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CREDIT AGREEMENT
Dated as of December 15, 1997
by and between
CELTICS LIMITED PARTNERSHIP
as the Borrower
BOSTON CELTICS LIMITED PARTNERSHIP
and
CITIZENS BANK OF MASSACHUSETTS
as the Lender
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CREDIT AGREEMENT
TABLE OF CONTENTS
SECTION PAGE
1. DEFINITIONS AND RULES OF INTERPRETATION 1
1.1. Definitions 1
1.2. Rules of Interpretation. 11
2. THE CREDIT FACILITIES 12
2.1. The Term Loan 12
2.2. The Revolving Credit 12
2.3. Reduction of Available Commitment 13
2.4. The Notes 13
2.5. Interest on Revolving Credit Loans 14
2.6. Requests for Revolving Credit Loans 15
2.7. Conversion 15
2.8. Funds for Loans 16
2.9. Additional Payments; Set-Off; Etc. 16
3. PREPAYMENT AND REPAYMENT OF THE LOANS 16
4. CERTAIN GENERAL PROVISIONS 17
4.1. Commitment Fee 17
4.2. Funds for Payments 18
4.3. Computations 18
4.4. Inability to Determine LIBOR Rate 18
4.5. Illegality 19
4.6. Additional Costs, Etc 19
4.7. Capital Adequacy 20
4.8. Certificate 21
4.9. Indemnity 21
4.10. Interest on Overdue Amounts 21
5. SECURITY 21
6. REPRESENTATIONS AND WARRANTIES 21
6.1. Legal Existence and Authority 21
6.2. Governmental and NBA Consents 22
6.3. Title to Properties; Leases 22
6.4. Financial Statements 22
6.5. No Material Changes, Etc. 23
6.6. Franchises, Patents, Copyrights, Etc. 23
6.7. Litigation 23
6.8. No Materially Adverse Contracts, Etc. 23
6.9. Compliance With Other Instruments, Laws, Etc. 23
6.10. Tax Status 24
6.11. No Event of Default 24
6.12. Absence of Financing Statements, Etc. 24
6.13. Perfection of Security Interest 24
6.14. Related Party Transactions 24
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6.15. Employee Benefit Plans 24
6.16. Regulation U and X 25
6.18. No Subsidiaries 25
6.19. Lease 26
6A. REPRESENTATIONS AND WARRANTIES OF BCLP 26
6A.1. Representations and Warranties in Section 6. 26
6A.2. No Material Changes 26
7. AFFIRMATIVE COVENANTS OF THE BORROWER 26
7.1. Punctual Payment 26
7.2. Maintenance of Office 26
7.3. Records and Accounts 26
7.4. Financial Statements, Certificates and Information 27
7.5. Notices 28
7.6. Legal Existence; Maintenance of Properties 29
7.7. Insurance 30
7.8. Taxes 30
7.9. Annual Financial Review 30
7.10. Inspection of Properties and Books 30
7.11. Compliance with Laws, Contracts, Licenses, and Permits 31
7.12. Employee Benefit Plans 31
7.13. Use of Proceeds 31
7.14. Compliance with Lease 31
7.15. Further Assurances 32
7.16. Maintenance of Accounts 32
7.17. NBA Consent 32
8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER 32
8.1. Restrictions on Indebtedness 32
8.2. Restrictions on Liens 33
8.3. Restrictions on Investments 34
8.4. Merger, Consolidation; Subsidiaries 35
8.5. Employee Benefit Plans 35
8.6. Debt Service Coverage 35
8.7. Distributions 36
8.8. Changes in NBA Franchise 36
8.9. NBA Franchise Valuation 36
8A. CERTAIN NEGATIVE COVENANTS OF BCLP 36
9. CLOSING CONDITIONS 36
9.1. Loan Documents, Etc 36
9.2. Certified Copies of Partnership Agreement 37
9.3. Partnership Action 37
9.4. Incumbency Certificate 37
9.5. Validity of Liens 37
9.6. Perfection Certificate and UCC Search Results 37
9.7. Certificates of Insurance 37
9.8. Opinions of Counsel 37
9.9. Payment of Fees 37
9.10. NBA Charter 38
9.11. No Adverse Change 38
9.12. Consummation of Marketing Alliance 38
9.13. Facility Fee 38
9.14. Landlord Consent, Waiver and Estoppel Certificate 38
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10. CONDITIONS TO ALL BORROWINGS 38
10.1. Representations True; No Event of Default 38
10.2. No Legal Impediment 38
10.3. Governmental Regulation 38
10.4. Proceedings and Documents 39
11. EVENTS OF DEFAULT: ACCELERATION: ETC. 39
11.1. Events of Default and Acceleration 39
11.2. Termination of Commitment 42
11.3. Remedies 42
11.4. Distribution of Collateral Proceeds 42
12. SETOFF 43
13. EXPENSES 43
14. INDEMNIFICATION BY BORROWER 43
14A. INDEMNIFICATION BY BCLP 44
15. SURVIVAL OF COVENANTS, ETC. 44
16. ASSIGNMENT 45
16.1. Assignment by the Lender 45
16.2. Disclosure 45
16.3. Assignment by Borrower 45
17. NOTICES, ETC. 45
18. GOVERNING LAW 46
19. HEADINGS 46
20. COUNTERPARTS 46
21. ENTIRE AGREEMENT, ETC. 46
22. WAIVER OF JURY TRIAL 46
23. CONSENTS, AMENDMENTS, WAIVERS, ETC. 47
24. SEVERABILITY 47
SCHEDULES AND EXHIBITS
Schedule 6.3 Title to Properties; Leases
Schedule 6.7 Litigation
Schedule 6.15 Employee Benefits
Schedule 8.3 Existing Investments
Exhibit A-1 Form of Term Note
Exhibit A-2 Form of Revolving Credit Note
Exhibit B Form of Loan Request
Exhibit B-1 Form of Disbursement Letter
Exhibit C Form of NBA Consent
Exhibit D Form of Borrower's Counsel Opinion
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CREDIT AGREEMENT
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This CREDIT AGREEMENT is made as of the 12th day of December, 1997, by
and between CELTICS LIMITED PARTNERSHIP (the "Borrower"), a Delaware limited
partnership having its principal place of business at 000 Xxxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, BOSTON CELTICS LIMITED PARTNERSHIP ("BCLP") (only
with respect to and Sections 6A, 8A and 14A as applicable), a Delaware limited
partnership having its principal place of business at 000 Xxxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000 and CITIZENS BANK OF MASSACHUSETTS (the "Lender"),
a Massachusetts savings bank having its principal place of business at 00 Xxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
Recitals
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BCLP is the sole limited partner of the Borrower and such limited
partnership interest represents a 99% interest of the Borrower. The Borrower
desires to refinance existing debt and arrange for credit facilities for its
working capital needs.
The Borrower has requested that the Lender make available a Term Loan of
$50,000,000 and Revolving Credit Loans of up to $10,000,000. All of the
obligations of the Borrower under this Agreement will be secured by a first
perfected security interest in all tangible and intangible assets, now owned or
hereafter acquired by Borrower, including but not limited to a security
interest in the NBA Franchise and a leasehold mortgage of the lease between the
Borrower and the New Boston Garden Corporation. The Lender is willing to
provide the credit facilities described herein on the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the mutual promises contained in this
Agreement, the receipt and sufficiency is hereby acknowledged, the parties
hereby agree as follows:
SECTION 1. DEFINITIONS AND RULES OF INTERPRETATION
1.1. Definitions. The following terms shall have the meanings set forth
in this [SECTION]1 or elsewhere in the provisions of this Credit Agreement
referred to below:
Advances. Collectively, advances and loans by the Borrower to any Person.
Affiliate. Any Person that would be considered to be an affiliate of the
Borrower under Rule 144(a) of the Rules and Regulations of the Securities and
Exchange Commission, as in effect on the date hereof, if the Borrower were
issuing securities.
Available Commitment. That portion of the Commitment available for
general working capital, as set forth in Section 2.2.
Balance Sheet Date. June 30, 1997.
Base Rate. The greater of (a) rate of interest announced from time to
time by the Lender as its "Base Rate" and (b) the Federal Funds Effective Rate
plus 1/2 of 1% per annum (rounded upwards, if necessary, to the next 1/8 of
1%).
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Base Rate Loans. Revolving Credit Loans bearing interest calculated by
reference to the Base Rate.
Borrower. The meaning specified in the preamble hereto.
Boston Celtics. The Boston Celtics professional NBA basketball team.
Business Day. Any day on which banking institutions in Boston,
Massachusetts are open for the transaction of banking business and, in the case
of LIBOR Rate Loans, also a day which is a LIBOR Business Day.
Capital Assets. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and goodwill); provided, however, that Capital Assets
shall not include any item customarily charged directly as an expense or
depreciated over a useful life of twelve (12) months or less in accordance with
generally accepted accounting principles.
Capital Expenditures. Amounts paid or incurred, including indebtedness
incurred, by Borrower in connection with the purchase or lease by Borrower of
Capital Assets that would be required to be capitalized and shown on the
balance sheet of Borrower in accordance with generally accepted accounting
principles.
Capitalized Leases. Leases under which the Borrower is the lessee or
obligor, the discounted future rental payment obligations under which are
required to be capitalized on the balance sheet of the lessee or obligor in
accordance with generally accepted accounting principles.
Cash Flow from Operating Activities. For any period, "Net Cash Flows from
Operating Activities" of the Borrower calculated in accordance with paragraphs
21 through 24 of Financial Accounting Standards Board Statement 95 - Statement
of Cash Flows, as from time to time amended.
Closing Date. The first date on which the conditions set forth in
[SECTION]9 have been satisfied and any Loans are to be made.
Coach Services Contracts. All contracts and agreements, whether now in
existence or made during the effectiveness of this Agreement, with each Coach.
Coach. Any Person engaged or formerly engaged to render coaching services
in connection with the Boston Celtics, including any head coach, assistant
coach, associate coach, strength coach and trainer.
Code. The Internal Revenue Code of 1986, as amended.
Collateral. All of the property, rights and interests of the Borrower,
together with any additions thereto or replacements or proceeds thereof that
are from time to time subject to the security interests, liens and mortgages
created by the Security Documents.
Collective Bargaining Agreement. The master collective bargaining
agreement between the NBA and the NBPA applicable to the NBA and its players,
which agreement shall extend for a term through the end of the 2000/2001 NBA
season, unless earlier terminated in accordance with its terms.
Commissioner. Any Person filling the office of Commissioner of the NBA.
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Commitment. The meaning specified in [SECTION]2.2.
Commitment Fee. The meaning specified in [SECTION]4.1.
Consolidated. With reference to any term defined herein, shall mean that
term as applied to the accounts of BCLP and its Subsidiaries, consolidated in
accordance with generally accepted accounting principles.
Credit Agreement. This Credit Agreement, including the Schedules and
Exhibits hereto.
Current Assets. All assets of the Borrower which may be properly
classified as current assets in accordance with generally accepted accounting
principles on a consolidated basis.
Current Liabilities. All liabilities of the Borrower which may be
properly classified as current liabilities in accordance with generally
accepted accounting principles on a consolidated basis.
Current Maturities. As of any date of determination, the aggregate amount
of principal due and payable in respect of specified Indebtedness of the
Borrower during the 12-month period commencing on such date.
Debt Service. The following amounts for the periods indicated: (a)
Interest Expense plus Current Maturities of Long Term Debt related to purchase
money equipment financing and capitalized leases ("CMLTD-PM") for the reporting
periods from December 31, 1997 through March 31, 2001; (b) Interest Expense
plus CMLTD-PM plus $5,000,000 for the reporting periods from June 30, 2001
through March 31, 2002; and (c) Interest Expense plus CMLTD-PM plus Current
Maturities of the Term Loan for all reporting periods beginning with the year
ending June 30, 2002.
Default. The meaning specified in [SECTION]11.1.
Deferred Compensation. All money and other items of value payable to a
Player or a Coach during a period commencing more than one year after the
August 31 following the expiration of the term of such Player's or Coach's
respective Player Contract or Coach Services Contract. The parties acknowledge
and agree that the Borrower's obligation in respect of Deferred Compensation
constitutes Indebtedness.
Distribution. The declaration or payment of any distribution on or in
respect of any units of any class of partnership interest of the Borrower other
than distributions payable solely in units of partnership interest of the
Borrower, directly or indirectly through a subsidiary of the Borrower or
otherwise; the return of capital by the Borrower to its unitholders as such; or
any other distribution on or in respect of any units of any class of
partnership interest of the Borrower.
Dollars or $. Dollars in lawful currency of the United States of America.
Drawdown Date. The date on which a Revolving Credit Loan is made or is to
be made, and the date on which any Revolving Credit Loan is converted or
continued in accordance with [SECTION]2.7.
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Employee Benefit Plan. Any employee benefit plan within the meaning of
[SECTION]3(3) of ERISA maintained or contributed to by the Borrower or any
ERISA Affiliate, other than a Multiemployer Plan.
Environmental Laws. The Resource Conservation and Recovery Act ("RCRA"),
the Comprehensive Environmental Response, Compensation and Liability Act as
amended ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986
("XXXX"), the Federal Clean Water Act, the Federal Clean Air Act, the Toxic
Substances Control Act or any state or local statute, regulation, ordinance,
order or decree relating to health, safety or the environment.
ERISA. The Employee Retirement Income Security Act of 1974, as amended.
ERISA Affiliate. Any Person which is treated as a single employer with
the Borrower under [SECTION]414 of the Code or Section 4001 of ERISA.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of [SECTION]4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
Event of Default. The meaning specified in [SECTION]11.1.
Expiration Date. The meaning specified in [SECTION]2.2.
Federal Funds Effective Rate For any one day, a fluctuating interest rate
per annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day that is a Business Day,
the average of the quotations for such day on such transactions received by the
Bank from three Federal funds brokers of recognized standing selected by the
Lender.
Xxxxxx Family. Xxxxxx Family shall have the meaning specified in
[SECTION]11.1(n).
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of [SECTION]3(2) of ERISA maintained or contributed to by the Borrower
or any ERISA Affiliate the benefits of which are guaranteed on termination in
full or in part by the PBGC pursuant to Title IV of ERISA, other than a
Multiemployer Plan.
