
Term Revolving Loans by the amount necessary to reduce the aggregate outstanding
Long Term Revolving Loans to an amount less than or equal to the Long Term
Commitments.
SECTION 2.13. RESERVE REQUIREMENTS; CHANGE IN CIRCUMSTANCES.
(a) Notwithstanding any other provision of this Agreement, if after the
date of this Agreement any change in any Law or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force of
Law) shall change the basis of taxation of payments to any Lender or the Issuing
Bank of the principal of or interest on any Eurodollar Loan or Fixed Rate Loan
made by such Lender or any Fees or other amounts payable hereunder (other than
changes in respect of taxes imposed on the overall net income (including without
limitation franchise taxes
37
on net income, branch profit taxes and alternate minimum income taxes) of such
Lender or the Issuing Bank by the jurisdiction in which such Lender or the
Issuing Bank is incorporated or has its principal office or by any political
subdivision or taxing authority therein), or shall impose, modify or deem
applicable any reserve, special deposit or similar requirement against assets
of, deposits with or for the account of or credit extended by any Lender or
the Issuing Bank (except any such reserve requirement which is reflected in
the Adjusted LIBO Rate) or shall impose on such Lender or the Issuing Bank or
the London interbank market any other condition affecting this Agreement or
Eurodollar Loans or Fixed Rate Loans made by such Lender or any Letter of
Credit or participation therein, and the result of any of the foregoing shall
be to increase the cost to such Lender or the Issuing Bank of making or
maintaining any Eurodollar Loan or Fixed Rate Loan or increase the cost to any
Lender of issuing or maintaining any Letter of Credit or purchasing or
maintaining a participation therein or to reduce the amount of any sum
received or receivable by such Lender or the Issuing Bank hereunder whether of
principal, interest or otherwise, by an amount deemed by such Lender or the
Issuing Bank to be material, then the Borrower will pay to such Lender or the
Issuing Bank, as the case may be, upon demand such additional amount or
amounts as will compensate such Lender or the Issuing Bank, as the case may
be, for such additional costs incurred or reduction suffered.
(b) If any Lender or the Issuing Bank shall have determined that the
adoption after the date hereof of any Law, agreement or guideline regarding
capital adequacy, or any change after the date hereof in any such Law, agreement
or guideline (regardless of whether the change in such Law, agreement or
guideline has been adopted) or in the interpretation or administration thereof
by any Governmental Authority charged with the interpretation or administration
thereof, or compliance by any Lender (or any lending office of such Lender) or
the Issuing Bank or any Lender's or the Issuing Bank's holding company with any
request or directive regarding capital adequacy (whether or not having the force
of Law) of any Governmental Authority has or would have the effect of reducing
the rate of return on such Lender's or the Issuing Bank's capital or on the
capital of such Lender's or the Issuing Bank's holding company, if any, as a
consequence of this Agreement or the Loans made or participations in Letters of
Credit purchased by such Lender pursuant hereto or the Letters of Credit issued
by the Issuing Bank pursuant hereto to a level below that which such Lender or
the Issuing Bank or such Lender's or the Issuing Bank's holding company could
have achieved but for such applicability, adoption, change or compliance (taking
into consideration such Lender's or the Issuing Bank's policies and the policies
of such Lender's or the Issuing Bank's holding company with respect to capital
adequacy) by an amount deemed by such Lender or the Issuing Bank to be material,
then from time to time the Borrower shall pay to such Lender or the Issuing
Bank, as the case may be, such additional amount or amounts as will compensate
such Lender or the Issuing Bank or such Lender's or the Issuing Bank's holding
company for any such reduction suffered.
38
(c) A certificate of a Lender or the Issuing Bank setting forth in
reasonable detail the basis for computation of the amount or amounts necessary
to compensate such Lender or the Issuing Bank or its holding company, as
applicable, as specified in paragraph (a) or (b) above shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender or the Issuing Bank the amount shown as due on any such certificate
delivered by it within 10 days after its receipt of the same.
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation for any increased costs or reduction in amounts received or
receivable or reduction in return on capital shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation; provided,
however, that in no event shall the Borrower be obligated to make any payment
under this Section 2.13 in respect of increased costs incurred prior to the
period commencing 90 days prior to the date on which demand for compensation in
respect of such increased costs is first made. In addition, the Borrower shall
not incur liability for additional amounts with respect to changes in the basis
of taxation described above for periods of time before such Lender or Issuing
Bank becomes aware of the change in such basis except in the case of any
retroactive application of such a change. The protection of this Section shall
be available to each Lender and the Issuing Bank regardless of any possible
contention of the invalidity or inapplicability or the Law, agreement, guideline
or other change or condition that shall have occurred or been imposed.
Notwithstanding any other provision of this Section, no Lender shall be entitled
to demand compensation hereunder in respect of any Competitive Loan if it shall
have been aware of the event or circumstance giving rise to such demand at the
time it submitted the Competitive Bid pursuant to which such Loan was made.
SECTION 2.14. CHANGE IN LEGALITY.
(a) Notwithstanding any other provision of this Agreement, if, after the
date hereof, any change in any Law or in the interpretation thereof by any
Governmental Authority charged with the administration or interpretation thereof
shall make it unlawful for any Lender to make or maintain any Eurodollar Loan or
to give effect to its obligations as contemplated hereby with respect to any
Eurodollar Loan, then, by written notice to the Borrower and to the
Administrative Agent:
(i) such Lender may declare that Eurodollar Loans will not thereafter
(for the duration of such unlawfulness) be made by such Lender hereunder
(or be continued for additional Interest Periods and ABR Loans will not
thereafter (for such duration) be converted into Eurodollar Loans),
whereupon such Lender shall not submit a Competitive Bid in response to a
request for a Eurodollar Competitive Loan and any request for a Eurodollar
Borrowing (or to convert an ABR Borrowing to a Eurodollar Borrowing or to
continue a Eurodollar Borrowing for an additional interest Period) shall,
as to such Lender only, be deemed a request for an ABR Loan (or a request
to
39
continue an ABR Loan as such for an additional Interest Period or to
convert a Eurodollar Loan into an ABR Loan, as the case may be), unless
such declaration shall be subsequently withdrawn; and
(ii) such Lender may require that all outstanding Eurodollar Loans
made by it be converted to ABR Loans, in which event all such Eurodollar
Loans shall be automatically converted to ABR Loans as of the effective
date of such notice as provided in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal that would otherwise have been applied to
repay the Eurodollar Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be applied to repay the
ABR Loans made by such Lender in lieu of, or resulting from the conversion of,
such Eurodollar Loans.
(b) For purposes of this Section 2.14, a notice to the Borrower by any
Lender shall be effective as to each Eurodollar Loan made by such Lender, if
lawful, on the last day of the Interest Period currently applicable to such
Eurodollar Loan; in all other cases such notice shall be effective on the date
of receipt by the Borrower.
SECTION 2.15. INDEMNITY. The Borrower shall indemnify each Lender against
any loss or expense that such Lender may sustain or incur as a consequence of
(a) any event, other than a default by such Lender in the performance of its
obligations hereunder, which results in (i) such Lender receiving or being
deemed to receive any amount on account of the principal of any Fixed Rate Loan
or Eurodollar Loan prior to the end of the Interest Period in effect therefor,
(ii) the conversion of any Eurodollar Loan to an ABR Loan, or the conversion of
the Interest Period with respect to any Eurodollar Loan, in each case other than
on the last day of the Interest Period in effect therefor, or (iii) any Fixed
Rate Loan or Eurodollar Loan to be made by such Lender (including any Eurodollar
Loan to be made pursuant to a conversion or continuation under Section 2.11
hereof) not being made after notice of such Loan shall have been given by the
Borrower hereunder for any reason other than default by a Lender (any of the
events referred to in this clause (a) being called a "BREAKAGE EVENT") or (b)
any default in the making of any payment or prepayment required to be made
hereunder. In the case of any Breakage Event, such loss shall include an amount
equal to the excess, as reasonably determined by such Lender, of (i) its cost of
obtaining funds for the Fixed Rate Loan or Eurodollar Loan that is the subject
of such Breakage Event for the period from the date of such Breakage Event to
the last day of the Interest Period in effect (or that would have been in
effect) for such Loan over (ii) the amount of interest likely to be realized by
such Lender in redeploying the funds released or not utilized by reason of such
Breakage Event for such period. A certificate of any such Lender shall be
delivered to the Borrower and shall be conclusive absent manifest error, so long
as such certificate sets forth in reasonable detail any
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amount or amounts which such Lender is entitled to receive pursuant to this
Section 2.15 and the basis of computation of the amount or amounts necessary
to compensate such Lender.
SECTION 2.16. PRO RATA TREATMENT. Except as provided below in this
Section 2.16 with respect to Competitive Borrowings and as required under
Section 2.14 hereof, each Borrowing, each payment or prepayment of principal of
any Borrowing, each payment of interest on the Loans, each payment of the
Facility Fees and Commitment Fees, each reduction of the Commitments and each
conversion of any Borrowing to or continuation of any Borrowing as a Borrowing
of any Type shall be allocated pro rata among the Lenders in accordance with
their respective applicable Commitments (or, if such Commitments shall have
expired or been terminated, in accordance with the respective principal amounts
of their outstanding Loans). Each payment of principal of any Competitive
Borrowing shall be allocated pro rata among the Lenders participating in such
Borrowing, in accordance with the respective principal amounts of their
outstanding Competitive Loans comprising such Borrowing. Each payment of
interest on any Competitive Borrowing shall be allocated pro rata among the
Lenders participating in such Borrowing in accordance with the respective
amounts of accrued and unpaid interest on their outstanding Competitive Loans
comprising such Borrowing. For purposes of determining the available
Commitments of the Lenders at any time, each outstanding Competitive Borrowing
shall be deemed to have utilized the Commitments of the Lenders (including those
Lenders which shall not have made Loans as part of such Competitive Borrowing)
pro rata in accordance with such respective Commitments. Each Lender agrees
that in computing such Lender's portion of any Borrowing to be made hereunder,
the Administrative Agent may, in its discretion, round each Lender's percentage
of such Borrowing to the next higher or lower whole dollar amount.
SECTION 2.17. SHARING OF SETOFFS. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim against
the Borrower, or pursuant to a secured claim under Section 506 of Title 11 of
the United States Code or other security or interest arising from, or in lieu
of, such secured claim, received by such Lender under any Debtor Relief Law or
other similar Law or otherwise, or by any other means, obtain payment (voluntary
or involuntary) in respect of any Loan or Loans or L/C Disbursement as a result
of which the unpaid principal portion of its Loans and participations in L/C
Disbursements shall be proportionately less than the unpaid principal portion of
the Loans and participations in L/C Disbursements of any other Lender, it shall
be deemed simultaneously to have purchased from such other Lender at face value,
and shall promptly pay to such other Lender the purchase price for, a
participation in the Loans and L/C Exposure of such other Lender, so that the
aggregate unpaid principal amount of the Loans and L/C Exposure and
participations in Loans and L/C Exposure held by each Lender shall be in the
same proportion to the aggregate unpaid principal amount of all Loans and L/C
Exposure then outstanding as the principal amount of its Loans and L/C Exposure
prior to such exercise of banker's lien, setoff or counterclaim or other event
was to the principal amount of all Loans and L/C Exposure outstanding prior to
such exercise of banker's lien,
41
setoff or counterclaim or other event; provided, however, that if any such
purchase or purchases or adjustments shall be made pursuant to this Section
2.17 and the payment giving rise thereto shall thereafter be recovered, such
purchase or purchases or adjustments shall be rescinded to the extent of such
recovery and the purchase price or prices or adjustment restored without
interest. The Borrower expressly consents to the foregoing arrangements and
agrees that any Lender holding a participation in a Loan or L/C Disbursement
deemed to have been so purchased may exercise any and all rights of banker's
lien, setoff or counterclaim with respect to any and all moneys owing by the
Borrower to such Lender by reason thereof as fully as if such Lender had made
a Loan directly to the Borrower in the amount of such participation.
SECTION 2.18. PAYMENTS.
(a) The Borrower shall make each payment (including principal of or
interest on any Borrowing or any L/C Disbursement or any Fees or other amounts)
hereunder not later than 12:00 (noon), Dallas, Texas time, on the date when due
in immediately available dollars, without setoff, defense or counterclaim. Each
such payment (other than Issuing Bank Fees, which shall be paid directly to the
Issuing Bank,) shall be made to the Administrative Agent at its offices at 000
Xxxx, 00xx Xxxxx, Xxxxxx, Xxxxx 00000.
(b) Whenever any payment (including principal of or interest on any
Borrowing or any Fees or other amounts) hereunder shall become due, or otherwise
would occur, on a day that is not a Business Day, such payment may be made on
the next succeeding Business Day, and such extension of time shall in such case
be included in the computation of interest or Fees, if applicable.
SECTION 2.19. TAXES.
(a) Any and all payments by the Borrower hereunder shall be made, in
accordance with Section 2.18 hereof, free and clear of and without deduction for
any and all current or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto EXCLUDING (i) income
taxes imposed on the net income (including without limitation, branch profit
taxes and alternative minimum income taxes of the Administrative Agent, any
Lender or the Issuing Bank (or any transferee or assignee thereof, including a
participation holder (any such entity a "TRANSFEREE")), (ii) franchise taxes
imposed on the net income of the Administrative Agent, any Lender or the Issuing
Bank (or Transferee), in each case by the jurisdiction under the Laws of which
the Administrative Agent, such Lender or the Issuing Bank (or Transferee) is
organized or any political subdivision thereof or by the jurisdiction in which
the applicable lending or issuing office of the Administrative Agent, such
Lender, or the Issuing Bank (or Transferee) is located or any political
subdivision thereof (all such nonexcluded taxes, levies, imposts, deductions,
charge, withholdings and liabilities, collectively or individually, being called
"TAXES"). If the Borrower shall be required to deduct
42
any Taxes from or in respect of any sum payable hereunder to the
Administrative Agent, any Lender or the Issuing Bank (or and Transferee), (i)
the sum payable shall be increased by the amount (an "ADDITIONAL AMOUNT")
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.19) the
Administrative Agent, such Lender or the Issuing Bank or Transferee), as the
case may be, shall receive an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with Applicable Law.
(b) In addition, the Borrower agrees to pay to the relevant Governmental
Authority in accordance with Applicable Law any current or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies that arise from and payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement
("OTHER TAXES").
(c) The Borrower will indemnify the Administrative Agent, each Lender and
the Issuing Bank (or Transferee) for the full amount of Taxes and Other Taxes
paid by the Administrative Agent, such Lender or the Issuing Bank (or
Transferee), as the case may be, and any liability, (including penalties,
interest and expenses (including reasonable attorney's fees and expenses))
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability prepared by the
Administrative Agent, a Lender or the Issuing Bank (or Transferee), or the
Administrative Agent on its behalf, absent manifest error, shall be final,
conclusive and binding for all purposes. Such indemnification shall be made
within 30 days after the date the Administrative Agent, any Lender or the
Issuing Bank (or Transferee), as the case may be, makes written demand therefor.
