1
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
BY AND AMONG
CABLE TV FUND 12-BCD VENTURE,
THE BANKS IDENTIFIED ON SCHEDULE 1 HERETO,
CORESTATES BANK, N.A.
AND
SOCIETE GENERALE
as Managing Agents
AND
CORESTATES BANK, N.A.
as Administrative Agent
February 12, 1996
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TABLE OF CONTENTS
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SECTION ONE DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.02. Rule of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION TWO - LOAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.01. The Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.02. Promissory Notes.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.03. Banks' Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.04. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.05. Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.06. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.07. Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.08. Reduction and Termination of Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.09. Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.10. Funding Costs and Loss of Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.11. Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.12. Commitment Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.13. Administrative Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.14. Regulatory Changes in Capital Requirements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.15. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION THREE - REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.01. Organization and Good Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.02. Power and Authority; Validity of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.03. No Violation of Laws of Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.04. Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.05. Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.06. Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.07. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.08. Title to Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.09. Partnership Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.10. Accuracy of Information; Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.11. Partnership Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.12. Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.13. Management Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.14. Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.15. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.16. Fees and Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.17. No Extension of Credit for Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.18. Perfection of Security Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.19. Hazardous Wastes, Substances and Petroleum Products . . . . . . . . . . . . . . . . . . . . . . . . 34
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3.20. Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
3.21. Investment Company Act; Public Utility Holding Company Act . . . . . . . . . . . . . . . . . . . . . 35
3.22. Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION FOUR - CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.01. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.02. Each Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION FIVE - AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.01. Existence and Good Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.02. Quarterly Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.03. Annual Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.04. Public Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.05. Quarterly Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.06. Books and Records; Inspection Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.07. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.08. Litigation; Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.09. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.10. Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.11. Additional Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.12. Compliance; Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.13. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.14. Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.15. Debt Service Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.16. Operating Cash Flow to Interest Expense Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.17. Extensions of Franchises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.18. Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.19. Transactions Among Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.20. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.21. Refund Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION SIX - NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.01. Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.02. Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
6.03. Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
6.04. Liens and Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
6.05. Additional Negative Pledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.06. Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.07. Transfer of Assets; Liquidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.08. Acquisitions and Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.09. Payments to Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.10. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.11. Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.12. Insurance Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
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SECTION SEVEN - ADDITIONAL COLLATERAL AND RIGHT OF SET-OFF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
7.01. Additional Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
7.02. Right of Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION EIGHT - DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
8.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
8.02. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION NINE - THE BANKS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
9.01. Application of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
9.02. Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
9.03. Modifications and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.04. Obligations Several . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.05. Banks' Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.06. investigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.07. Powers of Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.08. General Duties of Agent, Immunity and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.09. No Responsibility for Representations or Validity, etc . . . . . . . . . . . . . . . . . . . . . . . 54
9.10. Action on Instruction of Banks; Right to Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.11. Employment of Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.12. Reliance on Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.13. Agent's Rights as a Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.14. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.15. Resignation of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.16. Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
9.17. Collateral Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
9.18. Enforcement by Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION TEN MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
10.01. Non-Recourse. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
10.02. Indemnification and Release Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
10.03. Participations and Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
10.04. Binding and Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
10.05. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
10.06. No Waiver; Delay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
10.07. Modification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
10.08. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
10.09. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
10.10. Payment on Non-Business Days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
10.11. Time of Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
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10.12. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
10.13. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
10.14. Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
10.15. Acknowledgement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
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LIST OF SCHEDULES AND EXHIBITS
Schedule 1: Banks and Maximum Principal Amounts
Exhibit A: Advance Request Form
Exhibit B: Form of Replacement Note
Exhibit C: Disclosure Pursuant to Representations and Warranties
Exhibit D: Funding Costs and Loss of Earnings Calculation
Exhibit E: Opinions of Counsel
Exhibit E-1: Form of Opinion of Colorado Counsel
Exhibit E-2: Form of Opinion of California Counsel
Exhibit E-3: Form of Opinion of Florida Counsel
Exhibit E-4: Form of Opinion of New Mexico Counsel
Exhibit E-5: Form of Opinion of FCC Counsel
Exhibit F: Parties' Addresses for Notices
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
THIS AGREEMENT is made this 12th day of February, 1996, by and among
CABLE TV FUND 12-BCD VENTURE, a joint venture general partnership consisting of
three Colorado limited partnerships with offices at 9697 East Mineral Avenue,
Englewood, Colorado 80112 ("Borrower"); CORESTATES BANK, N.A., a national
banking association with offices at 1339 Chestnut Street, Philadelphia, PA
19101-7618 ("CoreStates," and in its capacity as administrative agent
hereunder, "Administrative Agent"); SOCIETE GENERALE, a French bank acting
through its New York branch with offices at 1221 Avenue of the Americas, New
York, New York 10020 ("Societe Generale," and together with CoreStates in their
capacity as managing agents hereunder, "Managing Agents"); and the other banks
identified on Schedule 1 attached hereto (together with CoreStates and Societe
Generale, each individually a "Bank" and individually and collectively,
"Banks").
W I T N E S S E T H:
WHEREAS, Borrower is a joint venture general partnership formed
pursuant to the Joint Venture Agreement dated as of March 17, 1986 (as amended,
the "Joint Venture Agreement") by and among Cable TV Fund 12-B, Ltd., Cable TV
Fund 12-C, Ltd. and Cable TV Fund 12-D, Ltd., each a Colorado limited
partnership (each individually a "Partner," and individually and collectively,
the "Partners"); and
WHEREAS, Borrower is the owner of certain cable television franchises,
related contract rights and operating cable television properties and systems
in and around Antelope Valley (Palmdale/Lancaster/California City/Edwards Air
Force Base), California and the development of Rancho Vista, Palmdale,
California (as further defined below, the "Palmdale System"), Albuquerque, New
Mexico (as further defined below, the "Albuquerque System") and the City of
Tampa, Florida (as further defined below, the "Tampa System"); and
WHEREAS, Borrower and NationsBank of Texas, N.A., Royal Bank of
Canada, Shawmut Bank Connecticut, N.A., Colorado National Bank, and CoreStates
for itself and as agent (the "Existing Banks") are parties to that certain
Amended and Restated Loan Agreement dated March 31, 1992, as amended by
Amendment No. 1 dated September 30, 1994 (as amended, the "Existing Loan
Agreement"), pursuant to which the Existing Banks agreed to advance to Borrower
up to an aggregate principal amount outstanding at any time of Eighty-Seven
Million Dollars ($87,000,000); and
WHEREAS, Borrower desires to amend and restate the commitment under
the Existing Loan Agreement and to borrow hereunder, and Banks on a several
basis are willing to lend, on
8
the terms and conditions hereinafter set forth, up to One Hundred Twenty
Million Dollars ($120,000,000) for the purposes set forth herein.
NOW, THEREFORE, in consideration of the promises and the agreements
hereinafter set forth, and intending to be legally bound hereby, the parties
hereto agree as follows:
SECTION ONE
DEFINITIONS
1.01. Definitions. When used in this Agreement, the following terms
shall have the meaning set forth below; certain terms relating to interest
rates are defined in Paragraph 2.06 and shall have the meanings set forth
thereunder.
"Administrative Agent" shall mean CoreStates in its capacity as
administrative agent for the Banks hereunder, and its successors and assigns in
such capacity.
"Advance Request Form" shall mean the certificate in the form attached
hereto as Exhibit A to be delivered by Borrower to Administrative Agent as a
condition of each advance of the Loan pursuant to Paragraph 2.07 hereof.
"Affiliate" of any person or entity shall mean (i) any person or
entity directly or indirectly owning, controlling or holding five percent (5%)
or more of the outstanding beneficial interest in such person or entity, (ii)
any person or entity five percent (5%) or more of the outstanding beneficial
interest of which is directly or indirectly owned, controlled, or held by such
person or entity, (iii) any person or entity directly or indirectly
controlling, controlled by, or under common control with such other person or
entity, or (iv) any officer, director, partner or employee of such person or
entity.
"Agent" shall mean individually, and "Agents" shall mean individually
and collectively, Administrative Agent and Managing Agents.
"Agreement" shall mean this Second Amended and Restated Credit
Agreement and all the exhibits and schedules hereto, as amended, modified or
restated from time to time.
"Albuquerque System" shall mean the cable franchises, related contract
rights and operating cable television properties and systems of Borrower
located in and around the City of Albuquerque, New Mexico, as more particularly
described on Exhibit C attached hereto.
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"Annualized Operating Cash Flow" shall mean as of any date of
determination four (4) times Borrower's Operating Cash Flow for the fiscal
quarter of the Borrower most recently ended.
"Bank" shall mean individually, and "Banks" shall mean individually
and collectively, CoreStates, Societe Generale and the other Banks identified
on Schedule 1 attached hereto.
"Basic Rate" shall mean the minimum standard monthly fees and charges
for the minimum level of "basic services" or "expanded basic services" (as such
terms are commonly used with respect to the Systems).
"Basic Subscribers" shall mean the number of subscribers in the
Systems (excluding "second connects" as such term is commonly understood in the
cable television industry) who are (a) currently receiving cable television
signals supplied by Borrower; (b) have commenced payment for such signals at
the Basic Rate, directly or indirectly, under subscriptions with Borrower; and
(c) are not sixty (60) or more days delinquent in payments as determined on a
contractual basis. 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 does obtain 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 and expanded basic service by (ii) the
applicable monthly rate for expanded basic services for the System in which
such building or dwelling is located. Residential households (other than in a
multiple residential dwelling) paying for services under any form of deferral
payment arrangement shall not be included.
"Borrower" shall mean Cable TV Fund 12-BCD Venture, a joint venture
general partnership comprised of three Colorado limited partnerships pursuant
to the Joint Venture Agreement by and among Cable TV Fund 12-B, Ltd., Cable TV
Fund 12-C, Ltd. and Cable TV Fund 12-D, Ltd., owning on the date of this
Agreement the respective percentages of partnership interests in Borrower set
forth on Exhibit C attached hereto.
"Business Day" shall mean any day not a Saturday, Sunday or public
holiday under the laws of the Commonwealth of Pennsylvania, the State of
Colorado or the State of New York.
-3-
10
"Cable Act" shall mean the Cable Communications Policy Act of 1984, as
amended, and all rules and regulations promulgated thereunder, as from time to
time in effect.
"Capital Expenditures" shall mean cash expenditures or the incurrence
of indebtedness for any fixed assets or improvements, replacements,
substitutions or additions thereto, which have a useful life of more than one
(1) year, including the direct or indirect acquisition of such assets by way of
increased product service charges, offset items or otherwise.
"Capital Leases" shall mean capital leases and subleases, as defined
in the Financial Accounting Standards Board Statement of Financial Accounting
Standards No. 13 dated November 1976, as amended and updated from time to time.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
all rules and regulations promulgated thereunder, as from time to time in
effect.
"Collateral" shall mean the collateral security afforded to CoreStates
as collateral security agent for the Banks and the holders of the Insurance
Notes under the Collateral Security Documents.
"Collateral Security Documents" shall mean collectively, the Security
Agreement and financing statements filed pursuant thereto, and the
Intercreditor Agreement, in each case required to be delivered pursuant to
Paragraph 4.01 hereof, and any additional documents granting or governing
security for the Loan or the Insurance Notes.
"Commitment" shall mean the maximum aggregate principal amount which
Banks have agreed to advance under Section Two hereof, being on the date of
this Agreement One Hundred Twenty Million Dollars ($120,000,000).
"Communications Act" shall mean the Federal Communications Act of
1934, as amended, and all rules and regulations promulgated thereunder, as from
time to time in effect.
"Copyright Act" shall mean title 17 of the United States Code, as
amended, and the rules and regulations promulgated thereunder, as from time to
time in effect.
"CoreStates" shall mean CoreStates Bank, N.A., a national banking
association.
"Debt Service" shall mean, for any fiscal period of Borrower, the
payment or accrual of principal, interest and fees (including without
limitation the commitment fee set forth in
-4-
11
Paragraph 2.12 hereof) due on Funded Debt in such period plus any amounts paid
or accrued under Capital Leases for such period; provided, however, that for
purposes of determining Debt Service for any fiscal quarter of Borrower,
one-half (1/2) of each semiannual principal and interest payment due on the
Insurance Notes shall be allocated on an equal basis to each of two (2)
quarters in each such semi-annual period.
"Default" shall mean an event or circumstance which with the giving of
notice or the passage of time or both would constitute an Event of Default.
"Depreciation" shall mean for any fiscal quarter of Borrower, the sum
of all Borrower's depreciation and amortization expenses for such quarter, as
determined in accordance with GAAP.
"Environmental Control Statutes" shall mean all federal, state or
local laws and regulations governing the control, removal, spill, release or
discharge of hazardous or toxic wastes or substances, pollutants, contaminants,
or petroleum products, as in effect from time to time, including without
limitation as provided in the provisions of and the regulations under the
Comprehensive Environmental Response, Compensation and Liability Act
("CERCIA"), the Solid Waste Disposal Act, the Clean Water Act, the Clean Air
Act, the Resource Conservation and Recovery Act of 1976, the Federal Water
Pollution Control Act Amendments of 1972, the Hazardous Materials
Transportation Act, and the Occupational Safety and Health Act, and all
amendments to the foregoing.
"EPA" shall mean the United States Environmental Protection Agency, or
any successor thereto.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, and all rules and regulations promulgated thereunder, as from time
to time in effect.
"ERISA Affiliate" shall mean any company, whether or not incorporated,
and any other entity which is considered a single employer or an affiliated
service group with Borrower under Titles I, II or IV of ERISA.
"Event of Default" shall mean each of the events described in
Paragraph 8.01 hereof.
"Existing Banks" shall mean NationsBank of Texas, N.A., Shawmut Bank
Connecticut, N.A., Colorado National Bank, Royal Bank of Canada and CoreStates,
in their capacity as "Banks" (and, in the case of CoreStates, "Agent") under
the Existing Loan Agreement.
-5-
12
"Existing Loan Agreement" shall mean the Amended and Restated Loan
Agreement by and among Borrower, the Existing Banks and CoreStates as Agent,
dated March 31, 1992, as amended by Amendment No. 1 dated September 30, 1994.
"FCC" shall mean the Federal Communications Commission, or any
successor thereto.
"Funded Debt" shall mean, as of the date of determination, (i) the
aggregate principal amount of all of Borrower's indebtedness for (a) borrowed
money, other than trade indebtedness incurred in the normal and ordinary course
of business for value received; (b) Capital Leases; (c) installment purchases
of real or personal property; and (d) obligations under direct or indirect
guarantees in respect of, and obligations (contingent or otherwise) to
purchase or otherwise acquire, or otherwise to assure a creditor against loss
in respect of, indebtedness or obligations of persons or entities other than
Borrower of the kinds referred to in clauses (a) through (c) above, less (ii)
indebtedness of the kind referred to in clause (i)(a) of Borrower to Jones
subordinated to the Loan pursuant to the Subordination Agreement.
"GAAP" shall mean generally accepted accounting principles applied on
a consistent basis, set forth in the Opinions of the Accounting Principles
Board of the American Institute of Certified Public Accountants and/or in
statements of the Financial Accounting Standards Board and/or in such other
statements by such other entity as Administrative Agent may reasonably approve,
which are applicable in the circumstances as of the date in question; and the
requisite that such principles be applied on a consistent basis shall mean that
the accounting principles observed in a current period are comparable in all
material respects to those applied in a preceding period.
"Gross Operating Revenues" shall mean for any fiscal period of
Borrower for which such sum is being computed the sum of all revenues of
Borrower from the operation of its businesses during such period, as determined
in accordance with GAAP.
"Home Office Allocations" shall mean for any fiscal period of Borrower
for which such sum is being computed the amount of reimbursement payable by
Borrower to Jones for general overhead and administrative expenses pursuant to
Section 2 of the Management Agreement during such period.
"Insurance Notes" shall mean those certain 8.64% Senior Secured Notes
issued by Borrower due March 31, 2000 in the aggregate principal amount of
Ninety-Three Million Dollars ($93,000,000).
-6-
13
"Intercreditor Agreement" shall mean the amended and restated
intercreditor and collateral agency agreement required to be executed and
delivered pursuant to Paragraph 4.01(e) hereof, as amended, modified or
restated from time to time.
"Interest Expense" shall mean for any fiscal period of Borrower the
amount required to be paid or accrued by Borrower as interest and fees on
Funded Debt.
"Joint Venture Agreement" shall mean the Joint Venture Agreement dated
as of March 17, 1986, by and among the Partners, as amended from time to time
with the consent of Required Banks.
"Jones" shall mean Jones Intercable, Inc., a Colorado corporation
which is the sole general partner of each of the Partners.
"Leverage Ratio" shall mean, as of any date of determination, the
ratio of Funded Debt to Annualized Operating Cash Flow.
