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REVOLVING CREDIT AND TERM LOAN AGREEMENT
Dated as of September 30, 1988
among
CABLE TV FUND 14-A/B VENTURE,
the Banks referred to in Section 2.1
and
THE BANK OF NOVA SCOTIA, as Agent
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TABLE OF CONTENTS
Section Page
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ARTICLE I DEFINITIONS; CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE II THE CREDITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.1 Revolving Credit Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(a) The Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(b) Revolving Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(c) Expiration Date; Failure
of Bank To Lend . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.2 Revolving Credit and Term
Loan Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.3 Making of Revolving Credit Loans . . . . . . . . . . . . . . . . . . . . . . 13
2.4 Commitment Fee; Reduction of
the Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(a) Commitment Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(b) Reduction of the Commitment . . . . . . . . . . . . . . . . . . . . . 14
2.5 Term Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.6 Term Loan Ceiling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.7 Making of Term Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.8 Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(a) Optional Bases of Borrowing . . . . . . . . . . . . . . . . . . . . . 16
(i) Base Rate Option . . . . . . . . . . . . . . . . . . . . . . . . 16
(ii) CD Rate Option . . . . . . . . . . . . . . . . . . . . . . . . . 17
(iii) Euro-Rate Option . . . . . . . . . . . . . . . . . . . . . . . . 18
(b) Maturity Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(c) Transactional Amounts . . . . . . . . . . . . . . . . . . . . . . . . 21
(d) Interest After Maturity . . . . . . . . . . . . . . . . . . . . . . . 21
(e) CD Rate or Euro-Rate
Unascertainable;
Impracticability . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.9 Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.10 Failure of Borrower To Give
Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.11 Interest Payment Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.12 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.13 Additional Compensation in
Certain Circumstances . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(a) Increased Costs or Reduced
Return Resulting From
Taxes, Reserves, Capital
Adequacy Requirements,
Expenses, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(b) Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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2.14 Funding by Branch, Subsidiary
or Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(a) Notional Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(b) Actual Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.15 Maximum Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE III REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . 28
3.1 Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . 28
3.2 Authority and Authorization . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.3 Execution and Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . 29
3.4 Authorizations and Filings . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.5 Absence of Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.6 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.7 No Event of Default; Compliance
With Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.8 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.9 Equity Investments and
Affiliated Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.10 Pension Related Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.11 Title to Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.12 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.13 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.14 Financial Accounting Practices . . . . . . . . . . . . . . . . . . . . . . . 32
3.15 Power To Carry on Business . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.16 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.17 Regulation U . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.18 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.19 Franchises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.20 Patents, Copyrights,
Licenses, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.21 Copyright Act Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.22 Chief Executive Office; Chief
Place of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.23 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.24 Documents Delivered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
3.25 Accurate and Complete Disclosure . . . . . . . . . . . . . . . . . . . . . . 35
3.26 Investment Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
3.27 Public Utility Holding Company . . . . . . . . . . . . . . . . . . . . . . . 35
3.28 Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE IV CONDITIONS OF LENDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.1 Representations and Warranties;
Events of Default and Potential
Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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4.2 Proceedings and Incumbency . . . . . . . . . . . . . . . . . . . . . . . . . . 37
(a) Jones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
(b) Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
(c) General Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
(d) Reliance on Certificates . . . . . . . . . . . . . . . . . . . . . . . 38
4.3 Opinions of Counsel--Revolving
Credit Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
4.4 Opinions of Counsel--Term Loan . . . . . . . . . . . . . . . . . . . . . . . 38
4.5 Security Documentation . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
4.6 Repayment of Existing Debt . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.7 Subordination Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.8 Capital Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.9 Certification of Franchises . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.10 Required Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.11 Details, Proceedings and
Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE V AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.1 Reporting and Information
Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
(a) Annual Audit Reports . . . . . . . . . . . . . . . . . . . . . . . . . 41
(b) Quarterly Reports . . . . . . . . . . . . . . . . . . . . . . . . . . 42
(c) Compliance and Reconciliation
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
(d) Monthly Subscriber Reports . . . . . . . . . . . . . . . . . . . . . . 43
(e) Other Reports and
Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
(f) Further Information . . . . . . . . . . . . . . . . . . . . . . . . . 43
(g) Notice of Event of Default . . . . . . . . . . . . . . . . . . . . . . 43
(h) Notice of Material Adverse
Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
(i) Notice of Material
Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
(j) Notice of Other Material
Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
(k) Notices With Respect
to Franchises . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
(l) FCC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
(m) Visitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.2 Preservation of Existence and
Franchises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
5.3 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
5.4 Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . 45
5.5 Financial Accounting Practices . . . . . . . . . . . . . . . . . . . . . . . . 46
5.6 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
5.7 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
5.8 Government Authorizations, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 46
5.9 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
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ARTICLE VI NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.1 Financial Maintenance Covenants . . . . . . . . . . . . . . . . . . . . . . . 47
(a) Total Debt/Annualized
Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
(b) Cash Flow/Debt Service . . . . . . . . . . . . . . . . . . . . . . . . 47
6.2 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.3 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.4 Guarantees and Contingent
Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.5 Loans and Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.6 Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.7 Sale-Leasebacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.8 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
6.9 Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
6.10 Dispositions of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
6.11 Acquisitions of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
6.12 Self-Dealing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
6.13 Continuation of or Change
in Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
6.14 Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
6.15 Amendments to Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
6.16 Pension Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
6.17 Regulation U . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE VII DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
7.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
7.2 Consequences of an Event
of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
7.3 Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
7.4 Equalization Among the Banks . . . . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE VIII THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
8.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
8.2 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.3 Nature of Duties; Independent
Credit Investigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.4 Actions in Discretion of
Agent; Instructions From
Required Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.5 Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
8.6 Reimbursement and Indemnification . . . . . . . . . . . . . . . . . . . . . . 62
8.7 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
8.8 The Bank of Nova Scotia in its
Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
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8.9 Holders of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
8.10 Related Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
8.11 Pro Rata Interest in Collateral . . . . . . . . . . . . . . . . . . . . . . . 64
8.12 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
8.13 Appointment of Co-Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE IX MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
9.1 Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
9.2 Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
9.3 Amendments or Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
9.4 No Implied Waiver; Cumulative
Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
9.5 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
9.6 Expenses; Taxes; Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . 68
9.7 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
9.8 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
9.9 Prior Understandings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
9.10 Duration; Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
9.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
9.12 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
9.13 Limitation on Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
9.14 Nonrecourse Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SIGNATURE PAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Exhibit A Form of Revolving Credit and Term Loan Note
Exhibit B Mortgage
Exhibit C Security Agreement
Exhibit D Subordination Agreement
Exhibit E Opinion of Borrower's Counsel
Exhibit F Opinion of FCC Counsel
Exhibit G Opinion of Local Counsel
Schedule 1 Authorization and Filings (Section 3.4)
Schedule 2 Required Consents (Section 3.12)
Schedule 3 Franchises (Section 3.19)
Schedule 4 Nonassignable Intangible Property (Section 3.20)
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Schedule 5 Chief Executive Office; Chief Place of
Business (Section 3.22)
Schedule 6 Location of Assets (Section 3.23)
Schedule 7 Liens (Section 6.2)
Schedule 8 Indebtedness and Guarantees (Sections 6.3 and 6.4)
Schedule 9 Loans and Investments (Section 6.5)
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REVOLVING CREDIT AND TERM LOAN AGREEMENT
THIS REVOLVING CREDIT AND TERM LOAN AGREEMENT, dated as of
September 30, 1988, by and among CABLE TV FUND 14-A/B VENTURE, a Colorado
general partnership (the "Borrower"), the banks named in Section 2.1
(hereinafter sometimes referred to collectively as the "Banks" and individually
as a "Bank") and THE BANK OF NOVA SCOTIA, a Canadian chartered bank, as Agent
for the Banks hereunder (hereinafter in such capacity referred to as the
"Agent"),
W I T N E S S E T H :
Whereas the Borrower has requested the Banks to extend credit
to the Borrower to enable it to borrow, repay and reborrow, at any time and
from time to time before the Expiration Date (as hereinafter defined), not in
excess of forty-two million five hundred thousand dollars ($42,500,000)
principal amount at any time outstanding, and thereafter to borrow such amount
on a term loan basis;
Whereas the Banks are willing to extend such credit to the
Borrower on the terms and conditions hereinafter set forth:
N o w, T h e r e f o r e, in consideration of the premises and
of the mutual covenants herein contained and intending to be legally bound
hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
1.1 Certain Definitions. In addition to other words and terms
defined elsewhere in this Agreement, as used herein the following words and
terms shall have the following meanings, respectively, unless the context
hereof otherwise clearly requires:
"Advances" shall mean loans and advances made by Jones to the
Borrower.
"Agreement" shall mean this Revolving Credit and Term Loan
Agreement as amended, modified or supplemented from time to time.
"Allocated Expenses" shall mean for any period the fees
payable (without regard to the Borrower's right to defer or limit actual
payment) to Jones to compensate Jones
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for that portion of its general overhead and administrative expenses, including
all of its direct and indirect expenses allocable to the operation of the
Borrower's business, including, but not limited to, home office rent, supplies,
telephone, travel and copying charges, and salaries of full and part-time
employees.
"Annualized Cash Flow" shall mean as of the end of any fiscal
quarter of the Borrower Cash Flow for such quarter times four (4).
"Assessment Rate" shall have the meaning assigned to that term
in Section 2.8(a) hereof.
"Base Rate" and "Base Rate Option" shall have the meanings
assigned to those terms in Section 2.8(a) hereof.
"Base Rate Loan" shall mean at any time any Loan bearing
interest at such time (i) under the Base Rate Option or (ii) under the first
sentence of Section 2.8(d) hereof. If no Base Rate Loan is specified, "Base
Rate Loan" shall refer to all Base Rate Loans outstanding at such time.
"Base Rate Maturity Period" shall have the meaning assigned to
that term in Section 2.8(b) hereof.
"Basic Subscriber Rate" shall mean the minimum standard
monthly fees and charges for "basic service" (as such term is commonly
understood in the cable television industry) charged to customers of Systems.
"Basic Subscribers" shall mean, at any time, all subscribers
subscribing to the Systems (excluding "second connects" as such term is
commonly understood in the cable television industry) who (i) pay the Basic
Subscriber Rate for service, and (ii) are not more than sixty (60) days past
due in payment. In the case of commercial buildings, such as hotels or motels,
or in the case of multiple residential dwellings, such as apartment houses and
multifamily homes, which do not obtain reduced bulk service rates, each
separate guest unit or dwelling unit receiving service shall be counted as one
subscriber. The number of subscribers in a commercial building or in a multiple
residential dwelling which obtains a reduced bulk service rate shall be
obtained by dividing (i) the aggregate dollar amount of monthly subscribers'
fees paid on account of such commercial building or multiple residential
dwelling for basic service by (ii) the Basic Subscriber Rate. Residential
households (other than in a multiple residential dwelling) paying the Basic
Subscriber Rate under any form of deferred payment arrangement shall not be
included.
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"Agent" shall mean The Bank of Nova Scotia, a Canadian
chartered bank.
"Banks" shall mean the banks named in Section 2.1
(individually referred to as a "Bank").
"Borrower" shall mean Cable TV Fund 14-A/B Venture, a Colorado
general partnership.
"Business Day" shall mean any day other than a Saturday,
Sunday, public holiday under the laws of the State of California or other day
on which banking institutions are authorized or obligated to close in San
Francisco, California.
"Capital Expenditures" shall mean expenditures for fixed or
capital assets or any debits to the property, plant and equipment accounts in
accordance with GAAP.
"Capitalized Lease" shall mean at any time any lease which, in
accordance with GAAP, is required to be capitalized on the balance sheet of the
lessee at such time, and "Capitalized Lease Obligation" of any person at any
time shall mean the aggregate amount which, in accordance with GAAP, is
required to be reported as the liability as lessee under a Capitalized Lease on
the balance sheet of such person at such time.
"Cash Flow" shall mean for any fiscal period total
consolidated revenues of the Borrower for such period, determined in accordance
with GAAP less the sum of (i) operating expenses of the Borrower for such
quarter (excluding depreciation, Management Fees and Allocated Expenses) and
(ii) general and administrative expenses of the Borrower for such quarter, in
each case determined in accordance with GAAP.
"CD Rate" and "CD Rate Option" shall have the meanings
assigned to those terms in Section 2.8(a) hereof.
"CD Rate Loan" shall mean any Loan bearing interest at any
time under the CD Rate Option or at a rate calculated by reference to the CD
Rate under Section 2.8(d) hereof. If no CD Rate Loan is specified, "CD Rate
Loan" shall refer to all CD Rate Loans outstanding at such time.
"CD Rate Maturity Period" shall have the meaning assigned to
that term in Section 2.8(b) hereof.
"Closing Date" shall mean the date of the first Loan hereunder.
-3- CREDIT AGREEMENT
11
"Code" means the Internal Revenue Code of 1986, as amended,
and any successor statute of similar import, and regulations thereunder, in
each case as in effect from time to time. References to sections of the Code
shall be construed to also refer to any successor sections.
"Collateral" shall have the meaning assigned to that term in
Section 8.11.
"Commitment" shall have the meaning assigned to that term in
Section 2.1(a) hereof.
"Controlled Group Member" shall mean each trade or business
(whether or not incorporated) which together with the Borrower is treated as a
single employer under section 4001(b)(1) of ERISA.
"Corresponding Source of Funds" shall mean:
(i) in the case of any CD Rate Loan, the proceeds of
hypothetical issuances by a Bank of one or more of its certificates of
deposit at the beginning of the CD Rate Maturity Period corresponding
to such CD Rate Loan, having maturities approximately equal to such CD
Rate Maturity Period and in an aggregate amount approximately equal to
the principal amount of such CD Rate Loan; and
(ii) in the case of any Euro-Rate Loan, the proceeds of
hypothetical receipts by a Notional Euro-Rate Funding Office or by a
Bank through a Notional Euro-Rate Funding Office of one or more Dollar
deposits in the interbank Eurodollar market at the beginning of the
Euro-Rate Maturity Period corresponding to such Euro-Rate Loan, having
maturities approximately equal to such Euro-Rate Maturity Period and
in an aggregate amount approximately equal to the principal amount of
such Euro-Rate Loan.
"Current Commitment" shall have the meaning assigned to that
term in Section 2.1(a) hereof.
"Debt Service" shall mean for any fiscal period the sum of (a)
all interest accrued on Total Debt for such period and (b) the aggregate
amounts of scheduled principal payments of Total Debt payable by the Borrower
during such period.
"Dollar," "Dollars" and the symbol "$" shall mean lawful
money of the United States of America.
-4- CREDIT AGREEMENT
12
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended, and any successor statute of similar import, and
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA shall be construed to also refer to any successor
sections.
"Euro-Rate" and "Euro-Rate Option" shall have the meanings
assigned to those terms in Section 2.8(a) hereof.
"Euro-Rate Loan" shall mean any Loan bearing interest at any
time under the Euro-Rate Option or at a rate calculated by reference to the
Euro-Rate under Section 2.8(d) hereof. If no Euro-Rate Loan is specified,
"Euro-Rate Loan" shall refer to all Euro-Rate Loans outstanding at such time.
"Euro-Rate Maturity Period" shall have the meaning assigned to
that term in Section 2.8(b) hereof.
"Event of Default" shall mean any of the Events of Default
described in Section 7.1 hereof.
"Existing Debt" shall mean all amounts owed by the Borrower
pursuant to the promissory note dated March 31, 1988 by and between the
Borrower and Mellon Bank, N.A., as the same shall have been amended, modified
or supplemented from time to time.
"Expiration Date" shall mean December 31, 1991.
"FCC" shall mean the Federal Communications Commission or any
successor agency thereto performing functions similar to those performed by the
Federal Communications Commission on the date hereof.
"FCC License" shall mean any license or permit issued by the
FCC, including, without limitation, licenses issued in connection with the
operation of community antenna television systems, community antenna relay
systems, microwave systems, earth stations and business and other two-way
radios.
"Franchise" shall mean any franchise, permit, license or other
authorization granted by any governmental unit or authority, including all
laws, regulations and ordinances relating thereto, for the construction,
operation and maintenance of a community antenna television system or SMATV
system and the reception and transmission of signals by microwave, and shall
include, without limitation, all licenses issued by the FCC for the operation
of community antenna relay systems, earth stations, business and other
-5- CREDIT AGREEMENT
13
two-way radios, microwave systems and all certificates of compliance and cable
television registration statements which are required to be issued by or filed
with the FCC.
"Franchise Agreement" shall mean any ordinance, agreement,
contract or other document stating the terms and conditions of any Franchise,
including, without limitation, all exhibits and schedules thereto, all
amendments thereof and consents, waivers and extensions issued thereunder, any
documents incorporated therein by reference and the application from which such
Franchise was granted.
"GAAP" shall mean generally accepted accounting principles (as
such principles may change from time to time) applied on a consistent basis
(except for changes in application in which the Borrower's independent
certified public accountants concur), applied both to classification of items
and amounts.
"General Partners" shall mean Cable TV Fund 14-A, Ltd. and
Cable TV Fund 14-B, Ltd., both Colorado limited partnerships.
"Indebtedness" of a person shall mean:
(i) all indebtedness or liability for or on account of money
borrowed by, or for or on account of deposits with or advances to,
such person;
(ii) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments;
(iii) all indebtedness or liability for or on account of
property or services purchased or acquired by such person; and
(iv) any amount secured by a Lien on property owned by such
person (whether or not assumed) and Capitalized Lease Obligations of
such person (without regard to any limitation of the rights and
remedies of the holder of such Lien or the lessor under such
Capitalized Lease to repossession or sale of such property).
"Joint Venture Agreement" shall mean the Joint Venture
Agreement of Cable TV Fund 14-A/B Venture dated as of January 8, 1988, between
Cable TV Fund 14-A, Ltd. and Cable TV Fund 14-B, Ltd.
"Jones" shall mean Jones Intercable, Inc., a Colorado
corporation.