(d) If the Administrative Agent, a Lender or the Issuing Bank (or
Transferee) receives a refund in respect of any Taxes or Other Taxes as to which
it has been indemnified by the Borrower or with respect to which the Borrower
has paid additional amounts pursuant to this Section 2.19, it shall within 30
days from the date of such receipt pay over to the Borrower (a) such refund (but
only to the extent of indemnity payments made, or additional amounts paid, by
the Borrower under this Section 2.19 with respect to the Taxes or Other Taxes
giving rise to such refund), net of all out-of-pocket expenses of the
Administrative Agent, such Lender or the Issuing Bank (or Transferee) and (b)
interest paid by the relevant Governmental Authority with respect to such
refund; PROVIDED, HOWEVER, that the Borrower, upon the request of the
Administrative Agent, such Lender or the Issuing Bank (or Transferee), shall
repay the amount paid over to the Borrower (plus penalties, interest or other
charges) to the Administrative Agent, such Lender or the Issuing Bank (or
Transferee) in the event the Administrative Agent, such Lender or the Issuing
Bank (or Transferee) is required to repay such refunds to such Governmental
Authority. If the Borrower determines in good faith that a reasonable basis
exists for contesting any Tax or Other Tax, the Administrative Agent,
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Lender, Issuing Bank or Transferee, as applicable, shall cooperate with the
Borrower in challenging such Tax or Other Tax at the Borrower's expense if
requested by the Borrower (it being understood and agreed that the
Administrative Agent, Lender, Issuing Bank or Transferee, as applicable,
shall have no obligation to contest or responsibility for contesting such Tax
or Other Tax).
(e) As soon as practicable after the date of any payment of Taxes or Other
Taxes by the Borrower to the relevant Governmental Authority, the Borrower will
deliver to the Administrative Agent, at its address referred to in Section 9.01
hereof, the original or a certified copy of any receipt actually issued by such
Governmental Authority evidencing payment thereof.
(f) Each Lender (or Transferee) that is organized under the Laws of a
jurisdiction other than the United States, any State thereof or the District of
Columbia (a "NON-U.S. LENDER") shall deliver to the Borrower and the
Administrative Agent two copies of either United States Internal Revenue Service
Form 1001 or Form 4224, or, in the case of a Non-U.S. Lender claiming exemption
from U.S. Federal withholding tax under Section 871(h) or 881(c) of the Code
with respect to payments of "portfolio interest", a Form W-8, or any subsequent
versions thereof or successors thereto (and, if such Non-U.S. Lender delivers a
Form W-8, a certificate containing representations regarding the status of such
Non-U.S. Lender as not being a bank for purposes of Section 881(c) of the Code,
as not being a 10-percent shareholder (within the meaning of Section
871(h)(3)(B) of the Code) of the Borrower and as not being a controlled foreign
corporation related to the Borrower (within the meaning of Section 864(d)(4) of
the Code)), properly completed and duly executed by such Non-U.S. Lender
claiming complete exemption from, or reduced rate of, U.S. Federal withholding
tax on payments by the Borrower under this Agreement. Such forms shall be
delivered by each Non-U.S. Lender on or before the date it becomes a party to
this Agreement (or, in the case of a Transferee that is a participation holder,
on or before the date such participation holder becomes a Transferee hereunder)
and on or before the date, if any, such Non-U.S. Lender changes its applicable
lending office by designating a different lending office (a "NEW LENDING
OFFICE"). In addition, each Non-U.S. Lender shall deliver such forms promptly
upon the obsolescence or invalidity of any form previously delivered by such
Non-U S. Lender. Notwithstanding any other provision of this Section 2.19(f), a
Non-U.S. Lender shall not be required to deliver any form pursuant to this
Section 2.19(f) that such Non-U.S. Lender is not legally able to deliver.
(g) The Borrower shall not be required to indemnify any Non-U.S. Lender or
to pay any additional amounts to any Non-U.S. Lender, in respect of United
States Federal withholding tax pursuant to paragraph (a) or (c) above to the
extent that (i) the obligation to withhold amounts with respect to United States
Federal withholding tax existed on the date such Non-U.S. Lender became a party
to this Agreement (or, in the case of a Transferee that is a participation
holder, on the date such participation holder became a Transferee hereunder)
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or, with respect to payments to a New Lending Office, the date such Non-U.S.
Lender designated such New Lending Office with respect to a Loan; provided,
however, that this paragraph (g) shall not apply (x) to any Transferee or New
Lending Office that becomes a Transferee or New Lending Office as a result of
an assignment, participation, transfer or designation made at the request of
the Borrower and (y) to the extent the indemnity payment or additional
amounts any Transferee, or any Lender (or Transferee), acting through a New
Lending Office, would be entitled to receive (without regard to this
paragraph (g)) do not exceed the indemnity payment or additional amounts that
the Person making the assignment, participation or transfer to such
Transferee, or Lender (or Transferee) making the designation of such New
Lending Office, would have been entitled to receive in the absence of such
assignment, participation, transfer or designation or (ii) the obligation to
pay such additional amounts would not have arisen but for a failure by such
Non-U.S. Lender to comply with the provisions of paragraph (g) above.
(h) Nothing contained in this Section 2.19 shall require any Lender or the
Issuing Bank (or any Transferee) or the Administrative Agent to make available
any of its tax returns (or any other information that it deems to be
confidential or proprietary).
(i) Each Bank represents that, to the best of its knowledge, it is not a
party to any "conduit financing arrangement" as defined under applicable
Treasury Regulations promulgated under the Code.
(j) Any Non-U.S. Lender that could become completely exempt from
withholding of any tax, assessment or other charge or levy imposed by or on
behalf of the United States of America or any taxing authority thereof ("U.S.
TAXES") in respect of payment of any obligations due to such Non-U.S. Lender
under this Agreement ("LENDER OBLIGATIONS") if the Lender Obligations were in
registered form for U.S. Federal income tax purposes may request the Borrower
(through the Administrative Agent), and the Borrower agrees thereupon, to
exchange any promissory note(s) evidencing such Lender Obligations for
promissory note(s) registered as provided in subsection (k) below (each, a
"REGISTERED NOTE"). Registered Notes may not be exchanged for promissory notes
that are not Registered Notes.
(k) From and after the time, if any, when any Lender requests a Registered
Note, the Borrower shall maintain, or cause to be maintained, a register (the
"REGISTER") on which it enters the name of each registered owner of the Lender
Obligation(s) evidenced by a Registered Note. A Registered Note and the Lender
Obligation(s) evidenced thereby may be assigned or otherwise transferred in
whole or in part only by registration of such assignment or transfer of such
Registered Note and the Lender Obligation(s) evidenced thereby on the Register
(and each Registered Note shall expressly so provide). Any assignment or
transfer of all or part of such Lender Obligation(s) and the Registered Note(s)
evidencing the same shall be registered on the Register only upon surrender for
registration of assignment or transfer of the Registered Note(s) evidencing such
Lender Obligation(s), duly endorsed by (or
45
accompanied by a written instrument of assignment or transfer duly executed
by) the Registered Noteholder thereof, and thereupon one or more new
Registered Note(s) in the same aggregate principal amount shall be issued to
the designated assignee(s) or transferee(s) pursuant to, in accordance with,
and subject to the restrictions of, Section 9.04 hereof). Prior to the due
presentment for registration of assignment or transfer of any Registered
Note, the Borrower and the Administrative Agent shall treat the Person in
whose name such Lender Obligation(s) and the Registered Note(s) evidencing
the same is registered as the owner thereof for the purpose of receiving all
payments thereon and for all other purposes, notwithstanding any notice to
the contrary. The Register shall be available for inspection by the
Administrative Agent and any Lender at any reasonable time upon reasonable
prior notice.
SECTION 2.20. ASSIGNMENT OF COMMITMENTS UNDER CERTAIN CIRCUMSTANCES; DUTY
TO MITIGATE.
(a) In the event (i) any Lender or the Issuing Bank delivers a certificate
requesting compensation pursuant to Section 2.13 hereof, (ii) any Lender or the
Issuing Bank delivers a notice described in Section 2.14 hereof or (iii) the
Borrower is required to pay any additional amount to any Lender or the Issuing
Bank or any Governmental Authority on account of any Lender or the Issuing Bank
pursuant to Section 2.19 hereof, the Borrower may, at its sole expense and
effort (including with respect to the processing and recordation fee referred to
in Section 9.04(b) hereof), upon notice to such Lender or the Issuing Bank and
the Administrative Agent, require such Lender or the Issuing Bank to transfer
and assign, without recourse (in accordance with and subject to the restrictions
contained in Section 9.04 hereof), all of its interests, rights and obligations
under this Agreement to an assignee that shall assume such assigned obligations
which assignee may be another Lender, if a Lender accepts such assignment);
provided that (x) such assignment shall not conflict with any Law, rule or
regulation or order of any court or other Governmental Authority having
jurisdiction, (v) the Borrower shall have received the prior written consent of
the Administrative Agent (and, if a Commitment is being assigned, of the Issuing
Bank), which consent shall not unreasonably be withheld, and (z) the Borrower or
such assignee shall have paid to the affected Lender or the Issuing Bank in
immediately available funds an amount equal to the sum of the principal of and
interest accrued to the date of such payment on the outstanding Loans and
participations in L/C Disbursements of such Lender or the Issuing Bank plus all
Fees and other amounts accrued for the account of such Lender or the Issuing
Bank hereunder (including any amounts under Section 2.13 hereof and Section 2.15
hereof); provided further that, if prior to any such transfer and assignment the
circumstances or event that resulted in such Lender's or the Issuing Bank's
claim for compensation under Section 2.13 hereof or notice under Section 2.14
hereof or the amounts paid pursuant to Section 2.19 hereof, as the case may be,
cease to cause such Lender or the Issuing Bank to suffer increased costs or
reductions in amounts received or receivable or reduction in return on capital,
or cease to have the consequences specified in Section 2.14, or cease to result
in amounts being payable under Section 2.19 hereof, as the case may be,
including as a result of any action taken by such Lender or the Issuing Bank
46
pursuant to paragraph (b) below), or if such Lender or the Issuing Bank shall
waive its right to claim further compensation under Section 2.13 hereof in
respect of such circumstances or event or shall withdraw its notice under
Section 2.14 hereof or shall waive its right to further payments under Section
2.19 hereof in respect of such circumstances or event, as the case may be, then
such Lender or the Issuing Bank shall not thereafter be required to make any
such transfer and assignment hereunder.
(b) If (i) any Lender or the Issuing Bank shall request compensation under
Section 2.13 hereof, (ii) any Lender or the Issuing Bank delivers a notice
described in Section 2.14 hereof or (iii) the Borrower is required to pay any
additional amount to any Lender or the Issuing Bank or any Governmental
Authority on account of any Lender or the Issuing Bank, pursuant to Section
2.19, then such Lender or the Issuing Bank shall use reasonable efforts (which
shall not require such Lender or the Issuing Bank to incur an unreimbursed loss
or unreimbursed cost or expense or otherwise take any action inconsistent with
its internal policies or legal or regulatory restrictions or suffer any
disadvantage or burden deemed by it to be significant) (x) to file any
certificate or document reasonably requested in writing by the Borrower or (y)
to assign its rights and delegate and transfer its obligations hereunder to
another of its offices, branches or affiliates, if such filing or assignment
would reduce its claims for compensation under Section 2.13 hereof or enable it
to withdraw its notice pursuant to Section 2.14 hereof or would reduce accounts
payable pursuant to Section 2.19 hereof, as the case may be, in the future. The
Borrower hereby agrees to pay all reasonable costs and expenses incurred by any
Lender or the Issuing Bank in connection with any such filing or assignment,
delegation and transfer.
SECTION 2.21. LETTERS OF CREDIT.
(a) GENERAL. The Borrower may request the issuance of a Letter of Credit,
in a form reasonably acceptable to the Administrative Agent and the Issuing
Bank, appropriately completed, for the account of the Borrower, at any time and
from time to time while the Commitments remain in effect. The face amount of
each Letter of Credit may never be greater than the lesser of (i) $10,000,000
and (ii) the amount by which the Total Commitment exceeds the Total Exposure on
the date of issuance. This Section shall not be construed to impose an
obligation upon the Issuing Bank to issue any Letter of Credit that is
inconsistent with the terms and conditions of this Agreement.
(b) NOTICE OF ISSUANCE, AMENDMENT, RENEWAL, EXTENSION; CERTAIN CONDITIONS.
In order to request the issuance of a Letter of Credit (or to amend, renew or
extend an existing Letter of Credit), the Borrower shall hand deliver or
telecopy to the Issuing Bank and the Administrative Agent (reasonably in advance
of the requested date of issuance, amendment, renewal or extension) a completed
Application and a notice requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, the date of
issuance, amendment, renewal or extension, the date on which such Letter of
Credit is to
47
expire (which shall comply with paragraph (c) below), the amount of such
Letter of Credit, the name and address of the beneficiary thereof, whether
such Letter of Credit is being issued under the Short Term Commitment or the
Long Term Commitment and such other information as shall be necessary to
prepare such Letter of Credit. In connection with a request for the issuance
of a Letter of Credit, in the event of any inconsistency between the terms of
any Application and the provisions of this Agreement, the provisions of this
Agreement shall be controlling. A Letter of Credit shall be issued, amended,
renewed or extended only if, and upon issuance, amendment, renewal or
extension of each Letter of Credit the Borrower shall be deemed to represent
and warrant that, after giving effect to such issuance, amendment, renewal or
extension (A) the L/C Exposure shall not exceed $10,000,000, (B) the sum of
the Total Exposure shall not exceed the Total Commitment, and (C) as
applicable, (I) the sum of the aggregate outstanding Short Term Revolving
Loans plus L/C Exposure attributable to the Short Term Commitment (after
giving effect to the issuance of such Letter of Credit) does not exceed the
Short Term Commitment, and (II) the sum of the aggregate outstanding Long
Term Revolving Loans plus L/C Exposure attributable to the Long Term
Commitment (after giving effect to the issuance of such Letter of Credit)
does not exceed the Long Term Commitment. The Issuing Bank shall not enter
into any amendment of an outstanding Letter of Credit which has not been
requested or approved in writing by the Borrower.
(c) EXPIRATION DATE. Each Letter of Credit shall expire at the close of
business on the earlier of the date one year after the date of the issuance of
such Letter of Credit and the date that is five Business Days prior to the Short
Term Revolving Loan Maturity Date or the Long Term Revolving Loan Maturity Date,
as applicable, unless such Letter of Credit (i) expires by its terms on an
earlier date or (ii) has a one-year tenor and provides for the renewal thereof
for additional one-year periods, so long as such periods referred to in this
clause (ii) shall not in any event expire at a date later than the date that is
five Business Days prior to the Short Term Revolving Loan Maturity Date or the
Long Term Revolving Loan Maturity Date, as applicable.
(d) PARTICIPATIONS. By the issuance of a Letter of Credit and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Lender, and each such Lender hereby acquires from the
applicable Issuing Bank, a participation in such Letter of Credit equal to such
Lender's Pro Rata Percentage of the aggregate amount available to bc drawn under
such Letter of Credit, effective upon the issuance of such Letter of Credit. In
consideration and in furtherance of the foregoing, each Lender hereby absolutely
and unconditionally agrees to pay to the Administrative Agent, for the account
of the Issuing Bank, such Lender's Pro Rata Percentage of each L/C Disbursement
made by the Issuing Bank and not reimbursed by the Borrower forthwith on the
date due as provided in Section 2.02(f) hereof. Each Lender acknowledges and
agrees that its obligation to acquire participations pursuant to this paragraph
in respect of Letters of Credit is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including the
48
occurrence and continuance of a Default or an Event of Default, and that each
such payment shall be made without any offset, abatement, withholding or
reduction whatsoever.
(e) REIMBURSEMENT. If the Issuing Bank shall make any L/C Disbursement in
respect of a Letter of Credit, the Borrower shall pay to the Administrative
Agent an amount equal to such L/C Disbursement not later than two hours after
the Borrower shall have received notice from the Issuing Bank that payment of
such draft will be made, or, if the Borrower shall have received such notice
later than 10:00 a.m., Dallas, Texas time, on any Business Day, not later than
10:00 a.m., Dallas, Texas time, on the immediately following Business Day.
