Exhibit 10.1
LOAN AGREEMENT
BETWEEN
XXXXX CABLE COMMUNICATIONS, INC. ("BORROWER")
and
FINOVA CAPITAL CORPORATION ("LENDER")
Dated December 18, 1996
TABLE OF CONTENTS
PRELIMINARY STATEMENT........................................................ 1
ARTICLE I.................................................................... 1
DEFINITIONS AND DETERMINATIONS............................................... 1
1.1 Definitions...................................................... 1
1.2 Time Periods..................................................... 17
1.3 Accounting Terms and Determinations.............................. 17
1.4 References....................................................... 17
1.5 Lender's or Agent's Discretion................................... 17
1.6 Borrower's Knowledge............................................. 18
ARTICLE II................................................................... 18
LOANS AND TERMS OF PAYMENT................................................... 18
2.1 Term Loan........................................................ 18
2.1.1 Amount and Disbursement.................................... 18
2.1.2 Use of Proceeds............................................ 18
2.1.3 Term Note.................................................. 18
2.1.4 Reborrowing................................................ 18
2.2 Revolving Loan................................................... 18
2.2.1 Amount and Disbursement.................................... 18
2.2.2 Reductions in Revolving Loan Commitment; Termination....... 18
2.2.3 Conditions of Disbursements................................ 18
2.2.4 Use of Proceeds............................................ 19
2.2.5 Revolving Note............................................. 19
2.2.6 Reborrowing................................................ 19
2.3 Interest......................................................... 19
2.3.1 Interest Rate.............................................. 19
2.3.2 Default Rate............................................... 19
2.3.3 Interest Computation....................................... 19
2.3.4 Maximum Interest........................................... 19
2.4 Principal and Interest Payments.................................. 20
2.4.1 Interest................................................... 21
2.4.2 Principal.................................................. 21
2.5 Late Charges..................................................... 21
2.6 Loan Fee......................................................... 21
2.7 Prepayments...................................................... 21
2.7.1 Voluntary Prepayments of the Term Loan..................... 22
2.7.2 Mandatory Prepayments of the Loans........................ 22
2.7.3 Prepayment Premium........................................ 23
2.7.4 No Prepayment Premium..................................... 23
2.8 Payments after Event of Default.................................. 24
2.9 Method of Payment; Good Funds.................................... 24
ARTICLE III.................................................................. 24
SECURITY..................................................................... 24
ARTICLE IV................................................................... 24
CONDITIONS OF CLOSING........................................................ 24
4.1 Representations and Warranties................................... 24
4.2 Confirmation..................................................... 24
4.3 Minimum Operating Cash Flow of the System........................ 24
4.4 Appraisal........................................................ 24
4.5 Cash Equivalents................................................. 24
4.6 Subscribers...................................................... 25
4.7 Delivery of Documents............................................ 25
4.8 Performance; No Default.......................................... 26
4.9 Opinions of Counsel; Direction for Delivery...................... 26
4.10 Approval of Instruments and Security Interests................... 26
4.11 Security Interests............................................... 26
4.12 Environmental Audit.............................................. 26
4.13 Franchises and Licenses.......................................... 26
4.14 Financial Statements, Reports and Projections.................... 27
4.15 Material Adverse Change.......................................... 27
4.16 Use of Assets.................................................... 27
4.17 Broker Fees...................................................... 27
4.18 Insurance........................................................ 27
4.19 Indebtedness to be Refinanced.................................... 27
4.20 Payment of Fees and Expenses..................................... 27
ARTICLE V.................................................................... 28
REPRESENTATIONS AND WARRANTIES............................................... 28
5.1 Existence and Power.............................................. 28
5.2 Authority........................................................ 28
5.3 Borrower Capital Stock, Subsidiaries and Related Matters......... 28
5.3.1 Borrower Capital Stock..................................... 28
5.3.2 Subsidiaries............................................... 28
5.3.3 Restrictions............................................... 28
5.4 Binding Agreements............................................... 29
5.5 Business and Property of Borrower................................ 29
5.5.1 Business and Property..................................... 29
5.5.2 Licenses and Franchises................................... 29
5.5.3 Operating Agreements...................................... 29
5.5.4 Facility Sites............................................ 29
5.5.5 Leases.................................................... 29
ii
5.5.6 Real Estate............................................... 30
5.5.7 Operation and Maintenance of Equipment.................... 30
5.5.8 Ordinances................................................ 30
5.5.9 Indebtedness to be Refinanced............................. 30
5.5.10 Subordinated Indebtedness................................ 30
5.6 Title to Property; Liens......................................... 30
5.7 Projections and Financial Statements............................. 30
5.7.1 Financial Statements...................................... 30
5.7.2 Projections............................................... 31
5.8 Litigation....................................................... 31
5.9 Defaults in Other Agreements; Consents; Conflicting Agreements... 31
5.10 Taxes............................................................ 31
5.11 Compliance with Applicable Laws.................................. 32
5.12 Patents, Trademarks, Franchises, Agreements...................... 32
5.13 FCC and Copyright Matters........................................ 32
5.14 Environmental Matters............................................ 32
5.15 Application of Certain Laws and Regulations...................... 33
5.15.1 Investment Company Act................................... 33
5.15.2 Holding Company Act...................................... 33
5.15.3 Foreign or Enemy Status.................................. 33
5.15.4 Regulations as to Borrowing.............................. 33
5.16 Margin Regulations............................................... 33
5.17 Other Indebtedness............................................... 33
5.18 No Misrepresentation............................................. 33
5.19 Employee Benefit Plans........................................... 34
5.19.1 No Other Plans........................................... 34
5.19.2 ERISA and Code Compliance and Liability.................. 34
5.19.3 Funding.................................................. 34
5.19.4 Prohibited Transactions and Payments..................... 34
5.19.5 No Termination Event..................................... 34
5.19.6 ERISA Litigation......................................... 34
5.20 Employee Matters................................................. 35
5.20.1 Collective Bargaining Agreements; Grievances............. 35
5.20.2 Claims Relating to Employment............................ 35
5.21 Burdensome Obligations........................................... 35
5.22 Dwelling Units; Passes; Channel Capacity......................... 35
5.23 Subscribers...................................................... 35
ARTICLE VI................................................................... 35
AFFIRMATIVE COVENANTS........................................................ 35
6.1 Legal Existence; Good Standing................................... 36
6.2 Inspection....................................................... 36
6.3 Financial Statements and Other Information....................... 36
6.3.1 Monthly Statements........................................ 36
6.3.2 Quarterly Certifications.................................. 36
6.3.3 Annual Statements......................................... 36
iii
6.3.4 Compliance Certificates.................................. 37
6.3.5 Accountants' Certificate................................. 37
6.3.6 Audit Reports............................................ 37
6.3.7 Business Plans........................................... 37
6.3.8 ......................................................... 37
6.3.9 Notice of Suits, Adverse Events.......................... 38
6.3.10 Reports to Shareholders, Creditors and
Governmental Bodies ..................................... 38
6.3.11 ERISA Notices and Requests............................... 38
6.3.12 Other Information........................................ 39
6.4 Reports to Governmental Bodies and Other Persons................. 40
6.5 Maintenance of Licenses, Franchises and Other Agreements......... 40
6.6 Insurance........................................................ 40
6.6.1 Maintenance of Insurance.................................. 40
6.6.2 Claims and Proceeds....................................... 40
6.7 Future Leases.................................................... 41
6.8 Future Acquisitions of Real Property............................. 41
6.9 Environmental Matters............................................ 41
6.9.1 Compliance................................................ 41
6.9.2 Certification............................................. 42
6.9.3 Environmental Audit....................................... 42
6.10 Compliance with Laws............................................. 42
6.11 Taxes and Claims................................................. 42
6.12 Maintenance of Properties........................................ 42
6.13 Governmental Approvals........................................... 42
6.14 Future Franchise Agreements...................................... 42
ARTICLE VII.................................................................. 43
NEGATIVE COVENANTS........................................................... 43
7.1 Borrowing........................................................ 43
7.2 Liens............................................................ 43
7.3 Merger and Acquisition........................................... 43
7.4 Contingent Liabilities........................................... 43
7.5 Distributions.................................................... 43
7.6 Capital Expenditures............................................. 43
7.7 Payments of Indebtedness for Borrowed Money...................... 44
7.8 Obligations as Lessee Under Operating Leases..................... 44
7.9 Investments, Loans............................................... 44
7.10 Fundamental Business Changes..................................... 44
7.11 Facility Sites................................................... 44
7.12 Sale or Transfer of Assets....................................... 45
7.13 Amendment of Documents........................................... 45
7.14 Acquisition of Additional Properties............................. 45
7.15 Issuance of Equity Interests..................................... 45
7.16 Transactions with Affiliates..................................... 45
7.17 Compliance with ERISA............................................ 45
7.18................................................................... 46
iv
7.19 Fixed Charge Coverage............................................ 47
7.20 Debt Service Coverage............................................ 47
ARTICLE VIII................................................................. 48
DEFAULT AND REMEDIES......................................................... 48
8.1 Events of Default................................................ 48
8.1.1 Default in Payment........................................ 48
8.1.2 Breach of Covenants....................................... 48
8.1.3 Breach of Warranty........................................ 49
8.1.4 Default Under Other Indebtedness for Borrowed Money ...... 49
8.1.5 Bankruptcy................................................ 49
8.1.6 Judgments................................................. 49
8.1.7 Impairment of Licenses; Other Agreements.................. 49
8.1.8 Collateral................................................ 50
8.1.9 Interruption of Operations................................ 50
8.1.10 Plans.................................................... 50
8.1.11 Change in Management..................................... 50
8.2 Acceleration of Borrower's Obligations........................... 50
8.3 Remedies on Default.............................................. 51
8.3.1 Enforcement of Security Interests......................... 51
8.3.2 Other Remedies............................................ 51
8.4 Application of Funds............................................. 51
8.4.1 Expenses.................................................. 51
8.4.2 Borrower's Obligations.................................... 51
8.4.3 Surplus................................................... 51
8.5 Performance of Borrower's Obligations............................ 51
ARTICLE IX................................................................... 52
ADDITIONAL LENDERS AND PARTICIPANTS.......................................... 52
9.1 Assignment to Other Lenders...................................... 52
9.1.1 Assignment................................................ 52
9.1.2 Effect of Loan Assignment................................. 52
9.1.3 Substitution of Notes..................................... 52
9.1.4 Inspections............................................... 52
9.2 Participations................................................... 53
9.3 Appointment and Function of Agent................................ 53
9.4 Set Off and Sharing of Payments.................................. 53
9.5 Lenders' Decisions............................................... 53
ARTICLE X.................................................................... 54
CLOSING...................................................................... 54
ARTICLE XI................................................................... 54
v
EXPENSES AND INDEMNITY....................................................... 54
11.1 Attorneys' Fees and Other Fees and Expenses...................... 54
11.1.1 Fees and Expenses for Preparation of Loan Instruments.... 54
11.1.2 Fees and Expenses in Enforcement of Rights or
Defense of Loan Instruments.............................. 54
11.2 Indemnity........................................................ 54
11.2.1 Brokerage Fees........................................... 55
11.2.2 General.................................................. 55
11.2.3 Operation of Collateral; Joint Venturers................. 55
11.2.4 Environmental Indemnity.................................. 55
ARTICLE XII.................................................................. 55
MISCELLANEOUS................................................................ 55
12.1 Notices.......................................................... 55
12.2 Survival of Loan Agreement; Indemnities.......................... 57
12.3 Further Assurance................................................ 57
12.4 Taxes and Fees................................................... 57
12.5 Severability..................................................... 57
12.6 Waiver........................................................... 57
12.7 Modification of Loan Instruments................................. 58
12.8 Captions......................................................... 58
12.9 Successors and Assigns........................................... 58
12.10 Remedies Cumulative............................................. 58
12.11 Entire Agreement; Conflict...................................... 58
12.12 APPLICABLE LAW.................................................. 58
12.13 JURISDICTION AND VENUE.......................................... 58
12.14 WAIVER OF RIGHT TO JURY TRIAL................................... 59
12.15 TIME OF ESSENCE................................................. 59
12.16 Estoppel Certificate............................................ 59
12.17 Consequential Damages........................................... 60
12.18 Counterparts.................................................... 60
12.19 No Fiduciary Relationship....................................... 60
12.20 Notice of Breach by Agent and Lenders........................... 60
12.21 Governmental Approval........................................... 60
vi
LOAN AGREEMENT
This LOAN AGREEMENT, dated as of December 18, 1996, is between XXXXX CABLE
COMMUNICATIONS, INC., a Texas corporation ("Borrower"), and FINOVA CAPITAL
CORPORATION, a Delaware corporation ("FINOVA"), in its individual capacity and
as agent for all Lenders (this and all other capitalized terms used herein are
defined in Section 1.1 below).
PRELIMINARY STATEMENT:
A. Borrower is a reorganized debtor under the Bankruptcy Code pursuant to
the Plan of Reorganization confirmed by the Bankruptcy Court on December 6,
1996.
B. Borrower desires to borrow funds from FINOVA, which funds shall be used
(i) to make the payments to Borrower's creditors contemplated by the Plan of
Reorganization, (ii) to make capital expenditures in connection with the
expansion and improvement of the System, (iii) to pay transaction costs and (iv)
for working capital.
C. FINOVA has agreed to make the Loans upon the terms and subject to the
conditions set forth herein.
NOW, THEREFORE, it is agreed as follows:
ARTICLE I
DEFINITIONS AND DETERMINATIONS
1.1 Definitions. As used in this Loan Agreement and in the other Loan
Instruments, unless otherwise expressly indicated herein or therein, the
following terms shall have the following meanings (such meanings to be
applicable equally to both the singular and plural forms of the terms defined):
Accountants: Deloitte & Touche or any other independent certified
public accounting firm selected by Borrower and reasonably satisfactory to
Lenders.
Accounting Changes: as defined in Section 1.3.
Accounts Decrease: for any period, the excess of the Eligible
Accounts at the beginning of such period over the Eligible Accounts at the
end of such period.
Accounts Increase: for any period, the excess of Eligible Accounts
at the end of such period over the Eligible Accounts at the beginning of
such period.
ADA: the Americans with Disabilities Act of 1990, as amended, any
successor statute thereto, and the rules and regulations issued
thereunder, as in effect from time to time.
Additional Sums: as defined in subsection 2.3.4.
Affiliate: any Person that directly or indirectly, through one or
more intermediaries, controls or is controlled by or is under common
control with another Person. The term "control" means possession, direct
or indirect, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of
voting securities or equity interests, by contract or otherwise. For the
purposes hereof (i) any Person which owns or controls, directly or
indirectly, 25% or more of the securities or equity interests, as
applicable, whether voting or non-voting, of any other Person shall be
deemed to "control" such Person and (ii) Xxxxx Management and Xxxxx X.
Xxxxxxxxx shall be deemed to be an Affiliate of Borrower.
Agent: FINOVA, as agent for all Lenders.
Amended and Restated Articles of Incorporation: the Amended and
Restated Articles of Incorporation of Borrower filed with the Secretary of
State of Texas on December 12, 1996.
Applicable Margin: shall have the meaning assigned to that term in
subsection 2.3.1.
Assignee: any Person to whom a Loan Assignment is made in compliance
with the provisions of subsection 9.1.1.
Assignment of Leases: a collateral assignment of leases executed by
Borrower in favor of Agent.
Assignment of Management Agreement: a collateral assignment of the
Management Agreement executed by Borrower in favor of Agent and
acknowledged by Xxxxx Management.
Bankruptcy Code: the United States Bankruptcy Code, any successor
statute thereto, and the rules, regulations and legally binding policies
promulgated thereunder, as amended and in effect from time to time.
Bankruptcy Court: the United States Bankruptcy Court for the
District of Delaware.
Base Rate: the per annum rate of interest announced or published
publicly from time to time by Citibank, N.A. in New York, New York as its
corporate base (or equivalent) rate of interest, which rate shall change
automatically without notice and simultaneously with each change in such
corporate base rate. The Base Rate is
2
a reference rate and does not necessarily represent the lowest or best
rate actually charged to any customer by Citibank, N.A. in New York, New
York.
Basic Financial Statements: as defined in subsection 6.3.3.
Borrower: has the meaning assigned to that term in the Preamble to
this Loan Agreement.
Borrower Capital Stock: all of the issued and outstanding capital
stock of Borrower and all warrants, options and other rights to purchase
capital stock of Borrower.
Borrower's Obligations: (i) any and all Indebtedness due or to
become due, now existing or hereafter arising, of Borrower to Lenders
and/or Agent, including, without limitation, the Loan Fee, pursuant to the
terms of this Loan Agreement or any other Loan Instrument and (ii) the
performance of the covenants of Borrower contained in the Loan
Instruments.
Business Day: any day other than a Saturday, Sunday or other day on
which banks in Phoenix, Arizona are required to close.
Cable Act: the Cable Communication Policy Act of 1984, the Cable
Television Consumer Protection and Competition Act of 1992, the
Telecommunications Act of 1996, any successor statute thereto, and the
rules, regulations and legally binding policies of the FCC promulgated
thereunder, as amended and in effect from time to time.
Cable Business: the business and operations involving the provision
of broadband telecommunications networks through a cable system facility,
consisting of a set of closed transmission paths and associated signal
generation, reception and control equipment, to multiple subscribers
within a community pursuant to a Franchise issued by a Franchisor, unless
such Franchise is not legally required and other telecommunications
businesses and activities generally engaged in by operators of cable
television systems.
Cable Statutes and Regulations: the Communications Act, the Cable
Act and the Ordinances.
Capital Expenditures: payments that are made or liabilities that are
incurred by Borrower for the lease, purchase, improvement, construction or
use of any Property, the value or cost of which under GAAP is required to
be capitalized and appears on Borrower's balance sheet in the category of
property, plant or equipment, without regard to the manner in which such
payments or the instruments pursuant to which they are made are
characterized by Borrower or any other Person.
Capitalized Lease: any lease of Property, the obligations for the
rental of which are required to be capitalized in accordance with GAAP.
3
Cash Equivalents: the aggregate of Borrower's (i) cash on hand or in
any bank or trust company, and checks on hand and in transit, (ii) monies
on deposit in any money market account, and (iii) treasury bills,
certificates of deposit, commercial paper and readily marketable
securities at current market value having, in each instance, a maturity of
not more than 180 days.
Chief Financial Officer: the chief financial officer of Borrower,
who shall be a duly elected officer of Borrower.
Class A Stock: the Class A Common Stock of Borrower.
Class C Stock: the Class C Common Stock of Borrower.
Closing: the disbursement of the Term Loan.
Closing Certificate: a Closing Certificate executed by Borrower to
Agent.
Closing Date: the date of the Closing.
Code: the Internal Revenue Code of 1986, any successor statute
thereto, and the rules, regulations and legally binding policies
promulgated thereunder, as amended and in effect from time to time.
Collateral: (i) all existing and after-acquired Property of
Borrower, including without limitation all of Borrower's existing and
after-acquired accounts, goods, equipment, inventory, fixtures, general
intangibles, instruments, chattel paper, documents, money, deposit
accounts and investment property, (ii) the Borrower Capital Stock and
(iii) all proceeds of the foregoing.