-6- CREDIT AGREEMENT
14
"Law" shall mean any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, order, injunction, writ, decree
or award of any Official Body.
"Lien" shall mean any mortgage, deed of trust, pledge, lien,
security interest, charge or other encumbrance or security arrangement of any
nature whatsoever, including but not limited to any conditional sale or title
retention arrangement, and any assignment, deposit arrangement or lease
intended as, or having the effect of, security.
"Loan" or "Loans" shall mean any and all loan or loans made by
the Banks to the Borrower under this Agreement.
"London Business Day" shall mean a day for dealing in deposits
in Dollars by and among banks in the London interbank market and which is a
Business Day.
"Management Fees" shall mean for any period the management
fees payable by the Borrower to Jones during such period for management
services provided to the Borrower pursuant to the Joint Venture Agreement.
"Mandatory Reduction Dates" shall mean the dates on which the
Term Loan Ceiling shall be reduced pursuant to Section 2.6(A) hereof.
"Maturity Date" and "Maturity Period" shall have the meanings
assigned to those terms in Section 2.8(b) hereof.
"month," with respect to a Euro-Rate Maturity Period, means
the interval between the Euro-Convention Dates in consecutive calendar months
as to such Euro-Rate Maturity Period. The "Euro-Convention Date" in a calendar
month at the end of any Euro-Rate Maturity Period shall mean the day in such
calendar month numerically corresponding to the first day of such Euro-Rate
Maturity Period, except (i) if there is no such numerically corresponding day
in a calendar month, the "Euro-Convention Date" for such calendar month shall
mean the last London Business Day of such calendar month, (ii) if the first day
of such Euro-Rate Maturity Period is the last day of a calendar month, the
"Euro-Convention Date" for any later calendar month shall mean the last London
Business Day of such calendar month and (iii) otherwise, if a numerically
corresponding day in a
-7- CREDIT AGREEMENT
15
given calendar month is not a London Business Day, the "Euro-Convention Date"
for such calendar month shall mean the next following day that is a London
Business Day, but not later than the last London Business Day of such calendar
month.
"Mortgage" shall mean a mortgage in the form of Exhibit B
hereto, dated as of the date hereof and executed and delivered by the Borrower
to the Agent covering the property and leases of the Borrower described in
Schedule 6 hereto as the same may be amended, modified or supplemented from
time to time.
"Multiemployer Plan" shall mean any employee benefit plan
which is a "multiemployer plan" within the meaning of section 4001(a)(3) of
ERISA and to which the Borrower or any Controlled Group Member has or had an
obligation to contribute.
"Note" or "Notes" shall mean the Revolving Credit and Term
Loan Notes of the Borrower executed and delivered under this Agreement,
together with all extensions, renewals, refinancings or refundings thereof in
whole or in part.
"Notional Euro-Rate Funding Office" shall have the meaning
given to that term in Section 2.14(a) hereof.
"Obligations" shall have the meaning assigned to that term in
the Security Agreement.
"Office" when used in connection with the Agent, shall mean
its office located at 444 Market Street, Suite 2450, San Francisco, California
94111, or at such other office or offices of the Agent or branch, subsidiary or
affiliate thereof as may be designated in writing from time to time by the
Agent to the Borrower and the Banks; provided that in no event shall the Agent
so designate any office located in the State of Florida.
"Official Body" shall mean any government or political
subdivision or any agency, authority, bureau, central bank, commission,
department or instrumentality of either, or any court, tribunal, grand jury or
arbitrator, in each case whether foreign or domestic.
"Option" shall mean the Base Rate Option, the CD Rate Option
or the Euro-Rate Option, as the case may be.
"Partnership Agreements" shall mean the limited partnership
agreements pursuant to which the General Partners were organized, as amended,
modified or supplemented prior to the date hereof.
-8- CREDIT AGREEMENT
16
"PBGC" means the Pension Benefit Guaranty Corporation
established under Title IV of ERISA or any other governmental agency,
department or instrumentality succeeding to the functions of said corporation.
"person" shall mean an individual, corporation, partnership,
trust, unincorporated association, joint venture, joint-stock company,
government (including political subdivisions), governmental authority or
agency, or any other entity.
"Plan" shall mean any employee pension benefit plan (other
than a Multiemployer Plan) to which section 4021 of ERISA applies and (i) which
is maintained for employees of the Borrower or any Controlled Group Member; or
(ii) to which the Borrower or any Controlled Group Member made, or was required
to make, contributions at any time within the preceding five (5) years.
"Pole Agreement" shall mean any conduit occupancy rights, pole
agreement, pole rental, pole use, access or similar agreement with any
telephone company, public authority, public utility or other entity pursuant to
which the coaxial, fiber optic or other type of cable and local distribution
units of a cable television system are extended.
"Potential Default" shall mean any event or condition which
with notice, passage of time or a determination by the Bank, or any combination
of the foregoing, would constitute an Event of Default.
"Premium Subscription" shall mean a Pay Service received by a
Basic Subscriber that (i) is in addition to the minimum package of subscriber
services that each Basic Subscriber to a System must receive as a subscriber
thereof, (ii) is for a fee in addition to the Basic Subscriber Rate, and (iii)
is not more than sixty (60) days past due. The number of Premium Subscriptions
in the case of Basic Subscribers receiving a reduced bulk pay programming
service rate shall be determined by dividing (x) the aggregate dollar amount of
monthly subscribers' fees paid on account of such services by (y) the standard
rate for the pay programming services received. As used herein, the term "Pay
Service" shall mean a motion picture or other entertainment cable television
broadcast service available to Basic Subscribers of a System.
"Related Documents" shall mean the Security Documents and the
Subordination Agreement.
"Reportable Event" means (i) a reportable event described in
section 4043 of ERISA and regulations
-9- CREDIT AGREEMENT
17
thereunder, (ii) a withdrawal by a substantial employer from a Plan to which
more than one employer contributes, as referred to in section 4063(b) of ERISA,
or (iii) a cessation of operations at a facility causing more than twenty
percent (20%) of Plan participants to be separated from employment, as referred
to in section 4062(f) of ERISA.
"Required Banks" means at any time when no Loans are
outstanding, Banks having Current Commitments equal to at least 60% of the
Total Current Commitment and, at any time when Loans are outstanding, Banks
holding at least 60% of the unpaid balance of all Notes.
"Revolving Credit Loans" shall have the meaning assigned to
that term in Section 2.1(a) hereof.
"Revolving Credit and Term Loan Notes" shall mean the
promissory notes of the Borrower executed and delivered under Section 2.2
hereof, together with all extensions, renewals, refinancings or refundings
thereof in whole or in part.
"Rollover Loan" shall mean any Loan made on the Maturity Date
of any preceding Loan or Loans, with the aggregate principal amount of such
Rollover Loan being less than or equal to the aggregate principal amount of
such preceding Loan or Loans.
"Security Agreement" shall mean a Security Agreement dated as
of the date hereof in the form of Exhibit C hereto, as the same may be amended,
modified or supplemented from time to time.
"Security Documents" shall mean the Security Agreement and the
Mortgage.
"Standard Notice" shall mean an irrevocable notice provided to
the Agent on a Business Day which is:
(i) at least one (1) Business Day in advance in the case of
selection of the Base Rate Option, or prepayment of any Base Rate
Loan;
(ii) at least two (2) Business Days in advance in the case of
selection of the CD Rate Option; and
(iii) at least two (2) London Business Days in advance in the
case of selection of the Euro-Rate Option.
-10- CREDIT AGREEMENT
18
Standard Notice must be provided no later than 10:00 A.M., San Francisco time,
on the last day permitted for such notice.
"Subordination Agreement" shall mean a subordination agreement
among the Borrower, Jones and the Agent dated as of the date hereof in the form
of Exhibit D hereto, as the same may be amended, modified or supplemented from
time to time.
"System" or "Systems" shall mean the assets constituting a
cable television or SMATV system (including, without limitation, all related
licenses, franchises and permits issued under federal, state or local laws from
time to time, and all agreements with public utilities and microwave
transmission companies, pole attachment, use, access or rental agreements,
utility easements and all other property owned or used in connection with the
entertainment and services provided pursuant to, and all interest of the
Borrower to receive revenues from, or pursuant to, said licenses, franchises
and permits) owned by the Borrower and serving subscribers within a
geographical area covered by one or more Franchises from the same head end
facility or by two or more related head end facilities.
"Term Loan Expiration Date" shall mean December 31, 1996.
"Term Loan" shall have the meaning assigned to that term in
Section 2.5 hereof.
"Term Loan Ceiling" shall have the meaning assigned to that
term in Section 2.6 hereof.
"Total Current Commitment" shall mean at any time the sum of
the Current Commitments of the Banks at such time.
"Total Debt" shall mean as of any date the aggregate principal
amount of all Indebtedness of the Borrower outstanding as of such date,
excluding accounts payable arising in the ordinary course of business on terms
customary in the trade and Advances.
-11- CREDIT AGREEMENT
19
1.2 Construction. Unless the context of this Agreement
otherwise clearly requires, references to the plural include the singular, the
singular the plural and the part the whole, and "or" has the inclusive meaning
represented by the phrase "and/or." References in this Agreement to
"determination" by a Bank or the Agent include good faith estimates by such
Bank or the Agent (in the case of quantitative determinations) and good faith
beliefs by such Bank or the Agent (in the case of qualitative determinations).
The words "hereof," "herein," "hereunder" and similar terms in this Agreement
refer to this Agreement as a whole and not to any particular provision of this
Agreement. The section and other headings contained in this Agreement and the
Table of Contents preceding this Agreement are for reference purposes only and
shall not control or affect the construction of this Agreement or the
interpretation thereof in any respect. Section, subsection and exhibit
references are to this Agreement unless otherwise specified.
ARTICLE II
THE CREDITS
2.1 Revolving Credit Loans.
(a) The Commitments. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Bank
severally agrees (such agreement being herein called such Bank's "Commitment")
to make loans to the Borrower (the "Revolving Credit Loans") at any time or
from time to time on or after the date hereof and to, but not including, the
Expiration Date in an aggregate principal amount not exceeding at any one time
outstanding such Bank's Current Commitment at such time. Each Bank's "Current
Commitment" at any given time shall be equal to the amount set forth opposite
the name of such Bank in the table below, as such amount may have been reduced
under Section 2.4 hereof at such time.
Current Percentage
Name of Bank Commitment Interest
------------ ---------- ----------
The Bank of Nova Scotia $30,000,000 70.59%
Provident National Bank $12,500,000 29.41%
Total $42,500,000 100%
(b) Revolving Credit. Within the limits of time and amount set
forth in this Section 2.1, and subject to the provisions of this Agreement, the
Borrower may borrow, repay and reborrow Revolving Credit Loans hereunder.
-12- CREDIT AGREEMENT
20
(c) Expiration Date; Failure of Bank To Lend. The Banks shall
have no obligation to make Revolving Credit Loans hereunder on or after the
Expiration Date. The failure of any Bank to make a Revolving Credit Loan shall
not relieve any other Bank of its obligation to lend hereunder, but neither the
Agent nor any Bank shall be responsible for the failure of any other Bank to
make a Revolving Credit Loan.
2.2 Revolving Credit and Term Loan Notes. The obligations of
the Borrower to repay the unpaid principal amount of the Revolving Credit Loans
made to it by each Bank and to pay interest thereon shall be evidenced in part
by a single promissory note of the Borrower dated the Closing Date (a
"Revolving Credit and Term Loan Note") in substantially the form attached
hereto as Exhibit A, with the blanks appropriately filled. Each executed Note
shall be delivered by the Borrower to the Agent on behalf of each Bank on the
Closing Date, and the Agent shall promptly send such Notes to the Banks.
2.3 Making of Revolving Credit Loans. Whenever the Borrower
desires that the Banks make Revolving Credit Loans, the Borrower shall provide
Standard Notice to the Agent setting forth the following information:
(a) The date, which shall be a Business Day, on which such
Loan is to be made;
(b) The interest rate Option for such Loan selected in
accordance with Section 2.8(a) hereof;
(c) The Maturity Period for such Loan selected in accordance
with Section 2.8(b) hereof; and
(d) The principal amount of such Loan selected in accordance
with Section 2.8(c) hereof.
The Agent shall advise each Bank of the information contained in such notice
and its Proportionate share of the aggregate Proposed borrowing promptly after
receipt of such notice. Standard Notice having been so provided, on the date
specified in such Standard Notice each Bank shall automatically apply the
proceeds of such Loan against Principal amounts due and payable on such date
under existing Loans and shall make the excess Proceeds of such Loan, if any,
available to the Borrower at the Agent's Office, no later than 12:00 noon San
Francisco time in funds immediately available at such Office.
-13- CREDIT AGREEMENT
21
2.4 Commitment Fee; Reduction of the Commitment.
(a) Commitment Fee. The Borrower agrees to pay to the Agent,
for the account of each Bank, as consideration for the Banks' Commitments
hereunder, a commitment fee equal to one-half percent (1/2%) per annum (based
on a year of 365 or 366 days, as the case may be) on the unborrowed amount of
the Current Commitment for each day from and including the earlier of the
Closing Date or the effective date of this Agreement to and including the
Expiration Date. A commitment fee shall be due and payable for the preceding
period for which such fee has not been paid (i) on the last day of each March,
June, September and December after the date hereof, (ii) on the date of each
reduction of the Current Commitment on the amount so reduced and (iii) on the
Expiration Date.
(b) Reduction of the Commitment. The Borrower may at any time
or from time to time permanently reduce the Total Current Commitment to an
amount (which may be zero) not less than the sum of the unpaid principal amount
of the Revolving Credit Loans then outstanding plus the principal amount of all
Revolving Credit Loans not yet made as to which notice has been given by the
Borrower under Section 2.3 hereof. Any reduction of the Total Current
Commitment shall be in an amount which is an integral multiple of one million
dollars ($1,000,000). Reduction of the Total Current Commitment shall be made
by providing not less than three (3) Business Days' notice (which notice shall
be irrevocable) to such effect to the Agent. The Agent shall promptly advise
each Bank of the date of any such termination of the Current Commitments and
the date and amount of each such permanent reduction of the Current
Commitments. After the date specified in such notice the commitment fee shall
be calculated upon the Total Current Commitment as so reduced.
2.5 Term Loans. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Bank
severally agrees:
(a) to make one or more Loans to the Borrower on the
Expiration Date in such aggregate principal amount as may be requested by the
Borrower but not in excess of such Bank's Current Commitment on the Expiration
Date; and
(b) to make Loans, each of which shall be a Rollover Loan, to
the Borrower from time to time from but not including the Expiration Date and
to but not including the Term Loan Expiration Date.
Loans made pursuant to this Section 2.5 shall be called "Term Loans."
-14- CREDIT AGREEMENT
22
2.6 Term Loan Ceiling.
At no time shall the aggregate principal amount of Term Loans
outstanding exceed the Term Loan Ceiling at such time. The "Term Loan Ceiling"
shall mean the aggregate principal amount of the Term Loans made on the
Expiration Date as provided in Section 2.5(a) (the "Initial Ceiling"), reduced
as follows:
(A) On March 31, June 30, September 30 and December 31 of the
years 1992, 1993, 1994, 1995 and 1996, the Term Loan Ceiling shall be
reduced by amounts equal to the following percentages of the Initial
Ceiling (regardless of whether the Term Loan Ceiling shall have been
reduced pursuant to (B) below):
1992 1-1/4%
1993 2-1/2%
1994 3-3/4%
1995 8-3/4%
1996 8-3/4%
(B) In addition, if at any time Term Loans are prepaid or
Rollover Loans are made in a lesser aggregate principal amount than
the maturing Term Loans being rolled over except to the extent
necessary as a result of a reduction in the Term Loan Ceiling pursuant
to (A) above, the then current Term Loan Ceiling shall on such date be
reduced by the amount of the prepayment or of such difference.
Once reduced, the Term Loan Ceiling may not be increased. If
on any Mandatory Reduction Date the outstanding Term Loans on such date shall
exceed the Term Loan Ceiling as reduced on such date, the Borrower shall pay or
prepay (subject, among other things, to Section 2.13(b) hereof) sufficient
Loans to reduce the principal amount of the outstanding Loans to such reduced
Term Loan Ceiling.
2.7 Making of Term Loans. If the Borrower desires that the
Banks make Term Loans, the Borrower shall provide Standard Notice to the Agent
setting forth the following information:
(a) The date, which shall be a Business Day, on which such
Loan is to be made;
(b) The interest rate Option for such Loan, selected in
accordance with Section 2.8(a) hereof;
-15- CREDIT AGREEMENT
23
(c) The Maturity Period for such Loan, selected in accordance
with Section 2.8(b) hereof; and
(d) The principal amount of such Loan, selected in accordance
with Section 2.8(c) hereof.
The Agent shall advise each Bank of the information contained in such notice
and its proportionate share of the aggregate proposed borrowing promptly after
receipt of such notice. Standard Notice having been so provided, on the date
specified in such notice each Bank shall (i) if the Loan is a Rollover Loan
made pursuant to Section 2.5(b), apply the proceeds to any amounts due and
payable hereunder and (ii) if the Loan is a Term Loan made pursuant to Section
2.5(a), apply the proceeds first (A) to payment of the outstanding principal
amount of the Revolving Credit Loans (whether or not due), unpaid interest
accrued thereon, accrued and unpaid commitment fee and all other amounts
accrued and unpaid thereon or under this Agreement and (B) if any proceeds
remain, then make such excess proceeds of such Term Loan available to the
Borrower at the Agent's Office no later than 12:00 noon, San Francisco time, in
funds immediately available at such Office. The Borrower shall pay to the Agent
on the Expiration Date any deficiency in the amount of the Term Loan made on
such date to make the payments required under the foregoing clause (ii)(A). The
Agent shall promptly remit to each Bank its proportional share of any such
additional payment.