(f) OBLIGATIONS ABSOLUTE. The Borrower's obligations to reimburse L/C
Disbursements as provided in paragraph (e) above shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement, under any and all circumstances whatsoever,
and irrespective of:
(i) any lack of validity or enforceability of any Letter of Credit or
any other Loan Paper, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure from all
or any of the provisions of any Letter of Credit or this Agreement;
(iii) the existence of any claim, setoff, defense or other right
that the Borrower, any other party guaranteeing, or otherwise obligated
with, the Borrower, any Subsidiary of the Borrower or other Affiliate
thereof or any other Person may at any time have against the beneficiary
under any Letter of Credit, the Issuing Bank, the Administrative Agent or
any Lender or any other Person, whether in connection with this Agreement
or any other related or unrelated agreement or transaction;
(iv) any draft 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;
(v) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the
terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of the
Issuing Bank, the Lenders, the Administrative Agent or any other Person or
any other event or circumstance whatsoever, whether or not similar to any
of the foregoing, that might, but for the provisions of this Section,
constitute a legal or equitable discharge of the Borrower's obligations
hereunder.
49
The foregoing shall not be construed to excuse the Issuing Bank from
liability to the Borrower to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the
Borrower to the extent permitted by Applicable Law) suffered by the Borrower
that are caused by the Issuing Bank's gross negligence or wilful misconduct in
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof; it is understood that the Issuing Bank may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary and, in making any payment under any Letter of
Credit (i) the Issuing Bank's exclusive reliance on the documents presented to
it under such Letter of Credit as to any and all matters set forth therein,
including reliance on the amount of any draft presented under such Letter of
Credit, whether or not the amount due to the beneficiary thereunder equals the
amount of such draft and whether or not any document presented pursuant to such
Letter of Credit proves to be insufficient in any respect, if such document on
its face appears to be in order, and whether or not any other statement or any
other document presented pursuant to such Letter of Credit proves to be forged
or invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever and (ii) any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit with the terms thereof shall, in
each case, be deemed not to constitute wilful misconduct or gross negligence of
the Issuing Bank
(g) DISBURSEMENT PROCEDURES. The Issuing Bank shall, promptly following
its receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall as promptly as
possible give telephonic notification, confirmed by telecopy, to the
Administrative Agent and the Borrower of such demand for payment and whether the
Issuing Bank has made or will make an L/C Disbursement thereunder; provided that
any failure to give or delay in giving such notice shall not relieve the
Borrower of its obligation to reimburse the Issuing Bank and the Lenders with
respect to any such L/C Disbursement. The Administrative Agent shall promptly
give each Lender notice thereof.
(h) INTERIM INTEREST. If the Issuing Bank shall make any L/C Disbursement
in respect of a Letter of Credit, then, unless the Borrower shall reimburse such
L/C Disbursement in full on such date, the unpaid amount thereof shall bear
interest for the account of the Issuing Bank, for each day from and including
the date of such L/C Disbursement, to but excluding the earlier of the date of
payment by the Borrower or the date on which interest shall commence to accrue
thereon as provided in Section 2.09(f) hereof, at the rate per annum that would
apply to such amount if such amount were an ABR Loan.
(i) RESIGNATION OR REMOVAL OF THE ISSUING BANK. The Issuing Bank may
resign at any time by giving 90 days' prior written notice to the Administrative
Agent, the Lenders and the Borrower, and may be removed at any time by the
Borrower by notice to the Issuing Bank, the Administrative Agent and the
Lenders. Subject to the next succeeding paragraph, upon the
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acceptance of any appointment as the Issuing Bank hereunder by a Lender that
shall agree to serve as successor Issuing Bank, such successor shall succeed
to and become vested with all the interests, rights and obligations of the
retiring Issuing Bank and the retiring Issuing Bank shall be discharged from
its obligations to issue additional Letters of Credit hereunder. At the time
such removal or resignation shall become effective, the Borrower shall pay all
accrued and unpaid fees pursuant to Section 2.06(c) hereof. The acceptance of
any appointment as the Issuing Bank hereunder by a successor Lender shall be
evidenced by an agreement entered into by such successor, in a form
satisfactory to the Borrower and the Administrative Agent, and, from and after
the effective date of such agreement, (i) such successor Lender shall have all
the rights and obligations of the previous Issuing Bank under this Agreement
and (ii) references herein to the term Issuing Bank, shall be deemed to refer
to such successor or to any previous Issuing Bank, or to such successor and
all previous Issuing Banks, as the context shall require. After the
resignation or removal of the Issuing Bank hereunder, the retiring Issuing
Bank shall remain a party hereto and shall continue to have all the rights and
obligations of an Issuing Bank under this Agreement with respect to Letters of
Credit issued by it prior to such resignation or removal, but shall not be
required to issue additional Letters of Credit.
(j) CASH COLLATERALIZATION. If any Event of Default shall occur and be
continuing, the Borrower shall, on the Business Day it receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Lenders holding participations in outstanding Letters of
Credit representing greater than 50% of the aggregate undrawn amount of all
outstanding Letters of Credit thereof and of the amount to be deposited, deposit
in an account with the Administrative Agent, for the benefit of the Lenders, an
amount in cash equal to the L/C Exposure as of such date. Such deposit shall be
held by the Administrative Agent as collateral for the payment and performance
of the obligations of the Borrower under this Agreement. The Administrative
Agent shall have exclusive dominion and control, including the exclusive right
of withdrawal, over such account and, if so requested by the Borrower, shall
invest the deposits therein in Permitted Investments. Other than any interest
earned on the investment of such deposits in Permitted Investments, which
investments shall be made at the option and sole discretion of the
Administrative Agent, such deposits shall not bear interest or profits, if any,
on such investments shall accumulate in such account. Moneys in such account
shall (i) automatically be applied by the Administrative Agent to reimburse the
Issuing Bank for L/C Disbursements for which it has not been reimbursed, (ii) be
held for the satisfaction of the reimbursement obligations of the Borrower for
the L/C Exposure at such time and (iii) if the maturity of the Loans has been
accelerated (but subject to the consent of Lenders holding participations in
outstanding Letters of Credit representing greater than 50% of the aggregate
undrawn amount of all outstanding Letters of Credit), be applied to satisfy
other obligations of the Borrower under this Agreement.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent, the
Issuing Bank and each of the Lenders that:
SECTION 3.01. ORGANIZATION; POWERS. The Borrower and each of its
Subsidiaries (a) is a corporation duly organized, validly existing and in good
standing under the Laws of the jurisdiction of its organization, (b) has all
requisite power and authority to own its property and assets and to carry on its
business as now conducted and as proposed to be conducted, (c) is qualified to
do business in, and is in good standing in, every jurisdiction where such
qualification is required, except where the failure so to qualify could not
reasonably be expected to result in a Material Adverse Effect, and (d) has the
corporate power and authority to execute, deliver and perform its obligations
under this Agreement, the other Loan Papers and each other agreement or
instrument contemplated thereby to which it is or will be a party and to borrow
hereunder.
SECTION 3.02. AUTHORIZATION. The execution, delivery and performance by
the Borrower of this Agreement, the promissory notes, the execution of the
guaranties by the Guarantors, the execution of all other Loan Papers by the
Obligors and the borrowings hereunder (collectively, the "Transactions") (a)
have been duly authorized by all requisite corporate and, if required,
stockholder action and (b) will not (i) violate (A) any provision of Law,
statute, rule or regulation, or of the certificate or articles of incorporation
or other constitutive documents or by-laws of the Borrower or any Subsidiary of
the Borrower, (B) any order of any Governmental Authority or (C) any provision
of any indenture, material agreement or other material instrument to which the
Borrower or any Subsidiary of the Borrower is a party or by which any of them or
any of their property is or may be bound, (ii) be in conflict with, result in a
breach of or constitute (alone or with notice or lapse of time or both) a
default under, or give rise to any right to accelerate or to require the
prepayment, repurchase or redemption of any obligation under any such indenture,
agreement or other instrument or (iii) result in the creation or imposition of
any Lien upon or with respect to any property or assets now owned or hereafter
acquired by the Borrower or any Subsidiary of the Borrower.
SECTION 3.03. ENFORCEABILITY. This Agreement has been duly executed and
delivered by the Borrower and constitutes a legal, valid and binding obligation
of the Borrower enforceable against the Borrower in accordance with its terms.
All other Loan Papers have been duly executed and delivered by the Borrower and
the Obligors and each constitutes a legal, valid and binding obligation of the
Borrower and the Obligors, as appropriate, enforceable against the Borrower and
the Obligors, as appropriate, in accordance with its terms.
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SECTION 3.04. GOVERNMENTAL APPROVALS. No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority is
or will be required in connection with the Transactions, except for such as have
been made or obtained and are in full force and effect.
SECTION 3.05. FINANCIAL STATEMENTS. OCV has heretofore furnished to the
Lenders its balance sheets and statements of income and equity and cash flow (a)
as of and for the fiscal year ended December 31, 1995, audited by and
accompanied by the opinion of Deloitte & Touche, LLP, independent public
accountants, and (b) as of and for the fiscal quarter and the portion of the
fiscal year ended June 30, 1996. Such financial statements present fairly the
financial condition and results of operations and cash flows of OCV as of such
dates and for such periods. Such balance sheets and the notes thereto disclose
all material liabilities, direct or contingent, of such entities as of the dates
thereof. Such financial statements were prepared in accordance with GAAP
applied on a consistent basis. The Pro Forma Financial Statements were prepared
in good faith and management believes them to be based on reasonable assumptions
and to fairly present the pro forma financial condition and results of
operations of the Borrower and its Subsidiaries consistent with the rules and
regulations of the Securities and Exchange Commission.
SECTION 3.06. NO MATERIAL ADVERSE CHANGE. There has been no material
adverse change in the business, assets, operations, financial condition, or
material agreements of the Borrower and its Subsidiaries, taken as a whole,
since June 30, 1996.
SECTION 3.07. TITLE TO PROPERTIES; POSSESSION UNDER LEASES.
(a) Each of the Borrower and its Subsidiaries has good and marketable
title to, or valid leasehold interests in, all its material properties and
assets, except for minor defects in title that do not interfere with its ability
to conduct its business as currently conducted or to utilize such properties and
assets for their intended purposes. All such material properties and assets are
free and clear of Liens, other than Liens expressly permitted by Section 6.02
hereof.
(b) Each of the Borrower and its Subsidiaries has complied with all
material obligations under all material leases to which it is a party and all
such leases are in full force and effect. Each of the Borrower and its
Subsidiaries enjoys peaceful and undisturbed possession under all such material
leases.
(c) Each of the Borrower and its Subsidiaries owns or possesses, or could
obtain ownership or possession of, on terms not materially adverse to it, all
patents, trademarks, service marks, trade names, copyrights, licenses and rights
with respect thereto necessary for the present conduct of its business, without
any known conflict with the rights of others, and free from any burdensome
restrictions, except where such conflicts and restrictions could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
53
SECTION 3.08. SUBSIDIARIES. SCHEDULE 3.08 hereto sets forth as of the
date hereof a list of all Subsidiaries of the Borrower and the percentage
ownership interest of the Borrower therein. As of the date hereof, the shares
of Capital Stock or other ownership interests so indicated on SCHEDULE 3.08 are
fully paid and non-assessable and are owned by the Borrower, directly or
indirectly, free and clear of all Liens.
SECTION 3.09. LITIGATION; COMPLIANCE WITH LAWS.
(a) Except as set forth on SCHEDULE 3.09 hereof, there are not any
actions, suits or proceedings at Law or in equity or by or before any
Governmental Authority now pending or, to the knowledge of the Borrower,
threatened against or affecting the Borrower or any Subsidiary of the Borrower
or any business, property or rights of any such Person (i) that involve this
Agreement or the Transactions or (ii) as to which there is a reasonable
possibility of an adverse determination and that, if adversely determined, could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect.
(b) None of the Borrower or any of its Subsidiaries or any of their
respective material properties or assets is in violation of, nor will the
continued operation of their material properties and assets as currently
conducted violate, any Law, or is in default with respect to any judgment, writ,
injunction, decree or order of any Governmental Authority, where such violation
or default could reasonably be expected to result in a Material Adverse Effect.
SECTION 3.10. AGREEMENTS.
(a) Neither the Borrower nor any of its Subsidiaries is a party to any
agreement or subject to any corporate restriction that, since December 31, 1995,
has resulted or could reasonably be expected to result in a Material Adverse
Effect, except as disclosed on SCHEDULE 3.10 hereof.
(b) Neither the Borrower nor any of its Subsidiaries is in default in any
manner under any provision of any indenture or other agreement or instrument
evidencing Indebtedness, or any other material agreement or instrument to which
it is a party or by which it or any of its properties or assets are or may be
bound, where such default could reasonably be expected to result in a Material
Adverse Effect.
SECTION 3.11. FEDERAL RESERVE REGULATIONS.
(a) Neither the Borrower nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of buying or carrying Margin Stock.
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(b) No part of the proceeds of any Loan or any Letter of Credit will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of, or that is inconsistent
with, the provisions of the Regulations of the Board, including Regulation
G, U or X.
SECTION 3.12. INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY ACT.
Neither the Borrower nor any Subsidiary of the Borrower is (a) an "investment
company" as defined in, or subject to regulation under, the Investment Company
Act of 1940 or (b) a "holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935.
SECTION 3.13. USE OF PROCEEDS. The Borrower will use the proceeds of the
Loans and will request the issuance of Letters of Credit only for the purposes
specified in the preamble to this Agreement.
SECTION 3.14. TAX RETURNS. Each of the Borrower and its Subsidiaries has
filed or caused to be filed all Federal, state, and material local and foreign
tax returns or materials required to have been filed by it and has paid or
caused to be paid all taxes due and payable by it and all assessments received
by it, except (a) taxes that are being contested in good faith by appropriate
proceedings and for which the Borrower or such Subsidiary, as applicable, shall
have set aside on its books adequate reserves, and (b) taxes owed by Spectradyne
or its Subsidiaries, as described on SCHEDULE 3.14 hereto.
SECTION 3.15. NO MATERIAL MISSTATEMENTS. None of (a) the S-4 Registration
Statement (at the time it is declared effective under the Securities Act of
1933), or (b) any other written information, report, financial statement,
exhibit or schedule prepared by the Borrower and furnished to the Administrative
Agent or any Lender in connection with the negotiation of this Agreement and the
other Loan Papers or in connection with any of the Corporate Restructuring
transactions, or included herein or delivered pursuant hereto contained (in the
case of subsection (a)) and contained, contains or will contain (in the case of
subsection (b)) when furnished any material misstatement of fact or omitted,
omits or will omit when furnished to state any material fact necessary to make
the statements therein, in the light of the circumstances under which they were,
are or will be made, not misleading.
SECTION 3.16. EMPLOYEE BENEFIT PLANS. Each of the Borrower and its ERISA
Affiliates is in compliance in all material respects with the applicable
provisions of ERISA and the Code and the regulations and published
interpretations thereunder. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events,
could reasonably be expected to result in liability of the Borrower or any
Subsidiary of the Borrower which would be material to the Borrower and its
Subsidiaries on a consolidated basis.
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SECTION 3.17. SOLVENCY.
