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CREDIT AGREEMENT
among
NORTHLAND CABLE PROPERTIES FOUR LIMITED PARTNERSHIP,
THE LENDING INSTITUTIONS PARTY HERETO, as Lenders
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent,
dated as of
AUGUST 31, 1995
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TABLE OF CONTENTS
ARTICLE I. DEFINITIONS....................................................................... 1
ARTICLE II. THE CREDITS....................................................................... 14
2.1. Commitments....................................................................... 14
2.1.1. Facility A Commitment.................................................. 14
2.1.2. Facility B Commitment.................................................. 14
2.2. Required Payments; Termination.................................................... 15
2.2.1. Facility A............................................................. 15
2.2.2. Facility B............................................................. 16
2.2.3. Excess Cash Flow....................................................... 16
2.2.4. Early Expiration....................................................... 17
2.2.5. Termination............................................................ 17
2.3. Ratable Loans..................................................................... 17
2.4. Types of Advances; Applicable Margin.............................................. 17
2.5. Commitment Fee; Reductions in Aggregate Commitments............................... 18
2.6. Minimum Amount of Each Advance.................................................... 18
2.7. Optional Principal Payments....................................................... 18
2.8. Method of Selecting Types and Interest Periods for New Advances................... 19
2.9. Conversion and Continuation of Outstanding Advances............................... 19
2.10. Changes in Interest Rate, Etc..................................................... 20
2.11. Rates Applicable After Default.................................................... 20
2.12. Method of Payment................................................................. 21
2.13. Notes; Telephonic Notices......................................................... 21
2.14. Interest Payment Dates; Interest and Fee Basis.................................... 21
2.15. Notification of Advances, Interest Rates, Prepayments and Commitment Reductions... 21
2.16. Lending Installations............................................................. 22
2.17. Non-Receipt of Funds by the Agent................................................. 22
2.18. Withholding Tax Exemption......................................................... 22
ARTICLE III. CHANGE IN CIRCUMSTANCES........................................................... 23
3.1. Yield Protection.................................................................. 23
3.2. Changes in Capital Adequacy Regulations........................................... 24
3.3. Availability of Types of Advances................................................. 24
3.4. Funding Indemnification........................................................... 24
3.5. Lender Statements; Survival of Indemnity.......................................... 25
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ARTICLE IV. CONDITIONS PRECEDENT.............................................................. 25
4.1. Initial Advance................................................................... 25
4.2. Advances for System Acquisitions.................................................. 27
4.3. Each Advance...................................................................... 28
ARTICLE V. REPRESENTATIONS AND WARRANTIES.................................................... 29
5.1. Existence and Standing............................................................ 29
5.2. Authorization and Validity........................................................ 29
5.3. No Conflict; Government Consent................................................... 29
5.4. Financial Statements.............................................................. 30
5.5. Material Adverse Change........................................................... 30
5.6. Taxes............................................................................. 30
5.7. Litigation and Contingent Obligations............................................. 30
5.8. Subsidiaries...................................................................... 31
5.9. ERISA............................................................................. 31
5.10. Accuracy of Information........................................................... 31
5.11. Regulation U...................................................................... 31
5.12. Material Agreements............................................................... 31
5.13. Compliance With Laws, Etc......................................................... 31
5.14. Ownership of Properties........................................................... 32
5.15. Investment Company Act............................................................ 32
5.16. Public Utility Holding Company Act................................................ 32
5.17. Insurance......................................................................... 32
ARTICLE VI. COVENANTS......................................................................... 32
6.1. Financial Reporting............................................................... 32
6.2. Use of Proceeds................................................................... 34
6.3. Notice of Default, Etc............................................................ 34
6.4. Conduct of Business; Maintenance of Licenses...................................... 35
6.5. Taxes............................................................................. 35
6.6. Insurance......................................................................... 35
6.7. Compliance with Laws.............................................................. 36
6.8. Maintenance of Properties......................................................... 36
6.9. Inspection........................................................................ 36
6.10. Distributions..................................................................... 36
6.11. Indebtedness...................................................................... 36
6.12. Merger............................................................................ 37
6.13. Sale of Assets.................................................................... 37
6.14. Sale of Accounts.................................................................. 37
6.15. Sale and Leaseback................................................................ 37
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6.16. Investments and Acquisitions...................................................... 37
6.17. Contingent Obligations............................................................ 38
6.18. Liens............................................................................. 38
6.19. Financial Covenants............................................................... 39
6.19.1. Capital Expenditures.............................................................. 39
6.19.2. Rentals........................................................................... 39
6.19.3. Interest Coverage Ratio........................................................... 39
6.19.4. Pro Forma Debt Service Ratio...................................................... 39
6.19.5. Fixed Charge Coverage Ratio....................................................... 40
6.19.6. Leverage Ratio.................................................................... 40
6.20. Affiliates........................................................................ 40
6.21. Management Fees................................................................... 40
6.22. Subordinated and Other Indebtedness............................................... 41
6.23. Rate Hedging Obligations.......................................................... 41
ARTICLE VII. DEFAULTS.......................................................................... 41
ARTICLE VIII. ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES.................................... 45
8.1. Acceleration...................................................................... 45
8.2. Consent to Receiver............................................................... 45
8.3. Amendments........................................................................ 46
8.4. Preservation of Rights............................................................ 47
ARTICLE IX. GENERAL PROVISIONS................................................................ 47
9.1. Survival of Representations....................................................... 47
9.2. Governmental Regulation........................................................... 47
9.3. Taxes............................................................................. 47
9.4. Headings.......................................................................... 48
9.5. Entire Agreement.................................................................. 48
9.6. Several Obligations; Benefits of this Agreement................................... 48
9.7. Expenses; Indemnification......................................................... 48
9.8. Numbers of Documents.............................................................. 48
9.9. Accounting........................................................................ 49
9.10. Severability of Provisions........................................................ 49
9.11. Nonliability of Lenders........................................................... 49
9.12. Choice of Law..................................................................... 49
9.13. Consent to Jurisdiction........................................................... 49
9.14. Waiver of Jury Trial.............................................................. 50
9.15. Confidentiality................................................................... 50
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9.16. Nonreliance....................................................................... 50
9.17. Compliance with Law............................................................... 50
9.18. Approval of Cable Authorities..................................................... 50
ARTICLE X. THE AGENT......................................................................... 51
10.1. Appointment....................................................................... 51
10.2. Powers............................................................................ 51
10.3. General Immunity.................................................................. 51
10.4. No Responsibility for Loans, Recitals, etc........................................ 51
10.5. Action on Instructions of Lenders................................................. 52
10.6. Employment of Agents and Counsel.................................................. 52
10.7. Reliance on Documents; Counsel.................................................... 52
10.8. Agent's Reimbursement and Indemnification......................................... 52
10.9. Rights as a Lender................................................................ 52
10.10. Lender Credit Decision............................................................ 53
10.11. Successor Agent................................................................... 53
10.12. Agent's Fee....................................................................... 54
10.13. Execution of Collateral Documents................................................. 54
10.14. Collateral Releases............................................................... 54
ARTICLE XI. SETOFF; RATABLE PAYMENTS.......................................................... 54
11.1. Setoff............................................................................ 54
11.2. Ratable Payments.................................................................. 54
ARTICLE XII. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS................................. 55
12.1. Successors and Assigns............................................................ 55
12.2. Participations.................................................................... 55
12.2.1. Permitted Participants; Effect......................................... 55
12.2.2. Voting Rights.......................................................... 56
12.2.3. Benefit of Setoff...................................................... 56
12.3. Assignments....................................................................... 56
12.3.1. Permitted Assignments.................................................. 56
12.3.2. Effect; Effective Date................................................. 57
12.4. Dissemination of Information...................................................... 57
12.5. Tax Treatment..................................................................... 57
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ARTICLE XIII. NOTICES........................................................................ 58
13.1. Giving Notice.................................................................. 58
13.2. Change of Address.............................................................. 58
ARTICLE XIV. COUNTERPARTS................................................................... 58
EXHIBITS
EXHIBIT "A" - FACILITY A NOTE.......................................................... 60
EXHIBIT "B" - FACILITY B NOTE.......................................................... 62
EXHIBIT "C" - NORTHLAND CABLE PROPERTIES FOUR LIMITED PARTNERSHIP SECURITY AGREEMENT... 63
EXHIBIT "D" - MANAGEMENT SUBORDINATION AGREEMENT....................................... 87
EXHIBIT "E" - FORM OF OPINION.......................................................... 92
EXHIBIT "F" - COMPLIANCE CERTIFICATE................................................... 101
EXHIBIT "G" - MANAGEMENT FEE REPORT.................................................... 105
EXHIBIT "H" - ASSIGNMENT AGREEMENT..................................................... 106
EXHIBIT "I" - LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION........................... 115
SCHEDULES
SCHEDULE "1" - LENDER COMMITMENTS....................................................... 116
SCHEDULE "2" - INVESTMENTS.............................................................. 117
SCHEDULE "3" - INDEBTEDNESS AND LIENS................................................... 118
SCHEDULE "4" - LITIGATION............................................................... 119
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NORTHLAND CABLE PROPERTIES FOUR LIMITED PARTNERSHIP
CREDIT AGREEMENT
This Agreement, dated as of August 31, 1995, is among NORTHLAND CABLE
PROPERTIES FOUR LIMITED Partnership, the LENDERS and THE FIRST NATIONAL BANK OF
CHICAGO, as Agent. The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or division thereof,
whether through purchase of assets, merger or otherwise or (ii) directly or
indirectly acquires (in one transaction or as the most recent transaction in a
series of transactions) at least a majority (in number of votes) of the
securities of a corporation which have ordinary voting power for the election of
directors (other than securities having such power only by reason of the
happening of a contingency) or a majority (by percentage or voting power) of the
outstanding partnership interests of a partnership or membership interests in a
limited liability company.
"Administrative General Partner" means FN Equities Joint Venture, a
California joint venture, or any other Person that succeeds to the functions of
FN Equities Joint Venture as the administrative general partner of the Borrower.
"Advance" means a borrowing hereunder consisting of the aggregate amount
of the several Loans made by the applicable Lenders to the Borrower of the same
Type under the same Facility and, in the case of Eurodollar Advances, for the
same Interest Period.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Agent" means The First National Bank of Chicago in its capacity as agent
for the Lenders pursuant to Article X, and not in its individual capacity as a
Lender, and any successor Agent appointed pursuant to Article X.
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"Aggregate Commitment" means the Aggregate Facility A Commitment or the
Aggregate Facility B Commitment, as appropriate.
"Aggregate Facility A Commitment" means the aggregate of the Facility A
Commitments of all the Lenders (including amounts outstanding thereunder), as
reduced from time to time pursuant to the terms hereof.
"Aggregate Facility B Commitment" means the aggregate of the Facility B
Commitments of all the Lenders (including amounts outstanding thereunder), as
reduced from time to time pursuant to the terms hereof.
"Agreement" means this credit agreement, as it may be amended or modified
and in effect from time to time.
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect from time to time, applied in a manner consistent with
that used in preparing the financial statements referred to in Section 5.4.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Corporate Base Rate for such day and (ii) the sum
of Federal Funds Effective Rate for such day plus 1/2% per annum.
"Annualized Operating Cash Flow" means, as at any date of determination
thereof, the product of Operating Cash Flow for the most recently ended fiscal
quarter of the Borrower multiplied by four.
"Applicable Margin" means, as appropriate, the applicable margin set
forth in Section 2.4.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Authorized Officer" means any of John S. Whetzell, President of the
Managing General Partner; Richard I. Clark, Vice President and Treasurer of the
Managing General Partner; Gary S. Jones, Vice President of the Managing General
Partner; or such other officers of the Borrower as the Borrower may designate in
writing to the Agent from time to time, acting singly.
"Borrower" means Northland Cable Properties Four Limited Partnership, a
Washington limited partnership, and its successors and assigns.
"Borrowing Date" means a date on which an Advance is made hereunder.
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"Borrowing Notice" is defined in Section 2.8.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago and New York for the conduct of
substantially all of their commercial lending activities and on which dealings
in United States dollars are carried on in the London interbank market and (ii)
for all other purposes, a day (other than a Saturday or Sunday) on which banks
generally are open in Chicago for the conduct of substantially all of their
commercial lending activities.
"Capital Expenditures" means, for any period, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities and including that
portion of Capitalized Leases which is capitalized on the balance sheet of the
Borrower) by the Borrower during that period that, determined in accordance with
Agreement Accounting Principles, are required to be included in or reflected by
the property, plant or equipment or similar fixed asset accounts reflected in
the balance sheet of the Borrower.
"Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"CATV Franchise" means, collectively, (i) any franchise, license, permit,
wire agreement or easement granted by any political jurisdiction or unit or
other franchising authority pursuant to which a Person has the right to operate
a CATV System, (ii) any pole attachment agreement or underground conduit use
agreement entered into in connection with the operation of any CATV System, and
(iii) any legislation, regulation, bill, ordinance, agreement or other
instrument or document setting forth all of any part of the terms of any FCC
License or franchise, license, permit, wire agreement or easement described in
clause (i) of this definition.
"CATV System" means a system owned by the Borrower or any Subsidiary
which transmits audio, video, digital or other signals or information by cable,
optical, antennae, microwave, or satellite means, to Persons who pay to receive
such transmissions.
"Change in Control" means (i) the acquisition by any Person, or two or
more Persons acting in concert, of beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of 20% or more of the outstanding shares of voting stock
of NTC; or (ii) NTC shall cease to own, free and clear
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of all Liens or other encumbrances, 100% of the outstanding shares of voting
stock of the Managing General Partner on a fully diluted basis.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Collateral" means, collectively, "Collateral" as defined in each of the
Collateral Documents.
"Collateral Documents" means, collectively, the Security Agreement and
all other agreements, instruments, or documents necessary to effect the purposes
of the Security Agreement, including, without limitation, UCC-1 Financing
Statements suitable for filing in the appropriate jurisdictions.
"Commitment" means a Facility A Commitment or a Facility B Commitment, as
appropriate.
"Condemnation" is defined in Section 7.8.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract, or application for a Letter of Credit.
"Conversion/Continuation Notice" is defined in Section 2.9.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower or any of its Subsidiaries, are
treated as a single employer under Section 414 of the Code.
"Corporate Base Rate" means a rate per annum equal to the corporate base
rate of interest announced by First Chicago from time to time, changing when and
as said corporate base rate changes.
"Cumulative Leakage Index" means the permitted index or range of
radiation leakage computed in accordance with the rules of the FCC and
applicable to the CATV Systems.
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"Debt" of a Person means such Person's (a) (i) indebtedness for borrowed
money (including accrued due and owing but unpaid interest), (ii) guarantees,
(iii) Letters of Credit, (iv) net liabilities under interest rate swap, exchange
or cap agreements, (v) obligations under non-compete agreements and (vi)
Capitalized Lease Obligations of such Person and its Subsidiaries; but excluding
(b) (i) intercompany debt and (ii) solely for purposes of calculating compliance
with Section 6.19, Indebtedness represented by Subordinated Seller Notes.
"Default" means an event described in Article VII.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Eurodollar Advance" means an Advance which bears interest at a
Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for
the relevant Interest Period, the rate determined by the Agent to be the rate at
which deposits in U.S. dollars are offered by First Chicago to first-class banks
in the London interbank market at approximately 11 a.m. (London time) two
Business Days prior to the first day of such Interest Period, in the approximate
amount of First Chicago's relevant Eurodollar Loan and having a maturity
approximately equal to such Interest Period.
"Eurodollar Loan" means a Loan which bears interest at a Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base
Rate applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, if any,
plus (ii) the Applicable Margin. The Eurodollar Rate shall be rounded to the
next higher multiple of 1/16 of 1% if the rate is not such a multiple.
"Excess Cash Flow" means, for any fiscal year, (a) Operating Cash Flow
for such fiscal year, minus (b) the sum of (i) Capital Expenditures, (ii)
payments of interest, scheduled principal and fees exclusive of mandatory
prepayments made for Excess Cash Flow during such period, (iii) the increase, as
of the last day of such fiscal year from the last day of the immediately
preceding fiscal year, in the amount of the excess of current assets (less cash
and cash equivalents on hand) over current liabilities, and (iv) taxes paid, all
calculated for such fiscal year for Borrower and its Subsidiaries on a
consolidated basis.
"FCC" means the Federal Communications Commission or any other regulatory
body which succeeds to the functions of the Federal Communications Commission.
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"FCC License" means any community antenna relay service, broadcast
auxiliary license, business radio, microwave or special safety radio service
license issued by the FCC pursuant to the Communications Act of 1934, as
amended.
"Facility" means Facility A or Facility B, as appropriate.
"Facility A" means a revolving credit facility (converting to a term loan
facility on the Revolving Credit Termination Date) in the amount of the
Aggregate Facility A Commitment utilized under this Agreement pursuant to
Section 2.1.1.
"Facility A Commitment" means, for each Lender, the obligation of such
Lender to make Loans under Facility A not exceeding the amount set forth
opposite its name on Schedule "1" hereto (but subject to Section 2.1.1) or as
set forth in any Notice of Assignment relating to any assignment that has become
effective pursuant to Section 12.3.2, as such amount may be modified from time
to time pursuant to the terms hereof.
"Facility A Lenders" means, collectively, Lenders having Facility A
Commitments.
"Facility A Note" means a promissory note, in substantially the form of
Exhibit "A" hereto, duly executed by the Borrower and payable to the order of a
Lender in the amount of its Facility A Commitment, including any amendment,
modification, renewal or replacement of such promissory note.
"Facility B" means a multiple draw term loan facility in the amount of
the Aggregate Facility B Commitment utilized under this Agreement pursuant to
Section 2.1.2.
"Facility B Commitment" means, for each Lender, the obligation of such
Lender to make term Loans under Facility B not exceeding the amount set forth
opposite its name on Schedule "1" hereto or as set forth in any Notice of
Assignment relating to any assignment that has become effective pursuant to
Section 12.3.2, as such amount may be modified from time to time pursuant to the
terms hereof.
"Facility B Lenders" means, collectively, Lenders having Facility B
Commitments.
"Facility B Note" means a promissory note, in substantially the form of
Exhibit "B" hereto, duly executed by the Borrower and payable to the order of a
Lender in the amount of its Facility B Commitment, including any amendment,
modification, renewal or replacement of such promissory note.
"Facility Termination Date" means December 31, 2003.
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"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"First Chicago" means The First National Bank of Chicago in its
individual capacity, and its successors.
"Fixed Charge Coverage Ratio" means, at any date of determination
thereof, the ratio of (i)(a) the sum of (1) Operating Cash Flow for the period
of twelve consecutive complete calendar months ending on or most recently ended
prior to such date, plus (2) cash and cash equivalents on hand on the last day
of the most recently ended fiscal quarter and/or availability under Facility A
(in the aggregate up to a maximum of $500,000), minus (b) the sum of taxes and
Capital Expenditures during such twelve-month period; to (ii) the aggregate
amount of payments of interest, scheduled principal, and fees (other than any
annual administrative agent's fee payable to the Agent in connection with this
Agreement) on Indebtedness required to be made during such twelve-month period;
all calculated for the Borrower and its Subsidiaries on a consolidated basis.
"Floating Rate" means, for any day, a rate per annum equal to (i) the
Alternate Base Rate for such day plus (ii) the Applicable Margin, in each case
changing when and as the Alternate Base Rate changes.
"Floating Rate Advance" means an Advance which bears interest at the
Floating Rate.
"Floating Rate Loan" means a Loan which bears interest at the Floating
Rate.
"Indebtedness" of a Person means such Person's (a) (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
Property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (iii)
obligations, whether or not assumed, secured by Liens or payable out of the
proceeds or production from property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) Capitalized Lease Obligations, (vi) net liabilities under
interest rate swap, exchange or cap agreements, and (vii) Contingent
Obligations; but excluding (b) (i) intercompany debt and (ii) solely for
purposes of calculating compliance with Section 6.19, Indebtedness represented
by Subordinated Seller Notes.
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"Interest Coverage Ratio" means, at any date of determination thereof,
the ratio of Operating Cash Flow to interest expense on Debt, all calculated for
the most recently ended fiscal quarter.
"Interest Period" means, with respect to a Eurodollar Advance, a period
of one, two, three, or, six months commencing on a Business Day selected by the
Borrower pursuant to this Agreement. Such Interest Period shall end on (but
exclude) the day which corresponds numerically to such date one, two, three, or
six months thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third, or sixth succeeding month, such
Interest Period shall end on the last Business Day of such next, second, third,
or sixth succeeding month. If an Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
"Investment" of a Person means any loan, advance (other than commission,
travel and similar advances to officers and employees made in the ordinary
course of business), extension of credit (other than accounts receivable arising
in the ordinary course of business on terms customary in the trade), deposit
account or contribution of capital by such Person to any other Person or any
investment in, or purchase or other acquisition of, the stock, partnership
interests, notes, debentures or other securities of any other Person made by
such Person.
"Lenders" means the lending institutions listed on the signature pages of
this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the Agent, any
office, branch, subsidiary or affiliate of such Lender or the Agent.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Leverage Ratio" means the ratio of (i) Debt of the Borrower as at the
last day of any fiscal quarter of the Borrower to (ii) Annualized Operating Cash
Flow for such fiscal quarter then ending.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
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"Loan" means, with respect to a Lender, such Lender's portion of any
Advance.
"Loan Documents" means this Agreement, the Notes, the Security Agreement
(and any agreements, instruments, or documents executed by the Borrower
necessary to effect the purposes of the Security Agreement) and the
Subordination Agreement.
"Management Fee Report" means a report substantially in the form of
Exhibit "G" hereto.
"Management Fees" means fees payable to the Managing General Partner as
permitted under Section 6.21.
"Managing General Partner" means Northland Communications Corporation, a
Washington corporation and Wholly-Owned Subsidiary of NTC, or any other
Wholly-Owned Subsidiary of NTC that succeeds to the functions of Northland
Communications Corporation as the managing general partner of the Borrower.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of operations,
or prospects of the Borrower and its Subsidiaries taken as a whole, (ii) the
ability of the Borrower to perform its obligations under the Loan Documents, or
(iii) the validity or enforceability of any of the Loan Documents or the rights
or remedies of the Agent or the Lenders thereunder.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.
"NTC" means Northland Telecommunications Corporation, a Washington
corporation, and its successors and assigns.
"Notes" means, collectively, the Facility A Notes and the Facility B
Notes, and "Note" means any one of the Facility A Notes or the Facility B Notes.
"Notice of Assignment" is defined in Section 12.3.2.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Notes, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Borrower to the Lenders
or to any Lender, the Agent or any indemnified party hereunder arising under the
Loan Documents.
"Operating Cash Flow" means, for any period of determination thereof, the
sum of (a) pre-tax income or deficit, as the case may be (excluding
extraordinary gains and losses),
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(b) interest expense, (c) depreciation and amortization, and (d) deferred
Management Fees, all calculated for the Borrower and its Subsidiaries for such
period after giving effect to any acquisitions and disposition of assets of the
Borrower and its Subsidiaries made during such period as if made on the first
day of such period.
"Participants" is defined in Section 12.2.1.
"Payment Date" means the last day of each March, June, September, and
December.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Permitted Acquisition" means, at any time of determination, any
Acquisition by the Borrower or any Subsidiary which has been approved or
consented to by (i) the board of directors or equivalent governing body of the
Person whose assets or equity interests are to be acquired and (ii) in the event
that the aggregate consideration for such Acquisition exceeds $2,000,000, the
Lenders.
"Person" means any natural person, corporation, firm, joint venture,
partnership, association, enterprise, trust or other entity or organization, or
any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Borrower or any member of the Controlled Group may have any
liability.
"Pro Forma Debt Service" means, at any date of determination thereof, the
aggregate amount of payments of interest, principal (excluding payments of
principal required hereunder pursuant to Section 2.2.3) and fees (other than any
annual administrative agent's fee payable to the Agent in connection with this
Agreement) on Debt required to be made by the Borrower and its Subsidiaries
during the period of twelve consecutive complete calendar months commencing on
the first day of the next calendar month succeeding such date of determination.
For purposes of this ratio, pro forma interest on Debt shall be calculated at
the Eurodollar Rate for an Interest Period of three months in effect on the date
of such calculation.
"Pro Forma Debt Service Ratio" means, at any date of determination
thereof, the ratio of Annualized Operating Cash Flow to Pro Forma Debt Service,
in each case calculated as at such date of determination.
"Pro Forma Leverage Ratio" means, as of any date of determination, the
ratio of (i) Debt of the Borrower as of such date to (ii) Annualized Operating
Cash Flow.
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"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Purchasers" is defined in Section 12.3.1.
"Rate Hedging Obligations" of a Person means any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, and (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"Rentals" of a Person means the aggregate fixed amounts payable by such
Person under any lease of Property having an original term (including any
required renewals or any renewals at the option of the lessor or lessee) of one
year or more but does not include any amounts payable under Capitalized Leases
of such Person.
"Reportable Event" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.
Page 11
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"Required Lenders" means Lenders in the aggregate having at least 66_% of
the combined Aggregate Commitments or, if a Default has occurred and is
continuing or if the Aggregate Commitments have been terminated, Lenders in the
aggregate holding at least 66 2/3% of the aggregate unpaid principal amount of
the outstanding Advances.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"Revolving Credit Termination Balance" means the aggregate principal
amount of Advances outstanding under Facility A on the Revolving Credit
Termination Date after giving effect to any Advances made or repaid under
Facility A on such date.
"Revolving Credit Termination Date" means December 31, 1998.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Secured Obligations" means, collectively, (i) the Obligations and (ii)
all Rate Hedging Obligations owing to one or more Lenders.
"Security Agreement" means a security agreement in substantially the form
of Exhibit "C" hereto, dated as of the date hereof, duly executed and delivered
to the Agent by the Borrower, as the same may be amended or modified and in
effect from time to time.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Subordination Agreement" means a subordination agreement in
substantially the form of Exhibit "D" hereto, dated as of the date hereof, duly
executed by the Borrower, NCC, the Administrative General Partner, and the Agent
on behalf of the Lenders as the same may be amended or modified and in effect
from time to time.
"Subordinated Indebtedness" of a Person means any Indebtedness of such
Person the payment of which is subordinated to payment of the Obligations to the
written satisfaction of the Required Lenders.
"Subordinated Seller Notes" is defined in Section 6.11(vii).
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled,
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directly or indirectly, by such Person or by one or more of its Subsidiaries or
by such Person and one or more of its Subsidiaries, or (ii) any partnership,
association, joint venture or similar business organization more than 50% of the
ownership interests having ordinary voting power of which shall at the time be
so owned or controlled. Unless otherwise expressly provided, all references
herein to a "Subsidiary" shall mean a Subsidiary of the Borrower.