2.8 Interest Rates.
(a) Optional Bases of Borrowing. Each Loan shall bear interest
for each day until due on a single basis selected by the Borrower from among
the interest rate Options set forth below, it being understood that subject to
the provisions of this Agreement the Borrower may select different Options to
apply simultaneously to different Loans; provided that the total number of
Loans outstanding shall not at any time exceed six:
(i) Base Rate Option: A rate per annum (computed on the basis
of a year of 365 or 366 days, as the case may be) for each day equal
to the Base Rate for such day plus 1/2%, such interest rate to change
automatically from time to time effective as of the effective date of
each change in the Base Rate. "Base Rate," as used herein, shall mean
a fluctuating interest rate per annum equal at all times to the rate
of interest announced by the Agent in San Francisco, California from
time to time in its sole discretion as its base rate.
-16- CREDIT AGREEMENT
24
(ii) CD Rate Option: A rate per annum (based on a year of 360
days and actual days elapsed) for each day equal to the CD Rate for
such day plus 1-5/8%. "CD Rate" for any day, as used herein, shall
mean for each proposed or existing CD Rate Loan corresponding to a CD
Rate Maturity Period the rate per annum determined by the Agent by
adding
(A) the rate per annum obtained by dividing (the resulting
quotient to be rounded upward to the nearest 1/100 of 1%) (1) the rate
of interest (which shall be the same for each day in such CD Rate
Maturity Period) determined in good faith by the Agent in accordance
with its usual procedures (which determination shall be conclusive) to
be the average of the secondary market bid rates at or about 11:00
A.M., Eastern time, on the first day of such CD Rate Maturity Period
by dealers of recognized standing in negotiable certificates of
deposit for the purchase at face value of negotiable certificates of
deposit of major money center banks for delivery on such day in
amounts comparable to such CD Rate Loan and having maturities
comparable to such CD Rate Maturity Period by (2) a number equal to
1.00 minus the CD Rate Reserve Percentage and
(B) the Assessment Rate.
The "CD Rate" may also be expressed by the following formula:
{average of the secondary market }
{bid rates determined by the Agent }
CD Rate = {per subsection (A)(1) } + Assessment Rate
--------------------------------------
{1.00 - CD Rate Reserve Percentage }
The "CD Rate Reserve Percentage" for any day is the maximum
effective percentage (expressed as a decimal, rounded upward to the
nearest 1/100 of 1%), as determined in good faith by the Agent (which
determination shall be conclusive), which is in effect on such day as
prescribed by the Board of Governors of the Federal Reserve System (or
any successor) for determining the reserve requirements (including
without limitation supplemental, marginal and emergency reserve
requirements) for a member bank of such System in respect of
nonpersonal time deposits in Dollars in the United States. The CD Rate
shall be adjusted
-17- CREDIT AGREEMENT
25
automatically as of the effective date of each change in the CD Rate
Reserve Percentage.
The "Assessment Rate" for any day is the rate per annum
(rounded upward to the nearest 1/100 of 1%) determined in good faith
by the Agent in accordance with its usual procedures (which
determination shall be conclusive) to be the maximum effective
assessment rate per annum payable by a bank insured by the Federal
Deposit Insurance Corporation (or any successor) for such day for
insurance on Dollar time deposits, exclusive of any credit allowed
against such annual assessment on account of assessment payments made
or to be made by such bank. The CD Rate shall be adjusted
automatically as of the effective date of each change in the
Assessment Rate.
The Agent shall give prompt notice to the Borrower and the
Banks of the CD Rate so determined or adjusted, which determination or
adjustment shall be conclusive if made in good faith.
(iii) Euro-Rate Option: A rate per annum (based on a year of
360 days and actual days elapsed) for each day equal to the Euro-Rate
for such day plus 1-1/2%. "Euro-Rate" for any day, as used herein,
shall mean for each proposed or existing Euro-Rate Loan corresponding
to a Euro-Rate Maturity Period the rate per annum determined by the
Agent by dividing (the resulting quotient to be rounded upward to the
nearest 1/100 of 1%) (A) the rate of interest (which shall be the same
for each day in such Euro-Rate Maturity Period) determined in good
faith by the Agent in accordance with its usual procedures (which
determination shall be conclusive) to be the average of the rates per
annum for deposits in Dollars offered to major money center banks in
the London interbank market at approximately 11:00 A.M., London time,
two London Business Days prior to the first day of such Euro-Rate
Maturity Period for delivery on the first day of such Euro-Rate
Maturity Period in amounts comparable to such Euro-Rate Loan and
having maturities comparable to such Euro-Rate Maturity Period by (B)
a number equal to 1.00 minus the Euro-Rate Reserve Percentage.
The "Euro-Rate" may also be expressed by the following
formula:
-18- CREDIT AGREEMENT
26
{average of the rates offered to major money }
{center banks in the London interbank market }
Euro-Rate = {determined by the Agent per subsection (A) }
-----------------------------------------------
{1.00 - Euro-Rate Reserve Percentage }
The "Euro-Rate Reserve Percentage" for any day is the maximum
effective percentage (expressed as a decimal fraction, rounded upward
to the nearest 1/100 of 1%), as determined in good faith by the Agent
(which determination shall be conclusive), which is in effect on such
day as prescribed by the Board of Governors of the Federal Reserve
System (or any successor) for determining the reserve requirements
(including, without limitation, supplemental, marginal and emergency
reserve requirements) with respect to euro-currency funding (currently
referred to as "Euro-currency liabilities") of a member bank in such
System. The Euro-Rate shall be adjusted automatically as of the
effective date of each change in the Euro-Rate Reserve Percentage.
The Agent shall give prompt notice to the Borrower and the
Banks of the Euro-Rate so determined or adjusted, which determination
or adjustment shall be conclusive if made in good faith.
(iv) The foregoing interest rates shall be decreased by 1/4%
during the period commencing on the date on which the Borrower
delivers to the Agent and the Banks the certificate referred to in
Section 5.1(c) demonstrating that the ratio of Total Debt to
Annualized Cash Flow did not exceed 5.00 to 1 for the preceding fiscal
quarter of the Borrower and ending on the date on which the Borrower
delivers to the Agent and the Banks (or was required to so deliver)
the certificate referred to in Section 5.1(c) demonstrating that the
ratio of Total Debt to Annualized Cash Flow exceeded 5.00 to 1 for the
preceding fiscal quarter of the Borrower. After any such increase the
interest rates may again be decreased (subject to later increase), all
in accordance with the first sentence of this clause (iv).
(b) Maturity Periods. At any time when the Borrower shall
request the Banks to make any Loan, the Borrower shall specify the term of such
Loan (the "Maturity Period" of such Loan) as set forth in the chart below:
-19- CREDIT AGREEMENT
27
Type of Loan Available Maturity Periods
- ------------ --------------------------
Base Rate Loan Such period as the Borrower may select ("Base Rate Maturity
Period");
CD Rate Loan 30, 60, 90 or 180 days or, if available from the Banks on
the date of the Loan, one or two years ( "CD Rate Maturity
Period"); and
Euro-Rate Loan One, two, three or six months or, if available from the
Banks on the date of the Loan, one or two years ("Euro-Rate
Maturity Period");
provided, that:
(i) Each Base Rate Maturity Period or CD Rate Maturity Period
which would otherwise end on a day which is not a Business Day shall
be extended to the next succeeding Business Day;
(ii) Each Euro-Rate Maturity Period shall begin on a London
Business Day, and the duration of each Euro-Rate Maturity Period shall
be determined in accordance with the definition of the term "month"
herein;
(iii) The Borrower may not select a Maturity Period that would
end after the Term Loan Expiration Date; and
(iv) The Borrower shall, in selecting any Maturity Period,
allow for the reductions in the Term Loan Ceiling imposed by Section
2.6(b) hereof and the resulting payments due on each Mandatory
Reduction Date.
Unless due earlier under the terms hereof or the applicable
Notes, each Loan shall be due and payable on the last day of the Maturity
Period corresponding thereto (the "Maturity Date" therefor).
If the Borrower selects a Maturity Period that would end after
the Expiration Date, then on the Expiration Date the Borrower shall request
Term Loans in an amount not less than the principal amount of Revolving Credit
Loans having Maturity Periods ending after the Expiration Date. In the absence
of such a request, the Banks shall have the option of either (i) deeming such
notice to have been made and making Term Loans in such principal amount on the
Expiration Date or (ii) demanding payment of any amounts due
-20- CREDIT AGREEMENT
28
under Section 2.13(b) as a result of the payment of the Revolving Credit Loans
in the middle of a Maturity Period. Notwithstanding the foregoing, the Banks
may refuse to make any requested Term Loan on the Expiration Date if the
conditions referred to in Article IV have not been satisfied and may demand
payment of any amounts due under Section 2.13(b) as a result of the payment of
the Revolving Credit Loans in the middle of a Maturity Period.
(c) Transactional Amounts. Every request for a Loan and every
prepayment of a Loan shall be in a principal amount such that after giving
effect thereto the principal amount of each such Loan, as the case may be,
shall be as set forth in the table below:
Type of Loan Allowable Principal Amounts
- ------------ ---------------------------
Base Rate Loan $10,000 or an aggregate integral multiple thereof, except
that a Rollover Loan may be in any principal amount;
CD Rate Loan $1,000,000 or an integral multiple of $1,000 in excess
thereof; and
Euro-Rate Loan $1,000,000 or an integral multiple of $1,000 in excess
thereof.
(d) Interest After Maturity. After the principal amount of
any Base Rate Loan shall have become due (by acceleration or otherwise), such
Loan shall bear interest for each day until paid (before and after judgment) at
a rate per annum (based on a year of 365 or 366 days, as the case may be) which
shall be 2% above the then current Base Rate Option, such interest rate to
change automatically from time to time effective as of the effective date of
each change in the Base Rate. After the principal amount of any CD Rate Loan or
Euro-Rate Loan shall have become due (by acceleration or otherwise), such Loan
shall bear interest for each day until paid (before and after judgment) until
the end of the applicable then current Maturity Period at a rate per annum 3%
above the rate otherwise applicable to such Loan and thereafter in accordance
with the previous sentence.
-21- CREDIT AGREEMENT
29
(e) CD Rate or Euro-Rate Unascertainable; Impracticability. If
(i) on any date on which a CD Rate or a Euro-Rate would
otherwise be set the Agent shall have in good faith determined (which
determination shall be conclusive) that:
(A) adequate and reasonable means do not exist for
ascertaining such CD Rate or Euro-Rate,
(B) a contingency has occurred which materially and adversely
affects the secondary market for negotiable certificates of deposit
maintained by dealers of recognized standing or the interbank
eurodollar market, as the case may be, or
(C) the effective cost to any Bank of funding a proposed CD
Rate Loan or Euro-Rate Loan from a Corresponding Source of Funds shall
exceed the CD Rate or the Euro-Rate, as the case may be, applicable to
such Loan, or
(ii) at any time the Agent shall have determined in good faith
(which determination shall be conclusive) that the making, maintenance
or funding of any CD Rate Loan or Euro-Rate Loan has been made
impracticable or unlawful by compliance by a Bank or a Notional
Euro-Rate Funding Office in good faith with any Law or guideline or
interpretation or administration thereof by any Official Body charged
with the interpretation or administration thereof or with any request
or directive of any such Official Body (whether or not having the
force of law);
then, and in any such event, the Agent shall notify the Borrower and the Banks
of such determination. Upon such date as shall be specified in such notice
(which shall not be earlier than the date such notice is given) the CD Rate
Option or Euro-Rate Option, as the case may be, shall cease to apply, and all
CD Rate Loans or Euro-Rate Loans, as the case may be, shall be due and payable.
Absent contrary notice from the Borrower by 10:00 A.M., San Francisco time, on
such date, the Borrower shall be deemed to have given the Agent notice pursuant
to Section 2.3 or 2.7 hereof, as the case may be, at such time to the effect
that the Borrower requests that the Banks make Base Rate Loans in principal
amount equal to the principal amount of Loans becoming due and payable pursuant
to the preceding sentence.
-22- CREDIT AGREEMENT
30
If at the time the Agent makes a determination under
subsection (i) or (ii) of this Section 2.8(e) the Borrower has previously
notified the Agent that it wishes to select the CD Rate Option or the Euro-Rate
Option, as the case may be, with respect to any proposed Loans, but such Loans
have not yet been made, such notification shall be deemed to provide for
selection of the Base Rate Option instead of the CD Rate Option or the
Euro-Rate Option as the case may be, with respect to such Loans.
2.9 Prepayments. Subject to the provisions of Section 2.13(b)
hereof, the Borrower shall have the right at its option from time to time to
prepay the Loans in whole or part and, with respect to any Base Rate Loan, such
prepayment shall be without premium or penalty. Except as expressly provided
herein, the Borrower shall not have the right to prepay any Loans.
Whenever the Borrower desires to prepay any Loan or to pay any
Loan on any date other than on the Expiration Date, the Term Loan Expiration
Date or any Mandatory Reduction Date, it shall provide Standard Notice to the
Agent setting forth the following information:
(a) The date, which shall be a Business Day, on which the
proposed payment or prepayment is to be made; and
(b) The total principal amount of such payment or prepayment,
selected in accordance with Section 2.8(c) hereof which shall be the sum of the
principal amounts of the Loans to be prepaid.
The Agent shall advise each Bank of the information contained in such notice
promptly after receipt thereof. Standard Notice having been so provided, on the
date specified in such Standard Notice the principal amounts of all Loans
specified in such notice, together with interest on such principal amounts to
such date, shall be due and payable.
2.10 Failure of Borrower To Give Notice. Absent contrary
notice from the Borrower pursuant to Section 2.3, 2.7 or 2.9 hereof, as the
case may be, by 12:00 P.M. San Francisco time, on the Maturity Date of any
Loan, the Borrower shall be deemed to have given the Agent Standard Notice,
pursuant to Section 2.3 or 2.7 hereof, as the case may be, that the Borrower
requests that the Banks make Rollover Loans at the Base Rate Option in
principal amount equal to the aggregate principal amount of Loans becoming due
end payable on such Maturity Date.
-23- CREDIT AGREEMENT
31
2.11 Interest Payment Dates. Interest on each Base Rate Loan
shall be due and payable quarterly in arrears. Interest on each CD Rate Loan
shall be due and payable on the last day of the corresponding CD Rate Maturity
Period and, if such CD Rate Maturity Period is longer than 90 days, also every
90th day during such CD Rate Maturity Period. Interest on each Euro-Rate Loan
shall be due and payable on the last day of the corresponding Euro-Rate
Maturity Period and, if such Euro-Rate Maturity Period is longer than three
months, also every third month during such Maturity Period. After maturity of
any Loan (by acceleration or otherwise), interest on such Loan shall be due and
payable on demand.
2.12 Payments. All payments and prepayments to be made in
respect of principal, interest, commitment fee or other amounts due from the
Borrower hereunder or under any Note shall be payable at 12:00 noon San
Francisco time, on the day when due without presentment, demand, protest or
notice of any kind, all of which are hereby expressly waived, and an action
therefor shall immediately accrue. Such payments shall be made to the Agent at
its Office for the account of the Banks in Dollars in funds immediately
available at such Office without setoff, counterclaim or other deduction of any
nature. Unless otherwise contemplated by this Agreement, the Agent shall
promptly distribute to the Banks pro rata according to their Current
Commitments all such payments received by it from the Borrower in like funds as
received by the Agent. To the extent permitted by law, after there shall have
become due (by acceleration or otherwise) interest, commitment fee or any other
amounts due from the Borrower hereunder or under the Notes (excluding overdue
principal, which shall bear interest as described in Section 2.8(d) hereof, but
including interest payable under this Section 2.12), such amounts shall bear
interest for each day until paid (before and after judgment), payable on
demand, at a rate per annum (based on a year of 365 or 366 days, as the case
may be) 2% above the then current Base Rate Option, such interest rate to
change automatically from time to time effective as of the effective date of
each change in the Base Rate.
2.13 Additional Compensation in Certain Circumstances.
(a) Increased Costs or Reduced Return Resulting From Taxes,
Reserves, Capital Adequacy Requirements, Expenses, Etc. If any Law or guideline
or interpretation or application thereof by any Official Body charged with the
interpretation or administration thereof or compliance with any request or
directive of any Official Body (whether or
-24- CREDIT AGREEMENT
32
not having the force of law) now existing or hereafter adopted:
(i) subjects any Bank or any Notional Euro-Rate Funding Office
to any tax or changes the basis of taxation with respect to this
Agreement, the Notes, the Loans or payments by the Borrower of
principal, interest, commitment fee or other amounts due from the
Borrower hereunder or under the Notes (except for taxes on the overall
net income of such Bank or such Notional Euro-Rate Funding Office
imposed by the jurisdiction in which such Bank's principal office or
Notional Euro-Rate Funding Office is located),
(ii) imposes, modifies or deems applicable any reserve,
special deposit or similar requirement against credits or commitments
to extend credit extended by, assets (funded or contingent) of,
deposits with or for the account of, other acquisitions of funds by,
any Bank or any Notional Euro-Rate Funding Office (other than
requirements expressly included herein in the determination of the CD
Rate or the Euro-Rate, as the case may be, hereunder),
(iii) imposes, modifies or deems applicable any capital
adequacy or similar requirement (A) against assets (funded or
contingent) of, or credits or commitments to extend credit extended
by, any Bank or any Notional Euro-Rate Funding Office, or (B)
otherwise applicable to the obligations of any Bank or any Notional
Euro-Bank Funding Office under this Agreement, or
(iv) imposes upon any Bank or any Notional Euro-Rate Funding
Office any other condition or expense with respect to this Agreement,
the Notes or its making, maintenance or funding of any Loan or any
security therefor,
and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense (including loss of margin) upon
such Bank or Notional Euro-Rate Funding Office with respect to this Agreement,
the Notes or the making, maintenance or funding of any Loan (or, in the case of
any capital adequacy or similar requirement, to have the effect of reducing the
rate of return on such Bank's capital taking into consideration such Bank's
policies with respect to capital adequacy) by an amount which such Bank deems
to be material (such Bank being deemed for this purpose to have made,
maintained or funded
-25- CREDIT AGREEMENT
33
any CD Rate Loan and Euro-Rate Loan from a Corresponding Source of Funds), such
Bank shall from time to time notify the Agent and the Borrower of the amount
determined in good faith (using any averaging and attribution methods) by such
Bank (which determination shall be conclusive) to be necessary to compensate
such Bank or Notional Euro-Rate Funding Office for such increase, reduction or
imposition. Such amount shall be due and payable by the Borrower to such Bank
ten Business Days after such notice is given. A certificate by such Bank as to
the amount due and payable under this Section 2.13(a) from time to time and the
method of calculating such amount shall be conclusive absent manifest error.