(a) Immediately after the consummation of the Transactions and the other
transactions to occur on the Closing Date and immediately following the
making of each Loan made and the issuance of each Letter of Credit issued and
after giving effect to the application of the proceeds thereof, (i) the fair
value of the assets of the Borrower and its Subsidiaries on a consolidated
basis, at a fair valuation, will exceed the debts and liabilities, direct,
subordinated, contingent or otherwise, of the Borrower and its Subsidiaries
on a consolidated basis; (ii) the present fair saleable value of the property
of the Borrower and its Subsidiaries on a consolidated basis will be greater
than the amount that will be required to pay the probable liability of the
Borrower and its Subsidiaries on a consolidated basis on their debts and
other liabilities, direct, subordinated, contingent or otherwise, as such
debts and other liabilities become absolute and matured; (iii) the Borrower
and its Subsidiaries on a consolidated basis will be able to pay their debts
and liabilities, direct, subordinated, contingent or otherwise, as such debts
and liabilities become absolute and matured; and (iv) the Borrower and its
Subsidiaries on a consolidated basis will not have unreasonably small capital
with which to conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted following the
Closing Date.
(b) The Borrower does not intend to, and does not believe that it or any
Subsidiary of the Borrower will, incur debts beyond its ability to pay such
debts as they mature, taking into account the timing and amounts of cash to
be received by it or any such Subsidiary and the timing and amounts of cash
to be payable on or in respect of its Indebtedness or the Indebtedness of any
such Subsidiary.
SECTION 3.18. INSURANCE. SCHEDULE 3.18 hereto sets forth a true,
complete and correct description of all insurance maintained by or for the
Borrower or for or by its Subsidiaries as of the date hereof and the Closing
Date. As of each such date, such insurance is in full force and effect and
all premiums have been duly paid. The Borrower and its Subsidiaries have
insurance in such amounts and covering such risks and liabilities as are in
accordance with normal industry practice.
SECTION 3.19. LABOR MATTERS. As of the date hereof and the Closing
Date, there are no strikes, lockouts or slowdowns against the Borrower or any
of its Subsidiary pending or, to the knowledge of the Borrower, threatened
which could reasonably be expected to have a Material Adverse Effect. The
hours worked by and payments made to employees of the Borrower and its
Subsidiaries have not been in violation of the Fair Labor Standards Act or
any other applicable Federal, state, local or foreign Law dealing with such
matters. All payments due from the Borrower or any Subsidiary of the
Borrower, or for which any claim may be made against the Borrower or any
Subsidiary of the Borrower, on account of wages and employee health and
welfare insurance and other benefits, have been paid or accrued as a
liability on the books of the Borrower or such Subsidiary. The consummation
of the
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Transactions to be consummated on or prior to the Closing Date will not give
rise to any right of termination or right of renegotiation on the part of any
union under any collective bargaining agreement to which the Borrower or any
Subsidiary of the Borrower is bound.
SECTION 3.20. ENVIRONMENTAL MATTERS. Except as set forth in SCHEDULE
3.20:
(a) The properties owned, operated or leased by the Borrower and its
Subsidiaries (the "PROPERTIES") do not contain any Hazardous Materials in
amounts or concentrations which (i) constitute, or constituted a violation
of, or (ii) could reasonably be expected to give rise to liability under,
Environmental Laws, which violations and liabilities, in the aggregate, could
reasonably be expected to result in a Material Adverse Effect;
(b) All Environmental Permits have been obtained and are in effect with
respect to the Properties and operations of the Borrower and its
Subsidiaries, and the Properties and all operations of the Borrower and its
Subsidiaries are in compliance, and in the last two years have been in
compliance, with all Environmental Laws and all necessary Environmental
Permits, except to the extent that such non-compliance or failure to obtain
any necessary permits, in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect;
(c) Neither the Borrower nor any of its Subsidiaries has received any
notice of an Environmental Claim in connection with the Properties or the
operations of the Borrower or its Subsidiaries or with regard to any Person
whose liabilities for environmental matters the Borrower or any of its
Subsidiaries has retained or assumed, in whole or in part, contractually,
which, in the aggregate, could reasonably be expected to result in a Material
Adverse Effect, nor do the Borrower or any of its Subsidiaries have knowledge
that any such notice will be received or is being threatened;
(d) Hazardous Materials have not been transported from the Properties,
nor have Hazardous Materials been generated, treated, stored or disposed of
at, on or under any of the Properties in a manner that could reasonably be
expected to give rise to liability under any Environmental Law, nor have the
Borrower or its Subsidiaries retained or assumed any liability contractually,
with respect to the generation, treatment, storage or disposal of Hazardous
Materials, which transportation, generation, treatment, storage or disposal,
or retained or assumed liabilities, in the aggregate, could reasonably be
expected to result in a Material Adverse Effect.
SECTION 3.21. ACQUISITION OF SPECTRADYNE; MERGER OF OCV.
(a) ACQUISITION; BANKRUPTCY PROCEEDINGS. An order has been entered
confirming the Reorganization Plan and the time for reconsideration,
rehearing or new trial and the time to appeal or to seek a petition for
review or certiorari has expired and no post-trial motion,
57
appeal or request for review is pending. All notices to creditors pursuant
to Debtor Relief Laws relating to the solicitation of votes and confirmation
of a plan of reorganization have been made within the time required by Debtor
Relief Laws. The Acquisition has been consummated in accordance with the
terms of the Acquisition Agreement. The Capital Stock of Spectradyne and all
of the assets of Spectradyne are wholly owned by the Borrower, free and clear
of any Liens on the terms set forth in the Acquisition Agreement and in the
Reorganization Plan.
(b) MERGER. No condition to closing of either the Merger or the
Acquisition has been waived by the Borrower. The Merger has been consummated
in accordance with the terms of the Merger Agreement. On the Closing Date,
there are no shareholders who have effectively exercised their appraisal
rights with respect to the Capital Stock of OCV. After the Closing Date,
there are no shareholders who have effectively exercised, or continue to have
the right to effectively exercise, their appraisal rights with respect to the
Capital Stock of OCV, the result of which exercise could reasonably be
expected to result in a Material Adverse Effect.
SECTION 3.22. SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC. All
representations and warranties made under this Agreement and the other Loan
Papers shall be deemed to be made at and as of the Closing Date and at and as
of the date of each Borrowing under either of the Revolving Loans, and each
shall be true and correct when made, except to the extent (a) previously
fulfilled in accordance with the terms hereof, (b) subsequently inapplicable,
or (c) previously waived in writing by the Administrative Agent and Lenders
with respect to any particular factual circumstance. The representations and
warranties made under this Agreement and the other Loan Papers shall be
deemed applicable to each Subsidiary of the Borrower as of the formation or
acquisition of such Subsidiary and at and as of each date the representations
and warranties are remade pursuant to this provision. All representations
and warranties made under this Agreement and the other Loan Papers shall
survive, and not be waived by, the execution hereof by the Administrative
Agent and Lenders, any investigation or inquiry by the Administrative Agent
or any Lender, or by the making of any Loan under this Agreement and the
other Loan Papers.
ARTICLE IV
CONDITIONS OF LENDING
The obligations of the Lenders to make Loans and of the Issuing Bank to
issue Letters of Credit hereunder are subject to the satisfaction of the
following conditions:
SECTION 4.01. ALL CREDIT EVENTS. On the date of each Borrowing, and on
the date of each issuance of a Letter of Credit (each such event being called
a "CREDIT EVENT"):
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(a) The Administrative Agent shall have received a notice of such
Borrowing as required by Section 2.03 or 2.04 hereof, as applicable (or such
notice shall have been deemed given in accordance with Section 2.04 hereof),
or, in the case of the issuance of a Letter of Credit, the Issuing Bank and
the Administrative Agent shall have received a duly completed Application and
a notice requesting the issuance of such Letter of Credit, required by
Section 2.21(b) hereof.
(b) The representations and warranties set forth in Article III hereof
shall be true and correct in all material respects on and as of the date of
such Credit Event with the same effect as though made on and as of such date,
except to the extent such representations and warranties expressly relate to
an earlier date, and there shall have occurred no event which caused a
Material Adverse Effect.
(c) The Borrower and each of its Subsidiaries shall be in compliance in
all material respects with the terms and provisions set forth herein on its
part to be observed or performed, and at the time of and immediately after
such Credit Event, no Event of Default or Default shall have occurred and be
continuing.
Each Credit Event shall be deemed to constitute a representation and
warranty by the Borrower on the date of such Credit Event as to the matters
specified in paragraphs (b) and (c) of this Section 4.01.
SECTION 4.02. FIRST CREDIT EVENT. On the Closing Date:
(a) The Administrative Agent shall have received, on behalf of itself,
the Lenders and the Issuing Bank, a favorable written opinion of (i) the
General Counsel of the Borrower and its Subsidiaries and (ii) Xxxxxx &
Xxxxxxx, in connection with the Transactions and the Corporate Restructuring,
in each case (y) dated the Closing Date, and (z) covering such other matters
relating to this Agreement, the Transactions and the Corporate Restructuring
as the Administrative Agent shall reasonably request in form reasonably
acceptable to the Administrative Agent and its counsel, and the Borrower
hereby requests and instructs such counsel to deliver such opinions. The
opinions shall be addressed to the Issuing Bank, the Administrative Agent and
the Lenders. The Administrative Agent shall have also received copies of (i)
all opinions delivered by each counsel to the Borrower and each of its
Affiliates in connection with the Corporate Restructuring, and (ii) all
opinions addressed to the Borrower or any of its Affiliates from counsel to
any party in connection with the Corporate Restructuring, in each case, with
reliance letters authorizing the Administrative Agent and the Lenders to rely
on such opinions.
(b) All legal matters incident to this Agreement, the Borrowings, the
Corporate Restructuring, the Transaction and extensions of credit hereunder
shall be reasonably satisfactory to the Lenders, to the Issuing Bank and to
the Administrative Agent.
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(c) The Administrative Agent shall have received (i) a copy of the
certificate or articles of incorporation, including all amendments thereto,
of the Borrower and each of its Subsidiaries, except foreign organized
Subsidiaries, certified as of a recent date by the Secretary of State of the
state of its organization, and a certificate as to the good standing of the
Borrower and each of its Subsidiaries as of a recent date, from such
Secretary of State; (ii) a certificate of the Secretary or Assistant
Secretary of the Borrower and each of its Subsidiaries, except foreign
organized Subsidiaries, dated the Closing Date and certifying (A) that
attached thereto is a true and complete copy of the by-laws of the Borrower
and each of its Subsidiaries as in effect on the Closing Date and at all
times since a date prior to the date of the resolutions described in clause
(B) below, (B) that attached thereto is a true and complete copy of
resolutions duly adopted by the Board of Directors of the Borrower and each
of its Subsidiaries authorizing the execution, delivery and performance of
this Agreement and the borrowings hereunder, as applicable, and that such
resolutions have not been modified rescinded or amended and are in full force
and effect, (C) that the certificate or articles of incorporation of the
Borrower and each of its Subsidiaries have not been amended since the date of
the last amendment thereto shown on the certificate of good standing
furnished pursuant to clause (i) above, (D) as to the incumbency and specimen
signature of each officer executing this Agreement or any other document
delivered in connection herewith on behalf of the Borrower and each of its
Subsidiaries, (E) that attached thereto is a true and complete copy of the
Acquisition Agreement, the Merger Agreement, the EDS Agreement and the
Reorganization Plan, each as in effect on the Closing Date, and (F) that
attached thereto is a true and complete copy of each of the Ascent Agreements
as in effect on the Closing Date; (iii) a certificate of another officer as
to the incumbency and specimen signature of the Secretary or Assistant
Secretary executing the certificate pursuant to (ii) above; and (iv) such
other documents as the Lenders, the Issuing Bank or Xxxxxxx, Xxxxxxx &
Xxxxxxx, P.C., counsel for the Administrative Agent, may reasonably request.
(d) The Lenders shall have received a duly completed Compliance
Certificate dated the Closing Date and executed by a Financial Officer of the
Borrower, confirming compliance with the conditions precedent set forth in
paragraphs (b) and (c) of Xxxxxxx 0.00 xxxxxx, xxxx xxxxxxxxxx (x), (x), (x),
(x) and (k) of this Section 4.02, and demonstrating compliance by the
Borrower with the provisions of Sections 6.09 and 6.10 hereof, and certifying
to the fact that there exists no Default or Event of Default under the terms
of this Agreement, and consummating the Agreement and making the initial
Loans hereunder would not cause a Default or Event of Default.
(e) Each Lender and the Administrative Agent shall have received payment
in full of all Fees and other amounts due and payable on or prior to the
Closing Date, including reimbursement or payment of all reasonable
out-of-pocket expenses required to be reimbursed or paid by the Borrower
hereunder.
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(f) The Borrower shall have delivered duly executed and completed copies
to each of the Lenders of each of the following documents and agreements, in
form and substance satisfactory to each Lender: this Agreement, applicable
Fee Letters and guaranties of the Obligations executed by all Guarantors.
The Borrower shall have delivered a promissory note to each Lender, in form
and substance satisfactory to each such Lender, and any other Loan Paper
reasonably required by any Lender in connection with this Agreement.
(g) An order has been entered confirming the Reorganization Plan, and
the time for reconsideration, rehearing or new trial and the time to appeal
or to seek a petition for review or certiorari has expired and no post-trial
motion or request for review is pending. All notices to creditors required
under Debtor Relief Laws in order to confirm such Plan have been made within
the time required by Debtor Relief Laws. No condition to closing of either
the Merger or the Acquisition has been waived by the Borrower. The
Acquisition has been consummated (or will be consummated on the Closing Date)
in accordance with the terms of the Acquisition Agreement and the Merger has
been consummated (or will be consummated simultaneous with this Transaction)
in accordance with the terms of the Merger Agreement. The Capital Stock of
Spectradyne and all of the assets of Spectradyne are wholly owned by the
Borrower (or will be wholly owned by the Borrower on the Closing Date) free
and clear of any Liens in accordance with the terms of the Acquisition
Agreement and the Reorganization Plan. There are no shareholders who have
effectively exercised, or continue to have the right to effectively exercise,
their appraisal rights with respect to the Capital Stock of OCV.
(h) Except with respect to certain FCC licenses of Spectradyne described
on SCHEDULE 4.02(h) hereto, all governmental and third party approvals
necessary or advisable in connection with the Corporate Restructuring, the
Transactions, and the continuing operations of the Borrower and its
Subsidiaries shall have been obtained and be in full force and effect, and
all applicable waiting periods shall have expired without any action being
taken or threatened by any Governmental Authority which would restrain,
prevent or otherwise impose adverse conditions on the Corporate Restructuring
or the Transactions.
(i) There shall not have occurred any material change in the
capitalization (whether in debt or in equity), corporate structure or assets
of the Borrower or any of its Subsidiaries from that set forth in the S-4
Registration Statement.
(j) No action, suit, litigation or similar proceeding by or before any
Governmental Authority shall exist or, in the case of litigation by a
Governmental Authority, be threatened, with respect to the Corporate
Restructuring or the Transactions contemplated thereby or otherwise, which
would be likely in the reasonable opinion of the Required Lenders to have a
Material Adverse Effect.
(k) The structure and documentation of the Corporate Restructuring and
the Transactions contemplated thereby, and all corporate and other
proceedings taken or to be
61
taken and all documents incidental thereto, shall be reasonably satisfactory
in form and substance to the Administrative Agent and Xxxxxxx, Xxxxxxx &
Xxxxxxx, P.C., counsel for the Administrative Agent, and each Lender shall
have received copies of all such documents as such Lender, acting through the
Administrative Agent, may reasonably request. All transactions necessary to
consummate the Corporate Restructuring shall have been completed in
accordance with the terms and conditions of the Merger Agreement, the
Acquisition Agreement and the Reorganization Plan.
(l) The Lenders shall have received a certification from the chief
financial officer of the Borrower, in form and substance reasonably
satisfactory to the Lenders, as to the solvency of the Borrower and its
Subsidiaries on a consolidated basis after giving effect to the Corporate
Restructuring and the consummation of the other transactions contemplated
hereby.