"Loan" shall mean the outstanding principal balance of indebtedness
advanced under the Commitment, together with interest accrued thereon and fees
and expenses incurred in connection therewith.
"Local Authorities" shall mean individually and collectively the state
and local governmental authorities which govern the cable television systems
owned by Borrower, including but not limited to the Systems.
"Managing Agents" shall mean CoreStates and Societe Generale, in their
capacity as managing agents hereunder, and their successors and assigns in such
capacity.
"Management Agreement" shall mean the Management Agreement dated as of
April 30, 1986, as amended, by and between Borrower and Jones pursuant to which
Jones is employed as the manager of the Systems, as amended, modified or
restated from time to time, as permitted by this Agreement.
"Management Fees" shall mean for any fiscal quarter of Borrower the
amount of management fees payable by Borrower to Jones pursuant to Section 2 of
the Management Agreement during such fiscal quarter.
"Maximum Principal Amount" shall mean the maximum principal amount of
the Commitment which each Bank has agreed to lend as set forth in Paragraph
2.03 hereof.
"Net Cash Proceeds" shall mean, with respect to any sale of a System
permitted pursuant to Paragraph 6.07 hereof, the
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14
cash proceeds received by Borrower in connection with such sale less related
sales expenses and amounts distributed to the Partners on account of tax
liabilities in connection with such sale as permitted by Paragraph 6.09(i)(A)
hereof.
"Net Income" shall mean, for any period, Borrower's net income plus,
to the extent taken into account in calculating net profit, taxes accrued but
not actually paid in cash for such period as determined in accordance with
GAAP.
"Note" shall mean individually, and "Notes" shall mean individually
and collectively, the amended and restated promissory notes of Borrower in the
form of Exhibit B attached hereto in favor of each Bank required to be executed
and delivered by Borrower to Banks pursuant to Paragraph 4.01(a) hereof, as
amended, modified, extended, consolidated or restated from time to time.
"Note Agreements" shall mean the Note Purchase Agreements dated March
31, 1992 by and between Borrower and each of the Purchasers listed on Schedule
1 thereto pursuant to which Borrower issued the Insurance Notes, as amended by
Amendment No.1 to Note Purchase Agreement dated as of March 31, 1994, Amendment
No. 2 dated as of September 30, 1994 and Amendment No. 3 dated of even date
herewith, and as may be further amended, modified or restated in accordance
with the terms hereof and thereof.
"Operating Cash Flow" shall mean, for any fiscal period of Borrower,
(i) the sum of Net Income, plus the following items, in each case to the extent
taken into account in calculating Net Income for such period: (a) Depreciation,
(b) Interest Expense, (c) Management Fees paid or accrued (not including
payments of amounts previously accrued), and (d) Home Office Allocations paid
or accrued (not including payments of amounts previously accrued), less (ii)
any non-cash gains or income of Borrower and any extraordinary income of
Borrower, determined in accordance with GAAP.
"Palmdale System" shall mean the cable television franchises, related
contract rights and operating cable television properties and systems of
Borrower in and around Antelope Valley (Palmdale/Lancaster/California
City/Edwards Air Force Base), California, and in the development of Rancho
Vista, Palmdale, California, as more particularly described on Exhibit C
attached hereto.
"Partners" shall mean, individually and collectively, the three
limited partnerships comprising Borrower, namely, Cable TV Fund 12-B, Ltd.,
Cable TV Fund 12-C, Ltd., and Cable TV Fund 12-D, Ltd., each a Colorado limited
partnership.'
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15
"Partnership Agreement" shall mean individually, and "Partnership
Agreements" shall mean individually and collectively, the limited partnership
agreements of each of the Partners.
"Pay Units" shall mean the number of pay cable television services
subscribed to by Basic Subscribers in the Systems.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Permitted Investments" shall mean (i) investments in commercial paper
maturing in 180 days or less from the date of issuance which is rated A1 or
better by Standard & Poor's Corporation or P1 or better by Moody's Investors
Services, Inc.; (ii) investments in direct obligations of the United States of
America or obligations of any agency thereof which are guaranteed by the United
States of America, provided that such obligations mature within twelve (12)
months of the date of acquisition thereof; and (iii) investments in
certificates of deposit maturing within one (1) year from the date of
acquisition thereof issued by a Bank or bank or trust company organized under
the laws of the United States or any state thereof, having capital, surplus and
undivided profits aggregating at least $500,000,000 and the long-term
indebtedness of which is rated A+ or better by Moody's Investors Services, Inc.
or equivalent by Standard & Poor's Corporation.
"Plan" shall mean any pension benefit or welfare benefit plan as
defined in Section 3(l), (2) or (3) of ERISA covering employees of Borrower or
any ERISA Affiliate.
"Pro Rata Share" shall mean as to a Bank the ratio which the
outstanding principal balance of its portion of the Loan hereunder bears to the
aggregate outstanding principal balance of the Loan at any time; or if no
indebtedness is outstanding hereunder, the ratio that its Maximum Principal
Amount bears to the Commitment.
"Refund Liability" shall have the meaning set forth in Paragraph 3.22
hereof.
"Required Banks" shall mean those Banks (which may include Agents)
having in the aggregate a Pro Rata Share equal to or in excess of sixty-six and
two-thirds percent (66-2/3%).
"Restricted Payments" shall mean (i) redemptions, repurchases,
dividends and distributions of any kind in respect of partnership interests in
Borrower; (ii) payments of principal and interest on Subordinated Debt; and
(iii) payments of Home Office Allocations and Management Fees.
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"Security Agreement" shall mean the amended and restated security
agreement required to be executed and delivered by Borrower pursuant to
Paragraph 4.01(b) hereof, as amended, modified or restated from time to time.
"Societe Generale" shall mean Societe Generale, a French bank.
"Subordinated Debt" shall mean indebtedness and obligations of
Borrower subordinated to the Loan with subordination provisions in form and
substance satisfactory to Banks, including without limitation any indebtedness
of Borrower to Jones and accrued and unpaid Home Office Allocations and
Management Fees, subject to the Subordination Agreement.
"Subordination Agreement" shall mean the amended and restated
subordination agreement that Jones is required to deliver to Administrative
Agent pursuant to Paragraph 4.01(f) hereof, as amended, modified or restated
from time to time.
"Subsidiary" shall mean any corporation of which the Borrower,
directly or indirectly, owns more than fifty percent (50%) of any class or
classes of securities.
"System" shall mean individually, and "Systems" shall mean
individually and collectively, the Palmdale System, the Tampa System and the
Albuquerque System, together with any additional cable television systems
acquired by Borrower in accordance with Paragraph 6.08 hereof, but not
including any cable television system which has been sold in accordance with
Paragraph 6.07 hereof.
"Tampa System" shall mean the cable television franchises, related
contract rights and operating properties and systems of Borrower in and around
the City of Tampa, Florida, as more particularly described on Exhibit C
attached hereto.
"Termination Date" shall mean the earlier of (i) December 31, 1999 or
(ii) the date on which the Commitment is terminated pursuant to Paragraph 2.08
or 8.02 hereof.
1.02. Rule of Construction. Except as otherwise provided herein,
financial and accounting terms used in the foregoing definitions or elsewhere
in this Agreement shall be defined in accordance with GAAP.
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17
SECTION TWO
LOAN
2.01. The Commitment.
(a) From time to time prior to the Termination Date and subject to
the terms and conditions hereinafter set forth, each Bank on a several basis up
to its respective maximum Principal Amount will make advances to Borrower, and
Borrower may repay at the offices of Administrative Agent and reborrow under
the Commitment, an aggregate principal amount not to exceed at any time
outstanding the aggregate Commitment as from time to time in effect, being on
the date hereof One Hundred Twenty Million Dollars ($120,000,000).
(b) This Agreement amends and restates the Existing Loan
Agreement, provided, however, that the execution and delivery of this
Agreement, the Collateral Security Documents and the other documents and
agreements executed in connection herewith shall not in any circumstances be
deemed to have terminated, extinguished or discharged Borrower's indebtedness
under the Existing Loan Agreement or the collateral security therefore (except
for the mortgages and leasehold assignments executed and delivered in
connection with the Existing Loan Agreement, which are being released as
provided herein), all of which indebtedness and collateral security shall
continue under and be governed by this Agreement, the Collateral Security
Documents and the other documents and agreements executed and delivered in
connection herewith.
(c) On the effective date of this Agreement:
(i) each Bank shall pay to Administrative Agent immediately
available funds equal to the amount, if any, by which its Pro Rata Share of the
outstanding loan under the Existing Loan Agreement is less than its Pro Rata
Share of the outstanding Loan following the effectiveness of this Agreement (a
Bank that is not an Existing Bank being treated as having a zero Pro Rata Share
under the Existing Loan Agreement), and such amounts shall be allocated to each
Bank and each Existing Bank as appropriate so that each Bank has its
corresponding Pro Rata Share hereunder and each Existing Bank that is not
continuing as a Bank hereunder is repaid the entire principal amount of its Pro
Rata Share of the outstanding loan under the Existing Loan Agreement; and
(ii) Borrower (A) shall pay to Administrative Agent all accrued
and unpaid interest and commitment fees in accordance with the Existing Loan
Agreement, which interest and commitment fees shall be allocated to Existing
Banks in accordance with the Existing Loan Agreement, and (B)
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18
shall pay to each Existing Bank all funding costs and loss of earnings (except
for loss of the applicable Margin) which may arise in connection with the
payments made pursuant to Paragraph 2.1(c)(i) above, as calculated by each
Existing Bank in accordance with Exhibit D to the Existing Loan Agreement.
2.02. Promissory Notes.
(a) The indebtedness of Borrower to each Bank under the Loan will
be evidenced by a Note executed by Borrower in favor of such Bank in the form
of Exhibit B attached hereto. The original principal amount of each Bank's Note
will be its respective Maximum Principal Amount; provided, however, that
notwithstanding the face amount of any Note, Borrower's liability under each
such Note shall be limited at all times to its actual indebtedness (principal,
interest, fees, premiums and expenses) then outstanding hereunder.
(b) The Notes shall collectively replace and supersede the Second
Amended and Restated Promissory Notes of Borrower in favor of Existing Banks
(the "Prior Notes"); provided, however, that the execution and delivery of the
Notes shall not in any circumstance be deemed to have terminated, extinguished
or discharged Borrower's indebtedness under the Prior Notes, all of which
indebtedness and the collateral security therefor (except as expressly set
forth herein) shall continue under and be governed by the Notes. The Notes are
a replacement, consolidation, amendment and restatement of the Prior Notes and
are NOT A NOVATION. Nothing herein is intended to modify or in any way affect
the priority of the liens which secure the Notes in favor of the Banks.
2.03. Banks' Participation. Banks shall participate in the Loan in
the Maximum Principal Amounts and percentages set forth on Schedule 1 attached
hereto.
2.04. Use of Proceeds. Funds advanced under the Loan shall be used
solely to refinance indebtedness of Borrower under the Existing Loan Agreement,
to fund scheduled payments of principal under the Insurance Notes, to finance
acquisitions permitted by Paragraph 6.08 hereof, to finance Capital
Expenditures permitted hereunder, and for general corporate purposes of
Borrower, including payment of Management Fees and Home Office Allocations
permitted by Paragraph 6.09 hereof.
2.05. Repayment.
(a) Scheduled Repayment. The outstanding principal balance of the
Loan shall be due and payable in full on the Termination Date; provided,
however, that, so long as no Event of Default or Default is then in existence,
Borrower in its sole discretion may elect to convert such outstanding balance
to
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a term loan in accordance with the terms hereof. Borrower shall notify the
Administrative Agent of its election to convert the Loan to a term loan by
delivering a written notice to the Administrative Agent no later than September
1, 1999. If Borrower so elects to convert the Loan to a term loan, then the
aggregate outstanding principal balance under the Loan on the Termination Date
shall be due and payable in consecutive quarterly installments, commencing on
March 31, 2000 and continuing quarterly on the last Business Day of each June,
September, December and March thereafter as set forth below until the Loan has
been repaid in full on or before December 31, 2004. The amount of each
quarterly payment during the period set forth in the left-hand column below
shall be the applicable percentage set forth in the right-hand column below
times the principal balance of the Loan outstanding on the Termination Date:
Percentage of Loan
Outstanding on Termination
Date to be Paid on Each
Quarterly Payment Date
Period During Period
------ --------------------------
1/l/00 - 12/31/00 2.5%
1/l/01 - 12/31/03 6.25%
1/l/04 - 12/31/04 3.75%
Notwithstanding the foregoing, the aggregate outstanding balance of the Loan
shall be due and payable on the earlier of December 31, 2004 or the date of
acceleration of the Loan in accordance with Paragraph 8.02 hereof;
(b) Sale of a System. In addition to the payments required by
subparagraph (a) of this Paragraph 2.05, upon the sale of a System as permitted
by Paragraph 6.07 hereof Borrower shall apply the Net Cash Proceeds of such
sale as and when received to the Loan and the Insurance Notes on a pro rata
basis based on the aggregate outstanding principal balance of the Loan and the
Insurance Notes, provided, however, that if any holders of the Insurance Notes
shall elect pursuant to the terms of the Insurance Notes not to receive such
payment, then all such Net Cash Proceeds shall be allocated between the Loan
and the holders of the Insurance Notes electing to be prepaid based on the
aggregate outstanding principal balance of the Loan and the aggregate
outstanding principal balance of the Insurance Notes as to which the holders
have elected to be prepaid. Any payments of the Loan pursuant to the foregoing
sentence shall be made together with all amounts required to be paid pursuant
to Paragraph 2.10 hereof. Any payments made under this Paragraph 2.05(b) shall
be applied first to accrued and unpaid interest hereunder and then to principal
in the inverse order of the maturity of the installments thereof, first to
Portions bearing interest based on the Base Rate and then to Portions
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20
bearing interest based on the Adjusted CD Rate or Adjusted Libor Rate, as
Borrower may elect. Payments made under this Paragraph 2.05(b) with respect to
the sale of any System other than the Tampa System prior to the Termination
Date shall permanently reduce the Commitment in accordance with Paragraph 2.09
hereof. In the event that the pro rata portion of the Net Cash Proceeds to be
applied to or in repayment of the Loan in accordance herewith exceeds the
outstanding balance of the Loan, then the Commitment shall be reduced by the
full amount of such pro rata portion of the Net Cash Proceeds, and the
outstanding balance of the Loan shall be repaid in its entirety out of the pro
rata portion of the Net Cash Proceeds, with the balance of such pro rata
portion to be retained by the Borrower.
2.06. Interest. Portions of the Loan shall bear interest on the
outstanding principal amount thereof in accordance with the following
provisions:
(a) Definitions. As used in this Paragraph 2.06, the following
words and terms shall have the meanings specified below:
"Adjusted CD Rate" shall mean, for any Interest Period, the rate per
annum (rounded upwards, if necessary, to the next 1/100 of 1%) determined
pursuant to the following formula:
Adjusted = Certificate of Deposit Rate + AR
---------------------------
CD Rate 1 - Reserve Percentage
Where, AR = Assessment Rate
For purposes hereof, the term "Certificate of Deposit Rate" shall mean, as
applied to a Portion, the arithmetic average of the prevailing rates per annum
bid at or about nine o'clock (9:00) a.m. Philadelphia time or as soon
thereafter as practicable on the first day of such Interest Period by two (2)
or more New York certificate of deposit dealers of recognized standing for the
purchase at face value of negotiable certificates of deposit of Administrative
Agent in amounts substantially equal to such Portion of the outstanding
principal amount of the Loan as to which Borrower may elect the Adjusted CD
Rate to be applicable and with a maturity of comparable duration to the
Interest Period selected by Borrower.
"Adjusted Libor Rate" shall mean, for any Interest Period, the rate
per annum (rounded upwards, if necessary to the next 1/16 of 1%) determined
pursuant to the following formula:
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21
Adjusted Libor Rate = Libor Rate
----------------------
1 - Reserve Percentage
For purposes hereof, the term "Libor Rate" shall mean, as applied to a Portion,
the arithmetic average of the rates of interest per annum (rounded upwards, if
necessary to the next 1/16 of 1%) at which Administrative Agent is offered
deposits of United States dollars in the London Interbank Market at or about
nine o'clock (9:00) a.m. Philadelphia time two (2) London Business Days prior
to the commencement of such Interest Period in amounts substantially equal to
such Portion as to which Borrower may elect the Adjusted Libor Rate to be
applicable with a maturity of comparable duration to the Interest Period
selected by Borrower.