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Indebtedness. All obligations, contingent and otherwise, that in
accordance with generally accepted accounting principles should be classified
upon the obligor's balance sheet as liabilities, or to which reference should
be made by footnotes thereto, including in any event and whether or not so
classified: (a) all debt and similar monetary obligations, whether direct or
indirect; (b) all liabilities secured by any mortgage, pledge, security
interest, lien, charge, or other encumbrance existing on property owned or
acquired subject thereto, whether or not the liability secured thereby shall
have been assumed; (c) all obligations in respect of Capitalized Leases; and
(d) all guarantees, endorsements and other contingent obligations whether
direct or indirect in respect of indebtedness of others, including any
obligation to supply funds to or in any manner to invest in, directly or
indirectly, the debtor, to purchase indebtedness, or to assure the owner of
indebtedness against loss, through an agreement to purchase goods, supplies, or
services for the purpose of enabling the debtor to make payment of the
indebtedness held by such owner or otherwise.
Initial Drawdown Date. The date of the initial drawdown of funds pursuant
to the Revolving Credit Loan.
Interest Expense. For any period, the aggregate amount (determined in
accordance with generally accepted accounting principles) of interest charged
to earnings during such period by the Borrower in respect of all Indebtedness
for borrowed money, Capital Leases and the deferred purchase price of property.
Interest Payment Date. (a) As to any Base Rate Loan, the first day of
each calendar quarter and any date on which such Base Rate Loan is converted to
a LIBOR Rate Loan; and (b) as to any LIBOR Rate Loan, the last day of the
Interest Period relating to such LIBOR Rate Loan, on every third month during
any Interest Period longer than three months and when such LIBOR Rate Loan is
due (by reason of acceleration or otherwise).
Interest Period. With respect to each LIBOR Rate Loan, the one, two,
three, six or twelve month period, as requested by the Borrower, commencing on
the Drawdown Date of such LIBOR Rate Loan; provided that the foregoing
provisions relating to Interest Periods are subject to the following:
(a) if any Interest Period for any LIBOR Rate Loan would otherwise
end on a day that is not a LIBOR Business Day, that Interest Period shall be
extended to the next succeeding LIBOR Business Day unless the result of such
extension would be to carry such Interest Period into another calendar month,
in which event such Interest Period shall end on the immediately preceding
LIBOR Business Day;
(b) any Interest Period for any LIBOR Rate Loan that begins on the
last LIBOR 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) shall, subject to clause (c) below, end on the last LIBOR Business Day
of a calendar month; and
(c) any Interest Period that would otherwise extend beyond the
Expiration Date shall end on the Expiration Date.
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Investments. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (a) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (b) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(c) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption,
retirement, repayment, liquidating dividend or liquidating distribution); (d)
there shall not be deducted in respect of any Investment any amounts received
as earnings on such Investment, whether as dividends, interest or otherwise,
except that accrued interest included as provided in the foregoing clause (b)
may be deducted when paid; and (e) there shall not be deducted from the
aggregate amount of Investments any decrease in the value thereof.
Lease. That certain New Garden License/Lease Agreement dated as of April
14, 1993 between New Boston Garden Corporation, as lessor, and Celtics Limited
Partnership, as lessee, notice of which is recorded with the Suffolk Registry
of Deeds in Book 18193, Page 073.
Lender. The meaning specified in the preamble hereto.
Lender's Head Office. The Lender's office located at 00 Xxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, or at such other location as the Lender may
designate from time to time.
LIBOR Business Day. Any Business Day on which commercial banks are open
for international business (including dealings in Dollar deposits) in London,
England.
LIBOR Rate. In relation to any Interest Period applicable to a LIBOR Rate
Loan, the quotient of (a) the fixed rate of interest determined by the Lender
with respect to such LIBOR Rate Loan two LIBOR Business Days prior to the
beginning of such Interest Period as being the rate at which deposits of
Dollars are offered to the Lender in the London interbank eurodollar market as
at 11:00 a.m. London time on such date for delivery on the first day of such
Interest Period for the number of days comprised therein in an amount equal to
the principal amount of such LIBOR Rate Loan to be outstanding on the first day
of such Interest Period, divided by (b) one (1) minus the Reserve Requirement
(expressed as a decimal) applicable to that Interest Period. The LIBOR Rate
shall be adjusted automatically as of the effective date of any change in the
Reserve Requirement.
LIBOR Rate Loans. Revolving Credit Loans bearing interest calculated by
reference to the LIBOR Rate.
Loan Documents. This Credit Agreement, the Term Note, the Revolving
Credit Note, the Security Documents, the Mortgage and the NBA Consent.
Loan Request. The meaning specified in [SECTION]2.6.
Loans. The Term Loan and the Revolving Credit Loans made by the Lender to
the Borrower pursuant to [SECTION]2.1 and [SECTION]2.2 hereof.
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Long Term Debt. Indebtedness having a maturity date in excess of 12
months from the date of issuance.
Marketing Alliance. The marketing alliance by and between Borrower and
Lender, as reflected in the letter agreement dated September 30, 1997 and all
subsequent agreements entered into by and between Borrower and Lender with
respect to the sponsorship program described therein.
Mortgage. The Leasehold Mortgage, Deed and Security Agreement from the
Borrower to the Lender with respect to the leasehold interests of the Borrower
in the Lease in form and substance satisfactory to the Lender.
Multiemployer Plan. Any multiemployer plan within the meaning of
[SECTION]3(37) of ERISA maintained or contributed to by the Borrower or any
ERISA Affiliate.
NBA. The National Basketball Association, a joint venture composed of its
member teams.
NBA Agreements. Collectively, the NBC Sports Agreement, the TBS/TNT
Agreement, the NBA Properties License Agreement, and any and all contracts or
agreements which represent, evidence, extend, renew, replace or substitute for
any of the foregoing, and all other contracts and agreements of every kind and
nature, whether now in existence or made during the effectiveness of this
Agreement, entered into by or with the NBA, any of its affiliates and/or any
other members of the NBA relating to any of the Borrower's rights under the NBA
Franchise or under any other contract, agreement, relationship, rule of law or
otherwise, or relating to the grant to any Person (including, The American
Broadcasting Company, Columbia Broadcasting System, Inc., the National
Broadcasting Company, Fox Broadcasting Company or any division or affiliate
thereof) of any exhibition, broadcast, transmission, publishing, merchandising
or other exploitation rights, without limitation, with regard to the NBA
Franchise.
NBA Charter. The constitution and by-laws of the NBA and the Joint
Venture Agreement among the member teams of the NBA, as amended from time to
time.
NBA Consent. The agreement of the NBA, the Lender and the Borrower dated
December 16, 1997, including the consent of the NBA to (i) the borrowings
described herein and (ii) the grant of the security interests as described in
the Security Documents.
NBA Documents. The NBA Charter and the NBA Consent.
NBA Franchise. The right of the Borrower under the NBA Charter, as a
member of the NBA, to operate a professional basketball team.
NBA Partnership Agreement. That certain NBA Market Extension Partnership
Agreement dated as of October 25, 1990, and restated as of April 23, 1991,
among the NBA franchises.
NBA Play Stoppage. A work stoppage or strike by NBA players, or a
"lock-out" or similar event preventing NBA players from engaging in NBA games,
or the cancellation of at least eight (8) Boston Celtics regular season NBA
games as a result of any of the foregoing events. An NBA Play Stoppage shall be
deemed to continue until the recommencement of NBA games after a suspension
thereof, so long as no further games are canceled.
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NBA Properties License Agreement. That certain License Agreement dated
September 1, 1967, between the Borrower and NBA Properties, Inc.
NBA Rules and Regulations. Collectively, the NBA Charter, the governing
documents of the NBA, NBA Properties, Inc., NBA Development, LLC and NBA Market
Extension Partnership, and such present and future rules, regulations,
memoranda, resolutions and directives of the NBA Board of Governors or the
Commissioner as may be generally applicable to member teams of the NBA, in each
case as the same may be amended from time to time, and including the custom and
practice thereunder.
NBA Shareholder Agreement. That certain Agreement dated as of January 27,
1968, among the shareholders of NBA Properties, Inc.
NBC Sports Agreement. That certain NBA/NBC Network Television Agreement
dated November 11, 1997, between NBC Sports, a division of the National
Broadcasting Company, Inc. and the NBA.
NBPA. The National Basketball Players Association.
Net Income. Net income (or loss) of the Borrower determined in accordance
with generally accepted accounting principles, including any Subsidiaries of
the Borrower to the extent that consolidated financial statements are required
by generally accepted accounting principles.
Notes. The Term Note and the Revolving Credit Note.
Obligations. All indebtedness, obligations and liabilities of the
Borrower to the Lender, individually or collectively, existing on the date of
this Credit Agreement or arising thereafter, direct or indirect, joint or
several, absolute or contingent, matured or unmatured, liquidated or
unliquidated, secured or unsecured arising by contract, operation of law or
otherwise, arising or incurred under this Credit Agreement or any of the other
Loan Documents or in respect of any of the Loans or the Notes or other
instruments at any time evidencing any thereof.
Outstanding. With respect to the Loans, the aggregate unpaid principal
thereof as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by [SECTION]4002
of ERISA and any successor entity or entities having similar responsibilities.
Perfection Certificate. The Perfection Certificate as defined in the
Security Agreement.
Permitted Liens. Liens, security interests and other encumbrances
permitted by [SECTION]8.2.
Person. Any individual, corporation, partnership, trust, unincorporated
association, joint venture, organization, business, or other legal entity, and
any government or any governmental agency or political subdivision thereof.
Player. Any Person engaged to play or who was previously engaged to play
basketball and whom the Borrower is obligated to pay as a member of the Boston
Celtics (whether in respect of current salary, bonus or Deferred Compensation).
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Player Contracts. All contracts and agreements, whether now in existence
or made during the effectiveness of this Agreement, with each Player.
Real Estate. All real property currently owned or leased by the Borrower,
including the property subject to the Lease.
Record. The grid attached to the Notes, or the continuation of such grid,
or any other similar record, including computer records, maintained by the
Lender with respect to any Loan referred to in the Notes.
Reserve Commitment. That portion of the Commitment to provide liquidity
to make payments of principal and interest on the Term Loan and the Revolving
Credit Loans in the event of an NBA Play Stoppage, as set forth in Section 2.2.
Reserve Requirement. The maximum aggregate reserve requirement (including
all basic, supplemental, marginal and other reserves) which is imposed under
Regulation D on the Lender against "Euro-currency Liabilities" as defined in
said Regulation D.
Revolving Credit Loans. The loans described in Section 2.2 hereof.
Revolving Credit Note. The promissory note of the Borrower delivered
pursuant to [SECTION]2.4.
Security Agreement. The Security Agreement dated as of the date hereof
between the Borrower and the Lender and in form and substance satisfactory to
the Lender.
Security Documents. The Security Agreement, the Mortgage and any and all
other agreements and instruments heretofore or hereafter securing the
Obligations.
Subsidiary. Any corporation, association, trust, or other business entity
of which the designated parent shall at any time own directly or indirectly
through a Subsidiary or Subsidiaries at least a majority (by number of votes)
of the outstanding Voting Interest.
TBS/TNT Agreement. That certain Agreement dated November 19, 1997,
between the NBA and Xxxxxx Network Television, Inc.
Term Loan. The term loan described in [SECTION]2.1 hereof.
Term Note. The promissory notes of the Borrower delivered pursuant to
[SECTION]2.1.
Voting Interest. Stock, partnership units, or similar interests, of any
class or classes (however designated), the holders of which are at the time
entitled, as such holders to cast any votes, whether or not the right so to
vote exists by reason of the happening of a contingency.
Working Capital. The excess of (a) Current Assets over (b) Current
Liabilities.
1.2. Rules of Interpretation.
(a) A reference to any document or agreement shall include such document
or agreement as amended, modified or supplemented from time to time in
accordance with its terms and the terms of this Credit Agreement.
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(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification to such
law.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
(e) Accounting terms not otherwise defined herein have the meanings
assigned to them by generally accepted accounting principles applied on a
consistent basis by the accounting entity to which they refer.
(f) The words "include", "includes" and "including" are not limiting.
(g) All terms not specifically defined herein or by generally accepted
accounting principles, which terms are defined in the Uniform Commercial Code
as in effect in Massachusetts, have the meanings assigned to them therein.
(h) Reference to a particular "[SECTION]" refers to that section of this
Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like import
shall refer to this Credit Agreement as a whole and not to any particular
section or subdivision of this Credit Agreement.
(j) The term "generally accepted accounting principles" (i) when used
herein, whether directly or indirectly through reference to a capitalized term
used herein, means (A) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, in effect for the fiscal year ended on the Balance Sheet Date,
and (B) to the extent consistent with such principles, the accounting practice
of the Borrower reflected in its financial statements for the year ended on the
Balance Sheet Date, and (ii) when used in general, other than as provided
above, means principles that are (C) consistent with the principles promulgated
or adopted by the Financial Accounting Standards Board and its predecessors, as
in effect from time to time and (D) consistently applied with past financial
statements of the Borrower adopting the same principles.
SECTION 2. THE CREDIT FACILITIES
2.1. The Term Loan.
(a) On the Closing Date, the Lender will make a term loan (the "Term
Loan") to the Borrower in the amount of $50,000,000. On the Closing Date, the
Borrower will execute and deliver to the Lender the Term Note to evidence the
Term Loan. The principal amount of the Term Loan will be repaid in quarterly
installments of $2,500,000, payable on the first day of each calendar quarter
(i.e., January, April, July and October) commencing on January 1, 2003, with
the final installment due on December 15, 2007 (the "Term Loan Maturity Date")
in the amount of the outstanding principal balance together with all accrued
interest and fees payable hereunder.
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(b) The Borrower shall pay interest on the unpaid balance of the Term
Loan from time to time outstanding at a per annum rate equal to 6.29%. Interest
shall be payable in arrears on the first day of each calendar quarter,
commencing January 1, 1998 and continuing until the Term Note shall have been
paid in full.
2.2. The Revolving Credit.
(a) The Borrower wishes to establish a revolving credit with the Lender
in an aggregate principal amount at any one time outstanding not in excess of
$10,000,000 (the "Commitment"), to expire December 15, 2000 (the "Expiration
Date"). The Expiration Date shall be automatically extended by one year on each
of December 31, 1998 and December 31, 1999, unless the Lender has given the
Borrower prior written notice to the contrary. The Lender is willing to
establish such revolving credit on behalf of the Borrower, subject to the terms
and conditions hereafter set forth.