(m) The Ascent Loan Facility shall have closed, or shall close
simultaneously with, this Transaction.
SECTION 4.03. INCREASE OF LONG TERM COMMITMENT. The Long Term
Commitment may only be increased if each of the following conditions has been
satisfied:
(a) The Borrower and each of its Subsidiaries, and the Guarantors, shall
have satisfied each condition in Section 4.01 hereof, and there shall exist
no Default or Event of Default on the date the Borrower requests such
advance, and both immediately before and after such increase.
(b) The Borrower shall give not less than five Business Day's notice of
a requested increase in the Long Term Commitment specifying (i) that such
notice is for an increase in the Long Term Commitment (with a corresponding
decrease in the Short Term Commitment) in accordance with the terms of
Section 2.01(b) hereof and this Section 4.03, (ii) the date that such
proposed increase is to be effective and (iii) the amount of such increase in
the Long Term Commitment (which such amount must be in excess of $5,000,000
and in integral multiples of $5,000,000 in excess thereof and otherwise
comply with subsection (c) below).
(c) The sum of (i) the aggregate outstanding Revolving Loans plus (ii)
the aggregate amount of outstanding Competitive Loans shall never exceed
$125,000,000 (as such $125,000,000 amount is reduced by each reduction in the
Commitments and Total Commitment in accordance with Section 2.10 hereof).
(d) Every increase in the Long Term Commitment shall reduce the Short
Term Commitment immediately and automatically in the amount of each such
increase. No increase in the Long Term Commitment may be made if such
increase would, upon reduction of the Short Term Commitment in accordance
with the terms of this subsection (d), reduce the Short Term Commitment to a
number less than zero.
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ARTICLE V
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees with each Lender that so long as this
Agreement shall remain in effect and until the Commitments have been
terminated and the Obligations shall have been paid in full and all Letters
of Credit have been canceled or have expired and all amounts drawn thereunder
have been reimbursed in full, the Borrower will, and will cause each of its
Subsidiaries to:
SECTION 5.01. EXISTENCE; BUSINESSES AND PROPERTIES.
(a) Do or cause to be done all things necessary to preserve, renew and
keep in full force and effect its legal existence, except as otherwise
expressly permitted under Section 6.05 hereof.
(b) Do or cause to be done all things necessary to obtain, preserve,
renew, extend and keep in full force and effect the rights, licenses,
permits, franchises, authorizations, patents, copyrights, trademarks and
trade names material to the conduct of its business; comply in all material
respects with all applicable Laws, rules, regulations and decrees and orders
of any Governmental Authority, whether now in effect or hereafter enacted;
and at all times maintain and preserve all property material to the conduct
of such business and keep such property in good repair, working order and
condition and from time to time make, or cause to be made, all needful and
proper repairs, renewals, additions, improvements and replacements thereto
necessary in order that the business carried on in connection therewith may
be properly conducted at all times.
SECTION 5.02. INSURANCE. Keep its insurable properties insured in
accordance with industry standards at all times by financially sound and
reputable insurers; maintain such other insurance, to such extent and against
such risks, including fire and other risks insured against by extended
coverage, as is customary with companies in the same or similar businesses
operating in the same or similar locations, including public liability
insurance against claims for personal injury or death or property damage
occurring upon, in, about or in connection with the use of any properties
owned, occupied or controlled by it; and maintain such other insurance as may
be required by Law.
SECTION 5.03. OBLIGATIONS AND TAXES. Pay and discharge promptly when
due all taxes, assessments and governmental charges or levies imposed upon it
or upon its income or profits or in respect of its property before the same
shall become delinquent or in default, as well as all lawful claims for
labor, materials and supplies or otherwise that, if unpaid, might give rise
to a Lien upon such properties or any part thereof; PROVIDED, HOWEVER, that
such payment and discharge shall not be required with respect to any such
tax, assessment, charge,
63
levy or claim so long as the validity or amount thereof shall be contested in
good faith by appropriate proceedings and the Borrower shall have set aside
on its books adequate reserves with respect thereto in accordance with GAAP
and such contest operates to suspend collection of the contested obligation,
tax, assessment or charge and enforcement of a Lien, and with respect to
those matters listed on SCHEDULE 3.14 hereto.
SECTION 5.04. FINANCIAL STATEMENTS, REPORTS, ETC. In the case of the
Borrower, furnish to the Administrative Agent and each Lender:
(a) within 105 days after the end of each fiscal year, its consolidated
and consolidating balance sheet and related consolidated and consolidating
statements of income and cash flow, showing the financial condition of the
Borrower and its consolidated Subsidiaries as of the close of such fiscal
year and the results of their operations during such year, and a comparison
of such financial position and results of operations as of the corresponding
date and for the previous fiscal year, all audited (in the case of the
consolidated financial statements) by Deloitte & Touche, LLP or other
independent public accountants of recognized national standing acceptable to
the Required Lenders and accompanied by an opinion of such accountants (which
shall not be qualified in any material respect) to the effect that such
consolidated financial statements fairly present the financial condition and
results of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied;
(b) within 60 days after the end of each of the first three fiscal
quarters of each fiscal year, its consolidated balance sheet and related
consolidated statements of earnings and cash flow showing the financial
condition of the Borrower and its consolidated Subsidiaries as of the close
of such fiscal quarter and the results of their operations during such fiscal
quarter and the then elapsed portion of the fiscal year, and a comparison of
such financial position and results of operations as of the corresponding
date and for the corresponding periods in the previous fiscal year, all
certified by one of its Financial Officers as fairly presenting the financial
condition and results of operations of the Borrower and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustment;
(c) (i) concurrently with any delivery of financial statements under
sub-paragraph (a) above, a certificate of the accounting firm opining on or
certifying such statements (which certificate may be limited to accounting
matters and disclaim responsibility for legal interpretations) certifying
that no Event of Default has occurred in Sections 6.01, 6.02(h), 6.03, 6.04,
6.05, 6.06, 6.09 and 6.10 hereof; and (ii) concurrently with any delivery of
financial statements under sub-paragraph (a) or (b) above, a Compliance
Certificate of a Financial Officer of the Borrower certifying that no Event
of Default or Default has occurred or, if such an Event of Default or Default
has occurred, specifying the nature and extent thereof and any corrective
action taken or proposed to be taken with respect thereto and setting
64
forth computations demonstrating compliance with the covenants contained in
Sections 6.01, 6.03, 6.04, 6.06, 6.09 and 6.10 hereof;
(d) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements, registration statements (other
than on Form S-8) and other similar materials filed by the Borrower or any
Subsidiary of the Borrower with the Securities and Exchange Commission, or
any Governmental Authority succeeding to any or all of the function of said
Commission, or with any national securities exchange, or distributed
generally to its shareholders, as the case may be; and
(e) promptly, from time to time, such other information regarding the
operations, business affairs and financial condition of the Borrower or any
Subsidiary of the Borrower, or compliance with the terms of this Agreement
and the other Loan Papers, as the Administrative Agent or any Lender may
reasonably request.
SECTION 5.05. LITIGATION AND OTHER NOTICES. Furnish to the
Administrative Agent, the Issuing Bank and each Lender prompt written notice
of the following:
(a) any Event of Default or Default, specifying the nature and extent
thereof and the corrective action (if any) taken or proposed to be taken with
respect thereto;
(b) the (i) filing or commencement of, or any written threat or notice
of intention of any Person to file or commence, any action, suit or
proceeding, whether at Law or in equity or by or before any Governmental
Authority, or (ii) the making of any written claim, in either case against
the Borrower or any Affiliate thereof as to which there is a reasonable
possibility of an adverse determination and which if adversely determined,
could reasonably be expected to result in a Material Adverse Effect; and
(c) any development (including developments in pending litigation and
developments in pending or threatened labor disruption) that has resulted in,
or could reasonably be expected to result in, a Material Adverse Effect.
SECTION 5.06. EMPLOYEE BENEFITS. (a) Comply in all material respects
with the applicable provisions of ERISA and the Code and (b) furnish to the
Administrative Agent (i) as soon as possible after, and in any event within
10 days after any Responsible Officer of the Borrower or any ERISA Affiliate
knows or has reason to know that, any ERISA Event has occurred that, alone or
together with any other ERISA Event could reasonably be expected to result in
liability of the Borrower in an aggregate amount exceeding $55,000,000, a
statement of a Financial Officer of the Borrower setting forth details as to
such ERISA Event and the action, if any, that the Borrower proposes to take
with respect thereto.
65
SECTION 5.07. MAINTAINING RECORDS; ACCESS TO PROPERTIES AND INSPECTIONS.
Keep proper books of record and account in which full, true and correct
entries in conformity with GAAP and all requirements of Law are made of all
dealings and transactions in relation to its business and activities. The
Borrower will, and will cause each of its Subsidiaries to, permit any
representatives designated by the Administrative Agent or any Lender, upon
reasonable prior written notice, to visit and inspect the financial records
and the properties of the Borrower or any Subsidiary of the Borrower at
reasonable times and as often as reasonably requested and to make extracts
from and copies of such financial records, and permit any representatives
designated by the Administrative Agent or any Lender to discuss the affairs,
finances and condition of the Borrower or any Subsidiary of the Borrower with
the officers thereof and (with the concurrence of the Administrative Agent)
independent accountants therefor (provided that the Borrower has the right to
have a representative present for any meeting with the Borrower's independent
accountants).
SECTION 5.08. USE OF PROCEEDS. Use the proceeds of the Loans and
request the issuance of Letters of Credit only for the purposes set forth in
the preamble to this Agreement.
SECTION 5.09. COMPLIANCE WITH ENVIRONMENTAL LAWS.
(a) Comply, and exercise best efforts to cause all lessees and other
Persons occupying its Properties to comply, in all material respects with all
Environmental Laws and Environmental Permits applicable to its operations and
Properties; and obtain and renew all material Environmental Permits necessary
for its operations and Properties; and conduct any Remedial Action to the
extent required by and in accordance with Environmental Laws; provided,
however, that none of the Borrower or any of its Subsidiaries shall be
required to undertake any Remedial Action to the extent that its obligation
to do so is being contested in good faith and by proper proceedings and
appropriate reserves are being maintained with respect to such circumstances.
(b) If a Default caused by reason of a breach of paragraph (a) above or
Section 3.20 hereof shall have occurred and be continuing, at the request of
the Required Lenders through the Administrative Agent, provide to the Lenders
within 45 days after such request, at the expense of the Borrower, a "Phase
1" environmental site assessment report for the Properties which are the
subject of such default prepared by an environmental consulting firm
acceptable to the Administrative Agent and indicating the presence or absence
of Hazardous Materials and the estimated cost of any compliance or Remedial
Action in connection with such Properties.
SECTION 5.10. COMPLIANCE WITH MATERIAL CONTRACTS. Except as set forth
in Section 6.07 hereof, maintain in full force and effect (including
exercising any available renewal option), and without amendment or
modification, each material contract, unless the failure so to maintain any
such material contract or replacement contract or contracts thereof
66
(or any amendment or modification thereto) could not, individually or in the
aggregate, be reasonably expected to have a Material Adverse Effect.
ARTICLE VI
NEGATIVE COVENANTS
The Borrower covenants and agrees with each Lender that, so long as this
Agreement shall remain in effect and until the Commitments have been
terminated and the Obligations have been paid in full and all Letters of
Credit have been canceled or have expired and all amounts drawn thereunder
have been reimbursed in full:
SECTION 6.01. INDEBTEDNESS OF THE SUBSIDIARIES OF THE BORROWER. The
Borrower will not cause or permit any of its Subsidiaries to, issue any
Preferred Stock, or to issue, incur, create, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness of any Subsidiary of the Borrower for borrowed money
existing on the date hereof and set forth in SCHEDULE 6.01 hereto, but not
any extensions, renewals or replacements of such Indebtedness; and
(b) Indebtedness of any Subsidiary of the Borrower owed to the Borrower
or to a Wholly Owned Subsidiary of the Borrower that does not otherwise
violate any provision of this Agreement or any other Loan Paper.
SECTION 6.02. LIENS. The Borrower will not, and will not cause or
permit any of its Subsidiaries to, create, incur, assume or permit to exist
any Lien on any of its property or assets (including stock or other
securities of any Person, including any Subsidiary) now owned or hereafter
acquired by it or them or on any income or revenues or rights in respect of
any thereof, except:
(a) Liens on property or assets of the Borrower and its Subsidiaries
existing on the date hereof and set forth in SCHEDULE 6.02 hereto; provided
that such Liens shall secure only those obligations which they secure on the
date hereof;
(b) any Lien existing on any property or asset prior to the acquisition
thereof by the Borrower or any Subsidiary of the Borrower; provided that (i)
such Lien is not created in contemplation of or in connection with such
acquisition and (ii) such Lien does not apply to any other property or assets
of the Borrower or any Subsidiary of the Borrower;
(c) Liens for taxes not yet due or which are being contested in
compliance with Section 5.03 hereof;
67
(d) carriers', warehousemen's, mechanics', materialmen's, repairmen's or
other like Liens arising in the ordinary course of business and securing
obligations that are not due and payable or which are being contested in
compliance with Section 5.03 hereof, which, in the aggregate, are not
substantial in amount and do not materially detract from the value of the
property subject thereto or materially interfere with the ordinary conduct of
the business of the Borrower or any of its Subsidiaries;
(e) pledges and deposits made in the ordinary course of business in
compliance with workmen's compensation, unemployment insurance and other
social security Laws or regulations;
(f) deposits to secure the performance of bids, trade contracts (other
than for Indebtedness), leases (other than Capital Lease Obligations),
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course or business;
(g) zoning restrictions, easements, rights-of-way, restrictions on use
of real property and other similar encumbrances incurred in the ordinary
course of business which, in the aggregate, are not substantial in amount and
do not materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries; and
(h) purchase money security interests in real property, equipment or
other assets hereafter acquired by the Borrower or any Subsidiary of the
Borrower; provided that (i) such security interests secure Indebtedness
(including, as applicable, Capital Lease Obligations) permitted by Section
6.01(c) hereof, (ii) such security interests are incurred, and the
Indebtedness secured thereby is created, within 180 days after such
acquisition, (iii) the Indebtedness secured thereby does not exceed 100% of
the cost of such real property, equipment or other assets at the time of such
acquisition and (iv) such security interests do not apply to any other
property or assets of the Borrower or any Subsidiary of the Borrower.
SECTION 6.03. SALE AND LEASE BACK TRANSACTIONS; OFF-BALANCE SHEET
FINANCINGS. The Borrower will not, and will not cause or permit any of its
Subsidiaries to:
(a) Enter into any arrangement, directly or indirectly, with any person
whereby it shall sell or transfer any property, real or personal, used or
useful in its business, whether now owned or hereafter acquired, and
thereafter rent or lease such property or other property which it intends to
use for substantially the same purpose or purposes as the property being sold
or transferred; PROVIDED, HOWEVER, that the Borrower or a Subsidiary of the
Borrower may enter into (i) any operating lease, (ii) Equipment Lease
Transactions permitted by paragraph (b) of this Section and (iii) Capital
Lease Obligations secured by purchase money
68
security interests permitted by Section 6.02(h) hereof to finance the initial
acquisition of real property, equipment or other assets.
(b) Directly or indirectly enter into or be or become liable with
respect to any Equipment Lease Transactions, other than Equipment Lease
Transactions of the Borrower and all of its Subsidiaries, which do not in the
aggregate at any time have Attributable Debt in an amount in excess of 20% of
the Borrower's Consolidated Tangible Net Worth as of the last day of the most
recently ended fiscal quarter of the Borrower.