"Substantial Portion" means, with respect to the Property of the Borrower
and its Subsidiaries, Property which (i) represents more than 10% of the
consolidated assets (before depreciation and amortization) of the Borrower and
its Subsidiaries as would be shown in the consolidated financial statements of
the Borrower and its Subsidiaries as at the beginning of the twelve-month period
ending with the month in which such determination is made, or (ii) is
responsible for more than 10% of the consolidated net sales or of the
consolidated net income of the Borrower and its Subsidiaries as reflected in the
financial statements referred to in clause (i) above.
"System Acquisition" means the Acquisition of the assets or stock of any
of the cable television systems located in or servicing (a) the communities of
Kaufman and Oak Grove in Kaufman County, Hillsboro in Hill County, New Waverly
in Walker County, and Waterwood in San Jacinto County, all in the State of
Texas; (b) the community of LeGrand in Merced County, California; and (c)(i) the
unincorporated areas of Harris County known as Huffman and North Huffman, the
incorporated area in the City of Houston known as Lakewood Heights, and the
unincorporated areas of Harris County known as Indian Shores and Spanish Cove;
(ii) the incorporated community of Prairie View, the incorporated community of
Waller, the campus of Prairie View A & M University, and nearby unincorporated
areas of Waller County; (iii) the incorporated community of Cut and Shoot and
nearby unincorporated areas of Montgomery County; (iv) the incorporated
community of Brookshire and nearby unincorporated areas of Waller County; (v)
the unincorporated area of Liberty County known as Tarkenton; (vi) the
unincorporated areas of Liberty County and Polk County known as and near Ace,
including unincorporated areas under control of the Wild Country P.O.A., the Big
Thicket P.O.A. and Taylor Lakes Estates Maintenance Committee; and (vii) the
incorporated communities of Simonton and Fulshear and nearby unincorporated
areas of Fort Bend County; all in the State of Texas.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as a Floating Rate
Advance or Eurodollar Advance.
"Unfunded Liabilities" means the amount (if any) by which the present
value of all vested nonforfeitable benefits under all Single Employer Plans
exceeds the fair market value
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of all such Plan assets allocable to such benefits, all determined as of the
then most recent valuation date for such Plans.
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of
the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by such Person or one or more Wholly-Owned
Subsidiaries of such Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, association, joint venture
or similar business organization 100% of the ownership interests having ordinary
voting power of which shall at the time be so owned or controlled.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II
THE CREDITS
2.1. Commitments.
2.1.1. Facility A Commitment. From and including the
date of this Agreement and prior to the Revolving Credit Termination
Date, each Facility A Lender severally agrees, on the terms and
conditions set forth in this Agreement, to make Loans to the Borrower
under Facility A from time to time in amounts not to exceed in the
aggregate at any one time outstanding the amount of its Facility A
Commitment. Subject to the terms of this Agreement, the Borrower may
borrow, repay and reborrow under Facility A at any time prior to the
Revolving Credit Termination Date. The Facility A Commitments to lend
hereunder shall expire on the Revolving Credit Termination Date.
Principal payments made after the Revolving Credit Termination Date on
Advances made under Facility A may not be reborrowed.
2.1.2. Facility B Commitment. From and including the
date of this Agreement and prior to the Facility Termination Date, each
Facility B Lender severally agrees, on the terms and conditions set
forth in this Agreement, to make term Loans to the Borrower under
Facility B from time to time in amounts not to exceed in the aggregate
the amount of its Facility B Commitment. Subject to the terms of this
Agreement, the Borrower may borrow under Facility B at any time on or
before September 27, 1996 so long as any portion of the Aggregate
Facility B
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Commitment remains unutilized. The Facility B Commitments to lend
hereunder shall expire on September 27, 1996. Principal payments made
on Advances made under Facility B may not be reborrowed.
2.2. Required Payments; Termination.
2.2.1. Facility A. The Revolving Credit Termination
Balance shall be payable in quarterly installments as follows:
% OF TERMINATION BALANCE PAYMENT DATE
------------------------ ------------
2.50% 3/31/99
2.50% 6/30/99
2.50% 9/30/99
2.50% 12/31/99
3.75% 3/31/00
3.75% 6/30/00
3.75% 9/30/00
3.75% 12/31/00
5.00% 3/31/01
5.00% 6/30/01
5.00% 9/30/01
5.00% 12/31/01
6.25% 3/31/02
6.25% 6/30/02
6.25% 9/30/02
6.25% 12/31/02
7.50% 3/31/03
7.50% 6/30/03
7.50% 9/30/03
balance Facility Termination Date
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2.2.2. Facility B. The outstanding balance of
Advances made under Facility B shall be payable in quarterly
installments as follows:
% OF FACILITY B AMOUNT PAYMENT DATE
---------------------- ------------
1.75% 9/30/96
1.75% 12/31/96
1.75% 3/31/97
1.75% 6/30/97
1.75% 9/30/97
1.75% 12/31/97
2.00% 3/31/98
2.00% 6/30/98
2.00% 9/30/98
2.00% 12/31/98
2.25% 3/31/99
2.25% 6/30/99
3.00% 9/30/99
3.00% 12/31/99
3.25% 3/31/00
3.25% 6/30/00
3.50% 9/30/00
3.50% 12/31/00
3.75% 3/31/01
3.75% 6/30/01
4.25% 9/30/01
4.25% 12/31/01
4.50% 3/31/02
4.50% 6/30/02
4.75% 9/30/02
4.75% 12/31/02
5.50% 3/31/03
5.50% 6/30/03
6.00% 9/30/03
balance Facility Termination Date
2.2.3. Excess Cash Flow. In addition to the scheduled
installments due on Advances under the Facilities as set forth above,
the Borrower shall, on or before April 1 of each year, commencing April
1, 1998, make a mandatory prepayment of Advances in an amount equal to
50% of the Excess Cash Flow, if positive, for the most recently ended
fiscal year, provided that, notwithstanding the foregoing, the
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23
Borrower shall not be obligated to make any payment of Excess Cash Flow
hereunder if but only to the extent that such payment would leave the
Borrower with less than $250,000 in available cash and cash equivalents
as of the date of such payment. Prepayments made under this Section
2.2.3 shall be applied first against installments due under Section
2.2.1 with respect to Facility A in the inverse order of maturity and
then against installments due under Section 2.2.2 with respect to
Facility B in the inverse order of maturity. Prior to the Revolving
Credit Termination Date, the Aggregate Facility A Commitment shall be
reduced simultaneously with any prepayment under this Section 2.2.3 in
the amount of such prepayment and the individual Facility A Commitments
of the Facility A Lenders shall be reduced ratably accordingly.
2.2.4. Early Expiration. In the event that the term
of the Borrower's partnership (pursuant to the Borrower's Agreement of
Limited Partnership) has not been extended, prior to June 30, 2001, to
a date occurring no earlier than March 31, 2004, all unpaid Obligations
shall be due and payable in full on September 30, 2001.
2.2.5. Termination. All other unpaid Obligations
shall be paid in full by the Borrower on the earlier to occur of (i)
the Facility Termination Date and (ii) the date on which all
Commitments have expired or been terminated and no Advances are
outstanding.
2.3. Ratable Loans. Each Advance hereunder shall consist of
Loans made under a Facility from the several Lenders ratably in proportion to
the ratio that their respective Commitments under such Facility bear to the
Aggregate Commitment under such Facility.
2.4. Types of Advances; Applicable Margin. Advances may be
Floating Rate Advances or Eurodollar Advances, or a combination thereof,
selected by the Borrower in accordance with Sections 2.8 and 2.9. The
Applicable Margin for Advances shall be based on the Leverage Ratio in
accordance with the table below. The Leverage Ratio shall be determined from
the financial statements delivered by the Borrower pursuant to Sections 6.1 (i)
and (ii). The adjustment, if any, to the Applicable Margin shall be effective
beginning on the fifth Business Day after the delivery of such financial
statements. Until financial statements for the first quarter ending after the
date hereof have been delivered, the maximum Applicable Margin shall apply.
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LEVERAGE RATIO APPLICABLE MARGIN
-------------- -----------------
But less than
Greater than or equal to Floating Eurodollar
- ------------------------------------------------------------------------------
5.5 - 1.750% 3.000%
5.0 5.5 1.500% 2.750%
4.5 5.0 1.250% 2.500%
4.0 4.5 1.000% 2.250%
3.5 4.0 .750% 2.000%
- 3.5 .500% 1.75%
2.5. Commitment Fee; Reductions in Aggregate Commitments. The
Borrower agrees to pay to the Agent for the account of each Lender a commitment
fee of .5% per annum on the daily unborrowed portion of such Lender's combined
Commitment from the date hereof to and including the Revolving Credit
Termination Date with respect to Facility A, and on September 27, 1996 with
respect to Facility B, payable on each Payment Date hereafter, on the Revolving
Credit Termination Date with respect to Facility A, and on September 27, 1996
with respect to Facility B. The Borrower may permanently reduce any Aggregate
Commitment in whole, or in part ratably among the applicable Lenders in integral
multiples of $500,000, upon at least three Business Days' written notice to the
Agent, which notice shall specify the amount of any such reduction, provided,
however, that the amount of the Aggregate Commitment under a Facility may not be
reduced below the aggregate principal amount of the outstanding Advances under
such Facility. All accrued commitment fees with respect to a Facility shall be
payable on the effective date of any termination of the obligations of the
Lenders to make Loans under such Facility.
2.6. Minimum Amount of Each Advance. Each Eurodollar Advance
shall be in the minimum amount of $100,000 (and in multiples of $100,000 if in
excess thereof), and each Floating Rate Advance shall be in the minimum amount
of $100,000 (and in multiples of $100,000 if in excess thereof), provided,
however, that any Floating Rate Advance may be in the amount of the applicable
unused Aggregate Commitment.
2.7. Optional Principal Payments. The Borrower may from time to
time pay, without penalty or premium, all outstanding Floating Rate Advances,
or, in a minimum aggregate amount of $100,000 or any integral multiple of
$100,000 in excess thereof, any portion of the outstanding Floating Rate
Advances upon three Business Days' prior written notice to the Agent. A
Eurodollar Advance may not paid prior to the last day of the applicable Interest
Period, subject to Section 3.4. Optional principal payments made on or before
the Revolving Credit Termination Date shall be applied first to Advances
outstanding under Facility A, and then to principal installments of Facility B
payable under Section 2.2.2 in the inverse order of maturity. Optional
principal payments made after the Revolving Credit Termination Date shall be
applied first to principal installments of Facility B payable under Section
2.2.2 in the inverse order of maturity, and then to principal installments of
Facility A payable under Section 2.2.1 in the inverse order of maturity.
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25
2.8. Method of Selecting Types and Interest Periods for New
Advances. The Borrower shall select the Type of Advance and, in the case of
each Eurodollar Advance, the Interest Period applicable to each Advance from
time to time. The Borrower shall give the Agent irrevocable notice (a
"Borrowing Notice") not later than 10:00 a.m. (Chicago time) at least one
Business Day before the Borrowing Date of each Floating Rate Advance and three
Business Days before the Borrowing Date for each Eurodollar Advance, specifying:
(i) the Facility under which such Advance is to be borrowed,
(ii) the Borrowing Date, which shall be a Business Day, of such
Advance,
(iii) the aggregate amount of such Advance,
(iv) the Type of Advance selected, and
(v) in the case of each Eurodollar Advance, the Interest Period
applicable thereto.
Not later than noon (Chicago time) on each Borrowing Date, each Lender shall
make available its Loan or Loans, in funds immediately available in Chicago to
the Agent at its address specified pursuant to Article XIII. The Agent will
make the funds so received from the Lenders available to the Borrower at the
Agent's aforesaid address.
2.9. Conversion and Continuation of Outstanding Advances.
Floating Rate Advances shall continue as Floating Rate Advances unless and until
such Floating Rate Advances are converted into Eurodollar Advances. Each
Eurodollar Advance shall continue as a Eurodollar Advance until the end of the
then applicable Interest Period therefor, at which time such Eurodollar Advance
shall be automatically converted into a Floating Rate Advance unless the
Borrower shall have given the Agent a Conversion/Continuation Notice requesting
that, at the end of such Interest Period, such Eurodollar Advance either
continue as a Eurodollar Advance for the same or another Interest Period or be
converted into a Floating Rate Advance. Subject to the terms of Section 2.4 and
Section 2.6, the Borrower may elect from time to time to convert all or any part
of an Advance of any Type into any other Type or Types of Advances; provided
that any conversion of any Eurodollar Advance shall be made on, and only on, the
last day of the Interest Period applicable thereto. The Borrower shall give the
Agent irrevocable notice (a "Conversion/Continuation Notice") of each conversion
of an Advance or continuation of a Eurodollar Advance not later than 10:00 a.m.
(Chicago time) at least one Business Day, in the case of a conversion into a
Floating Rate Advance, or three Business Days, in the case of a conversion into
or continuation of a Eurodollar Advance, prior to the date of the requested
conversion or continuation, specifying:
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26
(i) the requested date which shall be a Business Day, of such
conversion or continuation;
(ii) the aggregate amount and Type of the Advance which is to be
converted or continued; and
(iii) the amount and Type(s) of Advance(s) into which such Advance
is to be converted or continued and, in the case of a
conversion into or continuation of a Eurodollar Advance, the
duration of the Interest Period applicable thereto.
2.10. Changes in Interest Rate, Etc. Each Floating Rate Advance
shall bear interest on the outstanding principal amount thereof, for each day
from and including the date such Advance is made or is converted from a
Eurodollar Advance into a Floating Rate Advance pursuant to Section 2.9 to but
excluding the date it becomes due or is converted into a Eurodollar Advance
pursuant to Section 2.9 hereof, at a rate per annum equal to the Floating Rate
for such day. Changes in the rate of interest on that portion of any Advance
maintained as a Floating Rate Advance will take effect simultaneously with each
change in the Alternate Base Rate. Each Eurodollar Advance shall bear interest
from and including the first day of the Interest Period applicable thereto to
(but not including) the last day of such Interest Period at the interest rate
determined as applicable to such Eurodollar Advance. No Interest Period for
Advances may end after the Facility Termination Date. The Borrower shall select
Interest Periods so that it is not necessary to repay any portion of a
Eurodollar Advance prior to the last day of the applicable Interest Period in
order to make a mandatory repayment required pursuant to Section 2.2.
2.11. Rates Applicable After Default. Notwithstanding anything to
the contrary contained in Section 2.8 or 2.9, during the continuance of a
Default or Unmatured Default the Required Lenders may, at their option, by
notice to the Borrower (which notice may be revoked at the option of the
Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that no
Advance may be made as, converted into or continued as a Eurodollar Advance. If
any Advance is not paid at maturity, whether by acceleration or otherwise, the
Required Lenders may, at their option, by notice to the Borrower (which notice
may be revoked at the option of the Required Lenders notwithstanding any
provision of Section 8.2 requiring unanimous consent of the Lenders to changes
in interest rates), declare that (i) each Eurodollar Advance shall bear interest
for the remainder of the applicable Interest Period at the rate otherwise
applicable to such Interest Period plus 2% per annum and (ii) each Floating Rate
Advance shall bear interest at a rate per annum equal to the Floating Rate
otherwise applicable to the Floating Rate Advance plus 2% per annum.
Page 20
27
2.12. Method of Payment. All payments of the Obligations
hereunder shall be made, without setoff, deduction, or counterclaim, in
immediately available funds to the Agent at the Agent's address specified
pursuant to Article XIII, or at any other Lending Installation of the Agent
specified in writing by the Agent to the Borrower, by noon (local time) on the
date when due and shall be applied ratably by the Agent among the Lenders to
whom such Obligations are due. Each payment delivered to the Agent for the
account of any Lender shall be delivered promptly by the Agent to such Lender in
the same type of funds that the Agent received at its address specified pursuant
to Article XIII or at any Lending Installation specified in a notice received by
the Agent from such Lender. The Agent is hereby authorized to charge the
account of the Borrower maintained with First Chicago for each payment of
principal, interest and fees as it becomes due hereunder.
2.13. Notes; Telephonic Notices. Each Lender is hereby authorized
to record the principal amount of each of its Loans and each repayment on the
schedule attached to its applicable Note, provided, however, that the failure to
so record (or any error in such recordation) shall not affect the Borrower's
obligations under such Note. The Borrower hereby authorizes the Lenders and the
Agent to extend, convert or continue Advances, effect selections of Types of
Advances and to transfer funds based on telephonic notices made by any
Authorized Officer. The Borrower agrees to deliver promptly to the Agent a
written confirmation, if such confirmation is requested by the Agent or any
Lender, of each telephonic notice signed by an Authorized Officer. If the
written confirmation differs in any material respect from the action taken by
the Agent and the Lenders, the records of the Agent and the Lenders shall govern
absent manifest error.
2.14. Interest Payment Dates; Interest and Fee Basis. Interest
accrued on each Floating Rate Advance shall be payable on each Payment Date,
commencing with the first such date to occur after the date hereof, and at
maturity. Interest accrued on each Eurodollar Advance shall be payable on the
last day of its applicable Interest Period, on any date on which the Eurodollar
Advance is prepaid, whether by acceleration or otherwise, and at maturity.
Interest accrued on each Eurodollar Advance having an Interest Period longer
than three months shall also be payable on the last day of each three-month
interval during such Interest Period. Interest and commitment fees shall be
calculated for actual days elapsed on the basis of a 360-day year. Interest
shall be payable for the day an Advance is made but not for the day of any
payment on the amount paid if payment is received prior to noon (local time) at
the place of payment. If any payment of principal of or interest on an Advance
shall become due on a day which is not a Business Day, such payment shall be
made on the next succeeding Business Day and, in the case of a principal
payment, such extension of time shall be included in computing interest in
connection with such payment.
2.15. Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions. Promptly after receipt thereof but in any event before
the close of business on
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28
the day of such receipt, the Agent will notify each affected Lender of the
contents of each Aggregate Commitment reduction notice, Borrowing Notice,
Conversion/ Continuation Notice, and repayment notice received by it hereunder.
The Agent will notify the Borrower and each affected Lender of the interest rate
applicable to each Eurodollar Advance promptly upon determination of such
interest rate and will give the Borrower and each Lender prompt notice of each
change in the Alternate Base Rate.
2.16. Lending Installations. Each Lender may book its Loans at
any Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Notes shall be deemed held by each Lender for
the benefit of such Lending Installation. Each Lender may, by written or telex
notice to the Agent and the Borrower, designate a Lending Installation through
which Loans will be made by it and for whose account Loan payments are to be
made.
2.17. Non-Receipt of Funds by the Agent. Unless the Borrower or a
Lender, as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of any Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption.
If such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Agent, the recipient of such payment shall, on demand by the
Agent, repay to the Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date such
amount was so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to (i) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day or (ii) in the case of payment by the
Borrower, the interest rate applicable to the relevant Loan.
2.18. Withholding Tax Exemption. At least five Business Days prior
to the first date on which interest or fees are payable hereunder for the
account of any Lender, each Lender that is not incorporated under the laws of
the United States of America, or a state thereof, agrees that it will deliver to
each of the Borrower and the Agent two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224, certifying in either case that such
Lender is entitled to receive payments under this Agreement and the Notes
without deduction or withholding of any United States federal income taxes.
Each Lender which so delivers a Form 1001 or 4224 further undertakes to deliver
to each of the Borrower and the Agent two additional copies of such form (or a
successor form) on or before the date that such form expires (currently, three
successive calendar years for Form 1001 and one calendar year for Form 4224) or
becomes obsolete or after the occurrence of any event requiring a change in the
most recent forms so delivered by it, and such amendments thereto
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or extensions or renewals thereof as may be reasonably requested by the Borrower
or the Agent, in each case certifying that such Lender is entitled to receive
payments under this Agreement and the Notes without deduction or withholding of
any United States federal income taxes, unless an event (including without
limitation any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required which renders all
such forms inapplicable or which would prevent such Lender from duly completing
and delivering any such form with respect to it and such Lender advises the
Borrower and the Agent that it is not capable of receiving payments without any
deduction or withholding of United States federal income tax.
ARTICLE III
CHANGE IN CIRCUMSTANCES
3.1. Yield Protection. If after the date of this Agreement any
law or any governmental or quasi-governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law), or any
interpretation thereof, or the compliance of any Lender therewith,
(i) subjects any Lender or any applicable Lending Installation
to any tax, duty, charge or withholding on or from payments
due from the Borrower (excluding federal taxation of the
overall net income of any Lender or applicable Lending
Installation), or changes the basis of taxation of payments
to any Lender in respect of its Loans or other amounts due
it hereunder, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender or any
applicable Lending Installation (other than reserves and
assessments taken into account in determining the interest
rate applicable to Eurodollar Advances), or
(iii) imposes any other condition the result of which is to
increase the cost to any Lender or any applicable Lending
Installation of making, funding or maintaining loans or
reduces any amount receivable by any Lender or any
applicable Lending Installation in connection with loans, or
requires any Lender or any applicable Lending Installation
to make any payment calculated by reference to the amount of
loans held or interest received by it, by an amount deemed
material by such Lender,
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then, within 15 days of demand by such Lender, the Borrower shall pay such
Lender that portion of such increased expense incurred or reduction in an amount
received which such Lender determines is attributable to making, funding and
maintaining its Loans and its applicable Commitment.
3.2. Changes in Capital Adequacy Regulations. If a Lender
determines the amount of capital required or expected to be maintained by such
Lender, any Lending Installation of such Lender or any corporation controlling
such Lender is increased as a result of a Change, then, within 15 days of demand
by such Lender, the Borrower shall pay such Lender the amount necessary to
compensate for any shortfall in the rate of return on the portion of such
increased capital which such Lender reasonably determines is attributable to
this Agreement, its Loans or its obligation to make Loans hereunder (after
taking into account such Lender's policies as to capital adequacy). "Change"
means (i) any change after the date of this Agreement in the Risk-Based Capital
Guidelines or (ii) any adoption of or change in any other law, governmental or
quasi-governmental rule, regulation, policy, guideline, interpretation, or
directive (whether or not having the force of law) after the date of this
Agreement which affects the amount of capital required or expected to be
maintained by any Lender or any Lending Installation or any corporation
controlling any Lender. "Risk-Based Capital Guidelines" means (i) the
risk-based capital guidelines in effect in the United States on the date of this
Agreement, including transition rules, and (ii) the corresponding capital
regulations promulgated by regulatory authorities outside the United States
implementing the July 1988 report of the Basle Committee on Banking Regulation
and Supervisory Practices Entitled "International Convergence of Capital
Measurements and Capital Standards," including transition rules, and any
amendments to such regulations adopted prior to the date of this Agreement.
3.3. Availability of Types of Advances. If any Lender reasonably
determines that maintenance of its Eurodollar Loans at a suitable Lending
Installation would violate any applicable law, rule, regulation, or directive,
whether or not having the force of law, or if the Required Lenders determine
that (i) deposits of a type and maturity appropriate to match fund Eurodollar
Advances are not available or (ii) the interest rate applicable to a Type of
Advance does not accurately reflect the cost of making or maintaining such
Advance, then the Agent shall suspend the availability of the affected Type of
Advance and require any Eurodollar Advances of the affected Type to be repaid.
The Borrower shall not be required to repay any Eurodollar Advance under this
Section 3.3 prior to the last day of the applicable Interest Period unless such
delay in repayment would violate any applicable law, rule, regulation, or
directive, whether or not having the force of law.
3.4. Funding Indemnification. If any payment of a Eurodollar
Advance occurs on a date which is not the last day of the applicable Interest
Period, whether because of acceleration, prepayment or otherwise, or a
Eurodollar Advance is not made on the date specified by the Borrower for any
reason other than default by the Lenders, the Borrower
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will indemnify each affected Lender for any loss or cost incurred by it
resulting therefrom, including, without limitation, any loss or cost in
liquidating or employing deposits acquired to fund or maintain the Eurodollar
Advance.
3.5. Lender Statements; Survival of Indemnity. To the extent
reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its Eurodollar Loans to reduce any liability of
the Borrower to such Lender under Sections 3.1 and 3.2 or to avoid the
unavailability of a Type of Advance under Section 3.3, so long as such
designation is not disadvantageous to such Lender. Each Lender shall deliver
to the Agent and the Borrower a written statement of such Lender as to the
amount due, if any, under Sections 3.1, 3.2 or 3.4. Such written statement
shall set forth in reasonable detail the calculations upon which such Lender
determined such amount and shall be final, conclusive and binding on the
Borrower in the absence of manifest error. Determination of amounts payable
under such Sections in connection with a Eurodollar Loan shall be calculated as
though each Lender funded its Eurodollar Loan through the purchase of a deposit
of the type and maturity corresponding to the deposit used as a reference in
determining the Eurodollar Rate applicable to such Loan, whether in fact that
is the case or not. Unless otherwise provided herein, the amount specified in
the written statement shall be payable on demand after receipt by the Borrower
of the written statement. The obligations of the Borrower under Sections 3.1,
3.2 and 3.4 shall survive payment of the Obligations and termination of this
Agreement for up to one year.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Initial Advance. The Lenders shall not be required to make
the initial Advance hereunder unless the Borrower has furnished to the Agent
with sufficient copies for the Lenders:
(i) A certified copy of the Borrower's Agreement of Limited
Partnership as in effect of the date of this Agreement and
any certificates of limited partnership issued in
connection therewith, together with all amendments thereto
and a list of all general partners of the Borrower, all
certified by the Secretary or Assistant Secretary of the
Managing General Partner.
(ii) A copy, certified by the Secretary or Assistant Secretary
of the Managing General Partner, of any partners'
resolutions (and resolutions of other bodies, if any are
deemed necessary by counsel for the Agent) authorizing
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the execution and delivery of the Loan Documents and the
performance by the Borrower of its obligations thereunder.
(iii) An incumbency certificate, executed by the Secretary or
Assistant Secretary of the Managing General Partner, which
shall identify by name and title and bear the signature of
the officers of the Borrower or the Managing General
Partner authorized to sign the Loan Documents on behalf of
the Borrower.
(iv) Copies of the articles of incorporation of the Managing
General Partner, together with all amendments, and a
certificate of existence, both certified by the appropriate
governmental officer in its jurisdiction of incorporation.
(v) Copies, certified by the Secretary or Assistant Secretary
of the Managing General Partner, of its by-laws and of its
Board of Directors' resolutions (and resolutions of other
bodies, if any are deemed necessary by counsel for the
Agent) authorizing the execution of the Loan Documents and
the performance of the obligations of the Borrower
thereunder.