(b) Subject to the terms and conditions set forth in this Credit
Agreement, the Lender hereby establishes a revolving credit (the loans made
thereunder being referred to as the "Revolving Credit Loans") in favor of the
Borrower in the principal amount of the Commitment. The Lender agrees to lend
to the Borrower and the Borrower may borrow up to $7,000,000 of the Commitment
to provide general working capital (the "Available Commitment"). The Lender
agrees to lend to the Borrower and the Borrower may borrow up to the remaining
$3,000,000 of the Commitment to provide liquidity to make payments of principal
and interest on the Term Loan and the Revolving Credit Loans in the event and
during the continuance of an NBA Play Stoppage (the "Reserve Commitment"). In
the event the Collective Bargaining Agreement is renegotiated and results in a
reduced possibility of an NBA Play Stoppage, the Borrower may request in
writing that the Reserve Commitment be made available for general working
capital. The Lender shall consider the Borrower's request in good faith in
light of the renegotiated Collective Bargaining Agreement and the reduced
possibility of an NBA Play Stoppage and the Lender shall respond within 60 days
of such request from the Borrower. In the event the Lender fails to respond
within 60 days, such failure to respond shall be deemed to be a denial of the
request by the Lender. In the event the Lender responds favorably to the
Borrower's request, then the Lender agrees to lend to the Borrower and the
Borrower may borrow the entire Commitment to provide general working capital.
The Borrower may repay and reborrow from time to time between the Closing Date
and the Expiration Date upon notice by the Borrower to the Lender given in
accordance with [SECTION]2.6. All Revolving Credit Loans shall be made as LIBOR
Rate Loans or Base Rate Loans at Borrower's option. LIBOR Rate Loans may be
converted to Base Rate Loans and Base Rate Loans may be converted to LIBOR Rate
Loans. LIBOR Rate Loans shall be continued or converted to Base Rate Loans
under circumstances specified in [SECTION]2.7 hereof. Each request for a
Revolving Credit Loan hereunder shall constitute a representation and warranty
by the Borrower that the conditions set forth in [SECTION]9 and [SECTION]10, in
the case of the initial Revolving Credit Loan to be made on the Closing Date,
and [SECTION]10, in the case of all other Revolving Credit Loans, have been
satisfied on the date of such request.
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2.3. Reduction of Available Commitment. The Borrower shall have the right
at any time and from time to time upon five (5) Business Days' prior written
notice to the Lender to reduce by $1,000,000 or an integral multiple thereof or
terminate entirely the unborrowed portion of the Available Commitment,
whereupon the Available Commitment shall be reduced accordingly or, as the case
may be, terminated. Upon the effective date of any such reduction or
termination, the Borrower shall pay to the Lender the full amount of any
Commitment Fee payable pursuant to [SECTION]4.1 then accrued on the amount of
the reduction. No reduction of the Available Commitment may be reinstated.
2.4. The Notes.
(a) The Term Loan shall be evidenced by the promissory note of the
Borrower in substantially the form of Exhibit A-1 hereto (the "Term Note"),
dated as of the Closing Date and completed with appropriate insertions. The
Term Note shall be payable to the order of the Lender in the principal amount
equal to $50,000,000, plus interest accrued thereon, as set forth below. The
Borrower irrevocably authorizes the Lender to make or cause to be made, at the
time of receipt of any payment of principal on the Term Note or at any time
thereafter, an appropriate notation on the Record reflecting the receipt of
such payment. The outstanding amount of the Term Loan set forth on the Record
shall be prima facie evidence of the principal amount thereof owing and unpaid
to the Lender, but the failure to record, or any error in so recording, any
such amount on the Lender's Record shall not limit or otherwise affect the
obligations of the Borrower hereunder or under the Term Note to make payments
of principal of or interest on the Term Note when due.
(b) The Revolving Credit Loans shall be evidenced by the promissory note
of the Borrower in substantially the form of Exhibit A-2 hereto (the "Revolving
Credit Note"), dated as of the Closing Date and completed with appropriate
insertions. The Revolving Credit Note shall be payable to the order of the
Lender in the principal amount equal to the Commitment or, if less, the
outstanding amount of all Revolving Credit Loans made by the Lender, plus
interest accrued thereon, as set forth below. The Borrower irrevocably
authorizes the Lender to make or cause to be made, at or about the time of the
Drawdown Date of any Revolving Credit Loan or at the time of receipt of any
payment of principal on the Revolving Credit Note or at any time thereafter, an
appropriate notation on the Record reflecting the making of such Revolving
Credit Loan or (as the case may be) the receipt of such payment. The
outstanding amount of the Revolving Credit Loans set forth on the Record shall
be prima facie evidence of the principal amount thereof owing and unpaid to the
Lender, but the failure to record, or any error in so recording, any such
amount on the Lender's Record shall not limit or otherwise affect the
obligations of the Borrower hereunder or under the Revolving Credit Note to
make payments of principal of or interest on the Revolving Credit Note when
due.
2.5. Interest on Revolving Credit Loans.
(a) Each Base Rate Loan shall bear interest for the period commencing
with the Drawdown Date thereof until repaid in full at the Base Rate. Any
change in the interest rate resulting from a change in the Base Rate is to be
effective at the beginning of the day of such change.
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(b) Each LIBOR Rate Loan shall bear interest for the period commencing
with the Drawdown Date thereof and ending on the last day of the Interest
Period with respect thereto at the rate of seven-tenths of one percent (0.70%)
per annum above the LIBOR Rate determined for such Interest Period.
(c) The Borrower promises to pay interest on each Revolving Credit Loan
in arrears on each Interest Payment Date with respect thereto.
2.6. Requests for Revolving Credit Loans. The Borrower shall give to the
Lender written notice in the form of Exhibit B hereto (or telephone notice
confirmed in a writing in the form of Exhibit B hereto) of each Revolving
Credit Loan requested hereunder (a "Loan Request") no later than (a) 10:00 a.m.
(Boston time) on the proposed Drawdown Date of any Base Rate Loan and (b) two
(2) LIBOR Business Days prior to the proposed Drawdown Date of any LIBOR Rate
Loan. Each such notice shall specify (a) the principal amount of the Revolving
Credit Loan requested, (b) the proposed Drawdown Date of such Revolving Credit
Loan, (c) in the case of LIBOR Rate Loans, the Interest Period for such Loan,
and (d) the purpose or purposes to which such Loan proceeds shall be applied.
Each Loan Request shall be in a minimum aggregate amount of (a) $100,000 or a
higher integral multiple of $10,000 for Base Rate Loans and (b) $1,000,000 or a
higher integral multiple of $100,000 for LIBOR Rate Loans. The initial Drawdown
made hereunder on the Closing Date shall be made in accordance with the terms
of the Disbursement Letter substantially in the form attached hereto as Exhibit
B-1.
2.7. Conversion.
(a) The Borrower may, upon notice (a "Notice of Conversion") given to the
Lender not later than 10:00 A.M. (Boston time), (i) two Business Days prior to
the proposed Conversion in the case of a conversion into Base Rate Loans and
(ii) three LIBOR Business Days prior to the proposed Conversion in the case of
conversion into LIBOR Rate Loans, convert, on any Business Day, any portion of
the outstanding Revolving Credit Loans; provided, however, that any conversion
of LIBOR Rate Loans may be made on, and only on, the last day of an Interest
Period for such Loans. Each Notice of Conversion shall, within the restrictions
specified above, specify (A) the date of such conversion, (B) the Loans to be
converted, and (C) if such conversion is into LIBOR Rate Loans, the Interest
Period for such Loan.
(b) Anything herein to the contrary notwithstanding, if the Borrower,
with respect to an outstanding LIBOR Rate Loan, fails to give the Notice of
Conversion as required by this Section 2.6, then the Borrower shall be deemed
to have given a timely notice of conversion to convert such Loan into a Base
Rate Loan in an equivalent amount of dollars.
(c) Any LIBOR Rate Loan may at Borrower's option be continued as such
upon the expiration of an Interest Period with respect thereto as set forth in
(a) above; provided that no LIBOR Rate Loan may be continued as such when any
Default or Event of Default has occurred and is continuing or in the event the
Lender has delivered any notice pursuant to [SECTION]4.4 or [SECTION]4.5
hereof, but shall be automatically converted to a Base Rate Loan on the last
day of the first Interest Period relating thereto ending during the continuance
of any Default or Event of Default of which the officers of the Lender active
upon the Borrower's account have actual knowledge, or at the end of any such
Interest Period in which the Lender has determined pursuant to [SECTION]4.4
that adequate and reasonable methods do not exist for ascertaining the LIBOR
Rate that would otherwise determine the rate of interest applicable to any
LIBOR Rate Loan during such Interest Period.
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(d) Any conversion to or from LIBOR Rate Loans shall be in such amounts
and be made pursuant to such elections so that, after giving effect thereto,
the aggregate principal amount of all LIBOR Rate Loans having the same Interest
Period shall not be less than $1,000,000 or a whole multiple of $100,000 in
excess thereof.
2.8. Funds for Loans. Upon receipt of the documents required by
[SECTION]9 and [SECTION]10 and the satisfaction of the other conditions set
forth therein, to the extent applicable, the Lender will make available to the
Borrower the aggregate amount of such Revolving Credit Loans requested by the
Borrower, subject to the limitation set forth in Section 2.2(b) hereof.
2.9. Additional Payments; Set-Off; Etc.
(a) If a payment of principal or interest hereunder is not made within 10
days of its due date, the Borrower will also pay on demand a late payment
charge equal to 5% of the amount of such payment. Nothing in the preceding
sentence shall affect the Lender's right to exercise any of its rights or
remedies if an Event of Default has occurred.
(b) The Borrower hereby authorizes the Lender, without prior written
notice to the Borrower, prior to an Event of Default to charge against the
account of the Borrower with the Lender specified in writing by the Borrower an
amount equal to the accrued interest and principal and other amounts from time
to time due and payable to the Lender hereunder and under the Security
Documents and during the continuance of an Event of Default, to so charge any
account of the Borrower with the Lender.
(c) No interest payment or interest rate charged hereunder shall exceed
the maximum rate authorized from time to time by applicable law. If the due
date for any payment of principal is extended by operation of law, interest
shall be payable for such extended time. The outstanding amount of the
Revolving Credit Loans as reflected on the Lender's records from time to time
shall be considered correct and binding on the Borrower (absent manifest error)
unless within 30 days after receipt of any notice by the Lender of such
outstanding amount, the Borrower notifies the Lender in writing to the
contrary.
SECTION 3. PREPAYMENT AND REPAYMENT OF THE LOANS.
(a) The Borrower shall have the right, at its election, to prepay the
outstanding amount of the Term Loan, as a whole or in part, in amounts of
$1,000,000 or a whole multiple of $100,000 in excess thereof, at any time
without penalty or premium from Cash Flow from Operating Activities.
(b) The Borrower shall have the right, at its election, to prepay the
outstanding amount of the Term Loan, as a whole or in part, in amounts of
$1,000,000 or a whole multiple of $100,000 in excess thereof, at any time from
sources other than from Cash Flow from Operating Activities upon the payment of
a premium equal to the percentage of such payment according to the following:
Prepayment Date Penalty
--------------- -------
On or after Closing Date, but before December 15, 1999 2.5%
On or after December 15, 1999, but before December 15, 2001 1.0%
On or after December 15, 2001 0.5%
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Such prepayment penalty will be waived if the Term Loan is prepaid (i)
subsequent to the termination of the Marketing Alliance between the Borrower
and the Lender or (ii) subsequent to December 31, 1998 or December 31, 1999 if
the Expiration Date was not extended on such date by reason of Lender's notice
to Borrower as set forth in [SECTION]2.2.
(c) The Borrower shall have the right, at its election, to repay the
outstanding amount of the Revolving Credit Loans, as a whole or in part, at any
time without penalty or premium, provided that in the case of prepayment of
LIBOR Rate Loans pursuant to this [SECTION]3 on any day other than the last day
of the Interest Period applicable thereto Borrower shall pay any penalties or
premiums provided for in [SECTION]4.9. The Borrower shall give the Lender, no
later than 10:00 a.m., Boston time, at least two (2) Business Days, prior
written notice, of any proposed repayment pursuant to this [SECTION]3 of Base
Rate Loans, and three (3) LIBOR Business Days notice of any proposed repayment
pursuant to this [SECTION]3 of LIBOR Rate Loans, in each case, specifying the
proposed date of payment of such Loans and the principal amount to be paid.
Each such partial prepayment of such Loans shall be in a minimum amount of
$100,000 or an integral multiple thereof and shall be accompanied by the
payment of accrued interest on the principal repaid to the date of payment. If
at any time the outstanding principal amount of the Revolving Credit Loans
exceeds (i) in the case of Revolving Credit Loans for general working capital,
the Available Commitment or (ii) in the case of Revolving Credit Loans to
provide liquidity to make payments of principal and interest on the Term Loan
and the Revolving Credit Loans in the event of an NBA Play Stoppage, the
Reserve Commitment, the Company will immediately repay the Revolving Credit
Note, subject to [SECTION]4.9, in an amount necessary to cause the outstanding
principal amount of the Revolving Credit Loans not to exceed the Available
Commitment or the Reserve Commitment, as the case may be.
SECTION 4. CERTAIN GENERAL PROVISIONS.
4.1. Commitment Fee. The Borrower agrees to pay to the Lender in arrears
on the first Business Day of each calendar quarter (i.e., January, April, July
and October) from the date of execution of this Credit Agreement until the
Expiration Date a commitment fee (the "Commitment Fee") calculated at the rate
of one quarter of one percent (1/4%) per annum on the daily average amount
during the preceding quarter by which the Available Commitment exceeded the
outstanding Revolving Credit Loans during such quarter.
4.2. Funds for Payments.
(a) All payments of principal, interest, fees and any other amounts due
hereunder or under any of the other Loan Documents shall be made to the Lender
at 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or at such other location that
the Lender may from time to time designate, in each case in immediately
available funds.
