EXHIBIT 10.28
EXECUTION
LOAN AND GUARANTY AGREEMENT
DATED AS OF APRIL 5, 1999
AMONG
NORTHPOINT COMMUNICATIONS, INC.,
AS BORROWER,
NORTHPOINT COMMUNICATIONS HOLDINGS, INC.
AND
NORTHPOINT COMMUNICATIONS OF VIRGINIA, INC.,
AS GUARANTORS,
VARIOUS LENDERS,
XXXXXXX XXXXX CREDIT PARTNERS L.P.,
AS JOINT LEAD ARRANGER AND SYNDICATION AGENT,
CANADIAN IMPERIAL BANK OF COMMERCE,
AS ADMINISTRATIVE AGENT,
NEWCOURT COMMERCIAL FINANCE CORPORATION,
AS DOCUMENTATION AGENT AND COLLATERAL AGENT,
AND
CAPITAL SYNDICATION CORPORATION,
AS JOINT LEAD ARRANGER
FIRST PRIORITY LOAN AGREEMENT
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS 1
SECTION 1.01 Definitions 1
SECTION 1.02 Accounting Terms. 25
SECTION 1.03 Other Terms Defined in New York Uniform Commercial Code 25
ARTICLE II
LOANS 25
SECTION 2.01 Agreement to Lend 25
SECTION 2.02 Loans 26
SECTION 2.03 Procedure for Loan Request. 26
SECTION 2.04 The Notes 28
SECTION 2.05 Interest on Loans 29
SECTION 2.06 Conversion or Continuation 29
SECTION 2.07 Special Provisions Governing LIBOR Loans 30
SECTION 2.08 Payments 33
SECTION 2.09 Voluntary and Mandatory Prepayment of Loans 34
SECTION 2.10 Certain Provisions Regarding Prepayments. 36
SECTION 2.11 Fees 36
SECTION 2.12 Manner of Payment; Special Tax Considerations 37
SECTION 2.13 Maximum Lawful Interest Rate 41
SECTION 2.14 Funding Issues 41
ARTICLE III
REPRESENTATIONS AND WARRANTIES 43
SECTION 3.01 Organization; Powers 43
SECTION 3.02 Corporate Authorization 43
SECTION 3.03 Financial Statements 44
SECTION 3.04 No Material Adverse Change 44
SECTION 3.05 Litigation 44
SECTION 3.06 Tax Returns 44
SECTION 3.07 No Defaults 45
SECTION 3.08 Properties 45
SECTION 3.09 Collateral 45
FIRST PRIORITY LOAN AGREEMENT
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SECTION 3.10 Licenses, Material Agreements, Intellectual Property 46
SECTION 3.11 Compliance With Laws 47
SECTION 3.12 ERISA 47
SECTION 3.13 Investment Company Act; Public Utility Holding Company Act 48
SECTION 3.14 Federal Reserve Regulations 48
SECTION 3.15 Insurance 48
SECTION 3.16 Capitalization and Subsidiaries 48
SECTION 3.17 Real Estate Assets 49
SECTION 3.18 Solvency 49
SECTION 3.19 Brokers, etc. 49
SECTION 3.20 No Material Misstatements 49
SECTION 3.21 Year 2000 Matters 49
ARTICLE IV
CONDITIONS FOR LOANS 50
SECTION 4.01 Conditions Precedent to Initial Loans 50
SECTION 4.02 Conditions Precedent to All Loans 53
ARTICLE V
AFFIRMATIVE COVENANTS 54
SECTION 5.01 Corporate and Franchise Existence 54
SECTION 5.02 Compliance with Laws, Etc. 54
SECTION 5.03 Maintenance of Properties 54
SECTION 5.04 Insurance 55
SECTION 5.05 Obligations and Taxes 56
SECTION 5.06 Financial Statements, Reports, etc 56
SECTION 5.07 Litigation and Other Notices 58
SECTION 5.08 Future Properties 58
SECTION 5.09 ERISA 59
SECTION 5.10 Access to Premises and Records 59
SECTION 5.11 Design and Construction 59
SECTION 5.12 Environmental Notices 59
SECTION 5.13 Amendment of Organizational Documents 59
SECTION 5.14 Fiscal Year 60
SECTION 5.15 Year 2000 Problems 60
SECTION 5.16 Future Subsidiaries 60
SECTION 5.17 Accounting; Maintenance of Records 60
SECTION 5.18 Further Assurances 60
SECTION 5.19 Interest Rate Agreements 61
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FIRST PRIORITY LOAN AGREEMENT
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ARTICLE VI
NEGATIVE COVENANTS 62
SECTION 6.01 Liens, etc 62
SECTION 6.02 Use of Proceeds 64
SECTION 6.03 Sale of Assets, Consolidation, Merger, Acquisitions etc 64
SECTION 6.04 Dividends and Distributions; Sale of Equity Interests 64
SECTION 6.05 Management Fees and Permitted Corporate Overhead 65
SECTION 6.06 Investments 65
SECTION 6.07 Subsidiaries 66
SECTION 6.08 Permitted Activities 66
SECTION 6.09 Disposition of Licenses, etc. 66
SECTION 6.10 Transactions with Affiliates 66
SECTION 6.11 ERISA 67
SECTION 6.12 Debt 67
SECTION 6.13 Prepayment and Debt Documents 69
SECTION 6.14 Sale and Leaseback Transactions 69
SECTION 6.15 Margin Regulation 69
SECTION 6.16 Restrictive Agreements, etc. 69
ARTICLE VII
FINANCIAL COVENANTS 69
SECTION 7.01 Financial Covenants Prior to Achieving Positive EBITDA 70
SECTION 7.02 Financial Covenants After Achieving Positive EBITDA 72
ARTICLE VIII
GUARANTY 74
SECTION 8.01 Guaranty of the Obligations 74
SECTION 8.02 Contribution by Guarantors 74
SECTION 8.03 Payment by Guarantors 75
SECTION 8.04 Liability of Guarantors Absolute 76
SECTION 8.05 Waivers by Guarantors 78
SECTION 8.06 Guarantors' Rights of Subrogation, Contribution, Etc. 78
SECTION 8.07 Subordination of Other Obligations 79
SECTION 8.08 Continuing Guaranty 79
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FIRST PRIORITY LOAN AGREEMENT
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SECTION 8.09 Authority of Guarantors or Borrower 79
SECTION 8.10 Financial Condition of Borrower 79
SECTION 8.11 Bankruptcy, Etc. 80
SECTION 8.12 Notice of Events 81
SECTION 8.13 Discharge of Guaranty Upon Sale of Guarantor 81
ARTICLE IX
EVENTS OF DEFAULT; REMEDIES 81
SECTION 9.01 Events of Default 81
SECTION 9.02 Termination of Commitment; Acceleration 84
SECTION 9.03 Waivers 84
ARTICLE X
AGENTS 85
SECTION 10.01 Appointment of Agents 85
SECTION 10.02 Powers and Duties 85
SECTION 10.03 General Immunity 86
SECTION 10.04 Agents Entitled to Act as Lender 87
SECTION 10.05 Lenders' Representations and Warranties 87
SECTION 10.06 Right to Indemnity 87
SECTION 10.07 Successor Administrative Agent 88
SECTION 10.08 Other Loan Documents 88
ARTICLE XI
MISCELLANEOUS 89
SECTION 11.01 Notices 89
SECTION 11.02 Expenses 89
SECTION 11.03 Indemnity 90
SECTION 11.04 Set-Off 91
SECTION 11.05 Amendments and Waivers 91
SECTION 11.06 Successors and Assigns; Participations 93
SECTION 11.07 Independence of Covenants 96
SECTION 11.08 Survival of Representations, Warranties and Agreements 96
SECTION 11.09 No Waiver; Remedies Cumulative 96
SECTION 11.10 Marshalling; Payments Set Aide 96
SECTION 11.11 Severability 97
SECTION 11.12 Obligations Several; Independent Nature of Lenders' Rights 97
SECTION 11.13 Entire Agreement; Headings 97
SECTION 11.14 APPLICABLE LAW 97
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FIRST PRIORITY LOAN AGREEMENT
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SECTION 11.15 CONSENT TO JURISDICTION 97
SECTION 11.16 WAIVER OF JURY TRIAL 98
SECTION 11.17 Confidentiality 99
SECTION 11.18 Ratable Sharing 99
SECTION 11.19 Counterparts; Effectiveness 100
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FIRST PRIORITY LOAN AGREEMENT
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EXHIBITS:
EXHIBIT A-1 Notice of Borrowing
EXHIBIT A-2 Notice of Continuation/Conversion
EXHIBIT B-1 Revolving Loan Note
EXHIBIT B-2 Term Loan Note
EXHIBIT C Compliance Certificate
EXHIBIT D Opinion of Credit Parties' Counsel
EXHIBIT E Assignment Agreement
EXHIBIT F Closing Date Certificate
EXHIBIT G Counterpart Agreement
EXHIBIT H Pledge and Security Agreement
EXHIBIT I Intercreditor Agreement
EXHIBIT J-1 Landlord Consent and Estoppel (Node Site)
EXHIBIT J-2 Landlord Consent and Estoppel (Collocation)
EXHIBIT K Certificate Re Non-bank Status
SCHEDULES:
SCHEDULE 3.02 Certain Disclosures
SCHEDULE 3.10(a) Governmental Authorizations and Approvals
SCHEDULE 3.10(b) Material Agreements
SCHEDULE 3.12 ERISA Matters
SCHEDULE 3.15 Insurance
SCHEDULE 3.16 Capitalization and Subsidiaries
SCHEDULE 3.17 Real Estate Assets
SCHEDULE 6.12 Debt
ANNEXES:
ANNEX A Commitment Amounts
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FIRST PRIORITY LOAN AGREEMENT
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LOAN AND GUARANTY AGREEMENT
LOAN AND GUARANTY AGREEMENT, dated as of April 5, 1999, among
NORTHPOINT COMMUNICATIONS, INC., a Delaware corporation ("BORROWER"), NORTHPOINT
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COMMUNICATIONS OF VIRGINIA, INC., a Virginia corporation ("NORTHPOINT
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VIRGINIA"), and NORTHPOINT COMMUNICATIONS HOLDINGS, INC., a Delaware corporation
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("HOLDINGS"), as Guarantors, the Lenders party hereto from time to time
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("LENDERS"), Xxxxxxx Xxxxx Credit Partners L.P. ("GSCP"), as a Joint Lead
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Arranger (in such capacity, a "JOINT LEAD ARRANGER") and Syndication Agent (in
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such capacity, a "SYNDICATION AGENT"), Canadian Imperial Bank of Commerce
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("CIBC"), as Administrative Agent (in such capacity, the "ADMINISTRATIVE
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AGENT"), Newcourt Commercial Finance Corporation ("NEWCOURT"), as Documentation
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Agent (in such capacity, the "DOCUMENTATION AGENT") and Collateral Agent (in
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such capacity, the "COLLATERAL AGENT"), and Capital Syndication Corporation
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("CSC") as a Joint Lead Arranger (in such capacity, a "JOINT LEAD ARRANGER").
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R E C I T A L S
- - - - - - - -
WHEREAS, Borrower has requested the Lenders to extend credit to
Borrower; and
WHEREAS, the Lenders are willing to extend such credit to Borrower
subject to, and on the terms and conditions of, this Agreement.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, Borrower, each Guarantor, the Agents and the Lenders agree as follows:
1
FIRST PRIORITY LOAN AGREEMENT
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1 ARTICLE
DEFINITIONS
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2.1 SECTION Definitions. As used in this Agreement, including the preamble,
recitals, exhibits, schedules and annexes hereto, the following words and terms
shall have the meanings specified below:
"AFFILIATE" shall mean, with respect to a Person, any Person (other
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than any Lender) directly or indirectly controlling, controlled by or under
common control with such Person and any officer or shareholder of such Person,
which shareholder beneficially owns at least ten percent (10%) of the Equity
Interests of such Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by",
and "under common control with"), as used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided, however,
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that beneficial ownership of at least 10% of the Equity Interests of a Person
shall be deemed to constitute control.
"AGENTS" shall mean collectively, the Administrative Agent, the
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Collateral Agent, the Documentation Agent, the Syndication Agent and the Joint
Lead Arrangers.
"AGGREGATE AMOUNTS DUE" shall have the meaning given to such term in
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Section 11.18 hereof.
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"AGGREGATE PAYMENTS" shall have the meaning given to such term in
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Section 8.02.
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"AGREEMENT" shall mean this Loan and Guaranty Agreement, dated as of
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April 5, 1999, as it may be amended, supplemented or otherwise modified from
time to time.