(vi) An incumbency certificate, executed by the Secretary or
Assistant Secretary of the Managing General Partner, which
shall identify by name and title and bear the signature of
the officers of the Managing General Partner authorized to
sign the Loan Documents.
(vii) A certificate, signed by a senior financial officer of the
Borrower, stating that on the initial Borrowing Date no
Default or Unmatured Default has occurred and is
continuing.
(viii) A written opinion of counsel to the Borrower and the
Managing General Partner, addressed to the Lenders in
substantially the form of Exhibit "E" hereto.
(ix) Notes payable to the order of each of the Lenders.
(x) The Security Agreement, together with all agreements,
instruments, and documents necessary to effect the purpose
of the Security Agreement under applicable law, including
without limitation duly executed UCC-1 financing statements
describing the security interest of the Agent on behalf of
the Lenders in the "Collateral" (as that term is defined in
the Security Agreement) and acceptable for filing in the
appropriate public offices in each jurisdiction which the
Agent deems necessary or advisable to perfect the security
interest created thereby.
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(xi) Evidence satisfactory to the Agent and its counsel that the
Agent is designated as loss payee on behalf of the Lenders
on all insurance policies on the Property of the Borrower,
together with any necessary documentation evidencing the
assignment and perfection of the Lenders' security interest
therein.
(xii) The insurance certificate described in Section 5.17.
(xiii) The Subordination Agreement.
(xiv) A subscriber report in respect of each CATV System by
region as of June 30, 1995.
(xv) Evidence satisfactory to the Agent and its counsel that the
Borrower and its general partners shall have made all
filings and registrations with, or obtained all material
approvals, orders, authorizations, franchises, consents,
licenses, certificates and permits (including, without
limitation, all CATV Franchises and FCC Licenses) from, the
FCC, other federal, state and local regulatory or
governmental bodies and authorities (including, without
limitation, state and local filing or recording offices),
and other Persons which are or may be required
prerequisites to the validity, enforceability or
non-voidability of the Loan Documents or the pledge of the
assets of the Borrower subject to the Liens created
pursuant to the Collateral Documents.
(xvi) Copies of the most recent Cumulative Leakage Index reports
for the Borrower, together with such other reports on
environmental matters as the Agent may request, each of
which shall be in form and substance satisfactory to the
Agent and the Lenders.
(xvii) Written money transfer instructions, in substantially the
form of Exhibit "I" hereto, addressed to the Agent and
signed by an Authorized Officer, together with such other
related money transfer authorizations as the Agent may have
reasonably requested.
(xviii) Such other documents as any Lender or its counsel may have
reasonably requested.
4.2. Advances for System Acquisitions. The Lenders shall not be
required to make any Advance hereunder the proceeds of which are or are to be
used in connection with a System Acquisition unless, in addition to satisfying
the conditions set forth in Sections 4.1 and 4.3, the Borrower has furnished to
the Agent with sufficient copies for the Lenders:
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(i) Copies, certified by the Secretary or Assistant Secretary
of the Borrower, of the agreements, instruments, and
documents governing such System Acquisition, which,
together with all other aspects of such System Acquisition,
shall be in form and substance reasonably satisfactory to
the Agent.
(ii) Evidence satisfactory to the Agent and its counsel that all
material approvals, authorizations, filings, registrations,
consents, licenses, certificates and permits (including,
without limitation, transfer documents or orders with
respect to all affected CATV Franchises and FCC Licenses)
in connection with such System Acquisition have been or
shall be obtained or made, as appropriate, from or with the
FCC, other federal, state and local regulatory or
governmental bodies and authorities (including, without
limitation, state and local filing or recording offices),
and other Persons which are or may be required
prerequisites to the validity, enforceability or
non-voidability of the Loan Documents or the pledge of the
assets of the Borrower subject to the Liens created
pursuant to the Collateral Documents.
(iii) Copies of the most recent Cumulative Leakage Index reports
for the assets being acquired in such System Acquisition,
together with such other reports on environmental matters
as the Agent may request, each of which shall be in form
and substance satisfactory to the Agent and the Lenders.
(iv) Subscriber reports of the Persons to be acquired or, if
unavailable, a good faith estimate of the number of
subscribers to be acquired.
(v) Such other documents related to such System Acquisition as
any Lender or its counsel may have reasonably requested.
4.3. Each Advance. The Lenders shall not be required to make
any Advance (other than an Advance that, after giving effect thereto and to the
application of the proceeds thereof, does not increase the aggregate amount of
outstanding Advances), unless on the applicable Borrowing Date:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in Article V
are true and correct as of such Borrowing Date except to
the extent any such representation or warranty is stated to
relate solely to an earlier date, in which case such
representation or warranty shall be true and correct on and
as of such earlier date.
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(iii) The Borrower has delivered to the Agent a statement setting
forth the Pro Forma Leverage Ratio (after giving effect to
the contemplated Advance) as of such Borrowing Date.
(iv) All legal matters incident to the making of such Advance
shall be satisfactory to the Lenders and their counsel.
Each Borrowing Notice with respect to each such Advance shall
constitute a representation and warranty by the Borrower that the conditions
contained in Sections 4.3(i) and (ii) have been satisfied. Notwithstanding
anything herein to the contrary, in the event that the Pro Forma Leverage Ratio
exceeds the applicable permitted Leverage Ratio as set forth in Section 6.19.6,
the Lenders shall not be obligated to make the contemplated Advance. Any
Lender may require a duly completed compliance certificate in substantially the
form of Exhibit "F" hereto (after giving effect to the contemplated Advance) as
a condition to making an Advance.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
5.1. Existence and Standing. The Borrower is a limited
partnership duly organized and validly existing under the laws of the State of
Washington and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted.
5.2. Authorization and Validity. The Borrower has the power and
authority and legal right to execute and deliver the Loan Documents and to
perform its obligations thereunder. The execution and delivery by the Borrower
of the Loan Documents and the performance of its obligations thereunder have
been duly authorized by proper organizational proceedings, and the Loan
Documents constitute legal, valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally.
5.3. No Conflict; Government Consent. Neither the execution and
delivery by the Borrower of the Loan Documents, nor the consummation of the
transactions therein contemplated, nor compliance with the provisions thereof
will violate any law, rule, regulation, order, writ, judgment, injunction,
decree or award binding on the Borrower or
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the Borrower's agreement of limited partnership or the provisions of any
indenture, instrument or agreement to which the Borrower is a party or is
subject, or by which it, or its Property, is bound, or conflict with or
constitute a default thereunder, or result in the creation or imposition of any
Lien in, of or on the Property of the Borrower pursuant to the terms of any
such indenture, instrument or agreement. No material order, consent, approval,
license, authorization, or validation of, or filing, recording or registration
with, or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection
with the execution, delivery and performance of, or the legality, validity,
binding effect or enforceability of, any of the Loan Documents. The execution
and delivery of the Loan Documents does not constitute the transfer, assignment
or disposition in any manner, voluntarily or involuntarily, directly or
indirectly, of any license issued as of this date by the FCC in connection with
the operation of any of the CATV Systems, or the transfer of control of the
Borrower, within the meaning of Section 310(d) of the Communications Act of
1934, as amended.
5.4. Financial Statements. The December 31, 1994 financial
statements of the Borrower heretofore delivered to the Lenders were prepared in
accordance with generally accepted accounting principles in effect on the date
such statements were prepared and fairly present the financial condition and
operations of the Borrower at such date and the results of its operations for
the period then ended.
5.5. Material Adverse Change. Since December 31, 1994, there
has been no change in the business, Property, prospects, condition (financial
or otherwise) or results of operations of the Borrower which could reasonably
be expected to have a Material Adverse Effect.
5.6. Taxes. The Borrower has filed all United States federal
tax returns and all other tax returns which are required to be filed and has
paid all taxes due pursuant to said returns or pursuant to any assessment
received by the Borrower or any of its general partners with respect to the
Borrower, except such taxes, if any, as are being contested in good faith and
as to which adequate reserves have been provided. No tax liens have been filed
and no claims are being asserted with respect to any such taxes. The charges,
accruals and reserves on the books of the Borrower in respect of any taxes or
other governmental charges are adequate.
5.7. Litigation and Contingent Obligations. Except as set forth
on Schedule "4" hereto, there is no litigation, arbitration, governmental
investigation, proceeding or inquiry pending or, to the knowledge of any of
their officers, threatened against or affecting the Borrower which could
reasonably be expected to have a Material Adverse Effect. Other than any
liability incident to such litigation, arbitration or proceedings, the Borrower
has no material contingent obligations not provided for or disclosed in the
financial statements referred to in Section 5.4.
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5.8. Subsidiaries. The Borrower has no Subsidiaries.
5.9. ERISA. The Borrower has no Unfunded Liabilities. Neither
the Borrower nor any other member of the Controlled Group has incurred, or is
reasonably expected to incur, any withdrawal liability to Multiemployer Plans.
Each Plan complies in all material respects with all applicable requirements of
law and regulations, no Reportable Event has occurred with respect to any Plan,
neither the Borrower nor any other members of the Controlled Group has
withdrawn from any Plan or initiated steps to do so, and no steps have been
taken to reorganize or terminate any Plan.
5.10. Accuracy of Information. No information, exhibit or report
furnished by the Borrower to the Agent or to any Lender in connection with the
negotiation of, or compliance with, the Loan Documents contained any material
misstatement of fact or omitted to state a material fact or any fact necessary
to make the statements contained therein not misleading.
5.11. Regulation U. Margin stock (as defined in Regulation U)
constitutes less than 25% of those assets of the Borrower which are subject to
any limitation on sale, pledge, or other restriction hereunder.
5.12. Material Agreements. The Borrower is not a party to any
agreement or instrument or subject to any charter or other organizational
restriction under which non-defaulting performance could reasonably be expected
to have a Material Adverse Effect. The Borrower is not in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in (i) any agreement to which it is a party, which default
could reasonably be expected to have a Material Adverse Effect or (ii) any
agreement or instrument evidencing or governing Indebtedness in excess of
$100,000 in the aggregate.
5.13. Compliance With Laws, Etc. The Borrower has materially
complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof, having jurisdiction over the conduct of its business or the
ownership of its Property (including, without limitation, those relating to the
Cumulative Leakage Index). The Borrower has obtained all material franchises,
licenses, consents, approvals and authorizations granted or issued by any
public or governmental body, agency or authority necessary and appropriate to
operate the CATV Systems and all such franchises, licenses, certificates,
consents, approvals and authorizations are in full force and effect. The
Borrower has not received any notice to the effect that its operations are not
in material compliance with any of the requirements of applicable federal,
state and local environmental, health and safety statutes and regulations or
the subject of any federal or state investigation evaluating whether any
remedial action is needed to respond to a release of any
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toxic or hazardous waste or substance into the environment, which
non-compliance or remedial action could reasonably be expected to have a
Material Adverse Effect.
5.14. Ownership of Properties. Except as set forth on Schedule
"3" hereto, on the date of this Agreement, the Borrower will have good title,
free of all Liens other than those permitted by Section 6.18, to all of the
Property and assets reflected in the financial statements as owned by it.
5.15. Investment Company Act. The Borrower is not an "investment
company" or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended.
5.16. Public Utility Holding Company Act. The Borrower is not a
"holding company" or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
5.17. Insurance. The certificate signed by a senior officer of
the Managing General Partner, that attests to the existence and adequacy of,
and summarizes, the property and casualty insurance program carried by the
Borrower and that has been furnished by the Borrower to the Agent and the
Lenders, is complete and accurate. This summary includes the insurer's or
insurers' name(s), policy number(s), expiration date(s), amount(s) of coverage,
type(s) of coverage, exclusion(s), and deductibles. This summary also includes
similar information, and describes any reserves, relating to any self-insurance
program that is in effect.
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1. Financial Reporting. The Borrower will maintain, for
itself and each Subsidiary, a system of accounting established and administered
in accordance with generally accepted accounting principles, and furnish to the
Lenders:
(i) Within 90 days after the close of each of its fiscal years,
an unqualified (except for qualifications relating to
changes in accounting principles or practices reflecting
changes in generally accepted principles of accounting
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and required or approved by the Borrower's independent
certified public accountants) audit report certified by
independent certified public accountants, acceptable to the
Lenders, prepared in accordance with Agreement Accounting
Principles, including balance sheets as of the end of such
period, related profit and loss and reconciliation of
surplus statements, and a statement of cash flows,
accompanied by (a) any management letter prepared by said
accountants, and (b) a certificate of said accountants
that, in the course of their examination necessary for
their certification of the foregoing, they have obtained no
knowledge of any Default or Unmatured Default, or if, in
the opinion of such accountants, any Default or Unmatured
Default shall exist, stating the nature and status thereof.
(ii) Within 45 days after the close of each quarterly period of
each of its fiscal years, unaudited balance sheets as at
the close of each such period and profit and loss and
reconciliation of surplus statements and a statement of
cash flows for the period from the beginning of such fiscal
year to the end of such quarter, subject to normal year-end
audit adjustments, and a Management Fee Report, all
certified by a senior financial officer.
(iii) Within 30 days after the close of each month, profit and
loss statements for such month and for the period from the
beginning of such fiscal year to the end of such month and
subscriber reports as of the end of such month, all
certified by a senior financial officer.
(iv) Together with the financial statements required under
Sections 6.1(i) and (ii), a compliance certificate in
substantially the form of Exhibit "F" hereto signed by a
senior financial officer showing the calculations necessary
to determine compliance with this Agreement and stating
that no Default or Unmatured Default exists, or if any
Default or Unmatured Default exists, stating the nature and
status thereof.
(v) As soon as available, but in any event within 30 days after
the beginning of each fiscal year of the Borrower, a copy
of the plan and forecast (including a projected
consolidated income statement and funds flow statement) of
the Borrower for such fiscal year.
(vi) Within 270 days after the close of each fiscal year, a
statement of the Unfunded Liabilities of each Single
Employer Plan, if any, certified as correct by an actuary
enrolled under ERISA.
(vii) As soon as possible and in any event within 10 days after
the Borrower knows that any Reportable Event has occurred
with respect to any Plan, a
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statement, signed by a senior financial officer of the
Borrower, describing said Reportable Event and the action
which the Borrower proposes to take with respect thereto.
(viii) As soon as possible and in any event within 10 days after
receipt by the Borrower, a copy of (a) any notice or claim
to the effect that the Borrower is or may be liable to any
Person as a result of the release by the Borrower, or any
other Person of any toxic or hazardous waste or substance
into the environment, and (b) any notice alleging any
violation of any federal, state or local environmental,
health or safety law or regulation by the Borrower, which,
in either case, could reasonably be expected to have a
Material Adverse Effect.
(ix) Promptly upon the furnishing thereof to the shareholders of
the Borrower, copies of all financial statements, reports
and proxy statements so furnished.
(x) Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly or
other regular reports which the Borrower files with the
Securities and Exchange Commission.
(xi) Promptly upon the request of the Agent or any Lender,
copies of all material amendments or renewals of material
franchises, licenses, consents, approvals and
authorizations granted or issued by any public or
governmental body, agency or authority necessary and
appropriate to operate the CATV Systems and of all other
material communications between the Borrower and the FCC or
any other federal, state, or local regulatory entity having
jurisdiction over the Borrower.
(xii) Such other information (including non-financial
information) as the Agent or any Lender may from time to
time reasonably request.
6.2. Use of Proceeds. The Borrower will use the proceeds of the
Advances to refinance Indebtedness existing prior to the effective date of this
Agreement, for working capital purposes, to finance the System Acquisitions,
for other general corporate purposes, to make Permitted Acquisitions, and to
repay outstanding Advances. The Borrower will not use any of the proceeds of
the Advances to purchase or carry any "margin stock" (as defined in Regulation
U) or to make any other Acquisition.
6.3. Notice of Default, Etc. The Borrower will give prompt
notice in writing to the Agent, which shall promptly notify the Lenders, of the
occurrence of (a) any Default or Unmatured Default and of any other
development, financial or otherwise, which could reasonably be expected to have
a Material Adverse Effect; (b) the receipt by the Borrower of
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any notice from any federal, state or local governmental or regulatory body or
authority of the expiration without renewal, termination, material modification
or suspension of, or institution of any proceedings to terminate, materially
modify, or suspend, any CATV Franchise, FCC License or other license granted by
any governmental authority now or hereafter held by the Borrower the lack of
which could reasonably be expected to have a Material Adverse Effect; or (c)
any state or local statute, regulation or ordinance or judicial or
administrative order, or any federal judicial or administrative order
specifically addressed to the Borrower, limiting or controlling the operations
of the Borrower which has been issued or adopted hereafter and which could
reasonably be expected to have a Material Adverse Effect on the operation of
any of the CATV Systems.
6.4. Conduct of Business; Maintenance of Licenses. The Borrower
will (a) carry on and conduct the business of owning and operating the CATV
Systems in substantially the same manner and in substantially the same fields
of enterprise as it is presently conducted; (b) do all things necessary to
remain duly organized, validly existing and in good standing as a domestic
limited partnership in its jurisdiction of organization and maintain all
requisite authority to conduct its business in each jurisdiction in which the
failure to maintain such authority could reasonably be expected to have a
Material Adverse Effect; and (c) do all things necessary to renew, extend and
continue in effect all permits, licenses and authorizations which may at any
time and from time to time be necessary to operate the CATV Systems in
compliance with all applicable laws and regulations, the failure to comply with
which could reasonably be expected to have a Material Adverse Effect.
6.5. Taxes. The Borrower will pay when due all taxes,
assessments and governmental charges and levies upon it or its income, profits
or Property, except those which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves have been
set aside.
6.6. Insurance. The Borrower will maintain with financially
sound and reputable insurance companies insurance on all its Property in such
amounts and covering such risks as is consistent with sound business practice,
and the Borrower will furnish to the Agent upon request full information as to
the insurance carried. The Borrower will take all actions (including the
execution of appropriate documentation) from time to time reasonably requested
by the Agent or any Lender in order to maintain the assignment or perfection of
the security interest of the Agent on behalf of the Lenders therein. Unless a
Default or Unmatured Default has occurred and is continuing, the Borrower shall
be entitled to receive the proceeds of any insurance on the Property of the
Borrower provided and to the extent that such insurance proceeds are used to
acquire replacement Property within the later to occur of (i) 120 days after
the occurrence of the casualty underlying the payment of such proceeds and (ii)
30 days after the receipt of such insurance proceeds by the Borrower. The
Borrower will deliver to the Agent any insurance proceeds not used to acquire
replacement
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Property within the applicable period. The Lenders shall apply any insurance
proceeds they may receive to outstanding Obligations in the order set forth in
Section 2.7.
6.7. Compliance with Laws. The Borrower will comply with all
laws, rules, regulations, orders, writs, judgments, injunctions, decrees or
awards to which it may be subject, including, without limitation, all
applicable rules and regulations of the FCC and any other state or local
regulatory or governmental authority.
6.8. Maintenance of Properties. The Borrower will do all things
necessary to maintain, preserve, protect and keep its Property in good repair,
working order and condition, and make all necessary and proper repairs,
renewals and replacements so that its business carried on in connection
therewith may be properly conducted at all times.
6.9. Inspection. The Borrower will permit the Lenders, by their
respective representatives and agents, to inspect any of the Property,
corporate books and financial records of the Borrower, to examine and make
copies of the books of accounts and other financial records of the Borrower and
each Subsidiary, and to discuss the affairs, finances and accounts of the
Borrower and each Subsidiary with, and to be advised as to the same by, their
respective officers at such reasonable times and intervals as the Lenders may
designate.
6.10. Distributions. The Borrower will not declare or pay any
distributions on its partnership interests or redeem, repurchase or otherwise
acquire or retire any of its partnership interests at any time outstanding,
except for (i) quarterly distributions to limited partners in an amount not
exceeding in the aggregate $37,100 for quarters ending on or before June 30,
1996, and (ii) repurchases of limited partnership interests for an aggregate
amount not exceeding $50,000 in any fiscal year.
6.11. Indebtedness. The Borrower will not create, incur or
suffer to exist any Indebtedness, except:
(i) The Loans.
(ii) Indebtedness existing on the date hereof and described in
Schedule "3" hereto.
(iii) Contingent Obligations permitted under Section 6.17.
(iv) Rate Hedging Obligations.
(v) Capitalized Lease Obligations not exceeding $250,000 at any
one time outstanding.
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(vi) Subordinated Indebtedness represented by subordinated notes
issued to a seller in connection with a System Acquisition
representing a holdback of not more than 5 percent of the
aggregate consideration for such System Acquisition
(collectively, "Subordinated Seller Notes").
(vii) Accounts payable to trade creditors for goods and services
and current operating liabilities (other than for borrowed
money) incurred in the ordinary course of business.
(viii) Additional Indebtedness not exceeding $250,000 at any one
time outstanding.
6.12. Merger. The Borrower will not merge or consolidate with or
into any other Person.
6.13. Sale of Assets. The Borrower will not sell or otherwise
dispose of its Property, to any other Person except for (i) sales of equipment
and inventory in the ordinary course of business and upon fair and reasonable
terms no less favorable to the Borrower than the Borrower would obtain in a
comparable arms-length transaction; (ii) the sale or other disposition (other
than a sale or disposition described in the preceding clause (i) of this
Section 6.13) of Property that is no longer used or useful in the business of
the Borrower, provided that, within 30 days of any such sale or other
disposition, the Borrower replaces such Property with Property having
substantially equivalent value, and (iii) leases, sales or other dispositions
of its Property that, together with all other Property of the Borrower
previously leased, sold or disposed of as permitted by this clause (iii) of
this Section 6.13 during the twelve-month period ending with the month in which
any such lease, sale or other disposition occurs, do not constitute a
Substantial Portion of the Property of the Borrower.
6.14. Sale of Accounts. The Borrower will not sell or otherwise
dispose of any notes receivable or accounts receivable, with or without
recourse except in the ordinary course of business on terms and conditions
customary in the Borrower's industry.
6.15. Sale and Leaseback. The Borrower will not sell or transfer
any of its Property in order to concurrently or subsequently lease as lessee
such or similar Property.
6.16. Investments and Acquisitions. The Borrower will not make
or suffer to exist any Investments (including without limitation, loans and
advances to, and other Investments in, Subsidiaries), or commitments therefor,
or to create any Subsidiary or to become or remain a partner in any partnership
or joint venture, or to make any Acquisition of any Person, except:
(i) System Acquisitions.
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(ii) Short-term obligations of, or fully guaranteed by, the
United States of America.
(iii) Commercial paper rated A-l or better by Standard & Poor's
Ratings Group or P-l or better by Moody's Investors
Service, Inc.
(iv) Demand deposit accounts maintained in the ordinary course
of business.
(v) Certificates of deposit issued by and time deposits with
commercial banks (whether domestic or foreign) having
capital and surplus in excess of $100,000,000.
(vi) Investments in existence on the date hereof and described
in Schedule "2" hereto.
(vii) Permitted Acquisitions, provided that, prior to and after
giving effect to any such Acquisition, no Default or
Unmatured Default will exist.
6.17. Contingent Obligations. The Borrower will not make or
suffer to exist any Contingent Obligation, except (i) by endorsement of
instruments for deposit or collection in the ordinary course of business, (ii)
franchise bonds, performance bonds, Letters of Credit required in the ordinary
course of business and similar bonds, indemnities, and sureties, in each case
not representing, securing, or otherwise involving Indebtedness for borrowed
money; and (iii) to the extent permitted under Section 6.11(vii).
6.18. Liens. The Borrower will not create, incur, or suffer to
exist any Lien in, of or on the Property of the Borrower, except:
(i) Liens for taxes, assessments or governmental charges or
levies on its Property if the same shall not at the time be
delinquent or thereafter can be paid without penalty, or
are being contested in good faith and by appropriate
proceedings and for which adequate reserves in accordance
with generally accepted principles of accounting shall have
been set aside on its books.
(ii) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the
ordinary course of business which secure payment of
obligations not more than 60 days past due or which are
being contested in good faith by appropriate proceedings
and for which adequate reserves shall have been set aside
on its books.
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(iii) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age
pensions, or other social security or retirement benefits,
or similar legislation.
(iv) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a
nature generally existing with respect to properties of a
similar character or existing as of the date of acquisition
of such real property by the Borrower and which in either
event do not in any material way affect the marketability
of the same or interfere with the use thereof in the
business of the Borrower.
(v) Liens existing on the date hereof and described in Schedule
"3" hereto.
(vi) Liens in favor of the Lenders granted pursuant to any
Collateral Document.
(vii) Liens securing additional Indebtedness not exceeding
$250,000 at any one time outstanding.
6.19. Financial Covenants.
6.19.1. Capital Expenditures. The Borrower will not
expend, or be committed to expend for Capital Expenditures on a
non-cumulative basis (except as hereinafter provided) in the aggregate
for the Borrower, in excess of $1,500,000 during each fiscal year of
the Borrower ending during the period from the date of execution of
this Agreement to and including December 31, 1997. Amounts permitted
to be expended during any of the foregoing periods and not so expended
during such period may be expended during the immediately succeeding
period.
6.19.2. Rentals. The Borrower will not, nor will it
permit any Subsidiary to, create, incur or suffer to exist obligations
for Rentals in excess of $100,000 during any one fiscal year on a
non-cumulative basis in the aggregate for the Borrower.
6.19.3. Interest Coverage Ratio. The Borrower will
maintain, as at the last day of each fiscal quarter commencing with
the fiscal quarter ending September 30, 1995 through and including the
fiscal quarter ending June 30, 1997, an Interest Coverage Ratio of not
less than 1.75 to 1.0.
6.19.4. Pro Forma Debt Service Ratio. The Borrower will
maintain, as at the last day of each fiscal quarter commencing with
the fiscal quarter ending March 31, 1996, a Pro Forma Debt Service
Ratio of not less than 1.15 to 1.0.
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6.19.5. Fixed Charge Coverage Ratio. The Borrower will
maintain, as at the last day of each fiscal quarter commencing with
the fiscal quarter ending June 30, 1997, a Fixed Charge Coverage Ratio
of not less than 1.10 to 1.0.
6.19.6. Leverage Ratio. The Borrower will maintain at all
times during each fiscal quarter ending during the periods set forth
below, a Leverage Ratio of not more than the ratio set forth below
opposite each such period:
PERIOD RATIO
-------------------------------------------------
Date of Agreement through 6/30/96 5.75:1
7/1/96 through 12/31/96 5.50:1
1/1/97 through 6/30/97 5.25:1
7/1/97 through 12/31/97 5.00:1
1/1/98 through 6/30/98 4.75:1
7/1/98 through 12/31/98 4.50:1
1/1/99 through 6/30/99 4.00:1
7/1/99 through 12/31/99 3.50:1
1/1/00 through 6/30/00 3.25:1
7/1/00 and thereafter 3.00:1
6.20. Affiliates. The Borrower will not enter into any
transaction (including, without limitation, the purchase or sale of any
Property or service) with, or make any payment or transfer to, any Affiliate
except in the ordinary course of business and pursuant to the reasonable
requirements of the Borrower's business and upon fair and reasonable terms no
less favorable to the Borrower than the Borrower would obtain in a comparable
arms-length transaction.