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(b) All payments by the Borrower hereunder and under any of the other
Loan Documents shall be made without setoff or counterclaim and free and clear
of and without deduction for any taxes (other than taxes based upon or measured
by the income or profits of the Lender, and other than any withholding tax
imposed on any payments by the Borrower to the Lender), or, levies, imposts,
duties, charges, fees, deductions, withholdings, compulsory loans, restrictions
or conditions of any nature now or hereafter imposed or levied by any
jurisdiction or any political subdivision thereof or taxing or other authority
therein unless the Borrower is compelled by law to make such deduction or
withholding. If any such obligation is imposed upon the Borrower with respect
to any amount payable by it hereunder or under any of the other Loan Documents,
the Borrower will pay to the Lender on the date on which such amount is due and
payable hereunder or under such other Loan Document, such additional amount in
Dollars as shall be necessary to enable the Lender to receive the same net
amount which the Lender would have received on such due date had no such
obligation been imposed upon the Borrower. The Borrower will deliver promptly
to the Lender certificates or other valid vouchers for all taxes or other
charges deducted from or paid with respect to payments made by the Borrower
hereunder or under such other Loan Document.
4.3. Computations. All computations of interest on the Loans and of
commitment or other fees shall, unless otherwise expressly provided herein, be
based on a 360-day year and paid for the actual number of days elapsed. Except
as otherwise provided in the definition of the term "Interest Period" with
respect to LIBOR Rate Loans, whenever a payment hereunder or under any of the
other Loan Documents becomes due on a day that is not a Business Day, the due
date for such payment shall be extended to the next succeeding Business Day,
and interest shall accrue during such extension.
4.4 Inability to Determine LIBOR Rate. In the event, prior to the
commencement of any Interest Period relating to any LIBOR Rate Loan, the Lender
shall determine that adequate and reasonable methods do not exist for
ascertaining the LIBOR Rate that would otherwise determine the rate of interest
to be applicable to any LIBOR Rate Loan during any Interest Period, the Lender
shall forthwith give notice of such determination (which shall be conclusive
and binding on the Borrower) to the Borrower. In such event (a) any Loan
Request with respect to LIBOR Rate Loans shall be automatically withdrawn and
shall be deemed a request for a Base Rate Loan, (b) each LIBOR Rate Loan will
automatically, on the last day of the then current Interest Period thereof,
become a Base Rate Loan, and (c) the obligations of the Lender to make LIBOR
Rate Loans shall be suspended until the Lender determines that the
circumstances giving rise to such suspension no longer exist, whereupon the
Lender shall so notify the Borrower.
4.5. Illegality. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or change in the
interpretation or application thereof shall make it unlawful for the Lender to
make or maintain LIBOR Rate Loans, the Lender shall forthwith give notice of
such circumstances to the Borrower and thereupon (a) the commitment of the
Lender to make LIBOR Rate Loans shall forthwith be suspended and (b) the Loans
then outstanding as LIBOR Rate Loans, if any, shall be converted automatically
to Base Rate Loans on the last day of each Interest Period applicable to such
LIBOR Rate Loans or within such earlier period as may be required by law. The
Borrower hereby agrees promptly to pay the Lender upon demand by the Lender any
additional amounts necessary to compensate the Lender for any costs incurred by
the Lender in making any conversion in accordance with this [SECTION]4.5,
including any interest or fees payable by the Lender to lenders of funds
obtained by it in order to make or maintain its LIBOR Rate Loans hereunder.
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4.6. Additional Costs, Etc. If any present or future applicable law,
which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon
or otherwise issued to the Lender by any central bank or other fiscal, monetary
or other authority (whether or not having the force of law), shall:
(a) subject the Lender to any tax, levy, impost, duty, charge, fee,
deduction or withholding of any nature with respect to this Credit Agreement,
the other Loan Documents, or the Loans (other than taxes based upon or measured
by the income or profits of the Lender, and other than any withholding tax
imposed on any payments by the Borrower to the Lender), or
(b) materially change the basis of taxation (except for changes in taxes
on income or profits and except for any withholding tax imposed on any payments
by the Borrower to the Lender) of payments to the Lender of the principal of or
the interest on any Loans or any other amounts payable to the Lender under this
Credit Agreement or the other Loan Documents, or
(c) impose or increase or render applicable (other than to the extent
specifically provided for elsewhere in this Credit Agreement) any special
deposit, reserve, assessment, liquidity, capital adequacy or other similar
requirements (whether or not having the force of law) against assets held by,
or deposits in or for the account of, or loans by, or commitments of an office
of the Lender, or
(d) impose on the Lender any other conditions or requirements with
respect to this Credit Agreement, the other Loan Documents, the Loans, or any
class of loans or commitments of which any of the Loans forms a part, and the
result of any of the foregoing is
(i) to increase the cost to the Lender of making, funding, issuing,
renewing, extending or maintaining any of the Loans or the Commitment, or
(ii) to reduce the amount of principal, interest or other amount
payable to the Lender hereunder on account of any of the Loans or the
Commitment, or
(iii) to require the Lender to make any payment or to forego any
interest or other sum payable hereunder, the amount of which payment or
foregone interest or other sum is calculated by reference to the gross
amount of any sum receivable or deemed received by the Lender from the
Borrower hereunder,
then, and in each such case, the Borrower will, within ten (10) Business Days
following receipt of written notice from the Lender, which written notice shall
include calculations of the amounts payable, pay to the Lender such additional
amounts as will be sufficient to compensate the Lender for such additional
cost, reduction, payment or foregone interest or other sum.
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4.7. Capital Adequacy. If any present or future law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law) or the interpretation thereof by a court or governmental authority with
appropriate jurisdiction or any change in any such law or interpretation
(including, without limitation, any change according to a prescribed schedule
of increasing requirements, whether or not known on the date of this Credit
Agreement) affects the amount of capital required or expected to be maintained
by the Lender or any corporation controlling the Lender and the Lender
determines that the amount of capital required to be maintained by it is
increased by or based upon the existence of the Loans made pursuant hereto,
then the Lender may notify the Borrower of such fact. To the extent that the
costs of such increased capital requirements are not reflected in the
applicable rate(s) of interest on the Loans, the Borrower an the Lender shall
thereafter attempt to negotiate in good faith, within thirty (30) days of the
day on which the Borrower receives such notice, an adjustment payable hereunder
that will adequately compensate the Lender in light of these circumstances. If
the Borrower and the Lender are unable to agree to such adjustment within
thirty (30) days of the date on which the Borrower receives such notice, then
commencing on the date of such notice (but not earlier than the effective date
of any such increased capital requirement), the fees payable hereunder shall
increase by an amount that will, in the Lender's reasonable determination,
provide adequate compensation. The Lender shall allocate such cost increases
among its customers in good faith and on an equitable basis.
4.8. Certificate. A certificate setting forth any additional amounts
payable pursuant to [SECTIONS]4.6 or 4.7 and a brief explanation of such
amounts which are due including calculation of such amounts, submitted by the
Lender to the Borrower, shall be conclusive, absent manifest error, that such
amounts are due and owing.
4.9. Indemnity. the Borrower agrees to indemnify the Lender and to hold
the Lender harmless from and against any loss, cost or expense that the Lender
may sustain or incur as a consequence of (a) default by the Borrower in payment
of the principal amount of or any interest on any LIBOR Rate Loans as and when
due and payable, including any such loss or expense arising from interest or
fees payable by the Lender to lenders of funds obtained by it in order to
maintain its LIBOR Rate Loans, (b) failure by the Borrower to borrow any
Revolving Credit Loan hereunder after the Borrower has given (or is deemed to
have given) a Loan Request relating thereto in accordance with [SECTION]2.6 or
[SECTION]2.7 or (c) the making of any payment of a LIBOR Rate Loan or the
making of any conversion of any such Loan to a Base Rate Loan on a day that is
not the last day of the applicable Interest Period with respect thereto,
including interest or fees payable by the Lender to lenders of funds obtained
by it in order to maintain any such Loans.
4.10. Interest on Overdue Amounts. Overdue principal and (to the extent
permitted by applicable law) interest on the Loans and all other overdue
amounts payable hereunder or under any of the other overdue amounts payable
hereunder or under any of the other Loan Documents shall bear interest
compounded monthly and payable on demand at a rate per annum equal to one and
one half of one percent (1-1/2%) above the applicable rate until such amount
shall be paid in full (after as well as before judgment).
SECTION 5. SECURITY.
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The Obligations shall be secured by a perfected first priority security
interest (subject only to Permitted Liens entitled to priority under applicable
law) in all of the assets of the Borrower, whether now owned or hereafter
acquired, pursuant to the terms of the Security Documents to which the Borrower
is a party; provided, however, that the maximum amount of Obligations secured
pursuant to the Security Documents shall at no time exceed $66,000,000 in the
aggregate.
SECTION 6. REPRESENTATIONS AND WARRANTIES. The Borrower represents and warrants
to the Lender as follows:
6.1. Legal Existence and Authority.
(a) Organization; Good Standing. The Borrower (i) is a partnership duly
organized, validly existing and in good standing under the laws of its state of
organization, (ii) has all requisite power to own its property and conduct its
business as now conducted and as presently contemplated, (iii) is in good
standing as a foreign entity and is duly authorized to do business in each
jurisdiction where such qualification is necessary except where a failure to be
so qualified would not have a materially adverse effect on the business, assets
or financial condition of the Borrower, and (iv) is a member club in good
standing of the NBA and is in compliance with all applicable provisions of the
NBA Charter.
(b) Authorization. The execution, delivery and performance of this Credit
Agreement and the other Loan Documents to which the Borrower is or is to become
a party and the transactions contemplated hereby and thereby (i) are within the
powers of the Borrower, (ii) have been duly authorized by its general partner,
(iii) do not conflict with or result in any breach or contravention of any
provision of law, statute, rule or regulation to which the Borrower is subject
or any judgment, order, writ, injunction, license or permit applicable to the
Borrower, and (iv) do not conflict with any provision of the partnership
agreement of, or any material agreement or other material instrument binding
upon, the Borrower or any provision of the NBA Charter or any of the NBA Rules
and Regulations.
(c) Enforceability. This Credit Agreement and the other Loan Documents to
which the Borrower is or is to become a party are the valid and legally binding
obligations of the Borrower, enforceable against it in accordance with the
respective terms and provisions hereof and thereof, except as enforceability is
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting generally the enforcement of creditors' rights and
except to the extent that availability of the remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceeding therefor may be brought.
6.2. Governmental and NBA Consents. The execution, delivery and
performance by the Borrower of this Credit Agreement and the other Loan
Documents to which the Borrower is or is to become a party and the transactions
contemplated hereby and thereby do not require the approval or consent of, or
filing with, any governmental agency or authority or the NBA other than those
already obtained and delivered to the Lender in form and substance attached
hereto as Exhibit C.
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6.3. Title to Properties; Leases. Except as indicated on Schedule 6.3
hereto, the Borrower owns all of the assets reflected in the balance sheet of
the Borrower as at the Balance Sheet Date or acquired since that date (except
property and assets sold or otherwise disposed of in the ordinary course of
business since that date), subject to no rights of others, including any
mortgages, leases, conditional sales agreements, title retention agreements,
liens or other encumbrances except Permitted Liens.
6.4. Financial Statements. There has been furnished to the Lender balance
sheets of BCLP and the Borrower at the Balance Sheet Date, and statements of
income of BCLP and the Borrower for the year ended, each certified by its
independent auditors. Such balance sheets and income statements have been
prepared in accordance with generally accepted accounting principles and
present fairly its financial position on the date thereof and the results of
its operations for the year then ended. There are no contingent liabilities of
BCLP or the Borrower as of such date involving material amounts, known to its
officers not disclosed in its balance sheet or in the related notes thereto.
6.5. No Material Changes, Etc. Since the Balance Sheet Date there has
occurred no materially adverse change in the financial condition or business of
BCLP or the Borrower as shown on or reflected in the balance sheets as at the
Balance Sheet Date or in the Notes thereto, other than changes in the ordinary
course of business, that have not had any materially adverse effect either
individually or in the aggregate on the business or financial condition of the
Borrower or would have any such effect on the business or financial condition
of the Borrower.
6.6. Franchises, Patents, Copyrights, Etc. The Borrower possess all
franchises, patents, copyrights, trademarks, trade names, licenses and permits,
and rights in respect of the foregoing, adequate for the conduct of its
business substantially as now conducted without known conflict with any rights
of others.
6.7. Litigation. Except as set forth in Schedule 6.7, there are no
actions, suits, proceedings or investigations of any kind pending or threatened
against BCLP or the Borrower before any court, tribunal or administrative
agency or board or other dispute resolution body operating under the auspices
of the NBA or operating pursuant to the provisions of the NBA Charter that, if
adversely determined, might, either in any case or in the aggregate, materially
affect the properties, assets, financial condition or business of the Borrower
or materially impair the right of the Borrower, considered as a whole, to carry
on business substantially as now conducted by the Borrower, or result in any
substantial liability not adequately covered by insurance, or for which
adequate reserves are not maintained on the balance sheet of the Borrower, or
which question the validity of this Credit Agreement or any of the other Loan
Documents, or any action taken or to be taken pursuant hereto or thereto.
6.8. No Materially Adverse Contracts, Etc. The Borrower is not subject to
any partnership agreement, partnership or other legal restriction, or any
judgment, decree, order, rule or regulation that has or is expected in the
future to have a materially adverse effect on the business, assets or financial
condition of the Borrower. The Borrower is not a party to any contract or
agreement that has or is expected, after giving effect to anticipated changes
in operations or other relationships, in the judgment of such entities
officers, to have any materially adverse effect on the business of the
Borrower.
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6.9. Compliance With Other Instruments, Laws, Etc. The Borrower is not in
violation of any provision of the NBA Charter, the Collective Bargaining
Agreement, the NBA Agreements, the NBA Partnership Agreement or any other
agreement or instrument to which it may be subject or by which it or any of its
properties may be bound or any decree, order, judgment, statute, license, rule
or regulation, in any of the foregoing cases in a manner that could result in
the imposition of substantial penalties or materially and adversely affect the
financial condition, properties or business of the Borrower.
6.10. Tax Status. The Borrower (a) has made or filed all federal and
state income and all other tax returns, reports and declarations required by
any jurisdiction to which it is subject, (b) has paid all taxes and other
governmental assessments and charges shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and by appropriate proceedings and (c) has set aside on its books provisions
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply. There are no
unpaid taxes in any material amount claimed to be due by the taxing authority
of any jurisdiction, and the officers of the Borrower know of no basis for any
such claim.
6.11. No Event of Default. No Default or Event of Default has occurred
and is continuing.
6.12. Absence of Financing Statements, Etc. Except with respect to
Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry, or other public office, that purports to cover,
affect or give notice of any present or possible future lien on, or security
interest in, any assets or property of the Borrower or rights thereunder.