"Applicable Base Rate Margin," "Applicable CD Margin" and "Applicable
Libor Margin" shall mean with respect to each Portion bearing interest based on
the Base Rate, Adjusted CD Rate or Adjusted Libor Rate, respectively, the
percentage per annum set forth in the appropriate column below that corresponds
to the Borrower's Leverage Ratio as of the date of determination set forth in
the left-hand column below, as calculated based on the quarterly compliance
certificate of Borrower most recently delivered pursuant to Paragraph 5.06
hereof:
Applicable Applicable Applicable
Base Rate Libor CD
Leverage Ratio Margin Margin Margin
- -------------- ---------- ---------- ----------
4.0 or greater 0.375% 1.375% 1.500%
3.5 or greater but
less than 4.0 0.125% 1.125% 1.250%
3.0 or greater
but less than 3.5 0.000% 0.875% 1.000%
Less than 3.0 0.000% 0.625% 0.750%
The Applicable Base Rate Margin, Applicable CD Margin and Applicable Libor
Margin shall adjust automatically, as appropriate, (i) with respect to Portions
bearing interest based on the Base Rate, on the fifth (5th) Business Day
following delivery to Administrative Agent of a quarterly compliance
certificate of Borrower in accordance with Paragraph 5.06 hereof indicating a
change in the Leverage Ratio to a new Applicable Base Rate Margin, and (ii)
with respect to outstanding Portions bearing interest based on the Adjusted CD
Rate or Adjusted Libor Rate, on the first day of the next Interest Period
following delivery of such compliance certificate.
"Assessment Rate" shall mean for any Interest Period the annual
assessment rate (rounded upwards, if necessary, to the next higher 1/100 of 1%)
incurred by a Bank to the Federal Deposit Insurance Corporation (or any
successor) for such Corporation's (or such successor's) insuring time deposits
made
-15-
22
in United States Dollars at offices of such Bank in the United States during
the most recent annual period for which such rate has been determined prior to
the commencement of any Interest Period during which the Adjusted CD Rate is
applicable. The Adjusted CD Rate shall be adjusted on and as of the effective
date of any change in the Assessment Rate.
"Base Rate" shall mean the higher of (a) the Federal Funds Rate plus
one half of one percent (1/2%) per annum or (b) the Prime Rate, such rate
changing when and as the Federal Funds Rate or Prime Rate change.
"Federal Funds Rate" shall mean for any day the daily rate of interest
announced from time to time by the Board of Governors of the Federal Reserve
System in publication H.15 (or any successor) as the "Federal Funds
(Effective)" rate for such day, or if no such rate is so announced for such
day, the next preceding day for which such rate is so announced.
"Interest Period" shall mean, with respect to the Adjusted CD Rate, a
period of thirty (30), sixty (60), ninety (90), one hundred eighty (180) or (if
available) three hundred sixty (360) days' duration, as Borrower may elect, and
with respect to the Adjusted Libor Rate, a period of one (1), two (2), three
(3), six (6) or (if available) twelve (12) months' duration, as Borrower may
elect; provided, however, that (a) interest shall accrue from and including the
first day of each Interest Period to, but excluding, the day on which any
Interest Period expires; (b) with respect to any Interest Period for a Portion
bearing interest based on the Adjusted CD Rate, any Interest Period which would
otherwise end on a day which shall not be a Business Day shall be
extended to the next succeeding Business Day; (c) with respect to any Interest
Period for a Portion bearing interest based on the Adjusted Libor Rate, any
Interest Period which would otherwise end on a day which is not a London
Business Day shall be extended to the next succeeding London Business Day
unless such Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding London Business Day; and (d)
with respect to an Interest Period for a Portion bearing interest based on the
Adjusted Libor Rate which begins on the last London Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period), the Interest Period shall
end on the last London Business Day of a calendar month.
"London Business Day" shall mean any Business Day on which banks in
London, England are open for business, including dealing in United States
dollars.
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23
"Portion" shall mean a portion of the Loan as to which a specific
interest rate and, except in the case of a Portion bearing interest based on
the Base Rate, Interest Period has been elected by Borrower.
"Prime Rate" shall mean the rate of interest announced by
Administrative Agent from time to time as its prime rate.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System, comprising Part 204 of Title 12, Code of
Regulations, as amended, and any successor thereto.
"Reserve" shall mean, for any day, that reserve amount which is in
effect (whether or not actually incurred) with respect to a Bank on such day,
as prescribed by the Board of Governors of the Federal Reserve System (or any
successor or any other banking authority to which a Bank is subject including
any board or governmental or administrative agency of the United States or any
other jurisdiction to which a Bank is subject), for determining the maximum
reserve requirement (including without limitation any basic, supplemental,
marginal or emergency reserves) for (i) such Bank's negotiable non-personal
time deposits in United States Dollars with maturities of comparable duration
to the Interest Period elected by Borrower, or (ii) Eurocurrency liabilities as
defined in Regulation D.
"Reserve Percentage" shall mean, for a Bank on any day, that
percentage (expressed as a decimal) prescribed by the Board of Governors of the
Federal Reserve System (or any successor or any other banking authority to
which a Bank is subject, including any board or governmental or administrative
agency of the United States or any other jurisdiction to which a Bank is
subject), for determining the reserve requirement (including without limitation
any basic, supplemental, marginal or emergency reserves) for: (i) a Bank's
negotiable, non-personal time deposits in United States Dollars with maturities
of comparable duration to the Interest Period selected by Borrower, or (ii)
deposits of United States Dollars in a non-United States or an international
banking office of a Bank used to fund a Portion subject to an Adjusted Libor
Rate or any loan made with the proceeds of such deposit. The Adjusted Libor
Rate and Adjusted CD Rate shall be adjusted on and as of the effective day of
any change in the Reserve Percentage.
(b) Interest on the Loan.
(i) At Borrower's election in accordance with the
provisions of Paragraph 2.06(c) below, in the absence of an Event of Default or
Default hereunder and prior to maturity, any Portion of the Loan shall bear
interest at any one of the following rates:
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(A) Base Rate Plus Applicable Margin. The Base Rate
plus the Applicable Base Rate Margin.
(B) Adjusted Libor Rate Plus Applicable Margin. The
Adjusted Libor Rate plus the Applicable Libor Margin.
(C) Adjusted CD Rate Plus Applicable Margin. The
Adjusted CD Rate plus the Applicable CD Margin.
(ii) Notwithstanding the foregoing, upon (A) the
existence and during the continuation of an Event of Default or Default
hereunder, and (B) written notice by Administrative Agent (upon the direction
of Required Banks) to Borrower of the existence of an Event of Default or
Default hereunder, including after maturity and upon judgment, Borrower hereby
agrees to pay to Banks interest on the outstanding principal balance of the
Loan at the rate of two percent (2%) per annum in excess of the rates then
available to and elected by the Borrower for each Portion then outstanding
through the end of the applicable Interest Periods and, thereafter, at the rate
of two and three-eighths percent (2-3/8%) per annum in excess of the Base Rate.
(c) Procedure for Determining Interest Periods and Rates of
Interest.
(i) If Borrower elects the Base Rate to be applicable to
a Portion, Borrower must notify Administrative Agent of such election prior to
twelve o'clock (12:00) noon Philadelphia time one (1) Business Day prior to the
proposed application of such rate. If Borrower elects the Adjusted Libor Rate
to be applicable to a Portion, Borrower must notify Administrative Agent of
such election and the Interest Period selected prior to twelve o'clock (12:00)
noon Philadelphia time at least three (3) London Business Days prior to such
advance or the commencement of the proposed Interest Period. If Borrower elects
the Adjusted CD Rate to be applicable to a Portion, Borrower must notify
Administrative Agent of such election and the Interest Period selected prior to
twelve o'clock (12:00) noon Philadelphia time at least two (2) Business Days
prior to the commencement of the applicable Interest Period. If Borrower does
not provide the applicable notice for the Adjusted Libor Rate or Adjusted CD
Rate, then Borrower shall be deemed to have requested that the Base Rate shall
apply to any Portion as to which the Interest Period is expiring and to any new
advance of the Loan until Borrower shall have given notice of a change in or
determination of the rate of interest in accordance with this Paragraph
2.06(c).
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(ii) Borrower shall not elect more than five (5)
different Portions (other than Portions bearing interest at the Base Rate) to
be applicable to the Loan at one time. Portions as to which the Adjusted Libor
Rate or the Adjusted CD Rate is to be applicable shall be in the minimum amount
of $5,000,000 and additional multiples of $1,000,000. Portions as to which the
Base Rate is to be applicable shall be in the amount of $1,000,000 and
additional multiples of $250,000.
(d) Payment and Calculation of Interest. Interest shall be due and
payable on the last day of each Interest Period for each Portion; provided,
however, that (i) with respect to Portions which bear interest at (A) the
Adjusted CD Rate having an Interest Period in excess of ninety (90) days, or
(B) the Adjusted Libor Rate having an Interest Period in excess of three (3)
months, the Borrower shall pay interest on the ninetieth (90th), one hundred
eightieth (180th) and two hundred seventieth (270th) days of such Interest
Period and on the expiration of the Interest Period; and (ii) with respect to
Portions which bear interest at the Base Rate, the Borrower shall pay interest
on the last Business Day of each fiscal quarter commencing on the first such
date after the first advance which bears interest based on the Base Rate.
Interest shall be calculated in accordance with the provisions of Paragraph
2.06(b) hereof; interest based on the Prime Rate shall be calculated on the
basis of the actual number of days elapsed over a year of three hundred
sixty-five (365) or three hundred sixty-six (366) days, as the case may be, and
interest based on the Federal Funds Rate, the Adjusted CD Rate, and the
Adjusted Libor Rate shall be calculated on the basis of the actual number of
days elapsed over a year of three hundred sixty (360) days.
(e) Reserves. If at any time the Loan is subject to the Adjusted
Libor Rate, and a Bank is subject to and incurs a Reserve, Borrower hereby
agrees to pay within five (5) Business Days of demand therefor from time to
time, as billed by Administrative Agent on behalf of a Bank, such additional
amount as is necessary to reimburse such Bank for its costs in maintaining such
Reserve. Such amount shall be computed by taking into account the cost incurred
by the Bank in maintaining such Reserve in an amount equal to such Bank's
ratable share of the Portion on which such Reserve is incurred. The
determination by such Bank of such costs incurred and the allocation, if any,
of such costs among Borrower and other customers which have similar
arrangements with such Bank shall be prima facie evidence of the correctness of
the fact and the amount of such additional costs.
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(f) Special Provisions Applicable to Adjusted CD Rate.
(i) Change of CD Rates. The Adjusted CD Rate may be
automatically adjusted by Administrative Agent on a prospective basis to take
into account additional or increased costs incurred by Banks due to changes in
applicable law occurring subsequent to the commencement of the then applicable
Interest Period, including but not limited to changes in tax laws (except
changes of general applicability in corporate income tax laws) and changes in
the reserve requirements imposed by the Board of Governors of the Federal
Reserve System (or any successor), including the Reserve Percentage, and
assessments imposed by the Federal Deposit Insurance Corporation (or any
successor), including the Assessment Rate, that increase the cost to Banks of
funding a Portion bearing interest at the Adjusted CD Rate; provided, however,
that each Bank shall use reasonable efforts to minimize such costs, subject, in
any event, to such Bank's sole discretion. Administrative Agent shall give
Borrower notice of such determination and adjustment, which determination and
adjustment made in good faith shall be prima facie evidence of the correctness
of the fact and the amount of such adjustment. Borrower may, by notice to
Administrative Agent, (A) request Administrative Agent to furnish to Borrower a
statement setting forth the basis for adjusting such Adjusted CD Rate and the
method for determining the amount of such adjustment; and/or (B) repay the
Portion of the Loan with respect to which such adjustment is made pursuant to
the requirements of Paragraphs 2.09 and 2.10 hereof.
(ii) Unavailability of Adjusted CD Rate. In the event that
Borrower shall have requested the Adjusted CD Rate in accordance with Paragraph
2.06(c) hereof and any Bank shall have reasonably determined that the Adjusted
CD Rate will not adequately and fairly reflect the cost of making or
maintaining the principal amount of the Loan or a Portion thereof specified by
Borrower during the Interest Period selected because of the inability of
Administrative Agent to obtain sufficient bids in the amount of a requested
advance in accordance with the terms of the definition of Certificate of
Deposit Rate set forth above, Administrative Agent on behalf of such Bank shall
promptly give notice of such determination to Borrower. A determination by
Administrative Agent hereunder shall be prima facie evidence of the correctness
of such fact. Upon such a determination, (i) the obligation to advance or
maintain Portions at the Adjusted CD Rate shall be suspended until
Administrative Agent shall have notified Borrower and Banks that such
conditions shall have ceased to exist, and (ii) Borrower shall elect the
Adjusted Libor Rate or the Base Rate (plus the then-applicable Margin) to be
applicable to Portions.
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(g) Special Provisions Applicable to Adjusted Libor Rate. The
following special provisions shall apply to the Adjusted Libor Rate:
(i) Change of Adjusted Libor Rate. The Adjusted Libor
Rate may be automatically adjusted by Administrative Agent on a prospective
basis to take into account the additional or increased cost of maintaining any
necessary reserves for Eurodollar deposits (or Eurocurrency Liabilities) or
increased costs due to changes in applicable law occurring subsequent to the
commencement of the then applicable Interest Period, including but not limited
to changes in tax laws (except changes of general applicability in corporate
income tax laws) and changes in the reserve requirements imposed by the Board
of Governors of the Federal Reserve System (or any successor), including the
Reserve Percentage, that increase the cost to Banks of funding the Loan or a
Portion thereof bearing interest at the Adjusted Libor Rate; provided, however,
that each Bank shall use reasonable efforts to minimize such costs, subject, in
any event, to such Bank's sole discretion. Administrative Agent shall give the
Borrower notice of such a determination and adjustment, which determination and
adjustment made in good faith shall be prima facie evidence of the correctness
of the fact and the amount of such adjustment. Borrower may, by notice to
Administrative Agent, (A) request Administrative Agent to furnish to Borrower a
statement setting forth the basis for adjusting such Adjusted Libor Rate and
the method for determining the amount of such adjustment; and/or (B) repay the
Portion of the Loan with respect to which such adjustment is made pursuant to
the requirements of Paragraphs 2.09 and 2.10 hereof.
(ii) Unavailability of Eurodollar Funds. In the event that
Borrower shall have requested the Adjusted Libor Rate in accordance with
Paragraph 2.06(c) hereof and Administrative Agent shall have reasonably
determined that Eurodollar deposits equal to the principal amount of the
Portion and for the Interest Period specified are unavailable or that the,
Adjusted Libor Rate will not adequately and fairly reflect the cost of making
or maintaining the principal amount of the Portion specified by Borrower during
the Interest Period specified or that by reason of circumstances affecting
Eurodollar markets, adequate and reasonable means do not exist for ascertaining
the Adjusted Libor Rate applicable to the specified Interest Period,
Administrative Agent on behalf of Banks shall promptly give notice of such
determination to Borrower that the Adjusted Libor Rate is not available. A
determination by Administrative Agent hereunder shall be prima facie evidence
of the correctness of such fact. Upon such a determination, (i) the obligation
to advance or maintain Portions at the Adjusted Libor Rate shall be suspended
until Administrative Agent shall have notified Borrower and Banks that such
conditions shall have ceased to exist, and
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(ii) Borrower shall elect the Adjusted CD Rate or the Base Rate (plus the
then-applicable Margin) to be applicable to Portions.
(iii) Illegality. In the event that it becomes unlawful for
a Bank to maintain Eurodollar liabilities sufficient to fund any Portion of the
Loan subject to the Adjusted Libor Rate, then such Bank shall immediately
notify Borrower thereof (with a copy to Administrative Agent) and such Bank's
obligations hereunder to advance or maintain Portions at the Adjusted Libor
Rate shall be suspended until such time as such Bank may again cause the
Adjusted Libor Rate to be applicable to its share of any Portion of the
outstanding principal balance of the Loan and such Bank's share of any Portion
shall then be subject to either the Base Rate or Adjusted CD Rate (if
available) (plus the then-applicable Margin), as the Borrower may elect in
accordance with the provisions of this Paragraph 2.06.
2.07. Advances.
(a) At the times and on the dates for the notices set forth in
Paragraph 2.06(c) hereof relating to the election of interest rates, Borrower
shall give Administrative Agent prior written notice of each requested advance
under the Commitment specifying the date and amount thereof. Such notice shall
be in the form of the Advance Request Form attached hereto as Exhibit A, shall
be certified by the President, Group Vice President/Finance or Treasurer of
Jones and shall contain the following information and representations, which
shall be deemed affirmed and true and correct as of the date of the requested
advance:
(i) the aggregate amount of the requested advance, which
in the case of Portions as to which the Adjusted Libor Rate or Adjusted CD Rate
is to be applicable must be in the minimum amount of $5,000,000 and additional
multiples of $1,000,000 and in the case of Portions as to which the Base Rate
is to be applicable must be in the amount of $1,000,000 and additional
multiples of $250,000;
(ii) confirmation of the interest rate(s) (including
Interest Period(s)) Borrower has elected to apply to the advance and, if more
than one interest rate has been elected, the amount of the Portion as to which
each interest rate shall apply;
(iii) statements that the representations and warranties
set forth in Section Three hereof are true and correct as of the date thereof;
that no Event of Default or Default hereunder has occurred and is then
continuing or will be caused by the requested advance; and that there has been
no material adverse change in Borrower's financial condition or business
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since the date of the quarterly or audited annual financial statements most
recently delivered by Borrower to Banks pursuant to Paragraph 3.10, 5.02 or
5.03 hereof.