Communications Act: the Communications Act of 1934, any successor
statute thereto, and the rules, regulations and legally binding policies
of the FCC promulgated thereunder, as amended and in effect from time to
time.
Compliance Certificate: a Compliance Certificate executed by
Borrower in the form of Exhibit 1.1A attached hereto.
Confirmation Order: a final order of the Bankruptcy Court not
subject to review or appeal confirming the Plan of Reorganization.
Debt/Cash Flow Ratio: the ratio of the Principal Balance as of the
last day of any quarter to Operating Cash Flow for the four quarter period
ending on such day.
Debt Service: during any period, all cash payments of principal,
interest, premium, loan fees and other charges with respect to
Indebtedness for Borrowed Money (other than principal payments on the
Revolving Loan, the Loan Fee, fees paid to Xxxxxxxxx, Lufkin & Xxxxxxxx
and the restructuring fee paid to the holders of certain debentures issued
by Borrower), which payments are required or permitted to
4
be made pursuant to this Loan Agreement and are due and payable during
such period.
Default Rate: a per annum rate equal to the applicable Base Rate
plus the Applicable Margin plus 2.0% per annum.
Default Rate Period: a period of time commencing on the date that an
Event of Default has occurred and ending on the date that such Event of
Default is cured or waived.
Eligible Accounts: at any given time, the aggregate of the face
amount of the accounts receivable of Borrower not over 60 days past due,
net of applicable reserves with respect to such accounts.
Employee Benefit Plan: any employee benefit plan within the meaning
of Section 3(3) of ERISA which (i) is maintained for employees of Borrower
or any ERISA Affiliate or (ii) has at any time within the preceding six
years been maintained for the employees of Borrower or any ERISA
Affiliate.
Environmental Audit: (i) a Phase I audit report with respect to a
parcel of real estate and such other studies and reports as Agent deems
necessary after review of the results of such Phase I audit report,
including, if required by Agent, soil and ground water tests, each such
report and study to be in form and content and issued by Persons
acceptable to Agent and (ii) a letter from each Person issuing each such
report or study entitling Lenders to rely thereon.
Environmental Certificate: an Environmental Certificate executed by
Borrower to Agent.
Environmental Compliance Certificate: an Environmental Compliance
Certificate in the form of Exhibit 1.1B.
Environmental Laws: any and all federal, state and local laws that
relate to or impose liability or standards of conduct concerning public or
occupational health and safety or protection of the environment, as now or
hereafter in effect and as have been or hereafter may be amended or
reauthorized, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C ss.9601
et seq.), the Hazardous Materials Transportation Act (42 U.S.C. ss.1802 et
seq.), the Resource Conservation and Recovery Act (42 U.S.C. ss.6901 et
seq.), the Federal Water Pollution Control Act (33 U.S.C. ss.1251 et
seq.), the Toxic Substances Control Act (15 U.S.C. ss.2601 et seq.), the
Clean Air Act (42 U.S.C. ss.7901 et seq.), the National Environmental
Policy Act (42 U.S.C. ss.4231, et seq.), the Refuse Act (33 U.S.C. ss.407,
et seq.), the Safe Drinking Water Act (42 U.S.C. ss.300(f) et seq.), the
Occupational Safety and Health Act (29 U.S.C. ss.651 et seq.), and all
rules, regulations, codes, ordinances and guidance documents promulgated
or published thereunder, and the provisions of any licenses, permits,
orders and decrees issued pursuant to any of the foregoing.
5
ERISA: the Employee Retirement Income Security Act of 1974, and any
successor statute thereto, and the rules, regulations and legally binding
policies promulgated thereunder, as amended and in effect from time to
time.
ERISA Affiliate: any Person who is a member of a group which is
under common control with Borrower, who together with Borrower is treated
as a single employer within the meaning of Section 414(b), (c) and (m) of
the Code.
Event of Default: any of the Events of Default set forth in Section
8.1.
Excess Cash Flow: for any period, (i) the Operating Cash Flow for
such period, (ii) plus the Accounts Decrease, if any, for such period and
(iii) minus (without duplication) the sum of the following for such
period: (A) Debt Service actually paid during such period, (B) amounts
actually paid by Borrower during such period with respect to Capital
Expenditures permitted pursuant to Section 7.6, whether or not such
Capital Expenditures were deemed to be made during such period and (C) the
Accounts Increase, if any, for such period.
Excess Interest: as defined in subsection 2.3.4.
FCC: the Federal Communications Commission or any Governmental Body
succeeding to its functions.
FCC License: an authorization, or renewal thereof, whether in the
form of a license, permit, certificate or otherwise, issued by the FCC
authorizing the construction and/or operation of facilities using the
radio, television, microwave or other frequencies under the licensing
control of the FCC pursuant to the Communications Act or Cable Act,
including but not limited to cable television relay service stations,
earth stations or business radio facilities.
FINOVA: has the meaning assigned to that term in the Preamble to
this Loan Agreement.
Franchise: an authorization, or renewal thereof, whether in the form
of a franchise, permit, license, resolution, contract, certificate,
agreement or otherwise, issued by a Franchisor authorizing the
construction and/or operation of a cable system.
Franchise Agreement: any agreement pursuant to which a Franchise is
granted to Borrower.
Franchisor: any Governmental Body empowered by federal, state or
local law to grant a Franchise.
Franchisor Consents: the consent of or notice to each applicable
Franchisor to the grant by Borrower to Agent of a Lien on the interest of
Borrower in all
6
Franchise Agreements between such Franchisor and Borrower required by the
terms of such Franchise Agreement or applicable law.
Funding Date: the date of disbursement of an advance of the
Revolving Loan.
GAAP: generally accepted accounting principles as in effect from
time to time, which shall include but shall not be limited to the official
interpretations thereof by the Financial Accounting Standards Board or any
successor thereto.
Good Funds: United States Dollars available in Federal funds to (i)
FINOVA at or before 2:00 p.m., Phoenix time, on a Business Day and (ii)
any other Lender at the place and at or before the time designated in the
written direction delivered by such Lender to Borrower pursuant to clause
(ii) of Section 2.9.
Governmental Body: any foreign, federal, state, municipal or other
government, or any department, commission, board, bureau, agency, public
authority or instrumentality thereof or any court or arbitrator.
Hazardous Materials: any hazardous, toxic, dangerous or other waste,
substance or material defined as such in, regulated by or for purposes of
any Environmental Law.
Incipient Default: any event or condition which, with the giving of
notice or the lapse of time, or both, would become an Event of Default.
Indebtedness: all liabilities, obligations and reserves, contingent
or otherwise, which, in accordance with GAAP, would be reflected as a
liability on a balance sheet or would be required to be disclosed in a
financial statement, including, without duplication: (i) Indebtedness for
Borrowed Money, (ii) obligations secured by any Lien upon Property, (iii)
guaranties, letters of credit and other contingent obligations and (iv)
liabilities in respect of unfunded vested benefits under any Pension Plan
or in respect of withdrawal liabilities incurred under ERISA by Borrower
or any ERISA Affiliate to any Multiemployer Plan.
Indebtedness for Borrowed Money: without duplication, all
Indebtedness (i) in respect of money borrowed, (ii) evidenced by a note,
debenture or other like written obligation to pay money (including,
without limitation, all of Borrower's Obligations, Permitted Senior
Indebtedness and Subordinated Indebtedness), (iii) in respect of rent or
hire of Property under Capitalized Leases or for the deferred purchase
price of Property, (iv) in respect of obligations under conditional sales
or other title retention agreements and (v) all guaranties of any or all
of the foregoing.
Indebtedness to be Refinanced: the Indebtedness for Borrowed Money
of Borrower to be repaid on the closing date pursuant to the Plan of
Reorganization.
Landlord: a lessor under a lease of real property.
7
Landlord Consent and Waiver: a landlord consent and waiver in favor
of Agent executed by the Landlord under each Lease.
Lease: any lease of real estate under which Borrower is the lessee.
Leasehold Property: any real estate which is the subject of a Lease.
Lender Addition Agreement: an agreement executed by a Lender and an
Assignee in connection with a Loan Assignment.
Lenders: FINOVA and each Assignee.
Lenders' Decisions: all determinations to be made by Lenders
pursuant to the terms of the Loan Instruments, including, without
limitation, any amendment or modification of any of the Loan Instruments,
determinations with respect to the declaration of Events of Default and
acceleration of Borrower's Obligations or any other obligation of any
Obligor, waivers of affirmative or negative covenants or other provisions
of the Loan Instruments, advancement of funds pursuant to any of the Loan
Instruments or the exercise of any rights or remedies granted to Lenders
or Agent pursuant to the terms of any of the Loan Instruments.
Licenses: all licenses, permits, consents, approvals and authority,
other than Franchises, issued by any Governmental Body in connection with
the operation of the System, including, without limitation, any applicable
FCC License.
Lien: any mortgage, pledge, assignment, lien, charge, encumbrance or
security interest of any kind, or the interest of a vendor or lessor under
any conditional sale agreement, Capitalized Lease or other title retention
agreement.
Loan Agreement: this Loan Agreement and any amendments or
supplements hereto.
Loan Assignment: the assignment by a Lender of (i) any portion of
such Lender's interest in Borrower's Obligations and (ii) any of such
Lender's other rights under any of the Loan Instruments.
Loan Fee: the fee to be paid by Borrower to FINOVA in accordance
with Section 2.6.
Loan Instruments:
(i) Loan Agreement;
(ii) Notes;
(iii) Subordination Agreement;
8
(iv) Security Instruments;
(v) Closing Certificate;
(vi) Solvency Certificate;
(vii) Environmental Certificate;
(viii) Uniform Commercial Code financing statements filed in
connection with the Closing; and
(ix) other instruments and documents as Agent reasonably may
require in connection with the transactions
contemplated by this Loan Agreement.
Loans: collectively, the Term Loan and the Revolving Loan.
Loan Year: a period of time from the Closing Date or any anniversary
of the Closing Date to the immediately succeeding anniversary of the
Closing Date.
Management Agreement: the Management Agreement dated as of December
18, 1996 between Borrower and Xxxxx Management.
Material Adverse Effect: (i) a material adverse effect upon the
business, operations, Property, profits or condition (financial or
otherwise) of Borrower or upon the validity, enforceability or priority of
the Security Interests or (ii) a material impairment of the ability of
Borrower to perform its obligations under any Loan Instrument to which it
is a party or of Agent or any Lender to enforce or collect any of
Borrower's Obligations.
Maturity Date: the earlier of (i) January 2, 2002 or (ii) or the
date on which Borrower's Obligations are accelerated pursuant to this Loan
Agreement.
Maximum Rate: as defined in subsection 2.3.4.
Maximum Revolving Loan Commitment: $10,000,000 less all reductions
in the Revolving Loan Commitment required by subsection 2.2.2.
Mortgages: a mortgage on each parcel of Real Property executed by
Borrower in favor of Agent.
Multiemployer Plan: any multiemployer plan as defined pursuant to
Section 3(37) of ERISA to which Borrower or any ERISA Affiliate makes, or
accrues an obligation to make contributions, or has made, or been
obligated to make, contributions within the preceding six years.
9
Net Sale Proceeds: the gross proceeds payable to Borrower in
connection with any Permitted Asset Sale, less all reasonable, customary
and documented costs and expenses of such Permitted Asset Sale.
New Restructured Second Secured Indenture: the Indenture of even
date herewith between Borrower and the New Second PIK Note Indenture
Trustee.
New Restructured Second Secured PIK Instruments: the New
Restructured Second Secured Indenture, the New Restructured Second Secured
PIK Notes and all other documents and instruments executed in connection
with the Indebtedness evidenced thereby.
New Restructured Second Secured PIK Notes: as defined in the Plan of
Reorganization.
New Restructured Third Secured Indenture: the Indenture of even date
herewith between Borrower and the New Third PIK Note Indenture Trustee.
New Restructured Third Secured PIK Instruments: the New Restructured
Third Secured Indenture, the New Restructured Third Secured PIK Notes and
all other documents and instruments executed in connection with the
Indebtedness evidenced thereby.
New Restructured Third Secured PIK Notes: as defined in the Plan of
Reorganization.
New Second PIK Note Indenture Trustee: Fleet National Bank, a
national banking association.
New Third PIK Note Indenture Trustee: Fleet National Bank, a
national banking association.
Notes: collectively, the Term Note and the Revolving Note.
Obligor: any of the Obligors.
Obligors: collectively, Borrower and the Shareholders.
Operating Agreements: all right-of-entry agreements, access
agreements, advertising revenue contracts, equipment leases, video
programming distribution agreements, Pole Attachment Agreements, and
similar agreements relating to the operation of the Cable Business of
Borrower, excluding the Franchise Agreements and the Leases.
Operating Cash Flow: for any period, the net income of Borrower for
such period:
10
(i) plus the sum of the following (without duplication), to
the extent deducted in determining net income of Borrower for such
period:
(A) losses from sales, exchanges and other dispositions
of Property not in the ordinary course of business;
(B) interest, fees and other charges paid or accrued on
Indebtedness, including, without limitation, interest on
Capitalized Leases that is imputed in accordance with GAAP;
(C) depreciation and amortization;
(D) income taxes which are accrued, but not paid, during
such period;
(E) extraordinary and non-recurring losses not in the
ordinary course of business;
(F) casualty losses;
(G) for the years 1996 and 1997, the Restructuring
Expenses for each such year; and
(H) any other non-cash item deducted in determining such
net income; and
(ii) minus the sum of the following (without duplication), to
the extent included in determining net income for such period:
(A) gains from sales, exchanges and other dispositions
of Property not in the ordinary course of business; and
(B) proceeds of any insurance other than business
interruption insurance.
Operating Lease: any lease (other than Pole Attachment Agreements)
which, under GAAP, is not required to be capitalized.
Ordinances: the statutes, laws, rules, regulations, resolutions and
ordinances, as amended and in effect from time to time, pursuant to which
a Franchise may be granted.
Participant: any Person to which a Lender sells or assigns a
Participation.
Participation: a sale or an assignment by a Lender of a
participating interest in (i) any portion of such Lender's interest in
Borrower's Obligations and (ii) any of such Lender's rights under any of
the Loan Instruments.
11
Pay-Off Letter: a pay-off letter addressed to Agent from the holders
of the Indebtedness to be Refinanced.
PBGC: the Pension Benefit Guaranty Corporation or any Governmental
Body succeeding to the functions thereof.
Pension Plan: any Employee Benefit Plan, other than a Multiemployer
Plan, which is subject to the provisions of Part 3 of Subtitle B of Title
I of ERISA, Title IV of ERISA, or Section 412 of the Code and which (i) is
maintained for employees of Borrower or any ERISA Affiliate, or (ii) has
at any time within the preceding six years been maintained for the
employees of Borrower or any ERISA Affiliates.
Permitted Asset Sale: any bona fide sale of any Property of Borrower
in an arm's length transaction to a Person who is not an Affiliate of
Borrower, except to the extent permitted by Section 7.16, provided that
(i) the gross proceeds payable to Borrower in connection therewith are (A)
not less than the fair market value of such Property determined in a
manner reasonably satisfactory to Lenders and (B) payable solely in cash
and (ii) all documents and instruments executed by Borrower in connection
therewith are in form and substance reasonably satisfactory to Lenders.
Permitted Liens: any of the following Liens:
(i) the Security Interests;
(ii) the Permitted Senior Indebtedness Liens;
(iii) Liens for taxes or assessments and similar charges,
which either are (A) not delinquent or (B) being
contested diligently and in good faith by appropriate
proceedings, and as to which the Borrower has set aside
reserves on its books which are reasonably satisfactory
to Agent;
(iv) statutory Liens, such as mechanic's, materialman's,
warehouseman's, carrier's or other like Liens, incurred
in good faith in the ordinary course of business,
provided that the underlying obligations relating to
such Liens are paid in the ordinary course of business,
or are being contested diligently and in good faith by
appropriate proceedings and as to which Borrower has set
aside reserves on its books reasonably satisfactory to
Agent, or the payment of which obligations are otherwise
secured in a manner reasonably satisfactory to Agent;
(v) zoning ordinances, easements, licenses, reservations,
provisions, covenants, conditions, waivers or
restrictions on the use of Property and other title
exceptions, in each case, that are reasonably acceptable
to Agent;
12
(vi) Liens in respect of judgments or awards with respect to
which no Event of Default would exist pursuant to
subsection 8.1.6;
(vii) Liens to secure payment of insurance premiums (A) to be
paid in accordance with applicable laws in the ordinary
course of business relating to payment of worker's
compensation, or (B) that are required for the
participation in any fund in connection with worker's
compensation, unemployment insurance, old-age pensions
or other social security programs; and
(viii) the Subordinated Liens.
Permitted Prior Liens: any of the following Liens:
(i) the Permitted Senior Indebtedness Liens;
(ii) the Permitted Liens described in clauses (iii) and (iv)
of the definition of Permitted Liens that are accorded
priority to the Security Interests by law; and
(iii) the Permitted Liens described in clauses (v) and (vii)
of the definition of Permitted Liens, subject to the
limitations set forth therein.
Permitted Senior Indebtedness: Indebtedness, other than Borrower's
Obligations, incurred to purchase tangible personal property or
Indebtedness incurred to lease tangible personal property pursuant to
Capitalized Leases, provided that (i) such Indebtedness existing as of the
Closing Date shall not exceed $50,000, (ii) during any Loan Year after the
Closing Date the amount of such Indebtedness at any one time outstanding
during such Loan Year shall not exceed $100,000, and (iii) no Event of
Default exists at the time or will be caused as a result of the incurrence
of any Indebtedness described in clause (ii).
Permitted Senior Indebtedness Liens: Liens that secure Permitted
Senior Indebtedness, provided that each such Lien attaches only to the
Property purchased or leased with the proceeds of the Permitted Senior
Indebtedness incurred with respect to such Property.
Person: any individual, firm, corporation, business enterprise,
trust, association, joint venture, partnership, Governmental Body or other
entity, whether acting in an individual, fiduciary or other capacity.
Plan of Reorganization: Debtors' Second Amended Joint Plan of
Reorganization dated October 31, 1996, as amended or modified, in Case No.
96-166 (PJW) (Jointly Administered) filed with the Bankruptcy Court.
13
Pledge Agreement: a pledge agreement with respect to the Borrower
Capital Stock executed and delivered by the Shareholders in favor of
Agent.
Pole Attachment Agreement: any agreement, whether now in existence
or hereafter created, between Borrower and a municipality or public or
private utility company pursuant to which Borrower is permitted to use the
utility poles, trenches or easements of such public utility on which to
string or in which to bury the coaxial, fiber optic or other cable used to
operate any portion of the System.
Pole Attachment Authority: any Person who has entered into a Pole
Attachment Agreement with Borrower.
Principal Balance: the unpaid principal balance of the Loans or any
specified portion thereof outstanding from time to time.
Property: all types of real, personal or mixed property and all
types of tangible or intangible property.
Qualified Depository: a member bank of the Federal Reserve System
having a combined capital and surplus of at least $100,000,000.