6.13. Perfection of Security Interest. All filings, assignments, pledges
and deposits of documents or instruments have been made and all other actions
have been taken that are necessary or advisable, under applicable law, to
establish and perfect the Lender's security interest in the Collateral. The
Collateral and the Lender's rights with respect to the Collateral are not
subject to any setoff, claims, withholdings or other defenses. The Borrower is
the owner of the Collateral free from any lien, security interest, encumbrance
and any other claim or demand, except for Permitted Liens.
6.14. Related Party Transactions. The Borrower has no related party
transactions, as such transactions are defined by Statement of Financial
Accounting Standards No. 57 - Related Party Disclosures ("FAS 57"), other than
those referred to in footnote E of the Notes to the June 30, 1997 Financial
Statements.
6.15. Employee Benefit Plans.
(a) In General. Each Employee Benefit Plan of the Borrower has been
maintained and operated in compliance in all material respects with the
provisions of ERISA and, to the extent applicable, the Code, including but not
limited to the provisions thereunder respecting prohibited transactions. The
Borrower has heretofore delivered to the Lender the most recently completed
annual report, Form 5500, with all required attachments, and actuarial
statements required to be submitted under [SECTION]103(d) of ERISA, with
respect to each Guaranteed Pension Plan of the Borrower.
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(b) Terminability of Welfare Plans. Under each Employee Benefit Plan of
the Borrower which is an employee welfare benefit plan within the meaning of
[SECTION]3(1) or [SECTION]3(2)(B) or ERISA, no benefits are due unless the
event giving rise to the benefit entitlement occurs prior to plan termination
(except as required by Title I, Part 6 of ERISA. The Borrower or an ERISA
Affiliate, as appropriate, may terminate each such Plan at any time (or at any
time subsequent to the expiration of any applicable bargaining agreement) in
the discretion of the Borrower or such ERISA Affiliate without liability to any
Person.
(c) Guaranteed Pension Plans. Each contribution required to be made to a
Guaranteed Pension Plan, whether required to be made to avoid the incurrence of
an accumulated funding deficiency, the notice or lien provisions of
[SECTION]302(f) of ERISA, or otherwise, has been timely made. No waiver of an
accumulated funding deficiency or extension of amortization periods has been
received with respect to any Guaranteed Pension Plan. No liability to the PBGC
(other than required insurance premiums, all of which have been paid) has been
incurred by the Borrower or any ERISA Affiliate with respect to any Guaranteed
Pension Plan and there has not been any ERISA Reportable Event, or any other
event or condition which presents a material risk of termination of any
Guaranteed Pension Plan by the PBGC, except as described in Schedule 6.15.
Based on the latest valuation of each Guaranteed Pension Plan (which in each
case occurred within twelve months of the date of this representation, except
as described in Schedule 6.15, and on the actuarial methods and assumptions
employed for that valuation, the aggregate benefit liabilities of all such
Guaranteed Pension Plans within the meaning of [SECTION]4001 of ERISA did not
exceed the aggregate value of the assets of all such Guaranteed Pension Plans,
disregarding for this purpose the benefit liabilities and assets of any
Guaranteed Pension Plan with assets in excess of benefit liabilities.
(d) Multiemployer Plans. Neither the Borrower nor any ERISA Affiliate has
incurred any material liability (including secondary liability) to any
Multiemployer Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan under [SECTION]4201 of ERISA or as a result of a sale of
assets described in [SECTION]4202 of ERISA. Neither the Borrower nor any ERISA
Affiliate has been notified that any Multiemployer Plan is in reorganization or
insolvent under and within the meaning of [SECTION]4241 or [SECTION]4245 of
ERISA or that any Multiemployer Plan intends to terminate or has been
terminated under [SECTION]4041A of ERISA.
6.16. Regulation U and X. None of the proceeds of this Credit Agreement
will be used for the purpose of purchasing or carrying any "margin security" or
"margin stock" as such terms are used in Regulations U and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.
6.18. No Subsidiaries. There are no Subsidiaries of the Borrower.
6.19. Lease. The Lease is in full force and effect and has not been
modified, transferred or assigned. The Borrower is not in breach of any payment
obligation with respect to the Lease and no material default has occurred or is
continuing thereunder. The Borrower enjoys quiet possession under the Lease.
SECTION 6A. REPRESENTATIONS AND WARRANTIES OF BCLP.
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6A.1. Representations and Warranties in Section 6. BCLP represents and
warrants that the representations and warranties of Borrower as set forth in
Section 6 hereof (not including Sections 6.1(a)(iv), 6.18 and 6.19 and the last
sentence of Section 6.13) are true and correct as to BCLP (as if it was the
Borrower thereunder) as of the date of this Agreement and shall be true and
correct as to BCLP through and including the Initial Drawdown Date.
6A.2. No Material Changes. Since the Balance Sheet Date there has
occurred no materially adverse change in the financial condition or business of
BCLP as shown on or reflected in the balance sheet as at the Balance Sheet Date
or in the Notes thereto, or the consolidated statement of income for the fiscal
year then ended, other than changes in the ordinary course of business, that
have not had any materially adverse effect either individually or in the
aggregate on the business or financial condition of BCLP or would have any such
effect on the business or financial condition of BCLP.
SECTION 7. AFFIRMATIVE COVENANTS OF THE BORROWER. The Borrower covenants and
agrees that, so long as any Loan or Note is outstanding or the Lender has any
obligation to make any Loans:
7.1. Punctual Payment. The Borrower will duly and punctually pay or cause
to be paid the principal of and interest on the Loans and the fees and other
amounts provided for in this Credit Agreement, all in accordance with the terms
of this Credit Agreement and the Note.
7.2. Maintenance of Office. The Borrower will maintain its chief
executive office at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or at
such other place in the United States of America as the Borrower shall
designate upon written notice to the Lender, where notices, presentations and
demands to or upon the Borrower in respect of the Loan Documents may be given
or made.
7.3. Records and Accounts. The Borrower will (a) keep true and accurate
records and books of account in which full, true and correct entries will be
made in accordance with generally accepted accounting principles and (b)
maintain adequate accounts and reserves for all taxes (including income taxes),
depreciation, depletion, obsolescence and amortization of its properties,
contingencies, and other reserves.
7.4. Financial Statements, Certificates and Information. The Borrower
will deliver to the Lender:
(a) as soon as practical, but in any event not later than one hundred-ten
(110) days after the end of each fiscal year of BCLP, a balance sheet of BCLP,
as at the end of such year and statements of income, changes in partners'
capital and changes in cash flows for such year, setting forth in each case in
comparative form the related amounts at the corresponding date or for the
corresponding period of the preceding fiscal year. Such financial statements
will be consolidated to the extent that consolidated financial statements are
required by generally accepted accounting principles and, if consolidated, will
be accompanied by consolidating financial statements for the current year. All
such annual financial statements will be reported upon by an independent
certified public accountant of recognized national standing acceptable to the
Lender (Ernst & Young hereby being deemed acceptable to the Lender) expressing
an opinion without modification regarding the fairness of presentation of such
financial statements in accordance with generally accepted accounting
principles;
42
(b) as soon as practical, but in any event not later than one hundred-ten
(110) days after the end of each fiscal year of the Borrower, a balance sheet
of the Borrower, as at the end of such year and statements of income, changes
in partners' capital and changes in cash flows for such year, setting forth in
each case in comparative form the related amounts at the corresponding date or
for the corresponding period of the preceding fiscal year. Such financial
statements will be consolidated to the extent that consolidated financial
statements are required by generally accepted accounting principles and, if
consolidated will be accompanied by consolidating financial statements for the
current year. All such annual financial statements will be reported upon by an
independent certified public accountant of recognized national standing
acceptable to the Lender (Ernst & Young hereby being deemed acceptable to the
Lender) expressing an opinion without modification regarding the fairness of
presentation of such financial statements in accordance with generally accepted
accounting principles, and a statement that in connection with their audit they
reviewed any consolidating financial statements and that such consolidating
financial statements are presented fairly in relation to the related
consolidated financial statements taken as a whole, such statements to be
without modification except for accounting changes with which such accountants
concur, together with a statement that their examination included a review of
this Agreement and that based upon their review nothing has come to their
attention that has caused them to believe that the Borrower was not in
compliance with any of the provisions of this Agreement insofar as they relate
to accounting matters and are based on balances as of the close of such fiscal
year or for the year then ended;
(c) as soon as practical, but in any event not later than seventy-five
(75) days after the end of each fiscal quarter of the Borrower, unaudited
balance sheets of BCLP, as at the end of such quarter and unaudited statements
of income, changes in partners' capital and changes in cash flows for such
quarter and the fiscal year to date, setting forth in each case in comparative
form the related amounts at the corresponding date or for the corresponding
period of the preceding year. Such financial statements will be consolidated to
the extent that consolidated financial statements are required by generally
accepted accounting principles and, if consolidated, will be accompanied by
consolidating financial statements for the current quarter. All such quarterly
financial statements will be prepared in accordance with generally accepted
accounting principles except that only those footnotes customarily presented in
interim financial statements will be presented, together with a certification
by the principal financial or accounting officer of Borrower and BCLP that such
interim financial statements, other than any consolidating financial
statements, present fairly (subject to year end adjustments) the financial
position, results of operations, changes in partners' capital and cash flows at
such date or for such periods and that any consolidating financial statements
are presented fairly in relation to the related consolidated financial
statements taken as a whole. Concurrently with the delivery of such financial
statements, the Borrower will also certify that nothing has come to its
attention that has caused it to believe that the Borrower was not in compliance
with any of the provisions of this Agreement;
(d) contemporaneously with the filing or mailing thereof, copies of all
material of a financial nature which includes, as a separate company basis or
in consolidation, the financial statements of the Borrower filed with the
Securities and Exchange Commission or sent to the Unitholders of BCLP;
(e) from time to time such other financial data and information with
respect to the Borrower (including accountants' management letters) as the
Lender may reasonably request.
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7.5. Notices.
(a) Defaults. The Borrower will promptly notify the Lender in writing of
the occurrence of any Default or Event of Default. If any Person shall give any
notice or take any other action in respect of a claimed default (whether or not
constituting an Event of Default) under this Credit Agreement or any other
note, evidence of indebtedness, indenture or other obligation to which or with
respect to which the Borrower is a party or obligor, whether as principal or
surety, the Borrower shall forthwith give written notice thereof to the Lender,
describing the notice or action and the nature of the claimed default.
(b) Environmental Events. The Borrower will promptly give notice to the
Lender (i) of any violation of any Environmental Law that the Borrower reports
in writing or is reportable by the Borrower in writing (or for which any
written report supplemental to any oral report is made) to any federal, state
or local environmental agency and (ii) upon becoming aware thereof, of any
inquiry, proceeding, investigation, or other action, including a notice from
any agency of potential environmental liability, or any federal, state or local
environmental agency or board, that, in either case, has the potential to
materially adversely affect the assets, liabilities, financial conditions or
operations of the Borrower, or the Lender's security interests pursuant to the
Security Documents.
(c) Notification of Claims against Collateral. The Borrower will,
immediately upon becoming aware thereof, notify the Lender in writing of any
setoff, claims (including environmental claims), withholdings or other defenses
to which any of the Collateral, or the Lender's rights with respect to the
Collateral, are subject.
(d) Notice of Litigation and Judgments. The Borrower will give notice to
the Lender in writing within fifteen (15) days of becoming aware of any
litigation or proceedings threatened in writing or any pending litigation and
proceedings affecting the Borrower or to which the Borrower is or becomes a
party involving an uninsured claim against the Borrower that could reasonably
be expected to have a materially adverse effect on the Borrower and stating the
nature and status of such litigation or proceedings; provided, however, that
nothing in this Section 7.5(a) shall obligate the Borrower to give any notice
to Lender with respect to any threatened litigation or proceedings arising
against the Borrower by virtue of its membership in the NBA or against the NBA
and its member teams. The Borrower will give notice to the Lender, in writing,
in form and detail satisfactory to the Lender, within ten (10) days of any
judgment not covered by insurance, final or otherwise, against the Borrower in
an amount in excess of $250,000.
(e) Notice from NBA. The Borrower will promptly notify the Lender in
writing of its receipt of notice from the NBA of any action or proceeding by or
commenced against the NBA or its member teams or proposed to be taken against
the Borrower by the NBA pursuant to any provision of the NBA Charter which
could have a materially adverse effect on the Borrower, the franchise rights of
the Borrower or the Borrower's status as a member in good standing of the NBA.
44
(f) Notice of Defaults Under Lease. The Borrower will promptly notify the
Lender in writing of the occurrence of any material default under the Lease. If
any Person shall give any notice or take any other action in respect of a
claimed material default, or a nonmaterial default which remains unresolved for
a period in excess of 90 days, under the Lease, and in the case of a notice,
such notice includes a notice of intent to terminate the Lease if the claimed
default is not remedied, the Borrower shall forthwith give written notice
thereof to the Lender, describing the notice or action and the nature of the
claimed default. In addition to the foregoing notices, Borrower shall furnish
Lender with copies of all notices of default under the Lease, given by any
Person, on a quarterly basis with the financial statements required under
[SECTION]7.4 hereof.
7.6. Legal Existence; Maintenance of Properties. The Borrower will do or
cause to be done all things necessary to preserve and keep in full force and
effect its legal existence, rights and franchises. It (a) will cause all of its
properties used or useful in the conduct of its business to be maintained and
kept in good condition, repair and working order and supplied with all
necessary equipment, (b) will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Borrower may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times, (c) will
continue, unless it has Lender's prior written consent to make a change which
consent will not be unreasonably withheld, to engage primarily in the
businesses now conducted by its and in related businesses, and (d) will do or
cause to be done all things necessary to preserve and keep in full force and
effect its franchise and status as a member team of the NBA provided that
nothing in this [SECTION]7.6 shall prevent the Borrower from discontinuing the
operation and maintenance of any of its properties if such discontinuance, in
the judgment of the Borrower, is desirable in the conduct of its business and
does not in the aggregate materially adversely affect the business of the
Borrower.
7.7. Insurance. The Borrower will maintain with financially sound and
reputable insurers insurance with respect to its properties and business
against such casualties and contingencies as shall be in accordance with the
general practices of businesses engaged in similar activities and in amounts,
containing such terms, in such forms and for such periods as may be reasonable
and prudent and in accordance with the terms of the Security Agreement and the
Mortgage.