(b) (i) Upon receiving a request for an advance in accordance
with subparagraph (a) above, Administrative Agent shall promptly request that
each Bank advance funds to Administrative Agent so that each Bank participates
in the requested advance in the same percentage as it participates in the
Commitment. Each Bank shall advance its applicable percentage of the requested
advance to Administrative Agent by delivering immediately available federal
funds at Administrative Agent's offices prior to twelve o'clock (12:00) noon on
the date of the advance. Subject to the satisfaction of the terms and
conditions hereof, Administrative Agent shall make the requested advance
available to Borrower not later than two o'clock (2:00) p.m. on the day of the
requested advance; provided, however, that in the event Administrative Agent
does not receive in a timely fashion a Bank's share of the requested advance as
provided above, Administrative Agent shall not be obligated to advance such
Bank's share.
(ii) Unless Administrative Agent shall have been notified
by a Bank prior to the date such Bank's share of any such advance is to be made
that such Bank does not intend to make its share of such requested advance
available to Administrative Agent, Administrative Agent may assume that such
Bank has made such proceeds available to Administrative Agent on such date, and
Administrative Agent may, in reliance upon such assumption (but shall not be
obligated to), make available to Borrower a corresponding amount. If such
corresponding amount is not in fact made available to Administrative Agent by
such Bank on the date the advance is made, Administrative Agent shall be
entitled to recover such amount on demand from such Bank (or, if such Bank
fails to pay such amount forthwith upon such demand, from Borrower) together
with interest thereon in respect of each day during the period commencing on
the date such amount was made available to Borrower and ending on (but
excluding) the date Administrative Agent recovers such amount at a rate per
annum, equal to the effective rate for overnight federal funds in New York as
reported by the Federal Reserve Bank of New York for such day (or, if such day
is not a Business Day, for the next preceding Business Day).
(c) Each request for an advance pursuant to this Paragraph 2.07
shall be irrevocable and binding on Borrower. In the case of any advance which
is to be based upon the Adjusted CD Rate or Adjusted Libor Rate, Borrower shall
indemnify each Bank against any loss, cost or expense incurred by such Bank as
a result of any failure to fulfill on or before the date specified in such
request for an advance the applicable conditions set forth in Section Four,
including, without limitation, any loss
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(except loss of the applicable Margin), cost or expense incurred by reason of
the liquidation or redeployment of deposits or other funds acquired by such
Bank to fund the advance to be made by such Bank when such advance, as a result
of such failure, is not made on such date, as calculated by each Bank in
accordance with Exhibit-D attached hereto.
2.08. Reduction and Termination of Commitment.
(a) Borrower. Borrower shall have the right at any time and from
time to time, upon three (3) Business Days' prior written notice to
Administrative Agent, to reduce the Commitment in whole or in part pro rata
among the Banks without penalty or premium, provided that (i) any such
reduction in the Commitment shall be in the minimum amount of $5,000,000 or
increments of $1,000,000 in excess thereof, (ii) on the effective date of such
reduction Borrower shall make a prepayment of the Loan in an amount, if any, by
which the aggregate outstanding principal balance of the Loan exceeds the
amount of the Commitment as then so reduced, together with accrued interest on
the amount so prepaid, and (iii) if a Portion is paid prior to the last day of
an Interest Period, Borrower shall pay on the effective date of such reduction
any amounts which may be due pursuant to Paragraph 2.10 hereof.
(b) Banks. Pursuant to Paragraph 8.02 hereof, Required Banks shall
have the right to terminate the Commitment at any time, in their discretion and
upon notice to Borrower, upon the occurrence of any Event of Default hereunder.
Any payment following the occurrence of an Event of Default, acceleration and
demand for payment shall include the payment of any amounts due pursuant to
Paragraph 2.10 hereof. Any termination or reduction of the Commitment pursuant
to subparagraph (a) above or this subparagraph (b) shall be permanent, and the
Commitment cannot thereafter be restored or increased without the written
consent of all Banks.
2.09. Pre-payment. Upon one (1) Business Day's prior written notice
by Borrower to Administrative Agent, Borrower may prepay the outstanding
principal balance under the Loan at any time without premium or penalty,
provided, however, that (i) prepayments prior to the Termination Date (other
than (a) payments pursuant to Paragraph 2.05(b) hereof in connection with the
sale of a System other than the Tampa System and (b) payments made in
connection with the payment of Insurance Notes pursuant to Paragraph 6.12)
shall not reduce the Commitment and may be reborrowed and partial prepayments
after the Termination Date will be applied first to accrued interest and fees
and then to outstanding principal in the inverse order of the maturity of the
installments thereof; (ii) any prepayment (other than (a) payments pursuant to
Paragraph 2.05(b) hereof in connection with the sale of a System and (b)
payments made in connection with the
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payment of Insurance Notes pursuant to Paragraph 6.12) shall be in an amount
equal to $5,000,000 and additional multiples of $1,000,000 for Portions based
on an Adjusted Libor Rate or Adjusted CD Rate and of $1,000,000 and additional
multiples of $250,000 for Portions based on the Base Rate and (iii) such
prepayment shall be made together with any amounts which may be due pursuant to
Paragraph 2.10 hereof.
2.10. Funding Costs and Loss of Earnings. In connection with any
prepayment or repayment of a Portion based on an Adjusted Libor Rate or
Adjusted CD Rate made on other than the last day of the applicable Interest
Period, whether such prepayment or repayment is voluntary, mandatory, by
demand, acceleration or otherwise, Borrower shall pay to Banks all funding
costs and loss of earnings (except for loss of the applicable Margin) which may
arise in connection with such prepayment or repayment, as calculated by each
Bank in accordance with Exhibit D attached hereto.
2.11. Payments. Except as otherwise set forth herein, all payments
of principal, interest, fees and other amounts due hereunder, including any
prepayments thereof, shall be made by Borrower to Administrative Agent in
immediately available funds before twelve o'clock (12:00) noon on any Business
Day at the principal office of Administrative Agent set forth at the beginning
of this Agreement. Borrower hereby authorizes Administrative Agent to charge
Borrower's account with Administrative Agent for all payments of principal,
interest and fees due hereunder.
2.12. Commitment Fee. Borrower shall pay to Administrative Agent
(for the benefit of Banks) a commitment fee at the rate of three-eighths of one
percent (3/8%) per annum on the unborrowed portion of the Commitment from the
date hereof through the Termination Date, which fee shall be payable at the
offices of Administrative Agent quarterly in arrears on the last day of each
March, June, September and December, as billed by Administrative Agent. Banks
shall share in such commitment fee to the extent of their respective Pro Rata
Shares. The commitment fee shall be calculated on the basis of the actual
number of days elapsed over a year of three hundred sixty-five (365) or
three hundred sixty-six (366) days, as the case may be.
2.13. Administrative Fee. Borrower shall pay to Administrative Agent
an annual administrative fee as set forth in the Letter Agreement between
Borrower and Administrative Agent dated the date hereof, required to be
delivered by Borrower pursuant to Paragraph 4.01(g) hereof.
2.14. Regulatory Changes in Capital Requirements. if any Bank shall
have determined in good faith that the adoption or the effectiveness after the
date hereof of any law, rule,
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regulation or guideline regarding capital adequacy, or any change in any of the
foregoing or in the interpretation or administration of any of the foregoing by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by such Bank (or any
lending office of such Bank) or such Bank's holding company with any request or
directive regarding capital adequacy (whether or not having the force of law)
of any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Bank's capital or on the capital
of such Bank's holding company if any, as a consequence of this Agreement, the
Commitment, or the portion of the Loan made by such Bank pursuant hereto to a
level below that which such Bank or its holding company could have achieved but
for such adoption, change or compliance (taking into consideration such Bank's
policies and the policies of such Bank's holding company with respect to
capital adequacy) by an amount deemed by such Bank to be material, then from
time to time Borrower shall pay to such Bank on demand such additional amount
or amounts as will compensate such Bank or its holding company for any such
reduction suffered together with interest on each such amount from the date
demanded until payment in full thereof at the rate provided in Paragraph
2.06(b)(ii) hereof with respect to amounts not paid when due. Such Bank will
notify Borrower of any event occurring after the date of this Agreement that
will entitle such Bank to compensation pursuant to this Paragraph 2.14 as
promptly as practicable after it obtains knowledge thereof and determines to
request such compensation.
A certificate of such Bank setting forth such amount or amounts as
shall be necessary to compensate such Bank or its holding company as specified
above shall be delivered to Borrower and shall be conclusive absent manifest
error. Borrower shall pay such Bank the amount shown as due on any such
certificate delivered by such Bank within five (5) Business Days after its
receipt of the same.
Failure on the part of any Bank to demand compensation for increased
costs or reduction in amounts received or receivable or reduction in return on
capital with respect to any period shall not constitute a waiver of such Bank's
right to demand compensation with respect to such period or any other period.
2.15. Taxes.
(a) Any and all payments by Borrower to the Banks hereunder shall
be made free and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding in the case of each Bank, (i) taxes
arising solely from a connection between such Bank and the
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jurisdiction imposing such tax, other than a connection arising from the
activities of such Bank in connection with this Agreement, and (ii) subject in
all cases to Paragraph 2.15(d) hereof, United States withholding tax payable
with respect to payments hereunder or under the Notes under laws (including,
without limitation, any statute, treaty, ruling, determination or regulation)
in effect on the Initial Date (as hereinafter defined) for such Bank, provided
that any United States withholding tax payable as a result of any changes in
such laws occurring after the Initial Date shall not be excluded (all such
non-excluded taxes, levies, imposts, deductions, charges, withholding and
liabilities being hereinafter referred to as "Taxes"). For purposes of this
Paragraph 2.15, the term "Initial Date" shall mean, in the case of each Bank,
the date hereof and, in the case of each assignee (for purposes of this
Paragraph 2.15, "Assignee"), the date of the applicable assignment of the Loan.
If any Taxes shall be required by law to be deducted from or in respect of any
sum payable hereunder or under any Note to any Bank or Assignee, (i) the sum
payable by the Borrower shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Paragraph 2.15) such Bank or Assignee (as the case may
be) receives an amount equal to the sum it would have received had no such
deductions been made, but shall be decreased to take into account any credit,
deduction or offset available in any other jurisdiction as a result of such
payment, and (ii) the Borrower shall make such deductions and pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law. The Borrower shall not, however, be required to
pay any amounts pursuant to clause (i) of the preceding sentence to any Bank
organized under the laws of a jurisdiction outside of the United States, unless
such Bank has provided to the Borrower, within sixty (60) days after the
receipt by such Bank of a written request therefor, either (x) a facially
complete Internal Revenue Service Form 4224 or Form 1001 or other applicable
form, certificate or document prescribed by the Internal Revenue Service of the
United States certifying as to such Bank's entitlement to an exemption from, or
reduction of, United States withholding tax on payments to be made hereunder or
under the Notes or (y) a letter stating that such Bank is unable lawfully to
provide a properly completed and executed Form 4224 or Form 1001 or (z) other
facially complete documents satisfactory to the Administrative Agent and
Borrower indicating that all payments that will be made to such Bank are exempt
from or subject to a reduced rate of United States withholding tax.
(b) Borrower hereby agrees to pay each Bank the full amount of
Taxes (including, without limitation, any Taxes imposed by any jurisdiction on
amounts payable under this Paragraph 2.15) paid by such Bank decreased to take
into account the effect of any credit, deduction or offset, as determined and
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certified by such Bank's tax or accounting department to Borrower in good
faith, available in any other jurisdiction on account of the payment of Taxes,
and any liability (including penalties, interest, additions to tax and
expenses) arising therefrom or with respect thereto. Each Bank subject to Taxes
agrees either, at its option, to contest the payment of Taxes or to pay and
permit Borrower to pay such Taxes when due and payable and before penalties,
interest, additions to tax or expenses are due thereon. Payment under this
provision shall be made within thirty (30) days from the date such Bank makes
written demand therefor.
(c) Within (30) days after the date of any payment by it of Taxes,
Borrower will furnish to the Administrative Agent the original or a certified
copy of a receipt or other documents reasonably acceptable to the
Administrative Agent evidencing payment thereof.
(d) Any Bank or Assignee organized under the laws of a
jurisdiction other than the United States (or any political subdivision
thereof) shall provide on the date of this Agreement, and from time to time
thereafter if requested by Borrower and Administrative Agent or required by the
Internal Revenue Service of the United States, (i) a facially complete Internal
Revenue Service Form 4224 (or any successor form) certifying that all payments
made to such Bank are effectively connected with its conduct of trade or
business in the United States and will be includible in its gross income or
(ii) a facially complete an Internal Revenue Service Form 1001 (or any
successor form) certifying as to its status for purposes of determining the
applicability of a reduced rate of United States withholding taxes with respect
to all payments to be made hereunder to such Bank pursuant to a double tax
treaty obligation of the United States, or (iii) other facially complete
documents satisfactory to Administrative Agent and Borrower indicating that all
payments that will be made to such Bank are exempt from or subject to a reduced
rate of United States withholding tax. Unless Borrower and Administrative
Agent have received such forms or such documents validly indicating that
payments hereunder are not subject to United States withholding tax or are
subject to such tax at a rate reduced by an applicable double tax treaty,
Borrower or Administrative Agent shall withhold taxes from such payments to
such Bank at the applicable statutory rate.
(e) Any Bank that enters into any participation or assignment
permitted by Paragraph 10.03 hereof shall give Borrower and Administrative
Agent immediate notice of such assignment or participation, describing the
terms thereof and indicating the identity and country of residence of each of
the Participants or Assignees. Notwithstanding any other provision contained
herein to the contrary, Borrower and Administrative Agent shall be entitled to
deduct and withhold United States
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withholding taxes with respect to all payments to be made hereunder to or for
such Bank or Assignee as may be required by United States law due to such
assignment or participation and such Bank or Assignee shall indemnify and hold
harmless the Borrower and the Administrative Agent from and against any tax,
interest, penalty or other expense that Borrower and Administrative Agent may
incur as a consequence of any failure to withhold United States taxes
applicable because of any participation arrangement that is not fully disclosed
to them as required hereunder.
SECTION THREE
REPRESENTATIONS AND WARRANTIES,
Borrower represents and warrants as follows:
3.01. Organization and Good Standing. Borrower is a general
partnership duly formed and validly existing under the laws of the State of
Colorado; each of the Partners is a limited partnership duly formed and validly
existing under the laws of the State of Colorado; and Jones is a corporation
duly formed and validly existing under the laws of the State of Colorado; each
of Borrower and the Partners has partnership, and Jones has corporate, power
and authority to carry on its business as now conducted; and each of Borrower,
the Partners and Jones is qualified to do business in the States of California,
Florida, and New Mexico and in all other jurisdictions in which the nature of
its activities or the character of its properties requires such qualification
unless the failure to so qualify would not have a material adverse effect on
the business, operations or financial condition of Borrower, the Partners or
Jones, respectively.
3.02. Power and Authority; Validity of Agreement. Each of Borrower,
the Partners and Jones has the power and authority under Colorado law and under
its respective Joint Venture Agreement, Partnership Agreement or articles of
incorporation and by-laws to enter into and perform, to the extent it is a
party thereto, this Agreement, the Notes, the Collateral Security Documents and
all other agreements, documents and actions required hereunder; and all actions
(corporate or otherwise) necessary or appropriate for the execution and
performance by Borrower, the Partners and Jones, to the extent it is a party
thereto, of this Agreement, the Notes, the Collateral Security Documents and
all other agreements, documents and actions required hereunder have been taken,
and, upon their execution, the same will constitute the valid and binding
obligations of Borrower, the Partners and Jones to the extent each is a party
thereto, enforceable in accordance with their terms.
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3.03. No Violation of Laws or Agreements. The making and performance
of this Agreement, the Notes, the Collateral Security Documents and the other
documents, agreements and actions required of Borrower, the Partners and Jones
hereunder will not violate any provisions of any law or regulation, federal,
state or local (including of the Local Authorities), any court, arbitral or
governmental order, decree or award, or its respective Joint Venture Agreement,
Partnership Agreement (including without limitation Section 2.3(a)(vi) thereof)
or articles of incorporation and by-laws, or result in any breach or violation
of, or constitute a default under, any material agreement or instruments,
including without limitation any satellite master antenna television agreement
and any franchise, license or permit of a Local Authority, by which either
Borrower the Partners or Jones or their respective property may be bound,
except with respect to such consents which are required and have not been
obtained as identified on Exhibit C attached hereto.