"APPLICABLE MARGIN" shall mean with respect to (i) each Loan bearing
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interest based upon the Base Rate, 3.50% per annum, and (ii) each Loan bearing
interest based upon the LIBO Rate, 4.50% per annum.
"ASSIGNMENT AGREEMENT" shall mean an assignment agreement entered into
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in connection with an assignment pursuant to Section 11.06 hereof substantially
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in the form of Exhibit E hereof.
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"BASE LIBO RATE" shall mean, with respect to each day during each
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Interest Period pertaining to a LIBOR Loan, the rate per annum determined by the
Administrative Agent to be the arithmetic mean (rounded to the nearest 1/100th
of 1%) of the offered rates for deposits in Dollars with a term comparable to
such Interest Period that appears on the
FIRST PRIORITY LOAN AGREEMENT
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Telerate British Bankers Assoc. Interest Settlement Rates Page (as defined
below) at approximately 11:00 A.M., London time, on the second full Business Day
preceding the first day of such Interest Period; provided, however, that if
there shall at any time no longer exists a Telerate British Bankers Assoc.
Interest Settlement Rates Page, "Base LIBO Rate" shall mean, with respect to
each day during each Interest Period pertaining to a LIBOR Loan, the rate per
annum equal to the rate at which CIBC is offered Dollar deposits at or about
10:00 A.M., New York City time, two Business Days prior to the beginning of such
Interest Period in the interbank eurodollar market where the eurodollar and
foreign currency and exchange operations in respect of its LIBOR Loans are then
being conducted for delivery on the first day of such Interest Period for the
number of days comprised therein and in an amount comparable to the amount of
its LIBOR Loan to be outstanding during such Interest Period. "Telerate British
Bankers Assoc. Interest Settlement Rates Page" shall mean the display designated
as Page 3750 on the Telerate System Incorporates Service (or such other page as
may replace such page on such service for the purpose of displaying the rates at
which Dollar deposits are offered by leading banks in the London interbank
deposit market).
"BASE RATE" shall mean the higher of (i) a rate per annum equal to
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the prime rate announced by CIBC from time to time, changing when and as such
rate changes, it being understood that such rate of interest is not necessarily
the lowest or best rate charged by CIBC to its customers, and (ii) the sum of
the Federal Funds Effective Rate plus one-half percent (0.50%) per annum.
"BASE RATE LOAN" shall mean a Loan, or portion thereof, during any
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period in which it bears interest at a rate based upon the Base Rate.
"BASE RATE REVOLVING LOAN" shall mean a Revolving Loan during any
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period for which it is a Base Rate Loan.
"BASE RATE TERM LOAN" shall mean any portion of the Term Loans during
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any period for which such portion is a Base Rate Loan.
"BENEFICIARY" shall mean any Agent or any Lender.
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"BENEFIT PLAN" shall mean a defined benefit plan as defined in Section
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3(35) of ERISA (other than a Multiemployer Plan) in respect of which Borrower or
any ERISA Affiliate is, or within the immediately preceding six (6) years was,
an "employer" as defined in Section 3(5) of ERISA.
"BORROWER" shall have the meaning given to such term in the preamble
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hereto.
FIRST PRIORITY LOAN AGREEMENT
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"BORROWING BASE" shall mean, at any time, an amount equal to the sum
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of (i) the aggregate cost of all Telecommunications Equipment of Borrower and
its Subsidiaries in which (or in the proceeds of which, including sale,
insurance or condemnation proceeds) Collateral Agent, on behalf of Secured
Parties, has a valid and perfected first priority security interest and that is
not subject to any Lien pursuant to Section 6.01(ii) or 6.01(iii), (ii) with
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respect to any Loan made on the six month anniversary of the Closing Date, the
amount of the Escrowed Proceeds and (iii) 100% of the cost of Telecommunications
Equipment proposed to be acquired through any funding being requested by
Borrower.
"BUSINESS" shall mean the business of operating and maintaining the
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Systems owned by Borrower and its Subsidiaries and all operations related
thereto or in support thereof.
"BUSINESS DAY" shall mean (a) any day not a Saturday, Sunday or legal
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holiday in the State of New York or the State of New Jersey, on which banks are
open for business in New York and New Jersey and (b) with respect to all
notices, determinations, fundings and payments in connection with the LIBO Rate
or LIBOR Loans, any day that is a Business Day pursuant to clause (a) above and
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that is also a day on which trading is carried on by and between banks in the
London interbank market.
"CAPITAL EXPENDITURES" shall mean, for any period, the aggregate of
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all expenditures of Borrower and its Subsidiaries during such period determined
on a consolidated basis that, in accordance with GAAP, are or should be included
in "purchase of property and equipment" or similar items reflected in the
consolidated statement of cash flows of Borrower and its Subsidiaries
including, in any event, the amount of any cash expenditures made with respect
to Permitted Acquisitions.
"CAPITALIZATION" shall mean an amount equal to the funded equity
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capitalization and all funded Debt of Credit Parties, less the aggregate of all
amounts included in clause (ii)(F) of the definition of the term "EBITDA" since
the Closing Date.
"CAPITALIZED LEASE OBLIGATIONS" shall mean indebtedness represented by
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obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP.
"CERTIFICATE RE NON-BANK STATUS" means a certificate in the form of
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Exhibit K.
"CHANGE OF CONTROL" shall mean (i) prior to the consummation of an
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initial public offering of common stock by Holdings providing gross proceeds to
Holdings of not less than $125,000,000, the net proceeds of which are used to
make capital contributions to Borrower constituting Contributed Capital, (a)
Xxxxxxx X. Malaga (or any replacement
FIRST PRIORITY LOAN AGREEMENT
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thereof as Lenders holding at least 66% of the outstanding Loans may approve)
shall cease to be a member of the senior management of Holdings and Borrower, or
(b) either of the Founders referred to in clauses (iii) or (iv) of the
definition thereof shall cease to own and control any of the capital stock of
Holdings owned or controlled by such Founder as of the Closing Date; (ii) for
one year after the Closing Date, either of the Founders referred to in clauses
(i) or (ii) of the definition thereof shall cease to own and control at least
20% of the capital stock of Holdings owned and controlled by such Founder as of
the Closing Date; (iii) any Person (other than one or more of the Founders),
including a "group" (within the meaning of Sections 13(d) and 14(d)(2) of the
Securities Exchange Act) which includes such Person, shall purchase or otherwise
acquire, directly or indirectly, beneficial ownership of securities of Holdings
and, as a result of such purchase or acquisition, any person (together with its
associates and Affiliates), shall directly or indirectly beneficially own in the
aggregate securities representing more than 30% of the combined voting power of
Holdings' voting securities; (iv) a "Change of Control" or similar event shall
occur under any other Debt of a Credit Party or (v) Holdings shall cease to own
and control 100% of the outstanding capital stock of Borrower or any of its
other Subsidiaries or Borrower shall cease to own and control 100% of the
outstanding capital stock of any of its Subsidiaries.
"CLOSING DATE" shall mean the date on which this Agreement is executed
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and delivered by the parties hereto.
"CLOSING DATE CERTIFICATE" shall mean a certificate in the form of
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Exhibit F.
"COLLATERAL" shall mean, all property and interests in property now
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owned or hereafter acquired by any Credit Party, whether real, personal or
mixed, and whether tangible or intangible, in or upon which a security interest,
lien or mortgage is granted to the Collateral Agent by any Credit Party under
any of the Loan Documents.
"COLLATERAL AGENT" shall mean Newcourt in its capacity as Collateral
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Agent under the Loan Documents and the Intercreditor Agreement and also means
any successor Collateral Agent appointed pursuant to Section 1 of the
Intercreditor Agreement.
"COLLATERAL DOCUMENTS" shall mean the Pledge and Security Agreement,
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the Intercreditor Agreement, and all other instruments or documents delivered by
any Credit Party pursuant to this Agreement or any of the other Loan Documents
in order to grant to Collateral Agent, on behalf of Lenders, a Lien on any real,
personal or mixed, or tangible or intangible, property of that Credit Party as
security for the Obligations, as any of the foregoing may be amended,
supplemented or otherwise modified from time to time.
"COMDISCO FACILITY" shall mean the Master Lease Agreement dated as of
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October 23, 1997 by and between Comdisco, Inc. and Borrower, as it may be
amended from time to time in accordance with this Agreement.
FIRST PRIORITY LOAN AGREEMENT
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"COMMITMENT" shall mean the commitments of Lenders to lend as set
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forth in Section 2.01 hereof.
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"COMMITMENT AMOUNT" shall mean (a) as to any Lender, the aggregate of
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such Lender's Revolving Loan Commitment Amount and Term Loan Commitment Amount
as set forth opposite such Lender's name on Annex A to this Agreement or in the
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most recent Assignment Agreement executed by such Lender and (b) as to all
Lenders, the aggregate of all Lenders' Revolving Loan Commitment Amounts and
Term Loan Commitment Amounts, which aggregate commitment shall be Sixty Million
Dollars ($60,000,000) on the Closing Date, as such amount may be adjusted from
time to time in accordance with this Agreement.
"COMMON STOCK" shall mean with respect to any Person, all Equity
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Interests of such Person that are generally entitled to (i) vote in the election
of directors of such Person or (ii) if such Person is not a corporation, vote or
otherwise participate in the selection of the governing body, partners, managers
or others that will control the management and policies of such Person.
"COMPLIANCE CERTIFICATE" shall mean a compliance certificate in the
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form of Exhibit C attached hereto.
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"CONSOLIDATED" or "CONSOLIDATED" refers, with respect to any Person,
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to the consolidation of the accounts of such Person and its Subsidiaries, if
any, in accordance with GAAP.
"CONSOLIDATED DEBT" shall mean, as of any date of determination, the
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Debt of Holdings and its Subsidiaries determined on a consolidated basis in
accordance with GAAP (and shall include, without limitation, the fully accreted
value of any discount notes issued by Holdings) less, prior to the consummation
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of an initial public offering of common stock by Holdings providing gross
proceeds to Holdings of not less than $125,000,000, the net proceeds of which
are used to make capital contributions to Borrower constituting Contributed
Capital, the amount of cash on hand and any Temporary Cash Investment in excess
of $10,000,000 held by Borrower and its Subsidiaries as of such date.
"CONTAMINANT" shall mean any pollutant, hazardous substance, toxic
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substance, hazardous waste, special waste, petroleum or petroleum derived
substance or waste, or any constituent of any such substance or waste.
"CONTRIBUTED CAPITAL" shall mean, with respect to any Person, at any
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date of determination, all capital contributed in the form of cash to such
Person, including all funded equity and all Qualified Inter company Loans.
FIRST PRIORITY LOAN AGREEMENT
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"CONTRIBUTING GUARANTORS" shall have the meaning given to such term in
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Section 8.02 hereof.
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"COUNTERPART AGREEMENT" shall mean a counterpart agreement in the form
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of Exhibit G hereto.
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"CREDIT PARTY" shall mean each Person (other than any Agent or any
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Lender or any other representative thereof) from time to time party to a Loan
Document.
"DEBT" shall mean, with respect to any Person, (i) indebtedness for
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borrowed money, (ii) obligations evidenced by bonds, debentures, notes or other
similar instruments, (iii) obligations to pay the deferred purchase price of
property or services, excluding trade payables not more than 90 days past due
and accrued expenses incurred in the ordinary course of business, (iv)
Capitalized Lease Obligations, (v) all Guaranties of such Person, including
without limitation, all debt of any other Person secured by a Lien on property
of such Person, (vi) all reimbursement obligations, contingent or otherwise,
with respect to letters of credit or banker's acceptances issued for the account
of Borrower (other than letters of credit issued in support of ordinary trade
liabilities or workers' compensation obligations, unless and until drawn and
unreimbursed within one Business Day after such drawing), and (vii) all
indebtedness, obligations or other liabilities in respect of any Interest Rate
Agreement/1/, provided that Debt shall not include any liability for Federal,
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state, local or other taxes, and provided, further, that the amount outstanding
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at any time of any Debt issued with original issue discount is the principal
amount of such Debt less the remaining unamortized portion of the original issue
discount of such Debt at such time as determined in conformity with GAAP, and
that with respect to any high-yield Debt, the amount thereof shall not include
fees incurred in raising such Debt or overfunded amounts set aside solely to pay
interest. Notwithstanding any other provision of the foregoing definition, any
trade payable not more than 90 days past due arising from the purchase of goods
or materials or for services obtained in the ordinary course of business shall
not be deemed to be "Debt" of Borrower for purposes of this definition.
Furthermore, guarantees of (or obligations with respect to letters of credit
supporting) Debt otherwise included in the determination of such amount shall
not be included.
"DEFAULT" shall mean any event which but for the passage of time
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requirement or the giving of notice requirement, or both, would constitute an
Event of Default.