Real Property: all interests in real estate owned by Borrower other
than the Leasehold Property.
Restructuring Expenses: all fees, costs and expenses incurred in
connection with the restructuring and refinancing of Borrower's
Indebtedness, including but not limited to the fees, costs and expenses
attributable to the registration of the Class A Stock under the Securities
Exchange Act of 1934.
Revolving Loan: the revolving loan to be made by Lenders to Borrower
pursuant to Section 2.2.
Revolving Loan Commitment: the commitment of Lenders to make the
Revolving Loan.
Revolving Note: a promissory note in the principal amount of
$10,000,000 executed and delivered by Borrower to FINOVA to evidence the
Revolving Loan, and any notes issued in substitution therefor pursuant to
subsection 9.1.3.
Xxxxx Management: Xxxxx Cable Management Company, Inc., a
Connecticut corporation.
Xxxxx Management Fees: the management fees payable to Xxxxx
Management pursuant to Section 5 of the Management Agreement.
Securities Act: the Securities Act of 1933, the Securities Exchange
Act of 1934, any successor statute thereto, and the rules, regulations and
legally binding policies of
14
the Securities Exchange Commission promulgated thereunder, as amended and
in effect from time to time.
Security Agreement: a security agreement executed by Borrower in
favor of Agent.
Security Interests: the Liens in the Collateral granted to Agent
pursuant to the Security Instruments and any other document now or
hereafter executed by Borrower which purports to xxxxx x Xxxx on the
Property of Borrower in favor of Agent.
Security Instruments: collectively, the Security Agreement, the
Pledge Agreement, the Assignment of Leases, the Mortgages and the
Assignment of Management Agreement.
Shareholders: collectively, Xxxxx Management, Media/Communications
Partners Limited Partnership, a Delaware limited partnership, Chestnut
Street Partners, Inc., a Massachusetts corporation, Milk Street Partners,
Inc., a Massachusetts corporation, TA Investors, a Massachusetts general
partnership, Northeast Ventures II, a Connecticut general partnership,
Allstate Insurance Company, an Illinois insurance corporation, and the New
Second PIK Note Indenture Trustee.
Solvency Certificate: a solvency certificate executed by Borrower to
Agent.
Stated Rate: as defined in subsection 2.3.4.
Subordinated Credit Instruments: the New Restructured Second Secured
PIK Instruments and the New Restructured Third Secured PIK Instruments.
Subordinated Creditors: the holders of the New Restructured Second
Secured PIK Notes and the New Restructured Third Secured PIK Notes.
Subordinated Indebtedness: all Indebtedness now or hereafter owed by
Borrower to the Subordinated Creditors, whether pursuant to the
Subordinated Credit Instruments or otherwise.
Subordinated Liens: the Liens in the Collateral granted to the
Trustees pursuant to the Subordinated Credit Instruments.
Subordination Agreement: a subordination agreement among Agent,
Borrower and the Trustees.
Subscriber: any Person (i) with whom Borrower has a Subscription
Agreement and (ii) who is not more than 60 days delinquent in the payment
of any amounts due under such Subscription Agreement other than late fees.
For purposes of this Loan Agreement, the number of Subscribers under
Subscription Agreements covering multi-dwelling units or commercial
buildings shall be equal to the aggregate monthly basic charges billed
under such Subscription Agreements the payment of which is not more
15
than 60 days delinquent divided by Borrower's monthly basic published
charge for the area in which the applicable multi-dwelling unit or
commercial building is located.
Subscriber Base Certificate: a certificate in the form of Exhibit
1.1C executed by Borrower and delivered pursuant to subsection 6.3.1.
Subscription Agreement: an agreement, whether written or oral, for
the use of the System, which agreement (i) is in full force and effect and
(ii) requires a monthly payment of not less than (A) if such agreement
covers a single dwelling unit, Borrower's monthly basic published charge
(reduced by a reasonable amount, not to exceed 10%, on account of senior
citizen discounts, or by a reasonable amount for a reasonable period of
time for promotional purposes) or (B) if such agreement covers a
multi-dwelling unit or commercial spaces, the monthly charge which
Borrower has negotiated for the use of the System by such multi-dwelling
unit or commercial spaces.
Subsidiary: any Person in which Borrower owns or controls, directly
or indirectly, 25% or more of the securities or equity interests of such
Person.
System: the cable television system facilities of Borrower
consisting of a set of closed transmission paths and associated signal
generation, reception and control equipment (including one or more
headends, trunk and lateral cables, subscriber drops, antennas, towers and
subscriber devices), operated in the locations described in Exhibit 5.5.4.
Term Loan: the loan to be made by Lenders to Borrower in the amount
of $57,500,000 pursuant to Section 2.1.
Term Note: a promissory note in the principal amount of $57,500,000
executed and delivered by Borrower to FINOVA to evidence the Term Loan,
and any notes issued in substitution therefor pursuant to subsection
9.1.3.
Termination Event: (i) a "Reportable Event" described in Section
4043 of ERISA for which the thirty day notice requirement has not been
waived; or (ii) the withdrawal of Borrower or any ERISA Affiliate from a
Pension Plan during a plan year in which it was a "substantial employer"
as defined in Section 4001(a)(2); or (iii) the termination of a Pension
Plan, the filing of a notice of intent to terminate a Pension Plan or the
treatment of a Pension Plan amendment as a termination under Section 4041
of ERISA; or (iv) the institution of proceedings to terminate, or the
appointment of a trustee with respect to, any Pension Plan by the PBGC; or
(v) any other event or condition which would constitute grounds under
Section 4042(a) of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan; or (vi) the partial or complete
withdrawal of Borrower or any ERISA Affiliate from a Multiemployer Plan;
or (vii) the imposition of a lien pursuant to Section 412 of the Code or
Section 302 of ERISA; or (viii) any event or condition which results in
the reorganization or insolvency of a Multiemployer Plan under Sections
4241 or 4245 of ERISA; or (ix) any event or condition which results in the
termination of a Multiemployer Plan under Section 4041A
16
of ERISA or the institution by the PBGC of proceedings to terminate a
Multiemployer Plan under Section 4042 of ERISA.
Trustees: collectively, the New Second PIK Note Indenture Trustee
and the New Third PIK Note Indenture Trustee.
1.2 Time Periods. In this Loan Agreement and the other Loan Instruments,
in the computation of periods of time from a specified date to a later specified
date, (i) the word "from" means "from and including," (ii) the words "to" and
"until" each mean "to, but excluding" and (iii) the words "through," "end of"
and "expiration" each mean "through and including." Unless otherwise specified,
all references in this Loan Agreement and the other Loan Instruments to (i) a
"month" shall be deemed to refer to a calendar month, (ii) a "quarter" shall be
deemed to refer to a calendar quarter and (iii) a "year" shall be deemed to
refer to a calendar year.
1.3 Accounting Terms and Determinations. All accounting terms not
specifically defined herein shall be construed, all accounting determinations
hereunder shall be made and all financial statements required to be delivered
pursuant hereto shall be prepared in accordance with GAAP as in effect at the
time of such interpretation, determination or preparation, as applicable, except
that interim financial statements shall not be required to contain footnotes and
shall be subject to year-end adjustments. In the event that any Accounting
Changes (as hereinafter defined) occur and such changes result in a change in
the method of calculation of financial covenants, standards or terms contained
in this Loan Agreement, then Borrower and Lenders agree to enter into
negotiations to amend such provisions of this Loan Agreement so as to reflect
such Accounting Changes with the desired result that the criteria for evaluating
the financial condition of Borrower shall be the same after such Accounting
Changes as if such Accounting Changes had not been made. Until such amendments
are agreed upon, all determinations shall be based upon XXXX prior to such
Accounting Changes. For purposes hereof, "Accounting Changes" shall mean (i)
changes in generally accepted accounting principles required by the promulgation
of any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants (or
any successor thereto) or other appropriate authoritative body and (ii) changes
in accounting principles as approved by the Accountants.
1.4 References. All references in this Loan Agreement to "Article,"
"Section," "subsection," "subparagraph," "clause" or "Exhibit," unless otherwise
indicated, shall be deemed to refer to an Article, Section, subsection,
subparagraph, clause or Exhibit, as applicable, of this Loan Agreement.
1.5 Lender's or Agent's Discretion. Whenever the terms "satisfactory to
Lenders or Agent," "determined by Lenders or Agent," "acceptable to Lenders or
Agent," "Lenders or Agent shall elect," "Lenders or Agent shall request," "at
the option or election of Lenders or Agent," or similar terms are used in the
Loan Instruments, except as otherwise specifically provided therein, such terms
shall mean satisfactory to, at the election or option of, determined by,
acceptable to or requested by Lenders or Agent, as applicable, in their or its
sole and unlimited discretion.
17
1.6 Borrower's Knowledge. Any statements, representations or warranties
that are based upon the best knowledge of Borrower or an officer thereof shall
be deemed to have been made after due inquiry by Borrower or an officer, as
applicable, with respect to the matter in question.
ARTICLE II
LOANS AND TERMS OF PAYMENT
2.1 Term Loan.
2.1.1 Amount and Disbursement. The Term Loan shall consist of a term
loan from FINOVA to Borrower in the amount of $57,500,000. FINOVA shall
disburse the Term Loan to or as directed by Borrower when all of the terms
and conditions set forth in Article IV have been satisfied.
2.1.2 Use of Proceeds. The proceeds of the Term Loan shall be used
to provide funds to repay the Indebtedness to be Refinanced.
2.1.3 Term Note. The Term Loan shall be evidenced by the Term Note.
2.1.4 Reborrowing. Borrower shall not be entitled to reborrow any
portion of the Term Loan which is repaid or prepaid.
2.2 Revolving Loan.
2.2.1 Amount and Disbursement. Subject to the terms and conditions
of this Loan Agreement, during the period from the Closing Date to the
Maturity Date Lenders agree to make a revolving loan to Borrower in an
aggregate principal amount outstanding at any time not in excess of the
Maximum Revolving Loan Commitment. Lenders shall disburse advances of the
Revolving Loan to or as directed by Borrower subject to the conditions set
forth in subsection 2.2.3.
2.2.2 Reductions in Revolving Loan Commitment; Termination. The
Revolving Loan Commitment shall be reduced by the amount of all (i) Net
Sale Proceeds required to be applied to the Principal Balance of the
Revolving Loan pursuant to subsection 2.7.2 and (ii) insurance proceeds
applied to the Principal Balance of the Revolving Loan pursuant to
subsection 6.6.2. The Revolving Loan Commitment shall terminate upon the
prepayment in full of the Principal Balance of the Term Loan.
2.2.3 Conditions of Disbursements. The obligation of each Lender to
disburse advances of the Revolving Loan is subject to the satisfaction (or
waiver) of the following conditions precedent:
(a) no Incipient Default or Event of Default shall exist;
18
(b) each such advance shall be in a minimum amount of $50,000
and integral multiples of $25,000 in excess of that amount; and
(c) Agent shall have received a Notice of Borrowing from
Borrower in the form of Exhibit 2.2.3 with respect to each requested
advance no later than 12:00 p.m., Phoenix time, at least two
Business Days in advance of the proposed Funding Date with respect
to such advance, which Funding Date shall be on a Business Day.
2.2.4 Use of Proceeds. The proceeds of the Revolving Loan shall be
used (i) to provide funds to repay the Indebtedness to be Refinanced, (ii)
to make Capital Expenditures in connection with the expansion and
improvement of the System, (iii) to pay transaction costs and (iv) for
working capital and other corporate purposes.
2.2.5 Revolving Note. The Revolving Loan shall be evidenced by the
Revolving Note.
2.2.6 Reborrowing. Subject to the conditions set forth in this
Section 2.2, Borrower from time to time may reborrow all or any portion of
the Revolving Loan which is repaid to the extent that the Principal
Balance of the Revolving Loan after giving effect to such reborrowing will
not exceed the Maximum Revolving Loan Commitment.
2.3 Interest.
2.3.1 Interest Rate. Except as provided in subsection 2.3.2, the
Principal Balance shall bear interest at the Base Rate in effect from time
to time plus the Applicable Margin. As used in this Loan Agreement, the
term "Applicable Margin" for any quarter shall mean (i) 1.50% per annum if
the Debt/Cash Flow Ratio calculated as of on the last day of the second
quarter preceding such quarter is 4.50 or greater and (ii) 1.25% per annum
if the Debt/Cash Flow Ratio calculated as of on the last day of the second
quarter preceding such quarter is less than 4.50.
2.3.2 Default Rate. During a Default Rate Period, Borrower's
Obligations shall bear interest at the Default Rate.
2.3.3 Interest Computation. Interest shall be computed on the basis
of a year consisting of 360 days and charged for the actual number of days
during the period for which interest is being charged. In computing
interest, the Funding Date shall be included and the date of payment shall
be excluded.
2.3.4 Maximum Interest. Notwithstanding any provision to the
contrary contained herein or in any other Loan Instrument, Lenders shall
not collect a rate of interest, including the Loan Fee, on any obligation
or liability due and owing by Borrower to Lenders in excess of the maximum
contract rate of interest permitted by applicable law ("Excess Interest").
All fees, charges, goods, things in action or any other sums or things of
value (other than items (a), (b) and (c) below) paid or payable
19
by Borrower (collectively, the "Additional Sums"), whether pursuant to the
Notes, this Loan Agreement, the other Loan Instruments or any other
document or instrument in any way pertaining to the Loans, that, under the
laws of the State of Arizona, may be deemed to be interest with respect to
the Loans, for the purpose of any laws of the State of Arizona that may
limit the maximum amount of interest to be charged with respect to the
Loans shall be payable by Borrower and shall be deemed to be additional
interest, and for such purposes only, the agreed upon and "contracted for
rate of interest" with respect to the Loans shall be deemed to be
increased by the rate of interest resulting from the Additional Sums.
Lenders and Borrower agree that the interest laws of the State of Arizona
shall govern the relationship among them and understand and believe that
the transactions contemplated by the Loan Instruments comply with the
usury laws of the State of Arizona, but in the event of a final
adjudication to the contrary, Borrower shall be obligated to pay, nunc pro
tunc, to Lenders only such interest as then shall be permitted by the laws
of the state found to govern the contract relationship among Lenders and
Borrower. For the purpose of any laws of the State of Arizona that may
limit the maximum amount of interest to be charged with respect to a loan,
the "contracted for rate of interest" for the Loans shall consist of the
following: (a) interest calculated in accordance with the provisions of
subsection 2.3.1; (b) the late charges calculated in accordance with the
provisions of Section 2.5; (c) the Loan Fee; and (d) all Additional Sums,
if any. Borrower agrees to pay an effective "contracted for rate of
interest" which is the sum of items (a), (b), (c) and (d) above. If any
Excess Interest is provided for or determined by a court of competent
jurisdiction to have been provided for in this Loan Agreement or any other
Loan Instrument, then in such event (i) no Obligor shall be obligated to
pay such Excess Interest, (ii) any Excess Interest collected by Lenders
shall be, at Lenders' option, (A) applied to the Principal Balance or to
accrued and unpaid interest not in excess of the maximum rate permitted by
applicable law or (B) refunded to the payor thereof, (iii) the interest
rates provided for herein (collectively, including, without limitation,
the Loan Fee, the "Stated Rate") shall be automatically reduced to the
maximum rate allowed from time to time under applicable law (the "Maximum
Rate") and this Loan Agreement and the other Loan Instruments, as
applicable, shall be deemed to have been, and shall be, modified to
reflect such reduction, and (iv) neither Borrower nor any other Obligor
shall have any action against Agent or Lenders for any damages arising out
of the payment or collection of such Excess Interest; provided, however,
that if at any time thereafter the Stated Rate is less than the Maximum
Rate, Borrower shall, to the extent permitted by law, continue to pay
interest at the Maximum Rate until such time as the total interest
received by Lenders is equal to the total interest which Lenders would
have received had the Stated Rate been (but for the operation of this
provision) the interest rate payable. Thereafter, the interest rate
payable shall be the Stated Rate unless and until the Stated Rate again
exceeds the Maximum Rate, in which event the provisions contained in this
subsection 2.3.4 again shall apply.
2.4 Principal and Interest Payments.
2.4.1 Interest. Except as otherwise provided in subsections 2.7.1(b)
and 2.7.2(c), interest on the Principal Balance shall be payable quarterly
in arrears on the first Business Day of each quarter commencing with the
quarter beginning April 1, 1997.
20
2.4.2 Principal.
(a) Term Loan. The Principal Balance of the Term Loan shall be
payable in consecutive quarterly installments on the first Business
Day of each quarter commencing with the quarter beginning January,
1998 as follows:
Quarter Beginning Amount of Installment
----------------- ---------------------
January, 1998 $262,500
April, 1998 $262,500
July, 1998 $262,500
October, 1998 $262,500
January, 1999 $387,500
April, 1999 $387,500
July, 1999 $387,500
October, 1999 $387,500
January, 2000 $525,000
April, 2000 $525,000
July, 2000 $525,000
October, 2000 $525,000
January, 2001 $650,000
April, 2001 $650,000
July, 2001 $650,000
October, 2001 $650,000
The remaining Principal Balance and all other sums which then are
due and payable pursuant to the terms of the Loan Instruments shall
be payable on the Maturity Date.
(b) Revolving Loan. The Principal Balance of the Revolving
Loan shall be due and payable in full on the Maturity Date.
2.5 Late Charges. If a payment of principal or interest to be made
pursuant to this Loan Agreement becomes past due for a period in excess of five
Business Days, Borrower shall pay on demand to Lenders a late charge of 2% of
the amount of such overdue payment.
2.6 Loan Fee. Borrower shall pay a loan fee to FINOVA on the Closing Date
in the amount of $1,038,462, which shall be deemed to be fully earned and
payable on the Closing Date. FINOVA shall credit the $300,000 deposit (net of
expenses) previously paid by Borrower against the Loan Fee.
2.7 Prepayments.
2.7.1 Voluntary Prepayments of the Term Loan. Borrower at any time
voluntarily may prepay in whole or in part the Principal Balance of the
Term Loan, subject to the terms and conditions of subsection 2.7.3 and the
following terms and conditions:
21
(a) Notice of Prepayment; Number and Amount of Prepayments.
Not less than 20 days prior to the date upon which Borrower desires
to make any voluntary prepayment of the Principal Balance of the
Term Loan, Borrower shall deliver to Lenders notice of its intention
to prepay, which notice shall state the prepayment date and the
amount of the Principal Balance of the Term Loan to be prepaid. The
amount of any partial prepayment of the Principal Balance of the
Term Loan shall be not less than $100,000 or integral multiples
thereof. A prepayment of the Principal Balance of the Term Loan
shall not be made more frequently than once a month. If Borrower
delivers to Lenders a notice of prepayment and fails to make such
prepayment, Borrower shall reimburse Lenders on demand in the amount
of any loss, cost and/or expense incurred by Lenders as a result of
Lenders' reliance on such notice, including without limitation, any
loss, cost or expense resulting from Lenders' contractual
obligations in connection with the reinvestment of the amount
indicated in such notice of prepayment.