(b) Indemnity. In addition to the compensation required by
subsection (a) of this Section 2.13, the Borrower shall indemnify each Bank
against any loss or expense (including loss of margin) which such Bank has
sustained or incurred as a consequence of any
(i) payment or prepayment of any CD Rate Loan or Euro-Rate
Loan on a day other that the last day of the corresponding Maturity
Period (whether or not such payment or prepayment is mandatory or
automatic and whether or not such payment or prepayment is then due),
(ii) attempt by the Borrower to revoke (whether expressly, by
later inconsistent notices or otherwise) in whole or part any notice
stated herein to be irrevocable, or
(iii) default by the Borrower in the performance or observance
of any covenant or condition contained in this Agreement or the Notes,
including without limitation any failure of the Borrower to pay when
due (by acceleration or otherwise) any principal, interest, commitment
fee or any other amount due hereunder or under either Note.
If any Bank sustains or incurs any such loss or expense it shall from time to
time notify the Agent and the Borrower of the amount determined in good faith
by such Bank (which determination shall be conclusive) to be necessary to
indemnify such Bank for such loss or expense (such Bank being deemed for this
purpose to have made, maintained or funded each CD Rate Loan and Euro-Rate Loan
from a Corresponding Source of Funds). Such amount shall be due and payable by
the Borrower to such Bank ten Business Days after such notice is given.
-26- CREDIT AGREEMENT
34
2.14 Funding by Branch, Subsidiary or Affiliate.
(a) Notional Funding. Each Bank shall have the right from
time to time, prospectively or retrospectively, without notice to the
Borrower, to deem any branch, subsidiary or affiliate of such Bank to have
made, maintained or funded any Euro-Rate Loan at any time. Any branch,
subsidiary or affiliate so deemed shall be known as a "Notional Euro-Rate
Funding Office." Each Bank shall deem any Euro-Rate Loan or the funding
therefor to have been transferred to a different Notional Euro-Rate Funding
Office if such transfer would avoid or cure an event or condition described in
Section 2.8(e)(ii) hereof or would lessen compensation payable by the Borrower
under Section 2.13(a) hereof, and if such Bank determines in its sole
discretion that such transfer would be practicable and would not have a
material adverse effect on such Loan, such Bank or any Notional Euro-Rate
Funding Office (it being assumed for purposes of such determination that each
Euro-Rate Loan is actually made or maintained by or funded through the
corresponding Notional Euro-Rate Funding Office). Notional Euro-Rate Funding
Offices may be selected by each Bank without regard to such Bank's actual
methods of making, maintaining or funding the Loans or any sources of funding
actually used by or available to such Bank.
(b) Actual Funding. Each Bank shall have the right from time
to time to make or maintain any Euro-Rate Loan by arranging for a branch,
subsidiary or affiliate of such Bank to make or maintain such Loan. Each Bank
shall have the right to (i) hold any applicable Note payable to its order for
the benefit and account of such branch, subsidiary or affiliate or (ii) request
the Borrower to issue one or more promissory notes in the principal amount of
such Euro-Rate Loan in substantially the form attached hereto as Exhibit A or
B, as the case may be, with the blanks appropriately filled, payable to such
branch, subsidiary or affiliate and with appropriate changes reflecting that
the holder thereof is not obligated to make any additional Loans to the
Borrower. The Borrower agrees to comply promptly with any request under
subsection (ii) of this Section 2.14(b). If any Bank causes a branch,
subsidiary or affiliate to make or maintain any Loan hereunder, all terms and
conditions of this Agreement shall, except where the context clearly requires
otherwise, be applicable to such Loan and to any note payable to the order of
such branch, subsidiary or affiliate to the same extent as if such Euro-Rate
Loan were made or maintained and such note were a Revolving Credit Note or Term
Loan Note payable to such Bank's order.
-27- CREDIT AGREEMENT
35
2.15 Maximum Interest. Notwithstanding any provision of this
Agreement to the contrary, the parties intend that no provision of this
Agreement be interpreted, construed, applied, or enforced so as to permit or
require the payment or collection of interest in excess of the highest rate of
interest (the "Maximum Permitted Rate") permitted to be paid or collected by
applicable law. If, however, any such provision is so interpreted, construed,
applied or enforced, then the parties intend: (i) that such provision
automatically shall be deemed reformed nunc pro tunc so as to require payment
only of interest at the Maximum Permitted Rate; and (ii) if interest payments
in excess of such Maximum Permitted Rate have been received, that the amount of
such excess shall be deemed credited nunc pro tunc in reduction of the then
outstanding principal amount of the Indebtedness of Borrower hereunder,
together with interest at such Maximum Permitted Rate. In connection with all
calculations to determine the Maximum Permitted Rate, the parties intend:
first, that all charges be excluded to the extent they are properly excludable
under applicable usury laws, as they from time to time are determined to apply
to this obligation; and, second, that all charges be "spread" that may be
"spread" in the manner, if any, provided by applicable law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Borrower hereby represents and warrants to the Banks that:
3.1 Organization and Qualification.
(a) The Borrower is a general partnership duly organized and
validly existing under the laws of the State of Colorado.
(b) Jones is a corporation duly organized, validly existing
and in good standing under the laws of the State of Colorado. Jones is duly
qualified to do business as a foreign corporation and in good standing in all
jurisdictions in which the ownership of its properties or the nature of its
business or both make such qualification necessary and where a failure to be so
qualified would have a material adverse effect on the business, operations or
financial condition of the Borrower.
(c) Each General Partner is a limited partnership duly
organized, validly existing and in good standing under the laws of the State of
Colorado. Each General Partner is
-28- CREDIT AGREEMENT
36
duly qualified and in good standing in all jurisdictions in which the ownership
of its property or the nature of its activities or both make such qualification
necessary and where a failure to be so qualified would have a material adverse
affect on the business, operations or financial condition of the Borrower.
3.2 Authority and Authorization.
(a) The Borrower has power and authority to execute, deliver
and carry out the provisions of this Agreement and the Related Documents to
which it is a party, to make the borrowings provided for herein, to execute and
deliver the Notes in evidence of such borrowings and to perform its obligations
hereunder, under the Related Documents to which it is a party, and under the
Notes and all such action has been duly and validly authorized by all necessary
proceedings on its part.
(b) Jones has the corporate power and authority to execute and
deliver this Agreement, the Subordination Agreement, other Related Documents to
which the Borrower is a party and the Notes as general partner on behalf of the
General Partners and all such action has been duly and validly authorized by
all necessary corporate proceedings on its part. Jones has corporate and
partnership power and authority to execute and deliver and carry out the
provisions of the Partnership Agreements and the Joint Venture Agreement.
(c) Each General Partner has the partnership power and
authority to execute and deliver this Agreement, the Related Documents to which
the Borrower is a party and the Notes on behalf of the Borrower and all such
action has been duly and validly authorized by all necessary proceedings on its
part. Each General Partner has the partnership power and authority on its own
behalf or as general partner of the Borrower to execute and deliver and carry
out the provisions of its respective Partnership Agreement and the Joint
Venture Agreement.
3.3 Execution and Binding Effect.
(a) This Agreement, the Related Documents to which the
Borrower is a party and the Revolving Credit and Term Loan Notes have been duly
and validly executed and delivered by the Borrower and constitute legal, valid
and binding obligations of the Borrower enforceable in accordance with the
terms hereof and thereof, except as the enforceability of this Agreement, such
Related Documents or the Notes may be limited by bankruptcy, insolvency or
other similar laws of general application affecting the enforcement
-29- CREDIT AGREEMENT
37
of creditors' rights or by general principles of equity limiting the
availability of equitable remedies.
(b) The Subordination Agreement has been duly and validly
executed and delivered by Jones and constitutes the legal, valid and binding
obligation of Jones enforceable in accordance with the terms thereof, except as
the enforceability of the Subordination Agreement may be limited by bankruptcy,
insolvency or other similar laws of general application affecting the
enforcement of creditors' rights or by general principles of equity limiting
the availability of equitable remedies.
3.4 Authorizations and Filings. No authorization, consent,
approval, license, exemption or other action by, and no registration,
qualification, designation, declaration or filing with, any Official Body is or
will be necessary or advisable in connection with execution and delivery of
this Agreement, the Related Documents or the Notes, consummation of the
transactions herein or therein contemplated, performance of or compliance with
the terms and conditions hereof or thereof, except the consents or approvals
of, or filings with, Official Bodies listed on Schedule 1 hereto. All of the
consents, approvals or filings listed on Schedule 1 will have been obtained or
made prior to the Closing Date, except those noted with an asterisk on Schedule
1.
3.5 Absence of Conflicts. Neither the execution and delivery
of this Agreement, the Related Documents or the Notes nor consummation of the
transactions herein or therein contemplated nor performance of or compliance
with the terms and conditions hereof or thereof will (a) violate any Law, (b)
conflict with or result in a breach of or a default under the Joint Venture
Agreement, the Partnership Agreements or any agreement or instrument to which
the Borrower or the General Partners is a party or by which any of them or any
of their respective properties (now owned or hereafter acquired) may be subject
or bound, (c) conflict with or result in a breach of or a default under the
articles of incorporation or by-laws of Jones, or any agreement or instrument
to which Jones is a party or by which or any of its properties (now owned or
hereafter acquired) may be subject or bound or (d) result in the creation or
imposition of any Lien upon any property (now owned or hereafter acquired) of
the Borrower, Jones or the General Partners other than Liens created by the
Security Documents.
3.6 Financial Statements. The Borrower has heretofore
furnished to the Banks its unaudited balance sheet for the quarter ended June
30, 1988 and the related statements of income and capital accounts and changes
in
-30- CREDIT AGREEMENT
38
financial position for the fiscal years then ended. Such financial statements
(including the notes thereto) included in the above list present fairly the
financial condition of the Borrower as of the date thereof and the results of
its operations and the changes in its financial position for the period then
ended, all in conformity with generally accepted accounting principles applied
on a consistent basis. Except as disclosed therein the Borrower has no
material contingent liabilities (including liabilities for taxes), unusual
forward or long-term commitments or unrealized or anticipated losses from
unfavorable commitments.
3.7 No Event of Default; Compliance With Instruments. No event
has occurred and is continuing and no condition exists which constitutes an
Event of Default or Potential Default. Neither the Borrower, Jones nor any
General Partner is in violation of any material term of the Joint Venture
Agreement or the Partnership Agreements or any other material agreement or
instrument to which any of them is a party or by which any of them or any of
their respective properties (now owned or hereafter acquired) may be subject or
bound.
3.8 Litigation. There is no pending or (to the Borrower's
knowledge after due inquiry) threatened proceeding by or before any Official
Body against or affecting the Borrower, Jones or any General Partner which if
adversely decided would have a material adverse effect on the business,
operations, condition, financial or otherwise, or prospects of the Borrower or
on the ability of the Borrower to perform its respective obligations under this
Agreement, the Related Documents or the Notes.
3.9 Equity Investments and Affiliated Entities. The Borrower
holds no equity interest in any person and is not and has not agreed or
otherwise become obligated to become a general partner of any person or
otherwise generally liable for or on account of the liabilities, acts or
omissions of any person. The Borrower has not acquired and has not agreed or
otherwise become obligated to acquire securities or other interests in or make
capital contributions, loans or other investments to or on account of any
person.
3.10 Pension Related Matters. Neither the Borrower nor any
Controlled Group Member has established or maintained or has ever made or been
obligated to make contributions to any Plan or Multiemployer Plan.
3.11 Title to Property. The Borrower has good and marketable
title to all real property purported to be owned by it and good and marketable
title to all other prop-
-31- CREDIT AGREEMENT
39
erty purported to be owned by it, including that reflected in the most recent
balance sheet referred to in Section 3.6 hereof or submitted pursuant to
Section 5.1(a) hereof (except as sold or otherwise disposed of in the ordinary
course of business), subject only to Liens not forbidden by Section 6.2 hereof.
3.12 Contracts. The Borrower and, to the best of the
Borrower's knowledge, all other parties are in substantial compliance with all
agreements or instruments to which the Borrower is a party or in which the
Borrower has acquired any rights, by assignment from Jones or otherwise
(including but not limited to agreements to repay borrowed money, guarantees,
leases of real or personal property as lessor or lessee, grants of easements,
licenses, rights of way, permits, pole agreements, contracts for future
purchase or delivery of goods or rendering of services, powers of attorney,
distribution arrangements, patent license agreements, collective bargaining
agreements, employment agreements, bonus, pension or retirement plans, or
vacation pay, insurance or welfare agreements) other than agreements or
instruments which are not, singly or in the aggregate, material to the
business, operations or financial condition of the Borrower. Except as
disclosed on Schedule 2, no consent by or approval of any person to the
assignment of any of the foregoing to the Borrower (or any predecessor in
interest of the Borrower) or by the Borrower to the Agent is required pursuant
to the terms of any thereof.
3.13 Taxes. All tax returns required to be filed by the
Borrower have been properly prepared, executed and filed. All taxes,
assessments, fees and other governmental charges upon the Borrower or upon any
of its properties, incomes, sales or franchises which are due and payable have
been paid prior to the date upon which they would be delinquent. The reserves
and provisions for taxes on the books of the Borrower are adequate for all open
years and for its current fiscal period. The Borrower does not know of any
proposed additional assessment or basis for any material assessment for
additional taxes (whether or not reserved against). All taxes (whether
properly assessable to Borrower or any predecessor in interest thereof) the
nonpayment of which could result in a Lien on any property of the Borrower have
been paid in full.
3.14 Financial Accounting Practices. The Borrower makes and
keeps books, records and accounts which, in reasonable detail, accurately and
fairly reflect transactions and dispositions of assets and maintain a system of
internal accounting controls sufficient to provide reasonable assurances that
(a) transactions are executed in
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40
accordance with management's general or specific authorization, (b)
transactions are recorded as necessary (i) to permit preparation of financial
statements in conformity with GAAP and (ii) to maintain accountability for
assets, (c) access to assets is permitted only in accordance with management's
general or specific authorization and (d) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
3.15 Power To Carry on Business. The Borrower has all
requisite power and authority under the Joint Venture Agreement to own and
operate its properties and to carry on its business as now conducted and as
presently planned to be conducted.
3.16 No Material Adverse Change. Since June 30, 1988 there
has been no material adverse change in the business, operations, condition,
financial or otherwise, or prospects of the Borrower.
3.17 Regulation U. The Borrower will make no borrowing
hereunder for the purpose of buying or carrying any "margin stock," as such
term is used in Regulation U of the Board of Governors of the Federal Reserve
System, as amended from time to time. The Borrower does not own any "margin
stock." The Borrower is not engaged in the business of extending credit to
others for such purpose, and no part of the proceeds of any borrowing hereunder
will be used to purchase or carry any "margin stock" or to extend credit to
others for the purpose of purchasing or carrying any "margin stock."
3.18 Compliance With Laws. The Borrower is not in violation
of or subject to any contingent liability on account of any Law, except for
violations which in the aggregate do not have a material adverse effect on the
business, operations or financial condition of the Borrower.
3.19 Franchises. Schedule 3 hereto lists all Franchises of
the Borrower, all of which (to the knowledge of the Borrower after due inquiry)
were lawfully issued pursuant to the rules and regulations of the Official
Bodies listed on Schedule 3. The Franchises authorize the Borrower to operate
the Systems until the expiration dates listed on Schedule 3, and no other
further approval, filing or other action of any Official Body is or will be
necessary or advisable in order to permit the Borrower's operation of the
Systems in accordance with the terms thereof. Schedule 3 correctly identifies
the franchisee and accurately describes the franchise area, the exclusive or
nonexclusive nature of each such Franchise and all limitations contained in the
-33- CREDIT AGREEMENT
41
Franchise or related statutes on the assignment, sale or encumbering of the
Franchise or the related System's assets. The Borrower is in compliance in all
material respects with all terms and conditions of all Franchises and no event
has occurred or exists which permits, or, after the giving of notice, or the
lapse of time or both would permit, the revocation or termination of any such
Franchise.
3.20 Patents, Copyrights, Licenses, Etc. The Borrower owns,
possesses or has the right to use all patents, copyrights, copyrighted
materials, licenses, trademarks, service marks, trade names, permits and other
rights, including, without limitation, all agreements with public utilities and
microwave transmission companies, pole use access or rental agreements and all
other utility easements, necessary to own and operate its properties (including
its Systems) and to carry on its businesses as presently conducted or as
presently planned to be conducted. Each of the foregoing is in full force and
effect, and the Borrower is in compliance in all material respects with all the
terms and conditions of each thereof, with no known conflict with the rights of
others. No event has occurred which permits, or, after the giving of notice or
the lapse of time or both would permit, the revocation or termination of any
trademark, service mark, trade name, copyright, license, permit or other right
so as to affect adversely in any material manner the businesses, assets or
condition (financial or otherwise) of the Borrower. Schedule 4 hereto correctly
identifies each such trademark, service mark, trade name, copyright, license,
permit or other right relating to the Systems of the Borrower the terms of
which require consent to the assignment thereof by the grantor.