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/1/For purposes of determining the amount of Debt associated with any Interest
Rate Agreement, such determination shall only be made as of the last day of each
calendar quarter and shall be effective until the last day of the immediately
succeeding calendar quarter.
FIRST PRIORITY LOAN AGREEMENT
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"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like
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account with any financial institution, including, without limitation, a bank,
savings and loan association or credit union, other than an account evidenced by
a negotiable certificate of deposit.
"DOLLARS" or "$" shall mean lawful money of the United States of
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America.
"EBITDA" shall mean, with respect to any Person, for any period, an
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amount equal to, without duplication, (i) Net Income plus (ii) the sum of the
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following, to the extent deducted in determining Net Income: (A) income and
franchise taxes, (B) interest expense, (C) amortization and depreciation
expense, including, without limitation, amortization of deferred compensation,
(D) all extraordinary non-cash losses, (E) other non-cash charges (including,
without limitation, non-cash charges incurred in connection with the valuation
of warrants) reducing Net Income and (F) to the extent deducted in determining
Net Income, Market Co-Development Costs funded by Permitted Funds, minus (iii)
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the sum of (A) interest income, (B) extraordinary gains and (C) other non-cash
items increasing Net Income, all as determined for Borrower and its Subsidiaries
on a consolidated basis and in accordance with GAAP.
"ELIGIBLE ASSIGNEE" shall mean (i) any Lender, any Affiliate of any
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Lender, and any Related Fund (any two or more Related Funds being treated as a
single Eligible Assignee for all purposes hereof) and (ii) any commercial bank,
insurance company, investment or mutual fund, finance company or other entity
that is an "accredited investor" (as defined in Regulation D under the
Securities Act) and which extends credit or buys loans as one of its businesses;
provided, no Affiliate of Borrower shall be an Eligible Assignee.
"ENVIRONMENTAL LAWS" shall mean all federal, state and local laws,
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rules, regulations, ordinances, programs, permits, guidance, orders and consent
decrees or other binding determination of any Governmental Authority relating to
protection of the environment, the handling, disposal or Release of Contaminants
and occupational safety and health. Such laws and regulations include but are
not limited to the Resource Conservation and Recovery Act, 33 U.S.C. (S) 6901 et
--
seq., as amended; the Comprehensive Environmental Response, Compensation and
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Liability Act, 42 U.S.C. (S) 9601 et seq., as amended; the Toxic Substances
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Control Act, 15 U.S.C. (S) 2601 et seq., as amended; the Clean Water Act, 33
-- ----
U.S.C. (S) 1251 et seq., as amended; the Clean Air Act, 42 U.S.C. (S) 7401 et
-- ---- --
seq., as amended; state and federal environmental lien and environmental cleanup
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programs; the Occupational Safety and Health Act, 29 U.S.C. (S) 651 et seq.; and
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U.S. Department of Transportation regulations related to the transportation of
hazardous materials, each as from time to time hereafter in effect.
FIRST PRIORITY LOAN AGREEMENT
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"EQUITY AFFILIATE" shall mean, as applied to any Person, any other
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Person directly or indirectly controlling, controlled by, or under direct or
indirect common control with, such Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as applied to any Person,
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"EQUITY INTEREST" shall mean, with respect to any Person, any and all
---------------
shares or other equivalents (however designated) of capital stock, membership
units, partnership interests or any other participation right or other interest
in the nature of an equity interest in such Person or any option, warrant or
other security convertible into any of the foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act of
-----
1974, as amended from time to time.
"ERISA AFFILIATE" shall mean (i) any corporation which is a member of
---------------
the same controlled group of corporations (within the meaning of Section 414(b)
of the IRC) as Borrower, (ii) any partnership or other trade or business
(whether or not incorporated) under common control (within the meaning of
Section 414(c) of the IRC) with Borrower and (iii) any member of the same
affiliated service group (within the meaning of Section 414(m) of the IRC) as
Borrower.
"ESCROWED PROCEEDS" shall mean the proceeds of Revolving Loans made on
-----------------
the six-month anniversary of the Closing Date which are deposited in escrow with
the Collateral Agent or its designee, such proceeds to be released from such
escrow solely for the purpose of enabling Borrower to purchase
Telecommunications Equipment.
"EUROCURRENCY LIABILITIES" shall have the meaning assigned to that
------------------------
term in Regulation D of the Federal Reserve Board, as in effect from time to
time.
"EVENT OF DEFAULT" shall have the meaning given to such term in
----------------
Article IX hereof.
----------
"EVENT OF LOSS" shall mean, with respect to any item of Collateral,
-------------
the actual or constructive loss of such item of Collateral or the use thereof,
due to theft, destruction, damage beyond repair or damage from any reason
whatsoever, to an extent which makes repair uneconomical, or rendition thereof
unfit for normal use, or the condemnation, confiscation or seizure of, or
requisition of title to or use of, such item of Collateral by any Governmental
Authority or any other Person, acting under or deemed to be acting under color
of any Governmental Authority.
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
"EXCESS OPERATING CASH FLOW" shall mean, for any period, Net Income of
--------------------------
Borrower and its Subsidiaries plus non-cash interest expense, depreciation and
amortization and any other non-cash items of Borrower and its Subsidiaries
reducing Net Income, minus scheduled Principal Payments of Borrower and its
-----
Subsidiaries, lease payments and capital expenditures of Borrower and its
Subsidiaries (to the extent not otherwise deducted in determining Net Income),
plus or minus changes in working capital of Borrower and its Subsidiaries during
such period.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
------------
amended from time to time.
"FAIR SHARE CONTRIBUTION AMOUNT" shall have the meaning given to such
------------------------------
term in Section 8.02.
------------
"FAIR SHARE" shall have the meaning given to such term in Section
---------- -------
8.02.
----
"FAIR SHARE SHORTFALL" shall have the meaning given to such term in
--------------------
Section 8.02.
------------
"FCC" shall mean the Federal Communications Commission or any
---
successor commission or agency of the United States of America having
jurisdiction over Borrower or any System.
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any period, a
----------------------------
fluctuating interest rate per annum equal for each day during such period to (a)
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 preceding
Business Day) by the Federal Reserve Bank of New York in the Composite Closing
Quotations for U.S. Government Securities; or (b) if such rate is not so
published for any day which is a Business Day, the average of the quotations at
approximately 10:30 a.m. (New York time) for such day on such transactions as
determined by the Administrative Agent from three federal funds brokers of
recognized standing selected by it.
"FEDERAL RESERVE BOARD" shall mean the Board of Governors of the
---------------------
Federal Reserve System or any successor thereto.
"FINANCIALS" shall have the meaning given to such term in Section
---------- -------
3.03.
"FIXED CHARGES" shall mean with respect to any six-month period for
-------------
Borrower and its Subsidiaries, the sum of the following amounts calculated on a
consolidated basis at the end of such period with respect to such period without
duplication and in accordance with GAAP: (i) scheduled principal and interest
payments with respect to Debt dur-
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
ing such period, (ii) capital expenditures made during such period, (iii) income
tax payments payable in cash with respect to such period, and (iv) cash dividend
payments made during such period.
"FIXED CHARGE COVERAGE RATIO" shall have the meaning given to such
---------------------------
term in Section 7.02(c).
---------------
"FOUNDERS" shall mean each of (i) Xxxxxxx X. Malaga, (ii)Xxx Xxxxxxx,
--------
Xxxxxxx Xxxxx, Xxxxxx Xxxxxxx, Xxxxxx Xxxxx and Xxxxx Xxxxxx, as a group, (iii)
investment funds controlled by The Carlyle Group owning capital stock of
Holdings as of the Closing Date, as a group, and (iv) investment funds
controlled by Vulcan Ventures Incorporated owning capital stock of Holdings as
of the Closing Date, as a group.
"FUNDING DATE" shall mean each the date upon which, subject to the
------------
satisfaction of all conditions precedent contained in Sections 4.01 and/or 4.02,
-------------
or the waiver thereof by the Agents and the Requisite Lenders, the Loans are
made on or after the Closing Date.
"FUNDING GUARANTOR" shall have the meaning given to such term in
-----------------
Section 8.02.
------------
"GAAP" shall mean United States generally accepted accounting
----
principles in effect as of the date of determination thereof.
"GOVERNMENTAL APPROVAL" shall mean, with respect to Borrower or any of
---------------------
its Subsidiaries, any license, permit, franchise or certificate of public
convenience and necessity issued to Borrower or any of its Subsidiaries by the
FCC, any PUC or any other Governmental Authority in connection with any System.
"GOVERNMENTAL AUTHORITY" shall mean any federal, state, local or other
----------------------
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"GUARANTOR" shall mean Holdings and each direct or indirect Subsidiary
---------
of Holdings other than Borrower.
"GUARANTY" shall mean any (y) obligation, contingent or otherwise, of
--------
any Person guaranteeing any Debt of any other Person (the "PRIMARY OBLIGOR") in
---------------
any manner, whether directly or indirectly, and including any obligation of such
Person, direct or indirect, (i) to purchase or pay (or advance or supply funds
for the purchase or payment of) such indebtedness or to purchase (or to advance
or supply funds for the purchase of) any security for the payment of such
indebtedness; (ii) to purchase property, securities or services for the
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
purpose of assuring the owner of such indebtedness of the payment of such
indebtedness; or (iii) to maintain working capital, equity capital or other
financial statement condition of the Primary Obligor so as to enable the Primary
Obligor to pay such indebtedness and (z) any Interest Rate Agreement.
"HOLDINGS" shall have the meaning as set forth in the preamble to this
--------
Agreement.
"INDEMNIFIED LIABILITIES" shall mean, collectively, any and all
-----------------------
liabilities, obligations, losses, damages (including natural resource damages),
penalties, actions, judgments, suits, claims (including, without limitation,
environmental claims), costs (including the costs of any investigation, study,
sampling, testing, abatement, cleanup, removal, remediation or other response
action necessary to remove, remediate, clean up or xxxxx any hazardous materials
activity), expenses and disbursements of any kind or nature whatsoever
(including the reasonable fees and disbursements of counsel for Indemnitees in
connection with any investigative, administrative or judicial proceeding
commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto, and any fees or expenses
incurred by Indemnitees in enforcing this indemnity), whether direct, indirect
or consequential and whether based on any federal, state or foreign laws,
statutes, rules or regulations (including securities and commercial laws,
statutes, rules or regulations and Environmental Laws), on common law or
equitable cause or on contract or otherwise, that may be imposed on, incurred
by, or asserted against any such Indemnitee, in any manner relating to or
arising out of (i) this Agreement or any of the other Loan Documents or the
transactions contemplated hereby or thereby (including Lenders' agreement to
make Loans or the use or intended use of the proceeds thereof or the use or
intended use of any thereof, or any enforcement of any of the Loan Documents
(including any sale of, collection from, or other realization upon any of the
Collateral or the enforcement of any Guaranty)); (ii) the statements contained
in the commitment letter delivered by any Lender to Borrower with respect
thereto; or (iii) any environmental claim or any hazardous materials activity
relating to or arising from, directly or indirectly, any past or present
activity, operation, land ownership, or practice of any Credit Party or their
Affiliates.
"INDEMNITEE" shall have the meaning given to such term in Section
---------- -------
11.03 hereof.
-----
"INITIAL FUNDING DATE" shall mean the date upon which, subject to the
--------------------
satisfaction of all conditions precedent contained in Sections 4.01 and 4.02, or
------------- ----
the waiver thereof by the Agents and the Requisite Lenders, the initial Loans
are made on or after the Closing Date.
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
"INTERCREDITOR AGREEMENT" shall mean the Intercreditor Agreement by
-----------------------
and between Administrative Agent, Collateral Agent and Newcourt, as
Administrative Agent under the Second Priority Loan Documents in substantially
the form of Exhibit I annexed hereto to be executed and delivered pursuant to
---------
Section 4.01.
------------
"INTEREST EXPENSE" shall mean for any period, the total interest
----------------
expense (including, without limitation, interest expense attributable to
Capitalized Lease Obligations) determined on a consolidated basis, without
duplication, for Borrower and its Subsidiaries in accordance with GAAP.
"INTEREST PERIOD" shall mean, with respect to each LIBOR Loan, the
---------------
interest period applicable to such LIBOR Loan as set forth in the applicable
Notice of Borrowing or Notice of Continuation/Conversion .
"INTEREST RATE AGREEMENT" shall mean for any Person, any interest rate
-----------------------
swap agreement, interest rate cap agreement, interest rate collar agreement or
other similar agreement designed to protect the party indicated therein against
fluctuations in interest rates.
