EXHIBIT 99.9
LOAN AND SECURITY AGREEMENT
by and among
CAI WIRELESS SYSTEMS, INC.
as Borrower and an Obligor,
THE SUBSIDIARIES OF CAI WIRELESS SYSTEMS, INC. NAMED HEREIN
as the other Obligors,
THE FINANCIAL INSTITUTIONS NAMED HEREIN
as the Lenders,
and
FOOTHILL CAPITAL CORPORATION
as Agent
Dated as of May 16, 1997
TABLE OF CONTENTS
PAGE(S)
SCHEDULES AND EXHIBITS
Schedule C-1 Commitments
Schedule N-1 Non-Material Subsidiaries
Schedule P-1 Permitted Liens
Schedule P-2 Certain Investments existing on the Closing Date
Schedule P-3 Certain Channels re Charlotte, North Carolina BTA
Schedule 3.3(m) Certain Channel Leases required to be Amended
Schedule 5.7 Borrower Chief Executive Office and FEIN
Schedule 5.8 Subsidiaries
Schedule 5.13 ERISA Benefit Plans
Schedule 5.15 Brokerage Fees
Schedule 5.16 Certain Governmental Approvals
Schedule 5.18 Compliance with Laws, etc.
Schedule 5.19(a) Wireless Telecommunications Systems
Schedule 5.19(b)(i) System Agreements
Schedule 5.19(b)(ii) Excepted System Agreements
Schedule 5.19(c)(i) FCC Licenses and Applications
Schedule 5.19(c)(ii) Excepted FCC Licenses and Applications
Schedule 5.19(d) Channels
Schedule 5.19(f) Systems Assets Not Owned
Schedule 5.19(e) Systems Operating Documentation Not Possessed
Schedule 5.20 Interference
Schedule 5.21 Line of Sight Households
Schedule 5.22 Lease Agreements
Schedule 6.13 Location of Inventory and Equipment
Schedule 7.1(g) Certain Indebtedness of Covenant Parties other than
Borrower
Schedule 7.1(I) Certain Indebtedness existing on the Closing Date
Schedule 7.14 Certain Transactions with Affiliates or Associates
existing on the Closing Date
Exhibit A-1 Form of Assignment and Assumption
Exhibit A-2 Form of Additional Discount Amount Note
Exhibit C-1 Form of Compliance Certificate
Exhibit R-1 Form of Revolving Note
Exhibit T-1 Form of Term Note A
Exhibit T-2 Form of Term Note B
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (THIS "AGREEMENT"), is entered
into as of May 16, 1997, among the financial institutions listed on the
signature pages hereof (such financial institutions, together with
their respective successors and assigns, are referred to hereinafter
each individually as a "Lender" and collectively as the "Lenders"),
FOOTHILL CAPITAL CORPORATION, a California corporation, as agent for
the Lenders ("Agent"), with a place of business located at 11111 Santa
Monica Boulevard, Suite 1500, Los Angeles, California 90025-3333, CAI
WIRELESS SYSTEMS, INC., a Connecticut corporation ("Borrower"), with
its chief executive office located at 18 Corporate Woods Boulevard, 3rd
Floor, Albany, New York 12211, HAMPTON ROADS WIRELESS, INC., a Delaware
corporation ("Hampton"), with its chief executive office located at 520
Newtown Road, Virginia Beach, Virginia 23426, WASHINGTON CHOICE
TELEVISION, INC., a Delaware corporation ("Washington Choice"), with
its chief executive office located at 9246 Springhill Lane, Greenbelt,
Maryland 20770, PHILADELPHIA CHOICE TELEVISION, INC., a Delaware
corporation ("Philadelphia Choice"), with its chief executive office
located at 2510 Metropolitan Drive, Trevose, Pennsylvania 19053,
ATLANTIC MICROSYSTEMS, INC., a Delaware corporation ("AMI"), with its
chief executive office located at 18 Corporate Woods Boulevard, 3rd
Floor, Albany, New York 12211, CAI WIRELESS INTERNET, INC., a Delaware
corporation ("Internet"), with its chief executive office located at 18
Corporate Woods Boulevard, 3rd Floor, Albany, New York 12211, GREATER
ALBANY WIRELESS SYSTEMS, INC., a New York corporation ("Greater
Albany"), with its chief executive office located at 7 Hemphill Place,
Suite 130, Ballston Spa, New York 12020, EASTERN NEW ENGLAND TV, INC.,
a Delaware corporation ("ENETV"), with its chief executive office
located at 296 Veazie Street, Providence, Rhode Island 02904,
COMMONWEALTH CHOICE TELEVISION, INC., a Delaware corporation
("Commonwealth Choice"), with its chief executive office located at One
Financial Center, 655 Atlantic Avenue, 4th Floor, Boston, Massachusetts
02111-2651, NEW YORK CHOICE TELEVISION, INC., a Delaware corporation
("New York Choice"), with its chief executive office located at 286
Eldridge Road, Fairfield, New Jersey 07004, ROCHESTER CHOICE
TELEVISION, INC., a Delaware corporation ("Rochester Choice"), with its
chief executive office located at 3720 Monroe Avenue, Pittsford, New
York 14534, CONNECTICUT CHOICE TELEVISION, INC., a Connecticut
corporation ("Connecticut Choice"), with its chief executive office
located at 65 Louis Street, Suite 1, Newington, Connecticut, 06111, and
ONONDAGA WIRELESS, INC., a New York corporation ("Onondaga"), with its
chief executive office located at 18 Corporate Woods Boulevard, 3rd
Floor, Albany, New York 12211.
The parties agree as follows:
.1. DEFINITIONS AND CONSTRUCTION.
. 1.1 DEFINITIONS. As used in this Agreement, the
following terms shall have the following definitions:
"ACCOUNT DEBTOR" means any Person who is or who may
become obligated under, with respect to, or on account of, an Account.
"ACCOUNTS" means all currently existing and hereafter
arising accounts, contract rights, and all other forms of obligations
owing to Borrower arising out of the sale or lease of goods or the
rendition of services by Borrower, irrespective of whether earned by
performance, and any and all credit insurance, guaranties, or security
therefor.
"ACKNOWLEDGEMENT" means an Acknowledgement and Agreement
to Be Bound, in form and substance satisfactory to the Lender, executed
and delivered by each of the Covenant Parties (other than the Obligors)
in favor of the Lender Group.
"ADDITIONAL DISCOUNT AMOUNT" has the meaning set forth in
SECTION 2.11(B).
"ADDITIONAL DISCOUNT AMOUNT NOTE" has the meaning set
forth in SECTION 2.11(B).
"ADDITIONAL DISCOUNT AMOUNT PIK INTEREST PAYMENT OPTIONS"
has the meaning set forth in SECTION 2.6(D)(III).
"ADDITIONAL DISCOUNT AMOUNT REGULAR INTEREST PAYMENT
OPTION" has the meaning set forth in SECTION 2.6(D)(III).
"ADVANCE FUNDING BLOCKAGE NOTICE" has the meaning set
forth in SECTION 2.1(D).
"ADVANCES" has the meaning set forth in SECTION 2.1(A).
"AFFILIATE" means, as applied to any Person, (a) any
other Person who directly or indirectly controls, is controlled by, is
under common control with or is a director or officer of such Person,
and (b) in the case where such Person is a Lender, (i) any investment
fund or managed account that is managed by such Lender or such other
Person referred to in clause (a) above in respect of such Lender, and
(ii) any investment manager of such investment fund or managed account.
For purposes of this definition, "control" means the possession,
directly or indirectly, of the power to vote 5% or more of the
securities having ordinary voting power for the election of directors
or the direct or indirect power to direct the management and policies
of a Person.
"AGENT" means Foothill, solely in its capacity as agent
for the Lenders, and shall include any successor agent.
"AGENT'S ACCOUNT" has the meaning set forth in SECTION
2.7.
"AGENT ADVANCE" has the meaning set forth in SECTION
2.1(F).
"AGENT'S LIENS" has the meaning set forth in SECTION 4.1.
"AGENT-RELATED PERSONS" means Agent and any successor
agent, together with their respective Affiliates, and the officers,
directors, employees, counsel, agents, and attorneys-in-fact of such
Persons and Affiliates.
"AGREEMENT" has the meaning set forth in the preamble
hereto.
"[CONFIDENTIAL TREATMENT REQUESTED]
"ALTERNATIVE USE" means the provision of service other
than Wireless Cable Service through the use of, among others, ITFS,
MDS, and MMDS channels, including two-way transmission services and
fixed or mobile telecommunications services.
"ALTERNATIVE USE APPLICATION" means an application filed
by any Covenant Party or the Licensee of a Channel to provide an
Alternative Use, including an application for developmental authority,
experimental authority, or special temporary authority or any Booster
Application requesting to provide an Alternative Use.
"AMI" has the meaning ascribed to such term in the
preamble to this Agreement.
"AMI LICENSE" means AMI License, Inc., a Delaware
corporation.
"APPLICABLE EARLY TERMINATION PREMIUM" means (a) during
the first year after the Closing Date, an amount equal to (i) $75,000
times (ii) the number of months (whole or partial) remaining until the
end of the first year from the Closing Date, and (b) thereafter,
$75,000.
"ASSET DISPOSITION" means any sale, exchange, or other
disposition, directly or indirectly (including any loss, destruction,
or condemnation), of any of the properties or assets of any of the
Covenant Parties.
"ASSIGNEE" has the meaning set forth in SECTION 15.1.
"ASSIGNMENT AGREEMENTS" means, individually and
collectively, the several Bill of Sale and Assignment Agreements (or
other similar or related transfer documents) between Borrower and each
of the System Subs, each in form and substance satisfactory to the
Lenders, whereby Borrower transfers to each System Sub all of
Borrower's right, title, and interest in and to all Equipment and Tower
Site Leases relating to the operation of business of such System Sub;
[CONFIDENTIAL TREATMENT REQUESTED]
"ASSIGNMENT AND ASSUMPTION" has the meaning set forth in
SECTION 15.1 and shall be in the form of EXHIBIT A-1 attached hereto.
"ASSOCIATE" means, with respect to any Person: (i) a
corporation or other organization (other than the Covenant Parties) of
which such Person is an officer, member, or partner, or, directly or
indirectly, the beneficial owner of 10% or more of any class of equity
securities of such corporation or other organization; (ii) any trust or
other estate in which such Person or any other Associate has a
substantial beneficial interest or as to which such Person serves as
trustee or in a similar capacity; and (iii) any relative or spouse of
such Person, or any relative of such spouse, who resides in the same
home as such Person or who is a director or officer of any of the
Covenant Parties.
"AUTHORIZED PERSON" means any officer or other employee
of Borrower.
"AVAILABILITY" means the amount that Borrower is entitled
to borrow as Advances under SECTION 2.1, such amount being the
difference derived when (a) the sum of the principal amount of Advances
(including Agent Advances and Foothill Loans) then outstanding
(including any amounts that the Lender Group may have paid for the
account of Borrower pursuant to any of the Loan Documents and that have
not been reimbursed by Borrower) is subtracted from (b) the Maximum
Revolving Amount.
"AVERAGE UNUSED PORTION OF TOTAL FACILITY" means, as of
any date of determination, (a) the sum of (i) the Maximum Revolving
Amount, (ii) the Maximum Term Loan B Amount, and (iii) the Term Loan A
Amount, LESS (b) the sum of (i) the average Daily Balance of Advances
that were outstanding during the immediately preceding month, (ii) the
then outstanding balance of the Term Loans B (excluding, however, the
amount of accrued interest compounded under SECTION 2.6(D)(II)), and
(iii) the then outstanding balance of the Term Loans A (excluding,
however, the amount of accrued interest compounded under SECTION
2.6(D)(IV)).
"BANKRUPTCY CODE" means the United States Bankruptcy Code
(11 U.S.C. ' 101 ET SEQ.), as amended, and any successor statute.
"BANX" means BANX Partnership, a Delaware general
partnership.
"BANX AFFILIATES" means Bell Atlantic Corporation, a
Delaware corporation, and NYNEX Corporation, a Delaware corporation,
and their Affiliates.
"BANX DOCUMENTS" means the Convertible Notes, the
Securities Purchase Agreement, the BANX Preferred Stock (including the
certificate of designation with respect thereto), the BANX Warrants,
the Business Relationship Agreement, the Modification Agreement, and
the Modification Agreement First Amendment.
"BANX GUARANTEE AGREEMENT" means that certain Guaranty by
one or more of the Covenant Parties in favor of BANX.
"BANX GUARANTOR SECURITY AGREEMENT" means that certain
Guarantor Security Agreement by one or more of the Covenant Parties in
favor of BANX.
[CONFIDENTIAL TREATMENT REQUESTED]
"BANX PLEDGE AND SECURITY AGREEMENT" means that certain
Pledge and Security Agreement by one or more of the Covenant Parties in
favor of BANX.
"BANX PREFERRED STOCK" means 7,000 shares of Borrower's
14% senior preferred Stock, par value $10,000 per share, issued by
Borrower to BANX pursuant to the Securities Purchase Agreement.
"BANX WARRANTS" means warrants to purchase shares of
Borrower's voting convertible preferred Stock, which warrants were
issued to BANX pursuant to the Securities Purchase Agreement.
"BENEFIT PLAN" means a "defined benefit plan" (as defined
in Section 3(35) of ERISA) for which Borrower, any Subsidiary of
Borrower, or any ERISA Affiliate has been an "employer" (as defined in
Section 3(5) of ERISA) within the past six years.
"BOOKS" means all of Borrower's books and records
including: ledgers; records indicating, summarizing, or evidencing
Borrower's properties or assets (including the Collateral) or
liabilities; all information relating to Borrower's business operations
or financial condition; and all computer programs, disk or tape files,
printouts, runs, or other computer prepared information.
"BOOSTER APPLICATION" means an application filed by any
ITFS, MDS, or MMDS applicant, permittee, conditional licensee,
licensee, or lessee with the FCC to construct or operate a booster
station, consistent with Sections 21.913 or 74.985 and other relevant
provisions of the FCC Rules, as amended from time to time.
"BOOSTER LICENSE" means a License for a booster station.
"BORROWER" has the meaning ascribed to such term in the
preamble to this Agreement.
"BORROWING" means a borrowing hereunder consisting of
Advances, Term Loans B, or Term Loans A made on the same day by the
Lenders to Borrower, or by Foothill in the case of a Foothill Loan, or
by Agent in the case of an Agent Advance.
"BOTT" means George Bott.
"BOTT TRUSTEE" means Woodrow Baker, as trustee of The
Bott Family Trust.
"BOTT DOCUMENTS" means: (a) (i) that certain Stock
Purchase Agreement, dated as of January 12, 1996, between Borrower and
the Bott Parties, in respect of the Stock of Onondaga and Chenango;
(ii) that certain Pledge Agreement, dated as of January 12, 1996, among
Borrower, the Bott Parties, and Lombardi, Reinhard, Walsh & Harrison,
P.C. as Pledge Agent for the Bott Parties, in respect of the Stock of
Chenango; (iii) that certain Guarantee and Security Agreement, dated as
of January 12, 1996, between Chenango and the Bott Trustee; (iv) that
certain Escrow Agreement, dated as of January 12, 1996, among Bott,
Borrower, and Day, Berry & Howard, as Escrow Agent; and (v) that
certain Promissory Note, dated January 12, 1996, by Borrower to the
order of the Bott Trustee, in the original principal amount of
$1,430,000; and (b) (i) that certain Stock Purchase Agreement, dated as
of March 30, 1994, between Borrower and the Bott Parties, in respect of
the Stock of Housatonic, Onteo, and Niskayuna; (ii) that certain
Promissory Note, dated March 30, 1994, by Borrower to the order of
Bott, in the original principal amount of $3,200,000; (iii) that
certain Promissory Note, dated March 30, 1994, by Borrower to the order
of the Bott Trustee, in the original principal amount of $550,000; (iv)
that certain Pledge Agreement, dated as of March 30, 1994, among
Borrower, Bott, and Lombardi, Reinhard, Walsh & Harrison, P.C. as
Pledge Agent for Bott, in respect of the Stock of Onteo and Housatonic;
(v) that certain Pledge Agreement, dated as of March 30, 1994, among
Borrower, the Bott Trustee, and Lombardi, Reinhard, Walsh & Harrison,
P.C. as Pledge Agent for the Bott Trustee, in respect of the Stock of
Niskayuna; (vi) that certain Guarantee and Security Agreement, dated as
of March 30, 1994, among Onteo, Houstonic, and Bott; (vii) that certain
Guarantee and Security Agreement, dated as of March 30, 1994, between
Niskayuna and the Bott Trustee; and (viii) that certain Escrow
Agreement, dated as of March 30, 1994, between Lombardi, Reinhard,
Walsh & Harrison, on the one hand, and Day, Berry & Howard, on the
other hand.
"BOTT PARTIES" means, collectively, Bott and the Bott
Trustee.
"BOTT-RESTRICTED SUBSIDIARIES" means, collectively,
Chenango, Niskayuna, Onteo, and Housatonic.
"BTA" means basic trading area, as defined by Rand
McNally and used by the FCC in licensing MDS and MMDS channels pursuant
to the competitive bidding process.
"BTA AUTHORIZATION" means the Permit granted by the FCC
to apply for individual MDS and MMDS channels within a certain BTA.
"BUSINESS DAY" means any day that is not a Saturday,
Sunday, or other day on which national banks are authorized or required
to close.
"BUSINESS PLAN" means the business plan of the Covenant
Parties delivered to the Original Lenders on or about May 14, 1997, in
form and substance (including as to scope and duration and underlying
assumptions) satisfactory to the Lenders.
"BUSINESS RELATIONSHIP AGREEMENT" means that certain
Business Relationship Agreement, dated as of March 28, 1995, by and
among Borrower, Nynex MMDS Company, and MMDS Holdings, Inc., as amended
through the Closing Date, and as the same thereafter may be amended,
restated, supplemented, or otherwise modified from time to time in
accordance with the terms of the Loan Documents.
"CANPARTNERS" means Canpartners Investments IV, LLC, a
California limited liability company.
"CANYON LENDER" means Canpartners, FinVest, TVRF, or any
Affiliate (other than individuals) of any of the foregoing that, after
the Closing Date, is an Assignee and a Lender.
"CHANGE OF CONTROL" shall be deemed to have occurred at
such time as: (a)(i) a "person" or "group" (within the meaning of
Sections 13(d) and 14(d)(2) of the Exchange Act) becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of more than 50% of the total voting power of
all classes of Stock then outstanding of Borrower entitled to vote in
the election of directors; or (ii) a majority of members of the board
of directors of Borrower shall not be Continuing Directors; or (b)
Borrower shall cease to own and control, beneficially, directly, and of
record, 100% of the issued and outstanding capital Stock of each of the
Covenant Parties (other than Borrower); PROVIDED, HOWEVER, that no
Permitted Venture Subsidiary Transaction shall be deemed to trigger a
Change of Control under the preceding clause (b).
"CHANNELS" means the ITFS, MDS, or MMDS frequencies
licensed, or expected to be licensed, to one or more of the Covenant
Parties by the FCC pursuant to an FCC License or made available to one
or more of the Covenant Parties by an ITFS, MDS, or MMDS applicant,
permittee, conditional licensee or licensee pursuant to a Channel
Lease, including any frequencies associated with any booster station,
repeater station, response station hub or any facility used to provide
an Alternative Use.
"CHANNEL LEASES" means all leases or licenses to use
transmission capacity held by or for benefit of one or more of the
Covenant Parties relating to the use by one or more of the Covenant
Parties of the transmission capacity on ITFS, MDS, or MMDS frequencies
licensed by the FCC.
"CHANNEL LICENSE" means any Permit for a Channel granted
by the FCC to any one or more Covenant Parties or to a lessor of a
Channel Lease, or any application pending before the FCC for such
Permit.
"CHENANGO" means Chenango Associates, Inc.
"CLOSING DATE" means the date of the first to occur of
the making of the initial Loan.
"CODE" means the New York Uniform Commercial Code.
"COLLATERAL" means all right, title, or interest of
Borrower with respect to each of the following:
(a) the Accounts,
(b) the Books,
(c) the Equipment,
(d) the General Intangibles,
(e) the Inventory,
(f) the Negotiable Collateral,
(g) any money, or other assets of Borrower that now or
hereafter come into the possession, custody, or control
of any member of the Lender Group, and
(h) the proceeds and products, whether tangible or
intangible, of any of the foregoing, including proceeds
of insurance covering any or all of the Collateral, and
any and all Accounts, the Books, Equipment, General
Intangibles, Inventory, Negotiable Collateral, Real
Property, money, deposit accounts, or other tangible or
intangible property resulting from the sale, exchange,
collection, or other disposition of any of the foregoing,
or any portion thereof or interest therein, and the
proceeds thereof.
PROVIDED, HOWEVER, that the Collateral shall not include the Excluded
Property.
"COLLATERAL ACCESS AGREEMENT" means a landlord waiver or
consent, mortgagee waiver or consent, bailee letter, or a similar
acknowledgement agreement of any warehouseman, processor, or other
Person in possession of Collateral, in each case, in form and substance
reasonably satisfactory to each Lender.
"COLLECTIONS" means all cash, checks, notes, instruments,
and other items of payment (including, insurance proceeds, proceeds of
cash sales, rental proceeds, and tax refunds) of one of the Covenant
Parties.
"COLOCATE" means to construct, modify, or relocate a
facility of an ITFS, MDS, or MMDS applicant, permittee, conditional
license, or licensee, pursuant to FCC approval and in accordance with
FCC Rules, at a common transmitter site with other ITFS, MDS, and MMDS
licensees in the same market pursuant to common technical
characteristics.
"COLOCATION APPLICATION" means an application filed by an
ITFS, MDS, or MMDS applicant permittee, conditional licensee, or
licensee pursuant to the FCC Rules, that has not been dismissed or
denied by the FCC, to Colocate a facility at the relevant Colocation
Site, provided such application satisfies and complies with the FCC
Rules, including the interference protection requirements set forth in
47 C.F.R. sections 21.902, 21.938 and 74.903, and includes all
necessary consent and no objection letters.
"COLOCATION SITE" means the site at which the facilities
for the corresponding Channel are, or are to be, colocated at a common
transmitter site with other Channels that are used to provide Wireless
Telecommunication Service on the System.
"COMMITMENT" means, at any time with respect to a Lender
and with respect to any Loan Type, the commitment of that Lender to
make Loans of that Loan Type in the aggregate principal amount set
forth beside such Lender's name under the heading "Commitment" for that
Loan Type on SCHEDULE C-1 attached hereto or on the signature page of
the Assignment and Assumption pursuant to which such Lender became a
Lender hereunder in accordance with the provisions of SECTION 15.1, as
such Loan Type Commitment may be adjusted from time to time in
accordance with the provisions of SECTION 15.1, and "COMMITMENTS"
means, at any time with respect to all Lenders and with respect to any
Loan Type, collectively, the aggregate amount of the Commitments of all
of the Lenders to make Loans of that Loan Type.
"COMMONWEALTH CHOICE" has the meaning ascribed to such
term in the preamble to this Agreement.
"COMPLIANCE CERTIFICATE" means a certificate
substantially in the form of EXHIBIT C-1 and delivered by the chief
accounting officer of Borrower to the Lenders.
"COMMUNICATIONS ACT" means the Communications Act of
1934, as amended, 47 U.S.C. sec. 151 ET SEQ.
"CONCENTRATION ACCOUNT" has the meaning set forth in
SECTION 2.7.
"CONCENTRATION ACCOUNT AGREEMENT" means that certain
concentration account agreement, in form and substance satisfactory to
Agent, among Borrower, Agent, and the Designated Account Bank.
"CONCENTRATION DEADLINE" has the meaning set forth in
SECTION 2.7.
"CONNECTICUT CHOICE" has the meaning ascribed to such
term in the preamble to this Agreement.
"CONTINUING DIRECTOR" means, as of any date of
determination, a member of the board of directors of Borrower who (a)
was a member of the board of directors of Borrower on the Closing Date,
or (b) was nominated to be a member of the board of directors of
Borrower by a majority of the Continuing Directors then in office to
fill a vacancy left by the death, permanent disability, or resignation
of a Continuing Director.
"CONTROL AGREEMENT" means a control agreement, in form
and substance satisfactory to each Lender, between Borrower, Agent, and
the applicable securities intermediary, that provides (among other
things) that, from and after the giving of notice by Agent to such
securities intermediary (a "Notice of Exclusive Control"), such
securities intermediary shall take instructions solely from Agent with
respect to the applicable Securities Account and related Investment
Property.
"COVENANT PARTIES" means Borrower and each of its
Subsidiaries, EXCLUDING, HOWEVER, the Non-Material Subsidiaries.
"CONVERTIBLE NOTES" means the $30,000,000 14%
subordinated convertible term notes due 2005 issued by Borrower
pursuant to the Securities Purchase Agreement.
"CS WIRELESS" means CS Wireless Systems, Inc., a Delaware
corporation.
[CONFIDENTIAL TREATMENT REQUESTED]
"DAILY BALANCE" means the amount of an Obligation or Term
Loan A Obligation owed at the end of a given day.
"DEEMS ITSELF INSECURE" means that the Person deems
itself insecure in accordance with the provisions of Section 1208 of
the Code.
"DEFAULT" means an event, condition, or default that,
with the giving of notice, the passage of time, or both, would be an
Event of Default.
"DEFAULTING LENDER" means, with respect to any Loan Type,
any Lender that: (a)(i) fails to make its Pro Rata Portion (Advances)
of any requested Borrowing for Advances that such Lender is required to
make hereunder on any Funding Date, and (ii) has failed to deliver to
Agent, and to each other Lender with a Commitment to make Loans of such
Loan Type, an Advance Funding Blockage Notice in accordance with
Section 2.1(d) with respect to any requested Advance; (b) fails to make
its Pro Rata Portion (Term Loans A) of any requested Borrowing for Term
Loans A that such Lender is required to make hereunder on the Closing
Date; or (c)(i) fails to make its Pro Rata Portion (Term Loans B) of
any requested Borrowing for Term Loans B that such Lender is required
to make hereunder on any Funding Date, and (ii) has failed to deliver
to Agent, and to each other Lender with a Commitment to make Loans of
such Loan Type, a Term Loan B Funding Blockage Notice in accordance
with Section 2.2(d) with respect to any requested Term Loan B. For the
avoidance of doubt, any Lender that delivers in good faith an Advance
Funding Blockage Notice in accordance with Section 2.1(d) with respect
to any requested Advance or a Term Loan B Funding Blockage Notice in
accordance with Section 2.2(d) with respect to any requested Term Loan
B shall not be a Defaulting Lender with respect to such Borrowing.
"DEFAULTING LENDERS RATE" means the Reference Rate for
the first 3 days from and after the date the relevant payment is due
and, thereafter, at the interest rate then applicable to Advances.
"DEPOSIT ACCOUNT SECURITY AGREEMENT" means a deposit
account security agreement, in form and substance satisfactory to the
Lenders, between Borrower and Agent.
"DESIGNATED ACCOUNT" means account number 0001562960 of
Borrower maintained with Borrower's Designated Account Bank, or such
other deposit account of Borrower (located within the United States)
which has been designated, in writing and from time to time, by
Borrower to Agent.
"DESIGNATED ACCOUNT BANK" means Fleet Bank, whose mailing
address is: P.O. Box 3091, Utica, New York 13504; with a copy to: Fleet
Investment Management, 69 State Street, 9th Floor, Albany, New York
12207, Attention - Mr. Tim Easley (tel. no. 518.447.4309), and whose
ABA number is 011-500-010.
"DISBURSEMENT LETTER" means an instructional letter
executed and delivered by Borrower to each Original Lender regarding
the extensions of credit to be made on the Closing Date, the form and
substance of which shall be satisfactory to each Original Lender.
"DISCOUNT AMOUNT" has the meaning set forth in SECTION
2.11(A).
"DOLLARS OR $" means United States dollars.
"ELIGIBLE TRANSFEREE" means: (a) a commercial bank
organized under the laws of the United States, or any state thereof,
and having total assets in excess of $100,000,000; (b) a commercial
bank organized under the laws of any other country which is a member of
the Organization for Economic Cooperation and Development or a
political subdivision of any such country, and having total assets in
excess of $100,000,000, provided that such bank is acting through a
branch or agency located in the United States; (c) a finance company,
insurance or other financial institution or fund that is engaged in
making, purchasing, or otherwise investing in commercial loans in the
ordinary course of its business and having total assets in excess of
$50,000,000; (d) any Affiliate (other than individuals) of a Lender;
and (e) any other Person approved by Agent.
"ENETV" has the meaning ascribed to such term in the
preamble to this Agreement.
"EQUIPMENT" means all of Borrower's present and hereafter
acquired machinery, machine tools, motors, equipment, furniture,
furnishings, fixtures, vehicles, tools, parts, goods (other than
consumer goods, farm products, or Inventory), wherever located,
including, (a) any interest of any of Borrower in any of the foregoing,
and (b) all attachments, accessories, accessions, replacements,
substitutions, additions, and improvements to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act
of 1974, 29 U.S.C. '' 1000 et seq., amendments thereto, successor
statutes, and regulations or guidance promulgated thereunder.
"ERISA AFFILIATE" means (a) any corporation subject to
ERISA whose employees are treated as employed by the same employer as
the employees of Borrower under IRC Section 414(b), (b) any trade or
business subject to ERISA whose employees are treated as employed by
the same employer as the employees of Borrower under IRC Section
414(c), (c) solely for purposes of Section 302 of ERISA and Section 412
of the IRC, any organization subject to ERISA that is a member of an
affiliated service group of which Borrower is a member under IRC
Section 414(m), or (d) solely for purposes of Section 302 of ERISA and
Section 412 of the IRC, any party subject to ERISA that is a party to
an arrangement with Borrower and whose employees are aggregated with
the employees of Borrower under IRC Section 414(o).
"ERISA EVENT" means (a) a Reportable Event with respect
to any Benefit Plan or Multiemployer Plan, (b) the withdrawal of
Borrower, any of its Subsidiaries or ERISA Affiliates from a Benefit
Plan during a plan year in which it was a "substantial employer" (as
defined in Section 4001(a)(2) of ERISA), (c) the providing of notice of
intent to terminate a Benefit Plan in a distress termination (as
described in Section 4041(c) of ERISA), (d) the institution by the PBGC
of proceedings to terminate a Benefit Plan or Multiemployer Plan,
(e) any event or condition (i) that provides a basis under
Section 4042(a)(1), (2), or (3) of ERISA for the termination of, or the
appointment of a trustee to administer, any Benefit Plan or
Multiemployer Plan, or (ii) that may result in termination of a
Multiemployer Plan pursuant to Section 4041A of ERISA, (f) the partial
or complete withdrawal within the meaning of Sections 4203 and 4205 of
ERISA, of Borrower, any of its Subsidiaries or ERISA Affiliates from a
Multiemployer Plan, or (g) providing any security to any Plan under
Section 401(a)(29) of the IRC by the Covenant Parties or any of their
ERISA Affiliates.
"ESCROW ACCOUNT" means an escrow account for the deposit
of $90,638,756.40 of the net proceeds from the sale of the Senior
Notes, and the proceeds from the investment thereof, under the Escrow
Agreement.
"ESCROW AGREEMENT" means the Escrow Agreement, dated as
of September 15, 1995, among Borrower, Chemical Bank, as escrow agent,
and Chemical Bank, as trustee.
"EVENT OF DEFAULT" has the meaning set forth in SECTION
8.
"EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended, and any successor statute thereto.
"EXCLUDED PROPERTY" means (a) from and after the date
that the CS Wireless Release Condition is satisfied, the capital Stock
of CS Wireless owned by Borrower, (b) the Escrow Account or the Escrow
Agreement, (c) the capital Stock of the Non-Material Subsidiaries, and
(d) the capital Stock of any Seller-Restricted Subsidiary solely for so
long and to the extent that a Lien thereon in favor of the Lender Group
is restricted by the applicable Seller Documents.
"FAA" means the Federal Aviation Administration or any
other federal governmental agency which may hereafter perform its
functions.
"FCC" means the Federal Communications Commission or any
governmental body or agency succeeding to the functions thereof.
"FCC CHANNEL LEASE AGREEMENT" means a channel lease
agreement by and between Lenders and each Covenant Party, in form and
substance satisfactory to the Lenders.
"FCC COOPERATION AGREEMENT" means a cooperation
agreement, by and between Agent and each Covenant Party, in form and
substance satisfactory to each Lender.
"FCC LICENSES" means the Permits, including construction
permits, issued by the FCC to any Covenant Party or any lessor under a
Channel Lease, or that are the subject of an application filed with the
FCC by any Covenant Party or any such lessor under a Channel Lease, to
operate one or more of the Channels, including any BTA Authorization,
individual Permit to construct or operate Channels within a BTA, and
any Alternative Use Permit.
"FCC RULES" means Title 47 of the Code of Federal
Regulations, as amended at any time and from time to time, and FCC
decisions issued pursuant to the adoption of such regulations.
"FEIN" means Federal Employer Identification Number.
"FINVEST" means FinVest Capital Limited.
"FOOTHILL" means Foothill Capital Corporation, a
California corporation.
"FOOTHILL LOAN" has the meaning set forth in SECTION
2.1(E).
"FUNDING DATE" means the date on which a Borrowing
occurs.
"GAAP" means generally accepted accounting principles as
in effect from time to time in the United States, consistently applied.
"GENERAL INTANGIBLES" means all of Borrower's present and
future general intangibles and other personal property (including
System Agreements, contract rights, rights arising under common law,
statutes, or regulations, choses or things in action, goodwill,
patents, trade names, trademarks, servicemarks, copyrights, blueprints,
drawings, purchase orders, customer lists, monies due or recoverable
from pension funds, route lists, rights to payment and other rights
under any royalty or licensing agreements, infringement claims,
computer programs, information contained on computer disks or tapes,
literature, reports, catalogs, deposit accounts, insurance premium
rebates, tax refunds, and tax refund claims.
"GOVERNING DOCUMENTS" means the certificate or articles
of incorporation, by-laws, or other organizational or governing
documents of any Person.
"GOVERNING DOCUMENT AMENDMENTS" means amendments to the
Governing Documents of each of the Covenant Parties (other than
Borrower) substantially in form and substance satisfactory to each
Lender.
"GOVERNMENTAL AUTHORITY" shall mean any federal, state,
local, or other governmental or administrative body, instrumentality,
department, or agency or any court, tribunal, administrative hearing
body, arbitration panel, commission, or other similar dispute-resolving
panel or body.
"GREATER ALBANY" has the meaning ascribed to such term in
the preamble to this Agreement.
"HAMPTON" has the meaning ascribed to such term in the
preamble to this Agreement.
"HAZARDOUS MATERIALS" means (a) substances that are
defined or listed in, or otherwise classified pursuant to, any
applicable laws or regulations as "hazardous substances," "hazardous
materials," "hazardous wastes," "toxic substances," or any other
formulation intended to define, list, or classify substances by reason
of deleterious properties such as igniteability, corrosivity,
reactivity, carcinogenicity, reproductive toxicity, or "EP toxicity",
(b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters,
and other wastes associated with the exploration, development, or
production of crude oil, natural gas, or geothermal resources, (c) any
flammable substances or explosives or any radioactive materials, and
(d) asbestos in any form or electrical equipment that contains any oil
or dielectric fluid containing levels of polychlorinated biphenyls in
excess of 50 parts per million.
"HOUSATONIC" means Housatonic Wireless, Inc.