3.04. Systems. On the date of this Agreement, Borrower owns the
Systems described in Exhibit C attached hereto, which sets forth a description
of the franchises, agreements, locations and subscriber counts of the Systems,
a general description of the property and assets comprising the Systems,
including any property leased from others and including the locations of all
such property and assets, including without limitation, tower, headend and
office facilities, and the record owners and legal descriptions of such
locations and descriptions of any leases covering Borrower's lease of any of
such property, assets or locations from others.
3.05. Material Contracts. On the date of this Agreement, Borrower is
neither a party to nor in any manner obligated under any contracts material to
its business except the franchises and related agreements identified on Exhibit
C hereto, and except as set forth on Exhibit C attached hereto there exists no
material default under any of such franchises and contracts. As of the date of
this Agreement: (i) neither Jones nor any Partner is in default with respect to
any indebtedness for borrowed money and (ii) Borrower is not aware that the
grantor of any franchise intends to revoke, terminate or not to renew or extend
the applicable franchise.
3.06. Compliance. Borrower is in compliance in all material respects
with all applicable laws and regulations, federal, state and local (including
without limitation those administered by the Local Authorities and the FCC),
material to the conduct of its business and operations; Borrower possesses all
the franchises, permits, licenses, certificates of compliance and approval and
grants of authority necessary or required in the conduct of its business and
except as set forth on Exhibit C attached hereto the same are valid, binding,
enforceable and subsisting without any defaults which are not immaterial
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thereunder and are not subject to any proceedings or claims opposing the
issuance, development or use thereof or contesting the validity thereof; and,
except as set forth on Exhibit C, no approvals, waivers or consents,
governmental (federal, state or local) or non-governmental, under the terms of
contracts or otherwise, are required by reason of or in connection with the
execution and performance of this Agreement, the Notes, the Collateral Security
Documents and all other agreements, documents and actions required hereunder.
3.07. Litigation. Except as set forth on Exhibit C, there are no
actions, suits, proceedings or claims which are pending or, to the best of
Borrower's knowledge or information, threatened against Borrower, the Partners
or Jones which, if adversely resolved, would substantially and materially
affect their respective financial condition, business or operations or which
relate to this Agreement, the Notes or any of the Collateral Security
Documents.
3.08. Title to Assets. Borrower has in its own name good and
marketable title to all of its properties and assets, including without
limitation all assets in the Systems, free and clear of any liens and
encumbrances, except (i) the security interests granted to Banks hereunder and
to the holders of the Insurance Notes, and (ii) as permitted pursuant to
Paragraph 6.04 hereof, and all such assets are in good order and repair and
fully covered by the insurance required under Paragraph 5.08 hereof.
3.09. Partnership Interests. The number and percentage of
partnership interests in Borrower and the ownership thereof, and the percentage
of partnership interests in the Partners owned by Jones, are accurately set
forth on Exhibit C attached hereto; all such interests are validly existing and
the creation and sale thereof and the creation and sale of the limited
partnership interests in the Partners are in compliance with all applicable
federal and state securities laws and other applicable laws; except as set
forth on Exhibit C attached hereto, the Partners' and Jones' ownership thereof
is free and clear of any contractual restrictions except as set forth in the
applicable limited partnership agreement as to each of the Partners and in the
Joint Venture Agreement as to Borrower; and Jones is the sole general partner
of each Partner.
3.10. Accuracy of Information; Full Disclosure.
(a) All information furnished to Banks concerning the financial
condition of Borrower and the Systems, including the annual financial statement
for the period ending December 31, 1994, and the interim financial statements
dated September 30, 1995, copies of which have been furnished to Banks, has
been prepared in accordance with GA (except that quarterly
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statements are not accompanied by those footnotes which would have accompanied
such statements had they been audited) and fairly presents the financial
condition as of the dates and for the periods covered and discloses all
liabilities which are required to be disclosed by GAAP and there has been no
material adverse change in the financial condition or business of Borrower or
the Systems from December 30, 1994 to the date hereof; and
(b) All financial statements and other documents furnished by Borrower
to Banks in connection with this Agreement and the Notes do not and will not
contain any untrue statement of material fact or omit to state a material fact
necessary in order to make the statements contained therein not misleading.
Borrower has disclosed to Banks in writing any and all facts which materially
and adversely affect the business, properties, operations or condition,
financial or otherwise, of Borrower or any of the Systems, or Borrower's
ability to perform its obligations under this Agreement, the Notes and the
Collateral Security Documents.
3.11. Partnership Tax Matters.
(a) Except as set forth on Exhibit C, Borrower has duly and timely
filed all information and tax returns and reports with any federal, state,
local or foreign governmental taxing authority, body or agency, and all taxes,
including without limitation income, gross receipt, sales, use, excise,
withholding and any other taxes, and any governmental charges, penalties,
interest or fines with respect thereto, due and payable by Borrower, have been
paid, withheld or reserved for in accordance with GAAP or, to the extent they
relate to periods on or prior to the date of the financial statements
referenced in Section 3.10 hereof (the "Financial Statements"), are reflected
as a liability on the Financial Statements in accordance with GAAP.
(b) Borrower has properly withheld all amounts required by law to
be withheld for income taxes and unemployment taxes including without
limitation, all amounts required with respect to social security and
unemployment compensation, relating to its employees, and has remitted such
withheld amounts in a timely manner to the appropriate taxing authority, agency
or body.
(c) As of the date of this Agreement, none of Borrower's federal
income tax information returns have been audited. Except as set forth on
Exhibit C, Borrower has not entered into any agreements for the extension of
time for the assessment of any tax or tax delinquency, and Borrower has
received no outstanding and unresolved notices from the Internal Revenue
Service or other state, local or foreign taxing authority, agency or body of
any proposed examination or of any
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proposed change in reported information which may result in a deficiency or
assessment against Borrower or any partner in Borrower and there are no suits,
actions, claims, investigations, inquiries or proceedings now pending against
Borrower in respect of taxes, governmental charges or assessments.
(d) The Borrower's Tax Matters Partner (within the meaning of
Section 6231(a)(7) of the Internal Revenue Code of 1986, as amended, is Cable
TV Fund 12-B, Ltd.
3.12. Indebtedness. On the date of this Agreement, Borrower has no
presently outstanding indebtedness or obligations including contingent
obligations and obligations under leases of property from others, except trade
indebtedness and the indebtedness and obligations described in Exhibit C
attached hereto and in Borrower's financial statements which have been
furnished to Banks.
3.13. Management Agreements. Borrower is a party to no management
agreements for the provision of services to Borrower, except that Jones is the
sole manager of Borrower pursuant to the Management Agreement.
3.14. Investments. Borrower has no Subsidiaries, or investments in
or loans to any other individuals or business entities except as permitted by
Paragraph 6.03 or 6.08 hereof.
3.15. ERISA. Borrower and each ERISA Affiliate are in compliance in
all material respects with all applicable provisions of ERISA; and,
(a) Neither Borrower nor any ERISA Affiliate maintains or
contributes to or has maintained or contributed to any multiemployer plan (as
defined in section 4001 of ERISA) under which Borrower or any ERISA affiliate
could have any withdrawal liability;
(b) Neither Borrower nor any ERISA Affiliate sponsors or maintains
any Plan under which there is an accumulated funding deficiency within the
meaning of Section 412 of the Code, whether or not waived;
(c) The aggregate liability for accrued benefits and other
ancillary benefits under each pension Plan that is or will be sponsored or
maintained by Borrower or any ERISA Affiliate (determined on the basis of the
actuarial assumptions prescribed for valuing benefits under terminating defined
benefit plans under Title IV of ERISA) does not exceed the aggregate fair
market value of the assets under each such defined benefit pension Plan;
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(d) The aggregate liability of Borrower and each ERISA Affiliate
arising out of or relating to a failure of any Plan to comply with the
provisions of ERISA or the Code, will not have a material adverse effect upon
the business, operations or financial condition of Borrower; and
(e) There does not exist any unfunded liability (determined on the
basis of actuarial assumptions utilized by the actuary for the plan in
preparing the most recent Annual Report) of Borrower or any ERISA Affiliate
under any plan, program or arrangement providing post-retirement life or health
benefits.
3.16. Fees and Commissions. Neither Borrower nor Jones owes fees or
commissions of any kind, or knows of any claim for any fees or commissions, in
connection with Borrower's obtaining the Commitment or the Loan from Banks,
except those provided herein.
3.17. No Extension of Credit for Securities. Neither Borrower nor
any of its Partners is now, nor at any time has it been engaged principally, or
as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any securities. The proceeds of the Loan
shall be used by Borrower as set forth in Paragraph 2.04 hereof and none of the
proceeds of the Loan will be used, directly or indirectly, to purchase or carry
margin stock within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System.
3.18. Perfection of Security Interests. Upon the filing of the
financing statements or amendments thereto covering all the security interests
created by the Security Agreement, in California, Colorado, Florida, and New
Mexico and all such other places as, in the opinion of counsel for Borrower,
are necessary to perfect said security interests, no further action, including
any filing or recording of any document, is necessary in order to establish,
perfect and maintain the first priority security interests of CoreStates as
collateral security agent in the assets created by the Security Agreement,
except for the periodic filing of continuation statements with respect to
financing statements filed under the Uniform Commercial Code of applicable
jurisdictions.
3.19. Hazardous Wastes, Substances and Petroleum Products. On the
date of this Agreement:
(a) Borrower has received all permits and filed all notifications
necessary to carry on its business(es) under, and is in compliance in all
respects with, all Environmental Control Statutes.
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(b) Borrower has not given any written or oral notice to the
Environmental Protection Agency ("EPA") or any state or local agency with
regard to any actual or imminently threatened removal, spill, release or
discharge of hazardous or toxic wastes, substances or petroleum products on
properties owned or leased by Borrower or in connection with the conduct of its
business and operations.
(c) Borrower has not received notice that it is potentially
responsible for costs of clean-up of any actual or imminently threatened spill,
release or discharge of hazardous or toxic wastes or substances or petroleum
products pursuant to any Environmental Control Statute.
3.20. Solvency. Borrower is, and after receipt and application of
each advance will be, solvent such that (i) the fair value of its assets
(including without limitation the fair salable value of the goodwill and other
intangible property of Borrower) is greater than the total amount of its
liabilities, including without limitation, contingent liabilities, (ii) the
present fair salable value of its assets (including without limitation the fair
salable value of the goodwill and other intangible property of Borrower) is not
less than the amount that will be required to pay the probable liability on its
debts as they become absolute and matured, and (iii) it is able to realize upon
its assets and pay its debts and other liabilities, contingent obligations and
other commitments as they mature in the normal course of business. Borrower (i)
does not intend to, and does not believe that it will, incur debts or
liabilities beyond its ability to pay as such debts and liabilities mature, and
(ii) is not engaged in a business or transaction, or about to engage in a
business or transaction, for which its property would constitute unreasonably
small capital after giving due consideration to the prevailing practice and
industry in which it is engaged. For purposes of this Paragraph 3.20, in
computing the amount of contingent liabilities at any time, it is intended that
such liabilities will be computed at the amount which, in light of all the
facts and circumstances existing at such time, represents the amount that
reasonably can be expected to become an actual matured liability.
3.21. Investment Company Act; Public Utility Holding Company Act.
Borrower is not directly or indirectly controlled by or acting on behalf of any
person or entity which is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or a "public utility holding
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
3.22. Regulation. Borrower has elected to use the FCC-defined "cost
of service" showing as a method for determining its maximum permitted basic
service rate. Borrower is not aware
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of any refund liability relating to its cost of service showing calculation
which is in excess of Five Million Dollars ($5,000,000) and as to which there
has been issued an order of a Local Authority not appealed within the
applicable appeal period or a final order of the FCC (a "Refund Liability").
SECTION FOUR
CONDITIONS
4.01. Closing. The obligation of Banks to make an advance hereunder
shall be subject to satisfaction of the following conditions and Administrative
Agent's receipt of the following documents, each in form and substance,
satisfactory to Banks:
(a) Promissory Notes. The Notes duly executed by Borrower and
delivered to Administrative Agent for redelivery to each Bank.
(b) Security Agreement. An amended and restated security agreement
executed by Borrower in favor of CoreStates as collateral security agent for
Banks and the holders of the Insurance Notes granting and confirming a first
lien security interest in all of Borrower's assets (now owned or hereafter
acquired) as security for the Loan and the Insurance Notes, together with
financing statements or amendments thereto, landlord waivers with respect to
Borrower's offices at 9697 East Mineral Avenue and 9085 East Mineral Circle,
Englewood, Colorado, and evidence of any other recordations required by
applicable law or by Banks to perfect or to continue the perfected status of
such security interests.
(c) Mortgage Releases. Releases of the mortgages or deeds of trust
given in favor of CoreStates as collateral security agent for Banks and the
holders of the Insurance Notes pursuant to the Existing Loan Agreement.
(d) Releases of Leasehold Assignments. Releases of the leasehold
assignments in favor of CoreStates as collateral security agent for Banks and
the holders of the Insurance Notes pursuant to the Existing Loan Agreement.
(e) Intercreditor Agreement. An amended and restated intercreditor
agreement by and among Banks and the holders of the Insurance Notes consenting
to the increase in the Commitment hereunder and the release of the Mortgages
and the Leasehold Assignments, and providing, inter alia, that CoreStates shall
act as collateral security agent for the Banks and the holders of the Insurance
Notes, and that the collateral security
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interests securing the Loan and the Insurance Notes shall be ranked pari passu.
(f) Subordination Documents. An amended and restated subordination
agreement executed by Jones subordinating all of Borrower's indebtedness to
Jones, including any deferred Management Fees and Home Office Allocations, to
the Loan and the Insurance Notes, together with appropriate certified board
resolutions and legal opinions as required by Banks.
(g) Letter Agreement. A Letter Agreement between Borrower and
Administrative Agent regarding the annual administrative fee to be paid by
Borrower to Administrative Agent.
(h) Amendment or Waiver Under Insurance Notes. An amendment to the
Insurance Notes or waiver of the provision thereof with respect to (i)
prepayments in connection with the sale of the Tampa System, (ii) terms of
subordination of Management Fees and Home Office Allocations, and (iii) any
other matters as required in connection with the amendments contemplated
hereby.
(i) Authorization Documents. A certificate of a secretary or an
assistant secretary of Jones attaching (i) a copy of the Joint Venture
Agreement and all amendments thereto, (ii) a copy of the Partnership Agreements
for each of the Partners, and all amendments thereto, (iii) a copy of the
articles of incorporation, bylaws and resolutions of the Board of Directors of
Jones authorizing (A) Jones', the Partners' and Borrower's execution and full
performance of this Agreement, the Notes, the Collateral Security Documents and
all other documents and actions required hereunder, and (B) the President,
Group Vice President/Finance or Treasurer of Jones to request advances under
the Commitment as representative of Jones, (iv) a certificate of the Partners
of Borrower authorizing the Borrower's execution and full performance of this
Agreement, the Notes, the Collateral Security Documents and all other documents
and actions required hereunder, in substitution of the authority provided in
Article X(3) of the Joint Venture Agreement, and (v) an incumbency certificate
setting forth the names, titles and specimen signatures of the officers of
Jones authorized to act with respect to this Agreement, the Notes, the
Collateral Security Documents and all related documents.
(j) Opinions of Counsel. An opinion letter from Colorado counsel
for Borrower in the form of Exhibit E-1 attached hereto; opinion letters from
counsel for Borrower in California, Florida, and New Mexico in the form of
Exhibits E-2 through E-4, respectively, attached hereto; and an opinion from
FCC Counsel for Borrower in the form of Exhibit E-5 attached hereto.
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(k) Franchises and Approvals. Copies of all franchises,
certificates of compliance and approval and material related contracts,
licenses and permits necessary or required in connection with the Systems, all
of which shall be owned by Borrower and be otherwise satisfactory to Banks.
(l) Insurance. Certificates of insurance and evidence of loss
payee and additional insured endorsements in favor of CoreStates as collateral
security agent for Banks and the holders of the Insurance Notes with respect to
all of Borrower's fire, casualty, liability and other insurance covering its
respective property and business, as described on Exhibit C hereto.
(n) Searches. Uniform Commercial Code, tax and judgment searches
against Borrower in those offices and jurisdictions as Banks shall reasonably
request.
(o) Amendment to Management Agreement. Amendment to the Management
Agreement to conform the reference in Paragraph l(b) thereof to the Banks.