6.21. Management Fees. The Borrower may pay Management Fees in
cash in the first two months of any fiscal quarter and in September of 1995 in
an amount not in excess of 6% of revenues for each such month (as estimated by
the Borrower in good faith). The Borrower shall defer payment of Management
Fees for the third month of any fiscal quarter (other than September of 1995)
until it has delivered quarterly financial statements for such fiscal quarter
pursuant to Section 6.1(ii), at which time it shall reduce or adjust Management
Fees permitted to be paid as necessary to reflect differences between actual
and estimated revenues for prior months in accordance with the actual revenues
set forth in such financial statements. Management Fees payable in December of
1995 and deferred pursuant to the preceding sentence shall also be reduced or
adjusted for September of 1995 if necessary. Notwithstanding anything in this
Section 6.21 to the contrary, no Management Fees in excess of 3% of revenues
for any month may be paid if, before or after giving effect thereto, a Default
or Unmatured Default has occurred and is continuing. Any such Management Fees
which may not be so paid shall be deferred; Management Fees so deferred may be
paid only
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out of Excess Cash Flow that is not payable to the Lenders and only so long as
no Default or Unmatured Default shall exist.
6.22. Subordinated and Other Indebtedness. The Borrower will not
make any amendment or modification to the indenture, note or other agreement
evidencing or governing any Subordinated Indebtedness, or directly or
indirectly voluntarily prepay, defease or in substance defease, purchase,
redeem, retire or otherwise acquire, any Subordinated Indebtedness or other
Indebtedness.
6.23. Rate Hedging Obligations. Within 90 days of the date of
execution of this Agreement, the Borrower will enter into an interest rate
exchange or insurance agreement or agreements with one or more financial
institutions acceptable to the Required Lenders in their reasonable discretion,
providing for a fixed rate of interest on a notional amount of at least 60% of
the Aggregate Facility B Commitment for an average weighted maturity of at
least two years and containing other terms reasonably acceptable to the Agent.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
7.1. Any representation or warranty made or deemed made by or on
behalf of the Borrower or the Managing General Partner to the Lenders or the
Agent under or in connection with this Agreement, any Loan, or any certificate
or information delivered in connection with this Agreement or any other Loan
Document shall be materially false on the date as of which made.
7.2. Nonpayment of principal of any Note when due, or nonpayment
of interest upon any Note or of any commitment fee or other obligations under
any of the Loan Documents within five days after the same becomes due.
7.3. The breach by the Borrower of any of the terms or
provisions of Section 6.2, 6.10, 6.11, 6.12, 6.13, 6.14, 6.15, 6.16, 6.17,
6.18, 6.19, 6.20, 6.21, 6.22, or 6.23.
7.4. The breach by the Borrower (other than a breach which
constitutes a Default under Section 7.1, 7.2 or 7.3) of any of the terms or
provisions of this Agreement which is not remedied within five days after
written notice from the Agent or any Lender.
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7.5. Failure of the Borrower or the Managing General Partner or
NTC to pay any Indebtedness in the aggregate in excess of $100,000 when due; or
the default by the Borrower or the Managing General Partner or NTC in the
performance of any term, provision or condition contained in any agreement
under which any Indebtedness in the aggregate in excess of $100,000 was created
or is governed, or any other event shall occur or condition exist, the effect
of which is to cause, or to permit the holder or holders of such Indebtedness
to cause, such Indebtedness to become due prior to its stated maturity; or any
Indebtedness of the Borrower or the Managing General Partner or NTC in the
aggregate in excess of $100,000 shall be declared to be due and payable or
required to be prepaid (other than by a regularly scheduled payment) prior to
the stated maturity thereof; or the Borrower or the Managing General Partner or
NTC shall not pay, or admit in writing its inability to pay, its debts
generally as they become due.
7.6. The Borrower or the Managing General Partner or NTC shall
(i) have an order for relief entered with respect to it under the Federal
bankruptcy laws as now or hereafter in effect, (ii) make an assignment for the
benefit of creditors, (iii) apply for, seek, consent to, or acquiesce in, the
appointment of a receiver, custodian, trustee, examiner, liquidator or similar
official for it or any Substantial Portion of its Property, (iv) institute any
proceeding seeking an order for relief under the Federal bankruptcy laws as now
or hereafter in effect or seeking to adjudicate it a bankrupt or insolvent, or
seeking dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail to file
an answer or other pleading denying the material allegations of any such
proceeding filed against it, (v) take any corporate action to authorize or
effect any of the foregoing actions set forth in this Section 7.6 or (vi) fail
to contest in good faith any appointment or proceeding described in Section
7.7.
7.7. Without the application, approval or consent of the
Borrower or the Managing General Partner, or NTC, a receiver, trustee,
examiner, liquidator or similar official shall be appointed for the Borrower or
the Managing General Partner or NTC or any Substantial Portion of its Property,
or a proceeding described in Section 7.6(iv) shall be instituted against the
Borrower or the Managing General Partner or NTC and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for a period
of 60 consecutive days.
7.8. Any court, government or governmental agency shall condemn,
seize or otherwise appropriate, or take custody or control of (each a
"Condemnation"), all or any portion of the Property of the Borrower, the
Managing General Partner, or NTC which, when taken together with all other
Property of the Borrower, the Managing General Partner, or NTC so condemned,
seized, appropriated, or taken custody or control of, during the twelve-month
period ending with the month in which any such Condemnation occurs, constitutes
a Substantial Portion.
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7.9. The Borrower or the Managing General Partner shall fail
within 30 days to pay, bond or otherwise discharge any judgment or order for
the payment of money in excess of $100,000, which is not stayed on appeal or
otherwise being appropriately contested in good faith.
7.10. The Borrower shall incur Unfunded Liabilities or any
Reportable Event shall occur in connection with any Plan.
7.11. The Borrower or any other member of the Controlled Group
shall have been notified by the sponsor of a Multiemployer Plan that it has
incurred withdrawal liability to such Multiemployer Plan.
7.12. The Borrower or any other member of the Controlled Group
shall have been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being terminated, within the
meaning of Title IV of ERISA, if as a result of such reorganization or
termination the aggregate annual contributions of the Borrower and the other
members of the Controlled Group (taken as a whole) to all Multiemployer Plans
which are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the
respective plan years of each such Multiemployer Plan immediately preceding the
plan year in which the reorganization or termination occurs.
7.13. The Borrower or the Managing General Partner shall be the
subject of any proceeding or investigation pertaining to the release by the
Borrower or the Managing General Partner, or any other Person of any toxic or
hazardous waste or substance into the environment, or any violation of any
federal, state or local environmental, health or safety law or regulation
(including, without limitation, those relating to the Cumulative Leakage
Index), which, in either case, could reasonably be expected to have a Material
Adverse Effect.
7.14. Any Change in Control shall occur.
7.15. The occurrence of any "default," as defined in any Loan
Document (other than this Agreement or the Notes) or the breach of any of the
terms or provisions of any Loan Document (other than this Agreement or the
Notes), which default or breach continues beyond any period of grace therein
provided.
7.16. Nonpayment by the Borrower of any Rate Hedging Obligation
beyond any applicable grace period or the breach by the Borrower of any
material term, provision or condition contained in any agreement, device or
arrangement giving rise to any Rate Hedging Obligation beyond any applicable
grace period.
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7.17. Any Collateral Document shall for any reason fail to create
a valid and perfected first priority security interest in any collateral
purported to be covered thereby, except as permitted by the terms of any
Collateral Document, or any Collateral Document shall fail to remain in full
force or effect or any action shall be taken to discontinue or to assert the
invalidity or unenforceability of any Collateral Document, or the Borrower or
any general partner of the Borrower, as applicable, shall fail to comply with
any of the terms or provisions of any Collateral Document.
7.18. (a) Any license, authorization, consent or permit (including,
without limitation, any CATV Franchise or FCC License) necessary for the
ownership or essential for the operation by the Borrower of any CATV System
shall expire, and on or prior to such expiration, the same shall not have been
renewed or replaced by another license, authorization, consent or permit
authorizing substantially the same operations of such CATV System; or (b) any
license, authorization, consent or permit (including, without limitation, any
CATV Franchise or FCC License) necessary for the ownership or essential for the
operation of any CATV System shall be cancelled, revoked, terminated,
rescinded, annulled, suspended or modified in a materially adverse respect, or
shall no longer be in full force and effect, or the grant or the effectiveness
thereof shall have been stayed, vacated, reversed or set aside, and such action
shall be no longer subject to further administrative or judicial review; or (c)
the FCC shall have issued any hearing designation order in any non-comparative
license renewal proceeding or any license revocation proceeding involving any
license necessary for the ownership or essential for the operation of any CATV
System; or (d) in any comparative (multiple applicant) license renewal
proceeding involving any license necessary for the ownership or essential for
the operation of any CATV System, any administrative law judge of the FCC (or
successor to the functions of an administrative law judge of the FCC) shall
have issued an initial decision to the effect that the Borrower lacks the
qualifications to own or operate such CATV System, and such initial decision
shall not have been timely appealed or shall otherwise have become an order
that is final and no longer subject to further administrative or judicial
review, (provided, however, that none of the foregoing events described in
clause (c) or (d) of this Section 7.18 shall constitute a Default if, assuming
the final and non-appealable loss by the Borrower of any such license,
authorization, consent or permit at the conclusion of all legal proceedings
incident thereto, such loss would not materially adversely affect the value of
the Collateral or the Borrower's ability to perform its obligations under the
Loan Documents); or (e) any CATV System shall fail for any period of five
consecutive calendar days to operate or maintain any broadcast signal, and such
failure is not covered by business interruption insurance and the revenue
stream derived from the particular CATV System failing to so operate or
maintain a broadcast signal is material to the revenue stream of the Borrower
taken as a whole; or (f) any CATV System shall fail for any period of five
consecutive calendar days to maintain a broadcast signal that is material to
its operations receivable without either material interference or the use of
any equipment other than ordinary consumer antennae and receivers, and such
failure is not covered by business interruption insurance and the revenue
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stream derived from the particular CATV System failing to so operate or
maintain a broadcast signal is material to the revenue stream of the Borrower
taken as a whole.
7.19. Twenty-five percent (25%) or more of the value of any class
of equity interests in the Borrower shall be held by "benefit plan investors"
within the meaning of 29 C.F.R. Section 2510.3-101(f).
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. Acceleration. If any Default described in Section 7.6 or
7.7 occurs with respect to the Borrower, the obligations of the Lenders to make
Loans hereunder shall automatically terminate and the Obligations shall
immediately become due and payable without any election or action on the part
of the Agent or any Lender. If any other Default occurs, the Required Lenders
may terminate or suspend the obligations of the Lenders to make Loans
hereunder, or declare the Obligations to be due and payable, or both, whereupon
the Obligations shall become immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which the Borrower hereby
expressly waives.
If, within 14 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans
hereunder as a result of any Default (other than any Default as described in
Section 7.6 or 7.7 with respect to the Borrower) and before any judgment or
decree for the payment of the Obligations due shall have been obtained or
entered, the Required Lenders (in their sole discretion) shall so direct, the
Agent shall, by notice to the Borrower, rescind and annul such acceleration
and/or termination.
8.2. Consent to Receiver. Without limiting the generality of
the foregoing or limiting in any way the rights of the Agent or the Lenders
hereunder or under the Collateral Documents or otherwise under applicable law,
at any time after the occurrence and during the continuance of a Default caused
by the Borrower's failure to make a timely payment as required under the Loan
Documents, and not less than three days after the Agent has delivered notice to
the Borrower of its intent to do so (during which three-day period the Borrower
shall have failed to cure such Default), the Agent, at the direction of the
Required Lenders, shall be entitled to apply for and have a receiver appointed
under state or federal law by a court of competent jurisdiction (to the extent
such appointment is permitted under applicable law) in any action taken by the
Agent and the Lender to enforce their rights and remedies hereunder and under
the Collateral Documents in order to manage, protect, preserve, sell and
otherwise dispose of all or any portion of the Collateral and continue the
operation of the business of the Borrower, and to collect all revenues and
profits thereof and
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apply the same to the payment of all expenses and other charges of such
receivership, including the compensation of the receiver, and to the payment of
the Secured Obligations until a sale or other disposition of such Collateral
shall be finally made and consummated. THE BORROWER HEREBY IRREVOCABLY
CONSENTS TO AND WAIVES ANY RIGHT TO OBJECT TO OR OTHERWISE CONTEST THE
APPOINTMENT OF A RECEIVER AS PROVIDED ABOVE. THE BORROWER (I) GRANTS SUCH
WAIVER AND CONSENT KNOWINGLY AFTER HAVING DISCUSSED THE IMPLICATIONS THEREOF
WITH COUNSEL, (II) ACKNOWLEDGES THAT (A) THE UNCONTESTED RIGHT TO HAVE A
RECEIVER APPOINTED FOR THE FOREGOING PURPOSES IS CONSIDERED ESSENTIAL BY THE
AGENT AND THE LENDERS IN CONNECTION WITH THE ENFORCEMENT OF THEIR RIGHTS AND
REMEDIES HEREUNDER AND UNDER THE COLLATERAL DOCUMENTS, AND (B) THE AVAILABILITY
OF SUCH APPOINTMENT AS A REMEDY UNDER THE FOREGOING CIRCUMSTANCES WAS A
MATERIAL FACTOR IN INDUCING THE LENDERS TO MAKE ADVANCES TO THE BORROWER; AND
(III) AGREES TO ENTER INTO ANY AND ALL STIPULATIONS IN ANY LEGAL ACTIONS, OR
AGREEMENTS OR OTHER INSTRUMENTS IN CONNECTION WITH THE FOREGOING AND TO
COOPERATE FULLY WITH THE AGENT IN CONNECTION WITH THE ASSUMPTION AND EXERCISE
OF CONTROL BY THE RECEIVER OVER ALL OR ANY PORTION OF THE COLLATERAL.
8.3. Amendments. Subject to the provisions of this Article
VIII, the Required Lenders (or the Agent with the consent in writing of the
Required Lenders) and the Borrower may enter into agreements supplemental
hereto for the purpose of adding or modifying any provisions to the Loan
Documents or changing in any manner the rights of the Lenders or the Borrower
hereunder or waiving any Default hereunder; provided, however, that no such
supplemental agreement shall, without the consent of each Lender affected
thereby:
(i) Extend the maturity of any Loan or Note or forgive all or
any portion of the principal amount thereof, or reduce the
rate or extend the time of payment of interest or fees
thereon.
(ii) Reduce the percentage specified in the definition of
Required Lenders.
(iii) Extend the Revolving Credit Termination Date, or reduce the
amount or extend the payment dates for, the mandatory
payments required under Section 2.2, or increase the amount
of the Commitment of any Lender hereunder, or permit the
Borrower to assign its rights under this Agreement.
(iv) Amend this Section 8.3.
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(v) Except as provided in the Collateral Documents, release all
or substantially all of the Collateral.
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent. The Agent may waive
payment of the fee required under Section 12.3.2 without obtaining the consent
of any other party to this Agreement.
8.4. Preservation of Rights. No delay or omission of the
Lenders or the Agent to exercise any right under the Loan Documents shall
impair such right or be construed to be a waiver of any Default or an
acquiescence therein, and the making of a Loan notwithstanding the existence of
a Default or the inability of the Borrower to satisfy the conditions precedent
to such Loan shall not constitute any waiver or acquiescence. Any single or
partial exercise of any such right shall not preclude other or further exercise
thereof or the exercise of any other right, and no waiver, amendment or other
variation of the terms, conditions or provisions of the Loan Documents
whatsoever shall be valid unless in writing signed by the Lenders required
pursuant to Section 8.3, and then only to the extent in such writing
specifically set forth. All remedies contained in the Loan Documents or by law
afforded shall be cumulative and all shall be available to the Agent and the
Lenders until the Obligations have been paid in full.
ARTICLE IX
GENERAL PROVISIONS
9.1. Survival of Representations. All representations and
warranties of the Borrower contained in this Agreement shall survive delivery
of the Notes and the making of the Loans herein contemplated. Except as
otherwise provided in this Agreement, no representations and warranties of the
Borrower and no obligations of the Borrower shall survive beyond the payment in
full of the Obligations.
9.2. Governmental Regulation. Anything contained in this
Agreement to the contrary notwithstanding, no Lender shall be obligated to
extend credit to the Borrower in violation of any limitation or prohibition
provided by any applicable statute or regulation.
9.3. Taxes. Any taxes (excluding federal income taxes on the
overall net income of any Lender) or other similar assessments or charges made
by any governmental or revenue authority in respect of the Loan Documents shall
be paid by the Borrower, together with interest and penalties, if any.
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9.4. Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any
of the provisions of the Loan Documents.
9.5. Entire Agreement. The Loan Documents embody the entire
agreement and understanding among the Borrower, the general partners of the
Borrower, the Agent and the Lenders and supersede all prior agreements and
understandings among the Borrower, the general partners of the Borrower, the
Agent and the Lenders relating to the subject matter thereof.
9.6. Several Obligations; Benefits of this Agreement. The
respective obligations of the Lenders hereunder are several and not joint and
no Lender shall be the partner or agent of any other (except to the extent to
which the Agent is authorized to act as such). The failure of any Lender to
perform any of its obligations hereunder shall not relieve any other Lender
from any of its obligations hereunder. This Agreement shall not be construed
so as to confer any right or benefit upon any Person other than the parties to
this Agreement and their respective successors and assigns.
9.7. Expenses; Indemnification. The Borrower shall reimburse
the Agent for any costs, internal charges and out-of-pocket expenses (including
attorneys' fees and time charges of attorneys for the Agent, which attorneys
may be employees of the Agent) paid or incurred by the Agent in connection with
the preparation, negotiation, execution, delivery, review, amendment,
modification, and administration of the Loan Documents. The Borrower also
agrees to reimburse the Agent and the Lenders for any costs, internal charges
and out-of-pocket expenses (including attorneys' fees and time charges of
attorneys for the Agent and the Lenders, which attorneys may be employees of
the Agent or the Lenders) paid or incurred by the Agent or any Lender in
connection with the collection and enforcement of the Loan Documents. The
Borrower further agrees to indemnify the Agent and each Lender, their
respective directors, officers and employees against all losses, claims,
damages, penalties, judgments, liabilities and expenses (including, without
limitation, all expenses of litigation or preparation therefor whether or not
the Agent or any Lender is a party thereto) which any of them may pay or incur
arising out of or relating to this Agreement, the other Loan Documents, the
transactions contemplated hereby or the direct or indirect application or
proposed application of the proceeds of any Loan hereunder. The obligations of
the Borrower under this Section shall survive the termination of this
Agreement.
9.8. Numbers of Documents. All statements, notices, closing
documents, and requests hereunder shall be furnished to the Agent with
sufficient counterparts so that the Agent may furnish one to each of the
Lenders.
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9.9. Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles.
9.10. Severability of Provisions. Any provision in any Loan
Document that is held to be inoperative, unenforceable, or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or
invalid without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
9.11. Nonliability of Lenders. The relationship between the
Borrower and the Lenders and the Agent shall be solely that of borrower and
lender. Neither the Agent nor any Lender shall have any fiduciary
responsibilities to the Borrower. Neither the Agent nor any Lender undertakes
any responsibility to the Borrower to review or inform the Borrower of any
matter in connection with any phase of the Borrower's business or operations.
9.12. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE
CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE
OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
9.13. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
ILLINOIS STATE COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN
SHALL LIMIT THE RIGHT OF THE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST
THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING
BY THE BORROWER AGAINST THE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE AGENT
OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING
OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY
IN A COURT IN CHICAGO, ILLINOIS.
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9.14. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT AND EACH
LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
9.15. Confidentiality. Each Lender agrees to hold any
confidential information which it may receive from the Borrower pursuant to
this Agreement in confidence, except for disclosure (i) to other Lenders and
their respective Affiliates, (ii) to legal counsel, accountants, and other
professional advisors to that Lender or to a Transferee, (iii) to regulatory
officials, (iv) to any Person as requested pursuant to or as required by law,
regulation, or legal process, (v) to any Person in connection with any legal
proceeding to which that Lender is a party, (vi) permitted by Section 12.4, and
(vii) of information which has become public through no fault of that Lender.
9.16. Nonreliance. Each Lender hereby represents that it is not
relying on or looking to any margin stock (as defined in Regulation U) for the
repayment of the Loans provided for herein.
9.17. Compliance with Laws. The performance of this Agreement by
the Borrower shall be subject at all times to all laws, regulations and rules
of the United States of America, and any agency or instrumentality thereof, and
of any State, and any agency or instrumentality thereof. None of the Borrower,
Agent or Lenders shall be bound by any terms of this Agreement that are in
conflict with such law, regulations and rules.
9.18. Approval of Cable Authorities. Notwithstanding any
provisions in this Agreement to the contrary, no action shall be taken by the
Agent or the Lenders with respect to any items of the Collateral unless and
until all necessary requirements, if any, of the Communications Act of 1934,
the Cable Communications Policy Act of 1984 and the Cable Television Consumer
Protection and Competition Act of 1992 and the respective rules and regulations
thereunder, as well as any other federal, state, or other law applicable to or
having jurisdiction over the cable television industry or the Borrower have
been fully satisfied with respect to such action and there have been obtained
such consents, approvals, and authorizations, if any, as may be required to be
obtained from the FCC and any other such governmental authority or utility or
telephone company under the terms of any franchise, license, or similar
operating right held by the Borrower and included in the Collateral. It is the
intention of the parties hereto that the security interests and liens of the
Agent in and on the Collateral shall in all relevant aspects be subject to and
governed by said statutes, rules, and regulations and that nothing in this
Agreement shall be construed to diminish the control exercised by the Borrower
except in accordance with the provisions of such statutory requirements and
rules and regulations and the terms and conditions of this
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Agreement. Upon the Agent's request, the Borrower agrees that it will use its
best efforts to promptly obtain any and all governmental, regulatory, utility,
or telephone company consents, approvals, or authorizations referred to in this
Section 9.18.
ARTICLE X
THE AGENT
10.1. Appointment. The First National Bank of Chicago is hereby
appointed Agent hereunder and under each other Loan Document, and each of the
Lenders irrevocably authorizes the Agent to act as the agent of such Lender.
The Agent agrees to act as such upon the express conditions contained in this
Article X. The Agent shall not have a fiduciary relationship in respect of the
Borrower or any Lender by reason of this Agreement.
10.2. Powers. The Agent shall have and may exercise such powers
under the Loan Documents as are specifically delegated to the Agent by the
terms of each thereof, together with such powers as are reasonably incidental
thereto. The Agent shall have no implied duties to the Lenders, or any
obligation to the Lenders to take any action thereunder except any action
specifically provided by the Loan Documents to be taken by the Agent.
10.3. General Immunity. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable to the Borrower, the
Lenders or any Lender for any action taken or omitted to be taken by it or them
hereunder or under any other Loan Document or in connection herewith or
therewith except for its or their own gross negligence or willful misconduct.
10.4. No Responsibility for Loans, Recitals, etc. Neither the
Agent nor any of its directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into, or verify (i) any
statement, warranty or representation made in connection with any Loan Document
or any borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of any obligor under any Loan Document, including,
without limitation, any agreement by an obligor to furnish information directly
to each Lender; (iii) the satisfaction of any condition specified in Article
IV, except receipt of items required to be delivered to the Agent; (iv) the
validity, effectiveness or genuineness of any Loan Document or any other
instrument or writing furnished in connection therewith; or (v) the value,
sufficiency, creation, perfection or priority of any interest in any collateral
security. The Agent shall have no duty to disclose to the Lenders information
that is not required to be furnished by the Borrower to the Agent at such time,
but is voluntarily furnished by the Borrower to the Agent (either in its
capacity as Agent or in its individual capacity).
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10.5. Action on Instructions of Lenders. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder and
under any other Loan Document in accordance with written instructions signed by
the Required Lenders (or, if required by Section 8.3, each Lender affected
thereby), and such instructions and any action taken or failure to act pursuant
thereto shall be binding on all of the Lenders and on all holders of Notes.
The Agent shall be fully justified in failing or refusing to take any action
hereunder and under any other Loan Document unless it shall first be
indemnified to its satisfaction by the Lenders pro rata against any and all
liability, cost and expense that it may incur by reason of taking or continuing
to take any such action.
10.6. Employment of Agents and Counsel. The Agent may execute
any of its duties as Agent hereunder and under any other Loan Document by or
through employees, agents, and attorneys-in-fact and shall not be answerable to
the Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning all matters pertaining to the agency hereby created and its
duties hereunder and under any other Loan Document.
10.7. Reliance on Documents; Counsel. The Agent shall be
entitled to rely upon any Note, notice, consent, certificate, affidavit,
letter, telegram, statement, paper or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or persons, and,
in respect to legal matters, upon the opinion of counsel selected by the Agent,
which counsel may be employees of the Agent.
10.8. Agent's Reimbursement and Indemnification. The Lenders
agree to reimburse and indemnify the Agent ratably in proportion to their
respective Commitments (i) for any amounts not reimbursed by the Borrower for
which the Agent is entitled to reimbursement by the Borrower under the Loan
Documents, (ii) for any other expenses incurred by the Agent on behalf of the
Lenders, in connection with the preparation, execution, delivery,
administration and enforcement of the Loan Documents and (iii) for any
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature whatsoever which
may be imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of the Loan Documents or any other document
delivered in connection therewith or the transactions contemplated thereby, or
the enforcement of any of the terms thereof or of any such other documents,
provided that no Lender shall be liable for any of the foregoing to the extent
they arise from the gross negligence or willful misconduct of the Agent. The
obligations of the Lenders under this Section 10.8 shall survive payment of the
Obligations and termination of this Agreement.
10.9. Rights as a Lender. In the event the Agent is a Lender,
the Agent shall have the same rights and powers hereunder and under any other
Loan Document as any
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Lender and may exercise the same as though it were not the Agent, and the term
"Lender" or "Lenders" shall, at any time when the Agent is a Lender, unless the
context otherwise indicates, include the Agent in its individual capacity. The
Agent may accept deposits from, lend money to, and generally engage in any kind
of trust, debt, equity or other transaction, in addition to those contemplated
by this Agreement or any other Loan Document, with the Borrower or any of its
Subsidiaries in which the Borrower or such Subsidiary is not restricted hereby
from engaging with any other Person. The Agent, in its individual capacity, is
not obligated to remain a Lender.