"INDEBTEDNESS" means all obligations, contingent and
otherwise, that in accordance with GAAP should be classified upon the
Covenant Parties' balance sheets as liabilities, or to which reference
should be made by footnotes thereto, including in any event and whether
so classified: (a) all obligations of the Covenant Parties for borrowed
money, (b) all obligations of the Covenant Parties evidenced by bonds,
debentures, notes, or other similar instruments and all reimbursement
or other obligations of the Covenant Parties in respect of letters of
credit, bankers acceptances, interest rate swaps, or other financial
products, (c) all obligations of the Covenant Parties under capital
leases or with respect to the deferred purchase price for goods or
services, (d) all obligations or liabilities of others secured by a
Lien on any property or asset of the Covenant Parties irrespective of
whether such obligation or liability is assumed, and (e) any obligation
of the Covenant Parties guaranteeing or intended to guarantee (whether
guaranteed, endorsed, co-made, discounted, or sold with recourse to a
Covenant Party) any indebtedness, lease, dividend, letter of credit, or
other obligation of any other Person.
"INDEMNIFIED LIABILITIES" has the meaning set forth in
SECTION 11.3.
"INDEMNIFIED PERSON" has the meaning set forth in SECTION
11.3.
"INSOLVENCY PROCEEDING" means any proceeding commenced by
or against any Person under any provision of the Bankruptcy Code or
under any other bankruptcy or insolvency law, assignments for the
benefit of creditors, formal or informal moratoria, compositions,
extensions generally with creditors, or proceedings seeking
reorganization, arrangement, or other similar relief.
"INTELLECTUAL PROPERTY" has the meaning ascribed thereto
in SECTION 5.17.
"INTERNET" has the meaning ascribed to such term in the
preamble to this Agreement.
"INVESTMENT PROPERTY" means "investment property" as that
term is defined in Section 9-115 of the Official Text of the Uniform
Commercial Code.
"ITFS" means the Instructional Television Fixed Service,
a class of microwave frequencies licensed by the FCC pursuant to Part
74 of the FCC Rules primarily to educational organizations to be used
primarily for the transmission of instructional, cultural, and other
types of educational material to fixed receiving stations, the excess
capacity of which may be leased for commercial operations pursuant to
the terms and conditions set forth in the FCC Rules.
"INVENTORY" means all present and future inventory in
which Borrower has any interest, including goods held for sale or lease
or to be furnished under a contract of service and all of Borrower's
present and future raw materials, work in process, finished goods, and
packing and shipping materials, wherever located.
"IRC" means the Internal Revenue Code of 1986, as
amended, and the regulations thereunder.
"LEGAL REQUIREMENTS" means all applicable international,
foreign, federal, state, and local laws, judgments, decrees, orders,
statutes, ordinances, rules, regulations, or Permits including the
Communications Act and all orders issued and regulations promulgated
under the Communications Act.
"LENDER" and "LENDERS" have the respective meanings set
forth in the preamble to this Agreement, and shall include any other
Person made a party to this Agreement in accordance with the provisions
of SECTION 15.1 hereof.
"LENDER GROUP" means, collectively, each of the Lenders
and Agent.
"LENDER GROUP EXPENSES" means all: costs or expenses
(including taxes, and insurance premiums) required to be paid by the
Covenant Parties under any of the Loan Documents that are paid or
incurred by the Lender Group or any member thereof; fees or charges
paid or incurred by the Lender Group or any member thereof in
connection with the transactions of the Lender Group or any member
thereof with the Covenant Parties under the Loan Documents, including,
fees or charges for photocopying, notarization, couriers and
messengers, telecommunication, public record searches (including tax
lien, litigation, and UCC (or equivalent) searches and including
searches with the patent and trademark office, the copyright office, or
the department of motor vehicles), filing, recording, publication,
appraisal (including periodic appraisals of the properties or assets of
the Covenant Parties), real estate surveys, real estate title policies
and endorsements, and environmental audits; costs and expenses incurred
by the Lender Group or any member thereof in the disbursement of funds
to the Covenant Parties (by wire transfer or otherwise); charges paid
or incurred by the Lender Group or any member thereof resulting from
the dishonor of checks; costs and expenses paid or incurred by the
Lender Group or any member thereof to correct any default or enforce
any provision of the Loan Documents, or in gaining possession of,
maintaining, handling, preserving, storing, shipping, selling,
preparing for sale, or advertising to sell the Collateral, or any
portion thereof, irrespective of whether a sale is consummated; costs
and expenses paid or incurred by the Agent and any other Lender
participating in the examination of the Books; costs and expenses of
third party claims or any other suit paid or incurred by the Lender
Group or any member thereof in enforcing or defending the Loan
Documents or in connection with the transactions contemplated by the
Loan Documents or the relationship of the Lender Group or any member
thereof with Borrower (or any of the other Covenant Parties) relating
to the Loan Documents; and the reasonable attorneys fees and expenses
of the Lender Group or any member thereof incurred in advising,
structuring, drafting, reviewing, administering, amending, terminating,
enforcing (including attorneys fees and expenses incurred in connection
with a "workout" or a "restructuring"), defending, or concerning the
Loan Documents, irrespective of whether suit is brought. Anything
herein to the contrary notwithstanding, Lender Group Expenses shall not
include the costs and expenses (including legal expenses) incurred by
any prospective or actual participant or Assignee in connection with
the proposed or actual purchase by such Person of a participation or
assignment under Section 15.1.
"LENDER-RELATED PERSONS" means, with respect to any
Lender, such Lender, together with such Lender's Affiliates, and the
officers, directors, employees, counsel, agents, and attorneys-in-fact
of such Lender and such Lender's Affiliates.
"LICENSEE" means an applicant, permittee, conditional
licensee, or licensee of a facility regulated by the FCC.
"LICENSE SUB" has the meaning set forth in the definition
of Post-Closing Restructuring Transactions.
"LIEN" means any interest in property securing an
obligation owed to, or a claim by, any Person other than the owner of
the property, whether such interest shall be based on the common law,
statute, or contract, whether such interest shall be recorded or
perfected, and whether such interest shall be contingent upon the
occurrence of some future event or events or the existence of some
future circumstance or circumstances, including the lien or security
interest arising from a mortgage, deed of trust, encumbrance, pledge,
hypothecation, assignment, deposit arrangement, security agreement,
adverse claim or charge, conditional sale or trust receipt, or from a
lease, consignment, or bailment for security purposes and also
including reservations, exceptions, encroachments, easements, rights-
of-way, covenants, conditions, restrictions, leases, and other title
exceptions and encumbrances affecting Real Property.
"LOAN" means an Advance (including a Foothill Loan or an
Agent Advance), a Term Loan B, or a Term Loan A, as the context may
require.
"LOAN ACCOUNT" has the meaning set forth in SECTION 2.10.
"LOAN DOCUMENTS" means this Agreement, the Disbursement
Letter, the FCC Cooperation Agreement, the Concentration Account
Agreement, the Notes, any other note or notes executed by any one or
more of the Obligors and payable to the Lender Group, the Stock Pledge
Agreement, the Suretyship Agreement, the Warrants, the Deposit Account
Security Agreement, the Securities Account Security Agreement, the
Control Agreement, the Assignment Agreements, any agreement, document,
or instrument by or between one or more of the parties hereto in
connection with this Agreement that expressly recites it is a Loan
Document, and any other agreement entered into, now or in the future,
in connection with this Agreement.
"LOAN TYPE" means the Advances (including Foothill Loans
or Agent Advances), the Term Loans A, or the Term Loans B, as the
context may require.
"MASTER SUBLEASE AGREEMENT" means that certain Channel
Sublease and Agreement, dated June 19, 1992, as amended by that certain
First Amendment to Channel Sublease and Agreement, dated March 30,
1994, as modified by that certain Modification Agreement, dated August
31, 1995, and as otherwise modified prior to the Closing Date, in each
case, by and among Borrower, Bott, and certain other parties..
"MATERIAL ADVERSE CHANGE" means; (a) a material adverse
change in the business, prospects, operations, results of operations,
assets, liabilities or condition (financial or otherwise) of Borrower
or any other Covenant Party, including the cancellation, revocation,
material impairment, or non-renewal of any Channel, Channel License,
FCC License, or System Agreement, (b) the material impairment of
Borrower's or any other Covenant Party's ability to perform its
obligations under the Loan Documents to which it is a party or of the
Lender Group to enforce the Obligations or the Term Loan A Obligations,
or realize upon the Collateral, (c) a material adverse effect on the
value of the Collateral or the amount that the Lender Group would be
likely to receive (after giving consideration to delays in payment and
costs of enforcement) in the liquidation of the Collateral, or (d) a
material impairment of the priority of Agent's Liens with respect to
the Collateral.
"MAXIMUM REVOLVING AMOUNT" means $5,000,000.
"MAXIMUM TERM LOAN B AMOUNT" means (a) before the
Lenders' receipt of evidence satisfactory to the Lenders, of the
satisfactory completion of Milestone A, $5,000,000, (b) from and after
the Lenders' receipt of evidence satisfactory to the Lenders, of the
satisfactory completion of Milestone A and before the satisfactory
completion of Milestone B, $10,000,000, (c) from and after the Lenders'
receipt of evidence satisfactory to the Lenders, of the satisfactory
completion of Milestones A and B, $20,000,000; PROVIDED, HOWEVER, that,
in no event, shall the "Maximum Term Loan B Amount" exceed $15,000,000
on or before June 30, 1997.
"MDS" means the Multipoint Distribution Service, a
domestic transmission service licensed by the FCC pursuant to Part 21
of the FCC Rules using the frequencies of 2150 to 2162 MHZ, rendered on
microwave frequencies and used primarily for the distribution of
commercial visual and audio programming.
"MESTER" means John Mester (d/b/a Connecticut Home
Theater).
"MESTER DOCUMENTS" means that certain letter agreement,
dated April 11, 1997, between John Mester d/b/a Connecticut Home
Theater and Borrower.
"MESTER-RESTRICTED SUBSIDIARY" means Springfield License,
Inc.
"MILESTONE A" shall mean an operational milestone of the
Covenant Parties mutually agreed to by Borrower and the Lenders.
"MILESTONE B" shall mean an operational milestone of the
Covenant Parties mutually agreed to by Borrower and the Lenders.
"MMDS" means Multichannel Multipoint Distribution
Service, a domestic transmission service licensed by the FCC pursuant
to Part 21 of the FCC Rules using the frequency of 2596 to 2644 MHZ,
rendered on microwave frequencies and used primarily for the
distribution of commercial visual and audio programming.
"MMDS HOLDINGS" means MMDS Holdings, Inc., a Delaware
corporation.
"MMDS HOLDINGS II" means MMDS Holdings II, Inc., a
Delaware corporation.
"MODIFICATION AGREEMENT" means that certain Modification
Agreement, dated as of December 12, 1996, by and among Borrower,
certain of Borrower's Subsidiaries, BANX, MMDS Holdings, MMDS Holdings
II, NYNEX MMDS, and NYNEX MMDS Holding, as amended through the Closing
Date, and as the same thereafter may be amended, restated,
supplemented, or otherwise modified from time to time in accordance
with the terms of the Loan Documents.
"MODIFICATION AGREEMENT FIRST AMENDMENT" means that
certain Amendment No. 1 to Modification Agreement, dated as of April
29, 1997, by and among Borrower, certain of Borrower's Subsidiaries,
BANX, MMDS Holdings, MMDS Holdings II, NYNEX MMDS, and NYNEX MMDS
Holding, as amended through the Closing Date, and as the same
thereafter may be amended, restated, supplemented, or otherwise
modified from time to time in accordance with the terms of the Loan
Documents.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" (as
defined in Section 4001(a)(3) of ERISA) to which Borrower, any of its
Subsidiaries, or any ERISA Affiliate has contributed, or was obligated
to contribute, within the past six years.
"NEGOTIABLE COLLATERAL" means all of Borrower's present
and future letters of credit, notes, drafts, instruments, Investment
Property, certificated securities (including the Stock of its
Subsidiaries (including the Venture Subsidiaries), and of TelQuest and
CS Wireless, but excluding any Excluded Property), documents, personal
property leases (wherein Borrower is the lessor), chattel paper, and
Books relating to any of the foregoing.
"NET PROCEEDS" means (a) the gross cash proceeds
(including insurance proceeds, condemnation awards, and payments
received from time to time in respect of installment obligations and
other non-cash proceeds, if applicable) received by or on behalf of any
of the Covenant Parties in respect of an Asset Disposition, LESS (b)
the sum of (i) the amount, if any, of all taxes (other than income
taxes) payable by the Covenant Parties in connection with such Asset
Disposition PLUS Borrower's good faith best estimate of the amount of
all income taxes payable in connection with such Asset Disposition,
(ii) the amount of any reasonable reserve established in accordance
with GAAP against any liabilities associated with the properties or
assets that were the subject of such Asset Disposition, provided that
the amount of any subsequent reduction of such reserve (other than in
connection with a payment in respect of any such liability) shall be
deemed to be "Net Proceeds" of an Asset Disposition occurring on the
date of such reduction, (iii) the amount applied to repay any
Indebtedness secured by a Lien upon the properties or assets that were
the subject of the Asset Disposition, to the extent such Indebtedness
is required by its terms to be repaid as a result of such Asset
Disposition, and (iv) reasonable and customary fees, including legal
fees, commissions, and expenses and other costs paid by the Covenant
Parties in connection with such Asset Disposition (other than those
payable to any Affiliate of Borrower), in each case only to the extent
not already deducted in arriving at the amount referred to in clause
(a).
"NEW YORK CHOICE" has the meaning ascribed to such term
in the preamble to this Agreement.
"NISKAYUNA" means Niskayuna Associates, Inc.
"NON-MATERIAL SUBSIDIARY" means any Subsidiary of
Borrower identified on SCHEDULE N-1 attached hereto.
"NOTES" means, collectively, the Revolving Notes, the
Term Notes B, the Term Notes A, and the Additional Discount Amount
Notes.
"NOTICE OF EXCLUSIVE CONTROL" has the meaning set forth
in the definition of "Control Agreement."
"NYNEX MMDS COMPANY" means NYNEX MMDS Company, a Delaware
corporation.
"NYNEX MMDS HOLDING" means NYNEX MMDS Holding Company, a
Delaware corporation.
"OBLIGATIONS" means all loans, Advances (including Agent
Advances), Term Loans B, Term Loans A, debts, principal, interest,
premiums (including Applicable Early Termination Premiums), liabilities
(including all amounts charged to Borrower's Loan Account pursuant
hereto), obligations, fees (including the Additional Discount Amount),
charges, costs, or Lender Group Expenses (including any fees or
expenses that, but for the provisions of the Bankruptcy Code, would
have accrued), lease payments, guaranties, covenants, and duties owing
by Borrower to the Lender Group or any member thereof of any kind and
description (whether pursuant to or evidenced by the Loan Documents
(including the Notes) and the Warrants) or pursuant to any other
agreement between the Lender Group and Borrower, and irrespective of
whether for the payment of money), whether direct or indirect, absolute
or contingent, due or to become due, now existing or hereafter arising,
and including any debt, liability, or obligation owing from Borrower to
others that the Lender Group may have obtained by assignment or
otherwise, and further including all interest not paid when due and all
Lender Group Expenses that Borrower is required to pay or reimburse by
the Loan Documents, by law, or otherwise.
"OBLIGORS" means, individually and collectively, and
jointly and severally, Borrower, Hampton, Washington Choice,
Philadelphia Choice, AMI, Internet, Greater Albany, ENETV, Commonwealth
Choice, New York Choice, Rochester Choice, Connecticut Choice, and
Onondaga, and each other Subsidiary of Borrower that has executed and
delivered a joinder to, among other things, this Agreement.
"ONONDAGA" has the meaning ascribed to such term in the
preamble to this Agreement.
"ONTEO" means Onteo Associates, Inc.
"ORIGINAL LENDER" means any of Foothill, CanPartners,
FinVest, or TVRF.
"OVERADVANCE" has the meaning set forth in SECTION 2.5.
"PARTICIPANT" has the meaning set forth in SECTION
15.1(E).
"PBGC" means the Pension Benefit Guaranty Corporation as
defined in Title IV of ERISA, or any successor thereto.
"PCTV" means, collectively, People's Choice TV Corp. and
Alda Wireless Holdings, Inc.
"PCTV DOCUMENTS" means that certain Asset Purchase
Agreement, dated as of January 31, 1997, between PCTV and Borrower, and
the related note and pledge agreement contemplated therein.
"PCTV-RESTRICTED SUBSIDIARY" means AMI License.
"PERMITS" of a Person shall mean all rights, franchises,
permits, authorities, licenses, certificates of approval or
authorizations, including licenses and other authorizations issuable by
a Governmental Authority, which pursuant to applicable Legal
Requirements are necessary to permit such Person lawfully to conduct
and operate its business as currently conducted and to own and use its
assets.
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
"PERMITTED BTA DISPOSITIONS" means, subject to the
satisfaction of each of the following conditions, Asset Dispositions
consisting of the sale by Borrower to CS Wireless of the BTA
Authorizations awarded to Borrower for the Cleveland-Akron, Ohio and
Stockton, California markets: (a) Borrower receives, in respect of such
Asset Disposition, consideration (i) equal to, at the time of such
Asset Disposition, not less than Borrower's cost of acquiring each such
BTA Authorization, and (ii) at least 75% of which is cash or cash
equivalents received at the time of such Asset Disposition; and (b) the
Liens created by the Loan Documents remain continuously perfected as to
all proceeds of such Asset Disposition.
"PERMITTED CHARLOTTE CHANNELS DISPOSITION" means the
Asset Disposition consisting of the transfer by Borrower to CS Wireless
of the Channels for the Charlotte, North Carolina market that are
identified on SCHEDULE P-3 as partial consideration by Borrower for the
capital Stock of CS Wireless previously issued by CS Wireless to
Borrower pursuant to the underlying investment agreement in respect of
CS Wireless.
"PERMITTED COVENANT PARTY INDEBTEDNESS" means
Indebtedness incurred by a Covenant Party (other than Borrower) and
owed to Borrower so long as (a) no Default or Event of Default exists
at the time of the incurrence thereof, or would exist after giving
effect thereto, (b) such Indebtedness is not evidenced by a note or
other instrument, (c) such Indebtedness, if incurred after the Closing
Date, arises pursuant to SECTION 7.23, and (d) such Indebtedness is not
subordinated in right of payment to any other Indebtedness of such
Covenant Party.
"PERMITTED COVENANT PARTY INVESTMENTS" means, so long as
no Default or Event of Default has occurred and is continuing,
investments by Borrower in Covenant Parties (other than Borrower) made
in connection with the incurrence by the applicable Covenant Party of
Permitted Covenant Party Indebtedness.
"PERMITTED CS WIRELESS DISPOSITION" means, subject to the
satisfaction of each of the following conditions, the Asset Disposition
of the capital Stock of CS Wireless of Borrower: (a) no Default or
Event of Default has occurred and is continuing or would result
therefrom; (b) Borrower receives, in respect of such Asset Disposition,
consideration (i) equal to, at the time of such Asset Disposition, not
less than the fair market value of the capital Stock that is the
subject of such Asset Disposition, and (ii) at least 75% of which is
cash or cash equivalents received at the time of such Asset
Disposition; (c) Borrower receives an opinion, in form and substance
satisfactory to the Lenders and from a nationally recognized investment
banking firm reasonably acceptable to the Lenders, that such Asset
Disposition is fair to Borrower from a financial point of view; and
(d) the Liens created by the Loan Documents remain continuously
perfected as to all proceeds of such Asset Disposition.
"PERMITTED DISPOSITIONS" means (a) Permitted Ordinary
Course Dispositions, (b) the Permitted CS Wireless Disposition, (c) any
Permitted Venture Subsidiary Transaction, (d) any Permitted TelQuest
Transaction, (e) the Permitted Charlotte Channels Disposition, and (f)
any Permitted BTA Disposition.
"PERMITTED EXISTING INVESTMENTS" means the investments of
Borrower as in existence on the Closing Date and set forth on SCHEDULE
P-2.
"PERMITTED INVESTMENTS" means Permitted Covenant Party
Investments, Permitted Ordinary Course Investments, Permitted Existing
Investments, the Permitted TelQuest Transactions, and Permitted Venture
Subsidiary Investments.
"PERMITTED LIENS" means: (a) Liens held by the Lender
Group; (b) Liens for unpaid taxes that either (i) are not yet due and
payable or (ii) are the subject of Permitted Protests; (c) Liens set
forth on SCHEDULE P-1; (d) purchase money Liens and the interests of
lessors under operating leases and of lessors under capital leases to
the extent that the acquisition or lease of the underlying asset is
permitted under SECTION 7.21 and so long as the Lien only attaches to
the asset purchased or acquired and only secures the purchase price of
the asset; (e) Liens arising by operation of law in favor of
warehousemen, landlords, carriers, mechanics, materialmen, laborers, or
suppliers, incurred in the ordinary course of business of the Covenant
Parties and not in connection with the borrowing of money, and which
Liens either (i) are for sums not yet due and payable, or (ii) are the
subject of Permitted Protests; (f) Liens arising from deposits made in
connection with obtaining worker's compensation or other unemployment
insurance; (g) Liens or deposits to secure performance of bids,
tenders, or leases (to the extent permitted under this Agreement),
incurred in the ordinary course of business of the Covenant Parties and
not in connection with the borrowing of money; (h) Liens arising by
reason of security for surety or appeal bonds in the ordinary course of
business of the Covenant Parties; (i) Liens of or resulting from any
judgment or award that would not constitute a Material Adverse Change
and as to which the time for the appeal or petition for rehearing of
which has not yet expired, or in respect of which the Covenant Parties
are in good faith prosecuting an appeal or proceeding for a review, and
in respect of which a stay of execution pending such appeal or
proceeding for review has been secured; (j) with respect to any Real
Property, easements, rights of way, zoning and similar covenants and
restrictions, and similar encumbrances that customarily exist on real
property of Persons engaged in similar activities and similarly
situated and that in any event do not materially interfere with or
impair the use or operation of the Real Property by the Covenant
Parties; (k) Liens on the Escrow Account for the benefit of the holders
of the Senior Notes under the Escrow Agreement; and (l) with respect to
each Seller-Restricted Subsidiary, a Lien on the capital Stock of such
Seller-Restricted Subsidiary for the benefit of the holders of
Indebtedness of Borrower under the applicable Seller-Restriction
Documents, until the earliest to occur of (i) the payment in full of
such Indebtedness, (ii) the release of such Lien, and (iii) the
termination of such Seller-Restriction Documents.
"PERMITTED ORDINARY COURSE DISPOSITIONS" means Asset
Dispositions by the Covenant Parties (a) of obsolete or worn out
equipment in the ordinary course of business, (b) of inventory in the
ordinary course of business, and (c) of properties and assets in
connection with the consummation of the Restructuring Transactions.
"PERMITTED ORDINARY COURSE INVESTMENT" means (a) direct
obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States of America with a
maturity not exceeding 1 year, (b) certificates of deposit, time
deposits, banker's acceptances or other instruments of a bank having a
combined capital and surplus of not less than $500,000,000 with a
maturity not exceeding 1 year, (c) investments in commercial paper
rated at least A-1 or P-1 maturing within 1 year after the date of
acquisition thereof, (d) money market accounts maintained at a bank
having combined capital and surplus of no less than $500,000,000 or at
another financial institution reasonably satisfactory to Agent, (e)
loans and advances to officers and employees of Borrower in the
ordinary course of business in an aggregate amount at any one time
outstanding not to exceed $1,000,000, (f) investments in negotiable
instruments for collection, (g) advances in connection with purchases
of goods or services in the ordinary course of business, (h) deposits
required in connection with leases, (i) investments made in
consideration of Permitted Dispositions, and (j) investments in
existence on the Closing Date and described on SCHEDULE P-2.
"PERMITTED PREFERRED STOCK" means and refers to (a) the
Senior Preferred Stock, and (b) Preferred Stock issued by Borrower (and
not by one or more of the other Covenant Parties) that is not
Prohibited Preferred Stock.
"PERMITTED PROTEST" means the right of the Covenant
Parties to protest any Lien (other than any such Lien that secures the
Obligations), tax (other than payroll taxes or taxes that are the
subject of a United States federal tax lien), or lease or rental
payment, provided that (a) a reserve with respect to such obligation is
established on the books of the applicable Covenant Party in an amount
that is reasonably satisfactory to the Agent, (b) any such protest is
instituted and diligently prosecuted by such Covenant Party in good
faith, and (c) Agent is satisfied that, while any such protest is
pending, there will be no impairment of the enforceability, validity,
or priority of any of Agent's Liens in and to the Collateral.
"PERMITTED SENIOR NOTES DEBT-FOR-EQUITY SWAP" has the
meaning set forth in SECTION 7.8.
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
"PERSON" means and includes natural persons,
corporations, limited liability companies, limited partnerships,
general partnerships, limited liability partnerships, joint ventures,
trusts, land trusts, business trusts, or other organizations,
irrespective of whether they are legal entities, and governments and
agencies and political subdivisions thereof.
"PHILADELPHIA CHOICE" has the meaning ascribed to such
term in the preamble to this Agreement.
"PLAN" means any employee benefit plan, program, or
arrangement maintained or contributed to by Borrower or with respect to
which it may incur liability.
[CONFIDENTIAL TREATMENT REQUESTED]
"PRE-CLOSING RESTRUCTURING TRANSACTION" means the
distribution by AMI of all of its shares of capital Stock of AMI
License to Borrower.
"PREFERRED STOCK" means any class or series of equity
securities of Borrower or its Subsidiaries that is entitled, upon any
distribution of assets of Borrower or its Subsidiaries, as the case may
be, whether by dividend or by liquidation, to a preference over another
class or series of equity securities of Borrower or its Subsidiaries,
as applicable.
"PROHIBITED PREFERRED STOCK" means any Preferred Stock
that by its terms is mandatorily redeemable or subject to any other
payment obligation (including any obligation to pay dividends, other
than dividends of Preferred Stock of the same class and series payable
in kind or dividends of common Stock) on or before March 15, 2001 or,
on or before March 15, 2001, is redeemable at the option of the holder
thereof for cash (or assets or securities other than distributions in
kind of Preferred Stock of the same class and series or of common
Stock).
"PRO RATA PORTION (ADVANCES)" means, with respect to a
Lender at any time, a fraction (expressed as a percentage), the
numerator of which is the amount of such Lender's Commitment to make
Advances and the denominator of which is the aggregate amount of the
Commitments of all Lenders to make Advances.
"PRO RATA PORTION (TERM LOANS A)" means, with respect to
a Lender at any time, a fraction (expressed as a percentage), the
numerator of which is the amount of such Lender's Commitment to make a
Term Loan A and the denominator of which is the aggregate amount of the
Commitments of all Lenders to make the Term Loans A.
"PRO RATA PORTION (TERM LOANS B)" means, with respect to
a Lender at any time, a fraction (expressed as a percentage), the
numerator of which is the amount of such Lender's Commitment to make
the Term Loans B and the denominator of which is the aggregate amount
of the Commitments of all Lenders to make the Term Loans B.
"PRO RATA PORTION (TOTAL)" means, with respect to a
Lender at any time, a fraction (expressed as a percentage), the
numerator of which is the amount of such Lender's Total Commitment and
the denominator of which is the aggregate amount of the Total
Commitments.
"PRO RATA SHARE (ADVANCES)" means, with respect to a
Lender at any time, a fraction (expressed as a percentage), the
numerator of which is the aggregate principal amount of all Advances
then outstanding to such Lender and the denominator of which is the
aggregate principal amount of all Advances outstanding.
"PRO RATA SHARE (TERM LOANS A)" means, with respect to a
Lender at any time, a fraction (expressed as a percentage), the
numerator of which is the aggregate principal amount of all Term Loans
A then outstanding to such Lender and the denominator of which is the
aggregate principal amount of all Term Loans A then outstanding.
"PRO RATA SHARE (TERM LOANS B)" means, with respect to a
Lender at any time, a fraction (expressed as a percentage), the
numerator of which is the aggregate principal amount of all Term Loans
B then outstanding to such Lender and the denominator of which is the
aggregate principal amount of all Term Loans B then outstanding.
"PRO RATA SHARE (TOTAL)" means, with respect to a Lender
at any time, a fraction (expressed as a percentage), the numerator of
which is the aggregate principal amount of all Advances, Term Loans B,
and Term Loans A then outstanding to such Lender and the denominator of
which is the aggregate principal amount of all Advances, Term Loans B,
and Term Loans A then outstanding.
[CONFIDENTIAL TREATMENT REQUESTED]
"QUALIFIED SUBORDINATED INDEBTEDNESS" means unsecured,
subordinated Indebtedness of Borrower that, by its terms, is not
mandatorily prepayable or subject to any other payment obligation
(including any obligation to pay interest, other than interest payable
solely by adding the amount thereof to the outstanding principal
balance of such Indebtedness) on or before March 15, 2001.
"QUALIFYING CUSTOMERS" means, as of any date of
determination, the aggregate number of Subscribers as of the last day
of the most recent month ending not more than 45 days prior to the date
of determination; PROVIDED, HOWEVER, that Qualifying Customers shall
not include any Subscribers in any geographic service area in which (i)
the BANX Affiliates shall have implemented the Business Relationship
Agreement; and (ii) Borrower or any other Covenant Party is then
providing transport services, and is then entitled to receive
contractual monthly revenues therefor, under the Business Relationship
Agreement.
"REAL PROPERTY" means any estates or interests in real
property now owned or hereafter acquired by the Covenant Parties.
"REFERENCE RATE" means the variable rate of interest, per
annum, most recently announced by Norwest Bank Minnesota, National
Association, or any successor thereto, as its "base rate," irrespective
of whether such announced rate is the best rate available from such
financial institution.
"RELATED FACILITIES" means any facility licensed by the
FCC in conjunction with or in support of the operation of the Channels
or a System, including private operational fixed microwave facilities
and Booster Stations.
"RELATED FACILITIES LICENSE" means the Permit granted by
the FCC to operate a Related Facility or any application pending before
the FCC requesting such Permit.
"REPORTABLE EVENT" means any of the events described in
Section 4043(c) of ERISA or the regulations thereunder other than a
Reportable Event as to which the provision of 30 days notice to the
PBGC is waived under applicable regulations.
"REQUIRED LENDERS" means, at any time, Lenders whose Pro
Rata Portions (Total) aggregate 51% or more of the Total Commitments.
"RESTRUCTURING TRANSACTIONS" means the Pre-Closing
Restructuring Transaction and the Post-Closing Restructuring
Transactions.
"RETIREE HEALTH PLAN" means an "employee welfare benefit
plan" within the meaning of Section 3(1) of ERISA that provides
benefits to individuals after termination of their employment, other
than as required by Section 601 of ERISA.
"REVOLVER BLOCK" means, as of any date of determination:
(a) until such time, if ever, as the condition in SECTION 3.3(H) is
satisfied or waived by the Lenders in their sole and absolute
discretion, $2,000,000; and (b) thereafter, zero (-0-).
"REVOLVING FACILITY USAGE" means, as of any date of
determination, the aggregate amount of Advances (including Agent
Advances and Foothill Loans) outstanding.
"REVOLVING NOTE" has the meaning set forth in SECTION
2.1.
"ROCHESTER CHOICE" has the meaning ascribed to such term
in the preamble to this Agreement.
"SEC" means the United States Securities and Exchange
Commission and any successor Federal agency having similar powers.
"SECURITIES ACCOUNT" means a "securities account" as that
term is defined in Section 8-501 of the Official Text of the Uniform
Commercial Code.
"SECURITIES ACCOUNT SECURITIES AGREEMENT" means a
Securities Account security agreement governed by Pennsylvania law, in
form and substance satisfactory to the Lenders, between Borrower and
Agent.
"SECURITIES PURCHASE AGREEMENT" means that certain
Securities Purchase Agreement, dated as of March 28, 1995, by and
between Borrower and BANX, as amended through the Closing Date, and as
the same thereafter may be amended, restated, supplemented, or
otherwise modified from time to time in accordance with the terms of
the Loan Documents.
"SELLER-RESTRICTED SUBSIDIARIES" means, collectively, the
Bott-Restricted Subsidiaries, the Mester-Restricted Subsidiary, and the
PCTV-Restricted Subsidiary.
"SELLER DOCUMENTS" means, collectively, the Bott
Documents, the Mester Documents, and the PCTV Documents.
"SENIOR NOTES" means the $275,000,000 12.25% senior notes
due 2002, issued by Borrower pursuant to the Senior Notes Indenture.
"SENIOR NOTES INDENTURE" means that certain Indenture,
dated as of September 15, 1995, by and between Borrower, and Chemical
Bank as trustee relative to the Senior Notes, as amended through the
Closing Date, and as the same thereafter may be amended, restated,
supplemented, or otherwise modified from time to time in accordance
with the terms of the Loan Documents.
"SENIOR PREFERRED STOCK" means shares of the 14% senior
convertible Preferred Stock, par value $10,000 per share, of Borrower.
"SETTLEMENT" has the meaning set forth in SECTION
2.1(G)(I).
"SETTLEMENT DATE" has the meaning set forth in SECTION
2.1(G)(I).
"SOLVENT" means, with respect to any Person on a
particular date, that on such date (a) such Person is able to realize
upon its properties and assets and pay its debts and other liabilities,
contingent obligations and other commitments as they mature in the
normal course of business, (b) such Person does not intend to, and does
not believe that it will, incur debts beyond such Person's ability to
pay as such debts mature, and (c) such Person is not engaged in
business or a transaction, and is not about to engage in business or a
transaction, for which such Person's properties and assets would
constitute unreasonably small capital after giving due consideration to
the prevailing practices in the industry in which such Person is
engaged. In computing the amount of contingent liabilities at any
time, it is intended that such liabilities will be computed at the
amount that, in light of all the facts and circumstances existing at
such time, represents the amount that reasonably can be expected to
become an actual or matured liability.
"STOCK" means all shares, options, warrants, interests,
units, participations, or other equivalents (regardless of how
designated) of or in a corporation, limited liability company, or
equivalent entity, whether voting or nonvoting, including common stock,
preferred stock, or any other "equity security" (as such term is
defined in Rule 3a11-1 of the General Rules and Regulations promulgated
by the SEC under the Exchange Act).
"STOCK PLEDGE AGREEMENT" means a Stock Pledge Agreement
and Irrevocable Proxy, in form and substance satisfactory to each
Lender, executed and delivered by Borrower to Agent with respect to the
pledge of the capital Stock of each of its Subsidiaries (including the
Venture Subsidiaries, except to the extent any such capital Stock
constitutes Excluded Property and of CS Wireless and TelQuest to Agent
for the benefit of the Lender Group.
"SUBSCRIBER" means, as of any date of determination, any
individual customer or bulk or commercial account (computed on an
equivalent customer basis based on the basic programming service
subscriber fee) to whom Borrower or any other Covenant Party provides
Wireless Cable Services as well as accounts, both individual customer
and bulk or commercial accounts (the latter of which are computed on an
equivalent customer basis), to whom Borrower or any other Covenant
Party provides other Wireless Telecommunications Services for a fee, in
each case as of such date.
"SUBSIDIARY" of a Person means a corporation,
partnership, limited liability company, or other entity in which that
Person directly or indirectly owns or controls the shares of Stock or
other ownership interests having ordinary voting power to elect a
majority of the board of directors (or appoint other comparable
managers) of such corporation, partnership, limited liability company,
or other entity. For the avoidance of doubt, CS Wireless shall not
constitute a Subsidiary of Borrower for purposes of this Agreement and
the other Loan Documents.
"SURETYSHIP AGREEMENT" means an agreement, in form and
substance satisfactory to each Lender and entered into by each of the
Obligors for the benefit of the Lender Group.
"SYSTEMS" means (a) the wireless telecommunications
systems constructed and operated by one or more Covenant Parties as of
the Closing Date for the provision of Wireless Telecommunications
Service and more fully described on SCHEDULE 5.19 and (b) the wireless
telecommunications systems constructed and operated by one or more of
the Covenant Parties from and after the Closing Date for the provision
of Wireless Telecommunications Service.