"INVESTMENT" shall mean, as applied to any Person, any direct or
----------
indirect purchase or other acquisition by that Person of securities, or of a
beneficial interest in securities, of any other Person, and any direct or
indirect loan, advance (other than deposits with financial institutions
available for withdrawal on demand, prepaid expenses, advances to employees,
officers and directors and similar items, each made or incurred in the ordinary
course of business), or capital contribution by that Person to any other Person,
including all Debt of such other Person to that Person, but excluding accounts
owed by that other Person in the ordinary course of business. Investments shall
exclude extensions of trade credit on commercially reasonable terms in
accordance with normal trade practices. The amount of any Investment shall be
determined in conformity with GAAP.
"IRC" shall mean the Internal Revenue Code of 1986, as amended from
---
time to time and any successor statutes.
"IRS" shall mean the Internal Revenue Service or any successor agency.
---
"LANDLORD CONSENT AND ESTOPPEL" shall mean (i) with respect to any
-----------------------------
node site, a consent and estoppel in the form of Exhibit J-1 annexed hereto, and
(ii) with respect to any collocation agreement, a consent and estoppel in the
form of Exhibit J-2 annexed hereto; provided that Collateral Agent may, in its
discretion eliminate or modify the provisions otherwise required to be included
in any such Landlord Consent and Estoppel.
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
"LEASEHOLD PROPERTY" shall mean any leasehold interest of any Credit
------------------
Party as lessee under any lease of real property, other than any such leasehold
interest designated from time to time by Collateral Agent in its sole discretion
as not being required to be included in the Collateral.
"LENDER COUNTERPARTY INTEREST RATE AGREEMENT" shall have the meaning
-------------------------------------------
ascribed thereto in the definition of the term "Loan Documents".
"LENDING OFFICE" shall mean, with respect to a Lender or Agent, any
--------------
office, branch, subsidiary or affiliate of such Lender or the Agent.
"LIBO RATE" shall mean, with respect to each day during each Interest
---------
Period pertaining to a LIBOR Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward to the nearest 1/100th of
1%):
LIBO RATE = BASE LIBO RATE
----------------------
1.00 - LIBOR RESERVE PERCENTAGE
"LIBOR INTEREST PAYMENT DATE" shall mean, with respect to a LIBOR
---------------------------
Loan, the last day of each Interest Period applicable to such Loan, and, if such
Interest Period has a duration of more than three months, on each day which
occurs during such Interest Period every three months from the first day of such
Interest Period.
"LIBOR INTEREST RATE DETERMINATION DATE" shall mean each date of
--------------------------------------
calculating the LIBO Rate for purposes of determining the interest rate with
respect to an Interest Period. The LIBOR Interest Rate Determination Date for
any LIBOR Loan shall be the second Business Day prior to the first day of the
related Interest Period for such LIBOR Loan.
"LIBOR LOAN" shall mean a Loan, or portion thereof, during any period
----------
in which it bears interest at a rate based upon the LIBO Rate.
"LIBOR RESERVE PERCENTAGE" shall mean for any day for any Interest
------------------------
Period the maximum reserve percentage (expressed as a decimal, rounded upward to
the next 1/100th of 1.0%) in effect on such day (whether or not applicable to
any Lender) for United States domestic banks under regulations issued from time
to time by the Federal Reserve Board for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal reserve
requirement) with respect to Eurocurrency Liabilities having a term comparable
to such Interest Period.
"LIBOR REVOLVING LOAN" shall mean a Revolving Loan during any period
--------------------
for which it is a LIBOR Loan.
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
"LIBOR TERM LOAN" shall mean any portion of the Term Loans during any
---------------
period for which such portion is a LIBOR Loan.
"LIEN" shall mean any mortgage, pledge, deed of trust, assignment,
----
lien, charge, encumbrance or security interest of any kind, or the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement, but excluding easements, rights of way or similar
encumbrances on real property which are in the ordinary course and which do not
materially affect the value, use and insurability of title of such real
property.
"LOAN" shall mean a Revolving Loan and/or a Term Loan.
----
"LOAN DOCUMENTS" shall mean all agreements, instruments and documents,
--------------
including, without limitation, security agreements, loan agreements, notes,
guarantees, mortgages, deeds of trust, subordination agreements, pledges, powers
of attorney, consents, assignments, contracts, notices, leases, financing
statements, between Borrower, any Guarantor, any Agent or any of the Lenders and
all other written matter whether heretofore, now, or hereafter executed by or on
behalf of Borrower, any Guarantor or any other Person in connection with the
transactions contemplated hereby or by any other Loan Document and delivered to
any Agent or any of the Lenders, together with all agreements and documents
referred to therein or contemplated thereby; provided, the term "Loan Documents"
shall not include any Interest Rate Agreement unless y) such Interest Rate
Agreement is entered into by a Lender or an Affiliate thereof with the Borrower
(each, a "LENDER COUNTERPARTY INTEREST RATE AGREEMENT"), and z) Borrower and
-------------------------------------------
such Lender or Affiliate thereof have agreed that such Lender Counterparty
Interest Rate Agreement is a Loan Document.
"MARKET CO-DEVELOPMENT COSTS" means actual cash expenses incurred by
---------------------------
Borrower or any of its Subsidiaries in connection with the development of a
market; provided that y) such expenses are only incurred as a result of the
--------
development of such market in cooperation with another Person, other than an
Affiliate and z) such expenses are not included as projected expenses in the
Projections.
"MATERIAL ADVERSE EFFECT" shall mean, with respect to any Person, a
-----------------------
material adverse effect upon the business, condition (financial or otherwise),
operations, properties, or prospects of such Person, or upon the ability of such
Person to perform, or the ability of such Person to enforce any right or remedy,
under the Loan Documents.
"MAXIMUM RATE" shall have the meaning given to such term in Section
------------ -------
2.13 hereof.
----
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
"XXXXXX XXXXXXX BRIDGE NOTES" shall mean Senior Increasing Rate Notes
---------------------------
due July 15, 1999 issued pursuant to the Note Purchase Agreement dated as of
July 10, 1998 between NorthPoint and Xxxxxx Xxxxxxx Senior Funding, Inc.
"MULTIEMPLOYER PLAN" shall mean a "multiemployer plan" as defined in
------------------
Section 4001(a)(3) of ERISA which is, or within the immediately preceding six
(6) years was, contributed to by Borrower or an ERISA Affiliate.
"NET INCOME" shall mean, with respect to any Person for any period,
----------
the net income (or loss) of such Person determined in accordance with GAAP minus
-----
(ii) (a) the income of any Person (other than a Subsidiary of such Person) in
which any other Person has a joint interest, except to the extent of the amount
of dividends or other distributions actually paid to such Person or any of its
Subsidiaries by such Person during such period, (b) the income (or loss) of any
Person accrued prior to the date it becomes a Subsidiary of such Person or is
merged into or consolidated with that Person or that Person's assets are
acquired by such Person, (c) the income of any Subsidiary (other than a
Guarantor) of that Person to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary, (d) any after-tax gains or losses attributable to
asset sales or returned surplus assets of any pension plan, and (e) (to the
extent not included in clauses (a) through (d) above) any net extraordinary
gains or net non-cash extraordinary losses.
"NOTE" shall mean any Revolving Loan Note or any Term Loan Note.
----
"NOTICE OF BORROWING" shall mean a notice substantially in the form of
-------------------
Exhibit A-1 attached hereto.
-----------
"NOTICE OF CONVERSION/CONTINUATION" shall mean a notice in
---------------------------------
substantially the form of Exhibit A-2 annexed hereto.
-----------
"OBLIGEE GUARANTOR" shall have the meaning set forth in Section 8.07
----------------- ------------
hereof.
"OBLIGATIONS" shall mean all the obligations of any Credit Party now
-----------
or hereafter existing under this Agreement or any other Loan Document to which
any Credit Party is a party, whether for principal, interest, fees, expenses,
reimbursement, indemnification or otherwise. Obligations shall include,
without limitation, all interest, charges, expenses, fees, attorneys' fees and
disbursements, and paralegals' fees which accrue after the commencement of any
case or proceeding in bankruptcy after the insolvency of, or for the liquidation
or reorganization of any Credit Party, whether or not allowed in such
proceeding.
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
"PAYMENT ACCOUNT" shall mean the Administrative Agent's account at The
---------------
Bank of New York, New York, New York, ABA No. 000000000, for credit to: CIBC, NY
Agency, Account No.000-0000-000, for further credit to: Agented Loans, Account
No. 07-09611, attention: Agency Services, reference: NorthPoint.
"PAYMENT DATE" shall mean the last day of March, June, September, and
------------
December in each calendar year, but if any such date is not a Business Day, the
next succeeding Business Day, commencing on the first such date to occur after
the Closing Date.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
----
and defined in ERISA.
"PERMITTED ACQUISITION" shall mean any acquisition by Borrower,
---------------------
whether by purchase, merger or otherwise (but, in any event, except in the
ordinary course of business), of any assets, or a business line or a division
of, or Equity Securities of, any Person; provided that, (i) immediately prior
to, and after giving effect to such acquisition, no Default or Event of Default
shall have occurred and be continuing or would result therefrom, (ii) all
transactions in connection therewith shall be consummated in accordance with all
applicable laws and in conformity with all applicable Governmental
Authorizations, (iii) all of the Equity Securities acquired or otherwise issued
by such Person or any newly formed Subsidiary of Borrower in connection with
such acquisition shall be owned 100% by Borrower or a Guarantor, and Borrower
shall have taken, or caused to be taken, as of the date such Person becomes a
Subsidiary of Company, each of the actions set forth in Section 5.16 hereof,
------------
(iv) Borrower and its Subsidiaries shall be in compliance with, on a pro forma
basis after giving effect to such acquisition, the provisions of Article VII
hereof, (v) Borrower shall have delivered to Administrative Agent a certificate
in the form of a Compliance Certificate evidencing such compliance with such
Section, together with all relevant financial information for such acquired
assets, (vi) any Person or assets or division as acquired in accordance herewith
shall be in the same business or lines of business in which Borrower and/or its
Subsidiaries are engaged as of the Closing Date and (vii) the aggregate amount
of cash consideration paid by Borrower and its Subsidiaries to third parties in
connection with all such acquisitions shall not exceed $17,000,000.
"PERMITTED FUNDS" shall mean the proceeds of any equity issued by
---------------
Holdings to a Person that will co-develop a market with Borrower or any of its
Subsidiaries and which are contributed as equity to Borrower for the purpose of
funding Market Co-Development Costs referred to in clause (ii)(F) of the
definition of EBITDA for the purpose of developing a market in cooperation with
such Person.
"PERMITTED HOLDINGS DEBT" shall mean unsecured Debt of Holdings in an
-----------------------
aggregate principal amount not to exceed, at any time outstanding, $175,000,000
(or in the
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
case of Debt issued at a discount, an initial accreted value of $175,000,000),
which Debt shall not by its terms, require cash payments of principal or
interest or any mandatory redemption or other repayments (other than in the case
of a change of control or a sale of assets, provided that no such repayment is
required with respect to asset sales so long as the net proceeds thereof are
used to repay Debt of the Borrower and/or its Subsidiaries) with respect thereto
(whether before or after default, at maturity, as a result of acceleration or
otherwise) at any time the Total Leverage Ratio is greater than or equal to
6.00:1.00 and which shall not be guaranteed by Borrower or any of its
Subsidiaries.
"PERMITTED LIENS" shall have the meaning set forth in Section 6.01
--------------- ------------
hereof.
"PERSON" shall mean any natural person, corporation, division of a
------
corporation, business trust, joint venture, association, company, partnership,
unincorporated organization or other legal entity, or a government or any agency
or political subdivision thereof.
"PLAN" shall mean any employee benefit plan as defined in Section 3(3)
----
of ERISA (other than a Multiemployer Plan) in respect of which Borrower or any
ERISA Affiliate is, or within the immediately preceding six (6) years was, an
"employer" as defined in Section 3(5) of ERISA.
"PLEDGE AND SECURITY AGREEMENT" shall mean the Pledge and Security
-----------------------------
Agreement substantially in the form of Exhibit H attached hereto.
---------
"PREPAYMENT PREMIUM" shall mean with respect to a Loan prepaid during
------------------
any of the periods set forth below, the percentage of the amount of the Loan
prepaid indicated opposite such period:
Monthly Anniversary After the
Closing Date Percentage
----------------- ----------
7-12 2%
13-24 1%
25 and thereafter 0%
"PRINCIPAL PAYMENTS" shall mean, for any period, total required Debt
------------------
amortization (including, without limitation, the principal payments attributable
to Capitalized Leases) determined on a consolidated basis, without duplication,
for Borrower and its Subsidiaries in accordance with GAAP.