10.10. Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon the Agent or any other Lender and
based on the financial statements prepared by the Borrower and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and
without reliance upon the Agent or any other Lender and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement and
the other Loan Documents.
10.11. Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Lenders and the Borrower, such resignation
to be effective upon the appointment of a successor Agent or, if no successor
Agent has been appointed, forty-five days after the retiring Agent gives notice
of its intention to resign. Upon any such resignation, the Required Lenders
shall have the right to appoint, on behalf of the Borrower and the Lenders and
with the consent of the Borrower (which shall not be unreasonably withheld), a
successor Agent. If no successor Agent shall have been so appointed by the
Required Lenders within thirty days after the resigning Agent's giving notice
of its intention to resign, then the resigning Agent may appoint, on behalf of
the Borrower and the Lenders, a successor Agent. If the Agent has resigned and
no successor Agent has been appointed, the Lenders may perform all the duties
of the Agent hereunder and the Borrower shall make all payments in respect of
the Obligations to the applicable Lender and for all other purposes shall deal
directly with the Lenders. No successor Agent shall be deemed to be appointed
hereunder until such successor Agent has accepted the appointment. Any such
successor Agent shall be a commercial bank having capital and retained earnings
of at least $50,000,000. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
resigning Agent. Upon the effectiveness of the resignation of the Agent, the
resigning Agent shall be discharged from its duties and obligations hereunder
and under the Loan Documents. After the effectiveness of the resignation of an
Agent, the provisions of this Article X shall continue in effect for the
benefit of such Agent in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent hereunder and under the other Loan
Documents.
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10.12. Agent's Fee. The Borrower agrees to pay to the Agent, for
its own account, the fees agreed to by the Borrower and the Agent pursuant to
that certain letter agreement dated August 11, 1995, or as otherwise agreed
from time to time.
10.13. Execution of Collateral Documents. The Lenders hereby
empower and authorize the Agent to execute and deliver to the Borrower on their
behalf the Security Agreement and all related financing statements and any
financing statements, agreements, documents or instruments as shall be
necessary or appropriate to effect the purposes of the Security Agreement.
10.14. Collateral Releases. The Lenders hereby empower and
authorize the Agent to execute and deliver to the Borrower on their behalf any
agreements, documents or instruments as shall be necessary or appropriate to
effect any releases of Collateral which shall be permitted by the terms hereof
or of any other Loan Document or which shall otherwise have been approved by
the Required Lenders (or, if required by the terms of Section 8.3, all of the
Lenders) in writing.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. Setoff. In addition to, and without limitation of, any
rights of the Lenders under applicable law, if the Borrower becomes insolvent,
however evidenced, or any Default or Unmatured Default occurs, any and all
deposits (including all account balances, whether provisional or final and
whether or not collected or available) and any other Indebtedness at any time
held or owing by any Lender to or for the credit or account of the Borrower may
be offset and applied toward the payment of the Obligations owing to such
Lender, whether or not the Obligations, or any part hereof, shall then be due.
11.2. Ratable Payments. If any Lender, whether by setoff or
otherwise, has payment made to it upon its Loans under any Facility (other than
payments received pursuant to Sections 3.1, 3.2, or 3.4) in a greater
proportion than that received by any other Lender under such Facility, such
Lender agrees, promptly upon demand, to purchase a portion of the Loans held by
the other Lenders under such Facility so that after such purchase each Lender
will hold its ratable proportion of Loans under such Facility. If any Lender,
whether in connection with setoff or amounts which might be subject to setoff
or otherwise, receives collateral or other protection for its Obligations or
such amounts which may be subject to setoff, such Lender agrees, promptly upon
demand, to take such action necessary such that all Lenders share in the
benefits of such collateral ratably in proportion to their Loans. In
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case any such payment is disturbed by legal process, or otherwise, appropriate
further adjustments shall be made.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. Successors and Assigns. The terms and provisions of the
Loan Documents shall be binding upon and inure to the benefit of the Borrower
and the Lenders and their respective successors and assigns, except that (i)
the Borrower shall not have the right to assign its rights or obligations under
the Loan Documents and (ii) any assignment by any Lender must be made in
compliance with Section 12.3. Notwithstanding clause (ii) of this Section, any
Lender may at any time, without the consent of the Borrower or the Agent,
assign all or any portion of its rights under this Agreement and its Notes to a
Federal Reserve Bank; provided, however, that no such assignment shall release
the transferor Lender from its obligations hereunder. The Agent may treat the
payee of any Note as the owner thereof for all purposes hereof unless and until
such payee complies with Section 12.3 in the case of an assignment thereof or,
in the case of any other transfer, a written notice of the transfer is filed
with the Agent. Any assignee or transferee of a Note agrees by acceptance
thereof to be bound by all the terms and provisions of the Loan Documents. Any
request, authority or consent of any Person, who at the time of making such
request or giving such authority or consent is the holder of any Note, shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
Note or of any Note or Notes issued in exchange therefor.
12.2. Participations.
12.2.1. Permitted Participants; Effect. Any Lender
may, in the ordinary course of its business and in accordance with
applicable law, at any time sell to one or more banks or other
entities ("Participants") participating interests in any Loan owing to
such Lender, any Note held by such Lender, any Commitment of such
Lender or any other interest of such Lender under the Loan Documents,
provided that any such sale shall be at no cost to the Borrower. In
the event of any such sale by a Lender of participating interests to a
Participant, such Lender's obligations under the Loan Documents shall
remain unchanged, such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, such
Lender shall remain the holder of any such Note for all purposes under
the Loan Documents, all amounts payable by the Borrower under this
Agreement shall be determined as if such Lender had not sold such
participating interests, and the Borrower and the Agent shall continue
to deal solely and directly with such Lender in connection with such
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Lender's rights and obligations under the Loan Documents. The consent
of the Borrower shall be required prior to a participation becoming
effective with respect to a Participant which is not a Lender or an
Affiliate thereof; provided, however, that if a Default has occurred
and is continuing, the consent of the Borrower shall not be required.
Such consent shall not be unreasonably withheld or delayed.
12.2.2. Voting Rights. Each Lender shall retain the
sole right to approve, without the consent of any Participant, any
amendment, modification or waiver of any provision of the Loan
Documents other than any amendment, modification or waiver with
respect to any Loan or Commitment in which such Participant has an
interest which forgives principal, interest or fees or reduces the
interest rate or fees payable with respect to any such Loan or
Commitment, postpones any date fixed for any regularly-scheduled
payment of principal of, or interest or fees on, any such Loan or
Commitment, or releases any substantial portion of collateral, if any,
securing any such Loan.
12.2.3. Benefit of Setoff. The Borrower agrees that
each Participant shall be deemed to have the right of setoff provided
in Section 11.1 in respect of its participating interest in amounts
owing under the Loan Documents to the same extent as if the amount of
its participating interest were owing directly to it as a Lender under
the Loan Documents, provided that each Lender shall retain the right
of setoff provided in Section 11.1 with respect to the amount of
participating interests sold to each Participant. The Lenders agree
to share with each Participant, and each Participant, by exercising
the right of setoff provided in Section 11.1, agrees to share with
each Lender, any amount received pursuant to the exercise of its right
of setoff, such amounts to be shared in accordance with Section 11.2
as if each Participant were a Lender.
12.3. Assignments.
12.3.1. Permitted Assignments. Any Lender may, in
the ordinary course of its business and in accordance with applicable
law, at any time assign to one or more banks or other entities
("Purchasers") all or any part of its rights and obligations under the
Loan Documents, provided that (i) any such assignment shall be at no
cost the Borrower, and (ii) unless such Lender assigns all of its
rights and obligations under the Loan Documents to a Purchaser, each
such assignment shall be in a minimum amount of $5,000,000. Such
assignment shall be substantially in the form of Exhibit "H" hereto or
in such other form as may be agreed to by the parties thereto. The
consents of the Borrower and the Agent shall be required prior to an
assignment becoming effective with respect to a Purchaser which is not
a Lender or an Affiliate thereof; provided, however, that if a Default
has occurred and is
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continuing, the consent of the Borrower shall not be required. Such
consent shall not be unreasonably withheld or delayed.
12.3.2. Effect; Effective Date. Upon (i) delivery to
the Agent of a notice of assignment, substantially in the form
attached as Exhibit "1" to Exhibit "H" hereto (a "Notice of
Assignment"), together with any consents required by Section 12.3.1,
and (ii) payment of a $4,000 fee to the Agent for processing such
assignment, such assignment shall become effective on the effective
date specified in such Notice of Assignment. The Notice of Assignment
shall contain a representation by the Purchaser to the effect that
none of the consideration used to make the purchase of the Commitment
and Loans under the applicable assignment agreement are "plan assets"
as defined under ERISA and that the rights and interests of the
Purchaser in and under the Loan Documents will not be "plan assets"
under ERISA. On and after the effective date of such assignment, such
Purchaser shall for all purposes be a Lender party to this Agreement
and any other Loan Document executed by the Lenders and shall have all
the rights and obligations of a Lender under the Loan Documents, to
the same extent as if it were an original party hereto, and no further
consent or action by the Borrower, the Lenders or the Agent shall be
required to release the transferor Lender with respect to the
percentage of the Aggregate Commitment and Loans assigned to such
Purchaser. Upon the consummation of any assignment to a Purchaser
pursuant to this Section 12.3.2, the transferor Lender, the Agent and
the Borrower shall make appropriate arrangements so that replacement
Notes are issued to such transferor Lender and new Notes or, as
appropriate, replacement Notes, are issued to such Purchaser, in each
case in principal amounts reflecting their Commitment, as adjusted
pursuant to such assignment.
12.4. Dissemination of Information. The consent of the Borrower
shall be required prior to disclosure by any Lender to any Participant or
Purchaser or any other Person acquiring an interest in the Loan Documents by
operation of law (each a "Transferee") other than a Lender or an Affiliate
thereof and any prospective Transferee other than a Lender or an Affiliate
thereof any and all information in such Lender's possession concerning the
creditworthiness of the Borrower and its Subsidiaries; provided that each such
Transferee and prospective Transferee agrees to be bound by Section 9.15 of
this Agreement. Such consent shall not be unreasonably withheld or delayed.
12.5. Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with the provisions of Section 2.18.
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ARTICLE XIII
NOTICES
13.1. Giving Notice. Except as otherwise permitted by Section
2.13 with respect to borrowing notices, all notices and other communications
provided to any party hereto under this Agreement or any other Loan Document
shall be in writing or by telex or by facsimile and addressed or delivered to
such party at its address set forth below its signature hereto or at such other
address as may be designated by such party in a notice to the other parties.
Any notice, if mailed and properly addressed with postage prepaid, shall be
deemed given when received; any notice, if transmitted by telex or facsimile,
shall be deemed given when transmitted (answerback confirmed in the case of
telexes).
13.2. Change of Address. The Borrower, the Agent and any Lender
may each change the address for service of notice upon it by a notice in
writing to the other parties hereto.
ARTICLE XIV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrower, the
Agent and the Lenders and each party has notified the Agent by telex or
telephone, that it has taken such action.
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IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have
executed this Agreement as of the date first above written.
NORTHLAND CABLE PROPERTIES FOUR
LIMITED PARTNERSHIP
By: NORTHLAND COMMUNICATIONS
CORPORATION, ITS MANAGING GENERAL
PARTNER
By: /s/ JAMES A. PENNEY
---------------------------------------
James A. Penney
Vice President
1201 Third Avenue
Suite 3600
Seattle, Washington 98101
Attention: John S. Whetzell
President
James A. Penney
Vice President
Telecopier: (206) 623-9015
THE FIRST NATIONAL BANK OF
CHICAGO, INDIVIDUALLY AND AS AGENT
By:
---------------------------------------
Ronna Bury-Prince
Vice President
One First National Plaza
Chicago, Illinois 60670
Attention: Communications Division
Telecopier: (312) 732-8587
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EXHIBIT "A"
FACILITY A NOTE
$______________ _____________, 199__
NORTHLAND CABLE PROPERTIES FOUR LIMITED PARTNERSHIP, a Washington
limited partnership (the "Borrower"), promises to pay to the order of __________
(the "Lender") the lesser of the principal sum of ______________________________
Dollars or the aggregate unpaid principal amount of all Loans made by the
Lender to the Borrower under Facility A pursuant to Article II of the Credit
Agreement (as the same may be amended or modified, the "Agreement") hereinafter
referred to, in immediately available funds at the main office of The First
National Bank of Chicago in Chicago, Illinois, as Agent, together with interest
on the unpaid principal amount hereof at the rates and on the dates set forth
in the Agreement. The Borrower shall pay the principal of and accrued and
unpaid interest on the Loans in full on the Facility Termination Date and shall
make such mandatory payments as are required to be made under the terms of
Article II of the Agreement.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Loan and the date and amount of each principal
payment hereunder.
This Note is one of the Notes issued pursuant to, and is entitled to
the benefits of, the Credit Agreement, dated as of August 31,1995 among the
Borrower, The First National Bank of Chicago, individually and as Agent, and
the lenders named therein, including the Lender, to which Agreement, as it may
be amended from time to time, reference is hereby made for a statement of the
terms and conditions governing this Note, including the terms and conditions
under which this Note may be prepaid or its maturity date accelerated.
Capitalized terms used herein and not otherwise defined herein are used with
the meanings attributed to them in the Agreement.
NORTHLAND CABLE PROPERTIES FOUR
LIMITED PARTNERSHIP
By: NORTHLAND COMMUNICATIONS
CORPORATION, ITS MANAGING GENERAL
PARTNER
By:
------------------------------------
James A. Penney
Vice President
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SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
FACILITY A NOTE OF
NORTHLAND CABLE PROPERTIES FOUR LIMITED PARTNERSHIP,
DATED AUGUST 31, 1995
Maturity
Principal Maturity Principal
Amount of of Interest Amount Unpaid
Date Loan Period Paid Balance
- --------------------------------------------------------------------------------
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68
EXHIBIT "B"
FACILITY B NOTE
$______________ ___________, 199__
NORTHLAND CABLE PROPERTIES FOUR LIMITED PARTNERSHIP, a Washington
corporation (the "Borrower"), promises to pay to the order of __________________
(the "Lender") the lesser of the principal sum of ______________________________
Dollars or the aggregate unpaid principal amount of all Loans made by the
Lender to the Borrower under Facility B pursuant to Article II of the Credit
Agreement (as the same may be amended or modified, the "Agreement") hereinafter
referred to, in immediately available funds at the main office of The First
National Bank of Chicago in Chicago, Illinois, as Agent, together with interest
on the unpaid principal amount hereof at the rates and on the dates set forth
in the Agreement. The Borrower shall pay the principal of and accrued and
unpaid interest on the Loans in full on the Facility Termination Date and shall
make such mandatory payments as are required to be made under the terms of
Article II of the Agreement.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Loan and the date and amount of each principal
payment hereunder.
This Note is one of the Notes issued pursuant to, and is entitled to
the benefits of, the Credit Agreement, dated as of August 31, 1995 among the
Borrower, The First National Bank of Chicago, individually and as Agent, and
the lenders named therein, including the Lender, to which Agreement, as it may
be amended from time to time, reference is hereby made for a statement of the
terms and conditions governing this Note, including the terms and conditions
under which this Note may be prepaid or its maturity date accelerated.
Capitalized terms used herein and not otherwise defined herein are used with
the meanings attributed to them in the Agreement.
NORTHLAND CABLE PROPERTIES FOUR
LIMITED PARTNERSHIP
By: NORTHLAND COMMUNICATIONS
CORPORATION, ITS MANAGING GENERAL
PARTNER
By:
------------------------------------
James A. Penney
Vice President
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69
EXHIBIT "C"
NORTHLAND CABLE PROPERTIES FOUR LIMITED PARTNERSHIP
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Security Agreement") is entered into as
of August 31, 1995 by and between NORTHLAND CABLE PROPERTIES FOUR LIMITED
PARTNERSHIP, a Washington limited partnership (the "Borrower"), and THE FIRST
NATIONAL BANK OF CHICAGO, in its capacity as agent (the "Agent") for the
Lenders (as defined below). The parties hereto agree as follows:
WHEREAS, the Borrower (this and other capitalized terms shall have the
respective meanings set forth in Article I hereinbelow) has entered into that
certain Credit Agreement dated as of August 31, 1995 by and among the Borrower,
the Agent, and the Lenders party thereto (as it may be amended, modified, or
supplemented from time to time, the "Credit Agreement") pursuant to which the
Lenders have agreed to make extensions of credit available to the Borrower on
the terms and conditions set forth therein; and
WHEREAS, it is a condition precedent, among others, to the
effectiveness of the Credit Agreement that the Borrower execute and deliver
this Security Agreement to the Agent on behalf of the Lenders; and
WHEREAS, the Borrower expects to realize direct and indirect benefits
as a result of the contemplated extensions of credit and such other financial
accommodations as the Lenders may provide from time to time, and therefore
desires to enter into this Security Agreement to satisfy such condition
precedent;
NOW, THEREFORE, in consideration of the undertakings set forth herein
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the Borrower and the Agent, on behalf of the Lenders, hereby
agree as follows:
ARTICLE I
DEFINITIONS
1.1. Terms Defined in Credit Agreement. All capitalized terms used
herein and not otherwise defined shall have the meanings assigned to such terms
in the Credit Agreement.
1.2. Definitions of Certain Terms Used Herein. As used in this
Security Agreement, the following terms shall have the following meanings:
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"Accounts" means all rights to payment for goods sold or leased or
services rendered by the Borrower, whether or not earned by performance,
together with all security interests or other security held by or granted to
the Borrower to secure such rights to payment.
"Article" means a numbered article of this Security Agreement, unless
another document is specifically referenced.
"Chattel Paper" means any writing or group of writings which evidences
both a monetary obligation and a security interest in or a lease of specific
goods.
"Collateral" means all tangible and intangible property, wherever
located, in which the Borrower now has or hereafter acquires any right or
interest, and the proceeds (including insurance proceeds) and products thereof
and all cash and cash equivalents, bank accounts, special collateral accounts,
and all books and records, customer lists, credit files, computer files,
programs (to the extent they are assignable), printouts and other computer
materials and records related thereto, including, without limitation, the
following property: all Accounts, Chattel Paper, Documents, Equipment,
Fixtures, General Intangibles, Instruments, Inventory, Pledged Deposits and
Stock Rights (other than licenses or permits issued by the FCC to the extent it
is unlawful to grant a security interest in any such license or permit or to
the extent that the grant of any such security interest in any such license or
permit would result in the forfeiture of any such license or permit or a
default under any such license or permit, but including the proceeds of any
sale or disposition of such licenses or permits to the extent the grant of a
security interest in such proceeds is lawful).
"Credit Agreement" is defined in the recitals hereto.
"Default" means an event described in Section 5.1.
"Documents" means all documents of title (other than deeds of real
estate) and goods evidenced thereby, including without limitation all bills of
lading, dock warrants, dock receipts, warehouse receipts and orders for the
delivery of goods, and also any other document which in the regular course of
business or financing is treated as adequately evidencing that the person in
possession of it is entitled to receive, hold and dispose of the document and
the goods it covers.
"Equipment" means all equipment, machinery, furniture and goods used
or usable by the Borrower in its business and all other tangible personal
property (other than Inventory), and all accessions and additions thereto,
including, without limitation, all Fixtures.
"Fixtures" means all goods which become so related to particular real
estate that an interest in such goods arises under any real estate law
applicable thereto, including, without limitation, all trade fixtures.
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"General Intangibles" means all intangible personal property (other
than Accounts) including, without limitation, all contract rights, rights to
receive payments of money, choses in action, causes of action, judgments, tax
refunds and tax refund claims, patents, trademarks, trade names, copyrights,
licenses, franchises, computer programs, software, goodwill, customer and
supplier contracts, interests in partnerships and joint ventures, reversionary
interests in pension and profit sharing plans and reversionary, beneficial and
residual interests in trusts, leasehold interests in real or personal property,
rights to receive rentals of real or personal property and guarantee and
indemnity claims.
"Instruments" means all negotiable instruments (as defined in Section
3-104 of the Uniform Commercial Code as in effect from time to time in
Illinois), certificated and uncertificated securities and any replacements
therefor and Stock Rights related thereto, and other writings which evidence a
right to the payment of money and which are not themselves security agreements
or leases and are of a type which in the ordinary course of business are
transferred by delivery with any necessary indorsement or assignment,
including, without limitation, all checks, drafts, notes, bonds, debentures,
government securities, certificates of deposit, letters of credit, preferred
and common stocks, options and warrants.
"Inventory" means all goods held for sale or lease, or furnished or to
be furnished under contracts of service, or consumed in Borrower's business,
including without limitation raw materials work in process, packaging
materials, finished goods, semi- finished inventory, scrap inventory,
manufacturing supplies and spare parts, all such goods that have been returned
to or repossessed by or on behalf of the Borrower, and all such goods released
to the Borrower or to third parties under trust receipts or similar documents.
"Other Collateral" means any property of the Borrower, other than real
estate, not included within the defined terms Accounts, Chattel Paper,
Documents, Equipment, Fixtures, General Intangibles, Instruments, Inventory,
Pledged Deposits and Stock Rights, including, without limitation, all cash on
hand and all deposit accounts or other deposits (general or special, time or
demand, provisional or final) with any bank or other financial institution, it
being intended that the Collateral include all property of the Borrower other
than real estate.
"Pledged Deposits" means all time deposits of money, whether or not
evidenced by certificates, which the Borrower may from time to time designate
as pledged to the Agent or to any Lender as security for any Obligation, and
all rights to receive interest on said deposits.
"Rate Hedging Agreements" means any agreements, devices or
arrangements evidencing Rate Hedging Obligations.
"Receivables" means the Accounts, Chattel Paper, Documents,
Instruments, Pledged Deposits and any other rights or claims to receive money
which are General Intangibles or which are otherwise included as Collateral.
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72
"Required Secured Parties" means (x) prior to an acceleration of the
obligations under the Credit Agreement, the Required Lenders and (y) after an
acceleration of the obligations under the Credit Agreement, Lenders holding in
the aggregate at least 66 2/3% of the total of (i) the unpaid principal amount
of outstanding Advances and (ii) the aggregate net early termination payments
then due and unpaid from the Borrower to the Lenders under Rate Hedging
Agreements, as determined by the Agent in its reasonable discretion.
"Section" means a numbered section of this Security Agreement, unless
another document is specifically referenced.
"Stock Rights" means any securities, dividends or other distributions
and any other right or property which the Borrower shall receive or shall
become entitled to receive for any reason whatsoever with respect to, in
substitution for or in exchange for any securities constituting Collateral and
any securities, any right to receive securities and any right to receive
earnings, in which the Borrower now has or hereafter acquires any right, issued
by an issuer of such securities.
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II
GRANT OF SECURITY INTEREST
The Borrower hereby pledges, assigns and grants to the Agent, on
behalf of and for the ratable benefit of the Lenders, a security interest in
all of the Borrower's right, title and interest in and to the Collateral to
secure the prompt and complete payment and performance of the Secured
Obligations.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Agent and the Lenders that:
3.1. Incorporation by Reference. All of the representations and
warranties set forth in Article V of the Credit Agreement are true and correct
as of the date of this Security Agreement.
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3.2. Title, Authorization, Validity and Enforceability. The
Borrower has good and valid rights in and title to the Collateral with respect
to which it has purported to grant a security interest hereunder, free and
clear of all Liens except for Liens permitted under Section 4.1.4, and has full
power and authority to grant to the Agent the security interest in such
Collateral pursuant hereto. The execution and delivery by the Borrower of this
Security Agreement has been duly authorized by proper partnership proceedings,
and this Security Agreement constitutes a legal, valid and binding obligation
of the Borrower and creates a security interest which is enforceable against
the Borrower in all now owned and hereafter acquired Collateral. When
financing statements have been filed in the appropriate offices against the
Borrower in the locations listed on Exhibit "E" hereto, the Agent will have a
fully perfected first priority security interest on behalf of the Lenders in
that Collateral in which a security interest may be perfected by filing,
subject only to Liens permitted hereunder.
3.3. Conflicting Laws and Contracts. Neither the execution and
delivery by the Borrower of this Security Agreement, the creation and
perfection of the security interest in the Collateral granted hereunder, nor
compliance with the terms and provisions hereof will violate any law, rule,
regulation, order, writ, judgment, injunction, decree or award binding on the
Borrower or the Borrower's articles or certificate of incorporation or by-laws,
the provisions of any indenture, instrument or agreement to which the Borrower
is a party or is subject, or by which it, or its property, is bound, or
conflict with or constitute a default thereunder, or result in the creation or
imposition of any Lien pursuant to the terms of any such indenture, instrument
or agreement (other than the Lien of the Agent on behalf of the Lenders).
3.4. Principal Location. The Borrower's mailing address, and the
location of its chief executive office and of the books and records relating to
the Receivables, are disclosed in Exhibit "A" hereto; the Borrower has no other
places of business except those set forth in Exhibit "A" hereto.
3.5. Property Locations. The Inventory, Equipment and Fixtures are
located solely at the locations described in Exhibit "A" hereto. None of said
locations are leased by the Borrower as lessee except those designated in Part
B of Exhibit "A" hereto.
3.6. No Other Names. The Borrower has not conducted business under
any name except the name in which it has executed this Security Agreement and
Northland Cable Television and derivatives thereof.
3.7. No Default. No Default or Unmatured Default exists.
3.8. Accounts and Chattel Paper. The names of the obligors,
amounts owing, due dates and other information with respect to the Accounts and
Chattel Paper are and will be correctly stated in all records of the Borrower
relating thereto and in all invoices and reports with respect thereto furnished
to the Agent by the Borrower from time to time. As of the
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time when each Account or each item of Chattel Paper arises, the Borrower shall
be deemed to have represented and warranted that such Account or Chattel Paper,
as the case may be, and all records relating thereto, are genuine and in all
respects what they purport to be.
3.9. Filing Requirements. None of the Equipment is covered by any
certificate of title, except for the vehicles described in Exhibit "B" hereto.
None of the Collateral is of a type for which security interests or liens may
be perfected by filing under any federal statute except for patents and
copyrights held by the Borrower and described in Exhibit "B" hereto. The legal
description and street address, if available, of the property on which any
Fixtures are located is set forth in Exhibit "C" hereto together with the name
and address of the record owner of each such property.