"SYSTEM AGREEMENTS" means, collectively, all FCC Licenses
for Channels and booster stations, Channel Leases, Tower Site Leases,
programming agreements, retransmission agreements, non-interference or
cooperation agreements (excluding no-objection letters issued in the
ordinary course of business), equipment agreements or instruments,
licenses, permits, and other material agreements pertaining to the
transmission of video, voice, or data signals through wireless cable
transmission facilities, of each of the Covenant Parties now existing
or hereafter acquired or obtained, relative to the Channels or the
construction and operation of the Systems.
"SYSTEM SUB" has the meaning set forth in the definition
of Post-Closing Restructuring Transactions.
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
"TERM LOAN A" has the meaning set forth in SECTION
2.2(A).
"TERM LOAN A AMOUNT" means $5,000,000.
"TERM LOAN A OBLIGATIONS" means all loans, Term Loans A,
debts, principal, interest, premiums, liabilities (including all
amounts charged to the Loan Account pursuant hereto), obligations,
fees, charges, costs, or Lender Group Expenses (including any fees or
expenses that, but for the provisions of the Bankruptcy Code, would
have accrued), lease payments, guaranties, covenants, and duties owing
by any one or more of the Obligors to the Lender Group of any kind and
description (whether pursuant to or evidenced by the Loan Documents
(including the Term Notes A) or pursuant to any other agreement between
the Lender Group and any one or more of the Obligors (irrespective of
whether for the payment of money), whether direct or indirect, absolute
or contingent, due or to become due, now existing or hereafter arising,
and including any debt, liability, or obligation owing from any one or
more of the Obligors to others that the Lender Group may have obtained
by assignment or otherwise, and further including all interest not paid
when due and all Lender Group Expenses that any Obligor is required to
pay or reimburse by the Loan Documents, by law, or otherwise.
"TERM LOAN A PIK INTEREST PAYMENT OPTION" has the meaning
set forth in SECTION 2.6(D)(IV).
"TERM LOAN A REGULAR INTEREST PAYMENT OPTION" has the
meaning set forth in SECTION 2.6(D)(IV).
"TERM LOAN B" has the meaning set forth in SECTION 2.2.
"TERM LOAN B FUNDING BLOCKAGE NOTICE" has the meaning set
forth in SECTION 2.2(D).
"TERM LOAN B PIK INTEREST PAYMENT OPTION" has the meaning
set forth in SECTION 2.6(D)(II).
"TERM LOAN B REGULAR INTEREST PAYMENT OPTION" has the
meaning set forth in SECTION 2.6(D)(II).
"TERM NOTE A" has the meaning set forth in SECTION
2.2(A).
"TERM NOTE B" has the meaning set forth in SECTION 2.2.
"TOTAL COMMITMENT" means, at any time with respect to a
Lender, the Commitments of that Lender to make Loans of all Loan Types
in the aggregate principal amount set forth beside such Lender's name
under the heading "Total Loans Commitment" on SCHEDULE C-1 attached
hereto or on the signature page of the Assignment and Assumption
pursuant to which such Lender became a Lender hereunder in accordance
with the provisions of SECTION 15.1, as such Total Commitment may be
adjusted from time to time in accordance with the provisions of SECTION
15.1, and "TOTAL COMMITMENTS" means, at any time with respect to all
Lenders, collectively, the aggregate amount of the Total Commitments of
all of the Lenders.
"TVRF" means The Value Realization Fund, L.P., a Delaware
limited partnership.
"TOWER SITE LEASE" has the meaning ascribed thereto in
SECTION 5.22(A).
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
"VOIDABLE TRANSFER" has the meaning set forth in SECTION
18.7.
"WARRANTS" means warrants respecting shares of Borrower's
common Stock, in form and substance satisfactory to each Original
Lender.
"WASHINGTON CHOICE" has the meaning ascribed to such term
in the preamble to this Agreement.
"WIRELESS CABLE BUSINESS" means transmitting video,
voice, or data primarily through wireless cable transmission
facilities, utilizing wireless channels for any commercial purpose
permitted by the FCC and other activities directly related thereto.
"WIRELESS CABLE SERVICE" means the provision of
subscription video or entertainment and additional programming services
and services ancillary thereto through the use of, among others, ITFS,
MDS, and MMDS channels.
"WIRELESS TELECOMMUNICATIONS SERVICE" means any service
that is permitted under FCC rules and regulations or authorized by the
FCC to be provided on or by means of the transmission capacity on an
ITFS, MDS, or MMDS channel, including Wireless Cable Services and
Alternative Use services.
1.2 ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP. When used
herein, the term "financial statements" shall include the notes and
schedules thereto. Whenever the term "Borrower" is used in respect of
a financial covenant or a related definition, it shall be understood
to mean Borrower on a consolidated basis unless the context clearly
requires otherwise.
1.3 CODE. Any terms used in this Agreement that are defined
in the Code shall be construed and defined as set forth in the Code
unless otherwise defined herein.
1.4. CONSTRUCTION. Unless the context of this Agreement
clearly requires otherwise, references to the plural include the singular
references to the singular include the plural, the term "including" is
not limiting, and the term "or" has, except where otherwise indicated,
the inclusive meaning represented by the phrase "and/or." The words
"hereof," "herein," "hereby," "hereunder," and similar terms in this
Agreement refer to this Agreement as a whole and not to any particular
provision of this Agreement. An Event of Default shall "continue" or
be "continuing" until such Event of Default has been waived in writing
by the requisite Lenders. Section, subsection, clause, schedule, and
exhibit references are to this Agreement unless otherwise specified.
Any reference in this Agreement or in the Loan Documents to this Agreement
or any of the Loan Documents shall include all alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements, thereto and thereof, as applicable.
1.5 SCHEDULES AND EXHIBITS. All of the schedules and exhibits
attached to this Agreement shall be deemed incorporated herein by reference.
Any investigation made at any time by or on behalf of any party hereto shall
not diminish in any respect whatsoever such party's right to rely on the
representations and warranties made by or on behalf of any other party
herein or pursuant to this Agreement. The disclosures contained in any
schedule shall not be made generally in respect of the
representations and warranties in this Agreement and shall relate
instead specifically to the representation and warranty in the corresponding
definition or section of the Agreement.
1.6 COVENANT PARTIES. By its execution and delivery of the
Acknowledgement or any joinder thereto, any Covenant Party that is not
party to this Agreement or any joinder hereto nevertheless shall be
deemed to have agreed to be bound by each provision herein relating
to the Covenant Parties or their assets with the same force and effect
as though such Covenant Party were party to this Agreement or any joinder
hereto, MUTATIS MUTANDIS.
2. LOAN AND TERMS OF PAYMENT.
2.1 REVOLVING CREDIT FACILITY.
(a) ADVANCES. Subject to the terms and conditions of
this Agreement and during the term of this Agreement, each Lender that
has any Commitment to make Advances hereby agrees to make advances
("Advances") to Borrower in an amount at any one time outstanding not
to exceed such Lender's Pro Rata Portion (Advances) of an amount equal
to the Maximum Revolving Amount less the Revolver Block, if any;
PROVIDED, HOWEVER, that such Lenders shall have no obligation to make
further Advances hereunder to the extent they would cause the
outstanding Revolving Facility Usage to exceed the Maximum Revolving
Amount less the Revolver Block if any. Borrower shall execute and
deliver to each such Lender on the Closing Date a promissory note, in
the form of EXHIBIT R-1 (a "Revolving Note"), in the principal amount
of that Lender's Pro Rata Portion (Advances) of the Maximum Revolving
Amount. Amounts borrowed pursuant to this SECTION 2.1 may be repaid
and, subject to the terms and conditions of this Agreement, reborrowed
at any time during the term of this Agreement. The Revolving Notes and
this Agreement shall evidence the obligation of Borrower to repay all
Advances (other than Agent Advances and Foothill Loans, the obligation
to repay of which shall be evidenced by this Agreement), together with
accrued but unpaid interest thereon.
(b) PROCEDURE FOR BORROWING. Each Borrowing of Advances
shall be made upon Borrower's irrevocable written request therefor to
Agent and the Lenders (which request must be from an Authorized Person
and received by Agent and the Lenders no later than 10:00 a.m.
(California time) on the Business Day immediately preceding the
requested Funding Date) specifying (i) the amount of the Borrowing; and
(ii) the requested Funding Date, which shall be a Business Day.
(c) AGENT'S ELECTION. Promptly after receipt of a
request for a Borrowing pursuant to SECTION 2.1(B), Agent shall elect,
in its discretion, (i) to have the terms of SECTION 2.1(D) apply to
such requested Borrowing, or (ii) to request Foothill to make a
Foothill Loan pursuant to the terms of SECTION 2.1(E) in the amount of
the requested Borrowing; PROVIDED, HOWEVER, that if Foothill declines
in its sole discretion to make a Foothill Loan pursuant to
SECTION 2.1(E), Agent shall elect to have the terms of SECTION 2.1(D)
apply to such requested Borrowing.
(d) MAKING OF ADVANCES.
(i) In the event that Agent shall elect to have the
terms of this SECTION 2.1(D) apply to a requested Borrowing as
described in SECTION 2.1(C), then promptly after receipt of a
request for a Borrowing pursuant to SECTION 2.1(B), Agent shall
notify each Lender that has any Commitment to make Advances, not
later than 1:00 p.m. (California time) on the Business Day
immediately preceding the Funding Date applicable thereto, by
telecopy or other similar form of transmission, of the requested
Borrowing. Each such Lender shall make the amount of such
Lender's Pro Rata Portion (Advances) of the requested Borrowing
available to Agent in immediately available funds, to such account
of Agent as Agent may designate, not later than 10:00 a.m.
(California time) on the Funding Date applicable thereto. After
Agent's receipt of the proceeds of such Advances, upon
satisfaction of the applicable conditions precedent set forth in
SECTION 3 hereof, Agent shall make the proceeds of such Advances
available to Borrower on the applicable Funding Date by
transferring same day funds equal to the proceeds of such Advances
received by Agent to Borrower's Designated Account; PROVIDED,
HOWEVER, that no such Lender shall have the obligation to make any
Advance if Agent and each other such Lender shall have received
written notice given in good faith by any such Lender on or before
5:00 p.m. (California time) on the Business Day immediately prior
to the applicable Funding Date that (1) one or more of the
applicable conditions precedent set forth in SECTION 3 will not be
satisfied on the requested Funding Date for the applicable
Borrowing, or (2) the requested Borrowing would exceed the
Availability of Borrower on such Funding Date (any such notice
timely received by Agent from any such Lender being an "Advance
Funding Blockage Notice").
(ii) Unless Agent and each other such Lender
receives an Advance Funding Blockage Notice from any such Lender
on or prior to the Closing Date or, with respect to any Borrowing
after the Closing Date, no later than 5:00 p.m. (California time)
on the Business Day immediately prior to the applicable Funding
Date, stating that such Lender will not make available as and when
required hereunder to Agent for the account of Borrower the amount
of that Lender's Pro Rata Portion (Advances) of the Borrowing,
Agent may assume that each such Lender has made or will make such
amount available to Agent in immediately available funds on the
Funding Date and Agent may (but shall not be so required), in
reliance upon such assumption, make available to Borrower on such
date a corresponding amount. If and to the extent any such Lender
shall not have made its full amount available to Agent in
immediately available funds (unless such failure arises from such
Lender's Advance Funding Blockage Notice timely received by Agent)
and Agent in such circumstances has made available to Borrower
such amount, that Lender shall on the Business Day following such
Funding Date make such amount available to Agent, together with
interest at the Defaulting Lenders Rate for each day during such
period. A notice submitted by Agent to any such Lender with
respect to amounts owing under this subsection shall be
conclusive, absent manifest error. If such amount is so made
available, such payment to Agent shall constitute such Lender's
Advance on the date of Borrowing for all purposes of this
Agreement. If such amount is not made available to Agent on the
Business Day following the Funding Date, Agent will notify
Borrower of such failure to fund and, upon demand by Agent,
Borrower shall pay such amount to Agent for Agent's account,
together with interest thereon for each day elapsed since the date
of such Borrowing, at a rate per annum equal to the interest rate
applicable at the time to the Advances composing such Borrowing.
The failure of any such Lender to make any Advance on any Funding
Date shall not relieve any other such Lender of any obligation
hereunder to make an Advance on such Funding Date, but no other
such Lender shall be responsible for the failure of such Lender to
make the Advance to be made by such Lender on any Funding Date.
(iii) Unless and until the amount owing by any
Defaulting Lender pursuant to the second sentence of SECTION
2.1(D)(II) has been paid by Borrower or such Defaulting Lender,
Agent shall not be obligated to transfer to such Defaulting Lender
any payments made by Borrower to Agent for such Defaulting
Lender's benefit, nor shall such Defaulting Lender be entitled to
the sharing of any payments hereunder. Amounts payable to a
Defaulting Lender shall instead be paid to or retained by Agent.
Agent may hold and, in its discretion, re-lend to Borrower the
amount of all such payments received or retained by it for the
account of such Defaulting Lender. Solely for the purposes of
voting or consenting to matters with respect to the Loan Documents
and determining Required Lenders, such Defaulting Lender shall be
deemed not to be a "Lender" and such Lender's Pro Rata Portion
(Total) shall be deemed to be zero (-0-). This section shall
remain effective with respect to such Lender until (x) the
Obligations and the Term Loan A Obligations under this Agreement
shall have been declared or shall have become immediately due and
payable, (y) the amount owing by such Defaulting Lender pursuant
to the second sentence of SECTION 2.1(D)(II) has been paid by
Borrower or such Defaulting Lender, or (z) the requisite non-
Defaulting Lenders with Commitments to make Advances and Agent
shall have waived such Lender's default in writing. The operation
of this section shall not be construed to increase or otherwise
affect the Commitment of any Lender to make Advances, or relieve
or excuse the performance by Borrower of its duties and
obligations hereunder.
(e) MAKING OF FOOTHILL LOANS.
(i) In the event Agent shall elect, with the
consent of Foothill as a Lender, to have the terms of this SECTION
2.1(E) apply to a requested Borrowing as described in SECTION
2.1(C), Foothill as a Lender shall make an Advance in the amount
of such Borrowing (any such Advance made solely by Foothill as a
Lender pursuant to this SECTION 2.1(E) being referred to as a
"Foothill Loan" and such Advances being referred to collectively
as "Foothill Loans") available to Borrower on the Funding Date
applicable thereto by transferring same day funds to Borrower's
Designated Account. Each Foothill Loan is an Advance hereunder
and shall be subject to all the terms and conditions applicable to
other Advances, except that all payments thereon shall be payable
to Foothill as a Lender solely for its own account (and for the
account of the holder of any participation interest with respect
to such Advance). Agent shall not request Foothill as a Lender to
make, and Foothill as a Lender shall not make, any Foothill Loan
either if Foothill receives an Advance Funding Blockage Notice
from any other Lender with a Commitment to make any Advances in
accordance with SECTION 2.1(D)(II) or if Agent shall have received
written notice from any such Lender, or otherwise has actual
knowledge, that (i) one or more of the applicable conditions
precedent set forth in SECTION 3 will not be satisfied on the
requested Funding Date for the applicable Borrowing, or (ii) the
requested Borrowing would exceed the Availability of Borrower on
such Funding Date. Foothill as a Lender shall not otherwise be
required to determine whether the applicable conditions precedent
set forth in SECTION 3 have been satisfied on the Funding Date
applicable thereto prior to making, in its sole discretion, any
Foothill Loan.
(ii) The Foothill Loans shall be secured by the
Collateral and shall constitute Advances and Obligations
hereunder, and shall bear interest at the rate applicable from
time to time to Advances pursuant to SECTION 2.6 hereof.
(f) AGENT ADVANCES.
(i) Subject to the limitations set forth in the
proviso contained in this SECTION 2.1(F), Agent hereby is
authorized by Borrower and the Lenders, from time to time in
Agent's sole discretion, (A) after the occurrence of a Default or
an Event of Default, or (B) at any time that any of the other
applicable conditions precedent set forth in SECTION 3 have not
been satisfied, to make Advances for the benefit of Borrower on
behalf of the Lenders which Agent, in its reasonable business
judgment, deems necessary or desirable to (x) preserve or protect
the Collateral, (y) enhance the likelihood of repayment of the
Obligations or the Term Loan A Obligations, or (z) pay any other
amount chargeable to Borrower pursuant to the terms of this
Agreement, including Lender Group Expenses and the costs, fees,
and expenses described in SECTION 10 (any of the Advances
described in this SECTION 2.1(F) being hereinafter referred to as
"Agent Advances"); PROVIDED, HOWEVER, that the aggregate amount of
Agent Advances outstanding at any one time shall not exceed
$3,000,000, without the written consent of all Lenders that have
any Commitment to make Advances.
(ii) Agent Advances shall be repayable on demand
and secured by the Collateral, shall constitute Advances and
Obligations hereunder, and shall bear interest at the rate
applicable from time to time to Advances pursuant to SECTION 2.6
hereof.
(g) SETTLEMENT. It is hereby agreed that each Lender's
funded portion of the Loans is intended by the Lenders to equal, at all
times, such Lender's Pro Rata Portion (Total) of the outstanding Loans.
It is hereby further agreed that each Lender's funded portion of the
Advances is intended by the Lenders to equal, at all times, such
Lender's Pro Rata Portion (Advances) of the outstanding Advances. It
is agreed that each Lender's funded portion of the Term Loans A is
intended by the Lenders to equal, at all times, such Lender's Pro Rata
Portion (Term Loans A) of the outstanding Term Loans A. It is agreed
that each Lender's funded portion of the Term Loans B is intended by
the Lenders to equal, at all times, such Lender's Pro Rata Portion
(Term Loans B) of the outstanding Term Loans B. Agent and the Lenders
agree (which agreement shall not be for the benefit of or enforceable
by Borrower) that in order to facilitate the administration of this
Agreement and the other Loan Documents, settlement among them as to the
Loans shall take place on a periodic basis in accordance with the
following provisions:
(i) Agent shall request settlement ("Settlement")
with the Lenders on a weekly basis, or on such other basis if so
determined by the Required Lenders, (x) on behalf of Foothill,
with respect to each outstanding Foothill Loan, (y) for itself,
with respect to each Agent Advance, and (z) with respect to
Collections received, as to each by notifying the Lenders by
telecopy, or other similar form of transmission, of such requested
Settlement, no later than 2:00 p.m. (California time) on the
Business Day immediately prior to the date of such requested
Settlement (the date of such requested Settlement being the
"Settlement Date"). Such notice of a Settlement Date shall
include a summary statement of the amount of outstanding Agent
Advances, Foothill Loans, other Advances, Term Loans B, and Term
Loans A for the period since the prior Settlement Date, the amount
of repayments received in such period, and the amounts allocated
to each Lender of the interest, fees, and other charges (including
clearance charges) for such period. Subject to the terms and
conditions contained herein (including SECTION 2.1(G)(II)):
(1) (A) If a Lender's balance of the Advances exceeds such
Lender's Pro Rata Portion (Advances) of the Advances as of a
Settlement Date, then Agent shall by no later than 12:00 p.m
(California time) on the Settlement Date transfer in
immediately available funds to the account of such Lender as
such Lender may designate, an amount such that each such
Lender shall, upon receipt of such amount, have as of the
Settlement Date, its Pro Rata Portion (Advances) of the
Advances.
(B) If a Lender's balance of the Term Loans A exceeds
such Lender's Pro Rata Portion (Term Loans A) of the Term
Loans A as of a Settlement Date, then Agent shall by no later
than 12:00 p.m (California time) on the Settlement Date
transfer in immediately available funds to the account of
such Lender as such Lender may designate, an amount such that
each such Lender shall, upon receipt of such amount, have as
of the Settlement Date, its Pro Rata Portion (Term Loans A)
of the Term Loans A.
(C) If a Lender's balance of the Term Loans B exceeds
such Lender's Pro Rata Portion (Term Loans B) of the Term
Loans B as of a Settlement Date, then Agent shall by no later
than 12:00 p.m (California time) on the Settlement Date
transfer in immediately available funds to the account of
such Lender as such Lender may designate, an amount such that
each such Lender shall, upon receipt of such amount, have as
of the Settlement Date, its Pro Rata Portion (Term Loans B)
of the Term Loans B.
(2) (A) If a Lender's balance of the Advances is less than
such Lender's Pro Rata Portion (Advances) of the Advances as
of a Settlement Date, such Lender shall no later than 12:00
p.m. (California time) on the Settlement Date transfer in
immediately available funds to such account of Agent as Agent
may designate, an amount such that each such Lender shall,
upon transfer of such amount, have as of the Settlement Date,
its Pro Rata Portion (Advances) of the Advances. Such
amounts made available to Agent under the immediately
preceding sentence shall be applied against the amounts of
the applicable Foothill Loan or Agent Advance and, together
with the portion of such Foothill Loan or Agent Advance not
representing Foothill's Pro Rata Portion thereof, shall
constitute Advances of such Lenders. If any such amount is
not made available to Agent by any Lender on the Settlement
Date applicable thereto to the extent required by the terms
hereof, Agent shall be entitled to recover for its account
such amount on demand from such Lender together with interest
thereon at the Defaulting Lenders Rate.
(B) If a Lender's balance of the Term Loans A is less
than such Lender's Pro Rata Portion (Term Loans A) of the
Term Loans A as of a Settlement Date, such Lender shall no
later than 12:00 p.m. (California time) on the Settlement
Date transfer in immediately available funds to such account
of Agent as Agent may designate, an amount such that each
such Lender shall, upon transfer of such amount, have as of
the Settlement Date, its Pro Rata Portion (Term Loans A) of
the Term Loans A. If any such amount is not made available
to Agent by any Lender on the Settlement Date applicable
thereto to the extent required by the terms hereof, Agent
shall be entitled to recover for its account such amount on
demand from such Lender together with interest thereon at the
Defaulting Lenders Rate.
(C) If a Lender's balance of the Term Loans B is less
than such Lender's Pro Rata Portion (Term Loans B) of the
Term Loans B as of a Settlement Date, such Lender shall no
later than 12:00 p.m. (California time) on the Settlement
Date transfer in immediately available funds to such account
of Agent as Agent may designate, an amount such that each
such Lender shall, upon transfer of such amount, have as of
the Settlement Date, its Pro Rata Portion (Term Loans B) of
the Term Loans B. If any such amount is not made available
to Agent by any Lender on the Settlement Date applicable
thereto to the extent required by the terms hereof, Agent
shall be entitled to recover for its account such amount on
demand from such Lender together with interest thereon at the
Defaulting Lenders Rate.
(ii) (x) In determining whether a Lender's
balance of the Advances is less than, equal to, or greater than
such Lender's Pro Rata Portion (Advances) of the Advances as of a
Settlement Date, Agent shall, as part of the relevant Settlement,
apply to such balance the portion of payments actually received in
good funds by Agent or Foothill with respect to principal,
interest, fees payable by Borrower and allocable to the Lenders
hereunder, and proceeds of Collateral. To the extent that a net
amount is owed to any such Lender after such application, such net
amount shall be distributed by Agent or Foothill to that Lender as
part of such Settlement.
(y) In determining whether a Lender's
balance of the Term Loans A is less than, equal to, or greater
than such Lender's Pro Rata Portion (Term Loans A) of the Term
Loans A as of a Settlement Date, Agent shall, as part of the
relevant Settlement, apply to such balance the portion of payments
actually received in good funds by Agent with respect to
principal, interest, fees payable by the Obligors and allocable to
the Lenders hereunder, and proceeds of Collateral. To the extent
that a net amount is owed to any such Lender after such
application, such net amount shall be distributed by Agent to that
Lender as part of such Settlement.
(z) In determining whether a Lender's
balance of the Term Loans B is less than, equal to, or greater
than such Lender's Pro Rata Portion (Term Loans B) of the Term
Loans B as of a Settlement Date, Agent shall, as part of the
relevant Settlement, apply to such balance the portion of payments
actually received in good funds by Agent with respect to
principal, interest, fees payable by the Obligors and allocable to
the Lenders hereunder, and proceeds of Collateral. To the extent
that a net amount is owed to any such Lender after such
application, such net amount shall be distributed by Agent to that
Lender as part of such Settlement.
(iii) Between Settlement Dates, Agent, to the
extent no Agent Advances or Foothill Loans are outstanding, may
pay over to Foothill any payments received by Agent, that in
accordance with the terms of this Agreement would be applied to
the reduction of the Advances, for application to Foothill's Pro
Rata Share (Advances) of the Advances. If, as of any Settlement
Date, Collections received since the then immediately preceding
Settlement Date have been applied to Foothill's Pro Rata Share
(Advances) of the Advances other than to Foothill Loans or Agent
Advances, as provided for in the previous sentence, Foothill shall
pay to Agent for the accounts of the Lenders with any Commitment
to make Advances, and Agent shall pay to the Lenders with any
Commitment to make Advances, to be applied to the outstanding
Advances of such Lenders, an amount such that each such Lender
shall, upon receipt of such amount, have, as of such Settlement
Date, its Pro Rata Portion of the Advances. During the period
between Settlement Dates, Foothill with respect to Foothill Loans,
Agent with respect to Agent Advances, and each Lender with any
Commitment to make Advances with respect to the Advances other
than Foothill Loans and Agent Advances (after giving effect to any
payments applied to the reduction of Foothill's Advances pursuant
to this SECTION 2.1(G)(III)), shall be entitled to interest at the
applicable rate or rates payable under this Agreement on the daily
amount of funds in respect of Loans outstanding and employed by
Foothill, Agent, or such Lenders, as applicable.
(iv) Anything in this Agreement or any other
Loan Document to the contrary notwithstanding, any settlement
payment to be made to any Canyon Lender under this SECTION 2.1(G)
shall be made to Canpartners on behalf, and for the benefit, of
such Canyon Lender and any such settlement payment required to be
made to any Canyon Lender shall, upon Canpartners' receipt
thereof, be deemed received by that Canyon Lender.
(h) LENDERS' FAILURE TO PERFORM. All Advances (other
than Foothill Loans and Agent Advances) shall be made simultaneously by
those Lenders with any Commitment to make Advances and in accordance
with their Pro Rata Portions (Advances). It is understood that (i) no
such Lender shall be responsible for any failure by any other such
Lender to perform its obligation to make any Advances hereunder, nor
shall any Commitment to make Advances of any such Lender be increased
or decreased as a result of any failure by any other such Lender to
perform its obligation to make any Advances hereunder, and (ii) no
failure by any such Lender to perform its obligation to make any
Advances hereunder shall excuse any other such Lender from its
obligation to make any Advances hereunder.
2.2 TERM LOANS A; TERM LOAN B FACILITY.
(a) TERM LOANS A. Subject to the terms and conditions
of this Agreement, each Lender agrees to make, on the Closing Date and
on a several basis, a term loan (a "Term Loan A") to the Obligors,
jointly and severally, in the principal amount not to exceed such
Lender's Pro Rata Portion (Term Loans A) of the Term Loan A Amount.
The Term Loans A made by each Lender shall be evidenced by and
repayable in accordance with the terms and conditions of promissory
notes, in the form of EXHIBIT T-1 (the "Term Notes A"), executed by the
Obligors, jointly and severally, in favor of such Lender.
Amounts borrowed pursuant to this SECTION 2.2(A) may not be
reborrowed at any time during the term of this Agreement. The
outstanding principal balance and all accrued and unpaid interest under
each Term Loan A shall be due and payable upon the termination of this
Agreement, whether by its terms, by prepayment, by acceleration, or
otherwise. All amounts outstanding under the Term Loans A shall
constitute Term Loan A Obligations.
(b) TERM LOANS B. Subject to the terms and conditions
of this Agreement, each Lender with any Commitment to make Term Loans B
agrees to make a series of term loans ("Term Loans B") to Borrower in
the aggregate principal amount funded by such Lender not to exceed such
Lender's Pro Rata Portion (Term Loans B) of the Maximum Term Loan B
Amount. The foregoing to the contrary notwithstanding, (a) each
requested Borrowing of Term Loans B shall be in a principal amount of
not less than $2,000,000 in the aggregate, (b) each requested Borrowing
of Term Loans B shall be in an aggregate amount equal to or less than
the Maximum Term Loan B Amount LESS the original principal amount of
Term Loans B previously advanced (exclusive of any interest that has
been added to the principal balance of the Term Loans B pursuant to
SECTION 2.6(A)(II)) pursuant to this SECTION 2.2(B), (c) Borrower only
shall be entitled to request the making of Term Loans B on or before
December 31, 1998, and (d) Borrower shall be limited to 4 requests for
Borrowings of Term Loans B. Subject to the foregoing, each Term Loan B
shall be made by such Lenders at such times and in such amounts as
Borrower may request in writing. The Term Loans B made by each such
Lender shall be evidenced by and repayable in accordance with the terms
and conditions of promissory notes, in the form of EXHIBIT T-2 (the
"Term Notes B"), executed by Borrower in favor of such Lender. At any
such Lender's option, all (but not less than all) of the Term Loans B
made by such Lender may be consolidated into a single Term Loan B and
evidenced by a single restated Term Note B, with such additional
documentation as Agent and such Lender reasonably may require.
Amounts borrowed pursuant to this SECTION 2.2(B) may be not
be reborrowed at any time during the term of this Agreement. The
outstanding principal balance and all accrued and unpaid interest under
each Term Loan B shall be due and payable upon the termination of this
Agreement, whether by its terms, by prepayment, by acceleration, or
otherwise. All amounts outstanding under the Term Loans B shall
constitute Obligations.
(c) PROCEDURE FOR BORROWING. Each Borrowing of Term
Loans B shall be made upon Borrower's irrevocable written request
therefor to Agent and each Lender with any Commitment to make Term
Loans B (which request must be received from an Authorized Person and
by Agent and the Lenders no later than 10:00 a.m. (California time) not
less than 5 Business Days prior to the requested Funding Date)
specifying (i) the amount of the Borrowing; and (ii) the requested
Funding Date, which shall be a Business Day. The Borrowing of Term
Loans A to be made on the Closing Date shall be made upon Borrower's
irrevocable written request therefor to Agent and each Lender with a
Commitment to make Term Loans A pursuant to the Disbursement Letter.
(d) MAKING OF TERM LOANS B.
(i) Each Lender with any Commitment to make Term
Loans B shall make the amount of such Lender's Pro Rata Portion
(Term Loans B) of the requested Borrowing available to Agent in
immediately available funds, to such account of Agent as Agent may
designate, not later than 11:00 a.m. (California time) on the
Funding Date applicable thereto. After Agent's receipt of the
proceeds of such Term Loans B, upon satisfaction of the applicable
conditions precedent set forth in SECTION 3 hereof, Agent shall
make the proceeds of such Term Loans B available to Borrower on
the applicable Funding Date by transferring same day funds equal
to the proceeds of such Term Loans B received by Agent to
Borrower's Designated Account; PROVIDED, HOWEVER, that no such
Lender shall have the obligation to make any Term Loan B if Agent
and each other such Lender shall have received written notice
given in good faith by any such Lender on or before 5:00 p.m.
(California time) on the Business Day immediately prior to the
applicable Funding Date that one or more of the applicable
conditions set forth in SECTIONS 2.3(B) OR 3 will not be satisfied
on the requested Funding Date for the applicable Borrowing (any
such notice timely received by Agent and such other Lenders from
such Lender being a "Term Loan B Funding Blockage Notice").
(ii) Unless Agent and each other such Lender
receives a Term Loan B Funding Blockage Notice from such Lender on
or prior to the Closing Date or, with respect to any Borrowing
after the Closing Date, no later than 5:00 p.m. (California time)
on the Business Day immediately prior to the applicable Funding
Date, stating that such Lender will not make available as and when
required hereunder to Agent for the account of Borrower the amount
of that Lender's Pro Rata Portion (Term Loans B) of the Borrowing,
Agent may assume that each such Lender has made or will make such
amount available to Agent in immediately available funds on the
Funding Date and Agent may (but shall not be so required), in
reliance upon such assumption, make available to Borrower on such
date a corresponding amount. If and to the extent any such Lender
shall not have made its full amount available to Agent in
immediately available funds (unless such failure arises from such
Lender's Term Loan B Funding Blockage Notice timely received by
Agent) and Agent in such circumstances has made available to
Borrower such amount, such Lender shall on the Business Day
following such Funding Date make such amount available to Agent,
together with interest at the Defaulting Lenders Rate for each day
during such period. A notice submitted by Agent to any such
Lender with respect to amounts owing under this subsection shall
be conclusive, absent manifest error. If such amount is so made
available, such payment to Agent shall constitute such Lender's
Term Loan B on the date of Borrowing for all purposes of this
Agreement. If such amount is not made available to Agent on the
Business Day following the Funding Date, Agent will notify
Borrower of such failure to fund and, upon demand by Agent,
Borrower shall pay such amount to Agent for Agent's account,
together with interest thereon for each day elapsed since the date
of such Borrowing, at a rate per annum equal to the interest rate
applicable at the time to the Term Loans B composing such
Borrowing. The failure of any such Lender to make any Term Loan B
on any Funding Date shall not relieve any other such Lender of any
obligation hereunder to make a Term Loan B on such Funding Date,
but no other such Lender shall be responsible for the failure of
such Lender to make the Term Loan B to be made by such Lender on
any Funding Date.
(iii) Unless and until the amount owing by any
Defaulting Lender pursuant to the second sentence of SECTION
2.2(D)(II) has been paid by Borrower or such Defaulting Lender,
Agent shall not be obligated to transfer to a Defaulting Lender
any payments made by Borrower to Agent for the Defaulting Lender's
benefit; nor shall a Defaulting Lender be entitled to the sharing
of any payments hereunder. Amounts payable to a Defaulting Lender
shall instead be paid to or retained by Agent. Agent may hold
and, in its discretion, re-lend to Borrower the amount of all such
payments received or retained by it for the account of such
Defaulting Lender. Solely for the purposes of voting or
consenting to matters with respect to the Loan Documents and
determining Required Lenders, such Defaulting Lender shall be
deemed not to be a "Lender" and such Lender's Pro Rata Portion
(Total) shall be deemed to be zero (-0-). This section shall
remain effective with respect to such Lender until (x) the
Obligations and the Term Loan A Obligations under this Agreement
shall have been declared or shall have become immediately due and
payable, (y) the amount owing by such Defaulting Lender pursuant
to the second sentence of SECTION 2.2(D)(II) has been paid by
Borrower or such Defaulting Lender, or (z) the requisite non-
Defaulting Lenders with Commitments to make Term Loans B and Agent
shall have waived such Lender's default in writing. The operation
of this section shall not be construed to increase or otherwise
affect the Commitment of any Lender to make Term Loans B, or
relieve or excuse the performance by Borrower of its duties and
obligations hereunder.
(e) LENDERS' FAILURE TO PERFORM.
(i) All Term Loans A shall be made, simultaneously,
by the Lenders with Commitments to make Term Loans A and in
accordance with their Pro Rata Portions (Term Loans A). It is
understood that (i) no such Lender shall be responsible for any
failure by any other such Lender to perform its obligation to make
any Term Loan A hereunder, nor shall any Commitment of any Lender
to make Term Loans A be increased or decreased as a result of any
failure by any other such Lender to perform its obligation to make
any Term Loan A hereunder, and (ii) no failure by any such Lender
to perform its obligation to make any Term Loan A hereunder shall
excuse any other such Lender from its obligation to make any Term
Loan A hereunder. With respect to each Borrowing for Term Loans A
requested by one or more Obligors, if any such Lender fails to
make any Term Loan A and any one or more other such Lenders
make(s) their Term Loans A pursuant to clause (ii) of the
immediately preceding sentence, then the Pro Rata Shares (Term
Loans A) and the Term Loans (Total) of each Lender shall be
adjusted to reflect the Term Loans A made or not made, as the case
may be, by such Lenders pursuant to such requested Borrowing.