3.21 Copyright Act Filings. The Borrower has recorded or
deposited with and paid to the United States Copyright Office, the Register of
Copyrights and/or the Copyright Royalty Tribunal all notices, statements of
account, royalty fees and other documents, instruments and amounts required
under the Copyright Act and is not liable to any person for copyright
infringement under the Copyright Act.
3.22 Chief Executive Office; Chief Place of Business.
Schedule 5 hereto accurately sets forth the location of the chief executive
office and chief place of business (as such terms are used in the Colorado and
Florida Uniform Commercial Codes) of the Borrower.
3.23 Assets. Schedule 6 hereto accurately describes the
location of all real and tangible personal property owned or leased by the
Borrower.
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42
3.24 Documents Delivered. The Borrower has delivered to the
Agent and each Bank a true and complete copy of
(a) The Joint Venture Agreement; and
(b) The Partnership Agreements
as in effect on the date hereof. None of such agreements has been amended,
modified or supplemented since the date hereof.
3.25 Accurate and Complete Disclosure. No representation or
warranty made by the Borrower under this Agreement and no statement made by the
Borrower in any financial statement (furnished pursuant to Sections 3.6 or
5.1(e) hereof or otherwise), certificate, written report, exhibit or document
furnished by the Borrower to the Banks pursuant to or in connection with this
Agreement is false or misleading in any material respect (including by omission
of material information necessary to make such representation, warranty or
statement not misleading). The Borrower has disclosed to the Banks in writing
every fact which materially and adversely affects, or which so far as the
Borrower can now foresee is reasonably possible in the future and would
materially and adversely affect, the business, operations or financial
condition of the Borrower or the ability of the Borrower to perform its
obligations under this Agreement, the Related Documents and the Notes other
than matters affecting the cable television industry generally.
3.26 Investment Company. The Borrower is not an "investment
company" or a company "controlled" by an investment company within the meaning
of the Investment Company Act of 1940, as amended.
3.27 Public Utility Holding Company. The Borrower is not a
"holding company" or a "subsidiary company" of a "holding company" or an
"affiliate" of either a "holding company" or a "subsidiary company" within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
3.28 Proceeds. Except as otherwise provided by Section 2.7
hereof or the Subordination Agreement, the Borrower will apply the proceeds of
the Loans only to repayment of the Existing Debt and otherwise for general
business purposes.
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43
ARTICLE IV
CONDITIONS OF LENDING
The obligation of each Bank to make any Loans hereunder is
subject to the accuracy as of the date hereof of the representations and
warranties herein contained, to the performance by the Borrower of its
obligations to be performed hereunder on or before the date of such Loan and to
the satisfaction in form and substance of the following further conditions:
4.1 Representations and Warranties; Events of Default and
Potential Defaults.
(a) The representations and warranties contained in Article
III hereof and in the Related Documents shall be true on and as of the date of
each Loan hereunder with the same effect as though made on and as of each such
date, except that in the case of a Rollover Loan only the representations and
warranties contained in Sections 3.1, 3.2, 3.3, 3.7 and 3.16 shall be true on
and as of such date. On the date of each Loan hereunder no Event of Default
and no Potential Default shall have occurred and be continuing or exist or
shall occur or exist after giving effect to the Loan to be made on such date.
(b) At the time of requesting any Loan hereunder (other than a
Rollover Loan), the Agent shall have received a certificate, dated the date of
such Loan and signed on behalf of the Borrower by the President, Vice
President, Treasurer or chief financial officer of Jones, to the effect that
(i) the representations and warranties described in Section 4.1(a) are true and
correct on and as of such date and (ii) on such date no Event of Default or
Potential Default has occurred and is continuing or exists or will occur or
exist after giving effect to such Loan.
(c) Any request by the Borrower for any Rollover Loan
hereunder shall constitute a representation and warranty by the Borrower that
(i) the representations and warranties described in the last clause of the
first sentence of Section 4.1(a) are true and correct on and as of the date of
such request with the same effect as though made on and as of the date of such
request and (ii) on the date of such request no Event of Default or Potential
Default has occurred and is continuing or exists or will occur or exist after
giving effect to such Loan (for this purpose such Loan being deemed to have
been made on the date of such request). Failure of the Agent to receive notice
from the Borrower to the contrary before such Rollover Loan is made shall
constitute a further representation and warranty by the
-36- CREDIT AGREEMENT
44
Borrower that (x) the representations and warranties described in the last
clause of the first sentence of Section 4.1(a) are true and correct on and as
of the date of such Loan with the same effect as though made on and as of the
date of such Loan and (y) on the date of the Loan no Event of Default or
Potential Default has occurred and is continuing or exists or will occur or
exist after giving effect to such Loan.
4.2 Proceedings and Incumbency.
(a) Jones. On the Closing Date there shall have been delivered
to the Agent, with sufficient signed copies to provide one for each Bank, a
certificate in form and substance satisfactory to the Agent, dated the Closing
Date and signed on behalf of Jones by its Secretary or Assistant Secretary,
certifying as to
(i) true copies of the articles of incorporation and by-laws
of Jones as in effect on such date,
(ii) true copies of all corporate action taken by Jones
relative to this Agreement, the Subordination Agreement and other
Related Documents and the Notes, including but not limited to that
described in Section 3.2 hereof, and
(iii) the names, true signatures and incumbency of the officer
or officers or other authorized representatives of Jones, authorized
to execute and deliver this Agreement, the Subordination Agreement and
other Related Documents and the Notes, as the case may be.
(b) Borrower. On the Closing Date there shall have been
delivered to the Agent, with sufficient signed copies to provide one for each
Bank, a certificate in form and substance satisfactory to the Agent, dated the
Closing Date and signed on behalf of the Borrower by the Secretary or an
Assistant Secretary of Jones, certifying as to
(i) true copies of the Joint Venture Agreement as in effect on
such date, and
(ii) true copies of all partnership action, if any, taken by
the Borrower relative to this Agreement, the Related Documents and the
Notes.
(c) General Partners. On the Closing Date there shall have
been delivered to the Agent, with sufficient signed copies to provide one for
each Bank, a certificate in
-37- CREDIT AGREEMENT
45
form and substance satisfactory to the Agent, dated the Closing Date and signed
on behalf of each General Partner by the Secretary or an Assistant Secretary of
Jones, certifying as to
(i) true copies of each Partnership Agreement as in effect on
such date, and
(ii) true copies of all partnership action, if any, taken by
each General Partner relative to this Agreement, the Related Documents
and the Notes.
(d) Reliance on Certificates. The Agent and the Banks may
conclusively rely on the foregoing certificates unless and until a later
certificate revising the prior certificate has been furnished to the Agent and
the Banks.
4.3 Opinions of Counsel - Revolving Credit Loans. On the
Closing Date there shall have been delivered to the Agent, with sufficient
signed copies to provide one for each Bank:
(a) a written opinion, dated the Closing Date of Elizabeth
Steele, Vice President and General Counsel of Jones and counsel for the
Borrower, in substantially the form attached hereto as Exhibit E,
(b) a written opinion, dated the Closing Date, of Pepper &
Corazzini, as to matters of FCC law, in substantially the form of Exhibit F
hereto, and
(c) a written opinion, dated the Closing Date, of Ruden,
Barnett as to matters pertaining to Florida law, in substantially the form of
Exhibit G hereto.
4.4 Opinions of Counsel - Term Loan. On the Expiration Date
there shall have been delivered to the Agent, with sufficient signed copies to
provide one for each Bank a written opinion dated the Expiration Date, of local
counsel for the Borrower licensed to practice law in Florida, in form and
substance satisfactory to the Agent, as to any action required to be taken to
continue the perfection and priority of the Liens granted by the Security
Documents and as to such other matters incident to the transactions
contemplated hereby as the Agent may reasonably request.
4.5 Security Documentation. On or before the Closing Date the
Agent shall have received
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46
(a) duly executed and delivered copies of each of the Security
Documents;
(b) evidence satisfactory to the Agent of the completion of
all searches, recordings, registrations and filings as may be necessary or, in
the opinion of the Agent, desirable to determine the status of or perfect or
preserve the security interests created by the Security Documents, including
without limitation (i) evidence of searches satisfactory to the Agent listing
all effective financing statements which name the Borrower or any General
Partner or any prior owner of the Systems (under their present names and any
previous names) as debtor and which are filed in the jurisdictions referred to
in subsection (ii) of this Section 4.5(b), together with copies of such
financing statements (none of which shall cover the collateral purported to be
covered by the Security Documents (other than those relating to Liens permitted
by Section 6.2 hereof), or, if any of such financing statements cover such
collateral, appropriate termination statements and/or releases with respect
thereto including, without limitation, those executed (A) by Mellon Bank, N.A.
relating to security interests in its favor granted by the Borrower and by
Jones, (B) by Wells Fargo Bank, N.A. relating to a security interest in its
favor granted by Cable TV Fund 14-A Ltd. and (C) by The Philadelphia National
Bank relating to a financing statement in its favor executed by Jones) and (ii)
acknowledgment copies or other confirmation of proper financing statements on
Form UCC-1 duly filed in all jurisdictions as may be necessary or, in the
opinion of the Agent, desirable to perfect the security interests created by
the Security Documents;
(c) evidence in form and substance satisfactory to the Agent
that insurance coverage complying with Section 5.3 hereof has been obtained and
is in effect; and
(d) executed original (and one conformed copy) of mortgagee
title policies or an unconditional undertaking to issue at normal rates
mortgagee title policies (with, in each case, evidence of payment in full of
the premium therefor) in amounts satisfactory to the Agent issued by a
nationally recognized title insurance company satisfactory to the Agent
insuring that the Mortgage constitutes a first priority lien on all real
property described on Schedule 6 {(other than real property noted with an
asterisk on Schedule 6)} for the benefit of the Banks as security for the
initial Loans and all Loans made after the Closing Date and that title to such
property is vested in the Borrower free and clear of all Liens except for ad
valorem taxes not delinquent and except for Liens acceptable to the Agent in
its sole discretion, which title policies shall include such special
endorsements as Agent may deem appropriate.
-39- CREDIT AGREEMENT
47
4.6 Repayment of Existing Debt. On or before the Closing Date,
the Borrower shall have repaid the Existing Debt in full and shall have
delivered the canceled note and UCC termination statements (or facsimile copies
thereof) with respect thereto to the Agent, together with a certificate to such
effect signed on behalf of the Borrower by the President, Treasurer or chief
financial officer of Jones and sufficient signed copies to provide one for each
Bank. If facsimile copies of the canceled note and termination statements have
been provided, the originals thereof shall be delivered to the Agent promptly
thereafter.
4.7 Subordination Agreement. On the Closing Date the Agent
shall have received duly executed and delivered copies of the Subordination
Agreement.
4.8 Capital Contribution. The Borrower shall have delivered to
the Agent, with sufficient copies for each Bank, evidence satisfactory to the
Agent that
(a) the General Partners shall have funded capital
contributions which, after deduction of all fees and expenses associated with
the creation of the Borrower, total at least seventy million dollars
($70,000,000); and
(b) the Borrower shall have acquired all of Jones' right,
title and interest in and to the Systems for a price not greater than that paid
by Jones therefor plus any expenses incurred by Jones in acquiring and holding
the Systems, which price shall have been paid by the Borrower to Jones in full.
4.9 Certification of Franchises. The Agent shall have received
a certification (with sufficient signed copies to provide one to each Bank), in
form and substance satisfactory to the Agent, of the clerk or other official of
the Official Body issuing each Franchise:
(a) attaching a true and complete copy of such Franchise and
stating that such Official Body has taken no other action with respect to the
Franchise; and
(b) with respect to the Broward County, Florida Franchise
only, stating that the Board of County Commissioners for such county have
received satisfactory evidence that the Banks possess the financial ability to
perform the obligations of franchisee under such Franchise.
4.10 Required Consents. The Borrower shall have delivered to
the Agent (with sufficient copies for each Bank) signed copies of consents
executed by the persons listed in Schedule 2 hereto, in form and substance
satisfactory to the Agent.
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48
4.11 Details, Proceedings and Documents. All legal details and
proceedings in connection with the transactions contemplated by this Agreement
shall be satisfactory to the Agent and the Agent shall have received all such
counterpart originals or certified or other copies of such documents and
proceedings in connection with such transactions, and such other evidence of
satisfaction by Borrower of the conditions contained in this Article IV and
performance by Borrower of its obligations under this Agreement, all in form
and substance satisfactory to the Agent and each Bank, as the Agent may from
time to time request.
ARTICLE V
AFFIRMATIVE COVENANTS
The Borrower covenants to the Banks as follows:
5.1 Reporting and Information Requirements.
(a) Annual Audit Reports. As soon as practicable, and in any
event within 90 days after the close of each fiscal year of the Borrower, the
Borrower shall furnish to the Banks consolidated statements of income and
changes in financial position of the Borrower for such fiscal year and a
consolidated balance sheet of the Borrower as of the close of such fiscal year,
and notes to each, all in reasonable detail, setting forth in comparative form
the corresponding figures for the preceding fiscal year, if any (or in the case
of the second fiscal year of the Borrower, for the period from January 8, 1988
until the end of Borrower's fiscal year), with such statements and balance
sheet to be certified by independent certified public accountants of recognized
national standing selected by the Borrower and reasonably satisfactory to the
Required Banks. The certificate or report of such accountants shall be free of
exceptions or qualifications not acceptable to the Banks and such certificate
or report shall in any event contain a written statement of such accountants
substantially to the effect that (i) such accountants examined such
consolidated statements and balance sheet in accordance with generally accepted
auditing standards and accordingly made such tests of accounting records and
such other auditing procedures as such accountants considered necessary in the
circumstances and (ii) in the opinion of such accountants such consolidated
statements and balance sheet present fairly the financial position of the
Borrower as of the end of such fiscal year and the results of their operations
and the changes in their financial position for such fiscal year, in conformity
with generally accepted accounting principles applied on a basis consistent
with that of the preceding
-41- CREDIT AGREEMENT
49
fiscal year, if any (or in the case of the second fiscal year of the Borrower,
for the period from January 8, 1988 until the end of Borrower's fiscal year),
except for changes in application in which such accountants concur.
(b) Quarterly Reports. As soon as practicable, and in any
event within 60 days after the close of each of the first three quarters of
each fiscal year of the Borrower, the Borrower shall furnish to the Banks
unaudited consolidated statements of income, and changes in financial position
for the Borrower for such fiscal quarter and for the period from the beginning
of such fiscal year to the end of such fiscal quarter, and an unaudited
consolidated balance sheet of the Borrower as of the close of such fiscal
quarter, and notes to each, all in reasonable detail, setting forth in
comparative form the corresponding figures for the same period or as of the
same date during the preceding fiscal year, if any (except for the balance
sheet, which shall set forth in comparative form the corresponding balance
sheet as of the prior fiscal year end, if any (or in the case of the second
fiscal year of the Borrower, for the period from January 8, 1988 until the end
of Borrower's fiscal year), and certified on behalf of the Borrower by the
President, Treasurer or chief financial officer of Jones as being in conformity
with the requirements of the Securities and Exchange Commission (and as a
result not containing all of the necessary footnote disclosure required for a
fair presentation of the balance sheets, statements of income and retained
earnings and changes in financial position in conformity with GAAP) and in the
opinion of such officer, including all adjustments, consisting of only normal
recurring accruals, necessary to present fairly the financial position of the
Borrower as of the end of such fiscal quarter and the results of its operations
and the changes in its financial position for such fiscal quarter.
(c) Compliance and Reconciliation Certificates. Within 90 days
after the end of each fiscal year of the Borrower, within 60 days after the end
of each of the first three quarters of each fiscal year and on the Expiration
Date the Borrower shall deliver to the Banks a certificate dated as of the end
of such fiscal year or quarter or as of the Expiration Date, as the case may
be, signed on behalf of the Borrower by the President, Treasurer or chief
financial officer of Jones (i) stating that as of the date thereof no Event of
Default or Potential Default has occurred and is continuing or exists, or if an
Event of Default or Potential Default has occurred and is continuing or exists,
specifying in detail the nature and period of existence thereof and any action
with respect thereto taken or contemplated to be taken by the Borrower, (ii)
stating in reasonable detail the information and calculations necessary to
establish compliance
-42- CREDIT AGREEMENT
50
with the provisions of Section 6.1 and 6.14 hereof and (iii) stating that the
signer has personally reviewed this Agreement and that such certificate is
based on an examination made by or under the supervision of the signer
sufficient to assure that such certificate is accurate.
(d) Monthly Subscriber Reports. As soon as practicable, and in
any event within 30 days after the end of each calendar month, the Borrower
shall furnish to the Banks a subscriber's report setting forth for each System
as of the end of such month (i) the number of Basic Subscribers, (ii) the
number of Premium Subscriptions, (iii) the number of "homes passed" (as such
term is commonly understood in the cable television industry) and (iv) the
Basic Subscriber Rate.
(e) Other Reports and Information. Promptly upon their
becoming available to the Borrower, the Borrower shall deliver to the Banks a
copy of (i) all regular or special reports or effective registration statements
or amendments or supplements thereto which the Borrower shall file with the
Securities and Exchange Commission (or any successor thereto) or any securities
exchange, (ii) all reports, proxy statements, financial statements and other
information distributed by the Borrower to its partners or the financial
community in general, and (iii) any audit reports submitted to the Borrower by
independent accountants in connection with any annual, interim or special audit
of the Borrower. In addition, the Borrower shall deliver to the Banks as soon
as practicable, and in any event within 90 days after the close of each fiscal
year of the Borrower, the Borrower's annual budget of operations for the fiscal
year just commenced.
(f) Further Information. The Borrower will promptly furnish to
the Banks such other information and in such form as the Agent or any Bank may
reasonably request.
(g) Notice of Event of Default. Promptly upon becoming aware
of any Event of Default or Potential Default the Borrower shall give the Agent
and the Banks notice thereof, together with a written statement of the
President, Treasurer or chief financial officer of Jones setting forth the
details thereof and any action with respect thereto taken or contemplated to be
taken by the Borrower.