3.10. No Financing Statements. No financing statement describing
all or any portion of the Collateral which has not lapsed or been terminated
naming the Borrower as debtor has been filed in any jurisdiction except (i)
financing statements naming the Agent on behalf of the Lenders as the secured
party and (ii) as described in Schedule "3" to the Credit Agreement.
3.11. Pledged Securities. Exhibit "D" hereto sets forth a complete
and accurate list of the securities delivered to the Agent. The Borrower is
the direct and beneficial owner of each share of stock listed on Exhibit "D"
annexed hereto as being owned by it. The Borrower further represents and
warrants that all of such shares of stock have been duly and validly issued,
are fully paid and non-assessable and are owned by the Borrower free and clear
of any Liens, except for the security interest granted to the Agent for the
benefit of the Lenders hereunder.
3.12. Federal Employer Identification Number. The Borrower's
Federal employer identification number is 75-1998317.
ARTICLE IV
COVENANTS
From the date of this Security Agreement, and thereafter until this
Security Agreement is terminated:
4.1. General.
4.1.1. Incorporation by Reference. The Borrower will comply
with all applicable provisions of Article VI of the Credit Agreement
with respect to the Collateral, including, without limitation, the
obligations of the Borrower to permit inspections of the Collateral,
to pay when due all taxes, assessments and
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governmental charges and levies upon the Collateral, to maintain
complete and accurate books and records with respect to the
Collateral, to furnish to the Agent, with sufficient copies for each
of the Lenders, such reports relating to the Collateral as the Agent
shall from time to time request, and to notify the Agent of the
occurrence of any Default of which it is aware.
4.1.2. Financing Statements and Other Actions; Defense of
Title. The Borrower will execute and deliver to the Agent all
financing statements and other documents and take such other actions
as may from time to time be reasonably requested by the Agent in order
to maintain a first perfected security interest in the Collateral.
The Borrower will take any and all actions reasonably necessary to
defend title to the Collateral against all persons and to defend the
security interest of the Agent in the Collateral and the priority
thereof against any Lien not expressly permitted hereunder.
4.1.3. Disposition of Collateral. The Borrower will not
sell, lease or otherwise dispose of the Collateral except (i) prior to
the occurrence of a Default or Unmatured Default, dispositions
specifically permitted pursuant to the Credit Agreement, (ii) until
such time following the occurrence of a Default as the Borrower
receives a notice from the Agent instructing the Borrower to cease
such transactions, sales or leases of Inventory in the ordinary course
of business, and (iii) until such time as the Borrower receives a
notice from the Agent pursuant to Section 7.2, proceeds of Inventory
and Receivables collected in the ordinary course of business.
4.1.4. Liens. The Borrower will not create, incur, or
suffer to exist any Lien on the Collateral except (i) the security
interest created by this Security Agreement and (ii) as otherwise
permitted pursuant to the Credit Agreement.
4.1.5. Change in Location or Name. The Borrower will not
(i) have any Inventory, Equipment or Fixtures or proceeds or products
thereof (other than Inventory and proceeds thereof disposed of as
permitted by Section 4.1.3 (or Equipment or Fixtures relocated
temporarily for purposes of effecting repairs)) at a location other
than a location specified in Exhibit "A" hereto, (ii) maintain records
relating to the Receivables at a location other than at the locations
specified on Exhibit "A" as the Borrower's principal place of
business, (iii) maintain a place of business at a location other than
a location specified on Exhibit "A" hereto, (iv) change its name or
taxpayer identification number or (v) change its mailing address,
unless the Borrower shall have given the Agent not less than 30 days'
prior written notice thereof, and the Agent shall have determined that
such change will not adversely affect the validity, perfection or
priority of the Agent's security interest in the Collateral.
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4.1.6. Other Financing Statements. The Borrower will not
sign or authorize the signing on its behalf of any financing statement
naming it as debtor covering all or any portion of the Collateral,
except (i) financing statements naming the Agent as secured party and
(ii) as permitted by Section 4.1.4.
4.2. Receivables.
4.2.1. Certain Agreements on Receivables. The Borrower will
not make or agree to make any discount, credit, rebate or other
reduction in the original amount owing on a Receivable or accept in
satisfaction of a Receivable less than the original amount thereof,
except that, prior to the occurrence of a Default, the Borrower may
reduce the amount of Accounts arising from the sale of Inventory in
accordance with its present policies and in the ordinary course of
business.
4.2.2. Collection of Receivables. Except as otherwise
provided in this Security Agreement, the Borrower will collect and
enforce, at the Borrower's sole expense, all amounts due or hereafter
due to the Borrower under the Receivables in accordance with its
present policies and in the ordinary course of business.
4.2.3. Delivery of Invoices. The Borrower will deliver to
the Agent immediately upon its request after the occurrence of a
Default duplicate invoices with respect to each Account bearing such
language of assignment as the Agent shall specify.
4.2.4. Disclosure of Counterclaims on Receivables. If any
discount, credit, agreement to make a rebate or to otherwise reduce
the amount owing on a Receivable exists or if, to the knowledge of the
Borrower, any dispute, setoff, claim, counterclaim or defense exists
or has been asserted or threatened with respect to a Receivable, the
Borrower will disclose such fact to the Agent in writing in connection
with the inspection by the Agent of any record of the Borrower
relating to such Receivable and in connection with any invoice or
report furnished by the Borrower to the Agent relating to such
Receivable.
4.3. Inventory and Equipment.
4.3.1. Maintenance of Goods. The Borrower will do all things
necessary to maintain, preserve, protect and keep the Inventory and
the Equipment in good repair and working and saleable condition.
4.3.2. Insurance. The Borrower will, consistent with its
past practices, (i) maintain fire and extended coverage insurance on
the Inventory and Equipment containing a lender's loss payable clause
in favor of the Agent and providing that said insurance will not be
terminated except after at least 30 days' written notice from the
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insurance company to the Agent, (ii) maintain such other insurance on
the Inventory and the Equipment for the benefit of the Agent as the
Agent shall from time to time request, (iii) furnish to the Agent upon
the request of the Agent from time to time the originals of all
policies of insurance on the Inventory and the Equipment and
certificates with respect to such insurance and (iv) maintain general
liability insurance naming the Agent as an additional insured.
4.3.3. Titled Vehicles. The Borrower will, upon request,
deliver to the Agent the original of any vehicle title certificate and
do all things necessary to have the Lien of the Agent noted on any
such certificate.
4.4. Instruments, Chattel Paper, Documents and Pledged Deposits.
The Borrower will (i) deliver to the Agent immediately upon execution of this
Security Agreement the originals of all Chattel Paper and Instruments (if any
then exist) other than Chattel Paper and Instruments evidencing de minimis
amounts (including, without limitation, checks from subscribers), (ii) hold in
trust for the Agent upon receipt any Chattel Paper and Instruments constituting
Collateral and immediately thereafter deliver to the Agent any Chattel Paper
and Instruments constituting Collateral other than Chattel Paper and
Instruments evidencing de minimis amounts (including, without limitation,
checks from subscribers), (iii) upon the designation of any Pledged Deposits
(as set forth in the definition thereof), deliver to the Agent such Pledged
Deposits which are evidenced by certificates included in the Collateral
endorsed in blank, marked with such legends and assigned as the Agent shall
specify, and (iv) upon the Agent's request, after the occurrence and during the
continuance of a Default, deliver to the Agent any Document evidencing or
constituting Collateral.
4.5. Uncertificated Securities. The Borrower will permit the Agent
from time to time to cause the appropriate issuers of uncertificated securities
constituting Instruments to mark their books and records with the numbers and
face amounts of all uncertificated securities constituting Instruments and all
rollovers and replacements therefor to reflect the Lien of the Agent granted
pursuant to this Security Agreement.
4.6. Pledged Deposits. The Borrower will not withdraw all or any
portion of any Pledged Deposit or fail to rollover said Pledged Deposit without
the prior written consent of the Agent.
4.7. Deposit Accounts. The Borrower will (i) upon the Agent's
request, notify each bank or other financial institution in which it maintains
a deposit account or other deposit (general or special, time or demand,
provisional or final) of the security interest granted to the Agent hereunder
and (ii) upon the Agent's request after the occurrence and during the
continuance of a Default, deliver to each such bank or other financial
institution a letter, in form and substance acceptable to the Agent,
transferring dominion and control over each such account to the Agent until
such time as no Default exists. In the case of deposits
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maintained with Lenders, the terms of such letter shall be subject to the
provisions of the Credit Agreement regarding setoffs.
4.8. Federal Claims. The Borrower will notify the Agent of any
Collateral which constitutes a claim against the United States government or
any instrumentality or agency thereof, the assignment of which claim is
restricted by federal law.
ARTICLE V
DEFAULT
5.1. The occurrence of any one or more of the following events
shall constitute a Default:
5.1.1. Any representation or warranty made by or on behalf
of the Borrower under or in connection with this Security Agreement
shall be materially false as of the date on which made.
5.1.2. The breach by the Borrower of any of the terms or
provisions of Article IV or Section 8.7.
5.1.3. The breach by the Borrower (other than a breach which
constitutes a Default under Section 5.1.1 or 5.1.2) of any of the
terms or provisions of this Security Agreement which is not remedied
within 10 days after the giving of written notice to the Borrower by
the Agent.
5.1.4. Any material portion of the Collateral shall be
transferred or otherwise disposed of, either voluntarily or
involuntarily, in any manner not permitted by Section 4.1.3 or 8.7 or
shall be lost, stolen, damaged or destroyed.
5.1.5. Any Secured Obligation shall not be paid when due,
whether at stated maturity, upon acceleration, or otherwise.
5.1.6. The occurrence of any "Default" under, and as defined
in, the Credit Agreement.
5.2. Acceleration and Remedies. Upon the acceleration of the
obligations under the Credit Agreement pursuant to Section 8.1 thereof, the
Secured Obligations shall immediately become due and payable without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived, and the Agent may, with the concurrence or at the direction
of the Required Secured Parties, exercise any or all of the following rights
and remedies:
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5.2.1. Those rights and remedies provided in this Security
Agreement, the Credit Agreement, or any other Loan Document, provided
that this Section 5.2.1 shall not be understood to limit any rights or
remedies available to the Agent and the Lenders prior to a Default.
5.2.2. Those rights and remedies available to a secured party
under the Illinois Uniform Commercial Code (whether or not the
Illinois Uniform Commercial Code applies to the affected Collateral)
or under any other applicable law (including, without limitation, any
law governing the exercise of a bank's right of setoff or bankers'
lien) when a debtor is in default under a security agreement.
5.2.3. Without notice except as specifically provided in
Section 8.1 or elsewhere herein, sell, lease, assign, grant an option
or options to purchase or otherwise dispose of the Collateral or any
part thereof in one or more parcels at public or private sale, for
cash, on credit or for future delivery, and upon such other terms as
the Agent may deem commercially reasonable.
5.3. Debtor's Obligations Upon Default. Upon the request of the
Agent after the occurrence of a Default, the Borrower will:
5.3.1. Assembly of Collateral. Assemble and make available
to the Agent the Collateral and all records relating thereto at any
place or places specified by the Agent.
5.3.2. Secured Party Access. Permit the Agent, by the
Agent's representatives and agents, to enter any premises where all or
any part of the Collateral, or the books and records relating thereto,
or both, are located, to take possession of all or any part of the
Collateral and to remove all or any part of the Collateral.
5.4. License. The Agent is hereby granted a license or other right
to use, following the occurrence and during the continuance of a Default,
without charge, the Borrower's labels, patents, copyrights, rights of use of
any name, trade secrets, trade names, trademarks, service marks, customer lists
and advertising matter, or any property of a similar nature, as it pertains to
the Collateral, in completing production of, advertising for sale, and selling
any Collateral, and, following the occurrence and during the continuance of a
Default, the Borrower's rights under all licenses and all franchise agreements
shall inure to the Agent's benefit. In addition, the Borrower hereby
irrevocably agrees that the Agent may, following the occurrence and during the
continuance of a Default, sell any of the Borrower's Inventory directly to any
person, including without limitation persons who have previously purchased the
Borrower's Inventory from the Borrower and in connection with any such sale or
other enforcement of the Agent's rights under this Agreement, may sell
Inventory which bears any trademark owned by or licensed to the Borrower and
any Inventory that is covered
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by any copyright owned by or licensed to the Borrower and the Agent may finish
any work in process and affix any trademark owned by or licensed to the
Borrower and sell such Inventory as provided herein.
ARTICLE VI
WAIVERS, AMENDMENTS AND REMEDIES
No delay or omission of the Agent or any Lender to exercise any right
or remedy granted under this Security Agreement shall impair such right or
remedy or be construed to be a waiver of any Default or an acquiescence
therein, and any single or partial exercise of any such right or remedy shall
not preclude any other or further exercise thereof or the exercise of any other
right or remedy. No waiver, amendment or other variation of the terms,
conditions or provisions of this Security Agreement whatsoever shall be valid
unless in writing signed by the Agent with the concurrence or at the direction
of the Lenders required under Section 8.2 of the Credit Agreement and then only
to the extent in such writing specifically set forth. All rights and remedies
contained in this Security Agreement or by law afforded shall be cumulative and
all shall be available to the Agent and the Lenders until the Secured
Obligations have been paid in full.
ARTICLE VII
PROCEEDS; COLLECTION OF RECEIVABLES
7.1. Lockboxes. Upon request of the Agent, the Borrower shall
execute and deliver to the Agent irrevocable lockbox agreements in the form
provided by the Agent which agreements shall be accompanied by an
acknowledgment by the bank where the lockbox is located of the Lien of the
Agent granted hereunder and of irrevocable instructions to wire all amounts
collected therein to a special collateral account at the Agent.
7.2. Collection of Receivables. The Agent may at any time after
the occurrence of a Default, by giving the Borrower written notice, elect to
require that the Receivables be paid directly to the Agent for the benefit of
the Lenders. In such event, the Borrower shall, and shall permit the Agent to,
promptly notify the account debtors or obligors under the Receivables of the
Agent's interest therein and direct such account debtors or obligors to make
payment of all amounts then or thereafter due under the Receivables directly to
the Agent. Upon receipt of any such notice from the Agent, the Borrower shall
thereafter hold in trust for the Agent all amounts and proceeds received by it
with respect to the Receivables and Other Collateral and immediately and at all
times thereafter deliver to the Agent all such amounts and proceeds in the same
form as so received, whether by cash, check, draft or
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otherwise, with any necessary endorsements. The Agent shall hold and apply
funds so received as provided by the terms of Sections 7.3 and 7.4.
7.3. Special Collateral Account. The Agent may require all cash
proceeds of the Collateral received pursuant to Sections 7.1 and 7.2 or upon
the liquidation of any Collateral to be deposited in a special non-interest
bearing cash collateral account with the Agent and held there as security for
the Secured Obligations. The Borrower shall have no control whatsoever over
said cash collateral account. If no Default or Unmatured Default has occurred
or is continuing, the Agent shall from time to time deposit the collected
balances in said cash collateral account into the Borrower's general operating
account with the Agent. If any Default has occurred and is continuing, the
Agent may (and shall, at the direction of the Required Lenders), from time to
time, apply the collected balances in said cash collateral account to the
payment of the Secured Obligations whether or not the Secured Obligations shall
then be due.
7.4. Application of Proceeds. The proceeds of the Collateral shall
be applied by the Agent to payment of the Secured Obligations in the following
order unless a court of competent jurisdiction shall otherwise direct:
(a) FIRST, to payment of all costs and expenses of the
Agent incurred in connection with the collection and enforcement of
the Secured Obligations or of the security interest granted to the
Agent pursuant to this Security Agreement;
(b) SECOND, to payment of that portion of the Secured
Obligations constituting accrued and unpaid interest and fees, pro
rata amongst the Lenders in accordance with the amount of such accrued
and unpaid interest and fees owing to each of them;
(c) THIRD, to payment of the principal of the Secured
Obligations and net early termination payments then due and unpaid
from the Borrower to the Lenders under Rate Hedging Agreements, pro
rata amongst the Lenders in accordance with the amount of such
principal and net early termination payments then due and unpaid owing
to each of them;
(d) FOURTH, to payment of any Secured Obligations (other
than those listed above) pro rata amongst those parties to whom such
Secured Obligations are due in accordance with the amounts owing to
each of them; and
(e) FIFTH, the balance, if any, after all of the Secured
Obligations have been satisfied, shall be deposited by the Agent into
the Borrower's general operating account with the Agent.
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ARTICLE VIII
GENERAL PROVISIONS
8.1. Notice of Disposition of Collateral. The Borrower hereby
waives notice of the time and place of any public sale or the time after which
any private sale or other disposition of all or any part of the Collateral may
be made. To the extent such notice may not be waived under applicable law, any
notice made shall be deemed reasonable if sent to the Borrower, addressed as
set forth in Article IX, at least ten days prior to (i) the date of any such
public sale or (ii) the time after which any such private sale or other
disposition may be made.
8.2. Compromises and Collection of Collateral. The Borrower and
the Agent recognize that setoffs, counterclaims, defenses and other claims may
be asserted by obligors with respect to certain of the Receivables, that
certain of the Receivables may be or become uncollectible in whole or in part
and that the expense and probability of success in litigating a disputed
Receivable may exceed the amount that reasonably may be expected to be
recovered with respect to a Receivable. In view of the foregoing, the Borrower
agrees that the Agent may at any time and from time to time, if a Default has
occurred and is continuing, compromise with the obligor on any Receivable,
accept in full payment of any Receivable such amount as the Agent in its sole
discretion shall determine or abandon any Receivable, and any such action by
the Agent shall be commercially reasonable so long as the Agent acts in good
faith based on information known to it at the time it takes any such action.
8.3. Secured Party Performance of Debtor Obligations. Without
having any obligation to do so, the Agent may perform or pay any obligation
which the Borrower has agreed to perform or pay in this Security Agreement and
the Borrower shall reimburse the Agent for any amounts paid by the Agent
pursuant to this Section 8.3. The Borrower's obligation to reimburse the Agent
pursuant to the preceding sentence shall be a Secured Obligation payable on
demand. The Agent shall attempt to notify the Borrower of any actions it may
take under this Section 8.3, but the failure of the Agent to deliver or the
Borrower to receive any such notice shall not affect the rights of the Agent or
the obligations of the Borrower hereunder.
8.4. Authorization for Secured Party to Take Certain Action. The
Borrower irrevocably authorizes the Agent at any time and from time to time in
the sole discretion of the Agent and appoints the Agent as its attorney in fact
(i) to execute on behalf of the Borrower as debtor and to file financing
statements necessary or desirable in the Agent's sole discretion to perfect and
to maintain the perfection and priority of the Agent's security interest in the
Collateral, (ii) to indorse and collect any cash proceeds of the Collateral,
(iii) to file a carbon, photographic or other reproduction of this Security
Agreement or any financing statement with respect to the Collateral as a
financing statement in such offices as the Agent in its sole discretion deems
necessary or desirable to perfect and to maintain the
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perfection and priority of the Agent's security interest in the Collateral,
(iv) subject to the terms of Section 4.1.3, to enforce payment of the
Receivables in the name of the Agent or the Borrower, (v) to apply the proceeds
of any Collateral received by the Agent to the Secured Obligations as provided
in Article VII and (vi) to discharge past due taxes, assessments, charges, fees
or Liens on the Collateral (except for such Liens as are specifically permitted
hereunder), and the Borrower agrees to reimburse the Agent on demand for any
payment made or any expense incurred by the Agent in connection therewith,
provided that this authorization shall not relieve the Borrower of any of its
obligations under this Security Agreement or under the Credit Agreement.
8.5. Specific Performance of Certain Covenants. The Borrower
acknowledges and agrees that a breach of any of the covenants contained in
Sections 4.1.3, 4.1.4, 4.4, 5.3, 7 and 8.7 will cause irreparable injury to the
Agent and the Lenders, that the Agent and Lenders have no adequate remedy at
law in respect of such breaches and therefore agrees, without limiting the
right of the Agent or the Lenders to seek and obtain specific performance of
other obligations of the Borrower contained in this Security Agreement, that
the covenants of the Borrower contained in the Sections referred to in this
Section 8.5 shall be specifically enforceable against the Borrower.
8.6. Use and Possession of Certain Premises. Upon the occurrence
and during the continuance of a Default, the Agent shall be entitled to occupy
and use any premises owned or leased by the Borrower where any of the
Collateral or any records relating to the Collateral are located until the
Secured Obligations are paid or the Collateral is removed therefrom, whichever
first occurs, without any obligation to pay the Borrower for such use and
occupancy.
8.7. Dispositions Not Authorized. The Borrower is not authorized
to sell or otherwise dispose of the Collateral except as set forth in Section
4.1.3 and notwithstanding any course of dealing between the Borrower and the
Agent or other conduct of the Agent, no authorization to sell or otherwise
dispose of the Collateral (except as set forth in Section 4.1.3) shall be
binding upon the Agent or the Lenders unless such authorization is in writing
signed by the Agent with the consent of the Required Lenders.
8.8. Benefit of Agreement. The terms and provisions of this
Security Agreement shall be binding upon and inure to the benefit of the
Borrower, the Agent and the Lenders and their respective successors and
assigns, except that the Borrower shall not have the right to assign its rights
or delegate its obligations under this Security Agreement or any interest
herein, without the prior written consent of the Agent.
8.9. Survival of Representations. All representations and
warranties of the Borrower contained in this Security Agreement shall survive
the execution and delivery of this Security Agreement.
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8.10. Taxes and Expenses. Any taxes (including income taxes)
payable or ruled payable by Federal or State authority in respect of this
Security Agreement shall be paid by the Borrower, together with interest and
penalties, if any. The Borrower shall reimburse the Agent for any and all
out-of-pocket expenses and internal charges (including reasonable attorneys',
auditors' and accountants' fees and reasonable time charges of attorneys,
paralegals, auditors and accountants who may be employees of the Agent) paid or
incurred by the Agent in connection with the preparation, execution, delivery,
administration, collection and enforcement of this Security Agreement and in
the audit, analysis, administration, collection, preservation or sale of the
Collateral (including the expenses and charges associated with any annual or
special audit of the Collateral). Any and all costs and expenses incurred by
the Borrower in the performance of actions required pursuant to the terms
hereof shall be borne solely by the Borrower.
8.11. Headings. The title of and section headings in this Security
Agreement are for convenience of reference only, and shall not govern the
interpretation of any of the terms and provisions of this Security Agreement.
8.12. Termination. This Security Agreement shall continue in effect
(notwithstanding the fact that from time to time there may be no Secured
Obligations outstanding) until (i) the Credit Agreement has terminated pursuant
to its express terms and (ii) all of the Secured Obligations have been
indefeasibly paid and performed in full and no commitments of the Agent or the
Lenders which would give rise to any Secured Obligations are outstanding.
8.13. Entire Agreement. This Security Agreement embodies the entire
agreement and understanding between the Borrower and the Agent relating to the
Collateral and supersedes all prior agreements and understandings between the
Borrower and the Agent relating to the Collateral.
8.14. CHOICE OF LAW. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS (AND NOT THE LAW OF
CONFLICTS) OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.
8.15. Indemnity. The Borrower hereby agrees to indemnify the Agent
and the Lenders, and their respective successors, assigns, agents and
employees, from and against any and all liabilities, damages, penalties, suits,
costs, and expenses of any kind and nature (including, without limitation, all
expenses of litigation or preparation therefor whether or not the Agent or any
Lender is a party thereto) imposed on, incurred by or asserted against the
Agent or the Lenders, or their respective successors, assigns, agents and
employees, in any way relating to or arising out of this Security Agreement, or
the manufacture, purchase, acceptance, rejection, ownership, delivery, lease,
possession, use, operation, condition, sale, return or other disposition of any
Collateral (including, without limitation, latent and other
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defects, whether or not discoverable by the Agent or the Lenders or the
Borrower, and any claim for patent, trademark or copyright infringement) other
than, at such times as the Agent or any Lender shall be in possession of any
Collateral, misuse of such Collateral causing injury to a third party.
8.16. Conflicts. In the event of any conflict between the
provisions of this Security Agreement and the Credit Agreement, the provisions
of the Credit Agreement shall control.
8.17. Compliance with Laws. The performance of this Security
Agreement by the Borrower shall be subject at all times to all laws,
regulations and rules of the United States of America, and any agency or
instrumentality thereof, and of any State, and any agency or instrumentality
thereof. None of the Borrower, Agent or Lenders shall be bound by any terms of
this Security Agreement that are in conflict with such law, regulations and
rules.
8.18. Approval of Cable Authorities. Notwithstanding any provisions
in this Security Agreement to the contrary, no action shall be taken by the
Agent or the Lenders with respect to any items of the Collateral unless and
until all necessary requirements, if any, of the Communications Act of 1934,
the Cable Communications Policy Act of 1984 and the Cable Television Consumer
Protection and Competition Act of 1992 and the respective rules and regulations
thereunder, as well as any other federal, state, or other law applicable to or
having jurisdiction over the cable television industry or the Borrower have
been fully satisfied with respect to such action and there have been obtained
such consents, approvals, and authorizations, if any, as may be required to be
obtained from the FCC and any other such governmental authority or utility or
telephone company under the terms of any franchise, license, or similar
operating right held by the Borrower and included in the Collateral. It is the
intention of the parties hereto that the security interests and liens of the
Agent in and on the Collateral shall in all relevant aspects be subject to and
governed by said statutes, rules, and regulations and that nothing in this
Security Agreement shall be construed to diminish the control exercised by the
Borrower except in accordance with the provisions of such statutory
requirements and rules and regulations and the terms and conditions of this
Security Agreement. Upon the Agent's request, the Borrower agrees that it will
use its best efforts to promptly obtain any and all governmental, regulatory,
utility, or telephone company consents, approvals, or authorizations referred
to in this Section 8.18.
ARTICLE IX
NOTICES
9.1. Sending Notices. Any notice required or permitted to be given
under this Security Agreement shall be sent (and deemed received) in the manner
set forth in Article XIII of the Credit Agreement.
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9.2. Change in Address for Notices. Each of the Borrower, the
Agent and the Lenders may change the address for service of notice upon it by a
notice in writing to the other parties in the manner set forth in Article XIII
of the Credit Agreement.
ARTICLE X
THE AGENT
The First National Bank of Chicago has been appointed Agent for the
Lenders hereunder pursuant to Article X of the Credit Agreement, and the Agent
has agreed to act (and any successor Agent shall act) as such hereunder only on
the express conditions contained in such Article X. It is expressly understood
and agreed by the parties to this Security Agreement that any authority,
discretion, or right to act (or omit to act) conferred upon the Agent hereunder
is subject to the terms of the delegation of authority, discretion, or right to
act (or omit to act) made by the Lenders to the Agent pursuant to the Credit
Agreement. Any successor Agent appointed pursuant to Article X of the Credit
Agreement shall be entitled to all the rights, interests and benefits of the
Agent hereunder.