(i) All Term Loans B shall be made, simultaneously,
by the Lenders with Commitments to make Term Loans B and in
accordance with their Pro Rata Portions (Term Loans B). It is
understood that (i) no such Lender shall be responsible for any
failure by any other such Lender to perform its obligation to make
any Term Loan B hereunder, nor shall any Commitment of any such
Lender to make Term Loans B be increased or decreased as a result
of any failure by any other such Lender to perform its obligation
to make any Term Loan B hereunder, and (ii) no failure by any such
Lender to perform its obligation to make any Term Loan B hereunder
shall excuse any other such Lender from its obligation to make any
Term Loan B hereunder. With respect to each Borrowing for Term
Loans B requested by Borrower, if any such Lender fails, whether
pursuant to a Term Loan B Funding Blockage Notice or otherwise, to
make any Term Loan B and any one or more other such Lenders
make(s) their Term Loans B pursuant to clause (ii) of the
immediately preceding sentence, then the Pro Rata Shares (Term
Loans B) and the Term Loans (Total) of each such Lender shall be
adjusted to reflect the Term Loans B made or not made, as the case
may be, by such Lenders pursuant to such requested Borrowing.
(f) MANDATORY PREPAYMENTS.
(i) ASSET DISPOSITIONS. Subject to SECTION 7.4:
(A) Immediately upon receipt of the Net
Proceeds of any Asset Disposition (other than Permitted Dispositions
(but excluding (i.e., including as a mandatory prepayment) the
transaction described in clause (b) of the definition of "Permitted
Venture Subsidiary Transaction")), Borrower shall prepay the
Obligations and the Obligors shall prepay the Term Loan A Obligations
in an amount equal to the Net Proceeds of such Asset Disposition and
such amounts paid shall be applied in accordance with SECTION
2.2(F)(IV)(A).
(B) Immediately upon receipt of the Net
Proceeds of the Permitted CS Wireless Disposition (other than a ratable
90% of the first $60,000,000 of Net Proceeds of any Permitted CS
Wireless Disposition), Borrower shall prepay the Obligations and the
Obligors shall prepay the Term Loan A Obligations in an amount equal to
the Net Proceeds of such Asset Disposition and such amounts paid shall
be applied in accordance with SECTION 2.2(F)(IV). For the avoidance of
doubt, a ratable 10% of the first $60,000,000, and 100% of the amount
(if any) in excess of the first $60,000,000, of Net Proceeds of any
Permitted CS Wireless Disposition shall be prepaid pursuant to the
immediately preceding sentence.
(C) Concurrently with the making of any such
payment under this SECTION 2.2(F)(I), Borrower on behalf of the
Covenant Parties shall deliver to Agent an original, and to each Lender
a copy, of a certificate of Borrower's chief executive officer or chief
financial officer demonstrating its calculation of the amount required
to be paid. The foregoing is not meant to express or imply an ability
of the Covenant Parties to sell or otherwise dispose of properties or
assets other than as expressly and explicitly provided for herein.
(ii) EXTRAORDINARY TRANSACTIONS. In the event that
any of the Covenant Parties, subject to SECTION 7.1, issues
Indebtedness (other than any issuance of Indebtedness that is permitted
under SECTION 7.1), or, subject to SECTION 7.3, enters into any joint
venture transaction (other than Permitted Venture Subsidiary
Transactions), merger, recapitalization, or combination (each, a
"Extraordinary Transaction"), then immediately upon receipt of the Net
Proceeds therefrom by Borrower or any other Covenant Party, as
applicable (other than (a) proceeds of purchase money Indebtedness or
capital leases, (b) proceeds from the issuance of Stock to Borrower by
any Person that was a Subsidiary of Borrower immediately prior to such
issuance, or (c) mergers, combinations, or joint ventures occurring
solely between or among the Covenant Parties), Borrower shall prepay
the Obligations and the Obligors shall prepay the Term Loan A
Obligations in an amount equal to the Net Proceeds of such
Extraordinary Transaction and the amount paid shall be applied in
accordance with SECTION 2.2(F)(IV)(A). Concurrently with the making of
any such payment, Borrower on behalf of the Covenant Parties shall
deliver to Agent an original, and to each Lender a copy, of a
certificate of Borrower's chief executive officer or chief financial
officer demonstrating its calculation of the amount required to be
paid.
(iii) PLAN REVERSIONS. In the event that any of
the Covenant Parties receives any surplus assets of any Plan, Borrower
immediately shall prepay the Obligations and the Obligors immediately
shall prepay the Term Loan A Obligations in an amount equal to such
returned surplus assets net of related transaction costs (including
income, excise, or other taxes) and the amount paid shall be applied in
accordance with SECTION 2.2(F)(IV)(A). Concurrently with the making of
any such payment, Borrower on behalf of the Covenant Parties shall
deliver to Agent an original, and to each Lender a copy, of a
certificate of Borrower's chief executive officer or chief financial
officer demonstrating its calculation of the amount required to be
paid.
(iv) APPLICATION OF PROCEEDS.
(A) With respect to the mandatory prepayments
described in subsections (i) through (iii) above, such prepayments
shall be applied, first, to pay any fees, or expense reimbursements
then due to Agent from any one or more of the Obligors, second, to pay
any fees (other than the Additional Discount Amount) or expense
reimbursements then due to the Lenders from any one or more of the
Obligors, third, to pay any and all interest accrued and unpaid with
respect to the Advances (including Foothill Loans and Agent Advances),
the Term Loans B, and the Term Loans A, fourth, to pay or prepay
principal of Foothill Loans and Agent Advances, fifth, to pay any and
all interest accrued and unpaid with respect to the Additional Discount
Amount, sixth, to pay the Additional Discount Amount, seventh, ratably
to repay the principal of the Term Loans B, eighth, ratably to repay
the principal of the Term Loans A, ninth, ratably to repay principal of
the Advances (other than Foothill Loans and Agent Advances) and to
effect a commensurate permanent reduction of the Maximum Revolving
Amount, and tenth, ratably to pay any other Obligations or Term Loan A
Obligations due to Agent or any Lender.
(B) SECTION 2.2(F)(IV)(A) to the contrary
notwithstanding, any prepayment described in SECTION 2.2(F)(I)(B) in
connection with a Permitted CS Wireless Disposition that is applied to
the repayment of principal of the Advances (other than Foothill Loans
and Agent Advances) shall not effect a commensurate permanent reduction
of the Maximum Revolving Amount.
2.3 NOTES. Borrower shall deliver each Revolving Note,
each Term Note B, and each Additional Discount Amount Note to Agent
for delivery to the appropriate Lender. The Obligors shall deliver
each Term Note A to Agent for delivery to the appropriate Lender. All
of the Notes shall be payable to the order of each Lender at Agent's
address set forth in SECTION 12, or at such other office of Agent as
may be designated, from time to time, by Agent, for the account
of each Lender.
2.4 PAYMENTS.
(a) PAYMENTS BY OBLIGORS.
(i) All payments to be made by any one or more of
the Obligors shall be made without set-off, recoupment, deduction, or
counterclaim, except as otherwise required by law. Except as otherwise
expressly provided herein, all payments by any one or more of the
Obligors shall be made to Agent for the account of the Lenders at
Agent's address set forth in SECTION 12, and shall be made in
immediately available funds, no later than 11:00 a.m. (California time)
on the date specified herein. Any payment received by Agent later than
11:00 a.m. (California time) shall be deemed to have been received on
the following day and any applicable interest or fee shall continue to
accrue until such following day.
(ii) Unless Agent receives notice from Borrower on
behalf of the Obligors prior to the date on which any payment is due to
the Lenders that the Obligors will not make such payment in full as and
when required, Agent may assume that the Obligors have made such
payment in full to Agent on such date in immediately available funds
and Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Lender on such due date an amount equal
to the amount then due such Lender. If and to the extent the Obligors
have not made such payment in full to Agent, each Lender shall repay to
Agent on demand such amount distributed to such Lender, together with
interest thereon at the Reference Rate for each day from the date such
amount is distributed to such Lender until the date repaid.
(b) APPORTIONMENT, APPLICATION, AND REVERSAL OF
PAYMENTS. Except as otherwise provided with respect to Defaulting
Lenders, aggregate principal and interest payments shall be apportioned
ratably among the Lenders (according to the unpaid principal balance of
the Advances or Term Loans B or Term Loans A to which such payments
relate held by each Lender) and payments of the fees (other than fees
designated for Agent's sole and separate account) shall, as applicable,
be apportioned ratably (in accordance with the Lenders' respective Pro
Rata Portions (Total)) among the Lenders. All payments shall be
remitted to Agent and all such payments not relating to principal or
interest of specific Advances or Term Loans B or Term Loans A, or not
constituting payment of specific fees, and all proceeds of Accounts or
other Collateral received by Agent, shall be applied, first, to pay any
fees, or expense reimbursements then due to Agent from any one or more
of the Obligors, second, to pay any fees (other than the Additional
Discount Amount) or expense reimbursements then due to the Lenders from
any one or more of the Obligors, third, to pay any and all interest
accrued and unpaid with respect to the Advances (including Foothill
Loans and Agent Advances), the Term Loans B, and the Term Loans A,
fourth, to pay or prepay principal of Foothill Loans and Agent
Advances, fifth, to pay any and all interest accrued and unpaid with
respect to the Additional Discount Amount, sixth, to pay the Additional
Discount Amount, seventh ratably to repay the principal of the Term
Loans B, eighth, ratably to repay the principal of the Term Loans A,
ninth, ratably to repay principal of the Advances (other than Foothill
Loans and Agent Advances) and tenth, ratably to pay any other
Obligations or Term Loan A Obligations due to Agent or any Lender.
(c) PAYMENTS TO CANYON LENDERS. Anything in this
Agreement or any other Loan Document to the contrary notwithstanding,
any payment to be made to any Canyon Lender shall be made to
Canpartners on behalf, and for the benefit, of such Canyon Lender and
any such payment required to be made to any Canyon Lender shall, upon
Canpartners' receipt thereof, be deemed received by that Canyon Lender.
2.5 OVERADVANCES. If, at any time or for any reason, the
amount of Obligations pursuant to SECTION 2.1 is greater than either
the Dollar or percentage limitations set forth in SECTION 2.1
(an "Overadvance"), Borrower immediately shall pay to Agent, in cash,
the amount of such excess, which amount shall be used by Agent to reduce
the Obligations in accordance with the priority set forth in SECTION
2.4(B).
2.6 INTEREST: RATES, PAYMENTS, AND CALCULATIONS.
(a) Interest Rates. (i) all Obligations (except for the
Term Loans B and the Additional Discount Amount) shall bear interest at
a per annum rate of 4.75 percentage points above the Reference Rate,
(ii) the Term Loans B shall bear interest at a rate of 13 percent per
annum; (iii) the Additional Discount Amount shall bear interest at a
rate of 14 percent per annum; and (iv) all Term Loan A Obligations
(including the Term Loans A) shall bear interest at a rate of 13
percent per annum.
(b) Default Rates. Upon the occurrence and during the
continuation of an Event of Default, (i) all Obligations (except for
the Term Loans B and the Additional Discount Amount) shall bear
interest at a per annum rate equal to 7.75 percentage points above the
Reference Rate, (ii) the Term Loans B shall bear interest at a rate of
16 percent per annum, (iii) the Additional Discount Amount shall bear
interest at a rate equal to 17 percent per annum, and (iv) all Term
Loan A Obligations (including the Term Loans A) shall bear interest at
a rate of 16 percent per annum.
(c) Minimum Interest. In no event shall the rate of
interest chargeable under SECTION 2.6(A)(I) for any day be less than
13% per annum. To the extent that interest accrued hereunder at the
rate set forth in such section would be less than the foregoing minimum
daily rate, the interest rate chargeable hereunder for such day
automatically shall be deemed increased to the minimum rate.
(d) Payments. (i) Interest (other than interest accrued
with respect to the Term Loans B, the Term Loans A, and the Additional
Discount Amount) payable hereunder shall be due and payable, in
arrears, on the first day of each month during the term hereof. Any
interest not paid when due shall be compounded and shall thereafter
accrue interest at the rate then applicable to Advances hereunder.
(ii) Interest accrued with respect to the Term Loans B shall
be due and payable, in arrears, on the first day of each month during
the term hereof. So long as no Event of Default has occurred and is
continuing or would result therefrom, Borrower shall have the option
(to be exercised in the manner set forth below) of (y) having all of
such accrued and unpaid interest charged as an Advance to the Loan
Account (the "Term Loan B Regular Interest Payment Option"), or (z)
having one-half of all such accrued and unpaid interest (i.e., 6.5% per
annum) charged as an Advance to the Loan Account and having one-half of
all such accrued and unpaid interest paid by adding the amount thereof
to the balance of the Term Loans B, with such compounded amount
thereafter accruing interest at the rate then applicable to the Term
Loans B (the "Term Loan B PIK Interest Payment Option"). If an Event
of Default has occurred and is continuing or would result therefrom,
Borrower shall no longer have the ability to have any portion of such
interest compounded by adding the amount thereof to the balance of the
Term Loans B and all such accrued and unpaid interest shall be charged
as an Advance to the Loan Account. With respect to any month, unless
either (1) Agent receives, not later than 5 Business Days prior to the
beginning of such month, written notice from Borrower that it elects
the Term Loan B Regular Interest Payment Option for such month or (2)
an Event of Default has occurred and is continuing as of the beginning
of such month, Borrower shall be deemed to have elected the Term Loan B
PIK Interest Payment Option for such month for the number of days in
such month that an Event of Default has not occurred and is continuing;
PROVIDED, HOWEVER, that, upon the cure or waiver of any Event of
Default in any month, Borrower shall not have the right to elect the
Term Loan B PIK Interest Payment Option for the remainder of such
month.
(iii) Interest accrued with respect to the Additional
Discount Amount hereunder shall be due and payable, in arrears, on the
first day of each April, July, October, and January during the term
hereof. So long as no Event of Default has occurred and is continuing
or would result therefrom, Borrower shall have the option (to be
exercised in the manner set forth below) of (y) having all of such
accrued and unpaid interest charged as an Advance to the Loan Account
(the "Additional Discount Amount Regular Interest Payment Option"), or
(z) having all such accrued and unpaid interest paid by adding the
amount thereof to the balance of the Additional Discount Amount, with
such compounded amount thereafter accruing interest at the rate then
applicable to the Additional Discount Amount (the "Additional Discount
Amount PIK Interest Payment Option"). If an Event of Default has
occurred and is continuing or would result therefrom, Borrower shall no
longer have the ability to have any portion of such interest compounded
by adding the amount thereof to the balance of the Additional Discount
Amount and all such accrued and unpaid interest shall be charged as an
Advance to the Loan Account. With respect to any month, unless either
(1) Agent receives, not later than 5 Business Days prior to the
beginning of such month, written notice from Borrower that it elects
the Additional Discount Amount Regular Interest Payment Option for such
month or (2) an Event of Default has occurred and is continuing as of
the beginning of such month, Borrower shall be deemed to have elected
the Additional Discount Amount PIK Interest Payment Option for such
month for the number of days in such month that an Event of Default has
not occurred and is continuing; PROVIDED, HOWEVER, that, upon the cure
or waiver of any Event of Default in any month, Borrower shall not have
the right to elect the Additional Discount Amount PIK Interest Payment
Option for the remainder of such month.
(iv) Interest accrued with respect to the Term Loans A shall
be due and payable, in arrears, on the first day of each month during
the term hereof. So long as no Event of Default has occurred and is
continuing or would result therefrom, the Obligors shall have the
option (to be exercised in the manner set forth below) of (y) having
all of such accrued and unpaid interest charged as an Advance to the
Loan Account (the "Term Loan A Regular Interest Payment Option"), or
(z) having one-half of all such accrued and unpaid interest (i.e., 6.5%
per annum) charged as an Advance to the Loan Account and having one-
half of all such accrued and unpaid interest paid by adding the amount
thereof to the balance of the Term Loans A, with such compounded amount
thereafter accruing interest at the rate then applicable to the Term
Loans A (the "Term Loan A PIK Interest Payment Option"). If an Event
of Default has occurred and is continuing or would result therefrom,
the Obligors shall no longer have the ability to have any portion of
such interest compounded by adding the amount thereof to the balance of
the Term Loans A and all such accrued and unpaid interest shall be
charged as an Advance to the Loan Account. With respect to any month,
unless either (1) Agent receives, not later than 5 Business Days prior
to the beginning of such month, written notice from Borrower that it
elects the Term Loan A Regular Interest Payment Option for such month
or (2) an Event of Default has occurred and is continuing as of the
beginning of such month, Borrower shall be deemed to have elected the
Term Loan A PIK Interest Payment Option for such month for the number
of days in such month that an Event of Default has not occurred and is
continuing; PROVIDED, HOWEVER, that, upon the cure or waiver of any
Event of Default in any month, Borrower shall not have the right to
elect the Term Loan A PIK Interest Payment Option for the remainder of
such month.
(v) Except to the extent that any interest in respect of the
Term Loans B is compounded under the Term Loan B PIK Interest Payment
Option, that any interest in respect of the Additional Discount Amount
is compounded under the Additional Discount Amount PIK Interest Payment
Option, and that any interest in respect of the Term Loans A is
compounded under the Term Loan A PIK Interest Payment Option, each of
the Obligors hereby authorizes Agent to charge without prior notice to
any Obligor, and Agent shall charge without prior notice to any Obligor
(unless Agent notifies Borrower on behalf of the Obligors to the
contrary), all interest, all Lender Group Expenses (as and when
incurred), the fees and charges provided for in SECTION 2.11 (as and
when accrued or incurred), and all installments or other payments due
under any Loan Document (including the Notes) to which any Covenant
Party is a party to the Loan Account, which amounts thereafter shall
accrue interest at the rate then applicable to Advances hereunder. Any
interest with respect to the Term Loans A charged as an Advance to the
Loan Account shall automatically be deemed to be, as between Borrower,
on the one hand, and the Obligors other than Borrower, on the other
hand, Permitted Covenant Party Indebtedness (irrespective of the
existence of any Default or Event of Default, but such Indebtedness
otherwise shall comply with the requirements of "Permitted Covenant
Party Indebtedness").
(e) Computation. The Reference Rate as of the date of
this Agreement is 8.5% per annum. In the event the Reference Rate is
changed from time to time hereafter, the rate of interest provided for
in SECTION 2.6(A)(I) and SECTION 2.6(B)(I) automatically and
immediately shall be increased or decreased by an amount equal to such
change in the Reference Rate. All interest and fees chargeable under
the Loan Documents shall be computed on the basis of a 360 day year for
the actual number of days elapsed.
(f) Intent to Limit Charges to Maximum Lawful Rate. In
no event shall the interest rates payable under this Agreement or any
Note, plus any other amounts paid in connection herewith, exceed the
highest rate permissible under any law that a court of competent
jurisdiction shall, in a final determination, deem applicable. The
Obligors and the Lender Group in executing and delivering this
Agreement and the Notes, intend legally to agree upon the rate or rates
of interest and manner of payment stated within it; PROVIDED, HOWEVER,
that, anything contained herein or in any Note to the contrary
notwithstanding, if said rate or rates of interest or manner of payment
exceeds the maximum allowable under applicable law, then, IPSO FACTO as
of the date of this Agreement, the Obligors are and shall be liable
only for the payment of such maximum as allowed by law, and payment
received from the Obligors in excess of such legal maximum, whenever
received, shall be applied to reduce the principal balance of the
Obligations or the Term Loan A Obligations, as the case may be, to the
extent of such excess.
2.7 COLLECTION OF ACCOUNTS. Borrower, at all times from
and after the date set forth in SECTION 3.3(D) (the "Concentration
Deadline"), shall maintain a concentration account (the
"Concentration Account") at the Designated Account Bank and, from
and after the Concentration Deadline (or, if earlier, the date that
the Concentration Account is established), (i) shall instruct all Account
Debtors with respect to the Accounts, General Intangibles, and Negotiable
Collateral of Borrower to remit ALL Collections in respect thereof to
such Concentration Account (and shall cause the other Covenant Parties
to instruct all account debtors with respect to the accounts, general
intangibles, and other rights to payment of such Covenant Parties to
remit ALL Collections in respect thereof to such Concentration
Account (or into a deposit account of such Covenant Party the proceeds
of which are remitted no less frequently than each Business Day to
the Concentration Account), and each other Covenant Party hereby agrees
to so instruct all such account debtors (including the depository with
respect to any such deposit account)), and (ii) shall deposit (and shall
cause each of the other Covenant Parties to deposit, and each other Covenant
Party hereby agrees to deposit) ALL other Collections received by any
Covenant Party from any source immediately upon receipt in to the
Concentration Account (or into a deposit account of such Covenant Party
the proceeds of which are remitted no less frequently than each Business Day
to the Concentration Account). On or before the Concentration Deadline,
Borrower, Agent, and the Designated Account Bank shall enter into the
Concentration Account Agreement. Borrower and each of the other
Covenant Parties hereby agree that all Collections and other amounts
received by any Covenant Party from any account debtor or any
other source immediately upon receipt shall be deposited into the
Concentration Account (or into a deposit account of such Covenant Party
the proceeds of which are remitted no less frequently than each
Business Day to the Concentration Account). Neither Concentration
Account Agreement nor arrangement contemplated thereby shall be
modified by any Covenant Party without the prior written consent of
Agent. Upon the terms and subject to the conditions set forth in the
Concentration Account Agreement, all amounts received in the
Concentration Account shall be wired each Business Day into an account
(the "Agent Account") maintained by Agent at a depositary selected
by Agent.
2.8 CREDITING PAYMENTS; APPLICATION OF COLLECTIONS. The
receipt of any Collections by Agent (whether from transfers to Agent
by the Designated Account Bank pursuant to the Concentration Account
Agreement or otherwise) immediately shall be applied provisionally
to reduce Advances outstanding hereunder to zero and the excess, if any,
shall be transferred to the Designated Account, but shall not be
considered a payment on account unless such Collection item is a wire
transfer of immediately available federal funds and is made to the
Agent Account or unless and until such Collection item is honored when
presented for payment. From and after the Closing Date, the Lender
Group shall be entitled to charge Borrower for 3 Business Days of `
clearance' or `float' at the rate set forth in SECTION 2.6(A)(I)
or SECTION 2.6(C)(I), as applicable, on all Collections that are
received by the Lender Group or any member thereof (regardless of
whether forwarded by the Designated Account Bank to Agent,
whether provisionally applied to reduce the Obligations under SECTION
2.1, or otherwise) and, until the satisfaction of the condition set
forth in SECTION 3.3(K), on all other amounts that would have
constituted Collections received by the Lender Group if the cash
management system required to be implemented thereunder had been
fully and satisfactorily implemented on or before the Closing Date
(the "Virtual Collections"). This across-the-board 3 Business
Day clearance or float charge on all Collections and Virtual
Collections is acknowledged by the parties to constitute an integral
aspect of the pricing of the Lender Group's financing of Borrower,
and shall apply irrespective of the characterization of whether
receipts are owned by a Covenant Party or Agent, and whether or
not there are any outstanding Advances, the effect of such clearance
or float charge being the equivalent of charging 3 Business Days
of interest on such Collections and Virtual Collections. Should
any Collection item not be honored when presented for payment,
then Borrower shall be deemed not to have made such payment, and
interest shall be recalculated accordingly. Anything to the contrary
contained herein notwithstanding, any Collection item shall be
deemed received by Agent only if it is received into the Agent Account
on a Business Day on or before 11:00 a.m. California time.
If any Collection item is received into the Agent Account on a
non-Business Day or after 11:00 a.m. California time on a Business
Day, it shall be deemed to have been received by Agent as of the
opening of business on the immediately following Business Day. The
economic benefits of the 3 Business Day clearance or float charge
provided for in this SECTION 2.8 shall be for the ratable benefit
of the Lender Group (in accordance with the Lenders' respective
Pro Rata Portions (Total)). Until such time as the Concentration
Account Agreement has been established, Borrower shall provide
to Agent on a daily basis written reports, in form and substance
satisfactory to Agent, of the amount of Collections and any Virtual
Collections for purposes of calculating the clearance or float
charge provided for in this SECTION 2.8.
2.9 DESIGNATED ACCOUNT. Subject to the terms and
conditions of this Agreement, Agent and Foothill are authorized
to make the Advances (including Agent Advances and Foothill Loans)
and the Term Loans B under this Agreement based upon the written
instructions received from anyone purporting to be an Authorized
Person, or without instructions if pursuant to SECTION 2.6(D).
Borrower agrees to establish and maintain the Designated Account
with the Designated Account Bank for the purpose of receiving the
proceeds of the Advances and the Term Loans B requested by Borrower
and made by Agent and Foothill by Agent and Borrower, any Advance
or Term Loan B requested by Borrower and made hereunder shall
be made to the Designated Account. Each of the Obligors hereby agrees
that the proceeds of the Term Loans A to be made on the Closing Date
hereunder shall be made to the Designated Account.
2.10 MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF OBLIGATIONS
AND TERM LOAN A OBLIGATIONS. Agent shall maintain an account on its books
in the name of Borrower and the other Obligors (the "Loan Account")
on which (a) Borrower will be charged with all Advances and Term Loans B
made by Agent, Foothill, or the Lenders to Borrower or for Borrower's
account, including, accrued interest, Lender Group Expenses, and any
other payment Obligations of Borrower, and (b) the Obligors will be charged
with all Term Loans A made by the Lenders to or for the account
of the Obligors, including, accrued interest, the allocable portion of
Lender Group Expenses, and any other payment Term Loan A Obligations
all payments received by Agent from the Obligors or for the Obligors'
account, including all amounts received in the Agent Account from the
Concentration Account. Within 10 Business Days after the end of each
month, Agent shall render statements regarding the Loan Account to
Borrower on behalf of the Obligors, including principal, interest,
fees, and including an itemization of all charges and expenses
constituting Lender Group Expenses owing, and such statements
shall be conclusively presumed to be correct and accurate and
constitute an account stated between the Obligors and the Lender Group
unless, within 30 days after receipt thereof by Borrower on
behalf of the Obligors, Borrower on behalf of the Obligors shall deliver
to Agent written objection thereto describing the error or
errors contained in any such statements, and shall deliver to each Lender
a copy of such objection.
2.11 FEES. Borrower shall pay to Agent for the ratable benefit
of the Lender Group (in accordance with the Lenders' respective Pro Rata
Portions (Total)), except as otherwise indicated, the following:
(a) Discount Amount. On the Closing Date, a Discount
Amount (the "Discount Amount") of $1,500,000;
(b) Additional Discount Amount. An additional discount
amount (the "Additional Discount Amount") of $1,500,000, such amount to
be earned in full on the Closing Date and be payable on the date of
termination of this Agreement, whether at maturity, by prepayment, by
acceleration, or otherwise. Borrower shall execute and deliver to each
Lender on the Closing Date a promissory note, in the form of EXHIBIT A-
2 (an "Additional Discount Amount Note"), in the principal amount of
that Lender's Pro Rata Portion (Total) of the Additional Discount
Amount.
(c) Unused Total Facility Fee. On the first day of each
month during the term of this Agreement, an unused total facility fee
in an amount equal to 0.50% per annum times the Average Unused Portion
of the Total Facility;
(d) Financial Examination and Documentation Fees. For
each of the respective sole and separate accounts of Agent and each
Lender that exercises its rights under SECTION 4.6 hereof: (i) a
separate fee of $650 per day per examiner, plus out-of-pocket expenses,
for each financial analysis and examination (i.e., audits) of the
Covenant Parties performed by the respective personnel employed by
Agent or by such Lender; PROVIDED, HOWEVER, that, so long as no Event
of Default has occurred and is continuing, Agent and each Lender will
not perform an audit examination of the Covenant Parties and their
businesses more frequently than four times per year; (ii) a separate
appraisal fee of $1,500 per day per appraiser, plus out-of-pocket
expenses, for each appraisal of the properties and assets of the
Covenant Parties performed by the respective personnel employed by
Agent or by such Lender; PROVIDED, HOWEVER, that, solely with respect
to appraisals of spectrum rights (which appraisals shall be conducted
by Hardin & Associates or a similarly qualified appraiser designated by
Agent on behalf of the Lender Group as a whole and shall not be
conducted by any one or more of the Lenders), so long as no Event of
Default has occurred and is continuing, the Lender Group will not
perform an appraisal of the spectrum rights of the Covenant Parties
more frequently than once per year and the fees for each such appraisal
of the spectrum rights shall not exceed $10,000 plus out-of-pocket
expenses; PROVIDED FURTHER that, so long as no Event of Default has
occurred and is continuing, Borrower need not pay appraisal fees and
expenses in respect of appraisals of any property or assets of the
Covenant Parties other than the above-described appraisals of spectrum
rights; and (iii) the actual charges paid or incurred by Agent and by
such Lender, if Agent or such Lender elects to employ the services of
one or more third Persons to perform such audits or appraisals.
Anything to the contrary herein (other than with respect to appraisals
of the spectrum rights) notwithstanding, Borrower acknowledges and
agrees that Agent and any such Lender may, at Borrower's expense,
utilize the services of one or more industry appraisers or experts to
perform designated collateral monitoring and financial reporting
activities on behalf of Agent and the Lender Group; and
(e) Servicing Fee. On the first day of each month
during the term of this Agreement, and thereafter so long as any
Obligations or Term Loan A Obligations are outstanding, a servicing fee
in an amount equal to $5,000 per month.
2.12 LENDER GROUP EXPENSES, ETC. Borrower agrees to pay on
demand by Agent or any Lender the Lender Group Expenses of Agent or
such Lender, as the case may be, and all amounts payable by any
Lender to Agent pursuant to SECTION 17.7. Agent is authorized and
directed to apply the Collections, in the manner set forth in
SECTION 2.4, to the payment of all such Lender Group Expenses of
Agent or any Lender and all amounts payable by any Lender to Agent
pursuant to SECTION 17.7.
3. CONDITIONS; TERM OF AGREEMENT.
3.1 CONDITIONS PRECEDENT TO THE INITIAL LOANS. The
obligation of the Lender Group (or any member thereof) to make the
initial Loans is subject to the fulfillment, to the satisfaction of
Agent, each Original Lender, and their respective counsel, of each
of the following conditions on or before the Closing Date:
(a) the Closing Date shall occur on or before
June 6, 1997;
(b) Agent shall have received all financing
statements and fixture filings required by Agent and each
Original Lender, duly executed by Borrower, and Agent shall have
received searches reflecting the filing of all such financing
statements and fixture filings;
(c) Agent shall have received each of the
following documents, in form and substance satisfactory to
Agent and each Original Lender, duly executed, and each such
document shall be in full force and effect:
i. the Disbursement Letter;
ii. the Notes;
iii. the Stock Pledge Agreement, together with all
certificates (if any) representing shares of Stock
of each of the Subsidiaries of Borrower (other than
the Excluded Property), Stock of CS Wireless, and
Stock of any other Person pledged thereunder, as
well as Stock powers with respect to the foregoing
endorsed in blank;
iv. the Warrants;
v. the Deposit Account Security Agreement;
vi. the Securities Account Security Agreement;
vii. the Suretyship Agreement;
viii. the FCC Cooperation Agreement; and
ix. the Assignment Agreements.
(d) Agent shall have received a certificate from the
Secretary of each Covenant Party attesting to the resolutions of such
Covenant Party's Board of Directors authorizing its execution,
delivery, and performance of the Loan Documents to which such Covenant
Party is a party and authorizing specific officers of such Covenant
Party to execute the same;
(e) Agent shall have received copies of Borrower's
Governing Documents, as amended, modified, or supplemented to the
Closing Date, certified by the Secretary of Borrower;
(f) Agent shall have received copies of each other
Covenant Party's Governing Documents, as amended, modified, or
supplemented to the Closing Date, certified by the Secretary of the
applicable Covenant Party;
(g) Agent shall have received a certificate of status
(and any "bring-down" certificate dated within 10 days of the Closing
Date) with respect to each Covenant Party, such certificate to be
issued by the appropriate officer of the jurisdiction of organization
of such Covenant Party, which certificates shall indicate that such
Covenant Party is in good standing in such jurisdiction;
(h) Agent shall have received certificates of status
(and any "bring-down" certificates dated within 15 days of the Closing
Date) with respect to each Covenant Party, such certificates to be
issued by the appropriate officer of the jurisdictions in which its
failure to be duly qualified or licensed would constitute a Material
Adverse Change, which certificates shall indicate that such Covenant
Party is in good standing in such jurisdictions;
(i) Agent shall have received a certificate of
insurance, together with the endorsements thereto, as are required by
SECTION 6.10, the form and substance of which shall be satisfactory to
Agent, each Original Lender, and their respective counsel;
(j) Agent shall have received such Collateral Access
Agreements from the lessor of Borrower's leased premises located in or
about Albany, New York;
(k) [CONFIDENTIAL TREATMENT REQUESTED]
(l) Agent shall have received an opinion of Borrower's
counsel in form and substance satisfactory to Agent and each Original
Lender in their sole discretion (including an opinion that the BANX
Pledge and Security Agreement, the BANX Guarantee Agreement, and the
BANX Guarantor Security Agreement have been terminated and are no
longer in force and effect);
(m) Agent shall have received copies of the duly
executed documents that effect the termination of the BANX Pledge and
Security Agreement, the BANX Guarantee Agreement, and the BANX
Guarantor Security Agreement, each in form and substance satisfactory
to Agent and each Original Lender and each certified by the Secretary
of Borrower to be true, correct, and copies thereof;
(n) Agent shall have received the most recent
consolidating balance sheet information in form reasonably acceptable
to Agent and each Original Lender for each Covenant Party and a
detailed description of such Covenant Party's liabilities;
(o) Agent shall have received certifications to the
effect that the "Change Date" (as that term is defined in the
Convertible Notes) previously occurred;
(p) The Lenders shall have completed their business and
legal due diligence, the results of which are acceptable to the Lenders
in their sole discretion, including a review of the Covenant Parties'
other financing documents, an expert appraisal of the Covenant Parties'
spectrum rights, an expert assessment of collocation and interference
issues, a review of the Channel Leases and FCC Licenses to ensure that
all such leases and licenses are in full force and effect, are likely
to be extended or renewed as necessary or appropriate to the Covenant
Parties' continued operation of their business, and permit the
development of the Systems and the uses of broadcast spectrum as
previously represented to the Lenders by Borrower;
(q) Agent shall have received satisfactory evidence of
the consummation of the Pre-Closing Restructuring Transaction;
(r) The Covenant Parties shall have implemented a cash
management system acceptable to the Lenders in respect of the
operations of the Covenant Parties in the following markets: Albany,
New York; Rochester, New York; New York, New York; and Philadelphia,
Pennsylvania;
(s) Agent shall have received a copy of the Business
Plan, certified by the Secretary of Borrower as being true, correct,
and complete;
(t) Agent shall have received copies of the Master
Sublease Agreement, the Senior Note Indenture, the BANX Documents, and
the Seller Documents, in each case, certified by the Secretary of
Borrower as being true, correct, and complete;
(u) Agent shall have received satisfactory evidence that
the execution, delivery, and performance of this Agreement and the
other Loan Documents are not in conflict with the BANX Documents;
(v) Agent shall have received a Certificate of the Chief
Financial Officer of Borrower certifying that all tax returns required
to be filed by the Covenant Parties have been timely filed and all
taxes upon any Covenant Party, or the properties, assets, income, and
franchises (including real property taxes and payroll taxes) of any
Covenant Party have been paid prior to delinquency, except such taxes
that are the subject of a Permitted Protest; and
(w) all other documents and legal matters in connection
with the transactions contemplated by this Agreement shall have been
delivered, executed, or recorded and shall be in form and substance
satisfactory to Agent, each Original Lender, and their respective
counsel.
Execution and delivery to Agent by a Lender of a counterpart to this
Agreement shall be deemed confirmation by such Lender that (i) the
conditions precedent in this SECTION 3.1 have been fulfilled to the
satisfaction of such Lender and (ii) the decision of such Lender to
execute and deliver to Agent an executed counterpart to this Agreement
was made by such Lender independently and without reliance on Agent or
any other Lender as to the satisfaction of any condition precedent set
forth in this SECTION 3.1.