(h) Notice of Material Adverse Change. Promptly upon becoming
aware thereof the Borrower shall give the Agent and the Banks notice of any
material adverse change in the business, operations, condition, financial or
otherwise, or prospects of the Borrower.
-43- CREDIT AGREEMENT
51
(i) Notice of Material Proceedings. Promptly upon becoming
aware thereof the Borrower shall give the Agent and the Banks notice of the
commencement, existence or threat of any proceeding by or before any Official
Body against or affecting the Borrower which, if adversely decided, would have
a material adverse effect on the business, operations or financial condition of
the Borrower or on the ability of the Borrower to perform its obligations under
this Agreement, the Related Documents or the Notes.
(j) Notice of Other Material Defaults. Promptly upon becoming
aware of any material default by the Borrower under any agreement or instrument
to which the Borrower is a party or by which the Borrower or any of its
properties may be bound the Borrower shall give the Banks notice thereof,
together with a written statement of the President, Treasurer or chief
financial officer of Jones setting forth the details thereof if such agreement
or instrument or the consequences of such default are material to the business,
operations or financial condition of the Borrower.
(k) Notices With Respect to Franchises. The Borrower shall
promptly notify the Banks of (i) any lapse or other termination of any license,
permit, franchise or other authorization issued to the Borrower by any Official
Body, which lapse or termination may have a material adverse affect on the
business, operations or financial condition of the Borrower, (ii) any refusal
by any Official Body to renew or extend any such license, permit, franchise or
other authorization, or (iii) any dispute between the Borrower and any Official
Body which may have a material adverse effect on the business, operations or
financial condition of the Borrower.
(l) FCC Reports. Promptly upon their becoming available to the
Borrower, the Borrower shall deliver to the Banks a copy of (i) any periodic or
special report filed by the Borrower with the FCC or any governmental authority
succeeding to any of its functions or with any state or local authority
regulating Systems if (A) such report indicates any material change in the
business, operations or financial condition of the Borrower, or (B) a copy
thereof is requested by the Bank and (ii) any material notice or other material
communication from the FCC or any governmental authority succeeding to any of
its functions or from any state or local authority regulating cable systems
which specifically relate to the operation of the Systems.
(m) Visitation. The Borrower shall permit such persons as any
Bank may designate to visit and inspect any of the properties of the Borrower
to examine its books and records and take copies and extracts therefrom and to
-44- CREDIT AGREEMENT
52
discuss its affairs with its officers, employees and independent accountants at
such times and as often as any Bank may reasonably request.
5.2 Preservation of Existence and Franchises. The Borrower
shall maintain its existence as a Colorado general partnership and its rights
and Franchises in full force and effect.
5.3 Insurance. The Borrower shall maintain with financially
sound and reputable insurers insurance with respect to its properties and
business and against such liabilities, casualties and contingencies and of such
types and in such amounts as is customary in the case of partnerships engaged
in the same or a similar business or having similar properties similarly
situated.
5.4 Maintenance of Properties. The Borrower shall maintain in
good repair, working order and condition the properties now or hereafter owned,
leased or otherwise possessed by it and shall make or cause to be made all
needful and proper repairs, renewals, replacements and improvements thereto so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times.
5.5 Payment of Taxes and Other Potential Charges and Priority
Claims; Payment of Other Current Liabilities. The Borrower shall pay or
discharge
(a) on or prior to the date on which penalties attach thereto,
all taxes, assessments and other governmental charges or levies imposed upon it
or any of its properties or income (including such as may arise under Section
4062, Section 4063 or Section 4064 of ERISA, or any similar provision of law);
(b) on or prior to the date when due, all lawful claims of
materialmen, mechanics, carriers, warehousemen, landlords and other like
persons which, if unpaid, might result in the creation of a Lien upon any such
property;
(c) on or prior to the date when due, all other lawful claims
which, if unpaid, might result in the creation of a Lien upon any such property
(other than Liens not forbidden by Section 6.2 hereof) or which, if unpaid,
might give rise to a claim entitled to priority over general creditors of the
Borrower in a case under Title 11 (Bankruptcy) of the United States Code, as
amended, or in any insolvency proceeding or dissolution or winding-up involving
the Borrower; and
-45- CREDIT AGREEMENT
53
(d) other current material liabilities or current liabilities
as to which the obligee has instituted legal proceedings so that none is
overdue more than 90 days; provided that unless and until foreclosure,
distraint, levy, sale or similar proceedings shall have been commenced the
Borrower need not pay or discharge any such tax, assessment, charge, levy,
claim or current liability so long as the validity thereof is contested in good
faith and by appropriate proceedings diligently conducted and so long as such
reserves or other appropriate provisions as may be required by GAAP shall have
been made therefor and so long as such failure to pay or discharge does not
have a material adverse effect on the business, operations or financial
condition of the Borrower.
5.6 Financial Accounting Practices. The Borrower shall make
and keep books, records and accounts which, in reasonable detail, accurately
and fairly reflect its transactions and dispositions of its assets and maintain
a system of internal accounting controls sufficient to provide reasonable
assurances that (a) transactions are executed in accordance with management's
general or specific authorizations (b) transactions are recorded as necessary
(i) to permit preparation of financial statements in conformity with GAAP and
(ii) to maintain accountability for assets, (c) access to assets is permitted
only in accordance with management's general or specific authorization and (d)
the recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
5.7 Compliance With Laws. The Borrower shall comply with all
applicable Laws, in all respects, provided that the Borrower shall not be
deemed to be in violation of this Section 5.7 as a result of any failures to
comply which would not result in fines, penalties, forfeitures, injunctive
relief or other civil or criminal liabilities which, in the aggregate, would
materially affect the business' operations or financial condition of the
Borrower or the ability of the Borrower to perform its obligations under this
Agreement, the Related Documents or the Notes.
5.8 Use of Proceeds. Except as otherwise provided by Section
2.7 hereof or the Subordination Agreement, the Borrower shall apply the
proceeds of all Loans hereunder only to repayment of the Existing Debt, and
otherwise for general business purposes.
5.9 Government Authorizations, Etc. The Borrower shall at all
times obtain and maintain in full force and effect all authorizations, consents,
approvals, licenses,
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exemptions and other actions by, and all registrations qualifications,
designations, declarations and other filings with, any Official Body necessary
or advisable in connection with execution and delivery of this Agreement, the
Related Documents or the Notes, consummation of the transactions herein or
therein contemplated, performance of or compliance with the terms and
conditions hereof or thereof.
5.10 Contracts. The Borrower shall comply with all agreements
or instruments to which it is a party or by which it or any of its properties
(now owned or hereafter acquired) may be subject or bound, provided that the
Borrower shall not be deemed to be in violation of this Section 5.10 as a
result of any failure to comply which would not have a material adverse effect
on the business, operations or financial condition of the Borrower or on the
ability of the Borrower to perform its obligations under this Agreement, the
Related Documents or the Notes.
ARTICLE VI
NEGATIVE COVENANTS
The Borrower covenants to the Banks as follows:
6.1 Financial Maintenance Covenants.
(a) Total Debt/Annualized Cash Flow. The ratio of Total Debt
to Annualized Cash Flow shall not during any fiscal quarter occurring within
the periods set forth below exceed the amount set forth opposite such period:
Closing Date - December 31, 1988 6.5 to 1
January 1, 1989 - June 30, 1989 6.0 to 1
July 1, 1989 - December 31, 1989 5.75 to 1
January 1, 1990 - June 30, 1990 5.25 to 1
July 1, 1990 - December 31, 1990 4.75 to 1
January 1, 1991 and thereafter 4.0 to 1
(b) Cash Flow/Debt Service. The ratio of Cash Flow to Debt
Service shall not be less than 1.50 to 1 for any fiscal quarter of the Borrower
ending after the date hereof.
6.2 Liens. The Borrower shall not at any time create, incur,
assume or suffer to exist any Lien on any of its property or assets, tangible
or intangible, now owned or hereafter acquired, or agree or become liable to do
so, except:
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(a) Liens existing on the date hereof and listed in Schedule 7
hereto (and extension, renewal and replacement Liens upon the same property
theretofore subject to a listed Lien provided the amount secured by each Lien
constituting such an extension, renewal or replacement Lien shall not exceed
the amount secured by the Lien theretofore existing);
(b) Liens arising from taxes, assessments, charges, levies or
claims described in Section 5.5 hereof that are not yet due or that remain
payable without penalty or to the extent permitted to remain unpaid under the
proviso to such Section 5.5;
(c) Deposits or pledges to secure workmen's compensation,
unemployment insurance, old age benefits or other social security obligations,
or in connection with or to secure the performance of bids, tenders, trade
contracts or leases, or to secure statutory obligations, or stay, surety or
appeal bonds, or other pledges or deposits of like nature and all in the
ordinary course of business;
(d) Liens on property securing all or part of the purchase
price thereof to the Borrower and Liens (whether or not assumed) existing in
property at the time of purchase thereof by the Borrower (and any extension,
renewal and replacement Liens upon the same property theretofore subject to a
Lien described in this Section 6.2(d), provided the amount secured by each Lien
constituting such extension, renewal or replacement shall not exceed the amount
secured by the Lien theretofore existing), provided,
(i) each such Lien is confined solely to the property so
purchased, improvements thereto and proceeds thereof, and
(ii) the aggregate amount secured by all Liens described in
this Section 6.2(d) on property of the Borrower and Capitalized Lease
Obligations of the Borrower shall not at any time exceed $1,000,000;
(e) Liens arising under Capitalized Leases, provided, the
aggregate amount of all Capitalized Lease Obligations of the Borrower and the
aggregate amount secured by all Liens on property of the Borrower described in
Section 6.2(d) shall not at any time exceed $1,000,000;
(f) Liens arising from legal proceedings, so long as such
proceedings are being contested in good faith by appropriate proceedings
diligently conducted and so long as execution is stayed on all judgments
resulting from any such proceedings;
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56
(g) Zoning restrictions, easements, minor restrictions on the
use of real property, minor irregularities in title thereto and other minor
Liens that do not secure the payment of money or the performance of an
obligation and that do not in the aggregate materially detract from the value
of a property or asset to, or materially impair its use in the business of the
Borrower; and
(h) Liens created by the Security Documents.
6.3 Indebtedness. The Borrower shall not at any time create,
incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness under this Agreement or the Notes;
(b) Advances and deferrals of Management Fees and Allocated
Expenses, provided, the obligation of the Borrower to repay such amounts and
interest thereon shall be subordinated to the obligations of the Borrower
hereunder, under the Security Documents and under the Notes, pursuant to the
Subordination Agreement;
(c) current accounts payable arising out of transactions
(other than borrowings) in the ordinary course of business;
(d) Indebtedness secured by a Lien described in Section 6.2(d)
hereof;
(e) Capitalized Lease Obligations permitted by Section 6.2(e);
and
(f) Indebtedness existing on the date hereof and listed on
Schedule 8 hereto (and extensions, renewals, and replacements thereof on terms
no more burdensome than the Indebtedness extended, renewed or replaced).
6.4 Guarantees and Contingent Liabilities. The Borrower shall
not at any time directly or indirectly assume, guarantee, become surety for,
endorse or otherwise agree, become or remain directly or indirectly liable upon
or with respect to any obligation or liability of any other persons, except:
(a) guarantees and contingent liabilities existing on the date
hereof and listed in Schedule 8 hereto (and extensions, renewals and
replacements thereof on terms no more burdensome than the guarantee or
contingent liability extended, renewed or replaced);
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57
(b) liabilities of the Borrower as disclosed on Schedule 8
hereto; and
(c) contingent liabilities arising from the endorsement of
negotiable or other instruments for deposit or collection or similar
transactions in the ordinary course of business.
"Direct or contingent liability upon or with respect to any
obligation or liability of any other person" of the Borrower within the meaning
of this Section 6.4 includes but is not limited to an agreement, contingent or
otherwise:
(i) to reimburse banks, surety companies and other persons in
respect of drawings and other payments under letters of credit,
guarantees, surety bonds and similar documents opened or issued by
such other persons for the account of the Borrower;
(ii) to purchase an obligation or assume a liability of such
person or to supply funds for the payment or purchase of such
obligation or satisfaction of such liability;
(iii) to make any loan, advance, capital contribution or other
investment in, or to purchase any property, services or securities
from, such person so as to enable such person to meet a minimum
equity, net worth, working capital or other financial condition or to
enable such person to satisfy any obligation or liability or pay any
dividend or stock liquidation payment, or otherwise to supply funds to
or in any manner invest in such person;
(iv) to purchase, sell or lease (as lessee or lessor) property
or assets or to purchase or sell services (i) primarily for the
purpose of enabling such person to satisfy such obligation or
liability or of assuring the owner of such indebtedness or liability
against loss, or (ii) regardless of the non-delivery of such property
or assets or the failure to furnish such services, or (iii) in a
transaction otherwise having the characteristics of a take-or-pay or
throughput contract or as described in paragraph 6 of AICPA Statement
of Financial Accounting Standards No. 47; or
(v) which is substantially equivalent in economic effect to
any of the foregoing or other-
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58
wise substantially equivalent in economic effect to an assumption,
guarantee, endorsement or other direct or contingent liability upon or
with respect to any obligation or liability of such person.
6.5 Loans and Investments. The Borrower shall not at any time
make or suffer to remain outstanding any loan or advance to, or purchase,
acquire or own any stock, bonds, notes or securities of, or any partnership
interest (whether general or limited) in, or any other interest in, or make any
capital contribution to, any other person, or agree, become or remain liable to
do any of the foregoing, except:
(a) loans and investments existing on the date hereof and
listed in Schedule 9 hereto (including any extensions or renewals thereof);
(b) trade credit extended, and loans and advances extended to
subcontractors or suppliers, under usual and customary terms in the ordinary
course of business;
(c) demand deposits, time deposits or certificates of deposit
in United States or Canadian commercial banks having shareholders' equity of at
least $50,000,000 and maturing not in excess of one year from the date of
acquisition;
(d) obligations backed by the full faith and credit of the
United States of America maturing not in excess of one year from the date of
acquisition, commercial paper maturing not in excess of two hundred seventy
(270) days from the date of acquisition and rated P-1 by Moody's Investors
Service or A-1 by Standard & Poor's Corporation on the date of acquisition; and
(e) notes or securities received in a good-faith settlement of
loans or investments described in this Section 6.5, if such loan or investment
was not made in the expectation of such settlement.
6.6 Distributions. The Borrower shall not make, pay or agree
to pay, become or remain liable to make or pay, any distribution of any nature
(whether in cash, property, securities or otherwise) on account of or in
respect of any limited or general partnership interest of the Borrower or on
account of the purchase, redemption, retirement or acquisition of any limited
or general partnership interest.
6.7 Sale-Leasebacks. The Borrower shall not at any time enter
into or suffer to remain in effect any
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59
transaction to which the Borrower is a party involving the sale, transfer or
other disposition by the Borrower of any property, real or personal, now owned
or hereafter acquired, with a view directly or indirectly to the leasing back
of any part of the same property or any other property used for the same or a
similar purpose or purposes.
6.8 Leases. The Borrower shall not at any time enter into or
suffer to remain in effect any agreement to lease, as lessee, any real or
personal property, except:
(a) Capitalized Leases permitted by Section 6.2(e); and
(b) other leases which on any date in the aggregate will not
result in the payment or accrual by the Borrower of more than $1,000,000 in the
twelve-month period after such date (estimating on a reasonable basis all
amounts payable under any lease to the extent such amounts are not fixed.)
6.9 Dissolution. The Borrower shall not dissolve or liquidate
into any other person or agree to do so.
6.10 Dispositions of Assets. The Borrower shall not sell,
convey, assign, lease, abandon or otherwise transfer or dispose of, voluntarily
or involuntarily, any System or a substantial part of any System, unless:
(a) no Event of Default or Potential Default shall occur and
be continuing or shall exist at the time of such disposition and after giving
effect thereto;
(b) the Borrower shall deliver to the Bank not less than 10
Business Days prior to the time of such disposition a certificate demonstrating
that the Borrower will be in compliance with the covenants set forth in Section
6.1 hereof on a pro forma basis for the quarter immediately following the time
of such disposition and for the quarter in which such disposition occurs; and
(c) the net proceeds of such disposition shall be paid to the
Agent in accordance with Section 2.12 hereof and applied against the following
in such order as the Agent may elect: (i) outstanding principal on the Loans;
(ii) accrued and unpaid interest thereon; (iii) accrued and unpaid commitment
fees; and (iv) all other amounts owing under this Agreement. The Current
Commitments or the Term Loan Ceiling, as the case may be, shall be permanently
reduced in an amount equal to the principal on outstanding Loans paid in
accordance with the preceding sentence.
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60
Upon consummation of a disposition of assets in accordance
with this Section 6.10, the Banks shall deliver to the Borrower such documents
releasing the Banks' Lien on the assets sold as the Borrower may reasonably
request.
6.11 Acquisitions of Assets. The Borrower shall not purchase,
lease or otherwise acquire any System (except that Borrower may acquire small
Systems for an aggregate cost prior to the Term Loan Expiration Date of not to
exceed $500,000) or, except for Capital Expenditures permitted by Section 6.14
hereof and except for loans and investments permitted by Section 6.5 hereof,
any other substantial assets.