(b) Additional Payments; Full Prepayment. Concurrently with
any partial prepayment of the Principal Balance of the Term Loan
pursuant to this subsection 2.7.1, Borrower shall pay to Lenders
accrued and unpaid interest on the portion of the Principal Balance
which is being prepaid to the date on which Lenders are in receipt
of Good Funds, and any other sums which are due and payable pursuant
to the terms of any of the Loan Instruments. Concurrently with the
prepayment in full of the Term Loan Borrowers shall pay to Lenders
all of the other of Borrower's Obligations.
(c) Application of Partial Prepayments. Any partial prepayment
of the Principal Balance of the Term Loan pursuant to this
subsection 2.7.1 shall be applied to the installments of the
Principal Balance of the Term Loan in the inverse order of maturity.
2.7.2 Mandatory Prepayments of the Loans.
(a) Excess Cash Flow Payments. Until the Loans are paid in
full and the Revolving Loan Commitment is terminated, for each year
commencing with the year 1997 Borrower shall pay to Lenders within
120 days after the end of such year an amount equal to the lesser of
(i) 75% of the Excess Cash Flow for such year and (ii) the amount by
which the Cash Equivalents as of December 31 of such year exceeds
$750,000.
(b) Net Sale Proceeds. Until the Loans are paid in full and
the Revolving Loan Commitment is terminated, Borrower shall pay to
Lenders the amount of all Net Sale Proceeds upon receipt by Borrower
of such Net Sale Proceeds. Borrower shall not be deemed in receipt
of any Net Sale Proceeds required to be deposited in escrow to
secure customary indemnities under the documents executed in
connection with the Permitted Asset Sale giving rise to such Net
Sale Proceeds until such Net Sale Proceeds are released from escrow
to Borrower.
22
(c) Application of Mandatory Prepayments. Prepayments received
by Lenders pursuant to this subsection 2.7.2 shall be applied in the
following order of priority to the payment of: (i) any and all sums
which are due and payable pursuant to the terms of the Loan
Instruments, except the Principal Balance and accrued interest
thereon, (ii) accrued and unpaid interest on the portion of the
Principal Balance being prepaid, (iii) the installments of the
Principal Balance of the Term Loan in the inverse order of maturity
and (iv) the Principal Balance of the Revolving Loan.
2.7.3 Prepayment Premium.
(a) Voluntary Prepayments of the Term Loan. Except as provided
in subsections 2.7.3(b) and 2.7.4, concurrently with any prepayment
of all or any part of the Principal Balance of the Term Loan,
Borrower shall pay to Lenders a prepayment premium equal to a
percentage of the amount of the Principal Balance prepaid,
determined in accordance with the following schedule:
Percentage of Principal
Period of Prepayment Balance Prepaid
-------------------- ---------------
First Loan Year 4.0%
Second Loan Year 3.0%
Third Loan Year 2.0%
Thereafter 0.0%
(b) Mandatory Prepayments from Net Sale Proceeds. Concurrently
with any prepayment of the Principal Balance from Net Sale Proceeds,
Borrower shall pay to Lenders a prepayment premium equal to a
percentage of the amount of the Principal Balance prepaid,
determined in accordance with the following schedule:
Percentage of Principal
Period of Prepayment Balance Prepaid
-------------------- ---------------
First Loan Year 4.0%
Second Loan Year 1.0%
Thereafter 0.0%
2.7.4 No Prepayment Premium. No prepayment premium shall be payable
with respect to prepayments (i) made pursuant to subsection 2.7.2(a), (ii)
from any refinancing of the Loans made by Lenders, which refinancing shall
be at Lenders' sole and absolute discretion or (iii) from insurance
proceeds.
2.8 Payments after Event of Default. All payments received by Lenders
during the existence of an Event of Default shall be applied in accordance with
Section 8.4.
23
2.9 Method of Payment; Good Funds. All payments to be made pursuant to the
Loan Instruments by Borrower to (i) FINOVA shall be made by wire transfer of
Good Funds to the account of FINOVA at Citibank, N.A., 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, XXX 000000000, Credit: FINOVA Capital Corporation, Credit
Account No. 00000000 or to such other account as FINOVA shall notify Borrower,
and (ii) any other Lender shall be made by wire transfer of Good Funds to such
account as such Lender shall notify Borrower.
ARTICLE III
SECURITY
Borrower's Obligations shall be secured by a Lien upon all of the
Collateral, which at all times shall be superior and prior to all other Liens,
except Permitted Prior Liens.
ARTICLE IV
CONDITIONS OF CLOSING
The obligation of FINOVA to make the Loans shall be subject to the
satisfaction of all of the following conditions on or before the Closing Date in
a manner, form and substance satisfactory to FINOVA:
4.1 Representations and Warranties. On the Closing Date the
representations and warranties of each Obligor set forth in the Loan Instruments
to which such Obligor is a party shall be true and correct.
4.2 Confirmation. The Bankruptcy Court shall have entered the Confirmation
Order.
4.3 Minimum Operating Cash Flow of the System. Borrower shall demonstrate
to the satisfaction of FINOVA that Operating Cash Flow for the consecutive
twelve month period ending on June 30, 1996 was not less than $12,750,000.
4.4 Appraisal. FINOVA shall have received an appraisal of the System
prepared by Xxxxxx Capital Corporation indicating that the aggregate current
fair market value of the System is not less than $110,000,000, which appraisal
shall include a technical and operational review of the System satisfactory to
FINOVA.
4.5 Cash Equivalents. FINOVA shall have received evidence that Borrower
has not less than $10,000,000 of Cash Equivalents on the Closing Date after
making payment or provision for payment of all of its post-petition accounts
payable which are past the due date of such accounts payable.
4.6 Subscribers. FINOVA shall have received evidence that as of November
30, 1996 the aggregate number of Subscribers is not less than 74,750.
24
4.7 Delivery of Documents. The following shall have been delivered to
FINOVA, each duly authorized and executed, where applicable, and in form and
substance satisfactory to FINOVA:
(a) the Loan Instruments;
(b) good standing certificates for Borrower from the respective
States of Texas, New Mexico, Ohio, North Dakota, Colorado, California,
Virginia, Arkansas, Louisiana, Nebraska and all other States (except those
States where the failure to qualify would not have a Material Adverse
Effect) in which the laws thereof require Borrower to be qualified to
transact business, each dated a recent date prior to the Closing Date;
(c) certified copies of (i) the Amended and Restated Articles of
Incorporation, certified by the Secretary of State of Texas as of a recent
date prior to the Closing Date; (ii) the by-laws of Borrower, certified as
of the Closing Date by the corporate secretary of Borrower, and (iii)
copies of resolutions adopted by the board of directors of Borrower
authorizing the execution and delivery by Borrower of the Loan Instruments
to which Borrower is a party and the consummation of the transactions
contemplated thereby, certified as of the Closing Date by the corporate
secretary of Borrower;
(d) signature and incumbency certificates of the officers of
Borrower executing the Loan Instruments;
(g) certified copies or executed originals of each of the following:
(1) the Plan of Reorganization and the Confirmation Order;
(2) the Subordinated Loan Instruments;
(3) the Franchise Agreements;
(4) Franchisor Consents covering not less than 95% of all
Subscribers;
(5) the Management Agreement;
(6) the Leases;
(7) the Licenses;
(8) the Operating Agreements (other than Pole Attachment
Agreements and video programming distribution agreements); and
(9) all instruments and documents evidencing Permitted Senior
Indebtedness existing as of the Closing Date;
(h) a Landlord Consent and Waiver from each Landlord under each
Lease;
25
(i) the Pay-Off Letters; and
(j) such other instruments, documents, certificates, consents,
waivers and opinions as FINOVA reasonably may request.
4.8 Performance; No Default. Each Obligor and each Subordinated Lender
shall have performed and complied with all agreements and conditions contained
in the Plan of Reorganization, the Confirmation Order and the Loan Instruments
to be performed by or complied with by such Person prior to or at the Closing,
and no Event of Default or Incipient Default shall then exist or result from the
making of the Loans.
4.9 Opinions of Counsel; Direction for Delivery. FINOVA shall have
received (i) opinions dated the Closing Date from (A) Xxxx Marks & Xxxxx LLP,
counsel to Borrower, (B) Xxxx, Raywid & Xxxxxxxxx, special FCC counsel for
Borrower and (C) such opinions of local counsel as FINOVA reasonably may
request, in each case addressed to FINOVA, as a Lender and as Agent, in such
form and covering such matters as FINOVA may require and (ii) copies of letters
in form and substance satisfactory to FINOVA from Borrower addressed to the
counsel described in clause (i), directing such counsel to deliver to FINOVA the
foregoing opinions.
4.10 Approval of Instruments and Security Interests. FINOVA shall have
received evidence that the approval or consent shall have been obtained from all
Governmental Bodies, including, without limitation, Franchisors, and all other
Persons whose approval or consent is required to enable Obligors to enter into
and perform their respective obligations under the Loan Instruments to which
each such Person is a party and grant to Agent the Security Interests, except
(i) no approval or consent shall be required with respect to immaterial
Operating Agreements, Pole Attachment Agreements or programming agreements and
(ii) Franchisor Consents shall not be required with respect to that portion of
the System the Subscribers to which constitute not more than five percent of all
Subscribers to the System.
4.11 Security Interests. All filings of Uniform Commercial Code financing
statements and all other filings and actions necessary to perfect and maintain
the Security Interests as first, valid and perfected Liens in the Property
covered thereby, subject only to Permitted Prior Liens, shall have been filed or
taken and FINOVA shall have received such UCC, state and federal tax Lien,
pending suit, judgment and other Lien searches as it deems necessary to confirm
the foregoing.
4.12 Environmental Audit. FINOVA shall have received an Environmental
Audit with respect to each parcel of Real Property and Leasehold Property
designated by FINOVA.
4.13 Franchises and Licenses. FINOVA shall have received evidence that (i)
Borrower is the franchisee of all Franchises and the licensee of all Licenses
necessary for the operation of the System and (ii) such Licenses and Franchises
are in full force and effect as of the Closing Date and no event has occurred
which could result in the termination, revocation or non-renewal of any such
License or Franchise.
4.14 Financial Statements, Reports and Projections. FINOVA shall have
received (i) the financial statements and projections described in Exhibit 5.7.1
and the projections
26
described in Exhibit 5.7.2 and (ii) a subscriber base report in Borrower's
internally generated form as of the later of September 30, 1996 or no more than
two months prior to the Closing Date.
4.15 Material Adverse Change. No event shall have occurred since the later
of September 30, 1996 or two months prior to the Closing Date which has had or
d since the later
of September 30, 1996 or two months prior to the Closing Date which has had or
could have a Material Adverse Effect.
4.16 Use of Assets. FINOVA shall be satisfied that Borrower at all times
shall be entitled to the use and quiet enjoyment of all Property necessary for
the continued ownership and operation of the Cable Business conducted by
Borrower, including, without limitation, the use of equipment, fixtures,
Licenses, offices and means of ingress and egress thereto, and any easements or
rights-of-way necessary to reach any material equipment or other material items
necessary for the operation of such Cable Business.
4.17 Broker Fees. If the services of a broker or other agent have been
used in connection with the Loans, all fees owed to such broker or agent shall
have been paid by Borrower and FINOVA shall have received evidence of such
payment.
4.18 Insurance.
(a) Insurance. At least three Business Days prior to the Closing
Date Borrower shall have delivered to FINOVA evidence satisfactory to
FINOVA that all insurance coverage required pursuant to Section 6.6 is in
full force and effect and all premiums then due thereon have been paid in
full.
(b) Real Property. Agent shall have received an ALTA mortgagee's
policy of title insurance (ALTA Revised 1987 Form) in favor of Agent with
respect to each parcel of Real Property covered by the Mortgages, issued
by a title company and in an amount satisfactory to Agent, showing that
Borrower has good and marketable title to such parcel and insuring that
the Mortgage covering such parcel constitutes a valid Lien on such parcel,
subject only to Permitted Prior Liens. Each policy shall insure over all
survey and other general exceptions contained therein and shall include
such affirmative endorsements as may be required by Agent.
4.19 Indebtedness to be Refinanced. FINOVA shall have received evidence
that the Indebtedness to be Refinanced will be paid in full concurrently with
the Closing.
4.20 Payment of Fees and Expenses. Borrower shall have paid the Loan Fee
and all fees and expenses described in subsection 11.1.1 incurred in connection
with the Loans.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Agent and Lenders as follows:
27
5.1 Existence and Power. Borrower is a corporation duly formed, validly
existing and in good standing under the laws of the State of Texas. Borrower is
in good standing under the laws of the States of New Mexico, Ohio, North Dakota,
Colorado, California, Virginia, Arkansas, Louisiana, Nebraska and each other
jurisdiction in which the failure to be in good standing could have a Material
Adverse Effect. Borrower has all requisite power and authority to own its
Property and to carry on its business as now conducted and as proposed to be
conducted following the Closing Date.
5.2 Authority. Each Obligor has full power and authority to enter into,
execute, deliver and carry out the terms of the Loan Instruments to which it is
a party and to incur the obligations provided for therein, all of which have
been approved by the Bankruptcy Court pursuant to the Plan of Reorganization and
the Confirmation Order, have been duly authorized by all proper and necessary
action and are not prohibited by the organizational instruments of such Obligor.
5.3 Borrower Capital Stock, Subsidiaries and Related Matters.
5.3.1 Borrower Capital Stock. There is set forth in Exhibit 5.3.1 a
complete description of the Borrower Capital Stock. The Borrower Capital
Stock is validly issued, fully paid and non-assessable, and has been
issued and sold in compliance with the Plan of Reorganization and all
applicable federal and state laws, rules and regulations, including,
without limitation, all so-called "Blue-Sky" laws. Except as described in
Exhibit 5.3.1, the Borrower Capital Stock is owned beneficially and of
record by the Persons in the respective amounts and percentages set forth
on Exhibit 5.3.1, free and clear of all Liens except the Security
Interests.
5.3.2 Subsidiaries. There is set forth in Exhibit 5.3.2 a complete
list of each Subsidiary. Except as set forth on Exhibit 5.3.2 none of such
Subsidiaries owns or shall hereafter own any Property or conducts or shall
hereafter conduct any business.
5.3.3 Restrictions. Borrower (i) is not a party to and has no
knowledge of any agreements restricting the transfer of the Borrower
Capital Stock, except the Loan Instruments and the Subordinated Credit
Instruments, (ii) has not issued any rights which can be convertible into
or exchangeable or exercisable for any of its capital stock, or any rights
to subscribe for or to purchase, or any options for the purchase of, or
any agreements providing for the issuance (contingent or otherwise) of, or
any calls, commitments or claims of any character relating to, any of its
capital stock or any securities convertible into or exchangeable or
exercisable for any of its capital stock, except for the conversion of
Class C Stock to Class A Stock pursuant to the Amended and Restated
Articles of Incorporation and (iii) is not subject to any obligation
(contingent or otherwise) to repurchase or otherwise acquire or retire any
of its capital stock or any convertible rights or options. Borrower is not
required to file, and Borrower has not filed, pursuant to the Securities
Act, a registration statement relating to any class of debt or equity
securities, except for the registration of the Class A Stock under the
Securities Exchange Act of 1934.
28
5.4 Binding Agreements. This Loan Agreement and the other Loan
Instruments, when executed and delivered, will constitute the valid and legally
binding obligations of each Obligor to the extent such Obligor is a party
thereto, enforceable against such Obligor in accordance with their respective
terms, except as such enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws now or
hereafter in effect affecting the enforcement of creditors' rights generally and
(ii) equitable principles (whether or not any action to enforce such document is
brought at law or in equity).
5.5 Business and Property of Borrower.
5.5.1 Business and Property. Subject to the provisions of the
applicable Cable Statutes and Regulations, upon the Closing Borrower will
be the owner of all Property and the holder of all Leases, Licenses,
Franchises, Franchise Agreements and Operating Agreements necessary to
conduct the operations of the System in the places where it is now
conducted except to the extent that the failure to own such Property or
hold such Leases, Licenses, Franchises, Franchise Agreements or Operating
Agreements would not have a Material Adverse Effect. Borrower does not
engage or propose to engage in any business or activity other than the
Cable Business.
5.5.2 Licenses and Franchises. There is set forth in Exhibit 5.5.2 a
description of all Licenses and Franchises which have been issued or
assigned to Borrower. All of such Licenses and Franchises are, except as
disclosed in Exhibit 5.5.2, in full force and effect and have been duly
issued in the name of, or validly assigned to, Borrower, no default or
breach exists thereunder and Borrower has full power and authority
thereunder to operate the System.
5.5.3 Operating Agreements. There is set forth in Exhibit 5.5.3 a
description of all material Operating Agreements with respect to the
System. All of such Operating Agreements are, except as disclosed in
Exhibit 5.5.3, in full force and effect and no event has occurred which
could result in the cancellation or termination of any such Operating
Agreement or the imposition thereunder of any liability upon Borrower
which could have a Material Adverse Effect.
5.5.4 Facility Sites. There is set forth in Exhibit 5.5.4 the
locations of the chief executive office of Borrower and all headends,
earth stations, microwave facilities, tower installations, studios,
offices and other material Property used in the operation of the System.
5.5.5 Leases. There is set forth in Exhibit 5.5.5 a list of all
Leases. Each Lease is in full force and effect, there has been no material
default in the performance of any of its terms or conditions by any party
thereto, and no claims of default have been asserted with respect thereto.
5.5.6 Real Estate. There is set forth in Exhibit 5.5.6 a complete
and accurate address and legal description of each parcel of Real
Property. The present and contemplated use of the Leasehold Property and
the Real Property is in compliance with
29
all applicable zoning ordinances and regulations and other laws and
regulations, the violation of which could have a Material Adverse Effect.
5.5.7 Operation and Maintenance of Equipment. No Person owning or
operating any equipment necessary for the operation of the System has
used, operated or maintained the same in a manner which now or hereafter
could result in the cancellation or termination of the right of Borrower
to use or make use of the same or which could result in any material
liability of Borrower for damages in connection therewith. All of the
equipment and other tangible personal property owned by Borrower on the
Closing Date is, in all material respects, in good operating condition and
repair (subject to normal wear and tear and except for cable and equipment
which in the ordinary course of business requires repair or replacement)
and has been used, operated and maintained in substantial compliance with
all applicable laws, rules and regulations.
5.5.8 Ordinances. All Ordinances applicable to Borrower's Franchises
are in full force and effect in accordance with their respective terms.
The Franchises granted or assigned to Borrower have been duly and validly
granted by the respective Franchisors in the jurisdictions in which the
portion of the System covered thereby are located and the Ordinances
applicable to such Franchises constitute the binding and enforceable
obligations of the Franchisors in accordance with their respective terms,
except to the extent pre-empted by Federal or state law.
5.5.9 Indebtedness to be Refinanced. There is set forth in Exhibit
5.5.9 a complete description of the Indebtedness to be Refinanced.
5.5.10 Subordinated Indebtedness. There is set forth in Exhibit
5.5.10 a complete description of the Subordinated Indebtedness.