(p) Pay-Off of Certain Existing Banks. A letter from Shawmut Bank
Connecticut, N.A. setting forth its pay-off amounts and that its Commitment
and the Borrower's obligations (except as specifically set forth in the
Existing Credit Agreement) under the Existing Credit Agreement shall be
irrevocably terminated upon receipt of such amounts.
(q) Transitional Payments. Payment of all payments required from
Borrower pursuant to Paragraph 2.01(c)(ii) hereof.
(r) Fees. Payment of all fees required pursuant to the letters
dated November 2, 1995 and December 4, 1995 between Borrower and Agents.
(s) Other Documents. Such additional information and documents as
any Bank reasonably may request through Agents.
4.02. Each Advance. The obligation of Banks to make each advance
hereunder shall be subject to the following conditions:
(a) Advance Request. Receipt by Administrative Agent of the
Advance Request Form required pursuant to Paragraph 2.07(a) hereof.
(b) Fees. All fees required pursuant to Paragraphs 2.12 and 2.13
shall have been paid as and when due.
(c) Absence of Default; Representations and Warranties. There
shall be no Event of Default or Default
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hereunder, nor any default under any Collateral Security Document or other
document or agreement required in connection herewith or therewith, then in
existence or caused by such advance; and each of the representations and
warranties set forth in Article Three hereof and in any Collateral Security
Document or other document or agreement required in connection herewith or
therewith, shall be true and correct as of the date of such advance.
(d) No Material Adverse Change. There shall have been no material
adverse change in the assets, financial condition or business of Borrower since
the date of the quarterly or audited annual financial statements most recently
delivered by Borrower to Banks pursuant to Paragraph 3.10, 5.02 or 5.03 hereof.
(e) Other Documents. Receipt by Administrative Agent of such
additional documents and such additional information regarding the assets,
financial condition or business of Borrower as any Bank may reasonably request
through Agents.
SECTION FIVE
AFFIRMATIVE COVENANTS
Borrower covenants and agrees that so long as the Commitment of Banks
to Borrower or any indebtedness of Borrower to Banks is outstanding:
5.01. Existence and Good Standing. Borrower will preserve and
maintain its existence as a Colorado general partnership, and each of Borrower,
the Partners and Jones will preserve and maintain their respective good
standing in all states in which the nature of its activities or the character
of its properties requires it to qualify to do business and the failure to so
qualify would have a material adverse effect on the business, operations or
financial condition of Borrower, the Partners or Jones, respectively; and
preserve and maintain the validity of all its franchises, licenses, permits,
certificates of compliance or grants of authority required in the conduct of
its business.
5.02. Quarterly Financial Statements. Borrower will furnish to the
Administrative Agent within sixty (60) days after the end of each of the first
three quarterly fiscal periods in each fiscal year of Borrower hereafter with
unaudited quarterly financial statements, in form and substance as required by
Banks, including a balance sheet, a statement of income and a statement of cash
flows prepared in accordance with GAAP (except that the quarterly statements
will not be accompanied by those footnotes which would have accompanied such
statements if they had been audited); together with a certificate executed by
the President, Group Vice President/Finance or Treasurer of Jones stating that
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the financial statements fairly present the financial condition of Borrower as
of the date and for the period covered and that as of the date of such
certificate there has not been any violation of any provision of this Agreement
or the happening of any Event of Default or Default.
5.03. Annual Financial Statements. Borrower will furnish to the
Administrative Agent within one hundred five (105) days after the close of each
fiscal year of Borrower commencing with fiscal 1995 audited annual financial
statements, including the financial statements and information required under
Paragraph 5.02 hereof, which financial statements shall be prepared in
accordance with GAAP and shall be fully certified without qualification by an
independent certified public accounting firm of national recognition.
5.04. Public Information. Borrower, the Partners and Jones will
deliver to the Administrative Agent, promptly upon transmission thereof, copies
of all such financial statements, and all annual, quarterly or other reports
which it files with the Securities and Exchange Commission (or any governmental
body or agency succeeding to the functions of the Securities and Exchange
Commission) and all proxy statements, and material notices and reports as it
shall send to its stockholders or partners and copies of all registration
statements (without exhibits); provided, however, that as to such proxy
statements, notices and reports, Jones and each Partner shall deliver such
information only if it relates to Borrower or a Partner.
5.05. Quarterly Compliance Certificate. Borrower shall deliver to
the Administrative Agent within sixty (60) days after the end of each of the
first three fiscal quarters in each fiscal year of Borrower, and within one
hundred five (105) days after the end of each fiscal year, together with the
information required to be delivered by Paragraphs 5.02 and 5.03 hereof,
respectively, a certificate executed by the President, Group Vice
President/Finance or Treasurer of Jones (i) showing the calculation of the
Leverage Ratio in order to determine the Applicable Margin over the Base Rate,
the Adjusted CD Rate or Adjusted Libor Rate, and (ii) stating that the
financial covenants set forth in Paragraphs 5.14 through 5.16 hereof have been
met and showing the calculation of such covenants.
5.06. Books and Records; Inspection Rights. Borrower will keep and
maintain satisfactory and adequate books and records of account in accordance
with GAAP and make or cause the same to be made available to Banks or their
agents or nominees at any reasonable time upon reasonable notice for inspection
and to make extracts thereof. Borrower hereby authorizes the Banks to discuss
the affairs, finances and accounts of the Borrower with its officers, employees
and independent certified public accountants; and by this provision, authorizes
such accountants to discuss such matters with the Banks.
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5.07. Insurance. Borrower will keep and maintain all of its property
and assets in good order and repair and fully covered by insurance with
reputable and financially sound insurance companies against such hazards and in
such amounts as is customary in the industry, under policies requiring the
insurer to furnish reasonable notice to Banks and opportunity to cure any
non-payment of premiums prior to termination of coverage; and furnish Banks on
an annual basis with certificates of such insurance and cause CoreStates as
collateral security agent for Banks and the holders of the Insurance Notes to
be named as additional insured and the loss payee thereof, as their interests
may appear.
5.08. Litigation; Event of Default. Each of Borrower, the Partners,
and Jones will notify Banks in writing immediately of (i) the institution of
any litigation, the commencement of any administrative proceedings, the
happening of any event or the assertion or threat of any claim which relates to
this Agreement, the Notes or any Collateral Security Document or which would be
reasonably likely to materially and adversely affect its business, operations
or financial condition, (ii) the occurrence of any Event of Default or Default
hereunder or under the Note Agreements, and (iii) with respect to all matters
previously disclosed to Banks under Paragraph 3.19 or 5.12 hereof, no later
than thirty (30) days after the last day of each fiscal quarter of Borrower, a
report describing any material information regarding actual or alleged
liability of Borrower, a Partner or Jones, and the qualification thereof.
5.09. Taxes. Borrower will pay and discharge all taxes, assessments
or other governmental charges or levies imposed on it or any of its property or
assets prior to the date on which any penalty for non-payment or late payment
is incurred, unless the same are currently being contested in good faith by
appropriate proceedings and are covered by appropriate reserves maintained in
cash or cash equivalents in accordance with GAAP.
5.10. Costs and Expenses.
(a) Borrower will pay or reimburse Administrative Agent for all
reasonable out-of-pocket costs and expenses (including but not limited to
reasonable attorneys' fees and expenses) Administrative Agent may pay or incur
in connection with the preparation and review of this Agreement, the Notes, the
Collateral Documents and all waivers, consents and amendments in connection
therewith and all other documentation related thereto, the making of the Loan
hereunder, and the collection or enforcement of the same.
(b) Borrower will pay or reimburse Banks for all reasonable
out-of-pocket costs and expenses (including but not limited to reasonable
attorneys' fees and expenses) Banks may pay or incur in connection with the
preparation and review of all
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waivers, consents and amendments in connection with this Agreement, the Notes,
the Collateral Documents and the collection and enforcement of this Agreement,
the Notes, the Collateral Documents and the Loan made hereunder.
(c) All obligations provided for in this Paragraph 5.10 shall
survive any termination of this Agreement or the Commitment and the repayment
of the Loan.
5.11. Additional Collateral. Borrower will execute, deliver and
record, at any time upon Administrative Agent's request and in form and
substance satisfactory to Banks, any of the following instruments in favor of
Banks as additional collateral for all of Borrower's obligations hereunder: (i)
mortgages on any of Borrower's real estate and certificates of title
encumbrances against any of its vehicles, (ii) assignments of leases of real or
personal property leased by Borrower from or to others, (iii) specific
assignments by Borrower of easements, licenses, permits, certificates of
compliance and certificates of approval issued by regulatory authorities, pole
rental agreements, franchises or like grants of authority or service
agreements, and (iv) any other like assignments or agreements specifically
covering any of Borrower's properties or assets.
5.12. Compliance; Notification.
(a) Borrower, each Partner and Jones (with respect to a System)
will comply in all material respects with all local, state and federal laws and
regulations applicable to its business, including without limitation the Cable
Act, the Environmental Control Statutes, federal and state securities laws, the
Communications Act and all laws and regulations of the FCC and the Local
Authorities, and the provisions and requirements of all franchises, permits,
certificates of compliance and approval issued by regulatory authorities and
other like grants of authority held by Borrower and the Copyright Act; and
Borrower will notify Banks immediately in detail of any actual or alleged
failure to comply with or perform, breach, violation or default under any such
laws or regulations or under the terms of any of such franchises, licenses or
grants of authority, the existence of which would be reasonably likely to have
a material adverse effect on the business, operations or financial condition of
Borrower; or of the occurrence or existence of any facts or circumstances which
with the passage of time, the giving of notice or otherwise would be reasonably
likely to create such a breach, violation or default or would be reasonably
likely to occasion the termination of any of such franchises or grants of
authority.
(b) With respect to the Environmental Control Statutes, Borrower
shall notify Banks when, in connection with the conduct of Borrower's or any
Subsidiary's businesses) or operations, any person or entity, or any federal,
state or local
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agency provides oral or written notification to Borrower, the Partners or Jones
with regard to an actual or imminently threatened removal, spill, release or
discharge of hazardous or toxic wastes, substances or petroleum products; and
notify Banks in detail immediately (i) upon the receipt by Borrower of an
assertion of liability under the Environmental Control Statutes, (ii) of any
actual or alleged failure to comply with or perform, breach, violation or
default under any such Environmental Control Statutes and (iii) of the
occurrence or existence of any facts, events or circumstances which with the
passage of time, the giving of notice, or both, would be reasonably likely to
create such a breach, violation or default.
5.13. ERISA. Borrower, the Partners and Jones will comply in all
material respects with the provisions of ERISA to the extent applicable to any
Plan maintained for the employees of Borrower; not incur any material
accumulated funding deficiency (within the meaning of ERISA and the regulations
promulgated thereunder), or any material liability to the PBGC; not permit any
"reportable event" (as defined in ERISA) or other event to occur which may
indicate that its Plans are not sound or which may be the basis for PBGC to
assert a material liability against it or which may result in the imposition of
a lien on its properties or assets; and notify Banks in writing promptly after
it has come to the attention of senior management of Borrower, the Partners or
Jones of the assertion or threat of any "reportable event," the existence of
any "reportable threat" or other event which may indicate that a Plan is not
sound or may be the basis for the PBGC to assert a material liability against
it or impose a lien on its properties or assets.
5.14. Leverage Ratio. Borrower will maintain the Leverage Ratio at
all times during the periods set forth in the left-hand column below in an
amount not to exceed the ratios set forth in the right-hand column below:
Period Leverage Ratio
------ --------------
Date hereof to 9/30/96 4.50:1.00
10/l/96 to 6/30/97 4.00:1.00
7/l/97 to 6/30/98 3.50:1.00
7/l/98 and thereafter 3.00:1.00
5.15. Debt Service Coverage. Borrower will maintain at all times the
ratio of (A) Annualized Operating Cash Flow to (B) Debt Service for the
succeeding four fiscal quarters in an amount in excess of 1.25 to 1.
5.16. Operating Cash Flow to Interest Expense Ratio. Borrower will
maintain at all times the ratio of (A) Operating Cash Flow for the
most-recently ended fiscal quarter to (B) Interest Expense for the
most-recently ended fiscal quarter in an amount in excess of 2.25 to 1.
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5.17. Extensions of Franchises. Borrower shall commence the renewal
process of each franchise in a System which expires by its terms prior to
December 31, 2004 within thirty (30) days after the earliest date possible
under the Cable Act, and in connection with each renewal of a franchise
Borrower shall use its best efforts to obtain the consent of the franchisor to
permit the collateral assignment of the franchise.
5.18. Successor Agent. In the event of the appointment of any
successor Agent pursuant to Paragraph 9.15 hereof, Borrower will execute and
deliver any documents reasonably requested by Banks to effectuate and confirm
the transfer to such successor Agent of all rights, powers, duties, obligations
and property vested in its predecessor Agent hereunder.
5.19. Transactions Among Affiliates. Borrower will cause all
transactions between and among Affiliates to be on an arms-length basis and on
such terms and conditions as are customary in the applicable industry between
and among unrelated entities, provided, however, that transactions permitted
pursuant to Paragraph 6.09(ii) and (iii) hereof shall not be a violation of
this Paragraph 5.19.
5.20. Other Information. Provide Banks with any other documents and
information, financial or otherwise, reasonably requested by Banks from time to
time.
5.21. Refund Liabilities. Borrower will notify Banks in writing immediately
upon becoming aware of any Refund Liability.
SECTION SIX
NEGATIVE COVENANTS
So long as the Commitment or any indebtedness of Borrower to Banks
remains outstanding hereunder, Borrower covenants and agrees that without
Required Banks' prior written consent it will not:
6.01. Indebtedness. Borrow any monies or create any indebtedness,
including without limitation Funded Debt, except (i) borrowings from Banks
hereunder; (ii) indebtedness pursuant to the Insurance Notes in an aggregate
principal amount not to exceed $93,000,000 at any time outstanding; (iii) trade
indebtedness in the normal and ordinary course of business for value received;
(iv) indebtedness to Jones for deferred Management Fees and Home office
Allocations subordinated to the Loan pursuant to the Subordination Agreement;
(v) borrowings from Jones, provided such borrowings are subordinated to
Borrower's indebtedness to Banks hereunder pursuant to the provisions of the
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Subordination Agreement; (vi) indebtedness and obligations incurred to purchase
or lease fixed or capital assets, including pursuant to Capital Leases; and
(vii) unsecured indebtedness; provided, however, that the aggregate principal
amount of indebtedness outstanding under clauses (vi) and (vii) hereof shall
not at any time exceed $5,000,000.
6.02. Guaranties. Guarantee or assume or agree to become liable in
any way, either directly or indirectly, for any additional indebtedness or
liability of others except to endorse checks or drafts for collection in the
ordinary course of business.
6.03. Loans. Make any loans or advances to others except loans to
employees and advances to subcontractors and suppliers in the ordinary course
of business and not to exceed $50,000 aggregate principal amount at any time
outstanding.
6.04. Liens and Encumbrances. Create, permit or suffer the creation
or existence of any liens, security interests, or any other encumbrances on any
of its property, real or personal, except in favor of CoreStates as collateral
security agent for the Banks and the holders of the Insurance Notes and except
(i) liens arising in favor of sellers or lessors for indebtedness and
obligations incurred to purchase or lease fixed or capital assets permitted
under Paragraph 6.01(vi) hereof, provided, however, that such liens secure only
the indebtedness and obligations created thereunder and are limited to the
assets purchased or leased pursuant thereto; (ii) liens for taxes, assessments
or other governmental charges, federal, state or local, which are then being
currently contested in good faith by appropriate proceedings and are covered by
appropriate reserves maintained in cash or cash equivalents and in accordance
with GAAP; (iii) pledges or deposits to secure obligations under workmen's
compensation, unemployment insurance or social security laws or similar
legislation (but not ERISA); (iv) deposits to secure performance or payment
bonds, bids, tenders, contracts (other than contracts for borrowed money),
leases, franchises or public and statutory obligations required in the ordinary
course of business; (v) deposits to secure surety, appeal or custom bonds
required in the ordinary course of business; (vi) liens to secure mechanic's
liens which are then being currently contested in good faith by appropriate
proceedings; (vii) zoning restrictions, easements and similar immaterial
restrictions which do not secure the payment of money and which in the
aggregate do not adversely effect Borrower's use and title to such property;
(viii) judgment liens in existence for not more than sixty (60) days and either
singly or in the aggregate in an amount not in excess of Five Hundred Thousand
Dollars ($500,000) relating to judgments currently being contested in good
faith by appropriate proceedings and which are covered by appropriate reserves
maintained in cash or cash equivalents in accordance with GAAP; and (ix) liens
which are granted under pole attachment agreements
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in favor of pole lessors to secure Borrower's obligations under such pole
attachment agreements limited to the property subject to such agreements.