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IN WITNESS WHEREOF, the Borrower and the Agent have executed this
Security Agreement as of the date first above written.
NORTHLAND CABLE PROPERTIES FOUR
LIMITED PARTNERSHIP
By: NORTHLAND COMMUNICATIONS
CORPORATION, ITS MANAGING GENERAL
PARTNER
By:
-----------------------------------
James A. Penney
Vice President
THE FIRST NATIONAL BANK OF
CHICAGO, AS AGENT
By
-----------------------------------
Ronna Bury-Prince
Vice President
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EXHIBIT "A"
(See Sections 3.4 and 3.5 of Security Agreement)
This is Exhibit A to that certain Security Agreement dated August 31,
1995 by and between NORTHLAND CABLE PROPERTIES FOUR LIMITED PARTNERSHIP and THE
FIRST NATIONAL BANK OF CHICAGO, in its capacity as agent for the Lenders.
Borrower's Principal Place of Business and Mailing Address:
Northland Cable Properties Four Limited Partnership
c/o Northland Communications Corporation
1201 Third Avenue, Suite 3600
Seattle, Washington 98101
Attention: John S. Whetzell, James A. Penney,
and Gary S. Jones
Locations of Borrower's Receivables Records (if different from Principal Place
of Business above):
See each of the office sites listed below.
Location of Inventory and Equipment and Fixtures:
A. Properties Owned by the Borrower:
B. Properties Leased by the Borrower (Include Landlord's Name):
C. Counties in which Borrower conducts business:
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EXHIBIT "B"
(See Section 3.9 of Security Agreement)
This is Exhibit B to that certain Security Agreement dated August 31,
1995 by and between NORTHLAND CABLE PROPERTIES FOUR LIMITED PARTNERSHIP and THE
FIRST NATIONAL BANK OF CHICAGO, in its capacity as agent for the Lenders.
LIST OF VEHICLES
Vehicles Owned by Borrower:
Vehicle Registration
Identification Number Year Make Model County, State
- --------------------------------------------------------------------------------
Patents, Copyrights, Trade Marks Protected under Federal Law: N/A
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EXHIBIT "C"
(SEE SECTION 3.9 OF SECURITY AGREEMENT)
LEGAL DESCRIPTION AND STREET ADDRESS OF PROPERTY ON WHICH
FIXTURES ARE LOCATED:
This is Exhibit C to that certain Security Agreement dated August 31,
1995 by and between NORTHLAND CABLE PROPERTIES FOUR LIMITED PARTNERSHIP and THE
FIRST NATIONAL BANK OF CHICAGO, in its capacity as agent for the Lenders.
Please see Exhibit A to the Security Agreement.
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EXHIBIT "D"
(See Section 3.11 of Security Agreement)
This is Exhibit D to that certain Security Agreement dated August 31,
1995 by and between NORTHLAND CABLE PROPERTIES FOUR LIMITED PARTNERSHIP and THE
FIRST NATIONAL BANK OF CHICAGO, in its capacity as agent for the Lenders.
LIST OF PLEDGED SECURITIES
A. STOCKS
Issuer Certificate Number Number of Shares
B. BONDS
-None-
C. GOVERNMENT SECURITIES
-None-
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EXHIBIT "E"
(See Section 3.2 of Security Agreement)
This is Exhibit E to that certain Security Agreement dated August 31,
1995, 1994 by and between NORTHLAND CABLE PROPERTIES FOUR LIMITED PARTNERSHIP
and THE FIRST NATIONAL BANK OF CHICAGO, in its capacity as agent for the
Lenders.
OFFICES IN WHICH FINANCING STATEMENTS HAVE BEEN FILED
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EXHIBIT "D"
MANAGEMENT
SUBORDINATION AGREEMENT
August 31, 1995
The Agent and the Banks who are parties to
the Credit Agreement described below
c/o The First National Bank of Chicago, as Agent
One First National Plaza
Chicago, Illinois 60670
Ladies and Gentlemen:
The Agent and Lenders party to that certain Credit Agreement dated as
of August 31, 1995, by and among NORTHLAND CABLE PROPERTIES FOUR LIMITED
PARTNERSHIP, a Washington limited partnership, (herein sometimes called the
"Borrower"), THE FIRST NATIONAL BANK OF CHICAGO, as Agent (in such capacity,
the "Agent") and such Lenders (the "Credit Agreement") are hereby advised that
the Borrower is now obligated for payment of management fees to Northland
Communications Corporation and FN Equities Joint Venture.
To induce the Lenders to extend credit to the Borrower pursuant to the
Credit Agreement, the undersigned hereby agree to subordinate and do hereby
subordinate payment by the Borrower of all or any part of the above described
indebtedness together with any and all other indebtedness of the Borrower now
or hereafter incurred, created or evidenced to the undersigned (excepting
indebtedness for salaries, if any, as may from time to time accrue) howsoever
such indebtedness may be hereafter extended, renewed or evidenced (all such
indebtedness, obligations and liabilities being herein called the "Subordinated
Debt") to the payment to the Lender of any and all indebtedness, direct or
contingent, for which the Borrower may now or hereafter be under obligation to
the Lenders (all such indebtedness, obligations and liabilities being herein
called the "Senior Debt"), and in furtherance thereof does hereby agree, not to
ask, demand, sue for, take or receive all or any part of the Subordinated Debt,
including principal, interest and costs and expenses of collection, nor any
security therefor unless or until any and all Senior Debt now existing or
hereafter arising shall have been paid in full, except the payment of limited
amounts of Subordinated Debt as hereinafter provided for.
The undersigned further agree that upon any distribution of the assets
or readjustment of the indebtedness of the Borrower whether by reason of
liquidation, composition, bankruptcy, arrangement, receivership, assignment for
the benefit of creditors or any other action or
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proceeding involving the readjustment of all or any of the Subordinated Debt,
or the application of the assets of the Borrower to the payment or liquidation
thereof, you shall be entitled to receive payment in full of any and all Senior
Debt then owing to you by the Borrower prior to the payment of all or any part
of the Subordinated Debt, and in order to enable the Lenders to enforce their
rights hereunder in any such action or proceeding, the Agent and the Lenders
are hereby irrevocably authorized and empowered in their discretion to make and
present for and on behalf of the undersigned such proofs of claims against the
Borrower on account of the Subordinated Debt as the Lenders may deem expedient
or proper and to vote such proofs of claims in any such proceeding and to
receive and collect any and all dividends or other payments or disbursements
made thereon in whatever form the same may be paid or issued and to apply same
on account of any Senior Debt then owing to the Lenders.
The undersigned further agree to execute and deliver to the Lenders
such assignments or other instruments as may reasonably be required by the
Lenders in order to enable the Lenders to enforce any and all such claims and
to collect any and all dividends or other payments or disbursements which may
be made at any time on account of all or any of the Subordinated Debt.
The undersigned hereby also agree not to assign or transfer at any
time while this agreement remains in effect any rights, claim or interest of
any kind in or to any of the Subordinated Debt, either principal or interest,
without (1) first notifying the Agent and the Lenders and (2) making such
assignment expressly subject to a subordination agreement in form and substance
satisfactory to the Lenders. The undersigned will deliver any note or other
evidence of the indebtedness hereby subordinated to the Agent on behalf of the
Lenders.
It is also agreed that the Borrower may pay and the undersigned may
receive payments of the Subordinated Debt as set forth in Section 6.21 of the
Credit Agreement provided the Borrower is not in default in the payment of any
obligation to the Agent or the Lenders or under any of the provisions of this
agreement or the provisions of any note, contract, loan agreement or other
agreement evidencing its obligation to the Agent or the Lenders.
This is a continuing agreement of subordination and the Lenders may
continue, without notice to the undersigned, to extend credit or other
accommodation or benefit and loan monies to or for the account of the Borrower
on the faith hereof until written notice of revocation of this agreement shall
be delivered to the Lenders by the undersigned. Such notice of revocation shall
not affect this agreement in relation to any obligations or liabilities of the
Borrower then existing or any obligations or liabilities created thereafter
pursuant to any previous commitment made by any Lender to the Borrower or any
extensions or renewals of any such obligations or liabilities, and as to all
such obligations and liabilities and extensions or renewals thereof, this
agreement shall continue effective until the same shall have been fully
discharged with interest.
The undersigned agree that the provisions of this subordination
agreement shall be binding on the undersigned notwithstanding any release,
surrender, compromise, settlement, waiver,
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subordination or modification, with our without consideration, of any other
obligation of any person or entity with respect to the Senior Debt or the
enforceability or validity of the Senior Debt or any part thereof or the
genuineness, enforceability or validity of any guaranty, pledge agreement or
any other agreement relating thereto or with respect to any collateral securing
the Senior Debt or any part thereof.
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It is further understood and agreed that the Lenders may at any time,
either before or after such notice of revocation, in their discretion renew or
extend the time of payment of all or any existing or future indebtedness or
obligations of the Borrower to the Lenders or waive or release any collateral
which may be held therefor at any time and in reference thereto to make and
enter into any such agreement or agreements as the Lenders may deem proper or
desirable without notice to or further assent from the undersigned and without
in any manner impairing or affecting this agreement or any of the Lenders'
rights hereunder. In the event of any conflict between the provisions of this
Subordination Agreement and the Credit Agreement, the provisions of the Credit
Agreement shall control.
Yours very truly,
NORTHLAND COMMUNICATIONS
CORPORATION
By /s/ JAMES A. PENNEY
---------------------------
James A. Penney
Vice President
FN EQUITIES JOINT VENTURE
By: [ ]
-----------------------
By:
-------------------------
Name:
-----------------------
Title:
----------------------
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The undersigned hereby acknowledges receipt of a copy of the foregoing
Subordination Agreement and agrees that it will not pay any indebtedness
subordinated by the foregoing Subordination Agreement except as therein
provided. In the event of any breach of the provisions of the foregoing
agreement, the undersigned agrees that, in addition to any other rights and
remedies the Agent and the Lenders may have, all of our obligations and
liabilities to the Agent and the Lenders shall, without notice or demand,
become immediately due and payable unless you shall otherwise elect.
NORTHLAND CABLE PROPERTIES FOUR
LIMITED PARTNERSHIP
By NORTHLAND COMMUNICATIONS
CORPORATION, GEN PARTNER
By /s/ JAMES A. PENNEY
----------------------------
Its Vice
----------------------------
ACCEPTED:
THE FIRST NATIONAL BANK OF CHICAGO,
AS AGENT
By
---------------------------------
Ronna Bury-Prince
Vice President
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EXHIBIT "E"
FORM OF OPINION OF COUNSEL TO
BORROWER AND NCC
August 31, 1995
The Agent and the Lenders who are parties
to the Credit Agreement described below
c/o The First National Bank of Chicago,
as Agent
One First National Plaza
Chicago, Illinois 60670
Attention: Communications Division
Re: Credit Agreement among Northland Cable Properties Four Limited
Partnership ("Borrower"), the Lenders listed on Schedule A
attached hereto and incorporated herein by this reference
("Lenders") and The First National Bank of Chicago, as agent
for the Lenders ("Agent")
Ladies and Gentlemen:
We have acted as special counsel to Borrower in connection with the
Credit Agreement dated as of August 31, 1995 among Borrower, Agent and Lenders,
providing for advances in an aggregate principal amount not exceeding
$23,000,000 at any one time outstanding (the "Agreement"). We have also acted
as special counsel for Northland Communications Corporation, the Managing
General Partner of Borrower ("NCC"), in connection with the Pledge Agreement
dated as of August 31, 1995 by and between NCC, FN Equities Joint Venture
("FNEJV"), and Agent (the "Pledge Agreement") and the Management Subordination
Agreement dated as of August 31, 1995 executed by NCC and FNEJV, acknowledged
by Borrower and accepted by Agent (the "Subordination Agreement"). All
capitalized terms used in this opinion and not otherwise defined shall have the
meanings attributed to them in the Agreement. This opinion is being delivered
pursuant to your request in accordance with Section 4.1(xi) of the Agreement.
In connection with this transaction we have examined only the
documents listed below:
l. the Agreement;
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The First National Bank of Chicago
August 31, 1995
Page __
2. the respective Facility "A" Notes made by Borrower to the
Facility A Lenders;
3. the respective Facility "B" Notes made by Borrower to the
Facility B Lenders;
4. the security agreement by and between Borrower and Agent (the
"Security Agreement");
5. the Subordination Agreement;
6. UCC financing statements regarding Agent's and Lenders'
security interests in Collateral under the Security Agreement
and the Pledge Agreement, prepared for filing in the state and
county offices set forth in Schedule D attached hereto and
incorporated herein by this reference (the "Financing
Statements");
7. the governmental certificates attached hereto as Schedules B
and C and incorporated herein by this reference (the
"Governmental Certificates");
8. the UCC, federal and state tax lien, judgment and pending suit
searches performed by Prentice-Hall Legal and Financial
Services of the state and county offices and as of the dates
set forth in Schedule D (the "Searches");
9. those agreements listed on Schedule E (the "Material
Agreements");
10. Borrower's agreement of limited partnership, and authorizing
consent[s];
11. NCC's Articles of Incorporation, By-laws, and authorizing
consent; and
12. such certificates of the officers of Borrower and NCC as we
have deemed necessary to render the opinions expressed below.
The documents numbered 1 through 5 above, all of which are of even
date with the Agreement, are referred to herein as the "Loan Documents." With
respect to the documents listed above other than the Loan Documents, we have
examined copies of executed documents, and we have assumed the authenticity,
due authorization and validity of such documents, the genuineness of the
signatures appearing thereon, the completeness and the conformity of all such
documents to the original documents, and that such documents have not been
further amended or superseded following our review except as disclosed to us in
writing.
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We have relied without investigation, as to matters of fact, solely
upon: the representations made by Borrower and NCC in the Loan Documents;
those representations in such officers' certificates as we have deemed
necessary; the Governmental Certificates; the Searches; and matters within our
Actual Knowledge as defined below.
Attorneys in the firm have represented Borrower and NCC for some time;
however, we counsel them only on those selected matters about which legal
advice is requested. We do not review all of the transactions or legal
documents of Borrower or NCC.
For purposes of this opinion, we have assumed that Agent and Lenders
and any other party to the Loan Documents other than Borrower and NCC each has
all requisite power and authority and has taken all necessary corporate action
and has all governmental and third-party consents necessary or desirable to
execute, deliver, and give effect to the Loan Documents, and that where
necessary or desirable each has duly executed and delivered such documents.
In rendering this opinion, we have examined only the laws of the State
of Washington and applicable federal law. We have assumed without inquiry that
the laws of other jurisdictions that may be applicable, including without
limitation the laws of the States of Illinois, California, and Texas, are the
same as Washington law, and we express no opinion concerning the laws of any
other state or jurisdiction or the applicability of such laws to the Loan
Documents or the transactions contemplated thereby. In addition, we express no
opinion concerning federal and state (except the State of Washington)
communications law (including but not limited to the Cable Communications
Policy Act of 1984, the Communications Act of 1934 and the Cable Television
Consumer Protection and Competition Act of 1992), Titles 15, 17 and 35 of the
United States Code, federal and state aviation laws, federal and state
securities laws, federal and state tax laws, federal and state antitrust laws,
federal and state banking laws, and all rules and regulations promulgated under
such statutes, or the applicability of such laws to the Loan Documents or the
transactions contemplated thereby, nor do we express any opinion about
statutes, rules or regulations of any county, town, municipality or special
political subdivision or judicial decisions related thereto.
For purposes of the opinion expressed herein as to the creation and
perfection of certain security interests, we have assumed that Borrower and NCC
own or have rights in the Collateral. We have not examined or undertaken to
make an investigation of the chain of title to any property which may be, or
may become, Collateral under the Loan Documents, and we express no opinion with
respect to title to any such Collateral, or the priority of any lien or
security interest granted therein. Our opinions regarding security interests,
liens or assignments are further subject to the qualifications that (i)
perfection of a security interest in "proceeds" will be
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limited to the extent provided in RCW 62A.9-306 (Title 62A, Article 9 of the
Revised Code of Washington is referred to hereinafter as the "Washington
Code"); (ii) continuation statements must be filed from time to time under the
Washington Code in order to maintain the perfection of security interests which
are perfected by filing; (iii) we assume that Agent and Lenders have no Actual
Knowledge of any adverse claims against any of the Collateral; (iv) pursuant to
RCW 62A.9-402, a security interest in after-acquired property which is
perfected by filing will cease to be perfected as to such property to the
extent that such property is acquired by Borrower more than four months after
Borrower changes its name, identity, or corporate structure so as to render the
then filed financing statement seriously misleading (unless an appropriate new
financing statement is filed before the expiration of such four-month period);
(v) pursuant to RCW 62A.9-103(3) (e), a change in the location of Borrower or
NCC to another state will result in the security interest in such entity's
mobile goods, accounts and accounts receivable and general intangibles (unless
perfected by possession) becoming unperfected after the expiration of certain
time periods unless appropriate steps are taken; and (vi) under certain
circumstances described in RCW 62A.9-307 and 9-308, purchasers of Collateral
may take the same free of a perfected security interest. For purposes of the
following opinions, we have assumed that no portion of the Collateral is or
will become real property other than fixtures.
We express no opinion with respect to any security interest created
under the Loan Documents which purports to secure any future obligations or
liabilities of Borrower to Agent or Lenders that (i) arise after or purport to
survive repayment of the entire amount constituting the Obligations; (ii) arise
after or purport to survive the release of security interests in the Collateral
in which a security interest is sought after such release; or (iii) are
determined not to have been within the contemplation of the parties at the time
the Loan Documents were executed.
The opinions expressed herein are further qualified and we express no
opinion regarding the following:
l. The effect of applicable bankruptcy, reorganization,
insolvency, moratoria, fraudulent conveyance, fraudulent transfer, or other
similar laws of the United States or of any state, now or hereafter in effect,
affecting the rights of creditors generally.
2. The availability or enforceability of certain terms or
provisions, covenants or remedies set forth in the Loan Documents relating to
specific performance, injunctive relief, cumulative and nonexclusive remedies,
appointment, authorization or empowerment of any agent or attorney in fact,
rights to take possession of property or collect rents without the appointment
of a receiver, establishment of evidentiary standards, ordinary course of
business, course of dealing and care, choice of law, jurisdiction, venue,
conflicts of law, severability, adequacy of consideration, the exercise of
rights without providing an opportunity to cure defaults, set-off
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rights; the applicability of principles relating to unconscionability and good
faith, impracticability and impossibility, and mistakes of fact; the
application of equitable principles in any proceeding, legal or equitable,
including the qualification of certain rights and remedies under applicable
law; and the following:
(a) To the extent the following are unreasonable:
restraints on alienation; restrictions on consolidation, merger or sale of
assets; provisions regarding confidentiality; provisions regarding payment of
attorneys' fees and expenses and costs of enforcement;
(b) To the extent the following constitute a penalty:
prepayment, late payment and default interest provisions;
(c) To the extent inconsistent with or exercised in a
manner inconsistent with the Washington Code and other applicable state law:
self-help remedies; and
(d) To the extent that the indemnified party's conduct
involves gross negligence, recklessness, willful misconduct or unlawful
conduct, or the violation of public policy: indemnification.
3. The effect of changes after the date hereof in any rules,
laws, regulations, statutes of limitation, moratoria or similar actions by
federal, local or state government agencies, legislatures, courts or other
authorities having jurisdiction.
4. To the extent there is a question of fact arising about the
knowledge or intent of the waiving party, or to the extent the waiver conflicts
with public policy, the effect of waiver or purported waiver of rights to
counterclaim, rights to assert defenses, rights to contest the appointment of a
receiver, legal notice, statutes of limitation, set-off rights, rights to
surplus proceeds, extension, rights to a jury trial, rights to object to
jurisdiction or venue, statutory immunity, and any other waiver, release,
disclaimer or relinquishment of a legal right by Borrower or NCC.
5. It is our understanding that the Agreement and the Loan
Documents will be executed by Borrower and NCC in the State of Washington, and
by the Agent and Lenders in the State of Illinois. The Collateral securing the
Obligations under the Loan Documents is located in the States of Washington,
California, and Texas. The Obligations will be performed in various states.
Consummation of the initial advance under the Commitment will occur in
Illinois, and negotiations have been conducted in person and by telephone,
telex or fax in both Illinois and Washington. Agent's principal place of
business is in Illinois. Lenders' principal places of
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business are in various states. Borrower's and NCC's principal place of
business is in Washington. Because the effectiveness of a choice of law is not
purely a question of law, we cannot opine that the parties' choice of law of
the State of Illinois as the law governing the Loan Documents will be upheld.
We have found no published Washington cases which have held, under facts
identical to those recited herein above (and assuming no other material facts),
that Washington courts should not recognize the parties' choice of law;
however, when issues of important Washington public policy are involved,
Washington courts may apply Washington law in furtherance of that public policy
despite the parties' choice of Illinois law (but we are unaware of any
Washington public policy that is likely to be applicable to the transactions
contemplated by the Loan Documents except as otherwise expressly set forth
herein). In the event that a court deciding an issue arising as part of a
dispute under the Loan Documents does not respect the parties' choice of
Illinois law and instead applies Washington law, we have opined below regarding
the enforceability of the Loan Documents under Washington law.
For purposes of this opinion, "Actual Knowledge" means the conscious
awareness of facts or other information by lawyers employed by the undersigned
firm and actively representing Borrower and/or NCC.
On the basic of the foregoing and subject to the qualifications set
forth below, we are of the opinion that:
l. Based solely upon the Governmental Certificates, NCC is duly
incorporated, the Borrower is duly formed, and both are validly existing under
the laws of the State of Washington.
2. Borrower has all requisite power and authority, and has taken
all requisite corporate action, to execute and deliver the Loan Documents and
to perform its obligations thereunder.
3. The execution and delivery of the Loan Documents and the
performance of the Obligations by Borrower will not:
(a) require any consent of Borrower's partners not
already obtained;
(b) be prohibited by any law, rule or regulation of any
governmental agency applicable to Borrower which a lawyer in the State of
Washington exercising customary professional diligence would reasonably
recognize as being directly applicable to Borrower;
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(c) to our Actual Knowledge, violate any order, writ,
judgment, injunction, decree or award binding on Borrower;
(d) violate Borrower's agreement of limited partnership,
or any Material Agreement, except as disclosed on Schedule F attached hereto
and incorporated herein by this reference; or
(e) result in, or require, the creation or imposition of
any Lien pursuant to the provisions of any Material Agreement (other than the
Lien of Agent and Lenders).
4. The Loan Documents have been duly executed and delivered by
Borrower and constitute legal, valid and binding obligations of Borrower,
enforceable against Borrower in accordance with their terms.
5. Based solely upon the Searches and our Actual Knowledge, there
is no litigation or proceeding against Borrower which, if adversely determined,
could reasonably be expected to have a Material Adverse Effect, except as
disclosed on Schedule 4 to the Agreement.
6. No approval, authorization, consent, adjudication or order of
any governmental authority, which has not been obtained by Borrower, is
required to be obtained by Borrower in connection with the execution and
delivery of the Loan Documents, the borrowings under the Agreement, or the
payment by Borrower of the Obligations, except as disclosed on Schedule G
attached hereto and incorporated herein by this reference.
7. NCC has all requisite power and authority, and has taken all
requisite corporate action, to execute and deliver the Loan Documents on behalf
of Borrower (and, with respect to the Subordination Agreement, on its own
behalf) and to perform its obligations thereunder.
8. NCC's execution and delivery of the Loan Documents on behalf
of Borrower (and, with respect to the Subordination Agreement, on its own
behalf) and its performance of its obligations thereunder will not:
(a) require any consent of NCC's shareholders;
(b) be prohibited by any law, rule or regulation of any
governmental agency applicable to NCC which a lawyer in the State of Washington
exercising customary professional diligence would reasonably recognize as being
directly applicable to NCC;
(c) to our Actual Knowledge, violate any order, writ,
judgment, injunction, decree or award binding on NCC;
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(d) violate NCC's Articles of Incorporation or By-laws,
or any Material Agreement, except as disclosed on Schedule F attached hereto
and incorporated herein by this reference; or
(e) result in, or require, the creation or imposition of
any Lien pursuant to the provisions of any Material Agreement (other than the
Lien of Agent and Lenders)
9. The Subordination Agreement has been duly executed and
delivered by NCC and constitutes legal, valid and binding obligations of NCC
enforceable against NCC in accordance with its terms.
10. Based solely upon the Searches and our Actual Knowledge, there
is no litigation or proceeding against NCC which, if adversely determined,
could reasonably be expected to have a Material Adverse Effect, except as
disclosed on Schedule 4 to the Agreement.
11. No approval, authorization, consent, adjudication or order of
any governmental authority, which has not been obtained by NCC, is required to
be obtained by NCC in connection with the execution and delivery of the Loan
Documents.
12. With respect to any portion of the Collateral in which a
security interest may be created under the Washington Code, the provisions of
the Collateral Documents are sufficient to create in favor of Agent and Lenders
a security interest, as defined in the Washington Code, in all right, title and
interest of Borrower and NCC, respectively, in such Collateral. The Financing
Statements have been executed by NCC on behalf of Borrower. With respect to
Financing Statements filed in the State of Washington, such Financing
Statements are sufficient to perfect the security interest created by the
Collateral Documents in all right, title and interest of Borrower in those
items and types of Collateral located in the State of Washington and described
in the Collateral Documents in which a security interest may be perfected by
the filing of a
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financing statement under the Washington Code, except that we express no
opinion as to personal property affixed to real property in such manner as to
become a fixture.
The foregoing opinions shall not be delivered to or relied upon by any
other person or party except Agent and Lenders, and shall not be quoted or
referred to in whole or in part without our prior written consent. The
foregoing opinions are for the use of Agent and Lenders (and their permitted
assigns under Section 12.3 of the Agreement) and for no other purpose. We
assume no obligation to update or revise this opinion letter.
Very truly yours,
CAIRNCROSS & HEMPELMANN, P.S.
-----------------------------
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EXHIBIT "F"
COMPLIANCE CERTIFICATE
To: The Lenders parties to the
Credit Agreement Described Below
This Compliance Certificate is furnished pursuant to that certain
Credit Agreement dated as of August 31, 1995 (as amended, modified, renewed or
extended from time to time, the "Agreement") among the Borrower, the lenders
party thereto and The First National Bank of Chicago, as Agent for the Lenders.