5.6 Title to Property; Liens. Borrower has (i) good title to all of its
personal Property and insurable title to the Real Property, except (A) any
License or Franchise which cannot be transferred without the consent of a
Governmental Body, (B) any Operating Agreement which cannot be transferred
without the consent of the other parties thereto and (C) the portion thereof
consisting of a leasehold estate and (ii) a valid leasehold estate in each
portion of its Property which consists of a leasehold estate. Upon the Closing
all of such Property shall be free and clear of all Liens, except Permitted
Liens. Upon the proper filing with the appropriate Governmental Bodies of the
Mortgages and appropriate Uniform Commercial Code financing statements, the
applicable Loan Instruments will create valid and perfected Liens in the
Property described therein except the FCC Licenses (but including the proceeds
thereof), subject only to Permitted Prior Liens.
5.7 Projections and Financial Statements.
5.7.1 Financial Statements. Borrower has delivered to FINOVA the
financial statements described in Exhibit 5.7.1 pertaining to the
operations of Borrower. Such financial statements present fairly in all
material respects the results of operations of Borrower for the periods
covered thereby and the financial condition of Borrower as of the dates
indicated therein. All of such financial statements have been prepared in
30
conformity with GAAP. To the best knowledge of Borrower there has been no
change since June 28, 1996 which has had or could have a Material Adverse
Effect. Borrower also has delivered to FINOVA a pro-forma balance sheet as
of the Closing Date. Such pro-forma balance sheet, which assumes the
consummation of the transactions contemplated by the Loan Instruments,
presents fairly in all material respects the anticipated financial
condition of Borrower as of the Closing Date.
5.7.2 Projections. Borrower has delivered to FINOVA the projections
described in Exhibit 5.7.2 of the future operations of Borrower. Such
projections represent the good faith estimates of Borrower as of March 28,
1996 of Borrower's future financial performance. Borrower is not aware of
any material changes thereto since March 28, 1996.
5.8 Litigation. There is set forth in Exhibit 5.8 a description of all
actions and suits, arbitration proceedings and claims pending or, to the best
knowledge of Borrower, threatened against Borrower or maintained by Borrower at
law or in equity or before any Governmental Body. None of the matters set forth
in such Exhibit 5.8, if adversely determined, could have a Material Adverse
Effect.
5.9 Defaults in Other Agreements; Consents; Conflicting Agreements. Except
as otherwise disclosed herein, Borrower is not in default under any agreement to
which Borrower is a party or by which Borrower or any of its Property is bound,
the effect of which default could have a Material Adverse Effect. No
authorization, consent, approval or other action by, and no notice to or filing
with, any Governmental Body or any other Person which has not already been
obtained, taken or filed, as applicable, is required (i) for the due execution,
delivery or performance by Borrower of any of the Loan Instruments to which
Borrower is a party, except for any consent required from a Governmental Body or
any other Person in connection with the foreclosure of the Security Interests or
(ii) as a condition to the validity or enforceability of any of the Loan
Instruments to which Borrower is a party or any of the transactions contemplated
thereby or the priority of the Security Interests, except for certain filings to
establish and perfect the Security Interests. No provision of any material
mortgage, indenture, contract, agreement, statute, rule, regulation, judgment,
decree or order binding on Borrower or affecting the Property of Borrower
conflicts with, requires any consent which has not already been obtained with
respect to (other than any required consents not already obtained, the lack of
which could not have a Material Adverse Effect), or would in any way prevent the
execution, delivery or performance of the terms of, any of the Loan Instruments
or affect the validity or priority of the Security Interests. The execution,
delivery or performance of the terms of the Loan Instruments will not constitute
a default under, or result in the creation or imposition of, or obligation to
create, any Lien upon the Property of Borrower pursuant to the terms of any such
mortgage, indenture, contract or agreement, other than the Loan Instruments.
5.10 Taxes. Borrower has filed all tax returns required to be filed, and
has paid, or made adequate provision for the payment of, all taxes shown to be
due and payable on such returns or in any assessments made against Borrower, and
no tax Liens have been filed and no claims are being asserted in respect of such
taxes which are required by GAAP to be reflected in the financial statements of
Borrower and are not so reflected therein. The charges, accruals and reserves on
the books of Borrower with respect to all federal, state, local and other taxes
31
are considered by the management of Borrower to be adequate, and there is no
unpaid assessment which is or might be due and payable by Borrower or create a
Lien against any of Borrower's Property, except such assessments as are being
contested in good faith and by appropriate proceedings diligently conducted, and
for which adequate reserves have been set aside in accordance with GAAP. None of
the federal tax returns of Borrower are under audit.
5.11 Compliance with Applicable Laws. Borrower is not in default in
respect of any judgment, order, writ, injunction, decree or decision of any
Governmental Body, which default could have a Material Adverse Effect. Except as
otherwise provided herein, Borrower is in compliance in all material respects
with all applicable statutes and regulations, including, without limitation, the
Cable Statutes and Regulations, all Environmental Laws, ERISA, ADA and all laws
and regulations relating to unfair labor practices, equal employment opportunity
and employee safety, of all Governmental Bodies, a violation of which could have
a Material Adverse Effect. No condemnation, eminent domain or expropriation has
been commenced or, to the best knowledge of Borrower, threatened against the
Property which Borrower will own upon the Closing.
5.12 Patents, Trademarks, Franchises, Agreements. Upon the Closing
Borrower will own, possess or have the right to use all material patents,
trademarks, service marks, tradenames, copyrights, franchises and rights with
respect thereto, necessary for the conduct of the Cable Business as proposed to
be conducted by Borrower after the Closing Date, without any known conflict with
the rights of others and, in each case, free of any Liens.
5.13 FCC and Copyright Matters. Borrower (i) has duly and timely filed all
reports, statements of account and other filings which are required to be filed
by Borrower under the Cable Statutes and Regulations or any other applicable
law, rule or regulation of any Governmental Body, the non-filing of which could
have a Material Adverse Effect, (ii) is in compliance with all such laws, rules
and regulations, the noncompliance with which could have a Material Adverse
Effect and (iii) has paid all compulsory license fees required to be paid by it
under the Cable Statutes and Regulations. All information provided by or on
behalf of Borrower in any material filing with the FCC or the United States
Copyright Office was, at the time of filing, true, complete and correct in all
material respects when made, and the FCC or the United States Copyright Office,
as applicable, has been notified of any substantial or significant changes in
such information as may be required in accordance with applicable laws, rules
and regulations.
5.14 Environmental Matters. Borrower is in compliance with all applicable
Environmental Laws, except where the failure to comply would not have a Material
Adverse Effect, and no portion of the Real Property or Leasehold Property has
been used as a land fill. There currently are not any known Hazardous Materials
generated, manufactured, released, stored, buried or deposited over, beneath, in
or on (or used in the construction and/or renovation of) the Real Property or
Leasehold Property in violation of applicable Environmental Laws, which
violation could have a Material Adverse Effect.
5.15 Application of Certain Laws and Regulations. Neither Borrower nor
Affiliate of Borrower is:
32
5.15.1 Investment Company Act. An "investment company," or a company
"controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.
5.15.2 Holding Company Act. A "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding company"
or of a "subsidiary company" of a "holding company," as such terms are
defined in the Public Utility Holding Company Act of 1935, as amended.
5.15.3 Foreign or Enemy Status. (i) An "enemy" or an "ally of an
enemy" within the meaning of Section 2 of the Trading with the Enemy Act,
(ii) a "national" of a foreign country designated in Executive Order No.
8389, as amended, or of any "designated enemy country" as defined in
Executive Order No. 9095, as amended, of the President of the United
States of America, in each case within the meaning of such Executive
Orders, as amended, or of any regulation issued thereunder, (iii) a
"national of any designated foreign country" within the meaning of the
Foreign Assets Control Regulations or of the Cuban Assets Control
Regulations of the United States of America (Code of Federal Regulations,
Title 31, Chapter V, Part 515, Subpart B, as amended), or (iv) an alien or
a representative of any alien or foreign government within the meaning of
Section 310 of Title 47 of the United States Code.
5.15.4 Regulations as to Borrowing. Subject to any statute or
regulation which regulates the incurrence of any Indebtedness for Borrowed
Money, including, without limitation, statutes or regulations relative to
common or interstate carriers or to the sale of electricity, gas, steam,
water, telephone, telegraph or other public utility services.
5.16 Margin Regulations. None of the transactions contemplated by this
Loan Agreement or any of the other Loan Instruments, including the use of the
proceeds of the Loan, will violate or result in a violation of Section 7 of the
Securities Exchange Act of 1934, as amended, or any regulations issued pursuant
thereto, including, without limitation, Regulations G, T, U and X, and Borrower
does not own or intend to carry or purchase any "margin security" within the
meaning of such Regulation U or G.
5.17 Other Indebtedness. Upon the Closing Borrower will have no
Indebtedness for Borrowed Money, except (i) Borrower's Obligations, (ii)
Subordinated Indebtedness and (iii) Permitted Senior Indebtedness permitted to
exist as of the Closing Date pursuant to this Loan Agreement.
5.18 No Misrepresentation. Neither this Loan Agreement nor any other Loan
Instrument, certificate, information or report furnished or to be furnished by
or on behalf of Borrower to Agent or any Lender pursuant hereto, contains or
will contain a misstatement of material fact, or omits or will omit to state a
material fact required to be stated in order to make the statements contained
herein or therein, taken as a whole, not misleading in the light of the
circumstances under which such statements were made. There is no fact, other
than information known to the public generally, known to or reasonably foreseen
by Borrower after diligent inquiry, that could have a Material Adverse Effect
that has not expressly been disclosed to FINOVA in writing.
33
5.19 Employee Benefit Plans.
5.19.1 No Other Plans. Neither Borrower nor any ERISA Affiliate
maintains or contributes to, or has any obligation under, any Employee
Benefit Plan other than those identified on Exhibit 5.19.1. Borrower has
provided Agent accurate and complete copies of all contracts, agreements
and documents described on Exhibit 5.19.1.
5.19.2 ERISA and Code Compliance and Liability. Borrower and each
ERISA Affiliate is in compliance with all applicable provisions of ERISA
with respect to all Employee Benefit Plans except where failure to comply
would not result in a material liability to Borrower and except for any
required amendments for which the remedial amendment period as defined in
Section 401(b) of the Code has not yet expired. Each Employee Benefit Plan
that is intended to be qualified under Section 401(a) of the Code has been
determined by the Internal Revenue Service to be so qualified, and each
trust related to such plan has been determined to be exempt under Section
401(a) of the Code. No material liability has been incurred by Borrower or
any ERISA Affiliate which remains unsatisfied for any taxes or penalties
with respect to any Employee Benefit Plan or any Multiemployer Plan.
5.19.3 Funding. No Pension Plan has been terminated, nor has any
accumulated funding deficiency (as defined in Section 412 of the Code)
been incurred (without regard to any waiver granted under Section 412 of
the Code), nor has any funding waiver from the Internal Revenue Service
been received or requested with respect to any Pension Plan, nor has
Borrower or any ERISA Affiliate failed to make any contributions or to pay
any amounts due and owing as required by Section 412 of the Code, Section
302 of ERISA or the terms of any Pension Plan on or before the due dates
of such contributions under Section 412 of the Code or Section 302 of
ERISA, nor has there been any event requiring any disclosure under Section
4041(c)(3)(C), 4063(a) or 4068 of ERISA with respect to any Pension Plan.
5.19.4 Prohibited Transactions and Payments. Neither Borrower nor
any ERISA Affiliate has: (i) knowingly engaged in a nonexempt "prohibited
transaction" as such term is defined in Section 406 of ERISA or Section
4975 of the Code; (ii) incurred any liability to the PBGC which remains
outstanding other than the payment of premiums and there are no premium
payments which are due and unpaid; (iii) failed to make a required
contribution or payment to a Multiemployer Plan; or (iv) failed to make a
required installment or other required payment under Section 412 of the
Code.
5.19.5 No Termination Event. No Termination Event has occurred or is
reasonably expected to occur.
5.19.6 ERISA Litigation. No material proceeding, claim, lawsuit
and/or investigation is existing or, to the best knowledge of Borrower,
threatened concerning or involving any (i) employee welfare benefit plan
(as defined in Section 3(1) of ERISA) currently maintained or contributed
to by Borrower or any ERISA Affiliate, (ii) Pension Plan or (iii)
Multiemployer Plan.
34
5.20 Employee Matters.
5.20.1 Collective Bargaining Agreements; Grievances. (i) None of the
employees of Borrower is subject to any collective bargaining agreement
relating to their employment by Borrower, (ii) no petition for
certification or union election is pending with respect to the employees
of Borrower and no union or collective bargaining unit has sought such
certification or recognition with respect to the employees of Borrower and
(iii) there are no strikes, slowdowns, work stoppages, unfair labor
practice complaints, grievances, arbitration proceedings or controversies
pending or, to the best knowledge of Borrower, threatened against any
Borrower by any of Borrower's employees, other than employee grievances or
controversies arising in the ordinary course of business that could not in
the aggregate have a Material Adverse Effect.
5.20.2 Claims Relating to Employment. Neither Borrower nor, to
Borrower's best knowledge, any employee of Borrower, is subject to any
employment agreement or non-competition agreement with any former employer
or any other Person which agreement could have a Material Adverse Effect
due to (i) any information which Borrower would be prohibited from using
under the terms of such agreement or (ii) any legal considerations
relating to unfair competition, trade secrets or proprietary information.
5.21 Burdensome Obligations. After giving effect to the transactions
contemplated by the Loan Instruments Borrower will not be a party to or be bound
by any franchise, agreement, deed, lease or other instrument, or be subject to
any restriction, which is so unusual or burdensome so as to cause, in the
foreseeable future, a Material Adverse Effect.
5.22 Dwelling Units; Passes; Channel Capacity. As of the Closing Date, the
System in the aggregate passes not less than 112,740 individual dwelling units
and over 80% of the plant mileage of the System is capable of carrying at least
42 channels.
5.23 Subscribers. As of the Closing Date, Borrower in the aggregate has
not less than 74,750 Subscribers. The number of Subscribers for each "head-end"
of Borrower is set forth on Exhibit 5.23.
ARTICLE VI
AFFIRMATIVE COVENANTS
Until all of Borrower's Obligations are paid and performed in full
Borrower agrees that it will:
6.1 Legal Existence; Good Standing. Maintain its existence and its good
standing in the jurisdiction of its formation and its qualification in each
jurisdiction in which the failure so to qualify could have a Material Adverse
Effect, and in any event in each jurisdiction in which any portion of the System
is operated.
35
6.2 Inspection. Permit representatives of Agent and Lenders at any time to
(i) visit its offices, (ii) examine its books and records and Accountants'
reports relating thereto, (iii) make copies or extracts therefrom, (iv) discuss
its affairs with its employees, (v) examine and inspect its Property and (vi)
meet and discuss its affairs with the Accountants, and such Accountants, as a
condition to their retention by Borrower, are hereby irrevocably authorized by
Borrower to fully discuss and disclose all such affairs with Agent and Lenders.
The representatives of Agent and each Lender shall conduct the activities
described in this Section 6.2 at reasonable times and upon reasonable notice,
provided, however, if an Event of Default or Incipient Default exists, such
activities may be conducted at any time without notice.
6.3 Financial Statements and Other Information. Maintain a standard system
of accounting in accordance with GAAP and furnish to each Lender:
6.3.1 Monthly Statements. As soon as available and in any event
within (i) 30 days after the close of each month other than the last month
of any quarter and (ii) 45 days after the close of the last month of any
quarter:
(a) a copy of the balance sheet of Borrower as of the end of
such month,
(b) statements of operations and Operating Cash Flow of
Borrower for such month and for the period from the beginning of the
then current year to the end of such month, setting forth in each
case in comparative form the corresponding figures for the
corresponding period in the preceding year, and
(c) a Subscriber Base Certificate as of the last day of such
month,
all in reasonable detail, containing such information as Lenders
reasonably may require.
6.3.2 Quarterly Certifications. The financial statements delivered
to Lenders pursuant to subsection 6.3.1 for the last month of each quarter
shall be certified by the President or Chief Financial Officer, to the
best of his knowledge, as presenting fairly in all material respects the
results of operations of Borrower for the period covered thereby and the
financial condition of Borrower as of the dates indicated therein, subject
to normal year-end adjustments.
6.3.3 Annual Statements. As soon as available and in any event
within 90 days after the close of each year:
(a) the balance sheet of Borrower as of the end of such year
and the statements of operations, cash flows, shareholders' equity
(collectively, the "Basic Financial Statements"), Operating Cash
Flow of Borrower and Excess Cash Flow for such year setting forth in
each case in comparative form the corresponding figures for the
preceding year,
(b) an opinion of the Accountants which shall accompany the
Basic Financial Statements, which opinion shall be unqualified as to
going concern and
36
scope of audit, stating that (i) the examination by the Accountants
in connection with such Basic Financial Statements has been made in
accordance with generally accepted auditing standards, (ii) such
Basic Financial Statements have been prepared in conformity with
GAAP and in a manner consistent with prior periods, and (iii) such
Basic Financial Statements fairly present in all material respects
the financial position and results of operations of Borrower, and
(c) a letter from the Accountants stating that the annual
statements of Operating Cash Flow and Excess Cash Flow were prepared
in accordance with the requirements of this Loan Agreement.
6.3.4 Compliance Certificates. Each certification described in
subsection 6.3.2 and the financial statements described in subsection
6.3.3 shall be accompanied by a Compliance Certificate.
6.3.5 Accountants' Certificate. Simultaneously with the delivery of
the certified Basic Financial Statements required by subsection 6.3.3,
copies of a certificate of the Accountants stating that (i) they have
checked the computations delivered by Borrower in compliance with
subsection 6.3.3, and (ii) in making the examination necessary for their
audit of the Basic Financial Statements of Borrower for such year, nothing
came to their attention of a financial or accounting nature that caused
them to believe that (A) Borrower was not in compliance with the terms,
covenants, provisions or conditions of any of the Loan Instruments, or (B)
there shall have occurred any condition or event which would constitute an
Event of Default, or, if so, specifying in such certificate all such
instances of non-compliance and the nature and status thereof.
6.3.6 Audit Reports. Promptly upon receipt thereof, a copy of each
report, other than the reports referred to in subsection 6.3.3, including
any so-called "Management Letter" or similar report, submitted to Borrower
by the Accountants in connection with any annual, interim or special audit
made by the Accountants of the books of Borrower.
6.3.7 Business Plans. Not later than 30 days before the end of each
year, except 1996 with respect to 1997, a business plan for the following
year setting forth in reasonable detail the projected operations budget of
the System for such year and such other information as Lenders reasonably
may request, for such following year.
6.3.8 Notice of Defaults; Loss. Prompt written notice if: (i) any
Indebtedness of Borrower in excess of $50,000 is declared or shall become
due and payable prior to its declared or stated maturity, or called and
not paid when due, (ii) an event has occurred that enables the holder of
any note, or other evidence of such Indebtedness, certificate or security
evidencing any such Indebtedness of Borrower to declare such Indebtedness
due and payable prior to its stated maturity, (iii) there shall occur and
be continuing an Incipient Default or Event of Default, accompanied by a
statement setting forth what action Borrower proposes to take in respect
thereof, or (iv) any event shall occur which has or could have a Material
Adverse Effect, including the amount or the estimated amount of any loss
or depreciation or adverse effect.