3.2 CONDITIONS PRECEDENT TO ALL LOANS. The following shall
be conditions precedent to the obligations of the Lender Group (or any
member thereof) to make all Loans hereunder:
(a) the representations and warranties contained in this
Agreement and the other Loan Documents shall be true and correct in all
respects on and as of the date of such extension of credit, as though
made on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date);
(b) no Default or Event of Default shall have occurred
and be continuing on the date of such extension of credit, nor shall
either result from the making thereof;
(c) Borrower shall have executed and delivered to Agent
an original, and to each Lender copies, of a written certification
indicating that its intended use of the proceeds of the requested
Advance, Term Loan B, or Term Loan A (as the case may be) complied with
the restrictions on use of proceeds set forth in SECTION 7.17 and is
not in violation of the Senior Notes Indenture;
(d) no injunction, writ, restraining order, or other
order of any nature prohibiting, directly or indirectly, the extending
of such credit shall have been issued and remain in force by any
governmental authority against Borrower, Agent, the Lender Group, or
any of their Affiliates; and
(e) as a condition precedent to each Term Loan B
hereunder, Borrower shall have executed and delivered to Agent an
original, and to each Lender copies, of a written certification to the
effect that the proceeds of that Term Loans B are being used solely for
the purposes, as set forth in SECTION 7.17 and in accordance with in
the Business Plan.
3.3 CONDITIONS SUBSEQUENT. As conditions subsequent to the
initial closing hereunder, Borrower shall perform or cause to be
performed the following (the failure by Borrower to so perform or cause
to be performed constituting an Event of Default):
(a) within 30 days following the Closing Date, deliver
to Agent the certified copies of the policies of insurance, together
with the endorsements thereto, as are required by SECTION 6.10, the
form and substance of which shall be satisfactory to Agent, each
Lender, and their respective counsel;
(b) within 90 days following the Closing Date, Agent and
each Lender shall have received satisfactory evidence of the
consummation of each of the Post-Closing Restructuring Transactions;
(c) concurrent with the satisfaction of clause (b)
above, Agent and each Lender shall have received consolidating balance
sheet information in form reasonably acceptable to Agent and the
Lenders, for each System Sub and License Sub and a detailed description
of such Covenant Parties' liabilities;
(d) within 30 days following the Closing Date, Agent
shall have received the Concentration Account Agreements, in form and
substance satisfactory to Agent, duly executed, and such document shall
be in full force and effect;
(e) Within 15 Business Days following the Closing Date,
(i) Agent shall have received copies, with respect to each Covenant
Party (other than Borrower), of (x) such Covenant Party's Governing
Document Amendments, (y) the resolutions of the board of directors of
such Covenant Party authorizing the adoption and filing of such
Governing Document Amendments, and (z) the resolutions of the requisite
shareholders of such Covenant Party authorizing the adoption and filing
of such Governing Document Amendments, in each case certified by the
Secretary of the applicable Covenant Party, and (ii) Agent shall have
received evidence satisfactory to it that the required independent
director has been appointed to the Board of Directors of each such
Covenant Party;
(f) on or before July 30, 1997, Agent and each Lender
shall have received a Certificate of the Secretary of Borrower
certifying to the Lenders that Borrower has completed, on or before
such date, its planned relocation of its chief executive office to
Pennsylvania;
(g) within 10 days following the Closing Date, (i)
Borrower shall have established a Securities Account in Pennsylvania
with a securities intermediary acceptable to the Lenders, (ii) Borrower
shall have transferred the Investment Property [CONFIDENTIAL
TREATMENT REQUESTED] owned by Borrower to such
Securities Account, and (iii) Agent shall have received a Control
Agreement, duly executed and in full force and effect, in respect of
such Securities Account;
(h) [CONFIDENTIAL TREATMENT REQUESTED]
(i) [CONFIDENTIAL TREATMENT REQUESTED]
(j) [CONFIDENTIAL TREATMENT REQUESTED]
(k) within 10 Business Days following the Closing Date,
the Covenant Parties shall have implemented a cash management system
acceptable to the Lenders in respect of the operations of the Covenant
Parties in all markets other than the following markets: Albany, New
York; Rochester, New York; New York, New York; and Philadelphia,
Pennsylvania;
(l) [CONFIDENTIAL TREATMENT REQUESTED]
(m) [CONFIDENTIAL TREATMENT REQUESTED]
3.4 TERM; TERMINATION
(a) This Agreement shall become effective upon the
execution and delivery hereof by Borrower and the Lender Group and
shall continue in full force and effect for a term ending on March 1,
1999.
(b) The Lender Group shall have the right to terminate
its obligations under this Agreement immediately and without notice
upon the occurrence and during the continuation of an Event of Default.
3.5 EFFECT OF TERMINATION. On the date of termination of this
Agreement, all Obligations and Term Loan A Obligations immediately shall
become due and payable without notice or demand. No termination of this
Agreement, however, shall relieve or discharge the Covenant Parties
of their respective duties, Obligations and Term Loan A Obligations, or
covenants hereunder or under the other Loan Documents, and Agent's
continuing security interests in the Collateral for the benefit of the
Lender Group shall remain in effect until all Obligations and Term Loan A
Obligations have been fully and finally discharged and the Lender
Group's obligations to provide additional credit hereunder have been
terminated.
3.6 EARLY TERMINATION BY BORROWER. The provisions of
SECTION 3.4 notwithstanding, Borrower has the option, (i) at any time
upon 90 days prior written notice to Agent and each Lender, to
terminate this Agreement by paying to Agent, for the ratable benefit
of the Lender Group, in cash, the Obligations and the Term Loan
A Obligations, in full, together with the Applicable Early Termination
Premium, (ii) at any time upon 30 days prior written notice to Agent and
each Lender, to prepay, in whole or in part without penalty or premium,
the outstanding amount of the Additional Discount Amount, and (iii) at any
time upon 30 days prior written notice to Agent and each Lender, to prepay,
in whole or in part without penalty or premium, the outstanding
amount of the Term Loans B and the Term Loans A. The Applicable Early
Termination Premium provided for in this SECTION 3.6 shall be deemed
included in the Obligations.
3.7 TERMINATION UPON EVENT OF DEFAULT. If the Lender Group
terminates this Agreement upon the occurrence of an Event of Default,
in view of the impracticability and extreme difficulty of
ascertaining actual damages and by mutual agreement of the parties
as to a reasonable calculation of the Lender Group's lost profits as a
result thereof, Borrower shall pay to Agent for the ratable benefit of
the Lender Group upon the effective date of such termination, the
Applicable Early Termination Premium. The Applicable Early Termination
Premium shall be presumed to be the amount of damages sustained by the
Lender Group as the result of the early termination and Borrower
agrees that it is reasonable under the circumstances currently
existing. The Applicable Early Termination Premium provided for in
this SECTION 3.7 shall be deemed included in the Obligations.
4. CREATION OF SECURITY INTEREST.
4.1 GRANT OF SECURITY INTEREST. Borrower hereby grants to
Agent, for the benefit of the Lender Group, continuing Liens on all
right, title, and interest of Borrower in and to all currently
existing and hereafter acquired or arising Collateral in order
to secure prompt repayment of any and all Obligations and in order to
secure prompt performance by Borrower of each of its covenants and
duties under the Loan Documents (the "Agent's Liens"). Agent's
Liens in and to the Collateral shall attach to all Collateral without
further act on the part of the Lender Group or Borrower.
Anything contained in this Agreement or any other Loan Document
to the contrary notwithstanding, except for Permitted Dispositions,
no Covenant Party has any authority, express or implied, to
dispose of any asset or property of any Covenant Party. Subject to
SECTION 2.4(B), the secured claims of the Lender Group secured by
the Collateral shall be of equal priority, and ratable according
to the respective Obligations and Term Loan A Obligations due each
member of the Lender Group.
4.2 NEGOTIABLE COLLATERAL. In the event that any
Collateral, including proceeds, is evidenced by or consists of
Negotiable Collateral, Borrower, immediately upon the request of
Agent, shall endorse and deliver physical possession of such
Negotiable Collateral to Agent.
4.3 COLLECTION OF ACCOUNTS, GENERAL INTANGIBLES, AND
NEGOTIABLE COLLATERAL. At any time upon the occurrence and during
the continuance of an Event of Default, Agent or Agent's
designee may (a) notify customers or Account Debtors that the
Accounts, General Intangibles, or Negotiable Collateral
have been assigned to Agent, for the benefit of the Lender Group,
or that Agent, for the benefit of the Lender Group, has a security
interest therein, and (b) collect the Accounts, General
Intangibles, and Negotiable Collateral directly and charge the
collection costs and expenses to the Loan Account. Each Covenant
Party agrees that it shall hold in trust for the Lender Group, as
the Lender Group's trustee, any Collections that it receives and
immediately will deliver said Collections to Agent in their original
form as received by the applicable Covenant Party.
4.4 DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED. At
any time upon the request of Agent, Borrower shall execute and
deliver to Agent all financing statements, continuation
financing statements, fixture filings, security agreements, pledges,
assignments, collateral assignments, mortgages, leasehold mortgages,
deeds of trust, leasehold deeds of trust, endorsements of
certificates of title, applications for title, affidavits, reports,
notices, schedules of accounts, letters of authority, and all other
documents that Agent reasonably may request, in form satisfactory to
Agent, to perfect and continue perfected Agent's Liens on the
Collateral (whether now owned or hereafter arising or acquired), and
in order to consummate fully all of the transactions contemplated
hereby and under the other the Loan Documents. At any time upon
the request of Agent, Borrower shall cause each of the other
Covenant Parties to (and each of the Covenant Parties hereby
agrees to) execute and deliver to Agent all negative pledge
agreements, acknowledgements, and all other documents that
Agent reasonably may request, in form satisfactory to Agent,
in order to consummate fully all of the transactions contemplated
hereby and under the other the Loan Documents. Without limiting
the foregoing, each Covenant Party agrees to execute and deliver
any supplementary Control Agreements, security agreements,
financing statements, or other documents reasonably required by
Agent to create, perfect, or maintain the perfection or priority
of, its Liens on the Covenant Parties' Securities Accounts and
related Investment Property (subject to the remedial restrictions
contained herein).
4.5 POWER OF ATTORNEY. Each Covenant Party
hereby irrevocably makes, constitutes, and appoints Agent (and
any of Agent's officers, employees, or agents designated by
Agent) as such Covenant Party's true and lawful attorney, with power
to (a) if such Covenant Party refuses to, or fails timely to
execute and deliver any of the documents described in SECTION 4.4,
sign the name of such Covenant Party on any of the documents
described in SECTION 4.4, (b) at any time that an Event of
Default has occurred and is continuing or Agent deems itself
insecure, sign Borrower's name on any invoice or bill of lading
relating to any Account, drafts against Account Debtors, schedules
and assignments of Accounts, verifications of Accounts, and notices
to Account Debtors, (c) send requests for verification of Accounts,
(d) endorse any Covenant Party's name on any Collection item that
may come into the Lender Group's possession, (e) at any time that
an Event of Default has occurred and is continuing or the Lender Group
deems itself insecure, notify the post office authorities to change
the address for delivery of any Covenant Party's mail to an address
designated by Agent, to receive and open all mail addressed to a
Covenant Party, and to retain all mail relating to the Collateral
and forward all other mail to the Covenant Parties in care of Borrower,
(f) at any time that an Event of Default has occurred and is continuing
or Agent deems itself insecure, make, settle, and adjust all
claims under the Covenant Party's policies of insurance and make all
determinations and decisions with respect to such policies of insurance,
and (g) at any time that an Event of Default has occurred and is
continuing or Agent deems itself insecure, settle and adjust disputes
and claims respecting the Accounts directly with Account Debtors, for
amounts and upon terms that Agent determines to be reasonable, and
Agent may cause to be executed and delivered any documents and
releases that Agent determines to be necessary. The appointment of
Agent as the Covenant Parties' attorney, and each and every one
of Agent's rights and powers, being coupled with an interest, is
irrevocable until all of the Obligations and Term Loan A Obligations
have been fully and finally repaid and performed and the Lender
Group's obligations to extend credit hereunder are terminated.
4.6 RIGHT TO INSPECT. Subject to SECTION 2.11(D): Agent
and each Lender (through any of their respective officers, employees,
or agents) shall have the right, from time to time hereafter to
inspect the Books and to check, test, and appraise the Collateral
in order to verify Borrower's financial condition or the amount,
quality, value, condition of, or any other matter relating to, the
Collateral and the status of the FCC Licenses, the Channel Licenses,
the Channel Leases, and other Systems Agreements. Borrower and
each other Covenant Party shall permit Agent and each Lender (through
any of their respective officers, employees, or agents), from time
to time hereafter, to inspect the books and records of such other
Covenant Parties and to check, test, and appraise their properties and
assets in order to verify their financial condition or the
amount, quality, value, condition of, or any other matter relating
to, their properties or assets.
4.7 CONTROL AGREEMENTS. The Lender Group agrees that it
will not cause Agent on the Lender Group's behalf to give any Notice
of Exclusive Control unless an Event of Default has occurred and is
continuing. Borrower agrees that it will not transfer assets out of
any Securities Accounts other than as permitted under SECTION 7.23 and,
if to another securities intermediary, unless each of Borrower, Agent,
and the substitute securities intermediary have entered into a Control
Agreement. No arrangement contemplated hereby or by any Control
Agreement in respect of any Securities Accounts or other investment
property shall be modified by Borrower without the prior written
consent of Agent. Upon the occurrence and during the continuance of an
Event of Default or if the Lender Group deems itself insecure, the Lender
Group may elect to cause Agent to notify any securities intermediary to
liquidate or transfer the applicable Securities Account or any related
investment property maintained or held thereby and remit the proceeds
thereof to the Agent Account.
4.8 FCC AND OTHER APPROVALS. Anything to the contrary
contained herein notwithstanding, the Lender Group will not take any
action pursuant to this Agreement that would constitute or proximately
result in (a) any assignment of any FCC License or any other Permit
or (b) transfer of control of any Covenant Party (other than Borrower)
without the prior approval of the FCC or other applicable
Governmental Authority solely if and to the extent such assignment or
transfer of control requires under then existing applicable law such prior
approval. Each Covenant Party agrees to take any action which
the Agent may reasonably request in order to obtain and enjoy the full
rights and benefits granted to the Agent and the Lenders by this
Agreement and each other agreement, instrument and document delivered to
the Agent and the Lenders in connection herewith or in any document
evidencing or securing the Collateral, including specifically, at
Borrower's sole cost and expense, the use of its best efforts to assist
in obtaining approval of the FCC or any other agency or government for
any action or transaction contemplated by this Agreement which is then
required by law, and specifically, without limitation, upon request,
to prepare, sign and file with the FCC or any other agency or government
the assignor's or transferor's portion of any application or
applications for consent to the assignment of any license or franchise
or transfer of control necessary or appropriate under the
FCC's or any agency or government's rules and regulations for
approval of (a) any sale or sales of property constituting the
Collateral by the Lender Group or Agent on its behalf, or
(b) any assumption by the Lender Group or Agent on its behalf of
voting rights or management rights in property constituting the
Collateral effected in accordance with the terms of this Agreement.
5. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lender Group to enter into this
Agreement and make the Loans hereunder, the Covenant Parties make the
following representations and warranties to the Lender Group which
shall be true, correct, and complete in all respects as of the date
hereof, and shall be true, correct, and complete in all respects as of
the Closing Date, and at and as of the date of the making of each Loan
made thereafter, as though made on and as of the date of the making of
such Loan (except to the extent that such representations and
warranties relate solely to an earlier date) and such representations
and warranties shall survive the execution and delivery of this
Agreement:
5.1 NO ENCUMBRANCES. The Covenant Parties have good and
indefeasible title to their properties and assets, free and clear of
Liens except for Permitted Liens.
5.2 [INTENTIONALLY OMITTED].
5.3 [INTENTIONALLY OMITTED].
5.4 EQUIPMENT. All of the equipment owned by the Covenant
Parties is used or held for use in such Covenant Party's business and is
fit for such purposes.
5.5 LOCATION OF INVENTORY AND EQUIPMENT. The Inventory
and Equipment are not stored with a bailee, warehouseman, or similar
party (without Agent's prior written consent) and are located only
at the locations identified on SCHEDULE 6.12 or otherwise permitted by
SECTION 6.12.
5.6 [INTENTIONALLY OMITTED].
5.7 LOCATION OF CHIEF EXECUTIVE OFFICES; FEINS. The
address of the chief executive office and the FEIN of each Covenant
Party are set forth on SCHEDULE 5.7.
5.8 DUE ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.
(a) Borrower is duly organized and existing and in good
standing under the laws of the jurisdiction of its incorporation and
qualified and licensed to do business in, and in good standing in, any
state where the failure to be so licensed or qualified reasonably could
be expected to result in a Material Adverse Change.
(b) Each other Covenant Party is duly organized and
existing and in good standing under the laws of the jurisdiction of its
incorporation and qualified and licensed to do business in, and in good
standing in, any state where the failure to be so licensed or qualified
reasonably could be expected to result in a Material Adverse Change.
(c) Set forth on SCHEDULE 5.8, is a complete and
accurate description of the authorized capital Stock of Borrower, by
class, and, as of the Closing Date, a description of the number of
shares of each such class that are issued and outstanding and the
number of such shares that are held in Borrower's treasury. All such
outstanding shares have been validly issued and, as of the Closing
Date, are fully paid, nonassessable shares free of contractual
preemptive rights. The issuance and sale of all such shares have been
in compliance with all applicable federal and state securities laws.
Other than as described on SCHEDULE 5.8, there are no subscriptions,
options, warrants, or calls relating to any shares of Borrower's
capital Stock, including any right of conversion or exchange under any
outstanding security or other instrument. Borrower is not subject to
any obligation (contingent or otherwise) to repurchase or otherwise
acquire or retire any shares of its capital Stock or any security
convertible into or exchangeable for any of its capital Stock.
(d) Set forth on SCHEDULE 5.8 is a complete and accurate
list of Borrower's Subsidiaries and such schedule details, with respect
to each Subsidiary that is a Covenant Party: (i) the jurisdiction of
such Subsidiary's incorporation; (ii) the number of shares of each
class of common and preferred Stock authorized for such Subsidiary; and
(iii) the number and the percentage of the outstanding shares of each
such class owned by Borrower. All of the outstanding capital Stock of
each Subsidiary that is a Covenant Party has been validly issued and is
fully paid and non-assessable.
(e) Except as set forth on SCHEDULE 5.8, no capital
Stock (or any securities, instruments, warrants, options, purchase
rights, conversion or exchange rights, calls, commitments or claims of
any character convertible into or exercisable for capital Stock) of any
direct or indirect Subsidiary of Borrower that is a Covenant Party is
subject to the issuance of any security, instrument, warrant, option,
purchase right, conversion or exchange right, call, commitment or claim
of any right, title, or interest therein or thereto.
(f) Each Non-Material Subsidiary (i) does not own any
property or assets with a book value in excess of $25,000, (ii) does
not currently engage in any material business activity, and (iii) does
not currently intend in the future to engage in any material business
activity.
5.9 DUE AUTHORIZATION; NO CONFLICT.
(a) (1) The execution, delivery, and performance by
Borrower of this Agreement and the Loan Documents to which it is a
party have been duly authorized by all necessary corporate action.
(2) The execution, delivery, and performance by
each other Covenant Party of the Loan Documents to which it is a party
have been duly authorized by all necessary corporate action.
(b) (1) The execution, delivery, and performance by
Borrower of this Agreement and the Loan Documents to which it is a
party do not and will not (i) violate any provision of federal, state,
or local law or regulation (including Regulations G, T, U, and X of the
Federal Reserve Board) applicable to Borrower, the Governing Documents
of Borrower, or any order, judgment, or decree of any court or other
Governmental Authority binding on Borrower, (ii) conflict with, result
in a breach of, or constitute (with due notice or lapse of time or
both) a default under any material contractual obligation (including
the BANX Documents and the Senior Notes Indenture) or material lease of
Borrower, (iii) result in or require the creation or imposition of any
Lien of any nature whatsoever upon any properties or assets of
Borrower, other than Permitted Liens, or (iv) require any approval of
stockholders or any approval or consent of any Person under any
material contractual obligation of Borrower.
(2) The execution, delivery, and performance by
each other Covenant Party of the Loan Documents to which it is a party
do not and will not (i) violate any provision of federal, state, or
local law or regulation (including Regulations G, T, U, and X of the
Federal Reserve Board) applicable to such Covenant Party, the Governing
Documents of such Covenant Party, or any order, judgment, or decree of
any court or other Governmental Authority binding on such Covenant
Party, (ii) conflict with, result in a breach of, or constitute (with
due notice or lapse of time or both) a default under any material
contractual obligation or material lease of any Covenant Party,
(iii) result in or require the creation or imposition of any Lien of
any nature whatsoever upon any properties or assets of such Covenant
Party, other than Permitted Liens, or (iv) require any approval of
stockholders or any approval or consent of any Person under any
material contractual obligation of such Covenant Party.
(c) (1) Other than the taking of any action expressly
required under this Agreement and the Loan Documents, the execution,
delivery, and performance by Borrower of this Agreement and the Loan
Documents to which Borrower is a party do not and will not require any
registration with, consent, or approval of, or notice to, or other
action with or by, any federal, state, foreign, or other Governmental
Authority or other Person.
(2) Other than the taking of any action expressly
required under this Agreement and the Loan Documents, the execution,
delivery, and performance by each other Covenant Party of each of the
Loan Documents to which it is a party do not and will not require any
registration with, consent, or approval of, or notice to, or other
action with or by, any federal, state, foreign, or other Governmental
Authority or other Person.
(d) (1) This Agreement and the Loan Documents to which
Borrower is a party, and all other documents contemplated hereby and
thereby, when executed and delivered by Borrower will be the legally
valid and binding obligations of Borrower, enforceable against Borrower
in accordance with their respective terms, except as enforcement may be
limited by equitable principles or by bankruptcy, insolvency,
reorganization, moratorium, or similar laws relating to or limiting
creditors' rights generally.
(2) The Loan Documents to which each other Covenant
Party is a party, and all other documents contemplated hereby and
thereby, when executed and delivered by such Covenant Party will be the
legally valid and binding obligations of such Covenant Party,
enforceable against such Covenant Party in accordance with their
respective terms, except as enforcement may be limited by equitable
principles or by bankruptcy, insolvency, reorganization, moratorium, or
similar laws relating to or limiting creditors' rights generally.
(e) Agent's Liens granted by Borrower to Agent, for the
benefit of the Lender Group, in and to its properties and assets
pursuant to this Agreement and the other Loan Documents are validly
created, perfected, and first priority Liens, subject only to Permitted
Liens.
5.10 LITIGATION. There are no actions or proceedings pending by or
against any Covenant Party before any court or administrative agency
and no Covenant Party has any knowledge or belief of any pending,
threatened, or imminent litigation, governmental investigations, or
claims, complaints, actions, or prosecutions involving any Covenant
Party, except for: (a) ongoing collection matters in which a Covenant
Party is the plaintiff; (b) matters disclosed on SCHEDULE 5.10 or
SCHEDULE 5.18; and (c) matters that, if decided adversely to a Covenant
Party, would not have a Material Adverse Change.
5.11 NO MATERIAL ADVERSE CHANGE.. All financial statements
relating to any Covenant Party that have been delivered by or on behalf
of Borrower to any one or more members of the Lender Group have been
prepared in accordance with GAAP (except, in the case of unaudited
financial statements, for the lack of footnotes and being subject
to year-end audit adjustments) and fairly present, in all material
respects, such Covenant Party's financial condition as of the date
thereof and the results of operations for the period then ended.
There has not been a Material Adverse Change with respect to any of
the Covenant Parties since the date of the latest financial statements
submitted to the Lender Group on or before the Closing Date, except
or the possible application of FASB 121 by the Covenant Parties'
independent certified public accountants in connection with the
issuance of the Covenant Parties' audited financial statements for
the fiscal year ended March 31, 1997 (so long as such application
is made on or before the date of such issuance and is materially
consistent with the spectrum valuation report, dated May 13, 1997,
prepared by Hardin & Associates in respect of the Covenant Parties).
5.12 SOLVENCY.
(a) Borrower is Solvent.
(b) At the time of the consummation of each of the
Restructuring Transactions, each of the other Covenant Parties is
Solvent.
(c) No transfer of property is being made by Borrower
and no obligation is being incurred by Borrower in connection with the
transactions contemplated by this Agreement or the other Loan Documents
with the intent to hinder, delay, or defraud either present or future
creditors of Borrower.
(d) No transfer of property is being made by any other
Covenant Party and no obligation is being incurred by such Covenant
Party in connection with the transactions contemplated by this
Agreement or the other Loan Documents with the intent to hinder, delay,
or defraud either present or future creditors of such Covenant Party.
5.13 EMPLOYEE BENEFITS. None of Borrower, any of its
Subsidiaries, or any of their ERISA Affiliates maintains or contributes
to any Plan, other than those listed on SCHEDULE 5.13. Borrower,
each of its Subsidiaries and each ERISA Affiliate have satisfied the
minimum funding standards of ERISA and the IRC with respect to each
Benefit Plan to which it is obligated to contribute. No ERISA Event
has occurred nor has any other event occurred that may result in an
ERISA Event that reasonably could be expected to result in a
Material Adverse Change. None of the Covenant Parties, any ERISA
Affiliate, or any fiduciary of any Plan is subject to any direct or
indirect liability with respect to any Plan under any applicable
law, treaty, rule, regulation, or agreement other than to make
contributions and provide benefits in accordance with the terms of
such Plan. None of the Covenant Parties or any ERISA Affiliate is
required to provide security to any Plan under Section 401(a)(29)
of the IRC.
5.14 ENVIRONMENTAL CONDITION. None of any Covenant
Party's properties or assets has ever been used by any Covenant
Party or, to the best of Borrower's knowledge, by previous owners
or operators in the disposal of, or to produce, store, handle, treat,
release, or transport, any Hazardous Materials. None of the
Covenant Parties' properties or assets has ever been designated
or identified in any manner pursuant to any environmental protection
statute as a Hazardous Materials disposal site, or a candidate f
or closure pursuant to any environmental protection statute. No Lien
arising under any environmental protection statute has attached to any
revenues or to any real or personal property owned or operated by any
Covenant Party. No Covenant Party has received a summons, citation,
notice, or directive from the Environmental Protection Agency
or any other federal or state governmental agency concerning any action
or omission by any Covenant Party resulting in the releasing or disposing
of Hazardous Materials into the environment.
5.15 BROKERAGE FEES. Except as set forth on SCHEDULE 5.15,
no brokerage commission or finders fees has or shall be incurred or payable
in connection with or as a result of Borrower's obtaining financing from
the Lender Group under this Agreement, and Borrower has not utilized the
services of any broker or finder in connection with Borrower's
obtaining financing from the Lender Group under this Agreement.
5.16 GOVERNMENTAL APPROVALS, ETC. Except as set forth on
SCHEDULE 5.16, no order, consent, approval, license, authorization, or
validation of, or filing, recording or registration with, or exemption by,
any third party or any governmental or public body or authority, or by
any subdivision thereof, including any radio, television or other license,
Permit, certificate or approval granted or issued by the FCC or any
other Governmental Authority (including any MDS, MMDS, ITFS, business radio,
earth station or experimental licenses or permits issued by the FCC)
(other than those orders, consents, approvals, licenses, authorizations
or validations that previously have been obtained or made or that are
necessary in connection with the Post-Closing Restructuring Transactions
and except for filings to perfect security interests granted pursuant to
this Agreement or any other Loan Document), is required to authorize or
is required in connection with (a) the execution, delivery and performance
of any Loan Document or the transactions contemplated therein or
(b) the legality, validity, binding effect or enforceability of any
Loan Document. At the time of the making of the Loans, there does not
exist any judgment, order, injunction or other restraint issued or
filed with respect to the making of Loans, or the performance by Borrower
or any other Covenant Party of its obligations under the Loan Documents.
5.17 PATENTS, ETC. Borrower and each of the other Covenant
Parties owns or possesses adequate licenses or other rights to use all
patents, patent applications, trademarks, trademark applications, service
marks, service mark applications, trade names, copyrights, trade secrets and
know-how (collectively, the "Intellectual Property") that are necessary for
the operation of its business as currently conducted and as proposed
to be conducted. No claim is pending or threatened to the effect that
Borrower or any other Covenant Party infringes upon, or conflicts with,
the asserted rights of any other Person under any Intellectual Property,
and there is no basis for any such claim (whether pending or threatened).
No claim is pending or threatened to the effect that any such Intellectual
Property owned or licensed by Borrower or any other Covenant Party,
or in which Borrower or any other Covenant Party otherwise has the
right to use is invalid or unenforceable by Borrower or such other
Covenant Party, and there is not basis for any such claim (whether or
not pending or threatened).
5.18 COMPLIANCE WITH LAWS, ETC.
(a) Each of Borrower and the other Covenant Parties and
the operation and/or development of each of the Systems is in
compliance with all material laws and regulations, including the
Communications Act, FCC Rules, and those relating to copyright,
pollution and environmental control, equal employment opportunity and
employee safety, in all jurisdictions in which Borrower and any other
Covenant Party is currently doing business.
(b) Except as disclosed on SCHEDULE 5.18, all Channel
Licenses, FCC Licenses and Related Facility Licenses are in full force
and effect and there are no pending or threatened complaints,
investigations, inquiries or proceedings by or before the FCC or other
Governmental Authority or any actions or events that (i) could result
in the revocation, cancellation, adverse modification or non-renewal of
any Channel License, FCC License, or Related Facility License or the
imposition of a material fine or forfeiture, (ii) materially impair
Borrower's or any other Covenant Party's ability to develop or operate
any of the Channels or Systems, or (iii) otherwise result in a Material
Adverse Change. The Systems, Channels, Channel Licenses, FCC Licenses,
and Related Facilities are currently providing and, to the knowledge of
Borrower, have been providing service to the public (rather than a test
signal or color bar) and are being operated and/or developed in
material compliance with the respective FCC License, Channel License,
Related Facility License, and other Permits and with all other Legal
Requirements.
(c) Except as set forth on SCHEDULE 5.18, all material
reports and other documents required to be filed with the FCC or other
Governmental Authority with respect to the Systems, Channels, Channel
Licenses, FCC Licenses, Booster Licenses, System Agreements, and
Channel Leases have been timely filed, including, without limitation
certifications of completion of construction. Notwithstanding anything
contained herein to the contrary, to the knowledge of Borrower, except
as set forth on SCHEDULE 5.18, there have been no failures to make
filings with the FCC or any Governmental Authority at any time that
would reasonably be likely to have a material adverse effect on any of
the Channels, Channel Licenses, FCC Licenses, System Agreements, or
Systems, or any of the Covenant Parties, or that would reasonably be
likely to result in the imposition of a material fine or forfeiture,
including copyright filings, extension requests, and reports required
by Sections 21.11(a), 21.911 and 21.920 of the FCC Rules.
5.19 FCC LICENSES; CHANNEL LEASES; SYSTEM AGREEMENTS; AND
THE SYSTEMS.
(a) SCHEDULE 5.19(A) sets forth a description of each of
the markets in which Borrower and each other Covenant Party has an
operating System as of the Closing Date.
(b) (i) SCHEDULE 5.19(B) lists all System Agreements
other than FCC Licenses and Channel Leases. (ii) Except as set forth
in SCHEDULE 5.19(B), (A) each System Agreement constitutes a legal,
valid, and binding obligation of Borrower or the Covenant Party that is
a party thereto and is in full force and effect and materially complies
with all applicable Legal Requirements and has been filed with the FCC
to the extent required by the FCC Rules, and no other approval,
application, filing, registration, consent, or other action of any
Governmental Authority is required to enable Borrower or any other
Covenant Party to operate under such System Agreement to recognize the
benefits thereunder, or to comply with applicable Legal Requirements;
(B) except in connection with the consummation of the Restructuring
Transactions, none of the Covenant Parties has assigned its rights and
interests under any System Agreement to any other Person; (C) none of
the Covenant Parties is in material breach or default under any such
System Agreement, which breach or default could result in the
termination, impairment, or forfeiture of any rights under or any
payments being made with respect to any such System Agreement, nor has
an event occurred with respect to any System Agreement which (whether
with or without notice, the lapse of time, or the happening or
occurrence of any other event) would constitute a breach or default
under such System Agreement; (D) to the knowledge of Borrower, no third
party has any rights to assert any interest in any System Agreement or
the rights and benefits granted to Borrower or any Covenant Party
pursuant thereto; (E) there are no contractual restrictions relating to
any such System Agreement that reasonably could be expected to
materially adversely affect or delay the Colocation of the Channels at
their respective Colocation Sites or the implementation of digital
technology or Alternative Use Services; (F) there are no material
provisions of any such System Agreements that are the subject of
negotiation nor has any party to any such System Agreement requested
the renegotiation of any material term thereof; (G) none of the System
Agreements contain a put or call option with respect to the subject
matter thereof; and (H) none of the System Agreements contains any
restriction on the assignment of any System Agreement or the granting
of a lien or the placing of an encumbrance on the transmission
equipment by Borrower or any Covenant Party that is a party there to in
accordance with the terms of the Loan Documents or any provisions
granting the other party thereto the right to terminate the System
Agreement upon a change in control of Borrower. Borrower has delivered
to the Lender Group complete and accurate copies of each of the System
Agreements and none of such have been amended in any respect.
(c) SCHEDULE 5.19(C) lists all Channel Leases and the
monthly payment obligations thereunder. (ii) Except as set forth in
SCHEDULE 5.19(C), (A) each Channel Lease constitutes a legal, valid,
and binding obligation of Borrower or the Covenant Party that is a
party thereto and is in full force and effect and materially complies
with all applicable Legal Requirements and has been filed with the FCC,
to the extent required by the FCC Rules, and no other approval,
application, filing, registration, consent, or other action of any
Governmental Authority is required to enable Borrower or any other
Covenant Party to operate under such Channel Lease to recognize the
benefits thereunder, or to comply with applicable Legal Requirements;
(B) except in connection with the consummation of the Restructuring
Transactions, none of the Covenant Parties has assigned its rights and
interests under any Channel Lease to any other Person; (C) none of the
Covenant Parties is in material breach or default under any such
Channel Lease, which breach or default could result in the termination,
impairment, or forfeiture of any rights under or any payments being
made with respect to any such Channel Lease, nor has an event occurred
with respect to any Channel Lease which (whether with or without
notice, the lapse of time, or the happening or occurrence of any other
event) would constitute a breach or default under such Channel Lease;
(D) to the knowledge of Borrower, no third party has any rights to
assert any interest in any Channel Lease or the rights and benefits
granted to Borrower or any Covenant Party pursuant thereto; (E) there
are no contractual restrictions relating to any such Channel Lease that
reasonably could be expected to materially adversely affect or delay
the Colocation of the Channels at their respective Colocation Sites or
the implementation of digital technology or Alternative Use Services;
(F) there are no material provisions of any such Channel Lease that are
the subject of negotiation nor has any party to any such Channel Lease
requested the renegotiation of any material term thereof; (G) none of
the Channel Leases contain a put or call option with respect to the
subject matter thereof; and (H) none of the Channel Leases contains any
restriction on the assignment of any Channel Lease or the granting of a
lien or the placing of an encumbrance on the transmission equipment by
Borrower or any Covenant Party that is a party there to in accordance
with the terms of the Loan Documents or any provisions granting the
other party thereto the right to terminate the Channel Leases upon a
change in control of Borrower. Borrower has delivered to the Lender
Group complete and accurate copies of each of the Channel Leases and
none of such have been amended in any respect.