"PRO RATA SHARE" shall mean with respect to all matters relating to
--------------
any Lender (a) with respect to the Revolving Loans, the percentage obtained by
dividing (1) at any time prior to the Revolving Credit Commitment Termination
Date, the Revolving Loan
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
Commitment Amount of such Lender by the aggregate Revolving Loan Commitment
Amount of all Lenders, and (2) at any time after the Revolving Credit Commitment
Termination Date, the aggregate outstanding principal balance of the sum of the
Revolving Loans held by that Lender by the sum of the aggregate outstanding
principal balance of the Revolving Loans held by all Lenders, and (b) with
respect to the Term Loans, the percentage obtained by dividing (1) at any time
prior to the date on which the Term Loans are funded, the Term Loan Commitment
Amount of that Lender by the Term Loan Commitment Amount of all Lenders, and (2)
on and after the date on which the Term Loans are funded, the aggregate
outstanding principal balance of the Term Loans held by that Lender, by the
aggregate outstanding principal balance of the Term Loans held by all Lenders.
"PRODUCTION READY COS" shall mean a central office (i) where Borrower
--------------------
has secured either physical or virtual collocation, (ii) where equipment and
transport installation have been successfully completed, (iii) with respect to
which paid traffic is being billed and (iv) that has obtained all necessary
Governmental Approvals.
"PROJECTIONS" shall have the meaning given to such term in Section
----------- -------
3.03.
----
"PUC" shall mean any state Governmental Authority having utility or
---
telecommunications regulatory authority over Borrower or any System.
"PURCHASE DEBT" shall have the meaning given to such term in Section
------------- -------
6.12(iv).
--------
"QUALIFIED EQUITY OFFERING" shall mean one or more private or public
-------------------------
offerings of Equity Securities by Holdings providing gross proceeds to Holdings
of not less than $125,000,000, the net proceeds of which are used to make
capital contributions to Borrower constituting Contributed Capital.
"QUALIFIED INTER COMPANY LOAN" shall mean a loan to Borrower from
----------------------------
Holdings, which loan is expressly subordinated to the Obligations on terms and
conditions satisfactory to the Administrative Agent and Documentation Agent, has
a maturity date occurring on or after the annual anniversary of the Term Loan
Termination Date, and requires no cash payment of principal or interest prior to
the scheduled maturity date of such Loan (other than as permitted by Section
-------
6.04).
----
"REAL ESTATE ASSET" shall mean, at any time of determination, any
-----------------
interest then owned by any Credit Party in any real property, including, without
limitation, all easements, rights of way, rights of occupancy, licenses and
similar rights with respect thereto.
"REGISTER" shall have the meaning given to such term in Section
-------- -------
2.03(d).
-------
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
"RELATED FUND" shall mean, with respect to any Lender that is an
------------
investment fund, any other investment fund that invests in commercial loans and
that is managed or advised by the same investment advisor as such Lender or by
an Affiliate of such investment advisor.
"RELEASE" shall mean any release, spill, emission, leaking, pumping,
-------
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the environment or into or out of any property, including the movement of
Contaminants through or in the air, soil, surface water, groundwater or
property.
"REMEDIAL ACTION" shall mean actions required to (1) clean up, remove,
---------------
treat or in any other way address Contaminants in the environment; (2) prevent
the Release or threat of Release or prevent or minimize the further Release of
Contaminants so they do not migrate or endanger or threaten to endanger public
health or welfare or the environment; or (3) perform preremedial studies and
investigations and postremedial monitoring and care.
"REPORTABLE EVENT" shall mean any reportable event as defined in
----------------
Section 4043 of ERISA unless the reporting requirement with respect to such
reportable event has been waived by the PBGC or other appropriate Governmental
Authority.
"REQUISITE LENDERS" shall mean (a) prior to the date on which the Term
-----------------
Loans are made, Lenders having at least fifty-one percent (51%) of the aggregate
Commitment Amount of all Lenders, (b) on and after the date on which the Term
Loans are made and prior to the date on which all Lenders' Commitments to make
Revolving Loans has been terminated, Lenders holding at least fifty-one percent
(51%) of the sum of (i) the aggregate outstanding amount of the Term Loans and
(ii) the Revolving Loan Commitment Amount of all the Lenders, or (c) on and
after the date on which all Lenders' Commitment to make Revolving Loans has been
terminated, at least fifty-one percent (51%) of the aggregate outstanding amount
of all Loans.
"REQUISITE REVOLVING LENDERS" shall mean (a) prior to the Revolving
---------------------------
Credit Commitment Termination Date, Lenders having at least fifty-one percent
(51%) of the aggregate Revolving Loan Commitment Amount of all Lenders, or (b)
on or after the Revolving Credit Commitment Termination Date, Lenders having at
least fifty-one percent (51%) of the aggregate outstanding amount of the
Revolving Loans.
"REVOLVING CREDIT COMMITMENT TERMINATION DATE" shall mean the date
--------------------------------------------
occurring six months after the Closing Date.
"REVOLVING LENDERS" shall mean, as of any date of determination on or
-----------------
prior to the Revolving Credit Commitment Termination Date, Lenders having a
Revolving Loan Commitment Amount, and thereafter Lenders having outstanding
Revolving Loans.
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
"REVOLVING LOAN" shall mean any Loan made to Borrower pursuant to the
--------------
provisions of Section 2.01(b) hereof.
---------------
"REVOLVING LOAN COMMITMENT AMOUNT" shall mean (a) as to any Revolving
--------------------------------
Lender, the aggregate commitment of such Revolving Lender to make Revolving
Loans as set forth opposite such Revolving Lender's name on Annex A to this
-------
Agreement or in the most recent Assignment Agreement executed by such Revolving
Lender and (b) as to all Revolving Lenders, the aggregate commitment of all
Revolving Lenders to make Revolving Loans, which aggregate commitment shall be
Fifty Million Dollars ($50,000,000) on the Closing Date, as such amount may be
adjusted from time to time in accordance with this Agreement.
"REVOLVING LOAN NOTE" shall mean a promissory note of Borrower
-------------------
substantially in the form of Exhibit B-1 attached hereto.
-----------
"SECOND PRIORITY LOANS" shall mean the $40,000,000 aggregate principal
---------------------
amount of term loans made to Borrower pursuant to the Second Priority Loan
Documents.
"SECOND PRIORITY LOAN DOCUMENTS" shall mean, collectively, the Loan
------------------------------
and Guaranty Agreement, dated as of April 5, 1999, as it may be from time to
time amended, supplemented or otherwise modified, among Borrower, Holdings,
NorthPoint Virginia, the Lenders party thereto from time to time, GSCP, as a
Joint Lead Arranger and Syndication Agent, Newcourt, as Administrative Agent,
Documentation Agent and Collateral Agent, and Capital Syndication Corporation,
as a Joint Lead Arranger, together with the other "Loan Documents" as such term
is defined in such Loan and Guaranty Agreement.
"SECURED PARTIES" shall have the meaning assigned to that term in the
---------------
Intercreditor Agreement.
"SILICON VALLEY FACILITY" shall mean the QuickStart Loan and Security
-----------------------
Agreement, dated October 23, 1997, between Silicon Valley Bank and Borrower.
"SOLVENT" shall mean, at any time of determination, with respect to
-------
any Person:
(i) the assets of such Person, at a fair valuation, are in
excess of the total amount of its debts (including, without
limitation, contingent liabilities); and
(ii) the present fair saleable value of its assets is greater
than its probable liability on its existing debts as such debts become
absolute and matured; and
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
(iii) it is then able and expects to be able to pay its debts
(including, without limitation, contingent debts and other
commitments) as they mature; and
(iv) it has capital sufficient to carry on its business as
conducted or contemplated to be conducted.
For purposes of determining whether a Person is Solvent, the amount of any
contingent liability shall be computed as the amount that, in light of all the
facts and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or mature liability.
"SUBSIDIARY" shall mean, with respect to any Person, any corporation,
----------
partnership, joint venture, association or other business entity, whether now
existing or hereafter organized or acquired, (i) in the case of a corporation,
of which more than 50% of the total voting power of the Equity Interests
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, officers or trustees thereof is held by such Person or
any of its Subsidiaries; or (ii) in the case of a partnership, joint venture,
association or other business entity, with respect to which such Person or any
of its Subsidiaries has the power to direct or cause the direction of the
management and policies of such entity by contract or otherwise or if in
accordance with GAAP such entity is consolidated with the such Person for
financial statement purposes.
"SWITCH EQUIPMENT" shall mean telecommunications switches and
----------------
associated electronics.
"SYSTEM" shall mean each data communications, telecommunications or
------
information system (including, without limitation, any voice, video
transmission, data or Internet services), and any related, ancillary or
complementary services, owned by Borrower or its Subsidiaries and all
replacements, enhancements or additions thereto.
"TAXES" shall mean any and all license, documentation, recording and
-----
registration fees, and all taxes, including, without limitation, income (other
than taxes on net income or profits and franchise taxes imposed on the Lenders
or any Agent by the United States of America, or by the jurisdiction under the
laws of which such recipient is organized or in which its principal office is
located or, in the case of any Lender, in which its applicable Lending Office is
located), gross receipts, sales, value-added, use, excise, personal property
(tangible and intangible), real estate and stamp, documentary, transfer or
recording taxes, levies, imposts, deductions, duties, assessments, fees,
charges, and withholdings of any nature whatsoever, whether or not presently in
existence, together with any penalties, fines, additions to tax, or interest
thereon, imposed by any taxing authority or other Governmental Authority.
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
"TELECOMMUNICATIONS EQUIPMENT" shall mean all assets of Borrower and
----------------------------
its Subsidiaries capitalized in accordance with GAAP, including payments made to
obtain and develop central office collocation space.
"TEMPORARY CASH INVESTMENTS" shall mean (i) Investments in marketable,
--------------------------
direct obligations issued or guaranteed by the United States of America, or of
any governmental agency or political subdivision thereof, maturing within 365
days of the date of purchase; (ii) Investments in certificates of deposit or
time deposits issued by a bank organized under the laws of the United States of
America or any state thereof or the District of Columbia, in each case having
capital, surplus and undivided profits totaling more than $500,000,000 and rated
at least A by Standard & Poor's Ratings Service and A-2 by Xxxxx'x Investors
Service, Inc. maturing within 365 days of purchase; (iii) Investments not
exceeding 365 days in duration in money market funds that are sponsored by a
registered broker dealer or mutual fund distributor, (iv) commercial paper
issued by any Person organized under the laws of any State of the United States
of America and rated at least "Prime-1" (or the then equivalent grade) by
Moody's Investor's Service, Inc. or at least "A-1" (or the then equivalent
grade) by Standard and Poor's Ratings Group, a division of XxXxxx-Xxxx
Companies, Inc., in each case with maturities of not more than 180 days from the
date of acquisition thereof; and (v) repurchase agreements entered into by
Borrower with a bank or trust company or recognized securities dealer having
combined capital and surplus of at least $50,000,000 for direct obligations
issued by or fully guaranteed by the United States of America in which a Credit
Party shall have a valid and perfected first priority security interest (subject
to no other Liens) provided that each such repurchase agreement shall have a
fair market value of at least 100% of the amount of the repurchase obligations
thereunder on the date of purchase thereof.
"TERM LENDERS" shall mean those Lenders having Term Loan Commitment
------------
Amounts or who have made Term Loans.
"TERM LOAN" shall mean any loan made to Borrower pursuant to Section
--------- -------
2.01(a) hereof.
-------
"TERM LOAN COMMITMENT AMOUNT" shall mean (a) as to any Lender, the
---------------------------
commitment of such Lender to make a Term Loan as set forth opposite such
Lender's name on Annex A to this Agreement and (b) as to all Lenders, the
-------
aggregate commitment of all Lenders to make Term Loans, which aggregate
commitment shall be Ten Million Dollars ($10,000,000) on the Closing Date.
"TERM LOAN FUNDING DATE" shall mean the date upon which, subject to
----------------------
the satisfaction of all conditions precedent contained in Sections 4.01 and 4.02
------------- ----
hereof, the Term Loans are made.
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
"TERM LOAN NOTE" shall mean a promissory note of Borrower
--------------
substantially in the form of Exhibit B-2 attached hereto.
-----------
"TERM LOAN TERMINATION DATE" shall mean March 31, 2004.
--------------------------
"TERMINATION EVENT" shall mean (i) a Reportable Event with respect to
-----------------
a Benefit Plan; (ii) the withdrawal of Borrower or any ERISA Affiliate from a
Benefit Plan during a plan year in which Borrower or such ERISA Affiliate was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA; (iii) the
imposition of an obligation on Borrower or any ERISA Affiliate under Section
4041 of ERISA to provide affected parties written notice of intent to terminate
a Benefit Plan in a distress termination described in Section 4041(c) of ERISA;
(iv) the institution by the PBGC of proceedings to terminate a Benefit Plan; (v)
the termination of, or the appointment of a trustee to administer, any Benefit
Plan pursuant to Section 4042 of ERISA; or (vi) the partial or complete
withdrawal of Borrower or any ERISA Affiliate from a Multiemployer Plan, in each
case, provided that such event results or is reasonably likely to result in a
material liability to Borrower.