SECTION 6.04. INVESTMENTS, ACQUISITIONS, LOANS AND ADVANCES. The
Borrower will not, and will not cause or permit any of its Subsidiaries to,
purchase, hold or acquire any Capital Stock, evidences of indebtedness or
other securities of, make or permit to exist any loans or advances to, or
make or permit to exist any investment or any other interest in, or make any
acquisition of assets of any other Person as a going concern (each, an
"INVESTMENT"), except:
(a) Investments existing on the date hereof in the Capital Stock set
forth on SCHEDULE 6.04 hereto;
(b) Permitted Investments;
(c) Investments consisting of loans or advances to (i) a Wholly Owned
Subsidiary, provided that such loans or advances are not subordinated to any
other Indebtedness or other obligations of such Subsidiary and rank pari
passu with all senior, unsecured Indebtedness of such Subsidiary, or (ii)
employees of the Borrower or the Wholly Owned Subsidiaries, provided that
such loans or advances are made in the ordinary course of business and in
accordance with company policy, and provided further that the proceeds of
such loan or advance are used to finance employee related expenses (including
relocation expenses and travel and entertainment expenses);
(d) additional equity Investments in any Subsidiary of the Borrower
which is in existence on the date hereof provided that, immediately after
giving effect thereto, (i) the ratio of such Subsidiary's consolidated
liabilities (less borrowings by such Subsidiary allowed and outstanding under
this Agreement, deferred compensation, deferred income and allocation of
income to minority interests in earnings of consolidated subsidiaries) to
such Subsidiary's consolidated assets (determined in accordance with GAAP)
shall be less than 1.00 to 4.00 and (ii) the ratio of Consolidated
Liabilities (less borrowings allowed and outstanding under this Agreement,
deferred compensation, deferred income and allocation of income to minority
interests in earnings of consolidated subsidiaries) to Consolidated Assets
shall be less than 1.00 to 4.00;
69
(f) Investments consisting of non-cash consideration received in
connection with a sale or disposition of assets permitted under Section 6.05
hereof; and
(g) Investments (other than Investments described in clauses (a) through
(f) above and other than equity Investments in Subsidiaries of the Borrower) to
the extent the aggregate amount thereof made in any fiscal year does not exceed
10% of the Consolidated Assets as of the last day of the immediately preceding
fiscal year.
SECTION 6.05. MERGERS, CONSOLIDATIONS AND SALES OF ASSETS. The Borrower
will not, and will not cause or permit any of its Subsidiaries to:
(a) merge into or consolidate with any Person, or permit any other Person
to merge into or consolidate with it, provided that, if there exists no Default
or Event of Default at the time thereof or immediately after giving effect
thereto (i) any Wholly Owned Subsidiary may merge into the Borrower in a
transaction in which the Borrower is the surviving corporation, (ii) any Wholly
Owned Subsidiary may merge into or consolidate with any other Wholly Owned
Subsidiary in a transaction in which the surviving entity is a Wholly Owned
Subsidiary and no Person other than the Borrower or a Wholly Owned Subsidiary
receives any consideration; or
(b) sell, transfer, lease or otherwise dispose of (in one transaction or
in a series of transactions) all or any substantial part of its assets (whether
now owned or hereafter acquired) or any amount of Capital Stock of any
Subsidiary of the Borrower, except that (a) the Borrower and any Subsidiary of
the Borrower may sell or dispose of inventory and obsolete equipment in the
ordinary course of business, (b) if at the time thereof and immediately after
giving effect thereto no Event of Default or Default shall have occurred and be
continuing, the Borrower or any of its Subsidiaries may sell or dispose of
assets (not including Capital Stock owned by the Borrower or any Subsidiary of
the Borrower) for fair market value outside the ordinary course of business
(each an "ASSET DISPOSITION") so long as the cumulative aggregate noncash
consideration for all such Asset Dispositions after the date hereof shall not
exceed $10,000,000 in fair market value and provided that the aggregate Net Cash
Proceeds of all such Asset Dispositions are, to the extent they exceed
$25,000,000, applied in accordance with the terms of Section 2.12(c) hereof to
repay the Loans and reduce the Commitments, and (c) if at the time thereof and
immediately after giving effect thereto no Event of Default or Default shall
have occurred and be continuing, the Borrower may transfer control, through a
sale, corporate transaction or other disposition, of the hotel contracts and
related assets for its hotel customers outside of the United States.
SECTION 6.06. DIVIDENDS AND DISTRIBUTIONS; RESTRICTIONS ON ABILITY OF
SUBSIDIARIES TO PAY DIVIDENDS. The Borrower will not, and will not cause or
permit any of its Subsidiaries to, declare or pay, directly or indirectly, any
dividend or make any other distribution (by reduction of capital or otherwise),
whether in cash, property, securities or a
70
combination thereof, with respect to any shares of its Capital Stock or
directly or indirectly redeem, purchase, retire or otherwise acquire for
value (or permit any Subsidiary of the Borrower to purchase or acquire) any
shares of any class of its Capital Stock or set aside any amount for any such
purpose; provided, however, that (a) any Subsidiary of the Borrower may
declare and pay dividends or make other distributions to another Wholly Owned
Subsidiary or to the Borrower, and (b) so long as there exists no Default or
Event of Default both before and after giving effect to such dividend,
distribution or repurchase (i) the Borrower may make redemptions or
repurchases of its Capital Stock in connection with employee stock options
upon termination of such employment, for an aggregate amount of consideration
paid from and after the date hereof of up to $10,000,000, in connection with
any employee stock option or incentive plans, (ii) the Borrower may declare
and pay dividends or distributions to its shareholders, and redeem, purchase,
retire or otherwise acquire for value any shares of any class of its Capital
Stock, and (iii) any Subsidiary of the Borrower may declare and/or pay any
dividends in accordance with the terms of the Reorganization Plan.
SECTION 6.07. TRANSACTIONS WITH AFFILIATES. Except in accordance with the
terms of Section 6.06 hereof, the Borrower will not, and will not cause or
permit any of its Subsidiaries to, sell or transfer any property or assets to,
or purchase or acquire any property or assets from, or otherwise engage in any
other transactions with, or permit any Subsidiary of the Borrower to sell or
transfer any property or assets to, or purchase or acquire any property or
assets from, or otherwise engage in any other transactions with any of its
Affiliates, except that the Borrower or any Subsidiary of the Borrower may
engage in any of the foregoing transactions in the ordinary course of business
at prices and on terms and conditions not less favorable to the Borrower or such
Subsidiary than could be obtained on an arm's length basis from unrelated third
parties; PROVIDED, HOWEVER, that the foregoing shall not preclude the Borrower
nor any Subsidiary of the Borrower from performing and complying with its
obligations under (a) the Ascent Agreements in accordance with the terms thereof
on the date hereof or, so long as any such amendment (or extension to additional
services, in the case of the Services Agreement) does not materially adversely
affect the interests of the Administrative Agent, the Issuing Bank or the
Lenders, as the same may be hereafter amended (or extended to additional
services) or (b) the transactions necessary to consummate the Corporate
Restructuring. Notwithstanding anything in this Agreement or the other Loan
Papers to the contrary, it is understood by all parties hereto that all or any
of the Ascent Agreements may be terminated by the parties thereto at any time
during the term of this Agreement.
SECTION 6.08. LIMITATION ON RESTRICTIVE AGREEMENTS. The Borrower will
not, and will not cause or permit any of its Subsidiaries to, enter into any
indenture, agreement, instrument, financing document or other arrangement which,
directly or indirectly, prohibits or restrains, or has the effect of prohibiting
or restraining, or imposes materially adverse conditions upon: (a) the granting
of Liens, (b) the making or granting of Guarantees, (c) the payment of dividends
or distributions, (d) the purchase, redemption or retirement of any Capital
Stock, (e) the making of loans or advances or (f) transfers or sales of property
or
71
assets (including Capital Stock) by the Borrower or any of its Subsidiaries,
other than restrictions on the granting of Liens on, or the transfer of, assets
that are encumbered by Liens permitted under clauses (b), (h) and (i) of Section
6.02 hereof with respect to the property or assets covered by such Lien only.
SECTION 6.09. LEVERAGE RATIO. The Borrower will not permit the Leverage
Ratio as of the last day of any fiscal quarter ending during any period set
forth below to be more than the ratio set forth below for such period:
QUARTER ENDING RATIO RATIO
-------------------- -----
From the Closing Date to
through December 31, 1997 2.50 to 1.00
January 1, 1998 and thereafter 2.00 to 1.00
In the event that the Borrower shall complete, directly or through a
Subsidiary of the Borrower, a permitted acquisition, the Leverage Ratio shall be
determined thereafter, to the extent necessary, by computing such ratio on a pro
forma basis as if such acquisition had been completed on the first day of the
period of four consecutive fiscal quarters ending on the dates indicated above
occurring after the date of such acquisition.
SECTION 6.10. COVERAGE RATIO. The Borrower will not permit the Coverage
Ratio as of the last day of any fiscal quarter ending during any period set
forth below to be less than 4.00 to 1.00. In the event that the Borrower shall
complete, directly or through a Subsidiary of the Borrower, a permitted
acquisition, the Coverage Ratio shall be determined thereafter, to the extent
necessary, by computing such ratio on a pro forma basis as if such acquisition
had been completed on the first day of the period of four consecutive fiscal
quarters ending on the dates indicated above occurring after the date of such
acquisition.
SECTION 6.11. AMENDMENTS TO ORGANIZATIONAL DOCUMENTS. The Borrower will
not, and will not cause or permit any of its Subsidiaries to, enter into any
amendment of any term or provision, or accept any consent or waiver with respect
to any such provision, of its articles of incorporation, by-laws, or its
organizational documents, as applicable, in any manner that is material and
adverse to the Lenders.
ARTICLE VII
EVENTS OF DEFAULT
In case of the happening of any of the following events ("EVENTS OF
DEFAULT"):
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(a) (i) any representation or warranty made or deemed made by the
Borrower or any of its Subsidiaries (except representations and warranties
by or on behalf of Spectradyne and its Subsidiaries on the Closing Date)
in, or in connection with, this Agreement or in any other Loan Paper, or in
connection with any agreement related to the Corporate Restructuring or the
borrowings or issuances of Letters of Credit hereunder, or any
representation, warranty, statement or written information contained in any
report, certificate, financial statement or other instrument prepared by
the Borrower or any Subsidiary of the Borrower (except Spectradyne and its
Subsidiaries) and furnished by the Borrower or any Subsidiary of the
Borrower (except Spectradyne and its Subsidiaries) in connection with or
pursuant to this Agreement or any other Loan Paper, or in connection with
any of the transactions contemplated to occur as of the Closing Date, shall
prove to have been false or misleading in any material respect when so
made, deemed made or furnished; or
(ii) any representation or warranty made or deemed made by or on
behalf of Spectradyne or any of its Subsidiaries on the Closing Date: in or
in connection with, this Agreement or in any other Loan Paper, or in
connection with any agreement related to the Corporate Restructuring or the
borrowings or issuances of Letters of Credit hereunder, or any
representation, warranty, statement or written information contained in any
report, certificate, financial statement or other instrument prepared by
Spectradyne or any Subsidiary of Spectradyne and furnished by the Borrower
or any Subsidiary of the Borrower in connection with or pursuant to this
Agreement or any other Loan Paper, or in connection with any of the
transactions contemplated to occur as of the Closing Date, shall prove to
have been false or misleading in any material respect when so made, deemed
made or furnished, and which could reasonably be expected to have a
Material Adverse Effect;
(b) default shall be made in the payment of any principal of any Loan or
the reimbursement of principal with respect to any L/C Disbursement when and as
the same shall become due and payable, whether at the due date thereof or at a
date fixed for prepayment thereof or by acceleration thereof or otherwise;
(c) default shall be made in the payment of any interest on any Loan or
any Fee or L/C Disbursement or any other amount (other than an amount referred
to in (b) above) due under this Agreement or any other Loan Paper, when and as
the same shall become due and payable, and such default shall continue
unremedied for a period of five Business Days;
(d) default shall be made in the due observance or performance by the
Borrower or any Subsidiary of the Borrower of any covenant, condition or
agreement contained in Sections 5.01(a), 5.05 or 5.08 hereof or in Article VI
hereof;
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(e) default shall be made in the due observance or performance by the
Borrower or any Subsidiary of the Borrower of any covenant, condition or
agreement contained in this Agreement (other than those specified in (b), (c) or
(d) above) or in any other Loan Paper and such default shall continue unremedied
for a period of 15 days after notice thereof from the Administrative Agent or
any Lender to the Borrower;
(f) the Borrower or any Subsidiary of the Borrower shall (i) fail to pay
any principal or interest, regardless of amount, due in respect of any
Indebtedness in a principal amount in excess of $10,000,000, when and as the
same shall become due and payable, or (ii) fail to observe or perform any other
term, covenant, condition or agreement contained in any agreement or instrument
evidencing or governing any such Indebtedness if the effect of any failure
referred to in this clause (ii) is to cause, or to permit the holder or holders
of such indebtedness or a trustee on its or their behalf (with or without the
giving of notice, the lapse of time or both) to cause, such Indebtedness to
become due prior to its stated maturity;
(g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i) relief
in respect of the Borrower or any Subsidiary of the Borrower, or of a
substantial part of the property or assets of the Borrower or a Subsidiary of
the Borrower, under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other Federal, state or foreign bankruptcy,
insolvency, receivership or similar Law, (ii) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for the
Borrower or any Subsidiary of the Borrower or for a substantial part of the
property or assets of the Borrower or a Subsidiary of the Borrower or (iii) the
winding-up or liquidation of the Borrower or any Subsidiary of the Borrower; and
such proceeding or petition shall continue undismissed for 60 days or an order
or decree approving or ordering any of the foregoing shall be entered;
(h) the Borrower or any Subsidiary of the Borrower shall (i) voluntarily
commence any proceeding or file any petition seeking relief under Title 11 of
the United States Code, as now constituted or hereafter amended, or any other
Federal, state or foreign bankruptcy, insolvency, receivership or similar Law,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or the filing of any petition described in
(g) above, (iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Borrower or any
Subsidiary of the Borrower, or for a substantial part of the property or assets
of the Borrower or any Subsidiary of the Borrower, (iv) file an answer admitting
the material allegations of a petition filed against it in any such proceeding,
(v) make a general assignment for the benefit of creditors, (vi) become unable,
admit in writing its inability or fail generally to pay its debts as they become
due or (vii) take any action for the purpose of effecting any of the foregoing;
(i) one or more judgments for the payment of money in an aggregate amount
in excess of $10,000,000 shall be rendered against the Borrower, any Subsidiary
of the Borrower
74
or any combination thereof and the same shall remain undischarged for a
period of 30 consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to levy
upon assets or properties of the Borrower or any Subsidiary of the Borrower
to enforce any such judgment;
(j) an ERISA Event shall have occurred that, when taken together with all
other such ERISA Events, could reasonably be expected to result in liability of
the Borrower, any Subsidiary of the Borrower, or any combination thereof, in an
aggregate amount exceeding $10,000,000;
(k) there shall have occurred a Change in Control;
(l) Ascent shall: (i) fail to pay any principal or interest, regardless of
amount, due in respect of the Ascent Loan Facility, when and as the same shall
become due and payable taking into account any applicable period of grace
thereunder, or (ii) fail to observe or perform any other term, covenant,
condition or agreement contained in any agreement or instrument evidencing or
governing the Ascent Loan Facility if the effect of any failure referred to in
this clause (ii) is to cause, or to permit the holder or holders of such
indebtedness or a trustee on its or their behalf (with or without the giving of
notice, the lapse of time or both) to cause, such Indebtedness to become due
prior to its stated maturity;
(m) any of the following shall occur: (i) This Agreement, any guarantee
or promissory note executed in connection with this Agreement (collectively, the
"Material Agreements"), or any material provision of any thereof shall, for any
reason, not be valid and binding on the Obligor signatory thereto, or not be in
full force and effect, or shall be declared to be null and void; or (ii) the
validity or enforceability of any Material Agreement shall be contested by any
Obligor, the Borrower, any Subsidiary of the Borrower or any of their
Affiliates; or (iii) any Obligor shall deny in writing that it has any or
further liability or obligation under its respective Material Agreements; or
(iv) any default or breach under any provision of any Material Agreement shall
continue after the applicable grace period, if any, specified in such Material
Agreement;
(n) the occurrence of either of the following two events:
(i) confirmation of the Reorganization Plan is revoked; or (ii) the
Reorganization Plan is modified after confirmation in any manner not described
on SCHEDULE 7.0 hereto (A)without prior written notice to the Lenders or (B) in
any manner material and adverse to the interest of the Lenders (as determined by
the Required Lenders in their sole discretion) and without the prior written
consent of the Administrative Agent and the Required Lenders; or
(o) at any time that the debt limitation on the Borrower in the Corporate
Agreement with Ascent operates to limit the ability of the Borrower to make a
borrowing hereunder at a time when the Borrower needs such ability to meet
operating expenses or capital requirements
75
in each case approved by the Borrower's Board of Directors (as such approval
may be amended), provided that, no amendment to any such approval may be made
once operating expenses or capital requirements have been incurred or made,
or to avoid a Default or an Event of Default under this subsection (v);
then, and in every such event (other than an event with respect to the Borrower
described in paragraph (g) or (h) above), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Required Lenders shall, by notice to the Borrower, take either or both of
the following actions, at the same or different times: (i) terminate forthwith
the either or both of the Short Term Commitment or the Long Term Commitment,
(ii) declare the Loans then outstanding to be forthwith due and payable in whole
or in part, whereupon the principal of the Loans so declared to be due and
payable, together with accrued interest thereon and any unpaid accrued Fees and
all other liabilities of the Borrower accrued hereunder, shall become forthwith
due and payable, without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived by the Borrower, anything
contained herein to the contrary notwithstanding or (iii) require cash
collateral as contemplated by Section 2.21(j) hereof; and in any event with
respect to the Borrower described in paragraph (g) or (h) above, all the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest hereon and any unpaid accrued Fees
and all other liabilities of the Borrower accrued hereunder, shall automatically
become due and payable, without presentment, demand, protest or any other notice
of any kind, all of which are hereby expressly waived by the Borrower, anything
contained herein to the contrary notwithstanding. Notwithstanding anything in
this Agreement or in any Loan Paper to the contrary, to the extent any Default
or Event of Default under any of subsections (a), (d) or (e) above is due
exclusively to the actions, inactions or misrepresentations with respect to any
foreign Subsidiary of the Borrower, then such event shall not be a Default or
Event of Default unless such event could also reasonably be expected to cause a
Material Adverse Effect.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
In order to expedite the transactions contemplated by this Agreement and
the other Loan Papers, NationsBank is hereby appointed to act as Administrative
Agent on behalf of the Lenders and the Issuing Bank. Each of the Lenders and
each assignee of any such Lender, hereby irrevocably authorizes the
Administrative Agent to take such actions on behalf of such Lender or assignee
or the Issuing Bank and to exercise such powers as are specifically delegated to
the Administrative Agent by the terms and provisions hereof, together with such
actions and powers as are reasonably incidental thereto. The Administrative
Agent is hereby expressly authorized by the Lenders and the Issuing Bank,
without hereby limiting any implied
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authority, (a) to receive on behalf of the Lenders and the Issuing Bank all
payments of principal of and interest on the Loans, all payments in respect of
L/C Disbursements and all other amounts due to the Lenders hereunder, and
promptly to distribute to each Lender or the Issuing Bank its proper share of
each payment so received; (b) to give notice on behalf of each of the Lenders
to the Borrower of any Event of Default specified in this Agreement and the
other Loan Papers of which the Administrative Agent has actual knowledge
acquired in connection with its agency hereunder; and (c) to distribute to
each Lender copies of all notices, financial statements and other materials
delivered by the Borrower pursuant to this Agreement and the other Loan Papers
as received by the Administrative Agent.