(d) SCHEDULE 5.19(D) (I) lists all FCC Licenses and
applications for FCC Licenses. (ii) As of the Closing Date, except as
set forth in SCHEDULE 5.19(D) (II), (A) each of such FCC Licenses
constitutes a legal, valid, and binding obligation of the Covenant
Parties and is in full force and effect; (B) the Covenant Parties have
not assigned their rights and interest under any of the FCC Licenses or
any application for an FCC License; (C) neither any Covenant Party nor
any Lessor under any Channel Lease, as the case may be, is in material
breach or default under the corresponding FCC License or any
application for an FCC License, which breach or default could result in
the termination, impairment, or forfeiture of any rights under or any
payments being made with respect to such FCC License, nor has an event
occurred with respect to any of the FCC Licenses or applications for
FCC Licenses which (whether with or without notice, the lapse of time,
or the happening or occurrence of any other event) would constitute
such a material breach or default under any of the FCC Licenses or any
of the applications for FCC Licenses; (D) to the knowledge of Borrower,
except with respect to the Lessors under the Channel Leases, no third
party has any rights to assert any interest in any of the FCC Licenses
or applications for FCC Licenses; and (E) there are no contractual
restrictions relating to any of the FCC Licenses which reasonably could
be expected to materially adversely affect the Colocation of the
Channels that are the subject thereof at their respective Colocation
Site or the implementation of an Alternative Use. Borrower has
delivered to the Lender Group complete and accurate copies of each of
the FCC Licenses and applications for FCC Licenses and none of them
have been amended in any respect.
(e) SCHEDULE 5.19(E) accurately lists, with respect to
each of the Systems, all Channels, and accurately describes the
following:
(i) the status of each FCC License, Channel
License, and Booster License, and, for the System relative to Boston,
Massachusetts, any other Related Facility License including (A) the
expiration date of the license, (B) the renewal deadline and any
pending construction deadline and the status of compliance therewith
(including whether one or more extensions of the filing deadline have
been requested or obtained), (D) the status of any pending applications
(including assignment and transfer of control applications) including
whether the application has been accepted for filing by the FCC and any
pending deadline for filing timely petitions to deny such FCC
applications, (E) whether there are any threatened or pending
interference issues, petitions to deny, informal objections, competing
or conflicting applications, outstanding no-objection letters, comments
or waiver requests, and (F) the status of the request for a protected
service area or other interference protection;
(ii) the status of each Colocation Application,
Booster Application and Alternative Use Application and any amendments
thereto, including (A) the relevant Colocation Site or other
transmission site and proposed technical parameters and conditions for
analog and digital operations, (B) whether the application has been
accepted for filing by the FCC and cut-off from competing or
conflicting applications, (C) the pending deadlines for filing timely
petitions to deny, (D) whether there are any threatened or pending
interference issues, petitions to deny, informal objections, competing
or conflicting applications, outstanding no-objection letters,
outstanding consent letters, comments or waiver requests, and (E) the
status of the request for a protected service area or other
interference protection; and
(iii) the market trials and operations that the
Borrower or any of the other Covenant Parties are conducting, or intend
to conduct pursuant to the Business Plan, with respect to Alternative
Uses of the Channels or the Systems and identifies the relevant
authorizations used, or to be used, in conjunction with such trial and
operations and the conditions contained therein.
(f) Complete and correct copies of all of the Permits,
Colocation Applications and Alternative Use Applications and amendments
thereto (with the FCC file date stamped thereon), Channel Licenses,
Related Facilities Licenses, FCC Licenses and materials related
thereto, including pending applications filed with the FCC relating to
the Systems and other Permits owned, held or possessed by Borrower and
any Covenant Party have been provided to the Lender Group.
(g) Except as set forth on SCHEDULE 5.19(G), with
respect to each of the Systems, all of the assets, Permits, and System
Agreements relating to each System are owned by one or more of the
Covenant Parties.
(h) Except as disclosed in SCHEDULE 5.19(H), (i) the
Covenant Parties have obtained and possesses all System Agreements,
patents, copyrights, certificates of confirmation, licenses, permits,
trademarks, and trade names, or rights thereto, necessary to conduct
its business as currently conducted by the Covenant Parties, and the
Covenant Parties are not in violation of any valid rights of others
with respect to any of the foregoing; (ii) no other license, permit, or
franchise is necessary to the operation by Borrower or any other
Covenant Party of the Systems as conducted or proposed to be conducted
pursuant to the Business Plan; and (iii) the Covenant Parties have
obtained and possess all licenses, leases, conduit use, equipment
rental and microwave or satellite relay agreements necessary for the
operation of the Systems as required by the System Agreements.
5.20 INTERFERENCE. Except as set forth on SCHEDULE
5.20, neither any of the Covenant Parties nor any Licensee of a Channel
has accepted or will accept any electrical interference from any
source that is likely to result in material adverse electrical
interference to any of the Channels in any of the Systems now operating
or expected to be operated, including the BTA Authorizations or
any newly licensed Channel in any BTA in which any System operates or
the Covenant Parties expect to operate. Except as set forth in
SCHEDULE 5.20, neither any of the Covenant Parties nor any Channel
Licensee is likely to experience interference from any source to its
presently authorized facilities in an analog or digital mode or
to any facilities that it proposes to construct pursuant to an
application currently pending before the FCC.
5.21 LINE OF SITE HOUSEHOLDS. SCHEDULE 5.21 lists the
number of line of sight households for each of the Systems and describes
any material assumptions for arriving at such determinations.
5.22 LEASE AGREEMENTS.
(a) SCHEDULE 5.22 accurately and completely lists and
sets forth a description (including location of premises, term, and
assignability) of all agreements between each Covenant Party and any
Person relating to the location of towers and transmitters (the "Tower
Site Leases") and office and studio space and the same constitute the
only Tower Site Leases and other leases necessary in connection with
the conduct of business by the Covenant Parties as currently conducted.
Each Covenant Party enjoys quiet possession under all leases (including
Tower Site Leases) to which it is a party as lessee, and all of such
leases are valid, subsisting, and in full force and effect. None of
such leases contains any provision restricting the incurrence of
indebtedness by the lessee.
(b) All of the existing towers used in the operation of
the Systems are obstruction-marked and lighted to the extent required
by, and in accordance with, the rules and regulations of the FAA or
FCC. To the best knowledge and good faith belief of the Covenant
Parties, appropriate notification to the FAA has been filed for each
tower where required by the rules and regulations of the FAA or FCC.
5.23 DISCLOSURE. No representation or warranty of Borrower
or the other Covenant Parties contained in this Agreement or any schedules
hereto contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements made herein
or therein, in light of the circumstances under which they were made,
not misleading.
5.24 NO OTHER INDEBTEDNESS. Neither Borrower nor any
other Covenant Party is liable with respect to any Indebtedness, other
than as permitted under SECTION 7.1.
6. AFFIRMATIVE COVENANTS,
The Covenant Parties covenant and agree that, so long as any
credit hereunder shall be available and until full and final payment of
the Obligations and the Term Loan A Obligations, and unless the Lender
Group shall otherwise consent in writing, the Covenant Parties shall do
all of the following:
6.1 ACCOUNTING SYSTEM. Maintain a standard and modern
system of accounting that enables Borrower and each of the other
Covenant Parties to produce financial statements in accordance with
GAAP, and maintain records pertaining to the Collateral that contain
information as from time to time may be requested by the Lender Group.
6.2 OPERATIONAL REPORTING. Deliver to Agent originals,
and to each Lender copies, of the following at the following times in
form satisfactory to Agent and each Original Lender: (a) on a
weekly basis, a Subscriber activity report, including in respect
of all activity regarding new installations, re-installations,
reconnections, disconnections (soft and hard), moves, service calls,
and courtesy accounts, in each case, for each operating System
and categorized by (i) program packages, (ii) premium channels, and
(iii) pay-per-view; (b) on a monthly basis and in any event not
later than the 10th Business Day of each month, a report detailing all
capital expenditures in excess of $100,000 per transaction or
series of related transactions made or committed since the date of the
last such report; (c) within 2 Business Days following any
Covenant Party's first having knowledge or notice of same, written
notice of any formal FCC activity concerning Channel Licenses,
Channels, FCC Licenses, Booster Applications, Booster Licenses,
Alternative Use Applications, or Alternative Use Permits, including
activity relating to Colocation Applications; (d) on a monthly
basis, a report in respect of "additional outlet take rate" and
associated expenses; (e) on a quarterly basis, a report detailing
the Covenant Parties' compliance or non-compliance, as the case
may be, with SECTION 7.20(A); (f) within 2 Business Days following any
Covenant Party's first having knowledge or notice of such
event, written notice of the grant, denial, forfeiture, or amendment
by the FCC of any Channel License or the imposition of any fine
with respect thereto or the filing by any third Person of any
petition to deny, an application to amend, or similar filing with
respect to any Channel License, Channel, FCC License, Booster
Application, Booster License, Alternative Use Application, Alternative
Use Permit, or Colocation Application or any material violations of the
Communications Act or FCC Rules by any Covenant Party or any Licensee
of a Channel; (k) within 2 Business Days following any Covenant
Party's first having knowledge or notice of such event,
written notice of any breach or default by any Covenant Party under
any Systems Agreement; and (l) on a monthly basis and in any
event not later than the 10th Business Day of each month, a
reconciliation against the Business Plan of the usage of proceeds
of Loans and other cash or cash equivalents of the Covenant Parties
during the previous month, by each of the categories set forth in
the Business Plan.
6.3 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES.
Deliver to Agent an original, and to each Lender a copy, of:
(a) as soon as available, but in any event within 30 days after
the end of each month during each of Borrower's fiscal years, a
company prepared balance sheet, income statement, and statement
of cash flow covering Borrower's and the other Covenant Parties
operations during such period; and (b) as soon as available, but
in any event within 90 days after the end of each of
Borrower's fiscal years, financial statements of Borrower for each
such fiscal year, audited by independent certified public accountants
reasonably acceptable to the Lenders and certified, without any
qualifications, by such accountants to have been prepared in
accordance with GAAP, together with a certificate of such accountants
addressed to the Lenders stating that such accountants do not have
knowledge of the existence of any Default or Event of Default. Such
audited financial statements shall include a balance sheet, profit
and loss statement, and statement of cash flow and, if prepared,
such accountants' letter to management. In addition to the financial
statements referred to above, Borrower agrees to deliver financial
statements prepared on a consolidating basis (based on business segment)
so as to present Borrower and each such business segment separately,
and on a consolidated basis.
Together with the above, Borrower also shall deliver to
Agent and each Lender copies of Borrower's Form 10-Q Quarterly Reports,
Form 10-K Annual Reports, and Form 8-K Current Reports, and any other
filings made by Borrower with the SEC as soon as the same are filed, or
any other information that is provided by Borrower to its shareholders,
and any other report reasonably requested by the Lender Group or any
member thereof relating to the financial condition of Borrower or any
of the other Covenant Parties.
Each month, together with the financial statements
provided pursuant to SECTION 6.3(A), Borrower shall deliver to Agent an
original, and to each Lender a copy, of a certificate signed by its
chief financial officer to the effect that: (i) all financial
statements delivered or caused to be delivered to any one or more
members of the Lender Group hereunder have been prepared in accordance
with GAAP (except, in the case of unaudited financial statements, for
the lack of footnotes and being subject to year-end audit adjustments)
and fairly present the financial condition of Borrower and the other
Covenant Parties, (ii) the representations and warranties of the
Covenant Parties contained in this Agreement and the other Loan
Documents are true and correct in all material respects on and as of
the date of such certificate, as though made on and as of such date
(except to the extent that such representations and warranties relate
solely to an earlier date), (iii) for each month that also is the date
on which a financial covenant in SECTION 7.20 is to be tested, a
Compliance Certificate demonstrating in reasonable detail compliance at
the end of such period with the applicable financial covenants
contained in SECTION 7.20, and (iv) on the date of delivery of such
certificate to the Lender Group, there does not exist any condition or
event that constitutes a Default or Event of Default (or, in the case
of clauses (i), (ii), or (iii), to the extent of any non-compliance,
describing such non-compliance as to which he or she may have knowledge
and what action the relevant Covenant Party has taken, is taking, or
proposes to take with respect thereto).
Borrower (and if required the other Covenant Parties)
shall issue written instructions to its independent certified public
accountants authorizing them to communicate with the Lender Group or
any member thereof and to release to the Lender Group or any such
members whatever financial information concerning the Covenant Parties
that the Lender Group may request; PROVIDED, HOWEVER, that, so long as
no Event of Default has occurred and is continuing, the Lender Group
and each member thereof shall attempt to obtain such financial
information directly from the Covenant Parties prior to communicating
directly with such accountants. Each Covenant Party hereby irrevocably
authorizes and directs all auditors, accountants, or other third
parties to deliver to the Agent and directly to each Lender, at
Borrower's expense, copies of the Covenant Party's financial
statements, papers related thereto, and other accounting records of any
nature in their possession, and to disclose to the Lender Group or any
member thereof any information they may have regarding the Covenant
Parties' business affairs and financial conditions.
6.4 TAX RETURNS. Deliver to Agent and directly to each
Lender copies of each of the Covenant Party's future federal income
tax returns, and any amendments thereto, within 30 days of the
filing thereof with the Internal Revenue Service.
6.5 REPORTING OF SUITS, PROCEEDINGS, INVESTIGATIONS OR
ARBITRATIONS, ETC.. Provide to Agent an original, and directly to
each Lender copies, of the following reports at the following times
in form satisfactory to the Lender Group:
(a) (i) Promptly upon Borrower or any other Covenant
Party obtaining knowledge of the institution of, or written threat of,
any action, suit, proceeding, governmental investigation, or
arbitration against or affecting any Covenant Party or any property of
any Covenant Party not previously disclosed to the Lender Group, which
action, suit, proceeding, governmental investigation, or arbitration
(A) seeks (or in the case of multiple actions, suits, proceedings,
governmental investigations, or arbitrations arising out of the same
general allegations or circumstances which seek) recovery from Borrower
or any other Covenant Party aggregating $100,000 or more (exclusive of
claims covered by insurance policies unless the insurers of such claims
have disclaimed coverage on such claims) or (B) pertains to any System
Agreement, Borrower shall give notice thereof to Agent, with copies
directly to each Lender, and provide such other information as may be
reasonably available (exclusive of privileged documents) to enable the
Lender Group to evaluate such matters; (ii) as soon as practicable, and
in any event within 45 days after the end of each fiscal quarter,
Borrower shall provide a quarterly report to Agent, with copies
directly to each Lender, covering the institution of, or written threat
of, any action, suit, proceeding, governmental investigation, or
arbitration (not previously reported) against or affecting Borrower or
any other Covenant Party or any property of Borrower or any other
Covenant Party not previously disclosed to the Lender Group, which
action, suit, proceeding, governmental investigation, or arbitration
(A) seeks (or in the case of multiple actions, suits, proceedings,
governmental investigations, or arbitrations arising out of the same
general allegations or circumstances which seek) recover from Borrower
or any other Covenant Party aggregating $500,000 or more (exclusive of
claims covered by insurance policies unless the insurers of such claims
have disclaimed coverage on such claims), or (B) pertains to any System
Agreement, and shall provide such other information at such time as may
be reasonably available (exclusive of privileged documents) to enable
the Lender Group to evaluate such matters; (iii) in addition to the
requirements set forth in clauses (i) and (ii) of this SECTION 6.5(A),
Borrower, upon request, promptly shall give notice of the status of any
action, suit, proceeding, governmental investigation, or arbitration
covered by a report delivered to the Lender Group pursuant to clause
(i) or (ii) above and provide such other information as reasonably may
be available to it (exclusive of privileged documents) to enable the
Lender Group to evaluate such matters; and (iv) promptly upon Borrower
or any other Covenant Party obtaining knowledge of any dispute in
respect of or the institution of, or written threat of, any action,
suit, proceeding, governmental investigation, or arbitration in respect
of any material contract of Borrower or any other Covenant Party or any
license or lease necessary for, used or to be used in the operation of
any System, Borrower shall give notice thereof to Agent, with copies
directly to each Lender, and shall provide such other information as
may be reasonably available (exclusive of privileged documents) to
enable the Lender Group to evaluate such matters.
(b) As soon as reasonably possible, and in any event,
within 15 days after the end of each month, a statement signed by an
Authorized Officer of Borrower setting forth in reasonable detail as to
each System (i) the number of Subscribers as at the end of such month,
(ii) the fees paid by Subscribers during such month, and (iii) the
number of Subscribers terminating service during such month.
6.6 [INTENTIONALLY OMITTED.
6.7 [INTENTIONALLY OMITTED].
6.8 TITLE TO EQUIPMENT. Upon Agent's request, immediately
deliver to Agent, properly endorsed, any and all certificates of title
for any item of Equipment.
6.9 MAINTENANCE OF EQUIPMENT. Maintain the Covenant Parties'
respective equipment in good operating condition and repair (ordinary wear
and tear excepted), and make all necessary replacements thereto so that
the value and operating efficiency thereof shall at all times be maintained
and preserved. Other than (a) those items of equipment that
constitute fixtures on the Closing Date and (ii) those items of equipment of
any Covenant Party other than Borrower that unavoidably become fixtures
under applicable local law in connection with such Covenant Party's
ordinary market development activities, no Covenant Party shall permit
any item of equipment to become a fixture to real estate or an accession
to other property, and such equipment shall at all times remain personal
property.
6.10 TAXES. (a) Cause all assessments and taxes, whether
real, personal, or otherwise, due or payable by, or imposed, levied, or
assessed against any Covenant Party or any of its properties or assets to
be paid in full, before delinquency or before the expiration of any
extension period, except to the extent that the validity of such
assessment or tax (other than payroll taxes or taxes that are the
subject of a United States federal tax lien) shall be the subject of a
Permitted Protest.
(b) Make due and timely payment or deposit of all such
federal, state, and local taxes, assessments, or contributions required
of it by law, and will execute and deliver to the Lender Group, on
demand, appropriate certificates attesting to the payment thereof or
deposit with respect thereto.
(c) Make timely payment or deposit of all tax payments
and withholding taxes required of it by applicable laws, including
those laws concerning F.I.C.A., F.U.T.A., state disability, and local,
state, and federal income taxes, and will, upon request, furnish the
Lender Group with proof satisfactory to Agent and each Lender
indicating that the applicable Covenant Party has made such payments or
deposits.
6.11 INSURANCE.
(a) At its expense, keep the Covenant Parties'
properties and assets insured against loss or damage by fire, theft,
explosion, sprinklers, and all other hazards and risks, and in such
amounts, as are ordinarily insured against by other owners in similar
businesses. All of the Covenant Parties also shall maintain business
interruption, public liability, product liability, and property damage
insurance relating to their use of their properties and assets, as well
as insurance against larceny, embezzlement, and criminal
misappropriation.
(b) All such policies of insurance shall be in such
form, with such companies, and in such amounts as may be reasonably
satisfactory to Agent. All insurance required herein shall be written
by companies which have a Best's rating of A for capital and X for
financial stability. All hazard insurance and such other insurance as
Agent shall specify, shall contain a Form 438BFU (NS) mortgagee
endorsement, or an equivalent endorsement satisfactory to Agent,
showing Agent as the loss payee thereof, as its interests may appear,
and shall contain a waiver of warranties. Every policy of insurance
referred to in this SECTION 6.11 shall contain an agreement by the
insurer that it will not cancel such policy except after 30 days prior
written notice to Agent and that any loss payable thereunder shall be
payable notwithstanding any act or negligence of any Covenant Party
which might, absent such agreement, result in a forfeiture of all or a
part of such insurance payment. Borrower shall deliver to Agent
certified copies of such policies of insurance and evidence of the
payment of all premiums therefor.
(c) No Covenant Party shall take out separate insurance
concurrent in form or contributing in the event of loss with that
required to be maintained under this SECTION 6.11, unless Agent is
included thereon as named insured with the loss payable to Agent, as
its interests may appear, under a standard 438BFU (NS) Mortgagee
endorsement, or its local equivalent. Each Covenant Party agrees that
it immediately shall notify Agent and each Original Lender whenever
such separate insurance is taken out, specifying the insurer thereunder
and full particulars as to the policies evidencing the same, and
originals of such policies immediately shall be provided to Agent.
6.12 NO SETOFFS OR COUNTERCLAIMS. Make payments hereunder
and under the other Loan Documents without setoff or counterclaim and
free and clear of, and without deduction or withholding for or on
account of, any federal, state, or local taxes.
6.13 LOCATION OF INVENTORY AND EQUIPMENT. Keep their
inventory and equipment (other than equipment installed at subscribers'
homes in the ordinary course of the Covenant Parties' business)
only at the locations identified on SCHEDULE 6.13; PROVIDED, HOWEVER,
that Borrower may amend SCHEDULE 6.13 so long as such amendment occurs
by written notice to Agent not less than 30 days prior to the date on
which the inventory or equipment is moved to such new location, so
long as such new location is within the continental United States, and
so long as, at the time of such written notification, Borrower provides
any financing statements or fixture filings necessary or advisable to
perfect and continue perfected Agent's Liens.
6.14 COMPLIANCE WITH LAWS. Comply, and use best efforts
to cause the licensees of the Channels to comply, with the
requirements of all applicable laws, rules, regulations, and orders
of any governmental authority, including the Communications Act, the
FCC Rules, the Fair Labor Standards Act and the Americans With
Disabilities Act, other than laws, rules, regulations, and orders the
non-compliance with which, individually or in the aggregate, would not
have and could not reasonably be expected to result in a Material Adverse
Change.
6.15 EMPLOYEE BENEFITS.
(a) Cause to be delivered to Agent and directly to each
Lender, (i) promptly, and in any event within 10 Business Days after
Borrower or any of the other Covenant Parties knows or has reason to
know that an ERISA Event has occurred that reasonably could be expected
to result in a Material Adverse Change, a written statement of the
chief financial officer of Borrower describing such ERISA Event and any
action that is being taking with respect thereto by Borrower, any such
other Covenant Party, or ERISA Affiliate, and any action taken or
threatened by the IRS, Department of Labor, or PBGC; (ii) promptly, and
in any event within 3 Business Days after the filing thereof with the
IRS, a copy of each funding waiver request filed with respect to any
Benefit Plan and all communications received by Borrower, any of the
other Covenant Parties or, to the knowledge of Borrower, any ERISA
Affiliate with respect to such request; and (iii) promptly, and in any
event within 3 Business Days after receipt by Borrower, any of the
other Covenant Parties or, to the knowledge of Borrower, any ERISA
Affiliate, of the PBGC's intention to terminate a Benefit Plan or to
have a trustee appointed to administer a Benefit Plan, copies of each
such notice. Borrower or such other Covenant Party, as applicable,
shall be deemed to know all facts known by the administrator of any
Benefit Plan of which it is the plan sponsor.
(b) Cause to be delivered to Agent and directly to each
Lender, upon the reasonable request of Agent or any Lender, each of the
following: (i) a copy of each Plan (or, where any such plan is not in
writing, complete description thereof) (and if applicable, related
trust agreements or other funding instruments) and all amendments
thereto, all written interpretations thereof and written descriptions
thereof that have been distributed to employees or former employees of
the Covenant Parties; (ii) the most recent determination letter issued
by the IRS with respect to each Benefit Plan; (iii) for the three most
recent plan years, annual reports on Form 5500 Series required to be
filed with any governmental agency for each Benefit Plan; (iv) all
actuarial reports prepared for the last three plan years for each
Benefit Plan; (v) a listing of all Multiemployer Plans, with the
aggregate amount of the most recent annual contributions required to be
made by Borrower or any ERISA Affiliate to each such plan and copies of
the collective bargaining agreements requiring such contributions;
(vi) any information that has been provided to Borrower or any ERISA
Affiliate regarding withdrawal liability under any Multiemployer Plan;
and (vii) the aggregate amount of the most recent annual payments made
to former employees of the Covenant Parties under any Retiree Health
Plan.
6.16 LEASES AND SYSTEM AGREEMENTS. Pay when due all rents
and other amounts payable under any leases and Systems Agreements to
which a Covenant Party is a party or by which a Covenant
Party's properties and assets are bound, unless such payments are the
subject of a Permitted Protest. To the extent that any Covenant
Party fails timely to make payment of such rents and other amounts
payable when due under its leases, Agent shall be entitled, in its
discretion, to reserve an amount equal to such unpaid amounts against the
Maximum Revolving Amount.
6.17 BROKER COMMISSIONS. Pay any and all brokerage commission
or finders fees incurred by in connection with or as a result of Borrower's
obtaining financing from the Lender Group under this Agreement.
6.18 NON-MATERIAL SUBSIDIARY. In connection with any Subsidiary
that is not already a Covenant Party, whether such Subsidiary is identified
on Schedule N-1 as a Non-Material Subsidiary or otherwise, that has
property or assets with an aggregate book value in excess of $25,000 or
that currently engages, or currently intends to engage in the future, in
any material business activity, (a) cause such Subsidiary to become an Obligor
and to execute and deliver joinders to such Loan Documents as Agent may
require, and (b) execute and deliver such supplements to the Stock Pledge
Agreement, and pledge and deliver such stock certificates and executed blank
stock powers, in respect of such Subsidiary, as Agent may require. Upon the
completion of the actions described in the foregoing clauses (a) and (b), any
such Subsidiary shall be a Covenant Party and an Obligor and not a Non-Material
Subsidiary.
6.19 DISCONNECT POLICY. Implement and maintain a "disconnect
policy" for active, non-paying Subscribers not to exceed 59 days.
6.20 SELLER-RESTRICTED SUBSIDIARIES. With respect to each
Seller-Restricted Subsidiary, promptly (a) cause such Seller-Restricted
Subsidiary to become an Obligor and to execute and deliver joinders
to such Loan Documents as Agent may require, and (b) execute and deliver
such supplements to the Stock Pledge Agreement, and pledge and deliver such
stock certificates and executed blank stock powers, in respect of such
Subsidiary, as Agent may require, in each case upon the earliest to occur of
(i) the payment in full of Indebtedness of Borrower under the applicable
Seller Documents, (ii) the release of the Lien on the capital Stock of such
Seller-Restricted Subsidiary for the benefit of the holders of such
Subsidiary, and (iii) the termination of such Seller Documents. Upon the
completion of the actions described in the foregoing clauses (a) and
(b), any such Seller-Restricted Subsidiary shall be an Obligor and not a
Bott-Restricted Subsidiary, Mester-Restricted Subsidiary, or PCTV-Restricted
Subsidiary, as the case may be.
6.21 STOCK PLEDGE. With respect to any Covenant Party the capital
Stock of which has been pledged to the Lender Group pursuant to the Stock
Pledge Agreement or any supplement thereto: (a) hereby acknowledges,
and irrevocably agrees to be bound by, the provisions of the Stock Pledge
Agreement (including Sections 6, 7, and 8 thereof); and (b) hereby acknowledges,
and irrevocably agrees to be bound by, any action taken by the Lender Group
pursuant to the proxies or powers of attorney granted to the Lender Group under
the Stock Pledge Agreement; in each case, whether the shares of such capital
Stock have been registered in the name of the Lender Group, or otherwise.
6.22 [CONFIDENTIAL TREATMENT REQUESTED]
7. NEGATIVE COVENANTS.
The Covenant Parties covenant and agree that, so long as any
credit hereunder shall be available and until full and final payment of
the Obligations and the Term Loan A Obligations, the Covenant Parties
will not do any of the following without the Lender Group's prior
written consent:
7.1 INDEBTEDNESS. Create, incur, assume, permit, guarantee,
or otherwise become or remain, directly or indirectly, liable with respect
to any Indebtedness, except:
(a) Indebtedness evidenced by this Agreement and the
Notes;
(b) Indebtedness of Borrower evidenced by the Senior
Notes;
[CONFIDENTIAL TREATMENT REQUESTED]
(d) Permitted Covenant Party Indebtedness;
(e) (i) Indebtedness of the Covenant Parties (other
than Borrower) that is secured by Permitted Liens and was incurred on
or prior to the Closing Date, and (ii) Indebtedness of Borrower that is
secured by Permitted Liens;
(f) Indebtedness of Borrower arising from the honoring
by a bank or other financial institution of a check, draft, or similar
instrument inadvertently drawn against insufficient funds in the
ordinary course of business; PROVIDED, HOWEVER, that such Indebtedness
shall be extinguished within 2 Business Days of its incurrence;
(g) current liabilities of the Covenant Parties (other
than Borrower) solely in connection with purchases of goods and
services in the ordinary course of business and in any event not in
excess of the budgeted amounts set forth on SCHEDULE 7.1(G) on a per
market basis and in the aggregate;
(h) current liabilities of Borrower incurred in
connection with purchases of goods and services in the ordinary course
of business;
(i) Other Indebtedness of Borrower extant as of the
Closing Date and as set forth on SCHEDULE 7.1(I);
(j) refinancings, renewals, or extensions of
Indebtedness permitted under this SECTION 7.1 (and continuance or
renewal of any Permitted Liens associated therewith) so long as: (1)
the terms and conditions of such refinancings, renewals, or extensions
do not materially impair the prospects of repayment of the Obligations
by Borrower or of the Term Loan A Obligations by the Covenant Parties
other than Borrower, (2) [CONFIDENTIAL TREATMENT REQUESTED]
the net cash proceeds of such refinancings, renewals, or
extensions do not result in an increase in the aggregate principal
amount of the Indebtedness so refinanced, renewed, or extended, (3)
[CONFIDENTIAL TREATMENT REQUESTED] such
refinancings, renewals, refundings, or extensions do not result in a
shortening of the average weighted maturity of the Indebtedness so
refinanced, renewed, or extended, and (4) (y) if the Indebtedness that
is refinanced was subordinated in right of payment to the Obligations
(whether contractually or structurally), then the subordination terms
and conditions of the refinancing Indebtedness must be at least as
favorable to the Lender Group as those applicable to the refinanced
Indebtedness, or (z) if the Indebtedness that is refinanced was
subordinated in right of payment to the Term Loan A Obligations
(whether contractually or structurally), then the subordination terms
and conditions of the refinancing Indebtedness must be at least as
favorable to the Lender Group as those applicable to the refinanced
Indebtedness; and
(k) the obligation of Borrower or Commonwealth Choice
with respect to the [CONFIDENTIAL TREATMENT REQUESTED]
"Permitted BANX Lease Acquisition".
7.2 LIENS. Create, incur, assume, or permit to exist,
directly or indirectly, any Lien on or with respect to any of its
property or assets, of any kind, whether now owned or hereafter
acquired, or any income or profits therefrom, except for Permitted
Liens (including Liens that are replacements of Permitted Liens to the
extent that the original Indebtedness is refinanced under SECTION
7.1(J) and so long as the replacement Liens only encumber those assets
or property that secured the original Indebtedness).
7.3 RESTRICTIONS ON FUNDAMENTAL CHANGES." (a) Except for the
Restructuring Transactions and Permitted Dispositions, enter into
any merger, consolidation, reorganization, or recapitalization, or
reclassify its capital Stock, or liquidate, wind up, or dissolve
itself (or suffer any liquidation or dissolution), or convey, sell,
assign, lease, transfer, or otherwise dispose of, in one transaction
or a series of transactions, all or substantially all of its property
or assets; PROVIDED, HOWEVER, that any Subsidiary of Borrower may be
merged with Borrower so long as Borrower is the surviving entity in
such merger.
(b) Cause, suffer, or permit any Non-Material Subsidiary
to have any property or assets with an aggregate book value in excess
of $25,000 or to engage in any material business activity unless it
complies with SECTION 6.18.
7.4 DISPOSAL OF ASSETS. Except for Permitted Dispositions,
sell, lease, assign, transfer, or otherwise dispose of its properties
or assets.
7.5 CHANGE NAME. Change any its name, FEIN, corporate
structure (within the meaning of Section 9-402(7) of the Code), or
identity, or add any new fictitious name.
7.6 GUARANTEE. Guarantee or otherwise become in any way liable
with respect to the obligations of any third Person except by endorsement
of instruments or items of payment for deposit to the account of a Covenant
Party which is subject to a Lockbox Agreement or which are transmitted or
turned over to Agent.
7.7 NATURE OF BUSINESS. Make any change in the principal
nature of Borrower's and the other Covenant Party's business. The
Lender Group and Borrower hereby acknowledge that: (a) from and after
the Closing Date until the date that SECTION 3.3(E) is satisfied,
compliance with this Section 7.7 shall be determined with reference to
the Business Plan without giving effect to the amendment or update in
respect of the Business Plan referred to in SECTION 3.3(E); and (b)
thereafter, compliance with this Section 7.7 shall be determined with
reference to the Business Plan after giving effect to such amendment
or update.
7.8 PREPAYMENTS AND AMENDMENTS.
(a) Except in connection with a refinancing permitted by
SECTION 7.1(J), and other than as permitted hereunder, prepay, redeem,
retire, defease, purchase, or otherwise acquire any Indebtedness owing
to any third Person, other than the Obligations and the Term Loan A
Obligations in accordance with this Agreement,
(b) Except in connection with a refinancing permitted by
SECTION 7.1(J) and other than as permitted hereunder, directly or
indirectly, amend, modify, alter, increase, or change any of the terms
or conditions of any agreement, instrument, document, indenture, or
other writing evidencing or concerning Indebtedness permitted under
SECTION 7.1, and
(c) forgive, cancel, or otherwise extinguish, in whole
or in part, the Permitted Covenant Party Indebtedness.
[CONFIDENTIAL TREATMENT REQUESTED]
7.9 CHANGE OF CONTROL." Cause, permit, or suffer, directly
or indirectly, any Change of Control.
7.10 PREFERRED STOCK. Issue or sell any Preferred Stock,
other than Permitted Preferred Stock; PROVIDED, HOWEVER, that Borrower
shall be entitled to issue Prohibited Preferred Stock if it could have
incurred Indebtedness in an amount equal to the amount of such
Prohibited Preferred Stock and so long as, thereafter, such Prohibited
Preferred Stock is treated, for all purposes hereunder, as if it were
Indebtedness of Borrower.
7.11 DISTRIBUTIONS. Make any distribution or declare or
pay any dividends (in cash or other property, other than capital Stock)
on, or purchase, acquire, redeem, or retire the capital Stock of any
Covenant Party, of any class, whether now or hereafter outstanding, except
any Covenant Party (other than Borrower) may declare and pay dividends
or make other distributions, in cash or property consisting of
non-operating assets, to Borrower.
7.12 ACCOUNTING METHODS." Modify or change its method of
accounting or enter into, modify, or terminate any agreement currently
existing, or at any time hereafter entered into with any third party
accounting firm or service bureau for the preparation or storage of any
Covenant Party's accounting records without said accounting firm or
service bureau agreeing to provide the Lender Group information regarding
such Covenant Party's financial condition. Each Covenant Party hereby
waives the right to assert a confidential relationship, if any, with
any accounting firm or service bureau in connection with any information
requested by the Lender Group pursuant to or in accordance with this
Agreement, or any other Loan Document, and agrees that the Lender Group may
contact directly any such accounting firm or service bureau in order to
obtain such information.
7.13 INVESTMENTS. Except for Permitted Investments, directly
or indirectly make, acquire, or incur any liabilities (including contingent
obligations) for or in connection with (a) the acquisition of the
securities (whether debt or equity) of, or other interests in, a Person,
(b) loans, advances, capital contributions, or transfers of property to a
Person, or (c) the acquisition of all or substantially all of the properties
or assets of a Person.
7.14 TRANSACTIONS WITH AFFILIATES OR ASSOCIATES. Except as set
forth on SCHEDULE 7.14, directly or indirectly enter into or permit to exist
any material transaction with any Affiliate of the Covenant Parties or any
Associate of any officer or director of any of the Covenant Parties, except
for transactions that are (a) except with respect to Permitted TelQuest
Transactions, in the ordinary course of such Covenant Party's business,
(b) upon fair and reasonable terms, (c) fully disclosed to the Lender
Group, AND (d) no less favorable to the Covenant Parties, or any of
them, than would be obtained in an arm's length transaction with a
non-Affiliate. [CONFIDENTIAL TREATMENT REQUESTED]
7.15 SUSPENSION. Suspend or go out of a substantial portion
of its business.