37
6.3.9 Notice of Suits, Adverse Events. Prompt written notice of: (i)
any citation, summons, subpoena, order to show cause or other order naming
Borrower a party to any proceeding before any Governmental Body which
could have a Material Adverse Effect and include with such notice a copy
of such citation, summons, subpoena, order to show cause or other order,
(ii) any lapse or other termination of any license, permit, franchise,
agreement or other authorization issued to Borrower by any Governmental
Body or any other Person that is material to the operation of the Cable
Business of Borrower, (iii) any refusal by any Governmental Body or any
other Person to renew or extend any such license, permit, franchise,
agreement or other authorization and (iv) any dispute between Borrower and
any Governmental Body or any other Person, which lapse, termination,
refusal or dispute referred to in clauses (ii) and (iii) above or in this
clause (iv) could have a Material Adverse Effect.
6.3.10 Reports to Shareholders, Creditors and Governmental Bodies.
(a) Promptly upon becoming available, copies of all financial
statements, reports, notices and other statements sent or made
available generally by Borrower to its shareholders, of all regular
and periodic reports and all registration statements and
prospectuses filed by Borrower with any securities exchange or with
the Securities and Exchange Commission or any Governmental Body
succeeding to any of its functions, and of all statements generally
made available by Borrower or others concerning material
developments in the business of Borrower.
(b) Promptly upon becoming available, copies of any periodic
or special reports filed by Borrower with any Governmental Body or
Person, if such reports indicate any material change in the
business, operations, affairs or condition of Borrower, or if copies
thereof are requested by Lender, and copies of any material notices
and other communications from any Governmental Body or Person which
specifically relate to Borrower.
6.3.11 ERISA Notices and Requests.
(a) With reasonable promptness, and in any event within 30
days after occurrence of any of the following, Borrower will give
notice of and/or deliver to Agent copies of: (i) the establishment
of any new Employee Benefit Plan, Pension Plan or Multiemployer
Plan; (ii) the commencement of contributions to any Employee Benefit
Plan, Pension Plan or Multiemployer Plan to which Borrower or any of
its ERISA Affiliates was not previously contributing or any increase
in the benefits of any existing Employee Benefit Plan, Pension Plan
or Multiemployer Plan; (iii) each funding waiver request filed with
respect to any Employee Benefit Plan and all communications received
or sent by Borrower or any ERISA Affiliate with respect to such
request; and (iv) the failure of Borrower or any ERISA Affiliate to
make a required installment or payment under Section 302 of ERISA or
Section 412 of the Code by the due date.
38
(b) Promptly and in any event within 10 days of becoming aware
of the occurrence of or forthcoming occurrence of any (i)
Termination Event or (ii) "prohibited transaction", as such term is
defined in Section 406 of ERISA or Section 4975 of the Code, in
connection with any Pension Plan or any trust created thereunder,
Borrower will deliver to Agent a notice specifying the nature
thereof, what action Borrower has taken, is taking or proposes to
take with respect thereto and, when known, any action taken or
threatened by the Internal Revenue Service, the Department of Labor
or the PBGC with respect thereto.
(c) With reasonable promptness but in any event within 10 days
after the occurrence of any of the following, Borrower will deliver
to Agent copies of: (i) any favorable or unfavorable determination
letter from the Internal Revenue Service regarding the qualification
of an Employee Benefit Plan under Section 401(a) of the Code; (ii)
all notices received by Borrower or any ERISA Affiliate of the
PBGC's intent to terminate any Pension Plan or to have a trustee
appointed to administer any Pension Plan; (iii) each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series)
filed by Borrower or any ERISA Affiliate with the Internal Revenue
Service with respect to each Pension Plan; and (iv) all notices
received by Borrower or any ERISA Affiliate from a Multiemployer
Plan sponsor concerning the imposition or amount of withdrawal
liability pursuant to Section 4202 of ERISA. Borrower will notify
Agent in writing within two Business Days of Borrower or any ERISA
Affiliate that has filed or intends to file a notice of intent to
terminate any Pension Plan under a distress termination within the
meaning of Section 4041(c) of ERISA.
6.3.12 Other Information.
(a) Immediate notice of any change in, or termination of, the
employment of Xxxxx X. Xxxxxxxxx or the Chief Financial Officer, any
change in the location of any Property of Borrower which is material
to or necessary for the continued operation of Borrower's business,
any change in the name of Borrower, any sale or purchase of Property
outside the regular course of business of Borrower, and any change
in the business or financial affairs of Borrower, which change could
have a Material Adverse Effect.
(b) Notice that any competing provider of cable television
service or any MDS or MMDS operator, other than those indicated on
Exhibit 6.3.12, is operating within any area passed by the System
and is offering service to dwelling units or commercial buildings
passed by the System, promptly after Borrower becomes aware of such
fact.
(c) Promptly upon request therefor, such other information and
reports relating to the past, present or future financial condition,
operations, plans and projections of Borrower as Lenders reasonably
may request from time to time.
6.4 Reports to Governmental Bodies and Other Persons. Timely file all
material reports, statements of account, applications, documents, instruments
and information required
39
to be filed pursuant to all rules, regulations or requests of any Governmental
Body or other Person having jurisdiction over the operation of the business of
Borrower, including, but not limited to, such of the Loan Instruments as are
required to be filed with any such Governmental Body or other Person pursuant to
applicable rules and regulations promulgated by such Governmental Body or other
Person, except where the failure to file will not have a Material Adverse
Effect.
6.5 Maintenance of Licenses, Franchises and Other Agreements. Deliver to
Agent (i) at least 20 days' prior written notice of any proposed material
amendment of any of its Franchises or FCC Licenses and (ii) (A) evidence of the
filing of any application for renewal of any of its FCC Licenses or Franchises
not less than the earlier of (1) 60 days prior to the expiration of such FCC
License or Franchise or (2) the last day such application may be filed in
accordance with applicable law and (B) copies of any petition to deny any such
renewal application promptly after receipt thereof by Borrower.
6.6 Insurance.
6.6.1 Maintenance of Insurance. Maintain in full force and effect at
all times such property, casualty, business interruption and other
insurance required by the insurance letter agreement between Borrower and
Agent, the form of which is attached hereto as Exhibit 6.6.1, all of which
shall be written by insurers and in amounts and forms satisfactory to
Agent and otherwise comply with the terms of such insurance letter
agreement, and deliver to Agent evidence of compliance with this
subsection 6.6.1 as Agent may require.
6.6.2 Claims and Proceeds. Borrower shall direct all insurers under
all policies of casualty and property insurance required to be maintained
by Borrower pursuant to subsection 6.6.1 to pay all proceeds payable
thereunder directly to Agent and Borrower hereby authorizes Agent to
collect such proceeds; provided that so long as no Incipient Default or
Event of Default exists and is continuing any proceeds payable thereunder
in an aggregate amount of $100,000 or less may be paid directly to
Borrower provided Borrower promptly uses such proceeds to pay for the cost
of repair or replacement of the material Collateral subject to the
applicable loss, damage, destruction or other casualty to at least equal
value and substantially the same character as prior to such loss, damage,
destruction or other casualty. Borrower irrevocably appoints Agent (and
all officers, employees or agents designated by Agent) as Borrower's true
and lawful attorney and agent in fact for the purpose of and with power to
make, settle and adjust claims under such policies of insurance, endorse
the name of Borrower on any check, draft, instrument or other item of
payment for the proceeds of such policies of insurance, and to make all
determinations and decisions with respect to such policies of insurance.
Borrower acknowledges that such appointment of Agent as its attorney and
agent in fact is a power coupled with an interest and therefore is
irrevocable. Borrower shall promptly notify Agent of any material loss,
damage, destruction or other casualty to the Collateral. Subject to the
first sentence of this subsection 6.6.1, the insurance proceeds received
on account of any loss, damage, destruction or other casualty (i) if any
Incipient Default or Event of Default exists, at the option of Lenders
shall be applied (A) as set forth in the following clause (ii) or (B) in
reduction of Borrower's Obligations in the following order
40
of priority: (1) first, to the payment of any and all sums which are then
due and payable pursuant to the terms of the Loan Instruments, other than
the Principal Balance and accrued and unpaid interest thereon, (2) next,
to accrued and unpaid interest on the Principal Balance, (3) next, to the
Principal Balance of the Term Loan in the inverse order of the maturity of
the installments thereof and (4) then, to the Principal Balance of the
Revolving Loan, or (ii) if no Incipient Default or Event of Default exists
or if Lenders so elect, shall be held by Agent and applied to pay for the
cost of repair or replacement of the Collateral subject to such loss,
damage, destruction or other casualty, in which event such proceeds shall
be made available in the manner and under such conditions as Agent may
require. In the event the proceeds are to be applied to the repair or
replacement of Collateral, the Collateral shall be so repaired or replaced
as to be of at least equal value and substantially the same character as
prior to such loss, damage, destruction or other casualty.
6.7 Future Leases. Deliver to Agent, concurrently with the execution by
Borrower, as lessee, of any lease pertaining to real property, (i) a copy
thereof, (ii) at the option of Agent, either a leasehold mortgage upon or a
collateral assignment of such lease in favor of Agent, in either case in form
and substance satisfactory to Agent, and (iii) a Landlord Consent and Waiver in
form and substance satisfactory to Agent from the lessor under such lease.
6.8 Future Acquisitions of Real Property. Deliver to Agent concurrently
with the (i) execution by Borrower of any contract relating to the purchase by
Borrower of real property, an executed copy of such contract and (ii) closing of
the purchase of such real property, (A) a first mortgage or deed of trust in
favor of Agent on such real property, in form and substance satisfactory to
Agent, (B) a lender's policy of title insurance, in such form and amount and
containing such endorsements as shall be satisfactory to Agent, (C) an ALTA/ACSM
survey of such real property and (D) such other documents and assurances with
respect to such real property as Agent may require.
6.9 Environmental Matters.
6.9.1 Compliance. At all times comply with, and be responsible for,
its obligations under all Environmental Laws applicable to the Real
Property, the Leasehold Property and any other Property owned by Borrower
or used by Borrower in the operation of Borrower's business, except where
the failure to comply will not have a Material Adverse Effect. At its sole
cost and expense, Borrower shall (i) comply in all respects with (A) any
notice of any violation or administrative or judicial complaint or order
having been filed against Borrower, any portion of any Leasehold Property
or any other Property owned by Borrower or used by Borrower in the
operation of its business alleging violations of any law, ordinance and/or
regulation requiring Borrower to take any action in connection with the
release, transportation and/or clean-up of any Hazardous Materials, and
(B) any notice from any Governmental Body or any other Person alleging
that Borrower is or may be liable for costs associated with a response or
clean-up of any Hazardous Materials or any damages resulting from such
release or transportation, or (ii) diligently contest in good faith by
appropriate proceedings any demands set forth in such notices, provided
(A) reserves in an amount satisfactory to Agent to pay the costs
associated with complying with any such notice are established by
41
Borrower and (B) no Lien would or will attach to the Property which is the
subject of any such notice as a result of any compliance by Borrower which
is delayed during any such contest. Promptly upon receipt of any notice
described in the foregoing clause (i), Borrower shall deliver a copy
thereof to Agent.
6.9.2 Certification. Deliver to Agent, not later than January 31 of
each year, an Environmental Compliance Certificate.
6.9.3 Environmental Audit. At the request of Agent deliver to Agent
an Environmental Audit with respect to any real property leased or
acquired by Borrower referred to in Sections 6.7 and 6.8.
6.10 Compliance with Laws. Comply with all Cable Statutes and Regulations
and all other federal, state and local laws, ordinances, requirements and
regulations and all judgments, orders, injunctions and decrees applicable to
Borrower and its operations, the failure to comply with which could have a
Material Adverse Effect.
6.11 Taxes and Claims. Pay and discharge all material taxes, assessments
and governmental charges or levies imposed upon it or upon its income or
profits, or upon any Property belonging to it, prior to the date on which
penalties attach thereto, and all lawful claims which, if unpaid, might become a
Lien (other than a Permitted Lien) upon the Property of Borrower, provided that
so long as no Lien has attached to the Property of Borrower as a result of any
of the foregoing, Borrower shall not be required by this Section 6.11 to pay any
such amount if the same is being contested diligently and in good faith by
appropriate proceedings and as to which Borrower has set aside reserves on its
books satisfactory to Agent.
6.12 Maintenance of Properties. Maintain all of its Properties necessary
in the operation of its Cable Business in good working order and condition.
6.13 Governmental Approvals. Upon the exercise by Agent and/or Lenders of
any power, right or privilege pursuant to the provisions of any of the Loan
Instruments requiring any consent, approval or authorization of any Governmental
Body, Franchisor or Pole Attachment Authority (including, without limitation,
transfers of Franchises, Licenses or Pole Attachment Agreements), promptly
execute and cause the execution of all applications, certificates, instruments
and other documents that Agent and/or Lenders may be required to obtain for such
consent, approval or authorization.
6.14 Future Franchise Agreements. Deliver to Agent, promptly after the
execution by Borrower, as franchisee, of any Franchise Agreement (i) a copy
thereof and (ii) a Franchisor Consent with respect thereto.
42
ARTICLE VII
NEGATIVE COVENANTS
Until all of Borrower's Obligations are paid and performed in full,
Borrower shall not, without the prior written consent of Agent:
7.1 Borrowing. Create, incur, assume or suffer to exist any liability for
Indebtedness for Borrowed Money except (i) Borrower's Obligations, (ii) the
Subordinated Indebtedness and (iii) Permitted Senior Indebtedness.
7.2 Liens. Create, incur, assume or suffer to exist any Lien upon any of
its Property, whether now owned or hereafter acquired, except Permitted Liens.
7.3 Merger and Acquisition. Consolidate with or merge with or into any
Person, or acquire directly or indirectly all or substantially all of the
capital stock, equity interests or Property of any Person.
7.4 Contingent Liabilities. Assume, guarantee, endorse, contingently agree
to purchase, become liable in respect of any letter of credit, or otherwise
become liable upon the obligation of any Person, except liabilities arising from
the endorsement of negotiable instruments for deposit or collection, the posting
of bonds to secure performance to the extent necessary in connection with
Borrower's Cable Business and similar transactions in the ordinary course of
business.
7.5 Distributions. Make any dividends, distributions or other shareholder
expenditures with respect to the Borrower Capital Stock or apply any of its
Property to the purchase, redemption or other retirement of, or set apart any
sum for the payment of, or make any other distribution by reduction of capital
or otherwise in respect of, any of the Borrower Capital Stock.
7.6 Capital Expenditures. Make or incur any Capital Expenditures for the
period from the Closing Date through December 31, 1996 in excess of $1,000,000
or in any year after 1996 in excess of the amount set forth below opposite such
year:
Year Amount
---- ------
1997 $5,600,000
1998 $4,600,000
1999 $8,300,000
2000 $7,300,000
2001 $2,700,000;
provided that if the Capital Expenditures made or incurred by Borrower for the
years 1997 or 1998 are less than the amounts set forth above opposite such year,
Borrower may make or incur Capital Expenditures in the immediately succeeding
year in an amount not to exceed the sum of (i) the amount set forth above
opposite such succeeding year and (ii) the lesser of $1,000,000
43
or the amount by which the amount set forth above opposite the year 1997 or
1998, as applicable, exceeds the Capital Expenditures made or incurred by
Borrower for the year 1997 or 1998, as applicable.
7.7 Payments of Indebtedness for Borrowed Money. Make any (i) payment in
respect of the Subordinated Indebtedness except to the extent permitted by the
Subordination Agreement or (ii) voluntary or optional prepayment of any
Indebtedness for Borrowed Money other than Borrower's Obligations.
7.8 Obligations as Lessee Under Operating Leases. Enter into any
arrangement as lessee of Property under any Operating Lease if the aggregate
rentals for all such Operating Leases during any year would exceed $350,000.
7.9 Investments, Loans. At any time purchase or otherwise acquire, hold or
invest in the capital stock of, or any other interest in, any Person, or make
any loan or advance to, or enter into any arrangement for the purpose of
providing funds or credit to, or make any other investment, whether by way of
capital contribution or otherwise, in or with any Person, including, without
limitation, any Affiliate, except (i) investments in direct obligations of, or
instruments unconditionally guaranteed by, the United States of America or in
certificates of deposit issued by a Qualified Depository, (ii) investments in
commercial or finance paper which, at the time of investment, is rated "A" or
better by Xxxxx'x Investors Service, Inc., or Standard & Poor's Ratings Group, a
Division of XxXxxx-Xxxx, Inc., respectively, or at the equivalent rate by any of
their respective successors, (iii) any interests in any money market account
maintained, at the time of investment, with a Qualified Depository, the
investments of which, at the time of investment, are restricted to the types
specified in clause (i) above, (iv) loans to employees of Borrower in the
aggregate amount not to exceed $25,000 outstanding at any time and (v)
investments in equity interests of programmers made available to Borrower by
such programmers as an inducement to carry programming of such programmers,
provided the aggregate cost of all such investments does not exceed $100,000
outstanding at any time. All investments permitted pursuant to clauses (i), (ii)
and (iii) of this Section 7.9 shall have a maturity not exceeding one year.
7.10 Fundamental Business Changes. Materially change the nature of its
business or engage in any business other than the Cable Business.
7.11 Facility Sites. Change the locations of its chief executive office or
any headends, earth stations, microwave facilities, tower installations,
studios, offices or other Property used in the operation of the System unless
(i) Agent shall have received at least 30 days' prior written notice thereof,
(ii) Borrower shall have complied with all applicable laws, rules and
regulations and shall have received all required consents and approvals from any
Governmental Body, including, without limitation, the FCC, (iii) Agent shall
have received satisfactory evidence that such change could not reasonably be
expected to materially adversely affect the operations or business prospects of
Borrower and (iv) Borrower shall have executed and delivered to Agent any
documents Agent may reasonably require in order to maintain the validity and
priority of the Security Interests.
44
7.12 Sale or Transfer of Assets. Sell, lease, assign, transfer or
otherwise dispose of any Property (other than in the ordinary course of
business) except for (i) the sale or disposition of (A) Property which is not
material to or necessary for the continued operation of its business and (B)
obsolete or unusable items of equipment which promptly are replaced with new
items of equipment of like function and comparable value to the unusable items
of equipment when the same were new or not obsolete or unusable, provided such
replacement items of equipment shall become subject to the Security Interests
and (ii) Permitted Asset Sales.
7.13 Amendment of Documents. Amend, modify or waive any term or provision
of its articles of incorporation or by-laws or the Management Agreement in any
manner which adversely affects Lenders or agree to any amendment or modification
of any term or provision of the Subordinated Credit Instruments which is
prohibited by the Subordination Agreement.
7.14 Acquisition of Additional Properties. Acquire any additional Property
except such Property as is necessary to or useful in the operation of its
business, provided such acquisitions shall be subject to the conditions and
limitations set forth in this Loan Agreement.