6.12 Self-Dealing. The Borrower shall not enter into or carry
out any transaction with (including, without limitation, purchasing property or
services from or selling property or services to) any Affiliate except
(a) directors, officers and employees of the Borrower may
render services to the Borrower for compensation at the same rates generally
paid by corporations engaged in the same or similar businesses for the same or
similar services;
(b) the Borrower may pay Jones Management Fees, Allocated
Expenses and interest on and principal of Advances to the extent permitted by
the Subordination Agreement;
(c) the Borrower may enter into other transactions with
Affiliates, including the sale of television or other signals to such
Affiliates, the granting of rights to transmit signals on Systems, the lease of
channel space by such Affiliates, the purchase or lease of television or other
signals or specialized equipment from such Affiliates, merchandising and the
provision of credit arrangements from such Affiliates and the licensing of
technology and the provision of other various goods and services to the
Borrower; provided, any such contracts or transactions shall be in writing and
shall be at a price and on terms at least as favorable as those prices and
terms being generally offered in the same marketplace by unrelated parties for
goods or services as nearly identical as possible in regard to quality,
technical advancement and availability; and
(d) the Borrower may sell one or more Systems to Jones;
provided (i) each such System is sold at a price and on terms at least as
favorable as those that would obtain in a comparable arm's-length transaction
with a third party, (ii) such System is sold at a price not less than the
greater of (A) the sum of (1) the original purchase price thereof, (2) Capital
Expenditures and carrying costs for
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61
such System made or incurred by the Borrower and (3) brokerage or similar fees
payable in connection with the original acquisition and such sale or (B) the
average of the prices determined by three independent appraisals and (iii) such
sale complies with the requirements of Section 6.10 hereof. Upon consummation
of the sale of any System to Jones in accordance with this Section 6.12(d) the
Banks shall deliver to the Borrower such documents releasing the Banks' Lien on
such System as the Borrower may reasonably request.
"Affiliate," as used in this Section 6.12, shall mean any person which directly
or indirectly controls, or is controlled by, or is under common control with,
the Borrower or either of the General Partners or Jones. The term "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a person, whether through the
ownership of voting securities, by contract or otherwise.
6.13 Continuation of or Change in Business. The enterprise
represented by the Borrower shall continue to engage in the business of owning,
operating and maintaining cable television and SMATV systems and the Borrower
will not engage in any other business.
6.14 Capital Expenditures. Borrower shall not make Capital
Expenditures which in the aggregate exceed $7,000,000 in 1988, $6,000,000 in
1989 or $4,500,000 in any fiscal year of the Borrower thereafter. If Capital
Expenditures in any year are less than the aggregate permitted for that year,
the unused excess shall be carried forward and may be expended in any subsequent
year or years. The cost of Systems purchased by Borrower pursuant to Section
6.11 shall be included in Capital Expenditures hereunder.
6.15 Amendments to Agreements. The Borrower will not permit
any modification, amendment or other alteration of the Joint Venture Agreement
or the Partnership Agreements (except for amendments of the type described in
Section 6.1 of the Partnership Agreements) without the prior written consent of
the Banks provided, that the Banks agree to consider promptly the granting or
withholding of consent to any such amendments, which consent shall not be
unreasonably withheld.
6.16 Pension Plans. The Borrower shall not establish, make
contributions to, become obligated to make contributions to, or otherwise
become liable with respect to any Plan.
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62
6.17 Regulation U. The Borrower shall not use the proceeds of
any Loans hereunder directly or indirectly to purchase or carry any "margin
stock" (within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System) or to extend credit to others for the purpose of
purchasing or carrying, directly or indirectly, any such margin stock.
ARTICLE VII
DEFAULTS
7.1 Events of Default. An Event of Default shall mean the
occurrence or existence of one or more of the following events or conditions
(whatever the reason for such Event of Default and whether voluntary,
involuntary or effected by operation of Law):
(a) The Borrower shall fail to pay when due principal of any
Note; or
(b) The Borrower shall fail to pay when due interest on any
Note, any commitment fee, any amount payable pursuant to Section 2.13 hereof or
any other amount due hereunder or under any Note and such failure shall have
continued for a period of three Business Days; or
(c) Any representation or warranty made by the Borrower under
this Agreement or any Related Document or any statement made by the Borrower in
any financial statement, certificate, written report, exhibit or document
furnished by the Borrower to the Agent or the Banks pursuant to this Agreement
or any Related Document shall prove to have been false or misleading in any
material respect as of the time when made (including by omission of material
information necessary to make such representation, warranty or statement not
misleading); or
(d) The Borrower shall default in the performance or
observance of any covenant contained in Article VI hereof or of the covenants
contained in Section 5.1(g) or 5.5(d) hereof; or
(e) The Borrower shall default in the performance or
observance of any other covenant, agreement or duty under this Agreement, the
Related Documents or any Note and (i) in the case of e default under Section
5.1 hereof (other than under subsection (g) of such Section 5.1) such default
shall have continued for a period of ten days after notice from the Agent or
from any Bank to the Borrower and (ii) in the
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63
case of any other default such default shall have continued for a period of
thirty days; or
(f) The Borrower (i) shall default (as principal or as
guarantor or other surety) in any payment of any obligation (or set of related
obligations) in respect of Indebtedness in excess of $50,000 in aggregate
amount beyond any period of grace with respect thereto or, if such obligation
or obligations is or are payable or repayable on demand, shall fail to pay or
repay such obligation or obligations when demanded or (ii) shall default in the
observance of any covenant, term or condition contained in any agreement or
instrument by which such obligation or obligations is or are created, secured
or evidenced if the effect of such default is to cause, or to permit the holder
or holders of such obligation or obligations (or a trustee or agent on behalf
of such holder or holders) to cause, all or part of such obligation or
obligations to become due before its or their otherwise stated maturity;
(g) One or more judgments for the payment of money shall have
been entered against the Borrower, which judgment or judgments exceed $50,000
in the aggregate, and such judgment or judgments shall have remained
undischarged and unstayed for a period of thirty consecutive days; or
(h) A writ or warrant of attachment, garnishment, execution,
distraint or similar process shall have been issued against the Borrower or any
of its properties which shall have remained undischarged and unstayed for a
period of thirty consecutive days; or
(i) Any authorization, consent, approval, license, exemption,
registration, qualification, designation, declaration, filing or other action
or undertaking now or hereafter made by or with any Official Body in connection
with this Agreement (other than matters referred to in Section 7.1(k) hereof),
the Related Documents or the Notes or any such action or undertaking now or
hereafter necessary or advisable to make this Agreement, the Related Documents
or the Notes legal, valid, enforceable and admissible in evidence is not
obtained or shall have ceased to be in full force and effect or shall have been
modified or amended or shall have been held to be illegal or invalid and
Borrower shall have been unsuccessful in curing such illegality or invalidity
within a reasonable time and the Required Banks shall have determined in good
faith (which determination shall be conclusive) that such event or occurrence
may have a material adverse effect on the Agent's or the Banks' rights under
this Agreement, the Related Documents or any Note; or
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64
(j) The Required Banks shall have determined in good faith
that a material adverse change has occurred in the financial condition of the
Borrower or that the prospect of payment under this Agreement, the Related
Documents or the Notes is impaired in any material respect; or
(k) If any Franchise Agreement pursuant to which Borrower
serves more than 1,000 of the Basic Subscribers or any other license, permit,
lease, easement, conduit occupancy right, pole attachment, use, access or
rental agreement, certificate, consent, approval, authorization or agreement
(collectively, for purposes of this clause (k), "Approval") granted by the FCC
or by any other Official Body with jurisdiction over any System or by any
public utility or third party lessor, whether presently existing or hereafter
granted to or obtained by the Borrower, the cancellation or termination of
which would have a material adverse effect on the Borrower or the continued
operation of the Systems viewed as a whole, expires without renewal or is
suspended or revoked, and is not replaced, or the Borrower shall become subject
to any injunction or other order with respect to such Franchise Agreement or
Approval that materially or adversely affects or which may materially and
adversely affect (both in the sole judgment of the Agent) the Borrower; or
(l) Any of the Liens created by the Security Documents in
favor of the Agent pursuant to the Security Documents shall cease to be valid
and perfected Liens in favor of the Agent on behalf of the Banks prior to the
rights of all third parties except as permitted by the Security Documents; or
(m) Any General partner ceases to be a general partner of the
Borrower; or
(n) The Systems owned by the Borrower cease to be managed by
Jones as provided in the Joint Venture Agreement or Jones' performance under
the Joint Venture Agreement is substantially impaired; or
(o) The Borrower shall fail to use its best efforts to obtain
reasonably promptly after the Closing Date (i) written consents, in form and
substance reasonably satisfactory to the Agent, signed by such persons listed
in Schedule 2 hereto as have not signed consents prior to the Closing Date or
(iii memoranda of leases (to the extent not obtained prior to the Closing Date)
executed by the City of Dania and George W. and Irene M. Johnson with respect
to the property described on Exhibit B to the Mortgage; or the Borrower shall
fail to record such memoranda of leases, or thereafter to rerecord the
Mortgage, in each case with the Clerk of Circuit Court of Broward County,
Florida promptly after obtaining such memoranda; or
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(p) A proceeding shall have been instituted in respect of
the Borrower or any General Partner
(i) seeking to have an order for relief entered in respect of
the Borrower or any General Partner, or seeking a declaration or
entailing a finding that the Borrower or any General Partner is
insolvent or a similar declaration or finding, or seeking dissolution,
winding-up, charter revocation or forfeiture, liquidation,
reorganization, arrangement, adjustment, composition or other similar
relief with respect to the Borrower or any General Partner, their
respective assets or its debts under any law relating to bankruptcy,
insolvency, relief of debtors or protection of creditors, termination
of legal entities or any other similar law now or hereafter in effect
and if such proceeding be involuntary, it shall have remained
undismissed for sixty (60) days or more, or
(ii) seeking appointment of a receiver, trustee, custodian,
liquidator, assignee, sequestrator or other similar official for the
Borrower or any General Partner or for all or any substantial part of
its property and such proceeding shall result in the entry, making or
grant of any such order for relief, declaration, finding, relief or
appointment, or such proceeding shall remain undismissed and unstayed
for a period of thirty consecutive days; or
(q) The Borrower or any General Partner shall become
insolvent, shall become generally unable to pay its debts as they become due,
shall voluntarily suspend transaction of its business, shall make a general
assignment for the benefit of creditors, shall institute a proceeding described
in Section 7.1(p) (i) hereof or shall consent to any such order for relief,
declaration, finding or relief described therein, shall institute a proceeding
described in Section 7.1(p) (ii) hereof or shall consent to any such
appointment or to the taking of possession by any such official of all or any
substantial part of its property whether or not any such proceeding is
instituted, shall dissolve, wind-up or liquidate itself or any substantial part
of its property, or shall take any action in furtherance of any of the
foregoing, or
(r) Any of the events described in Section 7.1(p) or (q) with
respect to the Borrower shall occur with respect to Jones, or there shall occur
a change of ownership in a controlling interest in the voting securities of
Jones. "Controlling interest" means the right to vote (through ownership or
otherwise) a majority of Jones shares having the power to elect directors.
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7.2 Consequences of an Event of Default.
(a) If an Event of Default specified in subsections (a)
through (o) or (r) of Section 7.1 hereof shall occur the Banks shall be under
no further obligation to make Loans hereunder and at their option without
notice their respective Commitments may be terminated, and so long as such
Event of Default shall be continuing or shall exist, the Agent shall, at the
request of the Required Banks, by notice to the Borrower, declare the unpaid
principal amount of the Notes, interest accrued thereon and all other amounts
owing by the Borrower hereunder or under the Notes to be immediately due and
payable without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived, and an action therefor shall immediately
accrue.
(b) If an Event of Default specified in subsection (p) or (q)
of Section 7.1 hereof shall occur or exist, the Banks shall be under no further
obligation to make Loans hereunder and the unpaid principal amount of the
Notes, interest accrued thereon and all other amounts owing by the Borrower
hereunder or under the Notes shall become immediately due and payable without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived, and an action therefor shall immediately accrue.
7.3 Set-Off. If the unpaid principal amount of any Note,
interest accrued thereon or other amount owing by the Borrower hereunder or
under any Note shall have become due and payable (by acceleration or
otherwise), each Bank and any branch, subsidiary or affiliate of each Bank
anywhere in the world and the holder of any participation in any Note shall
each have the right, in addition to all other rights and remedies available to
it without notice to the Borrower, to set-off against and to appropriate and
apply to such due and payable amounts any debt owing to, and any other funds
held in any manner for the account of, the Borrower by such Bank or by such
branch, subsidiary or affiliate or by such holder including, without
limitation, all funds an all deposit accounts (whether time or demand, general
or special, provisionally credited or finally credited, or otherwise) now or
hereafter maintained by the Borrower with such Bank or such branch, subsidiary
or affiliate or such holder. Such right shall exist whether or not such Bank or
any such holder shall have given notice or made any demand hereunder or under
any Note or any such participation, whether or not such debt owing to or funds
held for the account of the Borrower is or are matured or unmatured, whether or
not any amounts owing by any person with respect to such participation are
matured or unmatured,
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whether or not the holder of such participation is in privity with or is a
creditor of the Borrower with respect to such participation, and regardless of
the existence or adequacy of any collateral, guaranty or any other security,
right or remedy available to the Agent or the Banks or any such holder. The
Borrower hereby consents to and confirms the foregoing arrangements and
confirms the Banks' rights and each such branch's, subsidiary's and affiliate's
and holder's rights of banker's lien and set-off. Nothing in this Agreement
shall be deemed a waiver or prohibition of or restriction on the Banks' rights
or any such branch's, subsidiary's and affiliate's and holder's rights of
banker's lien or set-off.
7.4 Equalization Among the Banks. The Banks hereby agree
between themselves that, with respect to all amounts received by any Bank for
application on any obligation hereunder or under the Notes, whether received by
voluntary payment, by realization upon security, by the exercise of the right
of set-off or banker's lien, by counterclaim or by any other non-pro rata
source, equitable adjustment will be made in the manner stated in the following
sentence so that, in effect, all such excess amounts will be shared ratably
between the Banks in proportion to each Bank's outstanding Loans. Any Bank
receiving any such amount shall purchase for cash from the other Banks an
interest in each Note in such amount as shall result in a ratable participation
by such Bank and such other Banks in the aggregate unpaid amount under the
Notes, provided that if all or any portion of such excess amount is thereafter
recovered from such Bank, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, together with interest or other
amounts, if any, required by Law (including court order) to be paid by such
Bank.
ARTICLE VIII
THE AGENT
8.1 Appointment. The Banks hereby appoint The Bank of Nova
Scotia to act as Agent as herein specified for the Banks hereunder. Each of
the Banks hereby irrevocably authorizes, and each holder of any Note by the
acceptance of such Note shall be deemed irrevocably to authorize, the Agent to
take such action on its behalf under the provisions of this Agreement, the
Related Documents and any other instruments and agreements referred to herein
or therein, and to exercise such powers and to perform such duties hereunder
and thereunder, as are specifically delegated to or required of the Agent by
the terms hereof or thereof,
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together with such powers as are reasonably incidental thereto. The Bank of
Nova Scotia agrees to act as the Agent on behalf of the Banks to the extent
provided in this Agreement and the Related Agreements.
8.2 Delegation of Duties. The Agent may perform any of its
duties hereunder by or through agents or employees and shall be entitled to
advice of counsel concerning all matters pertaining to its duties hereunder and
thereunder.
8.3 Nature of Duties; Independent Credit Investigation. The
Agent shall have no duties or responsibilities except those expressly set forth
in this Agreement or in the Related Documents. The duties of the Agent shall be
mechanical and administrative in nature; the Agent shall not have by reason of
this Agreement a fiduciary relationship in respect of any Bank; and nothing in
this Agreement or in the Related Documents, expressed or implied, is intended
to or shall be so construed as to impose upon the Agent any obligations in
respect of this Agreement or the Related Documents except as expressly set
forth herein and therein. Each Bank expressly acknowledges (a) that the Agent
has not made any representations or warranties to it and that no act by the
Agent hereafter taken, including any review of the affairs of the Borrower
shall be deemed to constitute any representation or warranty by the Agent to
any Bank; (b) that it has made and will make its own independent investigation
of the financial condition and affairs, and its own appraisal of the
creditworthiness, of the Borrower in connection with this Agreement; and (c)
that the Agent shall have no duty or responsibility, either initially or on a
continuing basis, to provide any Bank with any credit or other information,
whether coming into its possession before the making of any Loans hereunder or
at any time or times thereafter, except for notices, reports or other
information, if any, expressly required to be furnished to the Banks by the
Agent hereunder.
8.4 Actions in Discretion of Agent; Instructions From Required
Banks.
(a) The Agent agrees, upon the written request of the Required
Banks, to take any action or refrain from taking any action of the type
specified as being within the Agent's rights, powers or discretion herein. In
the absence of a request by the Required Banks, the Agent shall have authority
pursuant to Section 8.1 hereof, in its sole discretion, to take or not to take
any such action, unless this Agreement specifically requires the consent of the
Required Banks or all the Banks. Any action taken or failure to act pursuant to
such instructions or discretion
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shall be binding on all the Banks and on all holders of Notes. No Bank shall
have any right of action whatsoever against the Agent as a result of the Agent
acting or refraining from acting hereunder in accordance with the instructions
of the Required Banks, or in the absence of such instructions, in the absolute
discretion of the Agent, subject to the provisions of Section 8.5.
(b) The Agent agrees, upon the written request of the Required
Banks, to take any action of the type specified as being within the Agent's
rights, powers or discretion in the Related Documents. All such actions under
the Related Documents will be under the direction of the Required Banks, unless
this Agreement or a Related Document requires the consent of all the Banks. Any
action taken or failure to act pursuant to such instructions or any failure to
act in the absence of such instructions shall be binding on all the Banks and
on all holders of Notes. No Bank shall have any right of action whatsoever
against the Agent as a result of the Agent acting or refraining from acting
under the Related Documents in accordance with the instructions of the Required
Banks or refraining from acting under the Related Documents in the absence of
instructions from the Required Banks, subject to the provisions of Section 8.5.