"THIRD PARTY INTERACTIVES" shall mean all Persons with whom Borrower
------------------------
exchanges data electronically in the ordinary course of business, including
without limitation, customers, suppliers, third-party vendors, subcontractors,
processors-converters, shippers and warehousemen.
"TOTAL DEBT" shall mean, as of any date of determination, the Debt of
----------
Borrower and its Subsidiaries determined on a consolidated basis in accordance
with GAAP, less, prior to the consummation of an initial public offering of
----
common stock by Holdings providing gross proceeds to Holdings of not less than
$125,000,000, the net proceeds of which are used to make capital contributions
to Borrower constituting Contributed Capital, the amount of cash on hand and any
Temporary Cash Investment in excess of $10,000,000 held by Borrower and its
Subsidiaries as of such date.
"TOTAL LEVERAGE RATIO" shall mean the ratio of (i) Total Debt as of
--------------------
the last day of any fiscal quarter, to (ii) the product of (A) two (2)
multiplied by (B) EBITDA of Borrower and its Subsidiaries on a consolidated
basis, for the six month period ending on the last day of such fiscal quarter.
"VENDOR FINANCING" means Debt of Borrower owed to the provider of
----------------
Telecommunications Equipment (or an Affiliate thereof) with respect to the
purchase or acquisition of such Telecommunications Equipment by Borrower.
"VOTING STOCK" shall mean securities of any class or classes of a
------------
corporation, the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate directors (or
Persons performing similar functions).
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
"YEAR 2000 CORRECTIVE ACTIONS" shall mean, as to each of the Credit
----------------------------
Parties, all actions necessary to eliminate such Credit Party's Year 2000
Problems, including, without limitation, computer code enhancements and
revisions, upgrades and replacements of Year 2000 Date-Sensitive
Systems/Components, and coordination of such enhancements, revisions, upgrades
and replacements with Third Party Interactives.
"YEAR 2000 CORRECTIVE PLAN" shall mean, with respect to each of the
-------------------------
Credit Parties, a comprehensive plan to eliminate all of its Year 2000 Problems
on or before August 31, 1999, including without limitations (i) computer code
enhancements or revisions, (ii) upgrades or replacements of Year 2000 Date-
Sensitive Systems/Components, (iii) test and validation procedures, (iv) an
implementation time line and budget and (v) designation of specific employees
who will be responsible for planning, coordinating and implementing each phase
or subpart of the Year 2000 Corrective Plan.
"YEAR 2000 DATE-SENSITIVE SYSTEM/COMPONENT" shall mean, as to any
-----------------------------------------
Person, any system software, network software, applications software, database,
computer file, embedded microchip, firmware or hardware that accepts, creates,
manipulates, sorts, sequences, calculates, compares or outputs calendar-related
data accurately; such systems and components shall include, without limitation,
mainframe computers, file server/client system, computer workstations, routers,
hubs, other network-related hardware, and other computer-related software,
firmware or hardware and information processing and delivery systems of any kind
and telecommunications systems and other communications processors, security
systems, alarms, elevators and HVAC systems.
"YEAR 2000 IMPLEMENTATION TESTING" shall mean, as to each of the
--------------------------------
Credit Parties, (i) the performance of test and validation procedures regarding
Year 2000 Corrective Actions on a unit basis and a system wide basis, (ii) the
performance of test and validation procedures regarding data exchanges among the
Credit Parties' Year 2000 Date-Sensitive Systems/Components and data exchanges
with Third Party Interactives, and (iii) the design and implementation of
additional Year 2000 Corrective Actions, the need for which has been
demonstrated by test and validation procedures.
"YEAR 2000 PROBLEMS" shall mean, with respect to each of the Credit
------------------
Parties, limitations on the capacity or readiness of any such Credit Party's
Year 2000 Date-Sensitive Systems/Components to accurately accept, create,
manipulate, sort, sequence, calculate, compare or output calendar date
information with respect to calendar year 1999 or any subsequent calendar year
beginning on or after January 1, 2000 (including leap year computations),
including, without limitation, exchanges of information among Year 2000 Date-
Sensitive Systems/Components of the Credit Parties and exchanges of information
among the Credit Parties and Year 2000 Date-Sensitive Systems/Components of
Third Party Interactives and functionality of peripheral interfaces, firmware
and embedded microchips.
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
1.1 SECTION ACCOUNTING TERMS. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
-----------------
HEREIN, ALL ACCOUNTING TERMS NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE
MEANINGS ASSIGNED TO THEM IN CONFORMITY WITH GAAP. FINANCIAL STATEMENTS AND
OTHER INFORMATION REQUIRED TO BE DELIVERED BY CREDIT PARTIES TO LENDERS PURSUANT
TO Section 5.06 shall be prepared in accordance with GAAP as in effect at the
------------
time of such preparation. Subject to the foregoing, calculations in connection
with the definitions, covenants and other provisions hereof shall utilize
accounting principles and policies in conformity with those used to prepare the
Financials.
1.2 SECTION OTHER TERMS DEFINED IN NEW YORK UNIFORM COMMERCIAL CODE. All
-------------------------------------------------------
other terms contained in this Agreement (and which are not otherwise
specifically defined herein) shall have the meanings provided by the Uniform
Commercial Code of the State of New York (the "CODE") to the extent the same are
----
used or defined therein.
2 ARTICLE LOANS
-----
3.1 SECTION AGREEMENT TO LEND.
-----------------
(a) Each Term Lender severally agrees, on the terms and conditions
hereinafter set forth, to make in a single draw-down on the Term Loan Funding
Date a Term Loan to Borrower in the amount of such Lender's Term Loan Commitment
Amount.
(b) Each Revolving Lender severally agrees, on the terms and conditions
hereinafter set forth, to make on and after the Initial Funding Date and until
and including the Revolving Credit Commitment Termination Date, one or more
Revolving Loans to Borrower in an amount not to exceed the Revolving Loan
Commitment Amount of such Revolving Lender.
(c) Notwithstanding anything to the contrary contained in this Agreement,
the Borrower may not request a Loan hereunder if, after giving effect to the
application of the proceeds of such Loans, the aggregate amount of the Loans
would exceed the difference of (x) the Borrowing Base less (y) $40,000,000.
(d) The proceeds of the Term Loans, together with the proceeds of Second
Priority Term Loans, shall be used, on the Term Loan Funding Date, to repay the
principal of, interest and prepayment fees relating to the Xxxxxx Xxxxxxx Bridge
Notes and the Silicon Valley Facility, and to pay all fees and expenses incurred
in connection with the Loan Documents. The proceeds of Revolving Loans shall be
used to purchase or otherwise acquire Telecommunications Equipment.
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
(e) Term Loans that are repaid or prepaid may not be reborrowed. Revolving
Loans that are repaid or prepaid may be reborrowed through the Revolving Credit
Commitment Termination Date (but may not be reborrowed after such date).
(f) Notwithstanding anything to the contrary contained in this Agreement,
Borrower shall request that Revolving Loans be made on the Revolving Credit
Commitment Termination Date in an amount equal to the difference, if any, as of
such date, between the aggregate Revolving Loan Commitment Amounts of all
Revolving Lenders and the outstanding Revolving Loans.
3.2 SECTION LOANS.
-----
(a) Each Base Rate Loan shall be in a minimum principal amount of
$1,000,000 and increments of $250,000 in excess thereof. Each LIBOR Loan shall
be in a minimum principal amount of $5,000,000 and increments of $1,000,000 in
excess thereof.
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
(b) In any calendar month not more than four (4) Loans may be requested.
At any time, Loans may be subject to no more than seven (7) Interest Periods.
3.3 SECTION PROCEDURE FOR LOAN REQUEST.
---------------------------
(a) When requesting a Loan Borrower shall deliver to the Administrative
Agent a Notice of Borrowing on or before 11:00 a.m. (New York time) at least
three (3) Business Days prior to the date on which such Loan is requested to be
made if such Loan is requested to be a LIBOR Loan, and one (1) Business Day
prior to the date on which such Loan is requested to be made if such Loan is
requested to be a Base Rate Loan, which notice, once given, shall be
irrevocable. The Loans made on the Initial Funding Date shall be Base Rate Loans
and thereafter may be continued as Base Rate Loans or converted into LIBOR Loans
in the manner provided in Section 2.06 and subject to the other conditions and
------------
limitations therein set forth and set forth in this Article II. When requesting
----------
a Loan the proceeds of which will be used to purchase Telecommunications
Equipment, Borrower shall deliver to the Collateral Agent on or before 11:00
a.m. (New York time) at least six (6) Business Days prior to the Funding Date,
together with the applicable Notice of Borrowing, a schedule thereto supporting
one hundred percent (100%) of the Telecommunications Equipment requested to be
funded and, with respect to individual items of Telecommunications Equipment
with a purchase price in excess of $250,000, copies of invoices with respect
thereto, in each case, certified in the manner provided in such Notice of
Borrowing. Such schedule will detail all invoices for equipment, third party
labor, permits, other third party costs and all capitalized internal costs of
Borrower with respect to such Telecommunications Equipment permitted under GAAP
and confirming the Borrowing Base (after giving effect to such purchase)
together with invoices with respect thereto. The Notice of Borrowing shall, with
respect to any Loans requested, specify whether such requested Loans are to be
Base Rate Loans or LIBOR Loans, and if such requested Loans are to be LIBOR
Loans, the requested Interest Period for such Loans.
(b) The Administrative Agent agrees, promptly upon (i) receipt of a Notice
of Borrowing, and, (ii) if the Loan being requested is intended to fund the
purchase of Telecommunications Equipment, notice from the Collateral Agent that
it is satisfied, pursuant to the terms and conditions hereof, with the
applicable schedule and invoices delivered to the Collateral Agent with such
Notice of Borrowing, notify each Revolving Lender or Term Lender of the date and
amount of the Loan proposed thereunder and the amount of such Lender's Pro Rata
Share therein. So long as no Event of Default has occurred and is continuing and
upon fulfillment of the applicable conditions set forth in Article IV, each such
----------
Lender severally agrees, on or before 12:00 P.M. (New York time) on the date of
each proposed Loan, to pay into the Payment Account, an amount equal to such
Lender's Pro Rata Share of such Loan in dollars and in same day funds. After the
Administrative Agent's receipt of such Lender's Loan proceeds, the
Administrative Agent shall make available such
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
proceeds to Borrower or the Person entitled to payment thereof at the bank
account(s) specified in the Notice of Borrowing on the date specified in such
Notice of Borrowing in Dollars in immediately available funds.
(c) Unless the Administrative Agent has received written notice from a
Lender on or prior to the date of any proposed Loan that such Lender will not
make available to the Administrative Agent such Lender's Pro Rata Share of such
Loan, the Administrative Agent may, but is not obligated to, assume that such
Lender has made its Pro Rata Share of such Loan available to the Administrative
Agent on the date of such Loan in accordance with paragraph (b) above, and the
------------
Lenders may, in reliance upon such assumption, make available to Borrower on
such date a corresponding amount. If such Pro Rata Share is not, in fact, paid
to Administrative Agent by such Lender when due, the Administrative Agent will
be entitled to recover such amount on demand from such Lender or Borrower which
received the proceeds of such Loan without set-off, counterclaim or deduction of
any kind, together with interest thereon, for each day from the date such amount
is made available to Borrower until the date such amount is repaid to the
Administrative Agent either by Borrower or such Lender, at, (1) in the case of
Borrower, the interest rate applicable to such Loan, and (2) in the case of such
Lender, the Federal Funds Effective Rate. Nothing in this Section 2.03(c) or
---------------
elsewhere in this Agreement or the other Loan Documents shall be deemed to
require Administrative Agent to advance funds on behalf of any Lender or to
relieve any Lender from its obligation to fulfill its Commitment hereunder or to
prejudice any rights that Borrower may have against any Lender as a result of
any default by such Lender hereunder. Without limiting the foregoing, with
respect to any Lender which for any reason fails to make timely payment to the
Administrative Agent of its Pro Rata Share of any Loan, the Administrative
Agent, in addition to other rights and remedies which it may have, shall be
entitled to withhold or set off from any payments due to such Lender hereunder,
an amount equal to the Pro Rata Share required to have been paid by such Lender
plus interest as described above, and to bring an action or suit against such
Lender in a court of competent jurisdiction to recover such Pro Rata Share
thereof and any related interest thereon. If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount so repaid shall
constitute such Lender's applicable Pro Rata Share of such Loan for purposes of
this Agreement. If both such Lender and Borrower shall have repaid the
corresponding amount, the Administrative Agent shall promptly return to Borrower
its corresponding amount.