7.16 AMENDMENTS TO DOCUMENTS. After the Closing Date, enter
into any amendment or modification of, or waive, or consent to any waiver
of, any of the provisions of, any of the BANX Documents, the Senior Notes
Indenture or the Senior Notes, the Master Sublease Agreement, or the
Seller Documents, without having obtained the prior written consent of the
Lenders, except for any amendment, modification, waiver, or consent the
effect of which would be to: (a) extend the maturity of any
payment obligation due thereunder; (b) make any covenant or default
contained therein less stringent; (c) decrease the interest rate or the
default interest rate, or both, or the dividend rate, as applicable,
(d) amend or modify any other terms thereof so long as the amendments or
modifications referenced in this clause (d) are not in the aggregate
more expensive, more burdensome, or otherwise materially adverse to Borrower
or the Lender Group as compared to the BANX Documents as in effect on the
Closing Date.
7.17 USE OF PROCEEDS. (a) Use the proceeds of the Advances
(including Agent Advances and Foothill Loans) made hereunder for any
purpose other than (i) to pay the transactional fees, costs, and expenses
incurred in connection with this Agreement, and (ii) thereafter, the
purposes set forth in the Business Plan and consistent with the terms and
conditions hereof.
(b) Use the proceeds of any Term Loan A made hereunder
for any purpose other than (i) to pay the transactional fees, costs,
and expenses incurred in connection with this Agreement, and (ii)
thereafter, the purposes set forth in the Business Plan and consistent
with the terms and conditions hereof.
(c) Use the proceeds of any Term Loan B made hereunder
for any purpose other than, consistent with the terms and conditions
hereof, for the build-out of the Covenant Parties' Wireless Cable
Business (including the purchase and installation of wireless cable
equipment in accordance with the Business Plan). Anything contained in
this Agreement or any other Loan Document to the contrary
notwithstanding, (i) in no event shall the aggregate amount of the Term
Loans B exceed, at the time of incurrence, the product of (y)(1) $650,
if such Indebtedness is incurred prior to January 1, 1998, or (2) $600,
if such Indebtedness is incurred thereafter, multiplied by (z) the
number of Qualifying Customers, and (ii) no such Indebtedness shall be
directly or indirectly used to fund any acquisition of any Person or
entity or substantially all of the assets of any such Person or entity
or any division or line of business of any such Person or entity.
(d) Anything contained in this Agreement or any other
Loan Agreement to the contrary notwithstanding, in no event shall: (i)
more than 50% of the proceeds of the aggregate amount of Advances
(including Agent Advances), Term Loans B, and Term Loans A outstanding
be used for any purpose other than capital expenditures and the
acquisition of System Agreements, in each case as set forth in the
Business Plan and consistent with the terms and conditions hereof; and
(ii) the proceeds of any Loan be used in violation of the applicable
terms and conditions of the Senior Notes Indenture.
[CONFIDENTIAL TREATMENT REQUESTED]
7.18 CHANGE IN LOCATION OF CHIEF EXECUTIVE OFFICE;
INVENTORY AND EQUIPMENT WITH BAILEES. Relocate its chief executive
office to a new location without providing 30 days prior written
notification thereof to Agent and so long as, at the time of such
written notification, Borrower provides any financing statements or
fixture filings necessary or advisable to perfect and continue
perfected Agent's Liens. The inventory and equipment of the Covenant
Parties shall not at any time now or hereafter be stored with a bailee,
warehouseman, or similar party without Agent's prior written consent.
7.19 NO PROHIBITED TRANSACTIONS UNDER ERISA. NO PROHIBITED
TRANSACTIONS UNDER ERISA. NO PROHIBITED TRANSACTIONS UNDER ERISA".
Directly or indirectly:
(a) engage in any prohibited transaction which is
reasonably likely to result in a civil penalty or excise tax described
in Sections 406 of ERISA or 4975 of the IRC for which a statutory or
class exemption is not available or a private exemption has not been
previously obtained from the Department of Labor;
(b) permit to exist with respect to any Benefit Plan any
accumulated funding deficiency (as defined in Sections 302 of ERISA
and 412 of the IRC), whether or not waived;
(c) fail to pay timely required contributions or annual
installments due with respect to any waived funding deficiency to any
Benefit Plan;
(d) terminate any Benefit Plan where such event would
result in any liability of any Covenant Party or any ERISA Affiliate
under Title IV of ERISA;
(e) fail to make any required contribution or payment to
any Multiemployer Plan;
(f) fail to pay any required installment or any other
payment required under Section 412 of the IRC on or before the due date
for such installment or other payment;
(g) amend a Plan resulting in an increase in current
liability for the plan year such that a Covenant Party or any ERISA
Affiliate is required to provide security to such Plan under
Section 401(a)(29) of the IRC; or
(h) withdraw from any Multiemployer Plan where such
withdrawal is reasonably likely to result in any liability of any such
entity under Title IV of ERISA;
which, individually or in the aggregate, results in or reasonably would
be expected to result in a claim against or liability of the Covenant
Parties or any ERISA Affiliate in excess of $100,000.
7.20 FINANCIAL COVENANTS.
(a) OUTSTANDING LOANS. Cause, suffer, or permit the
aggregate amount of Advances (including Agent Advances), Term Loans B
(excluding, however, any interest in respect of the Term Loans B
compounded by adding the amount thereof to the balance of the Term
Loans B under SECTION 2.6(D)(II)), and Term Loans A (excluding,
however, any interest in respect of the Term Loans A compounded by
adding the amount thereof to the balance of the Term Loans A under
SECTION 2.6(D)(IV)) outstanding at the end of each month to exceed 120%
of the projected amount of outstanding Loans (reflected as negative
cash balances) for such month set forth in the Business Plan.
(b) NET WORTH. Fail to maintain a consolidated net
worth of Borrower and its Subsidiaries determined in accordance with
GAAP and measured on a fiscal quarter-end basis, of not less than the
result of (i) the consolidated net worth as of the end of the fiscal
year then ended, minus (ii) $80,000,000.
7.21 CAPITAL EXPENDITURES. Make capital expenditures in any
fiscal year inexcess of $24,000,000.
7.22 MINIMUM SUBSCRIBERS. Cause, suffer, or permit the number
of Subscribers to which the System in respect of Boston, Massachusetts
provides Wireless Cable Service to fall below the number of Subscribers
set forth below for the corresponding System for the periods corresponding
thereto, measured on fiscal quarter end basis:
Boston System
PERIOD NUMBER OF SUBSCRIBERS
12/31/97 920
3/31/98 1,640
6/30/98 2,360
9/30/98 3,080
12/31/98 3,800
7.23 SECURITIES ACCOUNTS. Borrower agrees that it will not
transfer assets out of any Securities Accounts; PROVIDED, HOWEVER, that,
so long as no Event of Default has occurred and is continuing or
would result therefrom, Borrower may (a) use such assets to the extent
permitted by this Agreement, or (b) subject to the limits set forth
in SECTION 7.1(G), make loans to any one or more other Covenant
Parties for the sole purpose of permitting such other Covenant Parties
to make payment of accounts payable of such other Covenant Parties
in the ordinary course of business and then due and owing, if and so long
as such other Covenant Parties promptly use, and the Covenant Parties
(other than Borrower) hereby agree to use promptly, the proceeds of such
loans solely to satisfy such obligations.
7.24 NO PERMIT LOSS. Borrowers shall not through direct or
indirect action, or failure to take an action, cause any of the Channels,
Channel Licenses or FCC Licenses to be forfeited, revoked, rescinded,
materially impaired or not-renewed.
8. EVENTS OF DEFAULT..
Any one or more of the following events shall constitute an
event of default (each, an "Event of Default") under this Agreement:
8.1 (a) If Borrower fails to pay when due and payable or when
declared due and payable, any portion of the Obligations (whether of
principal, interest, fees and charges due the Lender Group,
reimbursement of Lender Group Expenses, or other amounts constituting
Obligations); or (b) if any Covenant Party fails to pay when due and
payable or when declared due and payable, any portion of the Term Loan
A Obligations (whether of principal, interest, fees and charges due the
Lender Group, reimbursement of the allocable portion of Lender Group
Expenses, or other amounts constituting Term Loan A Obligations);
PROVIDED, HOWEVER, that in the case of Overadvances that are caused by
the charging of interest, fees, or Lender Group Expenses to the Loan
Account, such event shall not constitute an Event of Default if, within
2 Business Days of incurring such Overadvance, Borrower on behalf of
the Covenant Parties repays, or otherwise eliminates, such Overadvance;
8.2 (a) If any Covenant Party fails or neglects to perform,
keep, or observe any term, provision, condition, covenant, or agreement
contained in SECTIONS 6.2 (Operational Reporting), 6.3 (Financial
Statements, Reports, Certificates), 6.4 (Tax Returns), 6.13 (Location
of Inventory and Equipment), 6.14 (Compliance with Laws), 6.15
(Employee Benefits), or 6.16 (Leases) of this Agreement and such
failure continues for a period of 5 or more Business Days; (b) If any
Covenant Party fails or neglects to perform, keep, or observe any term,
provision, condition, covenant, or agreement contained in SECTIONS 6.1
(Accounting System) or 6.9 (Maintenance of Equipment) of this Agreement
and such failure continues for a period of 15 or more Business Days; or
(c) if any Covenant Party (other than Borrower) incurs Indebtedness in
excess of the amount set forth in SCHEDULE 7.1(G) applicable to such
Covenant Party and permitted under SECTION 7.1(G) and such Indebtedness
is not extinguished within 3 Business Days after the Lenders receive
the financial statements required under SECTION 6.3(A), so long as, at
the time such obligation is incurred, such Covenant Party had no
knowledge, and reasonably should not have had such knowledge, that such
Indebtedness was in excess of such amount; or (d) If any Covenant Party
fails or neglects to perform, keep, or observe any other term,
provision, condition, covenant, or agreement contained in this
Agreement, in any of the other Loan Documents (giving effect to any
grace periods, cure periods, or required notices, if any, expressly
provided for in such Loan Documents), or in any other present or future
agreement between any Covenant Party and the Lender Group (giving
effect to any grace periods, cure periods, or required notices, if any,
expressly provided for in such other agreement); in each case, other
than any such term, provision, condition, covenant, or agreement that
is the subject of another provision of this SECTION 8, in which event
such other provision of this SECTION 8 shall govern); PROVIDED that,
during any period of time that any such failure or neglect of any
Covenant Party referred to in this paragraph exists, even if such
failure or neglect is not yet an Event of Default by virtue of the
existence of a grace or cure period or the pre-condition of the giving
of a notice, the Lender Group shall not be required during such period
to make Loans;
8.3 If there is a Material Adverse Change;
8.4 If any material portion of any Covenant Party's
properties or assets is: (a) attached, seized, subjected to a writ or
distress warrant, or is levied upon; or (b) comes into the possession
of any third Person, other than as part of a Permitted Disposition;
8.5 If an Insolvency Proceeding is commenced by any Covenant
Party;
8.6 If an Insolvency Proceeding is commenced against any
Covenant Party and any of the following events occur: (a) such
Covenant Party consents to the institution of the Insolvency Proceeding
against it; (b) the petition commencing the Insolvency Proceeding is
not timely controverted; (c) the petition commencing the Insolvency
Proceeding is not dismissed within 60 calendar days of the date of the
filing thereof; PROVIDED, HOWEVER, that, during the pendency of such
period, Agent, Foothill, and any other members of the Lender Group
shall be relieved of any obligation to make additional credit available
hereunder; (d) an interim trustee is appointed to take possession of
all or a substantial portion of the properties or assets of, or to
operate all or any substantial portion of the business of, such
Covenant Party; or (e) an order for relief shall have been issued or
entered therein;
8.7 If any Covenant Party is enjoined, restrained, or in any
way prevented by court order from continuing to conduct all or any
material part of its business affairs;
8.8 (a) If a notice of Lien, levy, or assessment is filed of
record with respect to any of the Covenant Parties by the United
States, or if any taxes or debts owing at any time to the United States
becomes a Lien, whether choate or otherwise, upon any of the properties
or assets of any one or more of the Covenant Parties and the same is
not paid on the payment date thereof; or
(b) If (i) a notice of Lien, levy, or assessment for more
than $500,000 is filed of record with respect to any of the Covenant
Parties by any state, county, municipal, or other non-federal
governmental agency, or if any taxes or debts owing for an amount in
excess of $500,000 at any time to any one or more of such entities
becomes a Lien, whether choate or otherwise, upon any of properties or
assets of any one or more of the Covenant Parties, (ii) in any such
case, such taxes or debts are not the subject of a Permitted Protest,
and (iii) the Lien, levy, or assessment is not released, discharged, or
bonded against before the earlier of 30 days of the date it first
arises or 5 days of the date when such property or asset is subject to
being forfeited; PROVIDED, HOWEVER, that the Lender Group shall be
entitled to create a reserve against the Maximum Revolving Amount in an
amount sufficient to discharge such Lien, levy, or assessment and any
and all penalties or interest payable in connection therewith.
8.9 If a judgment or other claim becomes a Lien or
encumbrance upon any material portion of any Covenant Party's
properties or assets;
8.10 (a) If there is a default in any BANX Document, the
Senior Notes Indenture, or any Senior Note, and such default (i) occurs
at the final maturity of the obligations thereunder, or (ii) results in
a right by the third Person party thereto or beneficiary thereof,
irrespective of whether exercised, to accelerate the maturity of the
applicable Covenant Party's obligations thereunder; or
(b) If there is a default in any System Agreement, and
such default (i) occurs at the final maturity of the obligations
thereunder, (ii) results in a right by the other party thereto,
irrespective of whether exercised, to accelerate the maturity of the
applicable Covenant Party's obligations thereunder, or (iii) results in
the termination by the applicable other party of such System Agreement;
or
(c) If there is a default in any other agreement
involving Indebtedness of not less than $500,000 to which a Covenant
Party is a party with one or more third Persons, and such default (i)
occurs at the final maturity of the obligations thereunder, or (ii)
results in a right by the third Person party thereto or beneficiary
thereof, irrespective of whether exercised, to accelerate the maturity
of the applicable Covenant Party's obligations thereunder;
8.11 If any Covenant Party makes any payment on account of
Indebtedness that has been contractually subordinated in right of
payment to the payment of the Obligations or the Term Loan A
Obligations, except to the extent such payment is permitted by the
terms of the subordination provisions applicable to such Indebtedness;
8.12 If any misstatement or misrepresentation exists now or
hereafter in any warranty, representation, statement, or report made to
the Lender Group by any Covenant Party or any officer, employee, agent,
or director of any Covenant Party or if any such warranty or
representation is withdrawn;
8.13 If the obligation of any Covenant Party under any Loan
Document is limited or terminated by operation of law or by the
Covenant Party thereunder;
8.14 (a) If Milestone A is not achieved on or before a date
agreed to by Borrower and the Lenders; or
(b) If Milestone B is not achieved on or before a date
agreed to by Borrower and the Lenders; or
8.15 If any Covenant Party fails to keep in full force and
effect, suffers the termination or revocation of, terminates, forfeits,
or suffers a materially adverse amendment to any System Agreement at
any one time held by any Covenant Party that is necessary to the
operation of any System of any Covenant Party.
9. THE LENDER GROUP'S RIGHTS AND REMEDIES.
9.1 RIGHTS AND REMEDIES. Upon the occurrence, and during
the continuation, of an Event of Default, the Required Lenders for
the Lender Group (at its election but without notice of its election
and without demand) may, except to the extent expressly required below,
authorize and instruct Agent to do any one or more of the following on
behalf of the Lender Group (and Agent, acting upon the instructions of
the Required Lenders for the Lender Group, shall do the same on behalf
of the Lender Group), all of which hereby are authorized by Borrower
and each of the other Covenant Parties:
(a) Declare all Obligations and Term Loan A Obligations
immediately due and payable;
(b) Cease extending credit to or for the benefit of
Borrower;
(c) Terminate this Agreement and any of the other Loan
Documents as to any future liability or obligation of the Lender Group,
but without affecting Agent's rights and security interests, for the
benefit of the Lender Group, in the Collateral and without affecting
the Obligations or the Term Loan A Obligations;
(d) Settle or adjust disputes and claims directly with
Account Debtors for amounts and upon terms which Agent considers
advisable, and in such cases, Agent will credit Borrower's Loan Account
with only the net amounts received by Agent in payment of such disputed
Accounts after deducting all Lender Group Expenses incurred or expended
in connection therewith;
(e) [Intentionally Omitted];
(f) Without notice to or demand upon any Covenant Party,
make such payments and do such acts as Agent considers necessary or
reasonable to protect its security interests for the benefit of the
Lender Group in the Collateral. Borrower agrees to assemble the
Collateral if Agent so requires, and to make the Collateral available
to Agent as Agent may designate. Each of the Covenant Parties hereby
authorizes Agent to enter the premises where the Collateral is located,
to take and maintain possession of the Collateral, or any part of it,
and to pay, purchase, contest, or compromise any encumbrance, charge,
or Lien that in Agent's determination appears to conflict with Agent's
Liens and to pay all expenses incurred in connection therewith. With
respect to any owned or leased premises of any of the Covenant Parties,
each of the Covenant Parties hereby grants to Agent a license to enter
into possession of such premises and to occupy the same, without
charge, for up to 120 days in order to exercise any of the Lender
Group's rights or remedies provided herein, at law, in equity, or
otherwise;
(g) Without notice to Borrower or the Covenant Parties
(such notice being expressly waived), and without constituting a
retention of any collateral in satisfaction of an obligation (within
the meaning of Section 9-505 of the Code), set off and apply to the
Obligations or the Term Loan A Obligations any and all (i) balances and
deposits of Borrower or the Covenant Parties held by the Lender Group
(including any amounts received in the Lockbox Accounts), or (ii)
indebtedness at any time owing to or for the credit or the account of
Borrower or any other Covenant Party held by the Lender Group;
(h) Hold, as cash collateral, any and all balances and
deposits of Borrower or any other Covenant Party held by the Lender
Group, and any amounts received in the Lockbox Accounts, to secure the
full and final repayment of all of the Obligations and the Term Loan A
Obligations;
(i) Ship, reclaim, recover, store, finish, maintain,
repair, prepare for sale, advertise for sale, and sell (in the manner
provided for herein) the Collateral. Each of the Covenant Parties
hereby grants to Agent a license or other right to use, without charge,
the Covenant Party's labels, patents, copyrights, rights of use of any
name, trade secrets, trade names, trademarks, service marks, 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 Borrower's rights under all licenses and
all franchise agreements shall inure to the Lender Group's benefit;
(j) Subject to SECTION 4.8, sell the Collateral at
either a public or private sale, or both, by way of one or more
contracts or transactions, for cash or on terms, in such manner and at
such places (including any of the Covenant Party's premises) as Agent
determines is commercially reasonable. It is not necessary that the
Collateral be present at any such sale;
(k) Subject to SECTION 4.8, Agent shall give notice of
the disposition of the Collateral as follows:
(1) to Borrower, to each holder of a security
interest in the Collateral who has filed with Agent a written request
for notice, a notice in writing of the time and place of public sale,
or, if the sale is a private sale or some other disposition other than
a public sale is to be made of the Collateral, then the time on or
after which the private sale or other disposition is to be made;
(2) The notice shall be personally delivered or
mailed, postage prepaid, to Borrower as provided in SECTION 12 and at
least 10 days before the date fixed for the sale, or at least 10 days
before the date on or after which the private sale or other disposition
is to be made; no notice needs to be given prior to the disposition of
any portion of the Collateral that is perishable or threatens to
decline speedily in value or that is of a type customarily sold on a
recognized market. Notice to Persons other than Borrower claiming an
interest in the Collateral shall be sent to such addresses as they have
furnished to Agent;
(3) If the sale is to be a public sale, Agent also
shall give notice of the time and place by publishing a notice one time
at least 5 days before the date of the sale in a newspaper of general
circulation in the county in which the sale is to be held;
(l) Subject to SECTION 4.8, the Lender Group may credit
bid and purchase at any public sale; and
(m) Subject to SECTION 4.8, the Lender Group shall have
all other rights and remedies available to it at law or in equity
pursuant to any other Loan Documents; and
(n) Any deficiency that exists after disposition of the
Collateral as provided above will be paid immediately by Borrower. Any
excess will be returned, without interest and subject to the rights of
third Persons, by Agent to Borrower.
9.2 REMEDIES CUMULATIVE. The rights and remedies of the Lender
Group under this Agreement, the other Loan Documents, and all other
agreements shall be cumulative. The Lender Group shall have all
other rights and remedies not inconsistent herewith as provided under
the Code, by law, or in equity. No exercise by the Lender Group of
one right or remedy shall be deemed an election, and no waiver by
the Lender Group of any Event of Default shall be deemed a
continuing waiver. No delay by the Lender Group shall constitute a
waiver, election, or acquiescence by it.
10. TAXES AND EXPENSES.
If any Covenant Party fails to pay any monies (whether taxes,
assessments, insurance premiums, or, in the case of leased properties
or assets, rents or other amounts payable under such leases) due to
third Persons, or fails to make any deposits or furnish any required
proof of payment or deposit, all as required under the terms of this
Agreement or any other Loan Document, then, to the extent that Agent
determines that such failure by that Covenant Party could result in a
Material Adverse Change, in its discretion and without prior notice to
any Covenant Party, Agent may do any or all of the following: (a) make
payment of the same or any part thereof; (b) set up such reserves in
Borrower's Loan Account as Agent deems necessary to protect the Lender
Group from the exposure created by such failure; or (c) obtain and
maintain insurance policies of the type described in SECTION 6.10, and
take any action with respect to such policies as Agent deems prudent.
Any such amounts paid by Agent shall constitute Lender Group Expenses.
Any such payments made by Agent shall not constitute an agreement by
the Lender Group to make similar payments in the future or a waiver by
the Lender Group of any Event of Default under this Agreement. Agent
need not inquire as to, or contest the validity of, any such expense,
tax, or Lien and the receipt of the usual official notice for the
payment thereof shall be conclusive evidence that the same was validly
due and owing.
11. WAIVERS; INDEMNIFICATION.
11.1 DEMAND; PROTEST; ETC.. Each of the Obligors waives
demand, protest, notice of protest, notice of default or dishonor,
notice of payment and nonpayment, nonpayment at maturity, release,
compromise, settlement, extension, or renewal of accounts, documents,
instruments, chattel paper, and guarantees at any time held by the
Lender Group or any one or more members thereof on which any Obligor
may in any way be liable.
11.2. THE LENDER GROUP'S LIABILITY FOR COLLATERAL.
Borrower hereby agrees that so long as the Lender Group complies with
its obligations, if any, under Section 9-207 of the Code, the Lender
Group shall not in any way or manner be liable or responsible for:
(a) the safekeeping of the Collateral; (b) any loss or damage thereto
occurring or arising in any manner or fashion from any cause;
(c) any diminution in the value thereof; or (d) any act or default
of any carrier, warehouseman, bailee, forwarding agency, or other
Person. All risk of loss, damage, or destruction of the Collateral
shall be borne by Borrower.
11.3 INDEMNIFICATION. The Obligors shall pay, indemnify,
defend, and hold the Agent-Related Persons, the Lender-Related Persons
with respect to each Lender, each Participant, and each of their
respective officers, directors, employees, counsel, agents, and
attorneys-in-fact (each, an "Indemnified Person") harmless
(to the fullest extent permitted by law) from and against any and all
claims, demands, suits, actions, investigations, proceedings, and damages,
and all reasonable attorneys fees and disbursements and other costs and
expenses actually incurred in connection therewith (as and when they
are incurred and irrespective of whether suit is brought), at any time
asserted against, imposed upon, or incurred by any of them in connection
with or as a result of or related to the execution, delivery,
enforcement, performance, and administration of this Agreement and any
other Loan Documents or the transactions contemplated herein, and with
respect to any investigation, litigation, or proceeding related to this
Agreement, any other Loan Document, or the use of the proceeds of
the credit provided hereunder (irrespective of whether any Indemnified
Person is a party thereto), or any act, omission, event or circumstance
in any manner related thereto (all the foregoing, collectively, the
"Indemnified Liabilities"). The Obligors shall have no obligation to
any Indemnified Person under this SECTION 11.3 with respect to any
Indemnified Liability that a court of competent jurisdiction finally
determines to have resulted from the gross negligence or willful
misconduct of such Indemnified Person. This provision shall survive
the termination of this Agreement and the repayment of the other
Obligations and the Term Loan A Obligations.
12. NOTICES.
Unless otherwise provided in this Agreement, all notices or
demands by any party relating to this Agreement or any other Loan
Document shall be in writing and (except for financial statements and
other informational documents which may be sent by first-class mail,
postage prepaid) shall be personally delivered or sent by registered or
certified mail (postage prepaid, return receipt requested), overnight
courier, or telefacsimile to the relevant party at its address set
forth below:
IF TO ANY
COVENANT PARTY: C/O CAI WIRELESS SYSTEMS, INC.
18 Corporate Woods Boulevard
3rd Floor
Albany, New York 12211
Attn: Mr. James Ashman
Fax No. 518.462.3045
WITH COPIES TO: DAY, BERRY & HOWARD
1 Canterbury Green
Stamford, Connecticut 06901
Attn: Sabino Rodriguez, III, Esq.
Fax No. 203.977.7301
IF TO AGENT OR
FOOTHILL: FOOTHILL CAPITAL CORPORATION
11111 Santa Monica Boulevard
Suite 1500
Los Angeles, California 90025-3333
Attn: Business Finance Division Manager
Fax No. 310.478.9788
WITH COPIES TO: BROBECK, PHLEGER & HARRISON LLP
550 South Hope Street
Los Angeles, California 90071
Attn: John Francis Hilson, Esq.
Fax No. 213.745.3345
IF TO CANPARTNERS
OR ANY OTHER
CANYON LENDER: C/O CANPARTNERS INVESTMENTS IV, LLC
9665 Wilshire Boulevard, Suite 200
Beverly Hills, California 90212
Attn: Mr. Scott Imbach and Ms. Monica
Young
Fax No. 310.247.2701
WITH COPIES TO: SIDLEY & AUSTIN
555 West Fifth Street, Suite 4000
Los Angeles, CA 90013-1010
Attn: Gary J. Cohen, Esq.
Fax No. 213.896.6600
AND TO: SIDLEY & AUSTIN
875 Third Avenue
New York, NY 10022
Attn: Barbara Vrancik, Esq.
Fax No. 212.906.2021
The parties hereto may change the address at which they are
to receive notices hereunder, by notice in writing in the foregoing
manner given to all other parties. All notices or demands sent in
accordance with this SECTION 12, other than notices by Agent on behalf
of the Lender Group in connection with Sections 9-504 or 9-505 of the
Code, shall be deemed received on the earlier of the date of actual
receipt or 3 days after the deposit thereof in the mail. Borrower, for
itself and on behalf of each of the other Covenant Parties,
acknowledges and agrees that notices sent by Agent on behalf of the
Lender Group in connection with Sections 9-504 or 9-505 of the Code
shall be deemed sent when deposited in the mail or personally
delivered, or, where permitted by law, transmitted telefacsimile or
other similar method set forth above.
Anything in this Agreement or any other Loan Document to the
contrary notwithstanding (but without affecting the requirement in this
SECTION 12 to provide to counsel for the Canyon Lenders any copies of
notices), any notice to be given under this Agreement or any other Loan
Document to any Canyon Lender need only be given to Canpartners on
behalf of such Canyon Lender and any notice to be given under this
Agreement or any other Loan Document that is received by Canpartners
shall be deemed received by all Canyon Lenders.
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER
THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS,
THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF,
AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL
MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO
SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE
TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE
COUNTY OF NEW YORK, STATE OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT
SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE
AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. EACH OF THE COVENANT PARTIES AND THE LENDER
GROUP WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT
EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO
OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE
WITH THIS SECTION 13.
EACH OF THE COVENANT PARTIES AND THE LENDER GROUP HEREBY
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF
THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY
CLAIMS. EACH OF THE COVENANT PARTIES AND THE LENDER GROUP REPRESENT
THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.
14. DESTRUCTION OF DOCUMENTS.
All documents, schedules, invoices, agings, or other papers
delivered by or on behalf of the Covenant Parties to any one or more
members of the Lender Group may be destroyed or otherwise disposed of
by any such member of the Lender Group 4 months after they are
delivered to or received by such member of the Lender Group, unless the
applicable Covenant Party requests, in writing, the return of said
documents, schedules, or other papers and makes arrangements, at
Borrower's expense, for their return.
15. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
15.1 ASSIGNMENTS AND PARTICIPATIONS..
(a) Any Lender may, with the written consent of Agent,
assign and delegate to one or more assignees (provided that no written
consent of Agent shall be required in connection with any assignment
and delegation by a Lender to an Eligible Transferee) (each an
"Assignee") all, or any part, of the Obligations, the Term Loan A
Obligations, the Total Commitments and the other rights and obligations
of such Lender hereunder and under the other Loan Documents, and, in
the case of any Assignee other than an Affiliate of such Lender, such
assignment and delegation shall be in a minimum amount of the lesser of
(i) $5,000,000 or (ii) all, but not less than all, of the remaining
portion then held by such Lender of the Obligations, the Term Loan A
Obligations, the Commitments and the other rights and obligations of
such Lender hereunder and under the other Loan Documents; PROVIDED,
HOWEVER, that Borrower and Agent may continue to deal solely and
directly with such Lender in connection with the interest so assigned
to an Assignee until (x) written notice of such assignment, together
with payment instructions, addresses and related information with
respect to the Assignee, shall have been given to Borrower and Agent by
such Lender and the Assignee; (y) such Lender and its Assignee shall
have delivered to Agent an Assignment and Assumption Agreement
("Assignment and Assumption") in form and substance acceptable to
Agent, with a copy thereof (for notice purposes only) to Borrower; and
(z) the assignor Lender or Assignee has paid to Agent for Agent's sole
and separate account a processing fee in the amount of $2,500; PROVIDED
FURTHER that applicable new Notes will be issued, against delivery of
the Notes being replaced thereby, to such Assignee and, if the
assigning Lender assigns to such Assignee less than all of the
assigning Lender's right, title, and interest in and to the Obligations
and the Term Loan A Obligations, to the assigning Lender to the extent
needed to reflect their respective Pro Rata Portions (Advances) of the
Maximum Revolving Amount, Pro Rata Portions (Term Loans B) of the Term
Loans B, Pro Rata Portions (Term Loans A) of the Term Loans A, and Pro
Rata Portions (Total) of the Additional Discount Amount. Anything
contained herein to the contrary notwithstanding, the consent of Agent
shall not be required (and payment of any fees shall not be required)
if such assignment is in connection with any merger, consolidation,
sale, transfer, or other disposition of all or any substantial portion
of the business or loan portfolio of such Lender.
(b) From and after the date that Agent notifies the
assignor Lender that it has received an executed Assignment and
Assumption and payment of the above-referenced processing fee, (i) the
Assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to
such Assignment and Assumption, shall have the rights and obligations
of a Lender under the Loan Documents, and (ii) the assignor Lender
shall, to the extent that rights and obligations hereunder and under
the other Loan Documents have been assigned by it pursuant to such
Assignment and Assumption, relinquish its rights (except with respect
to SECTION 11.3 hereof) and be released from its obligations under this
Agreement and the other Loan Documents (and in the case of an
Assignment and Assumption covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement and the
other Loan Documents, such Lender shall cease to be a party hereto and
thereto), and such assignment shall effect a novation between Borrower
and the Assignee.
(c) By executing and delivering an Assignment and
Assumption, the assigning Lender thereunder and the Assignee thereunder
confirm to and agree with each other and the other parties hereto as
follows: (1) other than as provided in such Assignment and Assumption,
such assigning Lender makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement or any other Loan Document furnished
pursuant hereto; (2) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of Borrower or the performance or observance by Borrower of
any of its obligations under this Agreement or any other Loan Document
furnished pursuant hereto; (3) such Assignee confirms that it has
received a copy of this Agreement, together with such other documents
and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Assumption; (4)
such Assignee will, independently and without reliance upon Agent, such
assigning Lender or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make
its own credit decisions in taking or not taking action under this
Agreement; (5) such Assignee appoints and authorizes Agent to take such
action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to Agent by the terms hereof, together with
such powers as are reasonably incidental thereto; and (6) such Assignee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be
performed by it as a Lender.
(d) Immediately upon each Assignee's making its
processing fee payment under the Assignment and Assumption, this
Agreement shall be deemed to be amended to the extent, but only to the
extent, necessary to reflect the addition of the Assignee and the
resulting adjustment of the Commitments arising therefrom. The
Commitment allocated to each Assignee shall reduce such Commitments of
the assigning Lender PRO TANTO.
(e) Any Lender may at any time sell to one or more
commercial banks, financial institutions, funds, or other Persons not
Affiliates of Borrower (a "Participant") participating interests in the
Obligations, the Term Loan A Obligations, the Commitment, and the other
rights and interests of that Lender (the "originating Lender")
hereunder and under the other Loan Documents; PROVIDED, HOWEVER, that
(i) the originating Lender's obligations under this Agreement shall
remain unchanged, (ii) the originating Lender shall remain solely
responsible for the performance of such obligations, (iii) Borrower and
Agent shall continue to deal solely and directly with the originating
Lender in connection with the originating Lender's rights and
obligations under this Agreement and the other Loan Documents, (iv) no
Lender shall transfer or grant any participating interest under which
the Participant has the sole and exclusive right to approve any
amendment to, or any consent or waiver with respect to, this Agreement
or any other Loan Document, except to the extent such amendment to, or
consent or waiver with respect to this Agreement or of any other Loan
Document would (A) extend the final maturity date of the Obligations or
the Term Loan A Obligations hereunder in which such Participant is
participating; (B) reduce the interest rate applicable to the
Obligations or the Term Loan A Obligations hereunder in which such
Participant is participating; (C) release all or a material portion of
the Collateral or guaranties (except to the extent expressly provided
herein or in any of the Loan Documents) supporting the Obligations
hereunder in which such Participant is participating; (D) postpone the
payment of, or reduce the amount of, the interest or fees payable to
such Participant through such Lender; or (E) change the amount or due
dates of scheduled principal repayments or prepayments or premiums; and
(v) all amounts payable by Borrower hereunder shall be determined as if
such Lender had not sold such participation; except that, if amounts
outstanding under this Agreement are due and unpaid, or shall have been
declared or shall have become due and payable upon the occurrence of an
Event of Default, each Participant shall be deemed to have the right of
set-off in respect of its participating interest in amounts owing under
this Agreement to the same extent as if the amount of its participating
interest were owing directly to it as a Lender under this Agreement.
The rights of any Participant only shall be derivative through the
originating Lender with whom such Participant participates and no
Participant shall have any direct rights as to the other Lenders,
Agent, Borrower, the Collections, the Collateral, or otherwise in
respect of the Obligations or the Term Loan A Obligations. No
Participant shall have the right to participate directly in the making
of decisions by the Lenders among themselves.
(f) In connection with any such assignment or
participation or proposed assignment or participation, a Lender may
disclose all documents and information which it now or hereafter may
have relating to Borrower or Borrower's business.
(g) Any other provision in this Agreement
notwithstanding, any Lender may at any time create a security interest
in, or pledge, all or any portion of its rights under and interest in
this Agreement in favor of any Federal Reserve Bank in accordance with
Regulation A of the Federal Reserve Bank or U.S. Treasury Regulation 31
CFR '203.14, and such Federal Reserve Bank may enforce such pledge or
security interest in any manner permitted under applicable law.