7.8. Taxes. The Borrower will duly pay and discharge, or cause to be paid
and discharged, before the same shall become overdue, all taxes, assessments
and other governmental charges (other than taxes, assessments and other
governmental charges imposed by foreign jurisdictions that in the aggregate are
not material to the business or assets of the Borrower) imposed upon its and
its real properties, sales and activities, or any part thereof, or upon the
income or profits therefrom, as well as all claims for labor, materials, or
supplies that if unpaid might by law become a lien or charge upon any of its
property; provided that any such tax, assessment, charge, levy or claim need
not be paid if the validity or amount thereof shall currently be contested in
good faith by appropriate proceedings and if the Borrower shall have set aside
on its books adequate reserves with respect thereto; and provided further that
the Borrower will pay all such taxes, assessments, charges, review or claims
forthwith upon the commencement of proceedings to foreclose any lien that may
have attached as security therefor.
45
7.9. Annual Financial Review. The Lender shall have the right to conduct
an annual financial review of this credit facility on or about December 15 of
each year at its own cost during the term of this Credit Agreement.
7.10. Inspection of Properties and Books. The Borrower shall permit the
Lender or any of the Lender's designated representatives, to visit and inspect
any of the properties of the Borrower to examine the books of account of the
Borrower (and to make copies thereof and extracts therefrom), and to discuss
the affairs, finances and accounts of the Borrower with, and to be advised as
to the same by its officers, all at such reasonable times and intervals as the
Lender may reasonably request.
7.11. Compliance with Laws, Contracts, Licenses, and Permits. The
Borrower will comply with (a) the applicable laws and regulations wherever its
business is conducted, including all Environmental Laws, (b) the provisions of
its partnership agreement, (c) the applicable provisions and requirements of
the NBA Documents, (d) all agreements and instruments by which it or any of its
properties may be bound, and (e) all applicable decrees, orders, and judgments.
If at any time while any Loan or Note is outstanding or the Lender has any
obligation to make Loans hereunder, any authorization, consent, approval,
permit or license from any officer, agency or instrumentality of any government
or the NBA shall become necessary or required in order that the Borrower may
fulfill any of its obligations hereunder, the Borrower will immediately take or
cause to be taken all reasonable steps within the power of the Borrower to
obtain such authorization, consent, approval, permit or license and furnish the
Lender with evidence thereof.
7.12. Employee Benefit Plans. Upon request of the Lender, the Borrower
will (a) promptly upon filing the same with the Department of Labor or Internal
Revenue Service, furnish to the Lender a copy of the most recent actuarial
statement required to be submitted under [SECTION]103(d) of ERISA and Annual
Report, Form 5500, with all required attachments, in respect of each Guaranteed
Pension Plan, and (b) promptly upon receipt or dispatch, furnish to the Lender
any notice, report or demand sent or received in respect of a Guaranteed
Pension Plan under [SECTIONS]302, 4041, 4042, 4043, 4063, 4065, 4066 and 4068
of ERISA, or in respect of a Multiemployer Plan, under [SECTIONS]4041A, 4202,
4219, 4242, or 4245 of ERISA.
7.13. Use of Proceeds. Borrower shall use proceeds from the Term Loan to
repay outstanding indebtedness of the Borrower to Fleet National Bank. Borrower
shall use any portion of the Available Commitment for general working capital.
Borrower shall use any portion of the Reserve Commitment (i) to provide
liquidity to make payments of principal and interest on the Term Loan and the
Revolving Credit Loans in the event and during the continuance of an NBA Play
Stoppage or (ii) if Lender so consents under [SECTION]2.2(b), for general
working capital.
46
7.14. Compliance with Lease. The Borrower will comply with the terms and
provisions of the Lease and will not terminate or amend the Lease (i) in any
respect which increases the rental or other fees, charges or expenses paid by
the Borrower or (ii) in any other materially adverse manner, and in either case
without the prior written consent of the Lender. In the event the Borrower
enters into any new lease agreement for the lease of any property used for
purposes of playing official games in the NBA and conducting practices relating
thereto, the Borrower agrees to grant to the Lender a leasehold mortgage in
favor of the Lender on such leasehold interest in substantially the form of the
Mortgage (with appropriate modifications) and shall deliver in recordable form
any and all documentation necessary to evidence the leasehold mortgage interest
in favor of the Lender.
7.15. Further Assurances. The Borrower will cooperate with the Lender and
execute such further instruments and documents as the Lender shall reasonably
request to carry out to its satisfaction the transactions contemplated by this
Credit Agreement and the other Loan Documents and to enable the Lender to
exercise all of its powers, rights, privileges and remedies hereunder and
thereunder.
7.16. Maintenance of Accounts. The Borrower shall maintain its primary
deposit and cash management relationship with the Lender. The Borrower's
lockbox established to facilitate ticket sales shall be opened with the Lender
commencing with the 1998/1999 NBA season.
7.17. NBA Consent. Each of the provisions of the Loan Documents shall be
subject to the provisions of the NBA Consent, which the Borrower and the Lender
have accepted. Without limiting the generality of the preceding sentence, the
Lender shall not exercise, enforce or attempt to exercise or enforce any of its
rights or remedies under any of the Loan Documents in violation of the NBA
Consent.
SECTION 8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER. The Borrower covenants
and agrees that, so long as any Loan or Note is outstanding or the Lender has
any obligation to make any Loans:
8.1. Restrictions on Indebtedness. The Borrower will not create, incur,
assume, guarantee or be or remain liable, contingently or otherwise, with
respect to any Indebtedness other than:
(a) Indebtedness to the Lender arising under any of the Loan Documents;
(b) Current liabilities of the Borrower incurred in the ordinary course
of business not incurred through (i) the borrowing of money, or (ii) the
obtaining of credit except for credit on an open account basis customarily
extended and in fact extended in connection with normal purchases of goods and
services;
(c) Indebtedness in respect of taxes, assessments, governmental charges
or levies and claims for labor, materials and supplies to the extent that
payment therefor shall not at the time be required to be made in accordance
with the provisions of [SECTION]7.8;
47
(d) Indebtedness in respect of judgments or awards that have been in
force for less than the applicable period for taking an appeal so long as
execution is not levied thereunder or in respect of which the Borrower shall at
the time in good faith be prosecuting an appeal or proceedings for review and
in respect of which a stay of execution shall have been obtained pending such
appeal or review;
(e) Endorsements for collection, deposit or negotiation and warranties of
products or services, in each case incurred in the ordinary course of business;
(f) Indebtedness in respect of Player Contracts or Coach Services
Contracts;
(g) Ticket refunds payable;
(h) Capitalized Leases as determined in accordance with generally
accepted accounting principles and purchase money financing of equipment in an
aggregate amount at any time outstanding not to exceed $500,000; and
(i) Indebtedness of the Borrower consisting of its obligations as a
partner or member of the NBA other than obligations in respect of borrowed
money.
8.2. Restrictions on Liens. The Borrower will not (a) create or incur or
suffer to be created or incurred or to exist any lien, encumbrance, mortgage,
pledge, charge, restriction or other security interest of any kind upon any of
its property or assets of any character whether now owned or hereafter
acquired, or upon the income or profits therefrom; (b) transfer any of such
property; or assets or the income or profits therefrom for the purpose of
subjecting the same to the payment of Indebtedness or performance of any other
obligation in priority to payment of its general creditors; (c) acquire, or
agree or have an option to acquire, any property or assets upon conditional
sale or other title retention or purchase money security agreement, device or
arrangement; (d) suffer to exist for a period of more than thirty (30) days
after the same shall have been incurred any Indebtedness or claim or demand
against it that if unpaid might by law or upon bankruptcy or insolvency, or
otherwise, be given any priority whatsoever over its general creditors; or (e)
sell, assign, pledge or otherwise transfer any accounts, contract rights,
general intangibles, chattel paper or instruments, with or without recourse;
provided that the Borrower may create or incur or suffer to be created or
incurred or to exist:
(i) liens to secure taxes, assessments and other government charges
or claims for labor, material or supplies in respect of obligations not
overdue except claims permitted to be unpaid under [SECTION]7.8;
(ii) deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old age
pensions or other social security obligations;
(iii) liens in respect of judgments or awards, the Indebtedness
with respect to which is permitted by [SECTION]8.1(d);
(iv) liens of carriers, warehousemen, mechanics and material men,
and other like liens, in existence less than 120 days from the date of
creation thereof in respect of obligations not overdue;
48
(v) encumbrances consisting of easements, rights of way, zoning
restrictions, restrictions on the use of real property and defects and
irregularities in the title thereto, landlord's or lessor's liens under
leases to which the Borrower is a party, and other minor liens or
encumbrances none of which in the opinion of the Borrower interferes
materially with the use of the property affected in the ordinary conduct
of the business of the Borrower, which defects do not individually or in
the aggregate have materially adverse effect on the business of the
Borrower;
(vi) purchase money security interests in or purchase money
mortgages on real or personal property acquired after the date hereof to
secure purchase money Indebtedness incurred pursuant to [SECTION]8.1(h)
in connection with the acquisition of such property, which security
interests or mortgages cover only the real or personal property so
acquired;
(vii) liens in favor of the Lender under the Loan Documents; and
(viii) liens arising with respect to Capitalized Leases permitted
by [SECTION]8.1(h).
8.3. Restrictions on Investments. The Borrower will not make or permit to
exist or to remain outstanding any Investment except:
(a) Investments in marketable direct or guaranteed obligations of the
United States of America that mature within one (1) year from the date of
purchase by the Borrower;
(b) Investments in demand deposits, certificates of deposit, bankers
acceptances and time deposits of United States banks having total assets in
excess of $1,000,000,000;
(c) Investments in securities commonly known as "commercial paper" issued
by a corporation organized and existing under the laws of the United States of
America or any state thereof that at the time of purchase have been rated at
the ratings for which are not less than "p 2" if rated by Xxxxx'x Investors
Services, Inc., and not less than "a 2" if rated by Standard and Poor's;
(d) Investments in repurchase agreements secured by any one or more of
the instruments in which the Borrower is permitted to invest pursuant to
[SECTION]8.3(a), (b) and (c);
(e) Investments existing on the date hereof and listed on Schedule 8.3
hereto;
(f) Investments in Affiliates of the Borrower other than as provided in
[SECTION]8.3(h) not to exceed $500,000 in the aggregate at any time
outstanding;
(g) Investments incurred in the ordinary course of business in an amount
not to exceed $500,000;
(h) Investments in the NBA, NBA Properties, Inc., NBA Development, LLC
and the NBA Market Extension Partnership (i) existing on July 1, 1997, as
described on Schedule 8.3 hereto, and any earnings thereon, and (ii) incurred
after July 1, 1997 not to exceed $3,000,000 in the aggregate, and any earnings
thereon, at any time outstanding other than as provided in [SECTION]8.3(f); and
49
(i) Investments consisting of the Borrower's interest as a policy holder
of Planet Insurance.
8.4 Merger, Consolidation; Subsidiaries.
(a) The Borrower will not become a party to any merger or consolidation,
or agree to or effect any asset acquisition or stock acquisition (other than
the acquisition of assets in the ordinary course of business consistent with
past practices). The Borrower will not have any Subsidiaries.
(b) The Borrower will not become a party to or agree to or effect any
disposition of assets, other than the disposition of assets in the ordinary
course of business, consistent with past practices.
8.5. Employee Benefit Plans. Neither the Borrower nor any ERISA Affiliate
will:
(a) engage in any "prohibited transaction" within the meaning of
[SECTION]406 of ERISA or [SECTION]4975 of the Code which could result in a
material liability for the Borrower; or
(b) permit any Guaranteed Pension Plan to incur an "accumulated funding
deficiency", as such term is defined in [SECTION]302 of ERISA, whether or not
such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an extent which,
or terminate any Guaranteed Pension Plan in a manner which, could result in the
imposition of a lien or encumbrance on the assets of the Borrower pursuant to
[SECTION]302(f) or [SECTION]4068 of ERISA; or
(d) permit or take any action which would result in the aggregate benefit
liabilities (with the meaning of [SECTION]4001 of ERISA) of all Guaranteed
Pension Plans exceeding the value of the aggregate assets of such Plans,
disregarding for this purpose the benefit liabilities and assets of any such
Plan with assets in excess of benefit liabilities.
8.6. Debt Service Coverage. The Borrower shall not permit the ratio of
(a) (i) Cash Flows from Operating Activities plus (ii) Interest Expense minus
(iii) Capital Expenditures minus (iv) dividends and other Distributions and
minus (v) cash taxes paid, divided by (B) Debt Service, for each period of four
consecutive quarters, commencing with the period ending December 31, 1997 to
fall below 1.25-to-1.00.
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8.7 Distributions. Cumulative cash Distributions from July 1, 1997 to the
date of and including any proposed distribution shall be limited to cumulative
Cash Flows from Operating Activities of Borrower for that same period. If an
Event of Default other than an Event of Default specified in [SECTION]11.1(a)
or (b) shall have occurred and be continuing, then until such time as Lender
exercises its rights to accelerate the maturity of the Loans pursuant to
[SECTION]11.1, Borrower shall make no further cash distributions to any partner
other than distributions to partners for purposes of paying federal and state
income taxes for which the shareholders or partners of such partner are liable
under [SECTION]702 or 1366 of the Code and which are attributable to the
Borrower's taxable income. If any one or more of the Events of Default
specified in [SECTION]11.1(a) or (b) shall occur and be continuing, or if
Lender exercises its rights to accelerate the maturity of the Loans pursuant to
[SECTION]11.1, Borrower will not make any further cash distributions to any
partner.
8.8. Changes in NBA Franchise. The Borrower will not permit or agree to
(a) any termination of the NBA Franchise, (b) any assignment, transfer, or
other disposition by the Borrower of any right or interest of the Borrower in
the NBA Franchise other than in connection with events relating to the NBA
which affect all NBA teams equally, or (c) any move or relocation of the home
site of the NBA Franchise from the premises subject to the Lease.
8.9. NBA Franchise Valuation. On or before November 30, 1998, the
Borrower shall have delivered to the Lender a valuation of the NBA Franchise
prepared by a valuation firm acceptable to Lender and showing a value of at
least $120,000,000.
SECTION 8A. CERTAIN NEGATIVE COVENANTS OF BCLP. BCLP covenants and agrees
that, so long as any Loan or Note is outstanding or the Lender has any
obligation to make any Loans that BCLP will not take any actions that are in
contravention of this Agreement.