(d) Administrative Agent shall maintain at its principal office a register
for the recordation of the names and addresses of Lenders and the Commitment
Amount and Loans of each Lender from time to time (the "REGISTER"). The Register
--------
shall be available for inspection by Borrower or any Lender at any reasonable
time and from time to time upon reasonable prior notice. Administrative Agent
shall record in the Register the Commitment Amounts and the Loans, and each
repayment or prepayment in respect of the principal
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
amount of the Loans, and any such recordation shall be prima facie evidence of
such matters; provided, failure to make any such recordation, or any error in
such recordation, shall not affect any Commitment Amounts or any Obligations in
respect of any Loan. Each Borrower hereby designates CIBC to serve as such
Borrower's agent solely for purposes of maintaining the Register as provided in
this Section 2.03(d), and Borrower hereby agrees that, to the extent CIBC serves
---------------
in such capacity, CIBC and its officers, directors, employees, agents and
affiliates shall constitute "Indemnitees".
3.4 SECTION THE NOTES. Borrower shall execute and deliver to each Revolving
---------
Lender a Revolving Loan Note and to each Term Lender a Term Loan Note to
evidence the Commitment of that Lender. Each Revolving Loan Note shall be in the
principal amount of the Revolving Loan Commitment Amount of the applicable
Lender, dated the Initial Funding Date, stated to mature on March 31, 2004. Each
Term Loan Note shall be in the principal amount of the Term Loan Commitment
Amount of the applicable Term Lender, dated the Initial Funding Date, stated to
mature on March 31, 2004. The Notes payable to a Lender shall represent the
obligation of Borrower to pay the amount of each Lender's Revolving Loan
Commitment Amount or Term Loan Commitment Amount or, if less, the applicable
Lender's Pro Rata Share of the aggregate unpaid principal amount of all Loans to
Borrower together with interest thereon as prescribed in Section 2.05. The
------------
aggregate principal amount of all the Notes shall not exceed the aggregate
Commitments of all the Lenders. The Administrative Agent is hereby authorized by
Borrower to record in the Register the date and amount of each Revolving Loan or
Term Loan made to Borrower, as applicable, and to record therein the date and
amount of each payment on each Loan made to Borrower, and such recordations
shall be prima facie evidence of the amounts owing to the Lenders with respect
to the Loans in the absence of manifest error; provided, however, that the
-------- -------
failure of the Administrative Agent to register any such information on such
schedule shall not in any manner affect the obligation of Borrower to repay the
Loans made to Borrower in accordance with the terms of this Agreement.
3.5 SECTION INTEREST ON LOANS.
-----------------
(a) General. Subject to the provisions of Sections 2.05(b), 2.06 and 2.07,
------- ---------------- ---- ----
each Loan shall bear interest at the rate per annum equal to (i) the Base Rate
plus the Applicable Margin, computed on the basis of a 365 or 366 day year, or
(ii) the LIBO Rate plus the Applicable Margin, computed on the basis of a 360
day year, as selected by Borrower in the Notices of Borrowing and the Notices of
Continuation/Conversion.
(b) Default Interest. If Borrower shall default in the payment of the
----------------
principal of or interest on any Loan or any other amount becoming due hereunder
or under any of the other Loan Documents on its due date, then Borrower shall,
on demand from the Administrative Agent, thereafter pay interest on all Loans at
a rate that is four percent (4.00%) per
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
annum above the rates of interest otherwise payable on all the Loans from the
date such payment is due to the date such payment default is either cured or
waived in writing by the Requisite Lenders. If any other Event of Default shall
occur and be continuing and shall be declared by the Administrative Agent upon
the direction of the Requisite Lenders, then Borrower shall, on demand,
thereafter pay interest on all the Loans at a rate that is two percent (2.00%)
per annum above the rates of interest otherwise payable on the Loans from the
date of the occurrence of such Event of Default until the date such Event of
Default has been cured or waived in writing by the Requisite Lenders; provided,
--------
that if an Event of Default described in the first sentence of this clause (b)
----------
shall occur at any time that an Event of Default described in this second
sentence has occurred and is continuing, then the rate of interest described in
the first sentence of this clause (b) shall apply. After the occurrence and
----------
during the continuance of any Event of Default, Borrower shall be subject to the
limitations on borrowings of, conversions into and continuations as LIBOR Loans
set forth in Section 2.07(g).
---------------
3.6 SECTION CONVERSION OR CONTINUATION.
--------------------------
(a) Subject to the provisions of Section 2.07, Borrower shall have the
------------
option (i) to convert (A) all or any part of its outstanding Term Loans or (B)
all or any part of its outstanding Revolving Loans, in a minimum amount of
$5,000,000 and integral multiples of $1,000,000 in excess of that amount (in the
case of Term Loans and Revolving Loans) from a Term Loan or Revolving Loans that
are Base Rate Loans to LIBOR Term Loans or LIBOR Revolving Loans, as the case
may be; (ii) to convert (A) all or any part of its outstanding Term Loans or (B)
all or any part of its outstanding Revolving Loans from LIBOR Loans to Base Rate
Loans on the expiration of the Interest Period applicable thereto; and (iii)
upon the expiration of any Interest Period applicable to any outstanding LIBOR
Term Loan or any outstanding LIBOR Revolving Loan, to continue (A) all of such
LIBOR Term Loan or (B) all or any portion of such LIBOR Revolving Loan equal to
$5,000,000 and integral multiples of $1,000,000 in excess of that amount as a
LIBOR Term Loan or LIBOR Revolving Loan, as applicable; provided, however, that
-------- -------
no outstanding Loans may be converted into, or continued as, LIBOR Loans when
any Default or Event of Default referred to in Section 9.01(a) has occurred and
is continuing. Any conversion or continuation made with respect to less than the
entire outstanding balance of a Borrower's Revolving Loans or Term Loans must be
applied pro rata to such Borrower's Revolving Loans or Term Loans, as
applicable, according to the outstanding principal balance of such Revolving
Loans or Term Loans.
(b) Whenever a Borrower elects to convert or continue Loans under this
Section 2.06, Borrower shall deliver to the Administrative Agent a Notice of
------------
Conversion/Continuation signed by an authorized officer of Borrower (i) no later
than 10:00 a.m. (New York time) three (3) Business Days in advance of the
requested conversion date, in the
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
case of a conversion into Base Rate Loans, and (ii) no later than 10:00 a.m.
(New York time) three (3) Business Days in advance of the requested conversion
or continuation date, in the case of a conversion into, or continuation of,
LIBOR Loans. The Notice of Conversion/Continuation shall specify (1) the
conversion or continuation date (which shall be a Business Day) and, in the case
of any continuation, the last day of the then applicable Interest Period, (2)
the amount and type of the Loans to be converted or continued, (3) the nature of
the requested conversion or continuation, and (4) in the case of a conversion
into, or continuation of, LIBOR Loans, the requested Interest Period. Promptly
after receipt of a Notice of Conversion/Continuation pursuant to this Section
-------
2.06(b), the Administrative Agent shall notify the Revolving Lenders or the
-------
Term Lenders, as applicable, by telecopy, telephone or other similar form of
transmission, of the requested conversion or continuation. In the event that a
Borrower should fail to provide a Notice of Conversion/Continuation with respect
to any LIBOR Loans as provided above, such Loans shall, on the last day of the
Interest Period with respect to such Loans, convert to Base Rate Loans.
(c) Any Notice of Conversion/Continuation for conversion to, or
continuation of, Loans made pursuant to this Section 2.06 shall be irrevocable
------------
and the applicable Borrower shall be bound to convert or continue in accordance
therewith.
3.7 SECTION SPECIAL PROVISIONS GOVERNING LIBOR LOANS. Notwithstanding any
----------------------------------------
other provisions to the contrary contained in this Agreement, the following
provisions shall govern with respect to LIBOR Loans as to the matters covered:
(a) Amount of LIBOR Loans. Each continuation of or conversion to LIBOR
---------------------
Term Loans, and each election of, continuation of or conversion to LIBOR
Revolving Loans, shall be in a minimum amount of $5,000,000 and in integral
multiples of $1,000,000 in excess of that amount.
(b) Determination of Interest Period. By giving notice as set forth in
--------------------------------
Section 2.06(b), a Borrower shall have the option, subject to the other
---------------
provisions of this Section 2.07, to specify whether the Interest Period for such
------------
LIBOR Loan shall be a one, two, three or six month period. The determination of
Interest Periods shall be subject to the following provisions:
(i) In the case of immediately successive Interest
Periods, each successive Interest Period shall commence on
the day on which the preceding Interest Period expires.
(ii) If any Interest Period would otherwise expire on a day
which is not a Business Day, the Interest Period shall be
extended to expire on the next succeeding Business Day;
provided, however, that if the next succeeding Business Day
-------- -------
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
occurs in the following calendar month, then such Interest
Period shall expire on the immediately preceding Business
Day.
(iii) Borrower may not select an Interest Period for any
LIBOR Loan, which Interest Period expires later than the
maturity date of such Loan.
(iv) There shall be no more than seven (7) Interest Periods
in effect at any one time.
(c) Determination of Interest Rate. As soon as practicable after 10:00
------------------------------
a.m. (New York time) on the LIBOR Interest Rate Determination Date, the
Administrative Agent shall determine (which determination shall, absent manifest
error, be presumptively correct) the interest rate for the LIBOR Loans for which
an interest rate is then being determined and shall promptly give notice thereof
(in writing or by telephone confirmed in writing) to the Borrower and the
Lenders. In the event that on any LIBOR Interest Rate Determination Date the
Administrative Agent shall have determined (which determination shall, absent
manifest error, be presumptively correct and binding upon all parties) that:
(i) adequate and fair means do not exist for ascertaining
the applicable interest rates by reference to which the LIBO
Rate then being determined is to be fixed; or
(ii) Dollar deposits in the relevant amounts and for the
relevant Interest Period are not generally available to
Lenders in the eurodollar market at the LIBO Rate, then:
(A) each LIBOR Loan will automatically, on the last
day of the then existing Interest Period therefor, convert
into a Base Rate Loan; and
(B) the obligation of the Lenders to make, or to
convert Loans into, LIBOR Loans shall be suspended until the
Administrative Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension no
longer exist.
(d) Illegality. Notwithstanding any other provision of this Agreement, if
----------
any Lender shall notify the Administrative Agent that the introduction of or any
change in or in the interpretation of any law or regulation after the Closing
Date makes it unlawful, or any central bank or other Governmental Authority
asserts that it is unlawful, for any Lender to perform its obligations hereunder
to make LIBOR Loans or to fund or maintain LIBOR
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
Loans hereunder, (i) the obligation of the Lenders to make, or to convert Loans
into or to continue Loans as, LIBOR Loans shall be suspended until the
Administrative Agent shall notify Borrower and the Lenders that the
circumstances causing such suspension no longer exist and (ii) Borrower shall on
the termination of the Interest Period then applicable thereto, or on such
earlier date required by law, prepay in full all LIBOR Loans then outstanding
together with accrued interest thereon, or convert all such LIBOR Loans into
Base Rate Loans in accordance with Section 2.06.
------------
(e) Compensation. In addition to such amounts as are required to be paid by
-----------
Borrower pursuant to the other Sections of this Article II, Borrower agrees to
----------
compensate any Lender for all losses, expenses and liabilities, including,
without limitation, any loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund or
maintain such Lender's LIBOR Loans to Borrower, which such Lender may sustain
(i) if for any reason a funding of any LIBOR Loans does not occur on a date
specified therefor in a Notice of Borrowing or Notice of
Conversion/Continuation, or a successive Interest Period does not commence after
notice therefor is given pursuant to Section 2.06 as a result of any act or
------------
omission of Borrower, (ii) if any voluntary or mandatory prepayment of any LIBOR
Loans occurs for any reason on a date which is not the last scheduled day of an
Interest Period, (iii) as a consequence of any required conversion of LIBOR
Loans to Base Rate Loans as a result of any of the events indicated in Section
-------
2.07(d), or (iv) as a consequence of any other failure by a Borrower to repay
-------
LIBOR Loans when required by the terms of this Agreement.
(f) Booking of LIBOR Loans. The Lenders may make, carry or transfer LIBOR
----------------------
Loans at, to, or for the account of, any of their respective branch offices or
the office of any of their respective affiliates.
(g) LIBOR Loans After Event of Default. After the occurrence of and during
----------------------------------
the continuance of any Event of Default referred to in Section 9.01(a), Borrower
may not borrow Revolving Loans as LIBOR Loans or elect to have any Loans
continued as, or converted to, LIBOR Loans after the expiration of any Interest
Period then in effect for such Loans.