7.15 Issuance of Equity Interests. Issue or sell, permit to be issued or
sold, or otherwise consent to the transfer of, any additional capital stock or
any interests convertible into or exercisable for any such additional capital
stock, except for the conversion of the Class C Stock to Class A Stock.
7.16 Transactions with Affiliates. Sell, lease, assign, transfer or
otherwise dispose of any Property to any Affiliate of Borrower, lease Property,
render or receive services or purchase assets from any such Affiliate, or
otherwise enter into any contractual relationship with any Affiliate of
Borrower, except that Borrower may (i) receive management services from Xxxxx
Management under the terms of the Management Agreement and may pay to Xxxxx
Management (A) Xxxxx Management Fees provided that the aggregate amount of all
payments of Xxxxx Management Fees with respect to any month does not exceed 4.5%
of the gross revenues of Borrower for such month; except that any payment of
Xxxxx Management Fees with respect to December of any year may exceed 4.5% of
the gross revenues of Borrower for such month so long as the aggregate amount of
all payments of Xxxxx Management Fees with respect to any year does not exceed
4.5% of the gross revenues of Borrower for such year and (B) reasonable
out-of-pocket expenses and (ii) engage in such transactions with its Affiliates
provided such transactions are in the ordinary course of business of Borrower
and are under terms no less favorable to Borrower than could be obtained from an
independent third party.
7.17 Compliance with ERISA.
(i) Engage in any Termination Event which would result in a
liability to Borrower or any ERISA Affiliate in excess of $100,000;
(ii) Cause the present value of all benefit liabilities under all
Pension Plans to exceed the current value of the assets of such Pension
Plans allocable to such benefit liabilities by more than $100,000;
45
(iii) Cause any accumulated funding deficiency in excess of $100,000
(as defined in Section 302 of ERISA and Section 412 of the Code) with
respect to any Pension Plan, except to the extent waived;
(iv) Fail to make any contribution or payment to any Multiemployer
Plan which Borrower or any ERISA Affiliate may be required to make under
any agreement relating to such Multiemployer Plan, or any law pertaining
thereto which results in or is likely to result in a liability in excess
of $100,000;
(v) Engage, or permit any ERISA Affiliate to engage, in any
"prohibited transaction" as such term is defined in Section 406 of ERISA
or Section 4975 of the Code for which a civil penalty pursuant to Section
502(i) of ERISA or a tax pursuant to Section 4975 of the Code in excess of
$100,000 is imposed;
(vi) Establish any Employee Benefit Plan providing post-retirement
welfare benefits or establish or amend any Employee Benefit Plan which
establishment or amendment could result in liability to Borrower or any
ERISA Affiliate or increase the obligation of Borrower or any ERISA
Affiliate to a Multiemployer Plan which liability or increase,
individually or together with all similar liabilities and increases, is
material to Borrower or any ERISA Affiliate; or
(vii) Fail, or permit any ERISA Affiliate to fail, to establish,
maintain and operate each Employee Benefit Plan of Borrower in compliance
in all material respects with ERISA, the Code and all other applicable
laws and regulations and interpretations thereof.
7.18 Leverage Ratio. Permit the Debt/Cash Flow Ratio as of the last day of
any quarter ending as of any date set forth below to be greater than the amount
set forth opposite such date:
Date Amount
---- ------
December 31, 1996 5.00
March 31, 1997 5.00
June 30, 1997 5.00
September 30, 1997 4.75
December 31, 1997 4.75
March 31, 1998 4.75
June 30, 1998 4.75
September 30, 1998 4.50
December 31, 1998 4.50
March 31, 1999 4.50
June 30, 1999 4.50
September 30, 1999 4.25
December 31, 1999 4.25
March 31, 2000 4.25
June 30, 2000 4.25
46
September 30, 2000 4.25
December 31, 2000 4.25
March 31, 2001 4.25
June 30, 2001 4.25
September 30, 2001 4.25
December 31, 2001 4.25
7.19 Fixed Charge Coverage. Permit the ratio of Operating Cash Flow for
any period set forth below to the sum for such period of all Capital
Expenditures, Debt Service with respect to Borrower's Obligations (calculated on
an accrual basis for the first four such periods) and income taxes paid (other
than income taxes attributable to extraordinary gains) to be less than the
amount set forth opposite such period:
Three Months Ended Amount
------------------ ------
March 31, 1997 1.10
Six Months Ended Amount
---------------- ------
June 30, 1997 1.10
Nine Months Ended Amount
----------------- ------
September 30, 1997 1.10
Twelve Months Ended Amount
------------------- ------
December 31, 1997 1.10
March 31, 1998 1.10
June 30, 1998 1.10
September 30, 1998 1.10
December 31, 1998 1.10
March 31, 1999 1.05
June 30, 1999 1.05
September 30, 1999 1.05
December 31, 1999 1.05
March 31, 2000 1.05
June 30, 2000 1.05
September 30, 2000 1.05
December 31, 2000 1.05
March 31, 2001 1.05
June 30, 2001 1.05
September 30, 2001 1.05
December 31, 2001 1.05
7.20 Debt Service Coverage. Permit the ratio of Operating Cash Flow for
any period set forth below to Debt Service with respect to Borrower's
Obligations (calculated on an accrual
47
basis for the first four such periods) for such period to be less than the
amount set forth opposite such period:
Three Months Ended Amount
------------------ ------
March 31, 1997 1.85
Six Months Ended Amount
---------------- ------
June 30, 1997 1.85
Nine Months Ended Amount
----------------- ------
September 30, 1997 1.85
Twelve Months Ended Amount
------------------- ------
December 31, 1997 1.85
March 31, 1998 1.85
June 30, 1998 1.85
September 30, 1998 1.85
December 31, 1998 1.80
March 31, 1999 1.80
June 30, 1999 1.80
September 30, 1999 1.80
December 31, 1999 1.85
March 31, 2000 1.85
June 30, 2000 1.85
September 30, 2000 1.85
December 31, 2000 1.85
March 31, 2001 1.85
June 30, 2001 1.85
September 30, 2001 1.85
December 31, 2001 1.85
ARTICLE VIII
DEFAULT AND REMEDIES
8.1 Events of Default. The occurrence of any of the following shall
constitute an Event of Default under the Loan Instruments:
8.1.1 Default in Payment. If Borrower shall fail to pay all or any
portion of Borrower's Obligations when the same become due and payable;
provided that any failure to pay the portion of any interest payment
attributable to an increase in the Base
48
Rate shall not constitute an Event of Default under the Loan Instruments
until Borrower has received three Business Days' prior notice from Lenders
of such increase.
8.1.2 Breach of Covenants.
(a) If Borrower shall fail to observe or perform any covenant
or agreement made by Borrower contained in Section 6.2, 6.6 or 6.9
or in Article VII;
(b) If Borrower shall fail to comply with its obligations
pursuant to Section 6.1 and such failure shall continue for a period
of 30 days after such failure occurs;
(c) If Borrower or any other Obligor shall fail to observe or
perform any covenant or agreement (other than those referred to in
subparagraphs (a) and (b) above or specifically addressed elsewhere
in this Section 8.1) made by such Person in any of the Loan
Instruments to which such Person is a party, and such failure shall
continue for a period of 30 days after written notice of such
failure is given by Lenders.
8.1.3 Breach of Warranty. If any representation or warranty made by
or on behalf of Borrower or any Obligor in or pursuant to any of the Loan
Instruments or in any instrument or document furnished in compliance with
the Loan Instruments shall prove to be false or misleading in any material
respect on the date as of which made.
8.1.4 Default Under Other Indebtedness for Borrowed Money. If (i)
Borrower at any time shall be in default (as principal or guarantor or
other surety) in the payment of any principal of or premium or interest on
any Indebtedness for Borrowed Money (other than Borrower's Obligations)
beyond the grace period, if any, applicable thereto and the aggregate
amount of such payments then in default beyond such grace period shall
exceed $50,000 or (ii) any default shall occur in respect of any issue of
Indebtedness for Borrowed Money of Borrower (other than Borrower's
Obligations) outstanding in a principal amount of at least $200,000, or in
respect of any agreement or instrument relating to any such issue of
Indebtedness for Borrowed Money, and such default shall continue beyond
the grace period, if any, applicable thereto.
8.1.5 Bankruptcy.
(a) If Borrower shall (i) generally not be paying its debts as
they become due, (ii) file, or consent, by answer or otherwise, to
the filing against it of a petition for relief or reorganization or
arrangement or any other petition in bankruptcy or insolvency under
the laws of any jurisdiction, (iii) make an assignment for the
benefit of creditors, (iv) consent to the appointment of a
custodian, receiver, trustee or other officer with similar powers
for Borrower, or for any substantial part of the Property of
Borrower or (v) be adjudicated insolvent.
49
(b) If any Governmental Body of competent jurisdiction shall
enter an order appointing, without consent of Borrower, a custodian,
receiver, trustee or other officer with similar powers with respect
to Borrower, or with respect to any substantial part of the Property
belonging to Borrower, or if an order for relief shall be entered in
any case or proceeding for liquidation or reorganization or
otherwise to take advantage of any bankruptcy or insolvency law of
any jurisdiction, or ordering the dissolution, winding-up or
liquidation of Borrower or if any petition for any such relief shall
be filed against Borrower and such petition shall not be dismissed
or stayed within 60 days.
8.1.6 Judgments. If there shall exist a final judgment or award
against Borrower which shall have been outstanding for a period of 30 days
or more from the date of the entry thereof and shall not have been
discharged in full or stayed pending appeal, if the aggregate amount of
all such judgments and awards exceeds $100,000.
8.1.7 Impairment of Licenses; Other Agreements. If (i) any
Governmental Body shall (A) revoke, terminate, suspend or adversely modify
any License or Franchise of Borrower, the non-continuation of which could
have a Material Adverse Effect, or (B) enter a final order or decision to
suspend, revoke, terminate or adversely modify any such License or
Franchise or (ii) there shall exist any violation or default in the
performance of, or a material failure to comply with any agreement, or
condition or term of any License or Franchise, which violation, default or
failure could reasonably be expected to have a Material Adverse Effect, or
any such License or Franchise shall cease to be in full force and effect,
or (iii) any Operating Agreement shall expire or be revoked or terminated
and not replaced by a substitute acceptable to Lenders within 30 days
after the date of such expiration, revocation or termination, and such
expiration, revocation or termination and non-replacement could reasonably
be expected to have a Material Adverse Effect.
8.1.8 Collateral. If any material portion of the Collateral shall be
seized or taken by a Governmental Body or Person, or Borrower shall fail
to maintain or cause to be maintained the Security Interests and priority
of the Loan Instruments as against any Person, or the title and rights of
any Obligor to any material portion of the Collateral shall have become
the subject matter of litigation which could reasonably be expected to
result in impairment or loss of the security provided by the Loan
Instruments.
8.1.9 Interruption of Operations. If the transmitting operations of
any portion of the System affecting more than 6,000 Subscribers of
Borrower is interrupted at any time for more than 72 hours during any
period of 10 consecutive days, unless the Borrower shall be entitled to
receive with respect to such period of interruption (subject to a three
day deductible) proceeds of business interruption insurance sufficient to
assure that the per diem Operating Cash Flow of such portion of the System
during such period is at least equal to 90% of its average per diem
Operating Cash Flow for the twelve months preceding the initial date of
interruption.
8.1.10 Plans. If an event or condition specified in subsection
6.3.11 hereof shall occur or exist with respect to any Plan or
Multiemployer Plan and, as a result of such
50
event or condition, together with all other such events or conditions,
Borrower or any member of an ERISA Affiliate shall incur, a liability to a
Plan or Multiemployer Plan or the PBGC (or any of them) which, in the
reasonable judgment of Lender, could reasonably be expected to have a
Material Adverse Effect.
8.1.11 Change in Management. If at any time Xxxxx X. Xxxxxxxxx shall
die, become permanently disabled or cease, for a period of 60 days, to
devote his full business time to the operation of Borrower's business,
unless replaced by a person reasonably satisfactory to Lenders within 90
days after such death, disability or cessation.
8.2 Acceleration of Borrower's Obligations. Upon the occurrence of:
(a) any Event of Default described in clauses (ii), (iii), (iv) and
(v) of subsection 8.1.5(a) or in 8.1.5(b), the Revolving Loan Commitment
automatically shall terminate and all of Borrower's Obligations at that
time outstanding automatically shall mature and become due, and
(b) any other Event of Default, Lenders, at any time (unless such
Event of Default shall have been waived in writing or remedied), at their
option, without further notice or demand, may terminate the Revolving Loan
Commitment and declare all of Borrower's Obligations due and payable,
whereupon the Revolving Loan Commitment shall terminate and Borrower's
Obligations immediately shall mature and become due and payable,
all without presentment, demand, protest or notice (other than the declaration
referred to in clause (b) above), all of which hereby are waived.
8.3 Remedies on Default. If Borrower's Obligations have been accelerated
pursuant to Section 8.2, Lenders, at their option, may:
8.3.1 Enforcement of Security Interests. Enforce their rights and
remedies under the Loan Instruments in accordance with their respective
terms.
8.3.2 Other Remedies. Enforce any of the rights or remedies accorded
to Lenders and/or Agent at equity or law, by virtue of statute or
otherwise.
8.4 Application of Funds. Any funds received by Lenders or Agent pursuant
to the exercise of any rights accorded to Lenders and/or Agent pursuant to, or
by the operation of any of the terms of, any of the Loan Instruments, including,
without limitation, insurance proceeds, condemnation proceeds or proceeds from
the sale of Collateral, shall be applied to Borrower's Obligations in the
following order of priority:
8.4.1 Expenses. First, to the payment of (i) all reasonable fees and
expenses actually incurred, including, without limitation, court costs,
fees of appraisers, title charges, costs of maintaining and preserving the
Collateral, costs of sale, and all other costs incurred by Lenders and
Agent in exercising any rights accorded to such Persons pursuant to the
Loan Instruments or by applicable law, including, without limitation,
51
reasonable attorneys' fees, and (ii) all Liens superior to the Liens of
Agent except such superior Liens subject to which any sale of the
Collateral may have been made.
8.4.2 Borrower's Obligations. Next, to the payment of the remaining
portion of Borrower's Obligations in such order as Lenders may determine.
8.4.3 Surplus. Any surplus, to the Person or Persons entitled
thereto.
8.5 Performance of Borrower's Obligations. If Borrower fails to (i)
maintain in force and pay for any insurance policy or bond which Borrower is
required to provide pursuant to any of the Loan Instruments, (ii) keep the
Collateral free from all Liens except for Permitted Liens, (iii) pay when due
all taxes, levies and assessments on or in respect of the Collateral, except as
otherwise permitted pursuant to the terms hereof, (iv) make all payments and
perform all acts on the part of Borrower to be paid or performed in the manner
required by the terms hereof and by the terms of the other Loan Instruments with
respect to any of the Collateral, including, without limitation, all expenses of
protecting, storing, warehousing, insuring, handling and maintaining the
Collateral, (v) keep fully and perform promptly any other of the obligations of
Borrower hereunder or under any of the other Loan Instruments, and (vi) keep
fully and perform promptly the obligations of Borrower with respect to any issue
of Indebtedness for Borrowed Money secured by a Permitted Prior Lien, then Agent
or Lenders may (but shall not be required to) procure and pay for such insurance
policy or bond, place such Collateral in good repair and operating condition,
pay, contest or settle such Liens or taxes or any judgments based thereon or
otherwise make good any other aforesaid failure of Borrower. Borrower shall
reimburse Agent and Lenders immediately upon demand for all reasonable sums paid
or advanced on behalf of Borrower for any such purpose, together with reasonable
and/or necessary costs and expenses (including reasonable attorneys' fees) paid
or incurred by Agent and Lenders in connection therewith and interest on all
sums advanced from the date of advancement until repaid to Agent and Lenders at
the Default Rate. All such sums advanced by Agent and Lenders, with interest
thereon, immediately upon advancement thereof, shall be deemed to be part of
Borrower's Obligations.
ARTICLE IX
ADDITIONAL LENDERS AND PARTICIPANTS
9.1 Assignment to Other Lenders.
9.1.1 Assignment. FINOVA may make one or more Loan Assignments, and
each Assignee, with the prior written consent of FINOVA (which may be
given or denied in the sole discretion of FINOVA), may make a Loan
Assignment of the rights and obligations which were assigned to such
Assignee. Each Loan Assignment shall be for not less than $5,000,000 of
the Loans. Each Person making a Loan Assignment shall give prompt written
notice thereof to Borrower.
9.1.2 Effect of Loan Assignment. Each Assignee to which FINOVA makes
a Loan Assignment, and each subsequent Assignee, to the extent of such
Loan Assignment,
52
shall have the same rights, benefits and obligations under the Loan
Instruments as such Assignee would have had if such Assignee were an
original party to the Loan Instruments.
9.1.3 Substitution of Notes. Simultaneously with the delivery by any
Lender to Borrower of any Note which is the subject of a Loan Assignment
and which is marked "cancelled," Borrower shall execute and deliver to
such Lender for delivery to (i) the Assignee to which such Loan Assignment
is made, a promissory note payable to the order of such Assignee in an
amount equal to the amount assigned to such Assignee, and (ii) such Lender
making such Loan Assignment, a promissory note payable to the order of
such assigning Lender in an amount equal to the amount retained by such
Lender, each such Note to be substantially in the form of the canceled
Note.
9.1.4 Inspections. Any action which any Assignee shall desire to
undertake pursuant to Section 6.2 of the Loan Agreement shall be
coordinated by such Assignee through Agent, and Agent shall accompany each
such Assignee which desires to undertake any such action pursuant to such
Section 6.2.
9.2 Participations. Each Lender shall have the right to sell
Participations. In the event of the sale of a Participation, the obligations of
the Lender selling such a Participation shall remain unchanged, such Lender
shall remain solely responsible for the performance thereof, such Lender shall
remain the holder of any Note which previously has been delivered to Lender
pursuant to the terms of this Loan Agreement, and Borrower shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Loan Agreement. Notwithstanding the sale of
any Participation, all amounts payable by Borrower pursuant to the terms of the
Loan Instruments shall be determined as if no such Participation had been sold.
No Participant shall be entitled to require a Lender to take or omit to take any
action pursuant to the Loan Instruments except as provided in the Participation
Agreement executed by and between the Participant and such Lender.
9.3 Appointment and Function of Agent. FINOVA is hereby appointed as Agent
hereunder to act in such capacity on behalf of all Lenders under this Loan
Agreement and the other Loan Instruments. FINOVA agrees that it shall continue
to act as Agent throughout the term of the Loan. In performing its functions and
duties under this Agreement, Agent shall act solely as an agent of Lenders and
does not assume and shall not be deemed to have assumed any obligation towards
or relationship of agency or trust with or for any other Person. Notwithstanding
the appointment of FINOVA as Agent hereunder, Agent shall have the same rights
hereunder as any other Lender, and may exercise such rights as though FINOVA had
not been appointed as Agent hereunder.