SECTION 9. CLOSING CONDITIONS. The obligation of the Lender to make any
Loan on the Initial Drawdown Date shall be subject to the satisfaction of the
following conditions precedent:
9.1. Loan Documents, Etc. Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto, shall be in full
force and effect and shall be in form and substance satisfactory to the Lender.
The Lender shall have received a fully executed copy of each such document.
9.2. Certified Copies of Partnership Agreement. The Lender shall have
received from the Borrower a copy, certified by a duly authorized officer of
the Borrower to be true and complete on the Closing Date, of its partnership
agreement as in effect on such date of certification, certified by the
Secretary of State of the State of Delaware.
9.3. Partnership Action. All action necessary for the valid execution,
delivery and performance by the Borrower and BCLP of this Credit Agreement and
the other Loan Documents to which it is or is to become a party shall have been
duly and effectively taken, and evidence thereof satisfactory to the Lender
shall have been provided to the Lender.
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9.4. Incumbency Certificate. The Lender shall have received from the
General Partner of the Borrower an incumbency certificate, dated as of the
Closing Date, signed by a duly authorized officer of the General Partner of the
Borrower, and giving the name and bearing a specimen signature of each
individual who shall be authorized: (a) to sign, in the name and on behalf of
the General Partner, each of the Loan Documents to which the Borrower is or is
to become a party; (b) to make Loan Requests; and (c) to give notices and to
take other action on its behalf under the Loan Documents.
9.5. Validity of Liens. The Security Documents shall be effective to
create in favor of the Lender a legal, valid and enforceable first (except for
Permitted Liens entitled to priority under applicable law) lien on and security
interest in the Collateral. All filings, recordings, deliveries of instruments
and other actions necessary or desirable in the opinion of the Lender to
protect and preserve such security interests shall have been duly effected. The
Lender shall have received evidence thereof in form and substance satisfactory
to the Lender.
9.6. Perfection Certificate and UCC Search Results. The Lender shall have
received from the Borrower a completed and fully executed Perfection
Certificate and the results of UCC searches with respect to its Collateral,
indicating no liens other than Permitted Liens and otherwise in form and
substance satisfactory to the Lender.
9.7. Certificates of Insurance. The Lender shall have received (a) a
certificate of insurance from an independent insurance broker dated as of the
Closing Date, identifying insurers, types of insurance, insurance limits, and
policy terms, and otherwise describing the insurance obtained in accordance
with the provisions of this Credit Agreement and the Security Agreement and (b)
certified copies of all policies evidencing such insurance (or certificates
therefor signed by the insurer or an agent authorized to bind the insurer).
9.8. Opinions of Counsel. The Lender shall have received a favorable
opinion addressed to the Lender, dated as of the Closing Date, in form and
substance satisfactory to the Lender substantially as set forth in Exhibit D
hereto.
9.9. Payment of Fees. The Borrower shall have paid to the Lender the fees
and other fees and expenses to be paid by the Borrower in connection with the
documentation of the transactions described in this Agreement.
9.10. NBA Charter. The Borrower shall have delivered to the Lender the
NBA Charter, executed by duly authorized representatives of the member teams of
the NBA.
9.11. No Adverse Change. There shall have been no materially adverse
change in the business, properties, financial condition, operations or results
of operations of the Borrower since the Balance Sheet Date.
9.12. Consummation of Marketing Alliance. The Borrower and the Lender
shall have entered into the Marketing Alliance.
9.13. Facility Fee. The Borrower shall have paid to the Lender a facility
fee equal to $25,000, which shall be deemed earned in full at the Closing Date.
52
9.14. Landlord Consent, Waiver and Estoppel Certificate. The Lender shall
have received a Landlord Consent, Waiver and Estoppel Certificate, duly
executed by the New Boston Garden Corporation in a form acceptable to the
Lender.
SECTION 10. CONDITIONS TO ALL BORROWINGS. The obligations of the Lender to
make any Loan whether on or after the Closing Date, shall also be subject to
the satisfaction of the following conditions precedent:
10.1 Representations True; No Event of Default. Each of the
representations and warranties of the Borrower contained in this Credit
Agreement, the other Loan Documents or in any document or instrument delivered
pursuant to or in connection with this Credit Agreement shall be true as of the
date as of which they were made and shall also be true at and as of the time of
the making of such Loan with the same effect as if made at and as of that time
(except to the extent of changes resulting from transactions contemplated or
permitted by this Credit Agreement and the other Loan Documents and changes
occurring in the ordinary course of business that singly or in the aggregate
are not materially adverse, and to the extent that such representations and
warranties relate expressly to an earlier date) and no Default or Event of
Default shall have occurred and be continuing. The Lender shall have received a
certificate of the Borrower signed by an authorized officer of the Borrower to
such effect.
10.2. No Legal Impediment. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable
opinion of the Lender would make it illegal for the Lender to make such Loan.
10.3. Governmental Regulation. The Lender shall have received such
statements in substance and form reasonably satisfactory to the Lender as the
Lender shall require for the purpose of compliance with any applicable
regulations of the Comptroller of the Currency or the Board of Governors of the
Federal Reserve System.
10.4 Proceedings and Documents. All proceedings in connection with the
transactions contemplated by this Credit Agreement, the other Loan Documents
and all other documents incident thereto shall be satisfactory in substance and
in form to the Lender and its counsel, and the Lender and such counsel shall
have received all information and such counterpart originals or certified or
other copies of such documents as the Lender may reasonably request.
SECTION 11. EVENTS OF DEFAULT: ACCELERATION: ETC.
11.1 Events of Default and Acceleration. If any of the following events
("Events of Default" or, if the giving of notice or the lapse of time or both
is required, then, prior to such notice or lapse of time, "Defaults") shall
occur:
(a) the Borrower shall fail to pay any principal of the Loans when the
same shall become due and payable, whether at the stated date of maturity or
any accelerated date of maturity or at any other date fixed for payment and
such non-payment, shall not have been cured within 5 days of such due date;
53
(b) the Borrower shall fail to pay any interest on the Loans, the
Commitment Fee or other sums due hereunder or under any of the other Loan
Documents, when the same shall become due and payable, whether at the stated
date of maturity or any accelerated date of maturity or at any other date fixed
for payment and such non-payment shall not have been cured within 5 days
following receipt of written notice of any amounts due;
(c) the Borrower shall fail to comply with any of its covenants contained
in [SECTION]8 hereof;
(d) the Borrower shall fail to perform any term, covenant or agreement
contained herein or in any of the other Loan Documents (other than those
specified elsewhere in this [SECTION]11) for fifteen (15) days after written
notice of such failure has been given to the Borrower by the Lender;
(e) any representation or warranty of the Borrower or BCLP in this Credit
Agreement or any of the other Loan Documents or in any other document or
instrument delivered pursuant to or in connection with this Credit Agreement
shall prove to have been false in any material respect upon the date when made
or deemed to have been made or repeated;
(f) the Borrower shall fail to pay at maturity, or within any applicable
period of grace, any obligation in respect of any debt or similar monetary
obligations, whether direct or indirect of the Borrower which exceeds in the
aggregate $250,000, for such period of time as would permit (assuming the
giving of appropriate notice if required) the holder or holders thereof or of
any obligations issued thereunder to accelerate the maturity thereof;
(g) the Borrower shall make an assignment for the benefit of creditors,
or admit in writing its inability to pay or generally fail to pay its debts as
they mature or become due, or shall petition or apply for the appointment of a
trustee or other custodian, liquidator or receiver of the Borrower or of any
substantial part of the assets of the Borrower or shall commence any case or
other proceeding relating to the Borrower under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation or
similar law of any jurisdiction, now or hereafter in effect, or shall take any
action to authorize or in furtherance of any of the foregoing, or if any such
petition or application shall be filed or any such case or other proceeding
shall be commenced against the Borrower and the Borrower shall indicate its
approval thereof, consent thereto or acquiescence therein;
(h) a decree or order is entered appointing any such trustee, custodian,
liquidator or receiver or adjudicating the Borrower bankrupt or insolvent, or
approving a petition in any such case or other proceeding, or a decree or order
for relief is entered in respect of the Borrower in an involuntary case under
federal, state or other bankruptcy law as now or hereafter constituted;
(i) there shall remain in force, undischarged, unsatisfied and unstayed,
for more than sixty (60) days, whether or not consecutive, any final judgment
against the Borrower that, alone or with other outstanding final judgments,
undischarged, against the Borrower exceeds in the aggregate $250,000;
(j) the Borrower shall be in material default under the Lease or if for
any reason the Lease shall not be in full force and effect during the term of
this Credit Agreement;
54
(k) if any of the Loan Documents shall be canceled, terminated, revoked
or rescinded otherwise than in accordance with the terms thereof or with the
express prior written agreement, consent or approval of the Lender, or any
action at law, suit or in equity or other legal proceeding to cancel, revoke or
rescind any of the Loan Documents shall be commenced by or on behalf of the
Borrower or its general partner, or any court or any other governmental or
regulatory authority or agency of competent jurisdiction shall make a
determination that, or issue a judgment, order, decree or ruling to the effect
that, any one or more of the Loan Documents is illegal, invalid or
unenforceable in accordance with the terms thereof;
(l) with respect to any Guaranteed Pension Plan, an ERISA Reportable
Event shall have occurred and the Lender shall have determined in its
reasonable discretion that such event reasonably could be expected to result in
liability of the Borrower to the PBGC or such Guaranteed Pension Plan in an
aggregate amount exceeding $500,000; or a trustee shall have been appointed by
the United States District Court to administer such Guaranteed Pension Plan; or
the PBGC shall have instituted proceedings to terminate such Guaranteed Pension
Plan;
(m) the Borrower shall be indicted for a federal crime, a punishment for
which could include the forfeiture of any material assets of the Borrower
included in the Collateral;
(n) BCLP shall, at any time, own less than all limited partnership
interests in the Borrower, which limited partnership interests represent a 99%
interest in the Borrower and if control of Boston Celtics Corporation, the
General Partner of the Borrower and Celtics, Inc., the General Partner of BCLP,
which general partnership interests represent, respectively, a 1% interest in
the Borrower and a 1% interest in BCLP is not held by the Xxxxxx Family. For
purposes of this [SECTION]11.1(n) control shall mean ownership of more than 50%
of outstanding voting shares of such entity and Xxxxxx Family shall mean Xxxx
X. Xxxxxx and his family as determined with reference to Section 318(a) of the
Code including attributions from any partnership, estate, trust or corporation;
(o) the Borrower shall be in material default under the NBA Charter and
the NBA shall have commenced action against the Borrower in connection with
such default or if the franchise rights granted to the Borrower pursuant to the
NBA Charter shall be terminated, suspended, canceled or rescinded during the
term of this Credit Agreement or if the Borrower ceases for any reason to be a
member in good standing of the NBA;
(p) if any of the Security Documents, once executed and delivered, shall
in any material respect fail to provide to the Lender the liens intended to be
created thereby or cease to be in full force and effect, or the validity
thereof or the applicability thereof to the Loans, the Note, or any other
obligations purported to be secured or guaranteed thereby or any part thereof
shall be questioned or disaffirmed by or on behalf of the Borrower or any party
thereto;
(q) if any material change of ownership or reorganization of BCLP shall
have occurred without the prior written consent of Lender, such consent shall
not be unreasonably withheld;
55
then, and in any such event, so long as the same may be continuing, the Lender
may by notice in writing to the Borrower declare all amounts owing with respect
to this Credit Agreement, the Note and the other Loan Documents to be, and they
shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower; provided that in the event of any
Event of Default specified in [SECTION]11.1(g) or [SECTION]11.1(h), all such
amounts shall become immediately due and payable automatically and without any
requirement of notice from the Lender.
11.2 Termination of Commitment. If any one or more of the Events of
Default specified in [SECTION]11.1(g) or [SECTION]11.1(h) shall occur, any
unused portion of the credit hereunder shall be immediately terminated and the
Lender shall be relieved of all obligations to make Loans to the Borrower. If
any other Event of Default shall have occurred and be continuing, or if on any
Drawdown Date the conditions precedent to the making of the Loans to be made on
such Drawdown Date are not satisfied, the Lender may, by notice to the
Borrower, terminate the unused portion of the credit hereunder, and upon such
notice being given such unused portion of the credit hereunder shall terminate
immediately and the Lender shall be relieved of all further obligations to make
Loans. No termination of the credit hereunder shall relieve the Borrower of any
of the Obligations or any of its existing obligations to the Lender arising
under other agreements or instruments.
11.3 Remedies. In case any one or more of the Events of Default shall
have occurred and be continuing, and whether or not the Lender shall have
accelerated the maturity of the Loans pursuant to [SECTION]11.1, the Lender may
proceed to protect and enforce its rights by suit in equity, action at law or
other appropriate proceeding, whether for the specific performance of any
covenant or agreement contained in this Credit Agreement and the other Loan
Documents or any instrument pursuant to which the Obligations to the Lender are
evidenced, or in aid of the exercise of any power granted hereby or thereby or
by law, including as permitted by applicable law the obtaining of the
appointment of a receiver, ex parte or otherwise, and, if such amount shall
have become due, by declaration or otherwise, proceed to enforce the payment
thereof or any other legal or equitable right of the Lender. No remedy herein
conferred upon the Lender is intended to be exclusive of any other remedy and
each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity
or by statute or any other provision of law.
11.4 Distribution of Collateral Proceeds. In the event that following the
occurrence or during the continuance of any Default or Event of Default, the
Lender receives any monies in connection with the enforcement of any of the
Security Documents, or otherwise with respect to the realization upon any of
the Collateral, such monies shall be distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the reimbursement
of the Lender for or in respect of all reasonable costs, expenses,
disbursements and losses which shall have been incurred or sustained by the
Lender in connection with the collection of such monies by the Lender of all or
any of the rights, remedies, powers and privileges of the Lender under this
Credit Agreement or any of the other Loan Documents or in respect of the
Collateral and supports the provision of adequate indemnity to the Lender
against all taxes or liens which by law shall have, or may have, priority over
the rights of the Lender to such monies;
56
(b) Second, to all other Obligations in such order or preference as the
Lender may determine; provided, however, that the Lender may in its discretion
make proper allowance to take into account any Obligations not then due and
payable;
(c) Third, upon payment and satisfaction in full or other provisions for
payment in full satisfactory to the Lender of all of the Obligations, to the
payment of any obligations required to be paid pursuant to [SECTION]9- 504
(1)(c) of the Uniform Commercial Code of the Commonwealth of Massachusetts; and
(d) Fourth, the excess, if any, shall be returned to the Borrower or to
such other Persons as are entitled thereto.