8.5 Exculpatory Provisions. Neither the Agent nor any of its
directors, officers, employees or agents shall be liable to any Bank for any
action taken or omitted to be taken by it or them hereunder or under the
Related Documents, or in connection herewith or therewith, unless caused by its
or their own gross negligence or willful misconduct. Subject to the immediately
preceding sentence, in performing its functions and duties hereunder and under
the Related Documents on behalf of the Banks, the Agent shall exercise the same
care which it would exercise in dealing with loans for its own account, but it
shall not (a) be responsible in any manner to any of the Banks for the
effectiveness, enforceability, genuineness, validity or the due execution of
this Agreement, the Notes or the Related Documents or for any recital,
representation, warranty, document, certificate, report or statement herein or
therein made or furnished under or in connection with this Agreement or the
Related Documents or (b) be under any obligation to any of the Banks to
ascertain or to inquire as to the performance or observance of any of the
terms, covenants or conditions hereof or thereof on the part of the Borrower,
or the financial condition of the Borrower or the existence or possible
existence of any Event of Default and/or a Potential Default.
8.6 Reimbursement and indemnification. Each Bank agrees to
reimburse and indemnify the Agent (to the extent
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not reimbursed by the Borrower) ratably in proportion to its Current
Commitment, for and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by or
asserted against the Agent, in its capacity as such, in any way relating to or
arising out of this Agreement, the Notes or the Related Documents or any action
taken or omitted by the Agent hereunder or thereunder, provided, that no Bank
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
to the extent that the same result from the Agent's gross negligence or willful
misconduct.
8.7 Reliance by Agent. The Agent shall be entitled to rely
upon any writing, telegram, telex or teletype message, resolution, notice,
consent, certificate, letter, cablegram, statement, order or other document or
conversation by telephone or otherwise believed by it to be genuine and correct
and to have been signed, sent or made by the proper party or parties, and upon
opinions of counsel and other professional advisers selected by the Agent.
Subject to Section 8.5, the Agent shall be fully justified in failing or
refusing to take any action hereunder or under the Related Documents unless it
shall first be indemnified to its satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.
8.8 The Bank of Nova Scotia. in its Individual Capacity. With
respect to its Commitment, its Current Commitment, the Loans made by it and the
Notes held by it, The Bank of Nova Scotia shall have the same rights and powers
hereunder as any other Bank and may exercise the same as though it were not the
Agent, and the terms, "Banks" or "holders of Notes" shall, unless the context
hereof otherwise indicates, include The Bank of Nova Scotia in its individual
capacity. The Bank of Nova Scotia and its affiliates may, without liability to
account, make loans to, accept deposits from, act as trustee under indentures
of, and generally engage in any kind of banking or trust business with, the
Borrower and its partners and Affiliates as though it were not acting as Agent
hereunder.
8.9 Holders of Notes. The Agent may deem and treat the payee
of any Note as the owner of such Note for all purposes hereof unless and until
written notice of the assignment or transfer thereof shall have been filed with
the Agent. Any request, authority or consent of any party who at the time of
making such request or giving such authority or consent is the holder of any
Note shall be
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conclusive and binding on any subsequent holder, transferee or assignee of such
Note or of any Note or Notes issued in exchange therefor.
8.10 Related Documents. Each of the Banks acknowledges receipt
of a copy of each Related Document and accepts and agrees to the terms thereof.
8.11 Pro Rata Interest in Collateral. The liens and security
interests and other interests in property (collectively the "Collateral")
granted or transferred to or created in favor of the Agent by this Agreement
and the Security Documents as security for the outstanding Obligations shall be
held for the pro rata benefit of the Banks as specified herein or therein or,
if not so specified, in proportion to their respective interests at the time of
distribution in the outstanding principal amount of the Loans payable to each
of the Banks by the Borrower. Subject to Sections 8.4(b) and 9.3, each of the
rights, privileges and remedies provided to the Banks or the Agent with respect
to the Collateral by this Agreement, the Security Documents or otherwise may be
exercised by the Agent on behalf of the Banks, and any Collateral and the
proceeds thereof held or recovered at any time by the Agent shall inure to the
pro rata benefit of the Banks as specified in the Security Document which
relates to such Collateral or, if not so specified, in proportion to their
respective interests at the time of distribution in the outstanding principal
amount of Loans payable to the Banks at such time.
8.12 Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Banks and the Borrower. Upon any such
resignation, the Banks and the Borrower shall agree upon a successor Agent. If
no successor Agent shall have been so agreed upon and appointed, and shall have
accepted such appointment, within 30 days after the retiring Agent's giving of
notice of resignation, then the retiring Agent may, on behalf of the Banks,
appoint a successor Agent which shall be a commercial bank organized under the
laws of the United States of America or any State thereof and having a combined
capital and surplus of at least $100,000,000. Upon the acceptance by a
successor Agent of its appointment as Agent hereunder, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties under this Agreement. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Article VIII shall inure
to its benefit as to any actions taken or omitted by it while it was Agent
under this Agreement.
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8.13 Appointment of Co-Agent.
(a) It is the intent of this Agreement that there shall be no
violation of any law of any state or other jurisdiction denying or restricting
the right of banking corporations or associations to transact business as agent
in such state or jurisdiction. It is recognized that in case of litigation
under this Agreement, and in particular in case of enforcement upon the
occurrence of an Event of Default or in case the Agent deems that by reason of
any present or future law of any state or other jurisdiction it may not
exercise any of the powers, rights or remedies herein granted to the Agent, or
take any other action which may be desirable or necessary in connection
therewith, it may be necessary that the Agent appoint an additional individual
or institution as a separate or co-agent under this Agreement. The following
provisions of this Section are adopted to these ends.
(b) In the event that the Agent appoints an additional
individual or institution as a separate or co-agent, each and every remedy,
power, right, claim, demand, cause of action, immunity, estate, title, interest
and lien expressed or intended by this Agreement to be exercised by or vested
in or conveyed to the Agent with respect thereto shall be exercisable by and
vest in such separate or co-agent but only to the extent necessary to enable
such separate or co-agent to exercise such power, rights and remedies, and
every covenant and obligation necessary to the exercise thereof by such
separate or co-agent shall run to and be enforceable by either of them. The
Agent shall have the right to terminate the appointment of any separate or
co-agent hereunder.
(c) Should any instrument in writing from Borrower or the
Banks be required by the separate or co-agent so appointed by the Agent for
more fully and certainly vesting in and confirming to him or it such
properties, rights, power, trusts, duties and obligations, any and all such
instruments in writing shall, on request, be executed, acknowledged and
delivered by Borrower or the Banks. In case any separate or co-agent, or a
successor to either, shall die, become incapable of acting, resign or be
removed, all the estates, properties, rights, power, trusts, duties and
obligations of such separate or co-agent, so far as permitted by law, shall
vest in and be exercised by the Agent until the appointment of a new agent or
successor to such separate or co-agent.
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ARTICLE IX
MISCELLANEOUS
9.1 Holidays. Except as otherwise provided herein, whenever
any payment or action to be made or taken hereunder, under the Related
Documents or under the Notes shall be stated to be due on a day which is not a
Business Day, such payment or action shall be made or taken on the next
following Business Day and such extension of time shall be included in
computing interest or fees, if any, in connection with such payment or action.
9.2 Records. The unpaid principal amount of the Notes, the
unpaid interest accrued thereon, the interest rate or rates applicable to such
unpaid principal amount, the duration of such applicability, each Bank's
Current Commitment and the accrued and unpaid commitment fee shall at all times
be ascertained from the records of such Bank, which shall be conclusive absent
manifest error.
9.3 Amendments or Waivers. With the written consent of the
Required Banks, the Agent, acting on behalf of all Banks, and the Borrower may
from time to time enter into written agreements amending or changing any
provision of this Agreement or the Related Documents or the rights of the Banks
or the Borrower hereunder or thereunder or may grant waivers or consents to a
departure from the due performance of the obligations of the Borrower, any such
agreement, waiver or consent made with such written consent being effective to
bind all the Banks; provided, that no such agreement, waiver or consent may be
made which will
(i) reduce or increase the amount or alter the terms of the
Commitment or Current Commitment of any Bank hereunder or alter the
provisions relating to the commitment fees payable to any Bank
hereunder; or
(ii) extend the time for payment of principal or interest on
any Note, or reduce the principal amount of or the rate of interest
borne by any Note, or otherwise affect the terms of payment of the
principal of or interest on any Note; or
(iii) change the definition herein of "Required Banks", or
amend this Section 9.3; or
(iv) alter the terms, impair the value of, or release any
Collateral under the Security Documents, except (A) releases of
Collateral in connection with the sale of the Systems in accordance
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with Section 6.10 hereof and as contemplated by the Security Documents
and (B) releases of Collateral having an aggregate book value not in
excess of $1,000,000 during the term of this Agreement,
without the written consent of all the Banks. The Agent is authorized to take
the actions described in clauses (A) and (B) of paragraph (iv) above without
the consent of the Required Banks. In the case of any such waiver or consent
relating to any provision hereof, any Event of Default or potential Default so
waived or consented to shall be deemed to be cured and not continuing, but no
such waiver or consent shall extend to any other or subsequent Event of Default
or potential Default or impair any right consequent thereto.
9.4 No Implied Waiver; Cumulative Remedies. No course of
dealing and no delay or failure of the Agent or any Bank in exercising any
right, power or privilege under this Agreement, the Related Documents, the
Notes or any other documents or instruments pursuant to or in connection
herewith shall affect any other or future exercise thereof or exercise of any
other right, power or privilege; nor shall any single or partial exercise of
any such right, power or privilege or any abandonment or discontinuance of
steps to enforce such a right, power or privilege preclude any further exercise
thereof or of any other right, power or privilege. The rights and remedies of
the Agent and the Banks under this Agreement, the Related Documents, the Notes
or any other documents or instruments pursuant to or in connection herewith are
cumulative and not exclusive of any rights or remedies which the Agent or the
Banks would otherwise have.
9.5 Notices. All notices under Sections 2.3, 2.7 and 2.9(a)
hereof shall be sent to the Agent by telex or overnight courier service (which
shall be effective when received) or by telephone or telecopy confirmed by
telex or first-class mail (which shall be effective when telephoned or
telecopied), in all cases with charges prepaid. All notices under Sections 2.8
and 7.2(a) hereof shall be sent to the Borrower by telex or overnight courier
service (which shall be effective when received), by telephone or telecopy
confirmed by telex or first-class mail (which shall be effective when
telephoned or telecopied) or by first-class or first-class express mail (which
shall be effective when deposited in the mail), in all cases with charges
prepaid. All other notices, requests, demands, directions and other
communications (collectively "notices") under the provisions of this Agreement
or any Note shall be in writing (including telexed or telecopied communication)
unless otherwise
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expressly permitted hereunder and shall be sent by first-class or first-class
express mail, or by telex or telecopy with confirmation in writing mailed
first-class, in all cases with charges prepaid, and any such properly given
notice shall be effective when received. All notices shall be sent to the
applicable party at the address stated on the signature page hereof or in
accordance with the last unrevoked written direction from such party to the
other parties hereto.
9.6 Expenses; Taxes; Attorneys' Fees. The Borrower agrees to
pay or cause to be paid and to save the Agent and the Banks harmless against
liability for the payment of all reasonable out-of-pocket expenses, including
but not limited to (a) fees and expenses of counsel for the Agent, incurred by
the Agent from time to time (i) arising in connection with the preparation,
execution, delivery and performance of this Agreement, the Related Documents,
the Notes and any documents, instruments or transactions pursuant to or in
connection herewith (including but not limited to the issuance of notes under
Section 2.14 hereof), (ii) relating to any requested amendments, waivers or
consents to this Agreement, the Related Documents, the Notes or any such
documents or instruments and (b) fees and expenses of counsel (including
in-house counsel) for the Agent and each Bank incurred by the Agent or any Bank
from time to time arising in connection with Banks' enforcement or preservation
of rights under this Agreement, the Related Documents, the Notes or any such
documents or instruments, including but not limited to such expenses as may be
incurred by the Banks in the collection of outstanding Notes. The Borrower
agrees to pay all stamp, documentary stamp, intangible, transfer, recording or
filing taxes or fees and similar impositions now or hereafter determined by the
Agent to be payable in connection with this Agreement, the Related Documents,
the Notes or any other documents, instruments or transactions pursuant to or in
connection herewith, and the Borrower agrees to save the Agent and the Banks
harmless from and against any and all present or future claims, liabilities or
losses with respect to or resulting from any omission to pay or delay in paying
any such taxes, fees or impositions.
9.7 Severability. The provisions of this Agreement are
intended to be severable. If any provision of this Agreement shall be held
invalid or unenforceable in whole or in part in any jurisdiction such provision
shall, as to such jurisdiction, be ineffective to the extent of such invalidity
or unenforceability without in any manner affecting the validity or
enforceability thereof in any other
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jurisdiction or the remaining provisions hereof in any jurisdiction.
9.8 Governing Law. This Agreement and the Notes shall be
deemed to be contracts under the laws of the State of California and for all
purposes shall be governed by and construed and enforced in accordance with the
laws of said State.
9.9 Prior Understandings. This Agreement supersedes all prior
understandings and agreements, whether written or oral, among the parties
hereto relating to the transactions provided for herein.
9.10 Duration; Survival. All representations and warranties
of the Borrower contained herein or made in connection herewith shall survive
the making of and shall not be waived by the execution and delivery of this
Agreement or the Notes, any investigation by the Banks or the making of any
Loan hereunder. All covenants and agreements of the Borrower contained herein
shall continue in full force and effect from and after the date hereof so long
as it may borrow hereunder and until payment in full of the Notes, interest
thereon, commitment fees and all other obligations of the Borrower under this
Agreement or any Note hereunder. Without limitation, it is understood that all
obligations of the Borrower to make payments to or indemnify the Agent and the
Banks (including, without limitation, obligations arising under Sections 2.13
and 9.6 hereof) shall survive the payment in full of the Notes and of all other
obligations of the Borrower thereunder and hereunder.
9.11 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument.
9.12 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the Agent, the Banks, the Borrower and their
respective successors and assigns, except that (a) the Borrower may not assign
or transfer any of its rights hereunder without the prior written consent of
the Agent and the Banks; (b) no Bank shall assign or otherwise transfer any of
its rights under its Notes, its Loans or hereunder or otherwise participate any
of its rights under its Notes, its Loans or hereunder other than in accordance
with the following requirements:
(i) not in excess of 49% of a Bank's Commitment may be
assigned, transferred or participated;
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(ii) such Bank shall promptly notify the Borrower and Agent of
such transfer, assignment or participation; and
(iii) any grant of rights to a participant with respect to the
Loans by a Bank shall state that such rights exist only as a result of
the agreement between the participant and such Bank. Such
participation shall not confer on any person (other than the parties
hereto) any rights to vote on, approve or sign amendments or waivers,
any other independent benefit or any legal or equitable right, remedy
or other claim under this Agreement or the Notes, except as otherwise
provided in Section 7.3 hereof.
Except to the extent otherwise required by the context of this Agreement, the
word "Bank" where used in this Agreement shall mean and include any holder of a
Note originally issued to the Bank hereunder, and each such holder of a Note
shall be bound by and have the benefits of this Agreement the same as if such
holder had been a signatory hereto.
9.13 Limitation on Payments. The parties hereto intend to
conform to all applicable laws in effect from time to time limiting the maximum
rate of interest that may be charged or collected. Accordingly, notwithstanding
any other provision of this Agreement or the Notes, the Borrower shall not be
required to make any payment to any Bank, and each Bank shall refund any
payment made by the Borrower, to the extent that such requirement or such
failure to refund would violate applicable laws limiting the maximum amount of
interest which may be charged or collected by the Banks.
9.34 Nonrecourse Obligations. Anything contained in this
Agreement, the Related Documents or the Notes to the contrary notwithstanding,
in any action or proceeding brought on this Agreement, the Related Documents or
the Notes or the indebtedness evidenced thereby, no deficiency Judgment shall
be enforced against the separate assets of the general partners of the Borrower
(other than distributions to such partners made in violation of Section 6.6
hereof), and the liability of such partners for any amounts due under this
Agreement, the Related Documents and the Notes shall be limited to the interest
of such general partners in the collateral described in the Related Documents,
their interests in any other assets of the Borrower and any distributions made
in violation of Section 6.6 hereof. Subject to the preceding sentence, the Bank
may join any present or future general partners of the Borrower, in their
capacities as general partners, as defendants in any legal action it undertakes
to enforce its rights and
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remedies under this Agreement, the Related Documents and the Notes.
Notwithstanding the foregoing, nothing set forth herein shall be deemed to
prohibit the Agent and the Banks from taking legal action(s) and enforcing any
judgment arising therefrom against a present or future general partner of the
Borrower arising by reason of any fraud or intentional misconduct of such
general partner.
IN WITNESS WHEREOF, the parties hereto, by their officers
thereunto duly authorized, have executed and delivered this Agreement as of the
date first above written.
Attest: CABLE TV FUND 14-A/B Venture,
a Colorado general partnership
By: Cable TV Fund 14-A, Ltd.,
Cable TV Fund 14-B, Ltd.,
both Colorado limited
partnerships
By: Jones Intercable, Inc.,
a Colorado corporation,
as general partner of each
/s/ LORRI ELLIS By: /s/ KEVIN P. COYLE
Assistant Secretary Title: Vice President/Treasurer
{CORPORATE SEAL} Address for Notices:
9697 E. Mineral Avenue
Englewood, CO 80112
Attn: Kevin P. Coyle
Phone: (303) 792-3111
Telecopy: (303) 799-1644
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Address for Notices: THE BANK OF NOVA SCOTIA, as Agent
and as a participating Bank
The Bank of Nova Scotia
444 Market Street
Suite 2450 By: /s/ DOUGLAS E. ROPER
San Francisco, CA 94111 Title: Representative
Attn: Douglas Roper
Phone: (415) 986-1100
Telex: 00340602
Telecopy: (415) 397-0701
Address for Notices: PROVIDENT NATIONAL BANK, as a
participating Bank
Provident National Bank
Broad & Chestnut Streets
Philadelphia, PA 19110 By: /s/ SCOTT C. MEVES
Attn: Scott C. Meves Title: Vice President
Phone: (215) 585-6014
Telex: 845270
Telecopy: (215) 585-6680
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