9.4 Set Off and Sharing of Payments. Upon the occurrence of any Event of
Default and the acceleration of Borrower's Obligations, each Lender is
authorized by Borrower, at any time or from time to time thereafter, without
notice to Borrower or to any other Person, to set off and to appropriate and
apply any and all balances held by such Lender for the account of Borrower, and
any other Property at any time held or owing by such Lender to or for the credit
or for the account of Borrower, against and on account of any of Borrower's
Obligations which are not paid when due. Borrower agrees that (i) each Lender
may exercise its right to set off
53
with respect to amounts in excess of such Lender's share of Borrower's
Obligations and may sell Participations in such excess to other Lenders and (ii)
any Lender so purchasing a Participation in the Loan made or other of Borrower's
Obligations held by other Lenders may exercise all rights of set-off, bankers'
lien, counterclaim or similar rights with respect to such Participation as fully
as if such Lender were a direct holder of the Loan and other of Borrower's
Obligations in the amount of such Participation.
9.5 Lenders' Decisions. Until a Loan Assignment is made, all Lenders'
Decisions shall be made solely by FINOVA. After a Loan Assignment is made, any
Lenders' Decisions which may be made pursuant to the Loan Instruments by Lenders
or as to which the Lenders shall have the right to consent shall be made as set
forth in the applicable Lender Addition Agreements but in any event by not less
than 51% of all Lenders nor more than 66.67% of all Lenders, except that the
unanimous consent of all Lenders shall be required to (i) increase the Revolving
Loan Commitment or the Principal Balance of the Term Loan, (ii) compromise the
Principal Balance or alter the rate of interest payable on or fees payable with
respect to the Loans, (iii) postpone any date fixed for any payment of principal
or interest on any Loan, (iv) amend or modify this Section 9.5 or (iv) release
any of the Security Interests except in connection with a Permitted Asset Sale
or other disposition permitted under Section 7.12.
ARTICLE X
CLOSING
The Closing Date shall be such date as the parties shall determine, and
the Closing shall take place on such date, provided all conditions for the
Closing as set forth in this Loan Agreement have been satisfied or otherwise
waived by FINOVA. The Closing shall take place at the office of Xxxx Marks &
Xxxxx LLP, 805 Third Avenue, New York, New York, or such other place as the
parties hereto shall agree. Unless the Closing occurs on or before December 31,
1996, this Loan Agreement shall terminate and be of no further force or effect
and, except for any obligation of Borrower to FINOVA pursuant to Article XI,
none of the parties hereto shall have any further obligation to any other party.
ARTICLE XI
EXPENSES AND INDEMNITY
11.1 Attorneys' Fees and Other Fees and Expenses. Whether or not any of
the transactions contemplated by this Loan Agreement shall be consummated,
Borrower agrees to pay to Agent and Lenders on demand all expenses incurred by
Agent and Lenders in connection with the transactions contemplated hereby other
than any Loan Assignment or Participation and in connection with any amendments,
modifications or waivers (whether or not the same become effective) under or in
respect of any of the Loan Instruments, including, without limitation:
11.1.1 Fees and Expenses for Preparation of Loan Instruments. All
expenses, disbursements (including, without limitation, charges for
required mortgagee's
54
title insurance, lien searches, reproduction of documents, long distance
telephone calls and overnight express carriers) and reasonable attorneys'
fees, actually incurred by Agent and Lenders in connection with the (i)
preparation and negotiation of the Loan Instruments or any amendments,
modifications or waivers thereto or any documents delivered pursuant
thereto and (ii) administration of the Loans.
11.1.2 Fees and Expenses in Enforcement of Rights or Defense of Loan
Instruments. Any expenses or other costs, including reasonable attorneys'
fees and expert witness fees, actually incurred by Agent or Lenders in
connection with the enforcement or collection against any Obligor of any
provision of any of the Loan Instruments, and in connection with or
arising out of any litigation, investigation or proceeding instituted by
any Governmental Body or any other Person with respect to any of the Loan
Instruments, whether or not suit is instituted, including, but not limited
to, such costs or expenses arising from the enforcement or collection
against any Obligor of any provision of any of the Loan Instruments in
workout or restructuring any state or federal bankruptcy or reorganization
proceeding.
11.2 Indemnity. Borrower agrees to indemnify and save Agent and Lenders
harmless of and from the following:
11.2.1 Brokerage Fees. The fees, if any, of brokers and finders
engaged by Borrower.
11.2.2 General. Any loss, cost, liability, damage or expense
(including reasonable attorneys' fees and expenses) incurred by Agent or
Lenders in investigating, preparing for, defending against, providing
evidence, producing documents or taking other action in respect of any
commenced or threatened litigation, administrative proceeding, suit
instituted by any Person or investigation under any law, including any
federal securities law, the Bankruptcy Code, any relevant state corporate
statute or any other securities law, bankruptcy law or law affecting
creditors generally of any jurisdiction, or any regulation pertaining to
any of the foregoing, or at common law or otherwise, relating, directly or
indirectly, to the transactions contemplated by or referred to in, or any
other matter related to, the Loan Instruments, whether or not Agent or any
Lender is a party to such litigation, proceeding or suit, or is subject to
such investigation.
11.2.3 Operation of Collateral; Joint Venturers. Any loss, cost,
liability, damage or expense (including reasonable attorneys' fees and
expenses) incurred in connection with the ownership, operation or
maintenance of the Collateral, the construction of Agent or any Lender and
Borrower as having the relationship of joint venturers or partners or the
determination that Agent or any Lender has acted as agent for Borrower.
11.2.4 Environmental Indemnity. Any and all claims, losses, damages,
response costs, clean-up costs and expenses suffered and/or incurred at
any time by Agent or any Lender arising out of or in any way relating to
the existence at any time of any Hazardous Materials in, on, under, at,
transported to or from, or used in the construction and/or renovation of,
any of the Real Property or Leasehold Property, or
55
otherwise with respect to any Environmental Law, and/or the failure of
Borrower to perform its obligations and covenants hereunder with respect
to environmental matters, including, but not limited to: (i) claims of any
Persons for damages, penalties, response costs, clean-up costs, injunctive
or other relief, (ii) costs of removal and restoration, including fees of
reasonable attorneys and experts, and costs of reporting the existence of
Hazardous Materials to any Governmental Body, and (iii) any expenses or
obligations, including attorneys' fees and expert witness fees, incurred
at, before and after any trial or other proceeding before any Governmental
Body or appeal therefrom whether or not taxable as costs, including,
without limitation, witness fees, deposition costs, copying and telephone
charges and other expenses, all of which shall be paid by Borrower to
Agent or such Lender when incurred by Agent or such Lender.
ARTICLE XII
MISCELLANEOUS
12.1 Notices. All notices and communications under this Loan Agreement
shall be in writing and shall be (i) delivered in person, (ii) sent by telecopy,
or (iii) mailed, postage prepaid, by regular mail if a financial statement
required pursuant to subsection 6.3.1 and 6.3.3, and if other than such
financial statements either by registered or certified mail, return receipt
requested, or by overnight express carrier, addressed in each case as follows:
To Borrower: Xxxxx Cable Communications, Inc.
Four Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
Chief Executive Officer
Telecopy No.: (000) 000-0000
Copies of all notices and
communications other than
financial statements and
Notices of Borrowing to: Xxxx Marks & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Telecopy No.: (000) 000-0000
To Lender: FINOVA Capital Corporation
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Vice President
Telecopy No.: (000) 000-0000
56
Copies of all notices and
communications other than
financial statements and
Notices of Borrowing to: FINOVA Capital Corporation
0000 X. Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Vice President, Law
Telecopy No.: (000) 000-0000
and
Xxxxxx Xxxxxx & Xxxxx
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
or to any other address or telecopy number, as to any of the parties hereto, as
such party shall designate in a written notice to the other parties hereto. All
notices sent pursuant to the terms of this Section 12.1 shall be deemed received
(i) if personally delivered, then on the Business Day of delivery, (ii) if sent
by telecopy before 2:00 p.m. Phoenix time, on the day sent if a Business Day or
if such day is not a Business Day or if sent after 2:00 p.m. Phoenix time, then
on the next Business Day, (iii) if sent by overnight, express carrier, on the
next Business Day immediately following the day sent, or (iv) if sent by
registered or certified mail, on the earlier of the fifth Business Day following
the day sent or when actually received. Any notice by telecopy shall be followed
by delivery on the next Business Day by overnight, express carrier or by hand,
except that Notices of Borrowing sent by telecopy shall be followed by delivery
by first class mail.
12.2 Survival of Loan Agreement; Indemnities. All covenants, agreements,
representations and warranties made in this Loan Agreement and in the
certificates delivered pursuant hereto shall survive the making by Lender of the
Loans and the execution and delivery to Lenders of the Notes and of all other
Loan Instruments, and shall continue in full force and effect so long as any of
Borrower's Obligations remain outstanding, unperformed or unpaid.
Notwithstanding the repayment of all amounts due under the Loan Instruments, the
cancellation of the Notes and the release and/or cancellation of any and all of
the Loan Instruments or the foreclosure of any Liens on the Collateral, the
obligations of Borrower to indemnify Agent and Lenders with respect to the
expenses, damages, losses, costs and liabilities described in Section 11.2 shall
survive until all applicable statute of limitations periods with respect to
actions which may be brought against Agent or any Lender have run.
12.3 Further Assurance. From time to time, Borrower shall execute and
deliver to Agent and Lenders such additional documents as Lenders reasonably may
require to carry out the purposes of the Loan Instruments and to protect
Lenders' rights thereunder, including, without limitation, using its diligent
efforts in the event any Collateral is to be sold to secure the approval by any
Governmental Body of any application required by such Governmental Body
57
in connection with such sale, and not take any action inconsistent with such
sale or the purposes of the Loan Instruments.
12.4 Taxes and Fees. Should any tax (other than taxes based upon the net
income of any Lender), recording or filing fees become payable in respect of any
of the Loan Instruments, or any amendment, modification or supplement thereof,
Borrower agrees to pay the same on demand, together with any interest or
penalties thereon attributable to any delay by Borrower in meeting any Lender's
demand, and agrees to hold Lenders harmless with respect thereto.
12.5 Severability. In the event that any provision of this Loan Agreement
is deemed to be invalid by reason of the operation of any law, including, but
not limited to, any of the rules and regulations and policies of the FCC, or by
reason of the interpretation placed thereon by any court or the FCC or any other
Governmental Body, as applicable, this Loan Agreement shall be construed as not
containing such provision and the invalidity of such provision shall not affect
the validity of any other provisions hereof, and any and all other provisions
hereof which otherwise are lawful and valid shall remain in full force and
effect.
12.6 Waiver. No delay on the part of Agent or any Lender in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, and no
single or partial exercise of any right, power or privilege hereunder shall
preclude other or further exercise thereof, or be deemed to establish a custom
or course of dealing or performance between the parties hereto, or preclude the
exercise of any other right, power or privilege.
12.7 Modification of Loan Instruments. No modification or waiver of any
provision of any of the Loan Instruments shall be effective unless the same
shall be in writing, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. No notice to or
demand on Borrower in any case shall entitle Borrower to any other or further
notice or demand in the same, similar or other circumstances.
12.8 Captions. The headings in this Loan Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.
12.9 Successors and Assigns. This Loan Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto.
12.10 Remedies Cumulative. All rights and remedies of Agent and Lenders
pursuant to this Loan Agreement, any other Loan Instruments or otherwise, shall
be cumulative and non-exclusive, and may be exercised singularly or
concurrently. Neither Agent nor any Lender shall be required to prosecute
collection, enforcement or other remedies against any Obligor before proceeding
against any other Obligor or to enforce or resort to any security, liens,
collateral or other rights of Agent or Lenders. One or more successive actions
may be brought against Borrower and/or any other Obligor, either in the same
action or in separate actions, as often as Lenders deem advisable, until all of
Borrower's Obligations are paid and performed in full.
12.11 Entire Agreement; Conflict. This Loan Agreement and the other Loan
Instruments executed prior or pursuant hereto constitute the entire agreement
among the parties
58
hereto with respect to the transactions contemplated hereby or thereby and
supersede any prior agreements, whether written or oral, relating to the subject
matter hereof. In the event of a conflict between the terms and conditions set
forth herein and the terms and conditions set forth in any other Loan
Instrument, the terms and conditions set forth herein shall govern.
12.12 APPLICABLE LAW. THE LOAN INSTRUMENTS SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS AND DECISIONS OF THE STATE OF NEW YORK.
12.13 JURISDICTION AND VENUE. BORROWER HEREBY AGREES THAT ALL ACTIONS OR
PROCEEDINGS INITIATED BY BORROWER AND ARISING DIRECTLY OR INDIRECTLY OUT OF THE
LOAN INSTRUMENTS SHALL BE LITIGATED IN THE SUPERIOR COURT OF MARICOPA COUNTY, OR
THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA OR, IF AGENT OR ANY
LENDER INITIATES SUCH ACTION, IN ADDITION TO THE FOREGOING COURTS, ANY COURT IN
WHICH AGENT OR SUCH LENDER SHALL INITIATE SUCH ACTION, TO THE EXTENT SUCH COURT
HAS JURISDICTION. BORROWER HEREBY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO
SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED BY AGENT OR ANY LENDER
IN ANY OF SUCH COURTS, AND HEREBY AGREES THAT PERSONAL SERVICE OF THE SUMMONS
AND COMPLAINT, OR OTHER PROCESS OR PAPERS ISSUED THEREIN MAY BE SERVED IN THE
MANNER PROVIDED FOR NOTICES HEREIN, AND AGREES THAT SERVICE OF SUCH SUMMONS AND
COMPLAINT OR OTHER PROCESS OR PAPERS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO BORROWER AT THE ADDRESS TO WHICH NOTICES ARE TO BE SENT PURSUANT TO
SECTION 12.1. BORROWER WAIVES ANY CLAIM THAT MARICOPA COUNTY, ARIZONA OR THE
DISTRICT OF ARIZONA IS AN INCONVENIENT FORUM OR AN IMPROPER FORUM BASED ON LACK
OF VENUE. TO THE EXTENT PROVIDED BY LAW, SHOULD BORROWER, AFTER BEING SO SERVED,
FAIL TO APPEAR OR ANSWER TO ANY SUMMONS, COMPLAINT, PROCESS OR PAPERS SO SERVED
WITHIN THE NUMBER OF DAYS PRESCRIBED BY LAW AFTER THE MAILING THEREOF, BORROWER
SHALL BE DEEMED IN DEFAULT AND AN ORDER AND/OR JUDGMENT MAY BE ENTERED BY THE
COURT AGAINST BORROWER AS DEMANDED OR PRAYED FOR IN SUCH SUMMONS, COMPLAINT,
PROCESS OR PAPERS. THE EXCLUSIVE CHOICE OF FORUM FOR BORROWER SET FORTH IN THIS
SECTION 12.13 SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT BY AGENT OR ANY
LENDER OF ANY JUDGMENT OBTAINED IN ANY OTHER FORUM OR THE TAKING BY AGENT OR ANY
LENDER OF ANY ACTION TO ENFORCE THE SAME IN ANY OTHER APPROPRIATE JURISDICTION,
AND BORROWER HEREBY WAIVES THE RIGHT TO COLLATERALLY ATTACK ANY SUCH JUDGMENT OR
ACTION.
12.14 WAIVER OF RIGHT TO JURY TRIAL. AGENT, LENDERS AND BORROWER
ACKNOWLEDGE AND AGREE THAT ANY CONTROVERSY WHICH MAY ARISE UNDER ANY OF THE LOAN
INSTRUMENTS OR WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED THEREBY WOULD BE
BASED UPON DIFFICULT AND COMPLEX ISSUES AND, THEREFORE, THE PARTIES AGREE
59
THAT ANY LAWSUIT ARISING OUT OF ANY SUCH CONTROVERSY WILL BE TRIED IN A COURT OF
COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
12.15 TIME OF ESSENCE. TIME IS OF THE ESSENCE FOR THE PERFORMANCE BY
BORROWER OF THE OBLIGATIONS SET FORTH IN THIS LOAN AGREEMENT AND THE OTHER LOAN
INSTRUMENTS.
12.16 Estoppel Certificate. Within 15 days after Agent or any Lender
requests Borrower to do so, Borrower will execute and deliver to Agent or such
Lender a statement certifying (i) that this Loan Agreement is in full force and
effect and has not been modified except as described in such statement, (ii) the
date to which interest on the Notes has been paid, (iii) the Principal Balance,
(iv) whether or not to its knowledge an Incipient Default or Event of Default
has occurred and is continuing, and, if so, specifying in reasonable detail each
such Incipient Default or Event of Default of which it has knowledge, (v)
whether to its knowledge it has any defense, setoff or counterclaim to the
payment of the Notes in accordance with their terms, and, if so, specifying each
defense, setoff or counterclaim of which it has knowledge in reasonable detail
(including where applicable the amount thereof), and (vi) as to any other matter
reasonably requested by Agent or such Lender.
12.17 Consequential Damages. Neither Agent nor any Lender nor any agent or
attorney of Agent or such Lender shall be liable to Borrower for consequential
damages arising from any breach of contract, tort or other wrong relating to the
establishment, administration or collection of the Borrower's Obligations.
12.18 Counterparts. This Loan Agreement may be executed by the parties
hereto in several counterparts and each such counterpart shall be deemed to be
an original, but all such counterparts shall together constitute one and the
same agreement.
12.19 No Fiduciary Relationship. No provision in this Loan Agreement or in
any other Loan Instrument, and no course of dealing among the parties hereto,
shall be deemed to create any fiduciary duty by Agent or any Lender to Borrower.
12.20 Notice of Breach by Agent and Lenders. Borrower agrees to give Agent
and each Lender written notice of (i) any action or inaction by Agent or any
Lender or any agent or attorney of Agent or such Lender in connection with the
Loan Instruments that may be actionable against Agent or such Lender or any
agent or attorney of Agent or such Lender or (ii) any defense to the payment of
Borrower's Obligations for any reason, including, but not limited to, commission
of a tort or violation of any contractual duty implied by law. Borrower agrees
that unless such notice is fully given as promptly as possible (and in any event
within 30 days) after Borrower has knowledge, or with the exercise of reasonable
diligence should have had knowledge, of any such action, inaction or defense,
Borrower shall not assert, and Borrower shall be deemed to have waived, any
claim or defense arising therefrom.
12.21 Governmental Approval. Notwithstanding anything to the contrary
contained herein or in any other Loan Instrument, no party hereto shall take any
action that would constitute or result in the transfer or assignment of any FCC
license, or other license, permit
60
or authority issued by any Governmental Body, or a transfer of control over any
such license, permit or authorization, if such assignment or transfer would
require the prior approval of and/or notice to any Governmental Body, without
such party first having notified such Governmental Body of any such assignment
or transfer and, if required, obtaining the approval of such Governmental Body
therefor.
[remainder of this page intentionally left blank]
61
IN WITNESS WHEREOF, this Loan Agreement has been executed and delivered by
each of the parties hereto by a duly authorized officer of each such party on
the date first set forth above.
XXXXX CABLE COMMUNICATIONS, INC.,
a Texas corporation
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------------
Xxxxx X. Xxxxxxxxx
Chief Executive Officer
FINOVA CAPITAL CORPORATION, a
Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Xxxxxxx X. Xxxxxx
Vice President
62