6.05. Additional Negative Pledge. Agree or covenant with or promise
any person or entity other than the Banks that it will not pledge its assets or
properties or otherwise grant any liens, security interests or encumbrances on
its property on terms similar to those set forth in Paragraph 6.04 hereof
except pursuant to Section 9.16 of the Note Agreements.
6.06. Restricted Payments. Make any Restricted Payments except as
permitted pursuant to Paragraph 6.09 hereof.
6.07. Transfer of Assets; Liquidation. Sell, lease, transfer or
otherwise dispose of all or any portion of its assets, real or personal, other
than such transactions in the normal and ordinary course of business for value
received; or discontinue, liquidate, or change in any material respect any
substantial part of its operations or businesses). Notwithstanding the
foregoing, Banks hereby agree that Borrower may sell any System provided that
in connection with such sale of a System (i) Borrower shall make a mandatory
payment of the Loan as provided in Paragraph 2.05(b) hereof (together with
amounts required by Paragraph 2.10 hereof), (ii) immediately before,
immediately after and after giving effect to such sale, no Event of Default or
Default shall exist, (iii) Borrower certifies to Banks that (A) it is in
compliance with the covenants set forth in Paragraphs 5.14 through 5.16 hereof,
based on a pro forma calculation using the results of the most recently ended
fiscal quarter of Borrower, and reducing Operating Cash Flow (and Annualized
Operating Cash Flow) by the portion thereof attributable to the System being
sold and reducing Funded Debt, Debt Service and Interest Expense to the extent,
if any, attributable to any portion of Total Debt being paid contemporaneously
with the consummation of such sale and (B) immediately after the consummation
of such sale and after giving effect thereto, the Leverage Ratio (based on
operating cash flow for the most recently ended three months determined on a
pro forma basis to reflect the portion of Operating Cash Flow for such period
attributable to the System being sold times four (4)) shall be no greater than
the Leverage Ratio immediately prior to the consummation of such sale, and (iv)
in connection with such sale, Borrower and Banks shall amend Exhibit C hereto
to reflect such sale.
6.08. Acquisitions and Investments. Purchase or otherwise acquire
any part or amount of the capital stock or assets of, or make any investments
in, any other firm or corporation except (i) Permitted Investments and (ii) so
long as no Event of Default or Default has occurred and is then continuing
Borrower may make acquisitions of cable systems that are contiguous to and to
be operated together with Borrower's
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existing Systems, provided, that the aggregate amount of such acquisitions in
any fiscal year of Borrower shall not exceed Three million Dollars
($3,000,000); or enter into any new business activities or ventures not
directly related to its present business; or merge or consolidate with or into
any other firm or corporation; or create any Subsidiary.
6.09. Payments to Affiliates. Pay or accrue any salaries or other
compensation, fees (including Management Fees) or other payments (including
Home office Allocations) to Affiliates, except, in the absence of any Refund
Liability Or Event of Default or Default hereunder and provided such payment
shall not cause an Event of Default or Default hereunder: (i) in connection
with the sale of a System as permitted by Paragraph 6.07 hereof, Borrower may
make (A) such distributions to the Partners as shall be necessary to cover each
such Partner's tax liability arising in connection with such sale, and (B) in
the case of a sale of the Tampa System, an additional distribution in an amount
which, together with the distribution for tax liabilities permitted by clause
(A) above, does not exceed fifty percent (50%) of the cash proceeds from the
sale of the Tampa System; (ii) Borrower may, subject to the terms of the
Subordination Agreement, pay Management Fees and Home office Allocations in
accordance with the terms of the Management Agreement as in effect on the date
hereof, provided, however, that after December 31, 1999, no payment may be made
on Management Fees or Home Office Allocations that have been deferred pursuant
to the terms hereof; and (iii) Borrower may make payments to Affiliates for
brokerage services, including in connection with the purchase or sale of a
System, and for the sale of television or other signals, the purchase or lease
of television or other signals or specialized equipment and the licensing of
technology, provided (x) such transactions are at a price and on terms at least
as favorable as those prices and terms being generally offered in the same
market place by unrelated parties for goods or services as nearly identical as
possible in regard to quality, technical advancement and availability,
provided, however, that so long as no Default or Event of Default is in
existence, Borrower may pay brokerage fees to The Jones Group Ltd. in
connection with (a) the sale of a system to an entity which is not an Affiliate
in an amount not to exceed two and one-half percent (2-1/2%) of the gross sales
price of the system, and (b) the purchase of a System, in an amount not to
exceed four and one half percent (4-1/2%) of the lower of the gross purchase
price or appraisal value of the System and (y) payments to Jones Programming
Services, Inc. ("Programming") for the purchase of signals or programming for
the Systems shall not exceed the payments made by or charged to other
Affiliates of Programming by Programming for comparable quantity and quality of
signals or programming.
6.10. Use of Proceeds. Use any of the proceeds of the Loan, directly
or indirectly, to purchase or carry margin
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securities within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System; or engage as its principal business in the extension of
credit for purchasing or carrying such securities.
6.11. Documents. (a) Amend or permit any amendments to the Joint
Venture Agreement or (b) materially amend the manager's duties under the
Management Agreement.
6.12. Insurance Notes. Unless Borrower shall have provided prior
notice to the Banks and obtained the approval of Required Banks, amend or
permit any amendments to the Insurance Notes or the Note Agreements if the
effect would be to: (a) alter the maturity date of the Insurance Notes to make
it earlier than March 31, 2000, or alter the required payment (or mandatory
prepayment) schedule set forth in Section 7.1 of the Note Agreements in any
manner which causes required payments (or mandatory prepayments) to be made
sooner than set forth therein or increases the aggregate dollar amount due on
any given required payment (or mandatory prepayment) date (except on the final
maturity date); (b) increase the interest rates due on the Insurance Notes as
set forth in Section 1.1 of the Note Agreements or adjust the method or formula
by which the Make-Whole Amount is determined or increase fees or other amounts
due under the Insurance Note; or (c) alter any of the provisions of Sections
9.9 through 9.19, 9.21 and 9.22 of the Note Agreements in a manner which would
make it more difficult for Borrower to comply with or remain in compliance with
those covenants or add additional financial covenants to the Note Agreements
(it being understood that the Insurance Notes and Note Agreements may be
otherwise amended without the approval of Banks if prior notice shall have been
provided by Borrower to Banks); or make any prepayment on or repurchase the
Insurance Notes unless simultaneously with such prepayment or repurchase
Borrower makes a prepayment of that percentage of the Loan equal to the
percentage of the Insurance Notes being prepaid or repurchased.
SECTION SEVEN
ADDITIONAL COLLATERAL AND RIGHT OF SET-OFF
7.01. Additional Collateral. As additional collateral for the
payment of any and all of Borrower's indebtedness and obligations to Banks,
whether matured or unmatured, now existing or hereafter incurred or created
hereunder or otherwise, Borrower hereby grants to Banks a security interest in
and lien upon all funds, balances or other property of any kind of Borrower, or
in which Borrower has an interest, limited to the interest of Borrower therein,
whether now or hereafter in the possession, custody or control of any Bank.
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7.02. Right of Set-off. Upon a Default or an Event of Default, each
Bank is hereby authorized at any time and from time to time, to set-off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Bank
to or for the credit or the account of the Borrower against any and all of the
obligations of the Borrower now or hereafter existing under this Agreement and
the Note held by such Bank, irrespective of whether such Bank shall have made
any demand under this Agreement or such Note. Each Bank agrees promptly to
notify Borrower and Administrative Agent after any such set-off and application
made by such Bank; provided, however, that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of
each Bank under this Section Seven are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which such Bank may
have.
SECTION EIGHT
DEFAULT
8.01. Events of Default. Each of the following events shall be an
Event of Default hereunder:
(a) If Borrower shall fail to pay when due any installment of
principal or interest or fees or any other sum payable to Banks or Agents
hereunder or otherwise; or
(b) If any representation or warranty made herein or any
Collateral Security Document or in connection herewith or therewith or in any
statement, certificate or other document furnished hereunder or thereunder is
or becomes false or misleading in any material respect; or
(c) Except as otherwise provided in subparagraph (f) below as to
the Insurance Notes, if Borrower or a Partner shall default in the payment of,
or in the performance of any obligation in respect of, indebtedness to another
in excess of $1,000,000, whether now or hereafter incurred and with respect to
defaults relating to other than the payment of money, the effect of such
default is to cause or permit the holder(s) of such indebtedness to cause such
indebtedness to be due and payable prior to its stated maturity or to take any
action to realize upon any assets or property of Borrower under any agreement
or instrument evidencing or securing such indebtedness; or
(d) If Borrower shall default in or fail to observe at any test
date the covenants set forth in Paragraphs 5.14, 5.15 and 5.16 or Article Six;
or
(e) If Borrower, a Partner or Jones shall default in the
performance of any other agreement or covenant contained
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herein (other than as provided in subparagraphs (a), (b) or (d) above) or in
any document executed or delivered in connection herewith (including without
limitation any Collateral Security Document) and such default shall continue
uncured for thirty (30) days after notice thereof to Borrower given by
Administrative Agent pursuant to the direction of Required Banks; or
(f) If there shall be any Event of Default under the Insurance
Notes; or
(g) If the Partners shall agree to terminate or dissolve the
Borrower; if the Borrower is terminated or dissolved and not simultaneously
continued; if more than one Partner shall withdraw as a Partner; if Jones shall
cease to be the general partner of each of the Partners and the manager of
Borrower pursuant to the Management Agreement; or if the sole partners of
Borrower shall cease to be two or more of the Partners; or
(h) If custody or control of any substantial part of the property
of Borrower, a Partner or Jones shall be assumed by any governmental agency or
any court of competent jurisdiction at the request of any governmental agency;
if any franchise of the Borrower shall be suspended, revoked, not renewed or
otherwise terminated (including if Borrower is required by any franchising
authority or by court order or administrative order to halt construction or
operations under any franchise and such action shall continue uncorrected for
thirty (30) days after Borrower has received notice thereof), and such
franchise, together with all other franchises suspended, revoked, not renewed
or otherwise terminated at the time of such suspension, revocation or
termination, represents either singly or in the aggregate in excess of the
greater of ten percent (10%) of the Basic Subscribers covered by all of
Borrower's franchises on (i) the date hereof as set forth in Exhibit C and (ii)
the last day of the most recently ended fiscal quarter of Borrower; or if any
governmental regulatory authority or judicial body shall make any other final
non-appealable determination the effect of which would be to affect materially
and adversely the operations of Borrower as now conducted; or
(i) If Borrower, a Partner or Jones shall become insolvent,
bankrupt or generally fail to pay its debts as such debts become due; or is
adjudicated insolvent or bankrupt; or admits in writing its inability to pay
its debts; or shall suffer a custodian, receiver or trustee for it or
substantially all of its property to be appointed and if appointed without
its.consent, not be discharged within thirty (30) days; or makes an assignment
for the benefit of creditors; or suffers proceedings under any law related to
bankruptcy, insolvency, liquidation or the reorganization, readjustment or the
release of debtors to be instituted against it and if contested by it not
dismissed or stayed within thirty (30) days; or if proceedings under any law
related to bankruptcy, insolvency, liquidation, or the
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reorganization, readjustment or the release of debtors is instituted or
commenced by Borrower, a Partner or Jones; or if any order for relief is
entered relating to any of the foregoing proceedings; or if Borrower or a
Partner shall call a meeting of its creditors with a view to arranging a
composition or adjustment of its debts; or if Borrower or a Partner shall by
any act or failure to act indicate its consent to, approval of or acquiescence
in any of the foregoing; or
(j) If any event or condition shall occur or exist with respect to
any activity or substance regulated under the Environmental Control Statutes
and as a result of such event or condition, Borrower has incurred a liability
in excess of $500,000 during any consecutive twelve (12) month period; or
(k) If any judgment, writ, warrant or attachment or execution or
similar process which calls for payment or presents liability in excess of
$500,000 (not covered by insurance) shall be rendered, issued or levied against
Borrower or a Partner or its respective property and such process shall not be
paid, waived, stayed, vacated, discharged, settled, satisfied or fully bonded
within sixty (60) days after its issuance or levy; or
(l) If any judgment, writ, warrant or attachment or execution or
similar process which calls for payment or presents liability in excess of
$2,000,000 (not covered by insurance) shall be rendered, or issued or levied
against Jones or its property and such process shall not be paid, waived,
stayed, vacated, discharged, settled, satisfied or fully bonded within sixty
(60) days after its issuance or levy.
(m) If Borrower shall not have obtained, within six (6) months
after the date hereof, the consent of the County of Los Angeles to the grant of
security interests in franchises granted by such County.
8.02. Remedies.
(a) Upon the happening of any Event of Default and at any time
thereafter, at the election of Required Banks, and by notice by Administrative
Agent to Borrower (except if an Event of Default described in Paragraph 8.01(i)
shall occur in which case acceleration shall occur automatically without
notice), Required Banks may declare the entire unpaid balance, principal,
interest and fees, of all indebtedness of Borrower to Banks, hereunder or
otherwise, to be immediately due and payable. Upon such declaration, the
Commitment shall immediately and automatically terminate and Banks shall have
no further obligation to make any advances and, subject to the provisions of
the Intercreditor Agreement, shall have the immediate right to, or to cause the
collateral security agent to, enforce or realize on any collateral security
granted therefor in any manner or
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order they deem expedient without regard to any equitable principles of
marshalling or otherwise. In addition to any rights granted hereunder or in any
documents delivered in connection herewith, Banks, Administrative Agent and the
collateral security agent shall have all the rights and remedies granted by any
applicable law, all of which shall be cumulative in nature.
(b) In accordance with the letter dated March 13, 1992 of the
County of Los Angeles, and any similar letter hereinafter received containing
such a requirement, Borrower hereby agrees to notify the County of Los Angeles
within the time periods set forth therein in the event of the acceleration of
indebtedness as set forth in clause (a) above.
(c) Upon the occurrence of an Event of Default, Administrative
Agent or any Bank may send a notice to the Banks indicating its desire to cause
a Statement of Event of Default (as defined in the Intercreditor Agreement) to
be sent to Borrower pursuant to Paragraph 4.1 of the Intercreditor Agreement.
Upon receipt of such a notice, Administrative Agent shall promptly convene a
meeting of the Banks to discuss such course of action. Banks hereby agree that
the decision to send a Statement of Event of Default shall be subject to the
agreement of Required Banks.
SECTION NINE
THE BANKS
Except as set forth in Paragraph 9.03, this Section sets forth the
relative rights and duties of Agents and Banks respecting the Loan and does not
confer any enforceable rights on Borrower against Banks or create on the part
of Agents or Banks any duties or obligations to the Borrower.
9.01. Application of Payments. Except as provided in Paragraph
2.01(c)(ii), Administrative Agent shall apply all payments of principal,
interest, commitment fee or other amounts hereunder made to Administrative
Agent by or on behalf of Borrower, to Banks on the basis of their Pro Rata
Shares except the fee payable under Paragraph 2.13 hereof, which shall be paid
solely to Administrative Agent, and other compensation requested by a Bank,
including increased costs, capital adequacy payments and the like. Such
distribution of payments shall be made promptly in federal funds immediately
available at the office of each Bank set forth above.
9.02. Set-off. In the event a Bank, by exercise of its right of
set-off, or otherwise, receives any payment of the indebtedness owing to it
hereunder in an amount greater than its Pro Rata Share of such payment based
upon the Banks' respective
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shares of principal indebtedness outstanding immediately before such payment,
such Bank shall purchase a portion of the indebtedness hereunder owing to each
other Bank so that after such purchase each Bank shall hold its Pro Rata Share
of all the indebtedness then outstanding hereunder provided that if all or any
portion of such excess payment is thereafter recovered from such Bank, such
purchase shall be rescinded and the purchase price restored to the extent of
any such recovery, but without interest. Notice of the foregoing transactions
shall be given by each Bank to Administrative Agent, and by Administrative
Agent to Borrower.
9.03. Modifications and Waivers. No modification or amendment
hereof, consent hereunder or waiver of a Default or Event of Default hereunder
or under any of the Collateral Security Documents or any other document or
agreement required hereunder, shall be effective except by written consent of
the Required Banks, provided, however, that the written consent of all Banks
shall be required to (i) decrease the rate of interest, (ii) modify, amend,
waive, discharge or terminate the amount of the Commitment or the Banks'
respective shares thereof, (iii) modify, amend, waive, discharge, terminate or
suspend compliance with the dates of payment hereunder, (iv) decrease the
commitment fee(s) payable under Paragraph 2.12 hereof, (v) release or impair in
any respect the value of the Collateral (except as expressly contemplated by
Paragraph 3.2 of the Intercreditor Agreement), or modify, amend, waive,
discharge, terminate or suspend compliance with the Intercreditor Agreement, or
(vi) modify or amend the provisions of Paragraph 9.02, this Paragraph 9.03 or
the definition of Required Banks.