SECTION 12. SETOFF. Regardless of the adequacy of any collateral, during the
continuance of any Event of Default, any deposits or other sums credited by or
due from the Lender to the Borrower and any securities or other property of the
Borrower in the possession of the Lender may be applied to or set off against
the payment of Obligations and any and all other liabilities, direct, or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, of the Borrower to the Lender.
SECTION 13. EXPENSES. The Borrower agrees to pay (a) the reasonable costs of
producing and reproducing this Credit Agreement, the other Loan Documents and
the other agreements and instruments mentioned herein, (b) any taxes (including
any interest and penalties in respect thereto) payable by the Lender (other
than taxes based upon the Lender's net income) on or with respect to the
transactions contemplated by this Credit Agreement (the Borrower hereby
agreeing to indemnify the Lender with respect thereto), (c) the reasonable
fees, expenses and disbursements of the Lender's counsel or any local counsel
to the Lender incurred (i) in connection with the preparation of the Loan
Documents and other instruments mentioned herein (up to $7,500 in the aggregate
for fees), and (ii) amendments, modifications, approvals, consents or waivers
hereto or hereunder, (d) the reasonable fees, expenses and disbursements of the
Lender incurred by the Lender in connection with the preparation of the Loan
Documents and other instruments mentioned herein, (e) all reasonable
out-of-pocket expenses (including reasonable attorneys' fees and costs, which
attorneys may be employees of the Lender) incurred by the Lender in connection
with (i) the enforcement of or preservation of rights under any of the Loan
Documents against the Borrower or the administration thereof after the
occurrence of a Default or Event of Default and (ii) any litigation, proceeding
or dispute whether arising hereunder or otherwise, in any way related to the
Lender's relationship with the Borrower and (f) all reasonable fees, expenses
and disbursements of the Lender incurred in connection with UCC searches, UCC
filings or Mortgage recordings. The covenants of this [SECTION]13 shall survive
payment or satisfaction of payment of amounts owing with respect to the Note.
57
SECTION 14. INDEMNIFICATION BY BORROWER. The Borrower agrees to indemnify and
hold harmless the Lender and its officers, directors, employees and agents from
and against any and all claims, actions and suits whether groundless or
otherwise, and from and against any and all liabilities, losses, damages and
expenses of every nature and character arising out of this Credit Agreement or
any of the other Loan Documents or the transactions contemplated hereby
including, without limitation, (a) any actual or proposed use by the Borrower
of the proceeds of any of the Loans, (b) any actual or alleged infringement of
any patent, copyright, trademark, service xxxx or similar right of the Borrower
comprised in the Collateral, (c) the Borrower entering into or performing this
Credit Agreement or any of the other Loan Documents or (d) with respect to the
Borrower and its properties and assets, the violation of any Environmental Law,
the presence, disposal, escape, seepage, leakage, spillage, discharge,
emission, release or threatened release of any Hazardous Substances or any
action, suit, proceeding or investigation brought or threatened with respect to
any Hazardous Substances (including, but not limited to claims with respect to
wrongful death, personal injury or damage to property), in each case including,
without limitation, the reasonable fees and disbursements of counsel and
allocated costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding; provided, however, that no
indemnification shall be allowed if the Lender is finally adjudicated to have
acted in bad faith or if such liability is finally adjudicated to have been
caused by the Lender's gross negligence or willful misconduct. In litigation,
or the preparation therefor, the Lender shall be entitled to select its own
counsel and, in addition to the foregoing indemnity, the Borrower agrees to pay
promptly the reasonable fees and expenses of such counsel. If, and to the
extent that the obligations of the Borrower under this [SECTION]14 are
unenforceable for any reason, the Borrower hereby agrees to make the maximum
contribution to the payment in satisfaction of such obligations which is
permissible under applicable law.
SECTION 14A. INDEMNIFICATION BY BCLP. BCLP agrees to indemnify and hold
harmless the Lender from and against any and all claims, actions and suits
whether groundless or otherwise, and from and against any and all liabilities,
losses, damages and expenses of every nature and character arising out of any
breach of any representation or warranty made by BCLP in this Credit Agreement
or any of the other Loan Documents. In litigation, or the preparation thereof,
the Lender shall be entitled to select its own counsel and, in addition to the
foregoing indemnity, BCLP agrees to pay promptly the reasonable fees and
expenses of such counsel. If, and to the extent that the obligations of BCLP
under this Section 14A are unenforceable for any reason, BCLP hereby agrees to
make the maximum contribution to the payment in satisfaction of such
obligations which is permissible under applicable law.
SECTION 15. SURVIVAL OF COVENANTS, ETC. All covenants, agreements,
representations and warranties made herein, in the Note, in any of the other
Loan Documents or in any documents or other papers delivered by or on behalf of
the Borrower pursuant hereto shall be deemed to have been relied upon by the
Lender, notwithstanding any investigation heretofore or hereafter made by it,
and shall survive the making by the Lender of the Loans as herein contemplated,
and shall continue in full force and effect so long as any amount due under
this Credit Agreement or the Note or any of the other Loan Documents remains
outstanding or the Lender has any obligation to make any Loans. All statements
contained in any certificate or other paper delivered to the Lender at any time
by or on behalf of the Borrower pursuant hereto or in connection with the
transactions contemplated hereby shall constitute representations and
warranties by the Borrower hereunder.
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SECTION 16. ASSIGNMENT.
16.1. Assignment by the Lender. The Lender shall not assign or transfer
any of its rights or obligations under any of the Loan Documents without the
prior written consent of the Borrower; provided, however, that such consent
shall not be unreasonably withheld if such assignment is to any United States
national or state chartered bank and does not result in any increased cost to
the Borrower; provided further, however, that the Lender may, at any time and
from time to time, sell, transfer, assign or otherwise grant an interest in any
Loan to a U.S. Subsidiary or any U.S. affiliate of the Lender and to The Royal
Bank of Scotland.
16.2 Disclosure. The Borrower agrees that the Lender may disclose
information obtained by the Lender pursuant to this Credit Agreement to
assignees and potential assignees hereunder; provided that such assignees or
potential assignees shall agree (a) to treat in confidence such information,
(b) not to disclose such information to a third party (except as required by
law or regulatory authority) and (c) not to make use of such information for
purposes of transactions unrelated to such contemplated assignment.
16.3 Assignment by Borrower. The Borrower shall not assign or transfer
any of its rights or obligations under any of the Loan Documents without the
prior written consent of the Lender, which consent shall not be unreasonably
withheld.
SECTION 17. NOTICES, ETC. Except as otherwise expressly provided in this Credit
Agreement, all notices and other communications made or required to be given
pursuant to this Credit Agreement or the Note shall be in writing and shall be
delivered in hand, mailed by United States registered or certified first class
mail, postage prepaid, sent by overnight courier, or sent by telegraph,
telecopy, telefax or telex and confirmed by delivery via courier or postal
service, addressed as follows:
(a) if to the Borrower, Boston Celtics Limited Partnership, 000 Xxxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xx. Xxxxxxx Xxxx, Executive
Vice President and Chief Financial Officer, or at such other address for notice
as the Borrower shall last have furnished in writing to the Person giving the
notice; and
(b) if to the Lender, at Citizens Bank of Massachusetts, 00 Xxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, Xx. Xxxx X. Xxxxx, Senior Vice President, or such
other address for notice as the Lender shall last have furnished in writing to
the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile
and (ii) if sent by registered or certified first-class mail, postage prepaid,
on the third Business Day following the mailing thereof.
59
SECTION 18. GOVERNING LAW. THIS CREDIT AGREEMENT AND EACH OF THE OTHER LOAN
DOCUMENTS, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED THEREIN, ARE CONTRACTS
UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWER
AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURTS AND THE SERVICE OF PROCESS IN ANY SUCH
SUIT BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN
[SECTION]17. THE BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH
SUIT IS BROUGHT IN AN INCONVENIENT COURT.
SECTION 19. HEADINGS. The captions in this Credit Agreement are for convenience
of reference only and shall not define or limit the provisions hereof.
SECTION 20. COUNTERPARTS. This Credit Agreement and any amendment hereof may be
executed in several counterparts and by each party on a separate counterpart,
each of which when so executed and delivered shall be an original, and all of
which together shall constitute one instrument. In proving this Credit
Agreement it shall not be necessary to produce or account for more than one
such counterpart signed by the party against whom enforcement is sought.
SECTION 21. ENTIRE AGREEMENT, ETC. The Loan Documents and any other documents
executed in connection herewith or therewith express the entire understanding
of the parties with respect to the transactions contemplated hereby. Neither
this Credit Agreement nor any term hereof may be changed, waived, discharged or
terminated, except as provided in [SECTION]23.
SECTION 22. WAIVER OF JURY TRIAL. The Borrower hereby waives its right to a
jury trial with respect to any action or claim arising out of any dispute in
connection with this Credit Agreement, the Note or any of the other Loan
Documents, any rights or obligations hereunder or thereunder or the performance
of such rights and obligations. Except as prohibited by law, and except in the
case of the Lender's gross negligence, bad faith or willful misconduct the
Borrower hereby waives any right it may have to claim or recover in any
litigation referred to in the preceding sentence any special, exemplary,
punitive or consequential damages or any damages other than, or in addition to,
actual damages. The Borrower (a) certifies that no representative, agent or
attorney of the Lender has represented, expressly or otherwise, that the Lender
would not, in the event of litigation, seek to enforce the foregoing waivers
and (b) acknowledges that the Lender has been induced to enter into this Credit
Agreement and the other Loan Documents to which it is a party by, among other
things, the waivers and certifications contained herein.
60
SECTION 23. CONSENTS, AMENDMENTS, WAIVERS, ETC. Except as otherwise expressly
provided in this Credit Agreement and except for any consent or approval
required by the NBA or NBA Properties, Inc. or NBA Development, LLC, any
consent or approval required or permitted by this Credit Agreement to be given
by the Lender may be given, and any term of this Credit Agreement or of any
other instrument related hereto or mentioned herein may be amended, and the
performance or observance by the Borrower of any terms of this Credit Agreement
or such other instrument or the continuance of any Default or Event of Default
may be waived (either generally or in a particular instance and either
retroactively or prospectively) with, but only with, the written consent of the
Borrower and the written consent of the Lender. No waiver shall extend to or
affect any obligation not expressly waived nor impair any right consequent
thereon. No course of dealing or delay or omission on the part of the Lender in
exercising any right shall operate as a waiver thereof or otherwise be
prejudicial thereto. No notice to or demand upon the Borrower shall entitle the
Borrower to other or further notice or demand in similar or other
circumstances.
SECTION 24. SEVERABILITY. The provisions of this Credit Agreement are severable
and if any one clause or provision hereof shall beheld invalid or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof,
in such jurisdiction, and shall not in any manner affect such clause or
provision in any other jurisdiction, or any other clause or provision of this
Credit Agreement in any jurisdiction.
IN WITNESS WHEREOF, the Borrower and the Lender have caused this Agreement to
be executed by their duly authorized representatives all as of the day and year
first set forth above.
CELTICS LIMITED PARTNERSHIP
By: Boston Celtics Corporation,
as General Partner
By: /s/ XXXXXXX XXXX
------------------------------------
Xxxxxxx Xxxx,
Executive Vice President
and Chief Financial Officer
BOSTON CELTICS LIMITED PARTNERSHIP*
By: Celtics, Inc., as General Partner
By: /s/ XXXXXXX XXXX
------------------------------------
Xxxxxxx Xxxx,
Executive Vice President
and Chief Financial Officer
61
CITIZENS BANK OF MASSACHUSETTS
By: /s/ XXXX X.XXXXX
------------------------------------
Xxxx X. Xxxxx,
Senior Vice President
* With respect to Sections 6A, 8A and 14A as applicable.
Schedule 6.3
------------
to the Credit Agreement
dated as of December 15, 1997
by and between Celtics Limited Partnership
Boston Celtics Limited Partnership and Citizens Bank of Massachusetts
Title to Properties; Leases
---------------------------
License/Lease Agreement dated as of April 4, 1990 and amended April 14,
1993 between New Boston Garden Corporation and Celtics Limited Partnership,
pertaining to the New Boston Garden
Lease dated as of November 8, 1989 between Causeway Industries Trust and
Celtics Limited Partnership, with amendments 1, 2 and 3, pertaining to office
space at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
Miscellaneous furniture and fixtures (undepreciated book value at 6/30/97
of $181,250)
Miscellaneous equipment and improvements (undepreciated book value at
6/30/97 of $695,164)
62
Schedule 6.7
------------
to the Credit Agreement
dated as of December 15, 1997
by and between Celtics Limited Partnership
Boston Celtics Limited Partnership and Citizens Bank of Massachusetts
Litigation
----------
Celtics Limited Partnership, as a member of the National Basketball
Association (the "NBA"), is a defendant along with the other members in various
lawsuits incidental to the NBA's basketball operations. Celtics Limited
Partnership will generally be liable, jointly and severally, with all other
members of the NBA for the costs of defending such lawsuits and any liabilities
of the NBA which might result from such lawsuits.
Schedule 6.15
-------------
to the Credit Agreement
dated as of December 15, 1997
by and between Celtics Limited Partnership
Boston Celtics Limited Partnership and Citizens Bank of Massachusetts
Employee Benefit Plans
----------------------
None
63
Schedule 8.3
------------
to the Credit Agreement
dated as of December 15, 1997
by and between Celtics Limited Partnership
Boston Celtics Limited Partnership and Citizens Bank of Massachusetts
Investments
-----------
NBA Franchise (unamortized balance at 6/30/97 of $4,010,221)
NBA Properties, Inc. and Subsidiaries - 10 shares (book value at 7/31/92
of negative $333,333, book value at 7/31/96 of negative $401,138, carried at no
value on the balance sheet of Celtics Limited Partnership)
NBA Market Extension Partnership - pro rata partnership interest with all
NBA franchises (book value at 6/30/97 of $2,581,644, carried at no value on the
balance sheet of Celtics Limited Partnership)
NBA Development LLC - no investment as of 6/30/97
Planet Insurance Limited (book value at 12/31/96 of $135,319, carried at
no value on the balance sheet of Celtics Limited Partnership)
64