Unless otherwise defined herein, capitalized terms used in this Compliance
Certificate have the meanings ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected __________________ of the Borrower;
2. I have reviewed the terms of the Agreement and I have made, or
have caused to be made under my supervision, a detailed review of the
transactions and conditions of the Borrower and its Subsidiaries during the
accounting period covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which constitutes
a Default or Unmatured Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth below; and
4. Schedule I attached hereto sets forth financial data and
computations evidencing the Borrower's compliance with certain covenants of the
Agreement and the determination of the interest rates to be paid for Advances,
all of which data and computations are true, complete and correct.
Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken, is taking, or proposes to
take with respect to each such condition or event:
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
The foregoing certifications, together with the computations set forth
in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this ____ day of
__________, 19__.
----------------------------
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[SAMPLE]
SCHEDULE I TO COMPLIANCE CERTIFICATE
Schedule of Compliance as of with
Provisions of Section 6.19
the Agreement
Section 6.19.1 - CAPITAL EXPENDITURES
A. Year/Period to Date A = $
-----------
MAXIMUM PERMITTED:
1/1/95 - 12/31/95 $1,500,000
1/1/96 - 12/31/96 $1,500,000 *
1/1/97 - 12/31/97 $1,500,000 *
* plus unexpended amounts from previous Year
SECTION 6.19.2 - RENTALS
B. For current Fiscal Year B = $
-----------
MAXIMUM PERMITTED: $
-----------
SECTION 6.19.3 - INTEREST COVERAGE RATIO
C. Operating Cash Flow (most recent fiscal quarter):
(i) Pre-tax-income or deficit excluding
extraordinary gains and losses $
-----------
(ii) Interest Expense $
-----------
(iii) Depreciation and amortization $
-----------
(iv) Deferred Management Fees $
-----------
The sum of (i) through (v) C = $
-----------
D. Debt:
(i) Indebtedness for Borrowed Money $
-----------
(ii) Contingent Obligations $
-----------
(iii) Rate Hedging Net Liabilities $
-----------
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(iv) Non-Compete obligations $
-----------
(v) Capitalized Lease Obligations $
-----------
The sum of (i) through (v) D = $
-----------
E. Interest on D E = $
-----------
F. The ratio of C to E :1.00
-----------
MINIMUM PERMITTED: 1.75 TO 1.0
(THROUGH 6/30/97)
Section 6.19.4 - PRO FORMA DEBT SERVICE RATIO
G. Annualized Operating Cash Flow (= 4 x C above) $
-----------
H. Pro Forma Debt Service $
-----------
I. The ratio of G to H :1.00
-----------
MINIMUM PERMITTED: 1.15 TO 1.0
(COMMENCING 3/30/96)
Section 6.19.5 - FIXED CHARGE COVERAGE RATIO
J. Numerator:
(a) (1) Operating Cash Flow for last
12 complete months $
-----------
(2) Cash and Equivalents and/or
unused Facility A
(not greater than
$500,000) $
-----------
Total of (1) and (2) a = $
-----------
(b) (1) Taxes for last 12 complete months
$
-----------
(2) Cap. Exp. for last
12 complete months $
-----------
Total of (1) and (2) b = $
-----------
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Numerator: a minus b J = $
-----------
K. Required Payments for last 12 complete months $
-----------
L. The ratio of J to K :1.00
-----------
MINIMUM PERMITTED: 1.10 TO 1.0
(COMMENCING 6/30/97)
Section 6.19.6 - LEVERAGE RATIO
M. Debt (D above) $
-----------
N. Annualized Operating Cash Flow (G above) $
-----------
O. The ratio of M to N :1.00
-----------
MAXIMUM PERMITTED:
PERIOD RATIO
----------------------
Date of Agreement through 6/30/96 6.00:1
7/1/96 through 12/31/96 5.50:1
1/1/97 through 6/30/97 5.25:1
7/1/97 through 12/31/97 5.00:1
1/1/98 through 6/30/98 4.75:1
7/1/98 through 12/31/98 4.50:1
1/1/99 through 6/30/99 4.00:1
7/1/99 through 12/31/99 3.50:1
1/1/00 through 6/30/00 3.25:1
7/1/00 and thereafter 3.00:1
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EXHIBIT "G"
MANAGEMENT FEE REPORT
For Fiscal Quarter ending
---------------------
Quarter End
Month 1 Month 2 Month 3
------- ------- -------
A. Estimated Revenues
------- ------- -------
B. Management Fee Estimate
6% (.06) x (A)
------- ------- -------
C. Management Fees Paid N/A
------- ------- -------
D. Actual Revenues
------- ------- -------
E. Actual Management Fee
6% (.06) x (D)
------- ------- -------
F. Management Fee Surplus/
(Deficit) (C) - (E)
------- ------- -------
G. Covenant Compliance
(from Exhibit "H")
Compliance (Yes/No) N/A N/A
------- ------- -------
H. Management Fee Deferral
(If G = No) N/A N/A
------- ------- -------
I. Accumulated Management
Fee Deferral N/A N/A
------- ------- -------
---------------------
Date
---------------------
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EXHIBIT "H"
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between _______
(the "Assignor") and ____________ (the "Assignee") is dated as of ______________
, 19__. The parties hereto agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to a Credit
Agreement (which, as it may be amended, modified, renewed or extended from time
to time is herein called the "Credit Agreement") described in Item 1 of Schedule
1 attached hereto ("Schedule 1"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings attributed to them in the
Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns
to the Assignee, and the Assignee hereby purchases and assumes from the
Assignor, an interest in and to the Assignor's rights and obligations under the
Credit Agreement such that after giving effect to such assignment the Assignee
shall have purchased pursuant to this Assignment Agreement the percentage
interest specified in Item 3 of Schedule 1 of all outstanding rights and
obligations under the Credit Agreement relating to the facilities listed in Item
3 of Schedule 1 and the other Loan Documents. The aggregate [Facility ___]
Commitment (or Loans, if the applicable Commitment has been terminated)
purchased by the Assignee hereunder is set forth in Item 4 of Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment
Agreement (the "Effective Date") shall be the later of the date specified in
Item 5 of Schedule 1 or two Business Days (or such shorter period agreed to by
the Agent) after a Notice of Assignment substantially in the form of Exhibit
"1" attached hereto has been delivered to the Agent. Such Notice of Assignment
must include any consents required to be delivered to the Agent by Section
12.3.1 of the Credit Agreement. In no event will the Effective Date occur if
the payments required to be made by the Assignee to the Assignor on the
Effective Date under Sections 4 and 5 hereof are not made on the proposed
Effective Date. The Assignor will notify the Assignee of the proposed
Effective Date no later than the Business Day prior to the proposed Effective
Date. As of the Effective Date, (i) the Assignee shall have the rights and
obligations of a Lender under the Loan Documents with respect to the rights and
obligations assigned to the Assignee hereunder and (ii) the Assignor shall
relinquish its rights and be released from its corresponding obligations under
the Loan Documents with respect to the rights and obligations assigned to the
Assignee hereunder.
4. PAYMENTS OBLIGATIONS. On and after the Effective Date, the
Assignee shall be entitled to receive from the Agent all payments of principal,
interest and fees with respect to the interest assigned hereby. The Assignee
shall advance funds directly to the Agent with respect to all
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Loans and reimbursement payments made on or after the Effective Date with
respect to the interest assigned hereby. [In consideration for the sale and
assignment of Loans hereunder, (i) the Assignee shall pay the Assignor, on the
Effective Date, an amount equal to the principal amount of the portion of all
Floating Rate Loans assigned to the Assignee hereunder and (ii) with respect to
each Eurodollar Loan made by the Assignor and assigned to the Assignee
hereunder which is outstanding on the Effective Date, (a) on the last day of
the Interest Period therefor or (b) on such earlier date agreed to by the
Assignor and the Assignee or (c) on the date on which any such Eurodollar Loan
either becomes due (by acceleration or otherwise) or is prepaid (the date as
described in the foregoing clauses (a), (b) or (c) being hereinafter referred
to as the "Payment Date"), the Assignee shall pay the Assignor an amount equal
to the principal amount of the portion of such Eurodollar Loan assigned to the
Assignee which is outstanding on the Payment Date. If the Assignor and the
Assignee agree that the Payment Date for such Eurodollar Loan shall be the
Effective Date, they shall agree to the interest rate applicable to the portion
of such Loan assigned hereunder for the period from the Effective Date to the
end of the existing Interest Period applicable to such Eurodollar Loan (the
"Agreed Interest Rate") and any interest received by the Assignee in excess of
the Agreed Interest Rate shall be remitted to the Assignor. In the event
interest for the period from the Effective Date to but not including the
Payment Date is not paid by the Borrower with respect to any Eurodollar Loan
sold by the Assignor to the Assignee hereunder, the Assignee shall pay to the
Assignor interest for such period on the portion of such Eurodollar Loan sold
by the Assignor to the Assignee hereunder at the applicable rate provided by
the Credit Agreement. In the event a prepayment of any Eurodollar Loan which
is existing on the Payment Date and assigned by the Assignor to the Assignee
hereunder occurs after the Payment Date but before the end of the Interest
Period applicable to such Eurodollar Loan, the Assignee shall remit to the
Assignor the excess of the prepayment penalty paid with respect to the portion
of such Eurodollar Loan assigned to the Assignee hereunder over the amount
which would have been paid if such prepayment penalty was calculated based on
the Agreed Interest Rate. The Assignee will also promptly remit to the
Assignor (i) any principal payments received from the Agent with respect to
Eurodollar Loans prior to the Payment Date and (ii) any amounts of interest on
Loans and fees received from the Agent which relate to the portion of the Loans
assigned to the Assignee hereunder for periods prior to the Effective Date, in
the case of Floating Rate Loans or fees, or the Payment Date, in the case of
Eurodollar Loans, and not previously paid by the Assignee to the Assignor.]*
In the event that either party hereto receives any payment to which the other
party hereto is entitled under this Assignment Agreement, then the party
receiving such amount shall promptly remit it to the other party hereto.
*Each Assignor may insert its standard payment provisions in lieu of the
payment terms included in this Exhibit.
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5. FEES PAYABLE BY THE ASSIGNEE. The Assignee shall pay to the
Assignor a fee on each day on which a payment of interest [or commitment fees]
is made under the Credit Agreement with respect to the amounts assigned to the
Assignee hereunder (other than a payment of interest or commitment fees for the
period prior to the Effective Date or, in the case of Eurodollar Loans, the
Payment Date, which the Assignee is obligated to deliver to the Assignor
pursuant to Section 4 hereof). The amount of such fee shall be the difference
between (i) the interest [or fee, as applicable,] paid with respect to the
amounts assigned to the Assignee hereunder and (ii) the interest [or fee, as
applicable,] which would have been paid with respect to the amounts assigned to
the Assignee hereunder if each interest rate was of 1% less than the
interest rate paid by the Borrower or if the commitment fee was of 1% less
than the commitment fee paid by the Borrower, as applicable. In addition, the
Assignee agrees to pay % of the recordation fee required to be paid to the
Agent in connection with this Assignment Agreement.
6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S
LIABILITY. The Assignor represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim created by the Assignor. It is
understood and agreed that the assignment and assumption hereunder are made
without recourse to the Assignor and that the Assignor makes no other
representation or warranty of any kind to the Assignee. Neither the Assignor
nor any of its officers, directors, employees, agents or attorneys shall be
responsible for (i) the due execution, legality, validity, enforceability,
genuineness, sufficiency or collectability of any Loan Document, including
without limitation, documents granting the Assignor and the other Lenders a
security interest in assets of the Borrower or any guarantor, (ii) any
representation, warranty or statement made in or in connection with any of the
Loan Documents, (iii) the financial condition or creditworthiness of the
Borrower or any guarantor, (iv) the performance of or compliance with any of the
terms or provisions of any of the Loan Documents, (v) inspecting any of the
Property, books or records of the Borrower, (vi) the validity, enforceability,
perfection, priority, condition, value or sufficiency of any collateral securing
or purporting to secure the Loans or (vii) any mistake, error of judgment, or
action taken or omitted to be taken in connection with the Loans or the Loan
Documents.
7. REPRESENTATIONS OF THE ASSIGNEE. The Assignee (i) confirms
that it has received a copy of the Credit Agreement, together with copies of
the financial statements requested by the Assignee and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment Agreement, (ii) agrees that it will,
independently and without reliance upon the Agent, the Assignor or any other
Lender and based on such documents and information at it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Loan Documents, (iii) appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such powers under the
Loan Documents as are delegated to the Agent by the terms thereof, together
with such powers as are reasonably incidental thereto, (iv) agrees that it will
perform in accordance with their terms all of the obligations which by the
terms of the Loan Documents are required to be performed by it as a Lender, (v)
agrees that its payment instructions and notice instructions are as set forth
in the
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attachment to Schedule 1, (vi) confirms that none of the funds, monies, assets
or other consideration being used to make the purchase and assumption hereunder
are "plan assets" as defined under ERISA and that its rights, benefits and
interests in and under the Loan Documents will not be "plan assets" under
ERISA, [and (vii) attaches the forms prescribed by the Internal Revenue Service
of the United States certifying that the Assignee is entitled to receive
payments under the Loan Documents without deduction or withholding of any
United States federal income taxes].
8. INDEMNITY. The Assignee agrees to indemnify and hold the Assignor
harmless against any and all losses, costs and expenses (including, without
limitation, reasonable attorneys' fees) and liabilities incurred by the Assignor
in connection with or arising in any manner from the Assignee's non-performance
of the obligations assumed under this Assignment Agreement.
9. SUBSEQUENT ASSIGNMENTS. After the Effective Date, the Assignee
shall have the right pursuant to Section 12.3.1 of the Credit Agreement to
assign the rights which are assigned to the Assignee hereunder to any entity or
person, provided that (i) any such subsequent assignment does not violate any of
the terms and conditions of the Loan Documents or any law, rule, regulation,
order, writ, judgment, injunction or decree and that any consent required under
the terms of the Loan Documents has been obtained and (ii) unless the prior
written consent of the Assignor is obtained, the Assignee is not thereby
released from its obligations to the Assignor hereunder, if any remain
unsatisfied, including, without limitation, its obligations under Sections 4, 5
and 8 hereof.
10. REDUCTIONS OF AGGREGATE COMMITMENT. If any reduction in the
Aggregate [Facility ___] Commitment occurs between the date of this Assignment
Agreement and the Effective Date, the percentage interest specified in Item 3
of Schedule 1 shall remain the same, but the dollar amount purchased shall be
recalculated based on the reduced Aggregate [Facility ___] Commitment.
*to be inserted if required by the Credit Agreement.
**to be inserted if the Assignee is not incorporated under the laws of the
United States, or a state thereof.
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11. ENTIRE AGREEMENT. This Assignment Agreement and the attached
Notice of Assignment embody the entire agreement and understanding between the
parties hereto and supersede all prior agreements and understandings between
the parties hereto relating to the subject matter hereof.
12. GOVERNING LAW. This Assignment Agreement shall be governed by
the internal law, and not the law of conflicts, of the State of Illinois.
13. NOTICES. Notices shall be given under this Assignment Agreement
in the manner set forth in the Credit Agreement. For the purpose hereof, the
addresses of the parties hereto (until notice of a change is delivered) shall
be the address set forth in the attachment to Schedule 1.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement by their duly authorized officers as of the date first above written.
[NAME OF ASSIGNOR]
By:
----------------------------
Title:
----------------------------
----------------------------
----------------------------
[NAME OF ASSIGNEE]
By:
----------------------------
Title:
----------------------------
----------------------------
----------------------------
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SCHEDULE 1
to Assignment Agreement
1. Description and Date of Credit Agreement: Credit Agreement by and
among Northland Cable Properties Four Limited Partnership, The First
National Bank of Chicago individually and as Agent, and the Lenders
party thereto dated August 31, 1995.
2. Date of Assignment Agreement: ____________, 19__
3. Amounts (As of Date of Item 2 above):
Facility Facility
A B
-------- --------
a. Total of Commitments
(Loans)* under
Credit Agreement $_______ $_______
b. Assignee's Percentage
of each Facility purchased
under the Assignment
Agreement** ________% ________%
c. Amount of Assigned Share in
each Facility purchased under
the Assignment
Agreement $_______ $_______
4. Assignee's Aggregate (Loan
Amount)* Commitment Amount
Purchased Hereunder: $_______
5. Proposed Effective Date:
Accepted and Agreed:
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By: By:
-------------------------- --------------------------
Title: Title:
----------------------- -----------------------
* If a Commitment has been terminated, insert outstanding Loans in place
of Commitment
** Percentage taken to 10 decimal places
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118
Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT
Attach Assignor's Administrative Information Sheet, which must
include notice address for the Assignor and the Assignee
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119
EXHIBIT "1"
TO ASSIGNMENT AGREEMENT
NOTICE
OF ASSIGNMENT
___________, 19__
To: The First National Bank of Chicago Northland Cable Properties Four
One First National Plaza Limited Partnership
Chicago, Illinois 60670 1201 Third Avenue
Suite 3600
Attention: Communications Division Seattle, Washington 98101
Attention: Gary Jones
From: [NAME OF ASSIGNOR] (the "Assignor")
[NAME OF ASSIGNEE] (the "Assignee")
1. We refer to that Credit Agreement (the "Credit Agreement")
described in Item 1 of Schedule 1 attached hereto ("Schedule 1"). Capitalized
terms used herein and not otherwise defined herein shall have the meanings
attributed to them in the Credit Agreement.
2. This Notice of Assignment (this "Notice") is given and
delivered to the Borrower and the Agent pursuant to Sections 12.3.2 of the
Credit Agreement.
3. The Assignor and the Assignee have entered into an Assignment
Agreement, dated as of ___________, 19__ (the "Assignment"), pursuant to which,
among other things, the Assignor has sold, assigned, delegated and transferred
to the Assignee, and the Assignee has purchased, accepted and assumed from the
Assignor the percentage interest specified in Item 3 of Schedule 1 of all
outstanding, rights and obligations under the Credit Agreement relating to the
facilities listed in Item 3 of Schedule 1. The Effective Date of the
Assignment shall be the later of the date specified in Item 5 of Schedule 1 or
two Business Days (or such shorter period as agreed to by the Agent) after this
Notice of Assignment and any consents and fees required by Sections 12.3.1 and
12.3.2 of the Credit Agreement have been delivered to the Agent, provided that
the Effective Date shall not occur if any condition precedent agreed to by the
Assignor and the Assignee has not been satisfied.
4. The Assignor and the Assignee hereby give to the Agent notice
of the assignment and delegation referred to herein. The Assignor will confer
with the Agent before the date specified in Item 5 of Schedule 1 to determine
if the Assignment Agreement will become effective on such date pursuant to
Section 3 hereof, and will confer with the Agent to determine the Effective
Date pursuant to Section 3 hereof if it occurs thereafter. The Assignor shall
notify the Agent if the Assignment Agreement does not become effective on any
proposed Effective Date as a result of the failure to satisfy the conditions
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120
precedent agreed to by the Assignor and the Assignee. At the request of the
Agent, the Assignor will give the Agent written confirmation of the
satisfaction of the conditions precedent.
5. The Assignor or the Assignee shall pay to the Agent on or
before the Effective Date the processing fee of $4,000 required by Section
12.3.2 of the Credit Agreement.
6. If Notes are outstanding on the Effective Date, the Assignor
and the Assignee request and direct that the Agent prepare and cause the
Borrower to execute and deliver new Notes or, as appropriate, replacements
notes, to the Assignor and the Assignee. The Assignor and, if applicable, the
Assignee each agree to deliver to the Agent the original Note received by it
from the Borrower upon its receipt of a new Note in the appropriate amount.
7. The Assignee advises the Agent that notice and payment
instructions are set forth in the attachment to Schedule 1.
8. The Assignee hereby represents and warrants that none of the
funds, monies, assets or other consideration being used to make the purchase
pursuant to the Assignment are "plan assets" as defined under ERISA and that
its rights, benefits, and interests in and under the Loan Documents will not be
"plan assets" under ERISA.
9. The Assignee authorizes the Agent to act as its agent under
the Loan Documents in accordance with the terms thereof. The Assignee
acknowledges that the Agent has no duty to supply information with respect to
the Borrower or the Loan Documents to the Assignee until the Assignee becomes a
party to the Credit Agreement.*
*May be eliminated if Assignee is a party to the Credit Agreement prior to the
Effective Date.
NAME OF ASSIGNOR NAME OF ASSIGNEE
By: By:
---------------------------- ----------------------------------
Title: Title:
------------------------- -------------------------------
ACKNOWLEDGED AND CONSENTED TO BY ACKNOWLEDGED AND CONSENTED TO BY
THE FIRST NATIONAL BANK OF CHICAGO NORTHLAND CABLE PROPERTIES FOUR
LIMITED PARTNERSHIP
By: By:
---------------------------- ----------------------------------
Title: Title:
------------------------- -------------------------------
[Attach photocopy of Schedule 1 to Assignment]
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EXHIBIT "I"
LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION
To The First National Bank of Chicago,
as Agent (the "Agent") under the Credit Agreement
Described Below.
Re: Credit Agreement, dated August 31, 1995 (as the same may be amended or
modified, the "Credit Agreement"), among Northland Cable Properties
Four Limited Partnership (the "Borrower"), the Agent, and the Lenders
named therein Terms used herein and not otherwise defined shall have
the meanings assigned thereto in the Credit Agreement.
The Agent is specifically authorized and directed to act upon the
following standing money transfer instructions with respect to the proceeds of
Advances or other extensions of credit from time to time until receipt by the
Agent of a specific written revocation of such instructions by the Borrower,
provided, however, that the Agent may otherwise transfer funds as hereafter
directed in writing by the Borrower in accordance with Section 13.1 of the
Credit Agreement or based on any telephonic notice made in accordance with
Section 2.13 of the Credit Agreement.
Facility Identification Number(s)
-----------------------------------------------
Customer/Account Name
-----------------------------------------------------------
Transfer Funds To
---------------------------------------------------------------
-----------------------------------
-----------------------------------
For Account No.
-----------------------------------------------------------------
Reference/Attention To
----------------------------------------------------------
Authorized Officer (Customer Representative) Date
-------------------------------
- ------------------------------- ---------------------------
(Please Print) Signature
Bank Officer Name Date
-----------------------
- ------------------------------- ---------------------------
(Please Print) Signature
(Deliver Completed Form to Credit Support Staff For Immediate Processing)
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FACILITY A NOTE
$3,000,000 August 31, 1995
NORTHLAND CABLE PROPERTIES FOUR LIMITED PARTNERSHIP, a Washington limited
partnership (the "Borrower"), promises to pay to the order of THE FIRST NATIONAL
BANK OF CHICAGO (the "Lender") the lesser of the principal sum of Three Million
Dollars or the aggregate unpaid principal amount of all Loans made by the Lender
to the Borrower under Facility A pursuant to Article II of the Credit Agreement
(as the same may be amended or modified, the "Agreement") hereinafter referred
to, in immediately available funds at the main office of The First National Bank
of Chicago in Chicago, Illinois, as Agent, together with interest on the unpaid
principal amount hereof at the rates and on the dates set forth in the
Agreement. The Borrower shall pay the principal of and accrued and unpaid
interest on the Loans in full on the Facility Termination Date and shall make
such mandatory payments as are required to be made under the terms of Article II
of the Agreement.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Loan and the date and amount of each principal
payment hereunder.
This Note is one of the Notes issued pursuant to, and is entitled to the
benefits of, the Credit Agreement, dated as of August 31,1995 among the
Borrower, The First National Bank of Chicago, individually and as Agent, and the
lenders named therein, including the Lender, to which Agreement, as it may be
amended from time to time, reference is hereby made for a statement of the terms
and conditions governing this Note, including the terms and conditions under
which this Note may be prepaid or its maturity date accelerated. Capitalized
terms used herein and not otherwise defined herein are used with the meanings
attributed to them in the Agreement.
NORTHLAND CABLE PROPERTIES FOUR
LIMITED PARTNERSHIP
By: NORTHLAND COMMUNICATIONS
CORPORATION, ITS MANAGING
GENERAL PARTNER
By: /s/ James A. Penney
------------------------------
James A. Penney
Vice President
123
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
FACILITY A NOTE OF
NORTHLAND CABLE PROPERTIES FOUR LIMITED PARTNERSHIP,
DATED AUGUST 31, 1995
Maturity
Principal Maturity Principal
Amount of of Interest Amount Unpaid
Date Loan Period Paid Balance
- -------------------------------------------------------------------
Page 2
124
FACILITY B NOTE
$20,000,000 August 31, 1995
NORTHLAND CABLE PROPERTIES FOUR LIMITED PARTNERSHIP, a Washington
corporation (the "Borrower"), promises to pay to the order of THE FIRST NATIONAL
BANK OF CHICAGO (the "Lender") the lesser of the principal sum of Twenty Million
Dollars or the aggregate unpaid principal amount of all Loans made by the Lender
to the Borrower under Facility B pursuant to Article II of the Credit Agreement
(as the same may be amended or modified, the "Agreement") hereinafter referred
to, in immediately available funds at the main office of The First National Bank
of Chicago in Chicago, Illinois, as Agent, together with interest on the unpaid
principal amount hereof at the rates and on the dates set forth in the
Agreement. The Borrower shall pay the principal of and accrued and unpaid
interest on the Loans in full on the Facility Termination Date and shall make
such mandatory payments as are required to be made under the terms of Article II
of the Agreement.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Loan and the date and amount of each principal
payment hereunder.
This Note is one of the Notes issued pursuant to, and is entitled to the
benefits of, the Credit Agreement, dated as of August 31, 1995 among the
Borrower, The First National Bank of Chicago, individually and as Agent, and the
lenders named therein, including the Lender, to which Agreement, as it may be
amended from time to time, reference is hereby made for a statement of the terms
and conditions governing this Note, including the terms and conditions under
which this Note may be prepaid or its maturity date accelerated. Capitalized
terms used herein and not otherwise defined herein are used with the meanings
attributed to them in the Agreement.
NORTHLAND CABLE PROPERTIES FOUR
LIMITED PARTNERSHIP
By: NORTHLAND COMMUNICATIONS
CORPORATION, ITS MANAGING
GENERAL PARTNER
By: /s/ James A. Penney
------------------------------
James A. Penney
Vice President
125
SCHEDULE "1"
LENDER COMMITMENTS
(see Definitions)
FACILITY A FACILITY B
BANK COMMITMENT COMMITMENT TOTAL
- ---- ---------- ---------- -----
The First National Bank of $3,000,000 $20,000,000 $23,000,000
Chicago (Agent)
========== =========== ===========
AGGREGATE COMMITMENTS $3,000,000 $20,000,000 $23,000,000
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