9.04. Obligations Several. The obligations of the Banks hereunder
are several, and each Bank hereunder shall not be responsible for the
obligations of the other Banks hereunder, nor will the failure of one Bank to
perform any of its obligations hereunder relieve the other Banks from the
performance of their respective obligations hereunder.
9.05. Banks' Representations. Each Bank represents and warrants to
the other Banks and the Agents that (i) it has been furnished all information
it has requested for the purpose of evaluating its proposed participation under
this Agreement; (ii) it has decided to enter into this Agreement on the basis
of its independent review and credit analysis of Borrower, this Agreement and
the documentation in connection therewith and has not relied for such analysis
on any information or analysis provided by any other Bank or the Agents; (iii)
it is participating herein for its own account as a commercial transaction and
not with a view to the distribution, disposition or participation of its
interest herein, and it has no present intention of making any such
distribution, disposition or participation.
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9.06. Investigation. No Bank shall have any obligation to the others
to investigate the condition of the Borrower or any of the Collateral or any
other matter concerning the Loan.
9.07. Powers of Agents. Agents shall have and may exercise those
powers specifically delegated to Agents herein, together with such powers as
are reasonably incidental thereto.
9.08. General Duties of Agent, Immunity and Indemnity. In performing
its duties as Agent hereunder, each Agent will take the same care as it takes
in connection with loans in which it alone is interested, subject to the
limitations on liabilities contained herein; provided that Agents shall not be
obligated to ascertain or inquire as to the performance of any of the terms,
covenants or conditions hereof by Borrower, except as to delivery to it of
items required by Section Four and as to any matter or document that is
required to be satisfactory to it. Neither Agent nor any of its respective
directors, officers, agents or employees shall be liable for any action or
omission by any of them hereunder or in connection herewith except for gross
negligence or willful misconduct. Subject to such exception, each of the Banks
hereby indemnifies Agents on the basis of such Bank's Pro Rata Share, against
any such liability, claim, loss or expense.
9.09. No Responsibility for Representations or Validity, etc. Each
Bank agrees that neither Agents nor any other Bank shall be responsible to any
Bank for any representations, statements, or warranties of Borrower herein.
Neither Agents nor any of their directors, officers, employees or agents shall
be responsible for the validity, effectiveness, sufficiency, perfection or
enforceability of this Agreement and any collateral security therefor, or any
documents relating thereto or for the priority of any of Banks' or the
collateral security agent's security interests in any such collateral security.
9.10. Action on Instruction of Banks; Right to Indemnity. Agents
shall, subject to the provisions set forth below, take such actions as are
requested by Required Banks, and Agent shall in all cases be fully protected
in acting or refraining from acting hereunder in accordance with written
instructions to it signed by Required Banks unless the consent of all the Banks
is expressly required hereunder in which case Agents shall be so protected when
acting in accordance with such instructions from all the Banks. Such
instructions and any action taken or failure to act pursuant thereto shall be
binding on all Banks, provided that except as otherwise provided herein, Agents
may act hereunder in their own discretion without requesting such instructions.
Agents shall be fully justified in failing or refusing to take any action
hereunder unless they shall first be specifically indemnified to its
satisfaction by
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the other Banks on the basis of their respective Pro Rata Shares, against any
and all liability and expense which it may incur by reason of taking or
continuing to take any such action.
9.11. Employment of Agents. In connection with its activities
hereunder, each Agent may employ agents and attorneys-in-fact and shall not be
answerable, except as to money or securities received by it or its authorized
agents, for the default or misconduct of agents or attorneys-in-fact selected
with reasonable care.
9.12. Reliance on Documents. Each Agent shall be entitled to rely
upon (a) any paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons and (b) upon the
opinion of its counsel with respect to legal matters.
9.13. Agent's Rights as a Bank. With respect to its share of the
indebtedness hereunder, Agent shall have the same rights and powers hereunder
as any other Bank and may exercise the same as though it were not an Agent.
Each of the Banks may accept deposits from, lend money to, and generally engage
in any kind of banking or trust business with Borrower as if it were not an
Agent or a Bank hereunder.
9.14. Expenses. Each of the Banks shall reimburse each Agent, from
time to time at the request of such Agent, for its Pro Rata Share of any
expenses incurred by such Agent in connection with the performance of its
functions hereunder, provided however that in the event Banks shall reimburse
an Agent for expenses for which Borrower subsequently reimburses such Agent,
such Agent shall remit to each Bank the respective amount received from such
Bank against such expenses and shall remit to each Bank a pro rata share of any
interest paid by Borrower to Agent on account of such expenses.
9.15. Resignation of Agent. An Agent may at any time resign its
position as Agent, without affecting its position as a Bank, by giving written
notice to Banks and Borrower. Such resignation shall take effect upon the
appointment of a successor agent in accordance with this Paragraph 9.15. In the
event an Agent shall resign, Banks and Borrower shall appoint a Bank as
successor agent. If within thirty (30) days of an Agent's notice of resignation
no successor agent shall have been appointed by Banks and Borrower and accepted
such appointment, then Banks shall appoint a Bank as a successor agent, and if
within thirty (30) days after the end of the initial thirty (30) day period no
successor agent shall have been appointed by Banks and accepted such
appointment, then the resigning Agent, in its discretion, may appoint any other
Bank as a successor agent.
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9.16. Successor Agent. The successor Agent appointed pursuant to
Paragraph 9.15 shall execute and deliver to its predecessor and Banks an
instrument in writing accepting such appointment, and thereupon such successor,
without any further act, deed or conveyance, shall become fully vested with all
the properties, rights, duties and obligations of its predecessor Agent. The
predecessor Agent shall deliver to its successor Agent forthwith all collateral
security, documents and moneys held by it as Agent, if any, whereupon such
predecessor Agent shall be discharged from its duties and obligations as Agent
under this Agreement.
9.17. Collateral Security. CoreStates will hold, administer and
manage any collateral security pledged from time to time hereunder either in
its own name or as Collateral Security Agent pursuant to the Intercreditor
Agreement, but each Bank shall hold a direct, undivided pro rata beneficial
interest therein.
9.18. Enforcement by Administrative Agent. All rights of action
under this Agreement and under the Notes and all rights to the collateral
security hereunder may be enforced by Administrative Agent and any suit or
proceeding instituted by Administrative Agent in furtherance of such
enforcement shall be brought in its name as Administrative Agent without the
necessity of joining as plaintiffs or defendants any other Banks, and the
recovery of any judgment shall be for the benefit of Banks subject to the
expenses of Administrative Agent.
SECTION TEN
MISCELLANEOUS
10.01. Non-Recourse. Anything contained in this Agreement or any
Collateral Security Document to the contrary notwithstanding (except the
provisions set forth in Paragraph 14 of the Subordination Agreement), in any
action or proceeding brought on the Notes, this Agreement, or any Collateral
Security Document or the indebtedness evidenced or secured thereby, no
deficiency judgment shall be sought or obtained against Jones or any Partner or
enforced against the separate assets of Jones or any Partner, and the liability
of Jones or any Partner for any amounts due under the Notes, this Agreement, or
any Collateral Security Document, shall be limited to the interest of Jones and
the Partners in the Collateral and in any other assets of the Borrower. Banks
may join Jones in its capacity as general partner of the Partners or any
Partner in its capacity as a general partner of the Borrower as defendant in
any legal action it undertakes to enforce its rights and remedies under the
Notes, this Agreement, or any Collateral Security Document, but any judgment in
any such action may be satisfied by recourse only to the Collateral and any
other assets of Borrower, but not by
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recourse directly to or by execution on Jones' or any Partner's separate
assets. Notwithstanding the foregoing, nothing set forth herein shall be deemed
to limit the liability of Jones or any Partner or its assets or prohibit Banks
from taking any legal action against Jones or any Partner or its assets for (a)
any fraud, intentional misconduct or gross negligence of Jones or any Partner,
or (b) Jones' undertakings under the Subordination Agreement, or (c) to recoup
any amounts or assets paid or transferred directly or indirectly by the
Borrower to Jones or any Partner in violation of any provision of this
Agreement.
10.02. Indemnification and Release Provisions. Borrower hereby agrees
to defend each Agent and each Bank and its directors, officers, agents and
employees from, and hold each of them harmless against, any and all losses,
liabilities (including without limitation settlement costs and amounts,
transfer taxes, documentary taxes, or assessments or charges made by any
governmental authority), claims, damages, interests, judgments, costs, or
expenses, including without limitation reasonable fees and disbursements of
counsel, incurred by any of them arising out of or in connection with or by
reason of this Agreement, the Commitment, the making of the Loan, or any
Collateral Security Document, including without limitation, any and all losses,
liabilities, claims, damages, interests, judgments, costs or expenses relating
to or arising under any Environmental Control Statute or the application of any
such Statute to any of Borrower's properties or assets except with respect to
such Bank's or Agent's (as the case may be) own gross negligence or willful
misconduct. Borrower hereby releases each Agent and each Bank and its
respective directors, officers, agents and employees from any and all claims
for loss, damages, costs or expenses caused or alleged to be caused by any act
or omission on the part of any of them except with respect to such entity's or
person's (as the case may be) own gross negligence or willful misconduct. All
obligations provided for in this Paragraph 10.02 shall survive any termination
of this Agreement or the Commitment and the repayment of the Loan.
10.03. Participations and Assignments. Borrower hereby acknowledges
and agrees that a Bank may at any time: (a) grant participations in all or a
portion of its Maximum Principal Amount of the Loan or any Note or of its
right, title and interest therein or in or to this Agreement (collectively,
"Participations"), up to but not in excess of forty-nine percent (49%) of such
Bank's Maximum Principal Amount, to any other lending office or to any other
bank, lending institution or other entity which has the requisite
sophistication to evaluate the merits and risks of investments in
Participations ("Participants"), provided, however, that: (i) all amounts
payable by Borrower hereunder shall be determined as if such Bank had not
granted such Participation; and (ii) any agreement pursuant to which any Bank
may grant a Participation: (x) shall provide that such Bank shall retain the
sole right and
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responsibility to enforce the obligations of Borrower hereunder including,
without limitation, the right to approve any amendment, modification or waiver
of any provisions of this Agreement; (y) such participation agreement may
provide that such Bank will not agree to any modification, amendment or waiver
of this Agreement without the consent of the Participant if such amendment,
modification or waiver would reduce the principal of or rate of interest on the
Loan or postpone the date fixed for any payment of principal of or interest on
the Loan; and (z) shall not relieve such Bank from its obligations, which shall
remain absolute, to make advances hereunder, or (b) with the consent of
Borrower and Managing Agents, such consent not to be unreasonably withheld,
assign all or a portion of its rights under the Loan up to but not in excess of
forty-nine percent (49%) in the aggregate of such Bank's Maximum Principal
Amount without taking into account any prior assignments, provided that (i)
any such assignment shall be in a minimum amount of Four Million Nine Hundred
Thousand Dollars ($4,900,000); (ii) in connection with any such assignment the
assigning Bank shall pay to Administrative Agent a fee of Two Thousand Five
Hundred Dollars ($2,500); and (iii) notwithstanding the provisions of clauses
(i) and (ii) of this subsection (b), a Bank may assign its rights hereunder and
under its Note to a Federal Reserve Bank as collateral security for overdrafts
pursuant to Regulation A of the Board of Governors of the Federal Reserve
System, but such assignment shall not relieve such Bank of its obligations
hereunder.
10.04. Binding and Governing Law. This Agreement and all documents
executed hereunder shall be binding upon and shall inure to the benefit of the
parties hereto and their respective permitted successors and assigns and shall
be governed as to their validity, interpretation and effect by the laws of the
Commonwealth of Pennsylvania (except as to certain Collateral Security
Documents, which may be required by mandatory provision of law to be governed
by the laws of another jurisdiction).
10.05. Survival. All agreements, representations, warranties and
covenants of Borrower contained herein or in any documentation required
hereunder shall survive the execution of this Agreement and the making of the
Loan hereunder and except for Paragraphs 5.11 and 10.02 which provide
otherwise, will continue in full force and effect as long as any indebtedness
or other obligation of Borrower to any Bank remains outstanding.
10.06. No Waiver; Delay. If Banks or any of them shall waive any
power, right or remedy arising hereunder or under any applicable law, such
waiver shall not be deemed to be a waiver by any other Bank or upon the later
occurrence or recurrence of any of said events with respect to any Bank. No
delay by Banks or any of them in the exercise of any power, right or remedy
shall, under any circumstances, constitute or be deemed to be a waiver, express
or implied, of the same and no course of
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dealing between the parties hereto shall constitute a waiver of Banks' powers,
rights or remedies. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
10.07. Modification. Except as otherwise provided in this Agreement,
no modification or amendment hereof shall be effective unless made in a writing
signed by appropriate officers of the parties hereto.
10.08. Headings. The various headings in this Agreement are inserted
for convenience only and shall not affect the meaning or interpretation of this
Agreement or any provision hereof.
10.09. Notices. Except as otherwise specifically provided herein, any
notice, request or consent required hereunder or in connection herewith shall
be deemed satisfactorily given if in writing and delivered by hand or mailed
(registered, overnight or certified mail) or by telecopier to the parties at
their respective addresses or telecopier numbers set forth on Exhibit F
attached hereto.
10.10. Payment on Non-Business Days. Whenever any payment to be made
hereunder shall be stated to be due on a day other than a Business Day, such
payment may be made on the next succeeding Business Day (or preceding London
Business Day, as applicable), provided however that such extension of time
shall be included in the computation of interest due in conjunction with such
payment or other fees due hereunder, as the case may be.
10.11. Time of Day. All time of day restrictions imposed herein shall
be calculated using Administrative Agent's local time.
10.12. Severability. If any provision of this Agreement or the
application thereof to any person or entity or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the
application of such provisions to other persons, entities or circumstances
shall not be affected thereby and shall be enforced to the greatest extent
permitted by law.
10.13. Counterparts. This Agreement may be executed in any number of
counterparts with the same effect as if all the signatures on such counterparts
appeared on one document, and each such counterpart shall be deemed to be an
original.
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10.14. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY
KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE NOTES OR ANY COLLATERAL
SECURITY DOCUMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY BANK OR AGENT. THIS PROVISION IS
A MATERIAL INDUCEMENT FOR EACH BANK'S ENTERING INTO THIS AGREEMENT.
10.15. Acknowledgements. BORROWER ACKNOWLEDGES THAT IT HAS HAD THE
ASSISTANCE OF COUNSEL IN THE REVIEW AND EXECUTION OF THIS AGREEMENT AND,
SPECIFICALLY, PARAGRAPH 10.14 HEREOF, AND FURTHER ACKNOWLEDGES THAT THE MEANING
AND EFFECT OF THE FOREGOING WAIVER OF JURY TRIAL HAS BEEN FULLY EXPLAINED TO
BORROWER BY SUCH COUNSEL.
IN WITNESS WHEREOF, the undersigned, by their duly authorized partners
or officers, have executed this Agreement the day and year first above written.
CABLE TV FUND 12-BCD VENTURE
By: CABLE TV FUND 12-B, LTD., a general
partner
By: CABLE TV FUND 12-C, LTD., a general
partner
By: CABLE TV FUND 12-D, LTD., a general
partner
Attest: By: Jones Intercable, Inc.,
their general partner
By: /s/ JACK D. FINLAW JR. By: /s/ J. ROY POTTLE
------------------------------- ----------------------------
Name: Jack D. Finlaw Jr. Name: J. Roy Pottle
Title: Assistant Secretary Title: Treasurer
(CORPORATE SEAL)
(EXECUTIONS CONTINUED]
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CORESTATES BANK, N.A., individually and
in its capacity as Administrative Agent
and a Managing Agent hereunder
By: /s/ PHILIP D. HARRISON
------------------------------------
Name: Philip D. Harrison
Title: Assistant Vice President
SOCIETE GENERALE, acting through its
New York Branch, individually and in
its capacity as a Managing Agent
hereunder
By: /s/ MARK VIGIL
------------------------------------
Name: Mark Vigil
Title: Vice President
NATIONSBANK OF TEXAS, N.A.
By: /s/ DOUGLAS S. STUART
------------------------------------
Name: Douglas S. Stuart
Title: Senior Vice President
ROYAL BANK OF CANADA
By: /s/ CYNTHIA K. WONG
------------------------------------
Name: Cynthia K. Wong
Title: Manager
NATWEST BANK, N.A.
By: /s/ ROSELYN REID
------------------------------------
Name: Roselyn Reid
Title: Vice President
COLORADO NATIONAL BANK
By: /s/ DAVID S. WAZAR
------------------------------------
Name: David S. Wazar
Title: Vice President
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