Neither the Administrative Agent nor any of its directors, officers,
employees or agents shall be liable as such for any action taken or omitted by
any of them except for its or his own gross negligence or wilful misconduct, or
be responsible for any statement, warranty or representation herein or the
contents of any document delivered in connection herewith, or be required to
ascertain or to make any inquiry concerning the performance or observance by the
Borrower of any of the terms, conditions, covenants or agreements contained
herein. The Administrative Agent shall not be responsible to the Lenders for
the due execution, genuineness, validity, enforceability or effectiveness of
this Agreement, the other Loan Papers or any other instruments or agreements.
The Administrative Agent shall in all cases be fully protected in acting, or
refraining from acting, in accordance with written instructions signed by the
Required Lenders and, except as otherwise specifically provided herein, such
instructions and any action or inaction pursuant thereto shall be binding on all
the Lenders. The Administrative Agent shall, in the absence of knowledge to the
contrary, be entitled to rely on any instrument or document believed by it in
good faith to be genuine and correct and to have been signed or sent by the
proper Person or Persons. Neither the Administrative Agent nor any of its
directors, officers, employees or agents shall have any responsibility to the
Borrower on account of the failure of or delay in performance or breach by any
Lender or the Issuing Bank of any of its obligations hereunder or to any Lender
or the Issuing Bank on account of the failure of or delay in performance or
breach by any other Lender or the issuing Bank or the Borrower of any of their
respective obligations hereunder or in connection herewith. The Administrative
Agent may execute any and all duties hereunder by or through agents or employees
and shall be entitled to rely upon the advice of legal counsel selected by it
with respect to all matters arising hereunder and shall not be liable for any
action taken or suffered in good faith by it in accordance with the advice of
such counsel.
The Lenders hereby acknowledge that the Administrative Agent shall be under
no duty to take any discretionary action permitted to be taken by it pursuant to
the provisions of this Agreement or any other Loan Paper unless it shall be
requested in writing to do so by the Required Lenders.
Subject to the appointment and acceptance of a successor Administrative
Agent as provided below, the Administrative Agent may resign at any time by
notifying the Lenders and
77
the Borrower. Upon any such resignation, the Required Lenders shall have the
right to appoint a successor. If no successor shall have been so appointed by
the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent which shall be a bank having a combined capital
and surplus of at least $500,000,000 or an Affiliate of any such bank. Upon
the acceptance of any appointment as Administrative Agent hereunder by a
successor bank, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. After the Administrative Agent's resignation
hereunder, the provisions of this Article and Section 9.05 hereof 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 Administrative Agent.
With respect to the Loans made by it hereunder, the Administrative Agent in
its individual capacity and not as Administrative Agent shall have the same
rights and powers as any other Lender and may exercise the same as though it
were not the Administrative Agent, and the Administrative Agent and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Borrower or any Subsidiary of the Borrower or other
Affiliate thereof as if it were not Administrative Agent.
Each Lender agrees (a) to reimburse the Administrative Agent, on demand, in
the amount of its pro rata share (based on its Commitment hereunder) of any
expenses incurred for the benefit of the Lenders by the Administrative Agent,
including reasonable counsel fees and compensation of agents and employees paid
for services rendered on behalf of the Lenders, that shall not have been
reimbursed by the Borrower and (b) to indemnify and hold harmless the
Administrative Agent and any of its directors, officers, employees or agents, on
demand, in the amount of such pro rata share, from and against any and all
liabilities, taxes, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever that
may be Imposed on, incurred by or asserted against it in its capacity as the
Administrative Agent or any of them in any way relating to or arising out of
this Agreement or any other Loan Paper, or any action taken or omitted by it or
any of them under this Agreement or any other Loan Paper, to the extent the same
shall not have been reimbursed by the Borrower; provided that no Lender shall be
liable to the Administrative Agent or any such other indemnified Person for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or wilful misconduct of the Administrative Agent or any of
its directors, officers, employees or agents.
Each Lender acknowledges that it has, independently and without reliance
upon the Administrative Agent, or any other Lender and based on such documents
and information as it
78
has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement and the other Loan Papers. Each Lender also acknowledges
that it will, independently and without reliance upon the Administrative Agent
or any other Lender and based on such documents and information as it shall
from time to time deem appropriate, continue to make its own decisions in
taking or not taking action under or based upon this Agreement and the other
Loan Papers, or any related agreement or any document furnished hereunder or
thereunder.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. NOTICES. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopy, as follows:
(a) if to the Borrower, to it at:
On Command Corporation
0000 Xxxxxx Xxxxxx
Xxxxx Xxxxx, XX 00000
Attn: Xxxxx Xxxxx
Telephone: (000) 000-0000
Telecopy No.: (000) 000-0000
With a copy to:
Ascent Entertainment Group., Inc.
One Xxxxx Center, Suite 2800
0000 00xx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: X. X. Xxxxxx
Telephone: (000) 000-0000
Telecopy No.: (000) 000-0000
With a copy to:
Ascent Entertainment Group, Inc.
One Xxxxx Center, Suite 2800
0000 00xx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxx, Esq.
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Telephone: (000) 000-0000
Telecopy No.: (000) 000-0000
(b) if to the Administrative Agent, to it at:
NationsBank of Texas, National Association
NationsBank Plaza
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xx. Xxxxxxx X. Xxxxxx
Vice President
With a copy to:
Xxxxxxx, Xxxxxxx & Xxxxxxx, P.C.
3400 Renaissance Tower
0000 Xxx Xxxxxx
Xxxxxx, Xxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx Xxxxx Xxxxxxx
(c) if to a Lender, to it at its address (or telecopy number) set forth on
the signature pages hereto or in the Assignment and Acceptance pursuant to which
such Lender shall have become a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement and the other Loan Papers shall be deemed
to have been given on the date of receipt if delivered by hand or overnight
courier service or sent by telecopy or on the date five Business Days after
dispatch by certified or registered mail if mailed, in each case delivered, sent
or mailed (properly addressed) to such party as provided in this Section 9.01 or
in accordance with the latest unrevoked direction from such party given in
accordance with this Section 9.01.
SECTION 9.02. SURVIVAL OF AGREEMENT. All covenants, agreements,
representations and warranties made by the Borrower herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement and the other Loan Papers shall be considered to have
been relied upon by the Lenders and the Issuing Bank and shall survive the
making by the Lenders of the Loans and the issuance of Letters of Credit by the
Issuing Bank, regardless of any investigation made by the Lenders or the Issuing
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Bank or on their behalf, and shall continue in full force and effect as long as
the principal of or any accrued interest on any Loan or any Fee or any other
amount payable under this Agreement or any other Loan Paper is outstanding and
unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not been terminated. The provisions of Sections 2.13. 2.15, 2.19 and 9.05
hereof shall remain operative and in full force and effect regardless of the
expiration of the term of this Agreement, the consummation of the transactions
contemplated hereby, the repayment of any of the Loans, the expiration of the
Commitments, the expiration of any Letter of Credit, the invalidity or
unenforceability of any term or provision of this Agreement or any other Loan
Paper, or any investigation made by or on behalf of the Administrative Agent,
any Lender or the Issuing Bank.
SECTION 9.03. BINDING EFFECT. This Agreement shall become effective when
it shall have been executed by the Borrower and the Administrative Agent and
when the Administrative Agent shall have received counterparts hereof which,
when taken together, bear the signatures of each of the other parties hereto,
and thereafter shall be binding upon and inure to the benefit of the parties
hereto and their respective permitted successors and assigns.
SECTION 9.04. SUCCESSORS AND ASSIGNS.
(a) Whenever in this Agreement or any other Loan Paper any of the parties
hereto is referred to, such reference shall be deemed to include the permitted
successors and assigns of such party, and all covenants, promises and agreements
by or on behalf of the Borrower, the Administrative Agent, the Issuing Bank or
the Lenders that are contained in this Agreement and the other Loan Papers shall
bind and inure to the benefit of their respective successors and assigns.
(b) Each Lender may assign to one or more assignees all or a portion of
its interests, rights and obligations under this Agreement and the other Loan
Papers (including all or a portion of its Commitments and the Loans at the time
owing to it); PROVIDED, HOWEVER, that (i) except in the case of an assignment to
a Lender or an Affiliate of such Lender, (x) the Borrower and the Administrative
Agent (and, in the case of any assignment of a Commitment, the Issuing Bank)
must give their prior written consent to such assignment (which consent shall
not be unreasonably withheld) and (y) the amount of the Commitments of the
assigning Lender subject to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $10,000,000 (or, if less, the
entire remaining amount of such Lender's Commitments) and will not result in the
unassigned portion, if any, of the assigning Lender's Commitments being less
than $10,000,000 (provided, however, that the $10,000,000 amounts referred to in
this clause (i) shall be reduced ratably in accordance with any reductions in
the Total Commitments) (ii) the parties to each such assignment shall execute
and deliver to the Administrative Agent an Assignment and Acceptance, together
with a processing and recordation fee of $3,500 and (iii) the assignee, if it
shall not be a Lender, shall deliver to the Administrative Agent an
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Administrative Questionnaire. Upon acceptance and recording pursuant to
paragraph (e) of this Section 9.04, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be at least five
Business Days after the execution thereof, (A) the assignee thereunder shall be
a party hereto and, to the extent of the interest assigned by such Assignment
and Acceptance, have the rights and obligations of a Lender under this Agreement
and the other Loan Papers and (B) the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, be released
from its obligations under this Agreement and the other Loan Papers (and, in the
case of an Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement and the other
Loan Papers, such Lender shall cease to be a party hereto but shall continue to
be entitled to the benefits of Sections 2.13, 2.15, 2.19 and 9.05 hereof, as
well as to any Fees accrued for its account and not yet paid). The Borrower
shall, at its expense, issue to the assignor and assignee new promissory notes,
as applicable, in the respective amounts of each such Lender's Pro Rata
Percentage in the Loans, each in the form of the promissory notes delivered by
the Borrower on the Closing Date.
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and that
its Commitments, and the outstanding balances of its Revolving Loans and
Competitive Loans, in each case without giving effect to assignments thereof
which have nor become effective, are as set forth in such Assignment and
Acceptance; (ii) except as set forth in (i) above, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Paper, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
Loan Paper, or any other instrument or document furnished pursuant hereto, or
the financial condition of the Borrower or any Subsidiary of the Borrower or the
performance or observance by the Borrower or any Subsidiary of the Borrower of
any of its obligations under this Agreement or any other Loan Paper or any other
instrument or document furnished pursuant hereto; (iii) such assignee represents
and warrants that it is legally authorized to enter into such Assignment and
Acceptance; (iv) such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements referred
to in Section 3.05 or delivered pursuant to Section 5.04 and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (v) such
assignee will independently and without reliance upon the Administrative Agent,
such assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement and the
other Loan Papers; (vi) such assignee appoints and authorizes the Administrative
Agent to take such action as
82
agent on its behalf and to exercise such powers under this Agreement and the
other Loan Papers as are delegated to the Administrative Agent by the terms
hereof, together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their terms
all the obligations which by the terms of this Agreement and the other Loan
Papers are required to be performed by it as a Lender.
(d) The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at its offices in Dallas, Texas a copy of each
Assignment and Acceptance delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitments of, and principal
amount of the Loans owing to, each Lender pursuant to the terms hereof from time
to time (the "REGISTER"). The entries in the Register shall be conclusive and
the Borrower, the Administrative Agent, the Issuing Bank and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement and the other
Loan Papers, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower, the Issuing Bank and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, an Administrative Questionnaire
completed in respect of the assignee (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) above and, if required, the written consent of the Borrower, the Issuing
Bank and the Administrative Agent to such assignment, the Administrative Agent
shall (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Lenders and the Issuing Bank. No assignment shall be effective unless it has
been recorded in the Register as provided in this paragraph (e).