15.2 SUCCESSORS. This Agreement and the other Loan
Documents shall bind and inure to the benefit of the respective
successors and assigns of each of the parties; PROVIDED, HOWEVER, that
no Covenant Party may assign this Agreement or the other Loan Documents
or any rights or duties hereunder or thereunder without the Lenders'
prior written consent and any prohibited assignment shall be absolutely
void AB INITIO. No consent to assignment by the Lenders shall release
any Obligor its Obligations or Term Loan A Obligations. A Lender may
assign this Agreement and the other Loan Documents and its rights and
duties hereunder and thereunder pursuant to SECTION 15.1 hereof and no
consent or approval by any Covenant Party is required in connection
with any such assignment.
16. AMENDMENTS; WAIVERS.
16.1 AMENDMENTS AND WAIVERS. No amendment or waiver of any
provision of this Agreement or any other Loan Document, and no consent
with respect to any departure by Borrower or the other Covenant Parties
therefrom, shall be effective unless the same shall be in writing and
signed by the Required Lenders (or by Agent at the written request of the
Required Lenders) and Borrower and then any such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; PROVIDED, HOWEVER, that no such waiver, amendment, or consent
shall, unless in writing and signed by all the Lenders and Borrower and
acknowledged by Agent, do any of the following:
(a) increase or extend the Commitment with respect to
any Loan Type or the Total Commitment of any Lender;
(b) postpone or delay any date fixed by this Agreement
or any other Loan Document for any payment of principal, interest, fees
or other amounts due to the Lenders (or any of them) hereunder or under
any other Loan Document;
(c) reduce the principal of, or the rate of interest
specified herein on any Loan, or any fees or other amounts payable
hereunder or under any other Loan Document;
(d) change the percentage of the Total Commitments that
is required for the Lenders or any of them to take any action
hereunder;
(e) amend this Section or any provision of the Agreement
providing for consent or other action by all Lenders;
(f) release Collateral other than as permitted by
SECTION 17.11;
(g) change the definition of "Required Lenders";
(h) release Borrower from any Obligation for the payment
of money or release any guarantor of the Obligations from any
obligation of such guarantor for the payment of money;
(h) release any Obligor other than Borrower from any
Term Loan A Obligation for the payment of money or release any
guarantor of the Term Loan A Obligations from any obligation of such
guarantor for the payment of money; or
(i) amend any of the provisions of ARTICLE 17.
and, PROVIDED FURTHER, HOWEVER, that no amendment, waiver or consent
shall, unless in writing and signed by Agent, affect the rights or
duties of Agent under this Agreement or any other Loan Document; and,
PROVIDED FURTHER, HOWEVER, that no amendment, waiver or consent shall,
unless in writing and signed by Foothill in its individual capacity as
a Lender, affect the specific rights or duties of Foothill in its
individual capacity as a Lender (as contrasted with rights or duties of
Foothill as a member of the Lender Group) under this Agreement or any
other Loan Document. The foregoing notwithstanding, any amendment,
modification, waiver, consent, termination, or release of or with
respect to any provision of this Agreement or any other Loan Document
that relates only to the relationship of the Lender Group among
themselves, and that does not affect the rights or obligations of
Borrower, shall not require consent by or the agreement of Borrower.
16.2 NO WAIVERS; CUMULATIVE REMEDIES No failure by Agent or any
Lender to exercise any right, remedy, or option under this Agreement, any
other Loan Document, or any present or future supplement hereto or thereto,
or in any other agreement between or among Borrower and Agent or any
Lender, or delay by Agent or any Lender in exercising the same, will
operate as a waiver thereof. No waiver by Agent or any Lender will be
effective unless it is in writing, and then only to the extent specifically
stated. No waiver by Agent or the Lenders on any occasion shall
affect or diminish Agent's and each Lender's rights thereafter to require
strict performance by Borrower of any provision of this Agreement. Agent's
and each Lender's rights under this Agreement and the other Loan Documents
will be cumulative and not exclusive of any other right or remedy which
Agent or any Lender may have.
17. AGENT; THE LENDER GROUP.
17.1 APPOINTMENT AND AUTHORIZATION OF AGENT. Each Lender
hereby designates and appoints Foothill as its agent under this Agreement
and the other Loan Documents and each Lender hereby irrevocably authorizes
Agent to take such action on its behalf under the provisions of this
Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Agent agrees to act as such on the express
conditions contained in this ARTICLE 17. The provisions of this ARTICLE 17
are solely for the benefit of Agent and the Lenders and Borrower shall
have no rights as a third party beneficiary of any provisions contained
herein; PROVIDED, HOWEVER, that the provisions of SECTION 17.10 hereof
also shall be for the benefit of Borrower. Any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document
notwithstanding, Agent shall not have any duties or responsibilities,
except those expressly set forth herein, nor shall Agent have or be deemed
to have any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Document or otherwise
exist against Agent; it being expressly understood and agreed that
the use of the word "Agent" is for convenience only, that Foothill is merely
the representative of the Lenders, and has only the contractual duties set
forth herein. Except as expressly otherwise provided in this Agreement,
Agent shall have and may use its sole discretion with respect to exercising
or refraining from exercising any discretionary rights or taking or
refraining from taking any actions which Agent is expressly entitled to
take or assert under or pursuant to this Agreement and the other Loan
Documents. Without limiting the generality of the foregoing, or of any
other provision of the Loan Documents that provides rights or powers to Agent,
Lenders agree that Agent shall have the right to exercise the following
powers as long as this Agreement remains in effect: (a) maintain, in
accordance with its customary business practices, ledgers and records
reflecting the status of the Loans, the Collateral, the Collections,
and related matters; (b) execute or file any and all financing or similar
statements or notices, amendments, renewals, supplements, documents,
instruments, proofs of claim, notices and other written agreements with
respect to the Loan Documents; (c) subject to the terms and conditions
of this Agreement, make Advances and the Term Loans B, for itself or on
behalf of Lenders as provided in this Agreement; (d) exclusively receive,
apply, and distribute the Collections as provided in the Loan Documents;
(e) open and maintain such bank accounts and lock boxes as Agent deems
necessary and appropriate in accordance with the Loan Documents for the
foregoing purposes with respect to the Collateral and the Collections;
(f) perform, exercise, and enforce any and all other rights and remedies
for and on behalf of the Lender Group (at the discretion of Agent or,
where such rights and remedies expressly are reserved to the Lenders, at
the discretion of the Required Lenders) with respect to Borrower, the
other Covenant Parties, the Obligations, the Term Loan A Obligations, the
Collateral, the Collections, or otherwise related to any of same as
provided in the Loan Documents; and (g) incur and pay such Lender
Group Expenses as Agent may deem necessary or appropriate for the
performance and fulfillment of its functions and powers pursuant to the
Loan Documents.
17.2 DELEGATION OF DUTIES. Except as otherwise provided in
this section, Agent may execute any of its duties under this Agreement
or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning
all matters pertaining to such duties. Agent shall not be responsible for
the negligence or misconduct of any agent or attorney-in-fact that it
selects as long as such selection was made in compliance with this section
and without gross negligence or willful misconduct.
17.3 LIABILITY OF AGENT. None of the Agent-Related Persons
shall (i) be liable for any action taken or omitted to be taken by any of
them under or in connection with this Agreement or any other Loan Document
or the transactions contemplated hereby (except for its own gross
negligence or willful misconduct), or (ii) be responsible in any manner
to any of the Lenders for any recital, statement, representation or warranty
made by Borrower or any other Covenant Party, or any officer or director
thereof, contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for
in, or received by Agent under or in connection with, this Agreement or any
other Loan Document, or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document,
or for any failure of Borrower or any other party to any Loan Document to
perform its obligations hereunder or thereunder. No Agent-Related
Person shall be under any obligation to any Lender to ascertain or to
inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document,
or to inspect the properties, books or records of Borrower or any other
Covenant Party.
17.4. RELIANCE BY AGENT. Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or
telephone message, statement or other document or conversation believed by
it to be genuine and correct and to have been signed, sent, or made
by the proper Person or Persons, and upon advice and statements of legal
counsel (including counsel to Borrower or counsel to any Lender),
independent accountants and other experts selected by Agent. Agent shall
be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of the Lenders as it deems appropriate and until
such instructions are received, Agent shall act, or refrain from acting,
as it deems advisable. If Agent so requests, it shall first be indemnified
to its reasonable satisfaction by Lenders against any and all liability and
expense that may be incurred by it by reason of taking or continuing to
take any such action. Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement or any other Loan
Document in accordance with a request or consent of the Lenders and such
request and any action taken or failure to act pursuant thereto shall be
binding upon all of the Lenders.
17.5 NOTICE OF DEFAULT OR EVENT OF DEFAULT. Agent shall
not be deemed to have knowledge or notice of the occurrence of any Default
or Event of Default, except with respect to defaults in the payment of
principal, interest, fees, and expenses required to be paid to Agent for
the account of the Lenders, except with respect to Events of Default of which
Agent has actual knowledge, unless Agent shall have received written
notice from a Lender or Borrower referring to this Agreement, describing
such Default or Event of Default, and stating that such notice is a "notice
of default." Agent promptly will notify the Lenders of its receipt of
any such notice or of any Event of Default of which Agent has actual
knowledge. If any member of the Lender Group obtains actual knowledge
of any Event of Default, such member of the Lender Group promptly shall
notify the other members of the Lender Group of such Event of Default.
Each Lender shall be solely responsible for giving any notices to its
Participants, if any. Subject to SECTION 17.4, Agent shall take such
action with respect to such Default or Event of Default as may be
requested by the Lender Group in accordance with SECTION 9; PROVIDED,
HOWEVER, that unless and until Agent has received any such request,
Agent may (but shall not be obligated to) take such action, or refrain
from taking such action, with respect to such Default or Event of Default
as it shall deem advisable.
17.6 CREDIT DECISION. Each Lender acknowledges that none of
the Agent-Related Persons has made any representation or warranty to it,
and that no act by Agent hereinafter taken, including any review of
the affairs of Borrower and its Subsidiaries or Affiliates, shall be
deemed to constitute any representation or warranty by any
Agent-Related Person to any Lender. Each Lender represents to Agent
that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into
the business, prospects, operations, property, financial and other
condition and creditworthiness of Borrower and any other Person
(other than the Lender Group) party to a Loan Document, and all
applicable bank regulatory laws relating to the transactions
contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to Borrower. Each Lender also
represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking
or not taking action under this Agreement and the other Loan
Documents, and to make such investigations as it deems necessary to
inform itself as to the business, prospects, operations, property,
financial and other condition and creditworthiness of Borrower
and any other Person (other than the Lender Group) party to a Loan
Document. Except for notices, reports and other documents
expressly herein required to be furnished to the Lenders by Agent,
Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business,
prospects, operations, property, financial and other condition
or creditworthiness of any Covenant Party and any other Person party
to a Loan Document that may come into the possession of any of
the Agent-Related Persons.
17.7 COSTS AND EXPENSES; INDEMNIFICATION. Agent may incur
and pay Lender Group Expenses to the extent Agent deems reasonably
necessary or appropriate for the performance and fulfillment of its
functions, powers, and obligations pursuant to the Loan Documents,
including without limiting the generality of the foregoing, court
costs, reasonable attorneys fees and expenses, costs of collection
by outside collection agencies and auctioneer fees and costs of security
guards or insurance premiums paid to maintain the Collateral, whether
or not Borrower is obligated to reimburse Agent or Lenders for such
expenses pursuant to the Loan Agreement or otherwise. Agent is authorized
and directed to deduct and retain sufficient amounts from Collections to
reimburse Agent for such out-of-pocket costs and expenses prior to the
distribution of any amounts to Lenders. In the event Agent is not
reimbursed for such costs and expenses from Collections, each Lender
hereby agrees that it is and shall be obligated to pay to or
reimburse Agent for the amount of such Lender's Pro Rata Portion (Total)
thereof. Whether or not the transactions contemplated hereby are
consummated, the Lenders shall indemnify upon demand the Agent-Related
Persons (to the extent not reimbursed by or on behalf of Borrower and
without limiting the obligation of Borrower to do so), according
to their Pro Rata Portions (Total), from and against any and all
Indemnified Liabilities; PROVIDED, HOWEVER, that no Lender shall
be liable for the payment to the Agent-Related Persons of any portion
of such Indemnified Liabilities resulting solely from such Person's
gross negligence or willful misconduct. Without limitation of the
foregoing, each Lender shall reimburse Agent upon demand for its
ratable share (in accordance with its Pro Rata Portion (Total)) of any
costs or out-of-pocket expenses (including attorneys fees and expenses)
incurred by Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this
Agreement, any other Loan Document, or any document contemplated by
or referred to herein, to the extent that Agent is not reimbursed
for such expenses by or on behalf of Borrower. The undertaking in this
section shall survive the payment of all Obligations and Term Loan A
Obligations hereunder and the resignation or replacement of Agent.
17.8 AGENT IN INDIVIDUAL CAPACITY. Foothill and its
Affiliates may make loans to, issue letters of credit for the account
of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial
advisory, underwriting or other business with Borrower and its
Subsidiaries and Affiliates and any other Person (other than the Lender
Group) party to any Loan Documents as though Foothill were
not Agent hereunder and without notice to or consent of the Lenders.
The Lenders acknowledge that, pursuant to such activities,
Foothill or its Affiliates may receive information regarding
Borrower or its Affiliates and any other Person (other than the Lender
Group) party to any Loan Documents that is subject to confidentiality
obligations in favor of Borrower or such other Person and that
prohibit the disclosure of such information to the Lenders, and
the Lenders acknowledge that, in such circumstances (and in the
absence of a waiver of such confidentiality obligations, which
waiver Agent will use its reasonable best efforts to obtain), Agent
shall be under no obligation to provide such information to them.
With respect to the Agent Advances and the Foothill Loans,
Foothill shall have the same rights and powers under this Agreement
as any other Lender and may exercise the same as though it were
not Agent, and the terms "Lender" and "Lenders" include Foothill
in its individual capacity.
17.9 SUCCESSOR AGENT. Agent may resign as Agent upon
45 days notice to the Lenders. If Agent resigns under this
Agreement, the Required Lenders shall appoint a successor Agent for
the Lenders, which successor Agent shall be an Eligible Transferee.
If no successor Agent is appointed prior to the effective date of the
resignation of Agent, Agent may appoint, after consulting with the
Lenders, a successor Agent, which successor Agent shall be a Lender.
If Agent has materially breached or failed to perform any material
provision of this Agreement or of applicable law, the Lenders holding
an aggregate Pro Rata Portion (Total) of at least 30% of the Commitments
may agree in writing to remove and replace Agent with a successor Agent
from among the Lenders. In any such event, upon the acceptance of
its appointment as successor Agent hereunder, such successor Agent
shall succeed to all the rights, powers and duties of the retiring
Agent and the term "Agent" shall mean such successor Agent and the
retiring Agent's appointment, powers and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent,
the provisions of this SECTION 17 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under
this Agreement. If no successor Agent has accepted appointment as
Agent by the date which is 45 days following a retiring Agent's
notice of resignation, the retiring Agent's resignation shall
nevertheless thereupon become effective and the Lenders shall
perform all of the duties of Agent hereunder until such time, if
any, as the Lenders appoint a successor Agent as provided for above.
17.10 WITHHOLDING TAX. (a) If any Lender is a "foreign
corporation, partnership or trust" within the meaning of the IRC and
such Lender claims exemption from, or a reduction of, U.S. withholding
tax under Sections 1441 or 1442 of the IRC, such Lender agrees with and
in favor of Agent and Borrower, to deliver to Agent and Borrower:
(i) if such Lender claims an exemption from, or a
reduction of, withholding tax under a United States tax treaty,
properly completed IRS Forms 1001 and W-8 before the payment of any
interest in the first calendar year and before the payment of any
interest in each third succeeding calendar year during which interest
may be paid under this Agreement;
(ii) if such Lender claims that interest paid under
this Agreement is exempt from United States withholding tax because it
is effectively connected with a United States trade or business of such
Lender, two properly completed and executed copies of IRS Form 4224
before the payment of any interest is due in the first taxable year of
such Lender and in each succeeding taxable year of such Lender during
which interest may be paid under this Agreement, and IRS Form W-9;
(iii) as an alternative to delivering IRS Form 1001
or Form 4224, any non-U.S. Lender holding any Note that by its terms is
registered with the maker thereof (a "Registered Noteholder") (or, if
such Registered Noteholder is not the beneficial owner thereof, such
beneficial owner) may deliver to Agent and Borrower an IRS Form W-8 (or
such successor and related forms as may from time to time be adopted by
the relevant taxing authorities of the United States of America); and
(iv) such other form or forms as may be required
under the IRC or other laws of the United States as a condition to
exemption from, or reduction of, United States withholding tax.
Such Lender agrees promptly to notify Agent and Borrower of any change
in circumstances which would modify or render invalid any claimed
exemption or reduction.
(b) If any Lender claims exemption from, or reduction
of, withholding tax under a United States tax treaty by providing IRS
Form 1001 and such Lender sells, assigns, grants a participation in, or
otherwise transfers all or part of the Obligations of Borrower or Term
Loan A Obligations of any Obligor to such Lender, such Lender agrees to
notify Agent of the percentage amount in which it is no longer the
beneficial owner of Obligations of Borrower or Term Loan A Obligations
of such Obligor to such Lender. To the extent of such percentage
amount, Agent will treat such Lender's IRS Form 1001 as no longer
valid.
(c) If any Lender claiming exemption from United States
withholding tax by filing IRS Form 4224 with Agent sells, assigns,
grants a participation in, or otherwise transfers all or part of the
Obligations of Borrower or the Term Loan A Obligations of any Obligor
to such Lender, such Lender agrees to undertake sole responsibility for
complying with the withholding tax requirements imposed by Sections
1441 and 1442 of the IRC.
(d) If any Lender is entitled to a reduction in the
applicable withholding tax, Agent may withhold from any interest
payment to such Lender an amount equivalent to the applicable
withholding tax after taking into account such reduction. If the forms
or other documentation required by subsection (a) of this Section are
not delivered to Agent, then Agent may withhold from any interest
payment to such Lender not providing such forms or other documentation
an amount equivalent to the applicable withholding tax.
(e) If the IRS or any other Governmental Authority of
the United States or other jurisdiction asserts a claim that Agent did
not properly withhold tax from amounts paid to or for the account of
any Lender (because the appropriate form was not delivered, was not
properly executed, or because such Lender failed to notify Agent of a
change in circumstances which rendered the exemption from, or reduction
of, withholding tax ineffective, or for any other reason) such Lender
shall indemnify Agent fully for all amounts paid, directly or
indirectly, by Agent as tax or otherwise, including penalties and
interest, and including any taxes imposed by any jurisdiction on the
amounts payable to Agent under this Section, together with all costs
and expenses (including attorneys fees and expenses). The obligation
of the Lenders under this subsection shall survive the payment of all
Obligations and Term Loan A Obligation and the resignation or
replacement of Agent.
17.11 COLLATERAL MATTERS
(a) The Lenders hereby irrevocably authorize Agent, at
its option and in its sole discretion, to release any Lien on any
Collateral (i) upon the termination of the Commitments and payment and
satisfaction in full by Borrower of all Obligations and by the Obligors
of all Term Loan A Obligations; (ii) constituting property being sold
or disposed of if a release is required or desirable in connection
therewith and if Borrower certifies to Agent that the sale or
disposition is permitted under SECTION 7 of this Agreement or the other
Loan Documents (and Agent may rely conclusively on any such
certificate, without further inquiry); (iii) constituting property in
which Borrower owned no interest at the time the security interest was
granted or at any time thereafter; or (iv) constituting property leased
to Borrower under a lease that has expired or is terminated in a
transaction permitted under this Agreement. Except as provided above,
Agent will not execute and deliver a release of any Lien on any
Collateral without the prior written authorization of the Lenders.
Upon request by Agent or Borrower at any time, the Lenders will confirm
in writing Agent's authority to release any such Liens on particular
types or items of Collateral pursuant to this SECTION 17.11; PROVIDED,
HOWEVER, that (i) Agent shall not be required to execute any document
necessary to evidence such release on terms that, in Agent's opinion,
would expose Agent to liability or create any obligation or entail any
consequence other than the release of such Lien without recourse,
representation, or warranty, and (ii) such release shall not in any
manner discharge, affect, or impair the Obligations or Term Loan A
Obligations or any Liens (other than those expressly being released)
upon (or obligations of the Covenant Parties in respect of) all
interests retained by the Covenant Parties, including, the proceeds of
any sale, all of which shall continue to constitute part of the
Collateral.
(c) Agent shall have no obligation whatsoever to any of
the Lenders to assure that the Collateral exists or is owned by
Borrower or is cared for, protected, or insured or has been encumbered,
or that Agent's Liens have been properly or sufficiently or lawfully
created, perfected, protected, or enforced or are entitled to any
particular priority, or to exercise at all or in any particular manner
or under any duty of care, disclosure or fidelity, or to continue
exercising, any of the rights, authorities and powers granted or
available to Agent pursuant to any of the Loan Documents, it being
understood and agreed that in respect of the Collateral, or any act,
omission or event related thereto, subject to the terms and conditions
contained herein, Agent may act in any manner it may deem appropriate,
in its sole discretion given Agent's own interest in the Collateral in
its capacity as one of the Lenders and that Agent shall have no other
duty or liability whatsoever to any Lender as to any of the foregoing,
except as otherwise provided herein.
17.12 RESTRICTIONS ON ACTIONS BY LENDERS; SHARING OF
PAYMENTS (a) Each of the Lenders agrees that it shall not, without
the express consent of Agent and the Required Lenders, and that it
shall, to the extent it is lawfully entitled to do so, upon the
request of Agent and the Required Lenders, set off against the
Obligations or Term Loan A Obligations, any amounts owing by such
Lender to any Obligor or any accounts of an Obligor now or hereafter
maintained with such Lender. Each of the Lenders further agrees
that it shall not, unless specifically requested to do so by
Agent and the Required Lenders, take or cause to be taken any action,
including, the commencement of any legal or equitable proceedings, to
foreclose any Lien on, or otherwise enforce any security
interest in, any of the Collateral the purpose of which is, or could be,
to give such Lender any preference or priority against the other Lenders
with respect to the Collateral.
(b) Subject to SECTION 17.8, if, at any time or times
any Lender shall receive (i) by payment, foreclosure, setoff or
otherwise, any proceeds of Collateral or any payments with respect to
the Obligations or Term Loan A Obligations arising under, or relating
to, this Agreement or the other Loan Documents, except for any such
proceeds or payments received by such Lender from Agent pursuant to the
terms of this Agreement, or (ii) payments from Agent in excess of such
Lender's ratable portion of all such distributions by Agent, such
Lender promptly shall (y) turn the same over to Agent, in kind, and
with such endorsements as may be required to negotiate the same to
Agent, or in same day funds, as applicable, for the account of all of
the Lenders and for application to the Obligations or Term Loan A
Obligations in accordance with the applicable provisions of this
Agreement, or (z) purchase, without recourse or warranty, an undivided
interest and participation in the Obligations or Term Loan A
Obligations owed to the other Lenders so that such excess payment
received shall be applied ratably as among the Lenders in accordance
with their Pro Rata Portions (Total); PROVIDED, HOWEVER, that if all or
part of such excess payment received by the purchasing party is
thereafter recovered from it, those purchases of participations shall
be rescinded in whole or in part, as applicable, and the applicable
portion of the purchase price paid therefor shall be returned to such
purchasing party, but without interest except to the extent that such
purchasing party is required to pay interest in connection with the
recovery of the excess payment.
17.13 AGENCY FOR PERFECTION. Agent and each Lender hereby
appoints each other Lender as agent for the purpose of perfecting
Agent's Liens in assets which, in accordance with Article 9 of the
UCC can be perfected only by possession. Should any Lender obtain
possession of any such Collateral, such Lender shall notify Agent
thereof, and, promptly upon Agent's request therefor shall deliver such
Collateral to Agent or in accordance with Agent's instructions.
17.14 PAYMENTS BY AGENT TO THE LENDERS. All payments
to be made by Agent to the Lenders shall be made by bank wire
transfer or internal transfer of immediately available funds to:
If to Foothill: The Chase Manhattan Bank
ABA # 021-000-021
Credit: Foothill Capital Corporation
Account No. 323-266193
Re: CAI Wireless
If to any Canyon Lender: Citibank, New York
ABA # 021-000-089
Credit: Bear Stearns Securities Corp.
Account No. 0925-3186
For further credit
to: Canpartners Investments IV, LLC
Account No. 505-00500
Re: CAI Wireless
or pursuant to such other wire transfer instructions as each party may
designate for itself by written notice to Agent. Concurrently with
each such payment, Agent shall identify whether such payment (or any
portion thereof) represents principal, premium or interest on revolving
advances or otherwise.
or pursuant to such other wire transfer instructions as each party may
designate for itself by written notice to Agent. Concurrently with
each such payment, Agent shall identify whether such payment (or any
portion thereof) represents principal, premium or interest on revolving
advances or otherwise.
17.15 CONCERNING THE COLLATERAL AND RELATED LOAN DOCUMENTS. Each
member of the Lender Group authorizes and directs Agent to enter into
this Agreement and the other Loan Documents relating to the
Collateral, for the benefit of the Lender Group. Each member of the
Lender Group agrees that any action taken by Agent or all Lenders, as
applicable, in accordance with the terms of this Agreement or
the other Loan Documents relating to the Collateral and the exercise
by Agent or all Lenders, as applicable, of their respective
powers set forth therein or herein, together with such other powers
that are reasonably incidental thereto, shall be binding upon
all of the Lenders.
17.16 FIELD AUDITS AND EXAMINATION REPORTS; CONFIDENTIALITY;
DISCLAIMERS BY LENDERS; OTHER REPORTS AND INFORMATION. By signing this
Agreement, each Lender:
(a) is deemed to have requested that Agent furnish such
Lender, promptly after it becomes available, a copy of each field audit
or examination report (each a "Report" and collectively, "Reports")
prepared by Agent or by any Lender accompanying Agent on any such field
audit or examination, and Agent, and, if applicable, any other Lender
that prepares any such Report, shall so furnish each Lender with such
Reports;
(b) expressly agrees and acknowledges that none of
Foothill, Agent, or, if applicable, any other Lender (i) makes any
representation or warranty as to the accuracy of any Report, or (ii)
shall be liable for any information contained in any Report;
(c) expressly agrees and acknowledges that the Reports
are not comprehensive audits or examinations, that Agent, any Lender,
or any other party performing any audit or examination will inspect
only specific information regarding Borrower and will rely
significantly upon Borrower's books and records, as well as on
representations of Borrower's personnel;
(d) agrees to keep all Reports and other material, non-
public information regarding Borrower and its Subsidiaries and their
operations, assets, and existing and contemplated business plans in a
confidential manner; it being understood and agreed by Borrower that in
any event such Lender may make disclosures: (i) to counsel for and
other advisors, accountants, and auditors to such Lender; (ii)
reasonably required by any BONA FIDE potential or actual Assignee,
transferee, or Participant in connection with any contemplated or
actual assignment or transfer by such Lender of an interest herein or
any participation interest in such Lender's rights hereunder, PROVIDED,
HOWEVER, that by any such disclosure under this clause (ii), such
Assignee, transferee, or Participant shall be bound by the provisions
of this SECTION 17.16(D); (iii) of information that has become public
by disclosures made by Persons other than such Lender, its Affiliates,
assignees, transferees, or participants; or (iv) as required or
requested by any court, governmental or administrative agency, pursuant
to any subpoena or other legal process, or by any law, statute,
regulation, or court order; PROVIDED, HOWEVER, that, unless prohibited
by applicable law, statute, regulation, or court order, such Lender
shall notify Borrower of any request by any court, governmental or
administrative agency, or pursuant to any subpoena or other legal
process for disclosure of any such non-public material information
concurrent with, or where practicable, prior to the disclosure thereof;
and
(e) without limiting the generality of any other
indemnification provision contained in this Agreement, agrees: (i) to
hold Agent and any such other Lender preparing a Report harmless from
any action the indemnifying Lender may take or conclusion the
indemnifying Lender may reach or draw from any Report in connection
with any loans or other credit accommodations that the indemnifying
Lender has made or may make to Borrower, or the indemnifying Lender's
participation in, or the indemnifying Lender's purchase of, a loan or
loans of Borrower; and (ii) to pay and protect, and indemnify, defend
and hold Agent and any such other Lender preparing a Report harmless
from and against, the claims, actions, proceedings, damages, costs,
expenses and other amounts (including, attorney costs) incurred by
Agent and any such other Lender preparing a Report as the direct or
indirect result of any third parties who might obtain all or part of
any Report through the indemnifying Lender.
In addition to the foregoing: (x) Any Lender may from time to time
request of Agent in writing that Agent provide to such Lender a copy of
any report or document provided by Borrower to Agent which has not been
contemporaneously provided by Borrower to such Lender, and, upon
receipt of such request, Agent shall provide a copy of same to such
Lender promptly upon receipt thereof from Borrower; (y) To the extent
that Agent is entitled, under any provision of the Loan Documents, to
request additional reports or information from Borrower, any Lender
may, from time to time, reasonably request Agent to exercise such right
as specified in such Lender's notice to Agent, whereupon Agent promptly
shall request of Borrower the additional reports or information
specified by such Lender, and, upon receipt thereof from Borrower,
Agent promptly shall provide a copy of same to such Lender; and (z) Any
time that Agent renders to Borrower a statement regarding the Loan
Account, Agent shall send a copy of such statement to each Lender.
17.17 SEVERAL OBLIGATIONS; NO LIABILITY. Notwithstanding
that certain of the Loan Documents now or hereafter may have been or
will be executed only by or in favor of Agent in its capacity as
such, and not by or in favor of the Lenders, any and all obligations
on the part of Agent (if any) to make any credit available hereunder
shall constitute the several (and not joint) obligations of the
respective Lenders on a ratable basis, according to their respective
Total Commitments, to make an amount of such credit not to exceed,
in principal amount, at any one time outstanding, the amount of their
respective Total Commitments. Nothing contained herein shall
confer upon any Lender any interest in, or subject any Lender to any
liability for, or in respect of, the business, assets, profits, losses,
or liabilities of any other Lender. Each Lender shall be solely
responsible for notifying its Participants of any matters relating to
the Loan Documents to the extent any such notice may be required,
and no Lender shall have any obligation, duty, or liability to any
Participant of any other Lender. Except as provided in SECTION 17.7,
no member of the Lender Group shall have any liability for the acts or
any other member of the Lender Group. No Lender shall be responsible to
Borrower or any other Person for any failure by any other Lender to
fulfill its obligations to make credit available hereunder, nor to
advance for it or on its behalf in connection with its Commitment,
nor to take any other action on its behalf hereunder or in connection
with the financing contemplated herein.
18. GENERAL PROVISIONS.
18.1 EFFECTIVENESS. This Agreement shall be binding and
deemed effective when executed by Borrower and the Lender Group.
18.2 SECTION HEADINGS. Headings and numbers have been
set forth herein for convenience only. Unless the contrary is
compelled by the context, everything contained in each section
applies equally to this entire Agreement.
18.3 INTERPRETATION. Neither this Agreement nor any
uncertainty or ambiguity herein shall be construed or resolved against
the Lender Group or the Covenant Parties, whether under any rule
of construction or otherwise. On the contrary, this Agreement has been
reviewed by all parties (including Borrower for itself and on behalf of
the other Covenant Parties) and shall be construed and interpreted
according to the ordinary meaning of the words used so as to fairly
accomplish the purposes and intentions of all parties hereto.
18.4 SEVERABILITY OF PROVISIONS. Each provision of this
Agreement shall be severable from every other provision of this Agreement
for the purpose of determining the legal enforceability of any specific
provision.
18.5 AMENDMENTS IN WRITING. This Agreement can only be
amended by a writing signed by Agent, the requisite Lenders, and the
Obligors.
18.6 COUNTERPARTS; TELEFACSIMILE EXECUTION. This
Agreement may be executed in any number of counterparts and by
different parties on separate counterparts, each of which, when
executed and delivered, shall be deemed to be an original, and all
of which, when taken together, shall constitute but one and the
same Agreement. Delivery of an executed counterpart of this Agreement
by telefacsimile shall be equally as effective as delivery of an
original executed counterpart of this Agreement. Any party delivering
an executed counterpart of this Agreement by telefacsimile also
shall deliver an original executed counterpart of this Agreement but
the failure to deliver an original executed counterpart shall not
affect the validity, enforceability, and binding effect of this
Agreement. The foregoing shall apply to each other Loan Document
MUTATIS MUTANDIS.
18.7 REVIVAL AND REINSTATEMENT OF OBLIGATIONS.
If the incurrence or payment of the Obligations or Term Loan A
Obligations by any one or more of the Obligors or the transfer
by any one or more of the Obligors to the Lender Group of any
property of any one or more of the Obligors should for any reason
subsequently be declared to be void or voidable under any state
or federal law relating to creditors' rights, including
provisions of the Bankruptcy Code relating to fraudulent
conveyances, preferences, and other voidable or recoverable
payments of money or transfers of property (collectively, a
"Voidable Transfer"), and if the Lender Group is required to
repay or restore, in whole or in part, any such Voidable
Transfer, or elects to do so upon the reasonable advice of
its counsel, then, as to any such Voidable Transfer, or the
amount thereof that the Lender Group is required or elects
to repay or restore, and as to all reasonable costs, expenses,
and attorneys fees of the Lender Group related thereto, the
liability of Borrower automatically shall be revived,
reinstated, and restored and shall exist as though such Voidable
Transfer had never been made.
18.8 INTEGRATION. This Agreement, together with the
other Loan Documents, reflects the entire understanding of the
parties with respect to the transactions contemplated hereby
and shall not be contradicted or qualified by any other agreement,
oral or written, before the date hereof.
BPHLA\JFH\0440288.12
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered for acceptance by Agent
in New York.
CAI WIRELESS SYSTEMS, INC.,
a Connecticut corporation
By: /S/JAMES P. ASHMAN
Title EXECUTIVE VICE PRESIDENT
HAMPTON ROADS WIRELESS, INC.,
a Delaware corporation
WASHINGTON CHOICE TELEVISION, INC.,
a Delaware corporation
PHILADELPHIA CHOICE TELEVISION, INC.,
a Delaware corporation
ATLANTIC MICROSYSTEMS, INC.,
a Delaware corporation
CAI WIRELESS INTERNET, INC.,
a Delaware corporation
GREATER ALBANY WIRELESS SYSTEMS, INC.,
a New York corporation
EASTERN NEW ENGLAND TV, INC.,
a Delaware corporation
COMMONWEALTH CHOICE TELEVISION, INC.,
a Delaware corporation
NEW YORK CHOICE TELEVISION, INC.,
a Delaware corporation
ROCHESTER CHOICE TELEVISION, INC.,
a Delaware corporation
CONNECTICUT CHOICE TELEVISION, INC.,
a Connecticut corporation
ONONDAGA WIRELESS, INC.,
a New York corporation
By: /S/ JAMES P. ASHMAN
Title: EXECUTIVE VICE PRESIDENT OF EACH OF
ABOVE-LISTED OBLIGORS OTHER THAN
BORROWER
FOOTHILL CAPITAL CORPORATION,
a California corporation,
as Agent and as a Lender
By: /S/
Title: AVP
CANPARTNERS INVESTMENTS IV, LLC,
a California limited liability company,
as a Lender
By: Canpartners Incorporated, a California
corporation, its managing member
By: /S/
Title: VICE PRESIDENT
THE VALUE REALIZATION FUND, L.P.,
a Delaware limited partnership,
as a Lender
By: Canpartners Investments III, L.P.,
a California limited
partnership, its general partner
By: Canyon Capital Management, L.P.,
a California limited partnership,
its general partner
By: Canpartners Incorporated,
a California corporation,
its general partner
By: /S/
Title: /S/
FINVEST CAPITAL LIMITED,
as a Lender
By: Queensgate Bank and Trust Co. Ltd.,
its administrator
By: /S/
Title: DIRECTOR
BPHLA\JFH\0440288.12