(f) Each Lender may without the consent of the Borrower, the Issuing Bank
or the Administrative Agent sell participations to one or more banks or other
entities in all or a portion of its rights and obligations under this Agreement
and the other Loan Papers (including all or a portion of its Commitments and the
Loans owing to it); PROVIDED, HOWEVER, that (i) such Lender's obligations under
this Agreement and the other Loan Papers shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) the participating banks or other entities
shall be entitled to the benefit of the cost protection provisions contained in
Sections 2.13, 2.15 and 2.19 hereof to the same extent as if they were Lenders
and (iv) the Borrower, the Administrative Agent, the Issuing Bank and the
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement and
the other Loan Papers, and such Lender shall retain the sole right to enforce
the obligations of the Borrower relating to the Loans or L/C Disbursements and
to approve any amendment, modification or waiver of any provision of this
Agreement and the other Loan Papers (other
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than amendments, modifications or waivers decreasing any fees payable
hereunder or the amount of principal of or the rate at which interest is
payable on the Loans, extending any scheduled principal payment date or date
fixed for the payment of interest on the Loans or increasing or extending the
Commitments).
(g) Any Lender or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 9.04. disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrower furnished to such Lender
by or on behalf of the Borrower; PROVIDED that, prior to any such disclosure
of information designated by the Borrower as confidential, each such assignee
or participant or proposed assignee or participant shall execute an agreement
whereby such assignee or participant shall agree (subject to customary
exceptions) to preserve the confidentiality of such confidential information
on terms no less restrictive than those applicable to the Lenders pursuant to
Section 9.16 hereof.
(h) Any Lender may at any time assign all or any portion of its rights
under this Agreement and the other Loan Papers to a Federal Reserve Bank to
secure extensions of credit by such Federal Reserve Bank to such Lender;
PROVIDED that no such assignment shall release a Lender from any of its
obligations hereunder or substitute any such Bank for such Lender as a party
hereto. In order to facilitate such an assignment to a Federal Reserve Bank,
the Borrower shall, at the request of the assigning Lender, duly execute and
deliver to the assigning Lender a promissory note or notes evidencing the
Loans made to the Borrower by the assigning Lender hereunder.
(i) The Borrower shall not assign or delegate any of its rights or
duties hereunder without the prior written consent of the Administrative
Agent, the Issuing Bank and each Lender, and any attempted assignment without
such consent shall be null and void.
(j) In the event that Standard & Poor's Ratings Group, a Division of
XxXxxx-Xxxx, Inc., Xxxxx'x Investors Service, Inc., and Xxxxxxxx'x BankWatch
(or Insurance Watch Ratings Service, in the case of Lenders that are
insurance companies (or Best's Insurance Reports, if such insurance company
is not rated by Insurance Watch Ratings Service)) shall, after the date that
any Lender becomes a Lender, downgrade the longterm certificate deposit
ratings of such Lender, and the resulting ratings shall be below BBB-, Baa3
and C (or BB, in the case of a Lender that is an insurance company (or B, in
the case of an insurance company not rated by Insurance Watch Ratings
Service)), then the Issuing Bank shall have the right, but not the
obligation, at its own expense, upon notice to such Lender and the
Administrative Agent, to replace (or to request the Borrower to use its
reasonable efforts to replace) such Lender with an assignee (in accordance
with and subject to the restrictions contained in paragraph (b) above), and
such Lender hereby agrees to transfer and assign without recourse (in
accordance with and subject to the restrictions contained in paragraph (b)
above) all its interests, rights and obligations in respect of its
Commitments to such assignee; PROVIDED,
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HOWEVER, that (i) no such assignment shall conflict with any Law, rule and
regulation or order of any Governmental Authority and (ii) the Issuing Bank
or such assignee, as the case may be, shall pay to such Lender in immediately
available funds on the date of such assignment the principal of and interest
accrued to the date of payment on the Loans made by such Lender hereunder and
all other amounts accrued for such Lender's account or owed to it hereunder.
SECTION 9.05. EXPENSES; INDEMNITY.
(a) The Borrower agrees to pay all reasonable out-of-pocket expenses
incurred by the Administrative Agent and the Issuing Bank in connection with
the syndication of the credit facilities provided for herein and the
preparation and administration of this Agreement and the other Loan Papers or
in connection with any amendments, modifications or waivers of the provisions
hereof (whether or not the transactions hereby or thereby contemplated shall
be consummated) or incurred by the Administrative Agent or any Lender in
connection with the enforcement or protection of its rights in connection
with this Agreement and the other Loan Papers, or in connection with the
Loans made or Letters of Credit issued hereunder, including the reasonable
fees, charges and disbursements of Xxxxxxx, Xxxxxxx & Xxxxxxx, P.C., counsel
for the Administrative Agent, and, in connection with any such enforcement or
protection, the fees, charges and disbursements of any other counsel for the
Administrative Agent or any Lender.
(b) The Borrower agrees to indemnify the Administrative Agent, each
Lender and the Issuing Bank, each Affiliate of any of the foregoing Persons
and each of their respective directors, officers, employees and agents (each
such Person being called an "INDEMNITEE") against, and to hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities
and related expenses, including reasonable counsel fees, charges and
disbursements, incurred by or asserted against any Indemnitee arising out of,
in any way connected with, or as a result of (i) the execution or delivery of
this Agreement and the other Loan Papers or any agreement or instrument
contemplated thereby, the performance by the parties thereto of their
respective obligations thereunder or the consummation of the Transactions and
the other transactions contemplated thereby, (ii) the use of the proceeds of
the Loans or issuance of Lenders of Credit, (iii) the Corporate Restructuring
or any transactions connected therewith or (iv) any claim, litigation,
investigation or proceeding relating to any of the foregoing, whether or not
any Indemnitee is a party thereto; provided that such indemnity shall not, as
to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or wilful misconduct of, or breach of contract by,
such Indemnitee.
(c) The provisions of this Section 9.05 shall remain operative and in
full force and effect regardless of the expiration of the term of this
Agreement, the other Loan Papers, the consummation of the transactions
contemplated hereby, the repayment of any of the Loans, the
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expiration of the Commitments, the expiration of any Letter of Credit, the
invalidity or unenforceability of any term or provision of this Agreement,
any other Loan Paper, or any investigation made by or on behalf of the
Administrative Agent, any Lender or the Issuing Bank. All amounts due under
this Section 9.05 shall be payable on written demand therefor.
SECTION 9.06. RIGHT OF SETOFF. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by Law, to set off and
apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Lender to or for the credit or the account of the Borrower against any of and
all the obligations of the Borrower now or hereafter existing under this
Agreement and the other Loan Papers held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement
and although such obligations may be unmatured. The rights of each Lender
under this Section 9.06 are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
SECTION 9.07. APPLICABLE LAW. THIS AGREEMENT AND THE OTHER LOAN PAPERS
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE
OF TEXAS (EXCEPT, IN THE CASE OF CERTAIN OF THE LOAN PAPERS, TO THE EXTENT
THE LAWS OF ANOTHER JURISDICTION GOVERN THE PERFECTION AND EFFECT OF
PERFECTION OR NON-PERFECTION OF CERTAIN LIENS). EACH LETTER OF CREDIT SHALL
BE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OR RULES
DESIGNATED IN SUCH LETTER OF CREDIT OR IF NO SUCH LAWS OR RULES ARE
DESIGNATED, THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS (1993
REVISION), INTERNATIONAL CHAMBER OF COMMERCE, PUBLICATION NO. 500 (THE
"UNIFORM CUSTOMS") AND, AS TO MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS,
THE LAWS OF THE STATE OF TEXAS.
SECTION 9.08. WAIVERS; AMENDMENT.
(a) No failure or delay of the Administrative Agent, any Lender or the
Issuing Bank in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right
or power, preclude any other or further exercise thereof or the exercise of
any other right or power. The rights and remedies of the Administrative
Agent, the Issuing Bank and the Lenders hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of this Agreement or any other Loan Paper, or consent
to any departure by the Borrower therefrom shall in any event be effective
unless the same shall be permitted by paragraph (b) below, and then such
waiver or consent shall be effective only in the specific instance and for
the purpose for which given. No notice or demand on the Borrower in any
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case shall entitle the Borrower to any other or further notice or demand in
similar or other circumstances.
(b) Neither this Agreement nor any provision hereof or in any other Loan
Paper may be waived, amended or modified except pursuant to an agreement or
agreements in writing entered into by the Borrower and the Required Lenders;
PROVIDED, HOWEVER, that no such agreement shall (i) decrease the principal
amount of, or extend the maturity of or any scheduled principal payment date
or date for the payment of any interest on any Loan or any date for
reimbursement of an L/C Disbursement, or waive or excuse any such payment or
any part thereof, or decrease the rate of interest on any Loan or L/C
Disbursement, without the prior written consent of each Lender affected
thereby (ii) change or extend the Commitments or decrease the Commitment Fees
or the Facility Fees of any Lender without the prior written consent of such
Lender, or (iii) amend or modify the provisions of Sections 2.16 or 9.04(i)
hereof, the provisions of this Section or the definition of the term
"Required Lenders", without the prior written consent of each Lender;
PROVIDED FURTHER that no such agreement shall amend, modify or otherwise
affect the rights or duties of the Administrative Agent or the Issuing Bank
hereunder without the prior written consent of the Administrative Agent or
the Issuing Bank.
SECTION 9.09. INTEREST RATE LIMITATION. It is not the intention of any
party to any Loan Papers to make an agreement violative of the Laws of any
applicable jurisdiction relating to usury. In no event shall the Borrower or
any other Person be obligated to pay any amount in excess of the Maximum
Amount. If Administrative Agent or any Lender ever receives, collects or
applies, as interest, any such excess, such amount which would be excessive
interest shall be deemed a partial repayment of principal and treated
hereunder as such; and if principal is paid in full, any remaining excess
shall be paid to the Borrower or the other Person entitled thereto. In
determining whether or not the interest paid or payable, under any specific
contingency, exceeds the Maximum Amount, each Obligor, Administrative Agent
and each Lender shall, to the maximum extent permitted under Applicable Law,
(a) characterize any nonprincipal payment as an expense, fee or premium
rather than as interest, (b) exclude voluntary prepayments and the effect
thereof, and (c) amortize, prorate, allocate and spread in equal parts, the
total amount of interest throughout the entire contemplated term of the
Obligation so that the interest rate is uniform throughout the entire term of
the Obligation; PROVIDED that if the Obligation is paid and performed in full
prior to the end of the full contemplated term thereof, and if the interest
received for the actual period of existence thereof exceeds the Maximum
Amount, Administrative Agent or Lenders, as appropriate, shall refund to the
Borrower the amount of such excess or credit the amount of such excess
against the total principal amount owing, and, in such event, neither
Administrative Agent nor any Lender shall be subject to any penalties
provided by any Laws for contracting for, charging or receiving interest in
excess of the Maximum Amount. This SECTION 9.09 shall control every other
provision of all agreements among the parties to the Loan Papers pertaining
to the transactions contemplated by or contained in the Loan Papers.
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SECTION 9.10. ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN
PAPERS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENT OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
SECTION 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN PAPER. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER
AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED
TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN PAPERS BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.
SECTION 9.12. SEVERABILITY. In the event any one or more of the
provisions contained in this Agreement or in any other Loan Paper should be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby (it being understood
that the invalidity of a particular provision in a particular jurisdiction
shall not in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid
provisions the economic effect of which comes as close as possible to that of
the invalid, illegal or unenforceable provisions.
SECTION 9.13. COUNTERPARTS. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts),
each of which shall constitute an original but all of which when taken
together shall constitute a single contract, and shall become effective as
provided in Section 9.03 hereof. Delivery of an executed signature page to
this Agreement by facsimile transmission shall be as effective as delivery of
a manually signed counterpart of this Agreement.
SECTION 9.14. HEADINGS. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of
this Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
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SECTION 9.15. JURISDICTION; CONSENT TO SERVICE OF PROCESS.
(a) The Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any Texas State
court or Federal court of the United States of America sitting in Dallas,
Texas and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or any other Loan Paper, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of
any such action or proceeding may be heard and determined in such Texas State
or, to the extent permitted by Law, in such Federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by Law. Nothing in this Agreement
or in any other Loan Paper shall affect any right that the Administrative
Agent, the Issuing Bank or any Lender may otherwise have to bring any action
or proceeding relating to this Agreement or any other Loan Paper against the
Borrower or its properties in the courts of any jurisdiction.
(b) The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Paper in any Dallas, Texas State or Federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by Law, the
defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(c) Each party to this Agreement and any other Loan Paper irrevocably
consents to service of process in the manner provided for notices in Section
9.01 hereof. Nothing in this Agreement or any other Loan Paper will affect
the right of any party to this Agreement or any other Loan Paper to serve
process in any other manner permitted by Law.
SECTION 9.16. CONFIDENTIALITY. The Administrative Agent, the Issuing
Bank and each of the Lenders agrees to keep confidential (and to use its best
efforts to cause its respective agents and representatives to keep
confidential) the Information (as defined below) and all copies thereof,
extracts therefrom and analyses or other materials based thereon, except that
the Administrative Agent, the Issuing Bank or any Lender shall be permitted
to disclose Information (a) to such of its respective officers, directors,
employees, agents, affiliates and representatives as need to know such
Information, (b) to the extent requested by any regulatory authority, (c) to
the extent otherwise required by Applicable Laws and regulations or by any
subpoena or similar legal process, (d) in connection with any suit, action or
proceeding relating to the enforcement of its rights hereunder or (e) to the
extent such Information (i) becomes publicly available other than as a result
of a breach of this Section 9.16 or (ii) becomes available to the
Administrative Agent the Issuing Bank or any Lender on a nonconfidential
basis from a source other than the Borrower. For the purposes of this
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Section, "INFORMATION" shall mean all financial statements, certificates,
reports, agreements and information (including all analyses, compilations and
studies prepared by the Administrative Agent, the Issuing Bank or any Lender
based on any of the foregoing) that are received from the Borrower and
related to the Borrower, any shareholder of the Borrower or any employee,
customer or supplier of the Borrower, other than any of the foregoing that
were available to the Administrative Agent, the Issuing Bank or any Lender on
a nonconfidential basis prior to its disclosure thereto by the Borrower, and
which are in the case of Information provided after the date hereof, clearly
identified at the time of delivery as confidential. The provisions of this
Section 9.16 shall remain operative and in full force and effect regardless
of the expiration and term of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
THE BORROWER: ON COMMAND CORPORATION
/s/ XXXXX A. C. STEEL
-----------------------------------------
By: Xxxxx A. C. Steel
-------------------------------------
Its: Executive Vice President, Chief
Operating Officer and Chief
Financial Officer
------------------------------------
THE ADMINISTRATIVE AGENT:
NATIONSBANK OF TEXAS, NATIONAL ASSOCIATION,
as Administrative Agent
/s/ XXXXXXX X. XXXXXX
-----------------------------------------
By: Xxxxxxx X. Xxxxxx
Its: Vice President
LENDERS:
NATIONSBANK OF TEXAS, NATIONAL ASSOCIATION,
individually as a Lender
PRO RATA PERCENTAGE:
100%
Address:
000 Xxxx Xxxxxx
00xx Xxxxx
Xxxxxx, Xxxxx 00000 /s/ XXXXXXX X. XXXXXX
--------------------------------------
By: Xxxxxxx X. Xxxxxx
Attn.: Xxxxxxx X. Xxxxxx Its: Vice President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
91
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