3.8 SECTION PAYMENTS.
--------
(a) Interest on each LIBOR Loan shall be payable in arrears on each LIBOR
Interest Payment Date and, if such LIBOR Loan is paid in full other than on such
LIBOR Interest Payment date, on such other date. Interest on each Base Rate Loan
will be payable in arrears on each Payment Date and, if such Base Rate Loan is
paid in full (other than by means of a conversion to a LIBOR Loan) other than on
such Payment Date, on such other date.
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
(b) Subject to the provisions of Sections 2.09 and 9.02, the outstanding
------------- ----
principal balance of each of the Term Loans and the Revolving Loans shall be
repaid in the percentages of such Loans outstanding (including any such Loans
constituting Escrowed Proceeds) as of the six month anniversary of the Closing
Date on the dates specified below.
Date % of Outstanding
Loans
---------------------------- -----------------
June 30, 2001 8.33333%
September 30, 2001 8.33333%
December 31, 2001 8.33333%
March 31, 2002 8.33333%
June 30, 2002 8.33333%
September 30, 2002 8.33333%
December 31, 2002 8.33333%
March 31, 2003 8.33333%
June 30, 2003 8.33333%
September 30, 2003 8.333333%
December 31, 2003 8.333333%
March 31, 2004 8.333337%
(a) After the occurrence and during the continuance of an Event of
Default, all proceeds received by Administrative Agent or Collateral Agent from
any sale of, collection from, or other realization upon all or any part of the
Collateral under any Collateral Document during the continuation of such Event
of Default shall be applied as follows:
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
(i) to the payment of all costs and expenses of such
sale, collection or other realization, including all
expenses, liabilities and advances made or incurred by
Administrative Agent, Collateral Agent and their respective
agents and counsel in connection therewith, and all amounts
for which Administrative Agent, Collateral Agent or any
Lender is entitled to indemnification under any of the Loan
Documents and all advances made by Administrative Agent or
Collateral Agent thereunder for the account of the
applicable Credit Party, and to the payment of all costs and
expenses paid or incurred by Administrative Agent or
Collateral Agent in connection with the exercise of any
right or remedy under any Loan Document;
(ii) thereafter, to the payment of accrued interest and
fees owed to Agents and Lenders;
(iii) thereafter, to the extent of any excess such
proceeds, to the payment of all other Obligations then due
and owing for the benefit of the holders thereof in
accordance with the terms of the Intercreditor Agreement;
and
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
(iv) thereafter, to the extent of any excess such
proceeds, to the payment to or upon the order of such Credit
Party or to whosoever may be lawfully entitled to receive
the same or as a court of competent jurisdiction may direct.
1.2 SECTION VOLUNTARY AND MANDATORY PREPAYMENT OF LOANS.
-------------------------------------------
(a) Prior to the six-month anniversary of the Closing Date, Borrower shall
have the right to, upon the provision of five (5) days prior written notice to
the Administrative Agent, which notice, once given, shall be irrevocable, prepay
the outstanding principal amount of Revolving Loans that are Base Rate Loans in
a minimum amount of $1,000,000 and increments of $250,000 in excess thereof, or
the outstanding principal amount of Revolving Loans that are LIBOR Loans in a
minimum principal amount of $5,000,000 and increments of $1,000,000 in excess
thereof (in either case, with no corresponding reduction in the Revolving Loan
Commitment Amounts). No amount of Term Loans may be prepaid at any time prior to
the six-month anniversary of the Closing Date. At any time after the six-month
anniversary of the Closing Date, Borrower shall have the right upon the
provision of five days' prior written notice to the Administrative Agent, which
notice, once given, shall be irrevocable, to prepay the outstanding principal of
the Base Rate Loans in a minimum principal amount of $1,000,000 and increments
of $250,000 in excess thereof, or the outstanding principal amount of the LIBOR
Loans in a minimum principal amount of $5,000,000 and increments of $1,000,000
in excess thereof, together in each case with accrued interest thereon, the
aggregate Prepayment Premium applicable thereto and any amount payable pursuant
to Section 2.07(e). The amount of principal so prepaid shall be applied to the
---------------
remaining scheduled Principal Payments on the type of Loans prepaid in
accordance with Section 2.10.
------------
(b) Upon the occurrence of any Event of Loss in excess of $250,000 with
respect to any item of assets of a Credit Party that is not repaired or replaced
with assets used or useful in the business of such Credit Party that have a
value at least equal to the assets to be replaced before the occurrence of the
Event of Loss (assuming that the assets to be replaced had been maintained in
the condition and repair as required by the terms and conditions hereof or of
any other Loan Document) within 180 days after the occurrence of such Event of
Loss or any Events of Loss which, in the aggregate, exceed $500,000 with respect
to any assets that are not so repaired or replaced (in each case, other than an
item of assets no longer used or useful in the business of the Credit Parties),
Borrower shall make a principal prepayment within thirty (30) days of such Event
of Loss in an amount equal to the net cash proceeds, if any, so received,
together with accrued interest thereon (but without the Prepayment Premium) with
such principal payment to be applied, pro rata, to outstanding principal balance
--- ----
of the Revolving Loans and the Term Loans and further applied to the remaining
scheduled Principal Payments on such Loans in accordance with Section 2.10.
------------
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
(c) Borrower shall prepay the Loans on a pro rata basis (and such
prepayment shall be further applied to the remaining scheduled Principal
Payments in accordance with Section 2.10) in a principal amount equal to all of
------------
the net proceeds of any sales of assets of Borrower other than sales in the
ordinary course of business, which proceeds are not reinvested within one
hundred eighty (180) days after receipt thereof in productive long term assets
used or useful in the business of Borrower that have value at least equal to the
assets sold (assuming that such assets were maintained in good condition and
repair as required by the terms and conditions hereof or of any other Loan
Document), plus the applicable Prepayment Premium, within five (5) days after
the expiration of the applicable one hundred eighty (180) day period.
(d) On the first Payment Date of each year, commencing with the Payment
Date occurring on March 31, 2002, the Loans shall be prepaid on a pro rata basis
(and the amount of such prepayment (but without a Prepayment Premium) further
applied to the remaining scheduled Principal Payments on the Loans in accordance
with Section 2.10) by an amount equal to fifty percent (50%) of Excess Operating
------------
Cash Flow for the preceding fiscal year until Borrower has achieved and
maintained for at least two (2) consecutive fiscal quarters (whether before or
after March 31, 2002), a Total Leverage Ratio of less than 6:1, as determined by
reference to the financial statements delivered pursuant to Section 5.06.
------------
(e) Upon the occurrence and during the continuance of a Default, Borrower
shall prepay the Loans on a pro rata basis (and such prepayment shall be further
applied to the remaining scheduled Principal Payments in accordance with Section
-------
2.10) in a principal amount equal to all of the net proceeds of any sales of
-----
Investments permitted pursuant to Section 6.06(viii), plus the applicable
Prepayment Premium, within five (5) days after the receipt of such proceeds.
(f) Borrower shall also prepay Loans (together with the Prepayment Premium
applicable thereto) in an amount such that the sum of outstanding principal
balance of the Loans does not exceed the Borrowing Base at any time, such
prepayments to be applied to prepay Loans on a pro rata basis and further
applied to the remaining Principal Payments on the Loans in accordance with
Section 2.10.
------------
1.3 SECTION CERTAIN PROVISIONS REGARDING PREPAYMENTS.
-----------------------------------------
(a) Any prepayment of Loans shall be applied first to Base Rate Loans to
the full extent thereof before application to LIBOR Loans in each case so as to
minimize the amount of any payments required to be made by Borrower pursuant to
Section 2.07(e).
---------------
(b) Notwithstanding any provision to the contrary contained in Section
-------
2.09, no voluntary prepayment of Term Loans and no mandatory prepayment of
----
Revolving Loans or Term Loans shall be made until the six-month anniversary of
the Closing Date, and any pro-
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
ceeds otherwise required to be used to make a mandatory prepayment prior to such
date shall be delivered on the date otherwise required to be used to prepay
Loans in accordance with Section 2.09 to Collateral Agent to be held in escrow,
------------
and invested in Temporary Cash Investments (to the extent the Collateral Agent
is able to provide or otherwise invest in such Temporary Cash Investments), for
application to prepayment of Loans on the six-month anniversary of the Closing
Date.
(c) Each voluntary and mandatory prepayment (other than voluntary
prepayments of Revolving Loans prior to the Revolving Credit Commitment
Termination) made pursuant to Section 2.09 shall also be applied, on a pro rata
------------
basis, to reduce each Principal Payment scheduled to occur after the date of
such prepayment.
(d) Each voluntary and mandatory prepayment (other than voluntary
prepayments of Revolving Loans prior to the Revolving Credit Commitment
Termination) required under Section 2.09 shall be allocated among the Lenders to
------------
repay their Loans on the basis of their Pro Rata Shares.
1.4 SECTION FEES.
----
(a) COMMITMENT FEE. The Borrower shall pay to the Revolving Lenders a
--------------
commitment fee (the "COMMITMENT FEE") for the period commencing on the Effective
--------------
Date and ending on the Revolving Credit Commitment Termination Date, computed
(on the basis of the actual number of days elapsed over a year of 360 days) at
the rate of 1.50% per annum, on the average daily aggregate amount of unused
Revolving Loan Commitment Amounts. Such Commitment Fee, to the extent then
accrued, shall be payable on each Payment Date.
(b) The Borrower shall also pay the Agents and shall be liable to the
Agents, for payment of other amounts separately agreed to by Borrower and
Agents.
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
(c) All fees once paid shall be deemed fully earned and nonrefundable.
1.5 SECTION MANNER OF PAYMENT; SPECIAL TAX CONSIDERATIONS.
---------------------------------------------
(a) All payments by Borrower hereunder and under the Notes shall be made
to the Administrative Agent by wire transfer or other electronic payment method
to the Payment Account or to such bank account as the Administrative Agent may
designate, for the account of the Lenders in Dollars in immediately available
funds by 11:00 a.m., New York time, on the date on which such payment shall be
due. The Administrative Agent will promptly thereafter (but in no event later
than the date of receipt of such payment, if such is received at or prior to
12:00 p.m., New York time, on the date immediately following the date of receipt
of such payment, if such is received after 12:00 p.m., New York time) cause to
be distributed like funds relating to the payment of principal or interest or
other fees ratably (other than amounts payable pursuant to Section 2.14) to each
------------
Lender in accordance with its Pro Rata Share. In the event that the
Administrative Agent shall not make distributions to any Lender in accordance
with the terms of the immediately preceding sentence, the amounts required to be
so distributed by the Administrative Agent shall bear interest at then Federal
Funds Effective Rate from the date such amount was required to be distributed to
such Lender pursuant to the immediately preceding sentence until the date such
distribution is actually made to such Lender. Any such accrued interest shall be
payable by the Administrative Agent on demand. Interest in respect of any Loan
hereunder shall accrue from the day such Loan is made up to and including the
day prior to the date on which such Loan is paid in full. Payments received
after 12:00 p.m. New York time shall not be given credit until the next Business
Day, and Borrower shall be liable for interest, if any, accruing on such payment
until the next Business Day.
(1) Any and all payments by Borrower hereunder shall be made free and
clear of and without deduction for any and all Taxes. If Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under the other Loan Documents to any Lender or Administrative
Agent, (A) the sum payable shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 2.12) such Lender or Administrative Agent
------------
receives an amount equal to the sum it would have received had no such
deductions been made, (B) Borrower shall make such deductions, and (C) Borrower
shall pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law. If a withholding tax of the United
States of America or any other Governmental Authority shall be or become
applicable (y) after the date of this Agreement, to the payments by Borrower
made to the Lending Office or any other office that a Lender may claim as its
Lending Office, or (z) after such Lender's selection and designation of any
other Lending Office, to such payments made to such other Lending Office, such
Lender shall use reasonable efforts to make, fund and maintain its Loans through
another Lending Office of
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
such Lender in another jurisdiction so as to reduce, but not increase, the
applicable Borrower's liability hereunder, if the making, funding or maintenance
of such Loans through such other Lending Office of such Lender does not, in the
sole and absolute judgment of such Lender, otherwise materially adversely affect
such Loans, such Lender's obligations under its Commitment or such Lender.
Notwithstanding anything to the contrary hereunder, if a Person becomes a Lender
under this Agreement pursuant to Section 11.06 hereof, Borrower shall in no
-------------
event be required to increase any payment pursuant to paragraph (b) of this
Section 2.12 by an amount that would exceed the amount of any increase that
------------
would be required to be made under paragraph (b) of this Section 2.12 to the
------------
assigning Lender.
(2) The Borrower will indemnify each Lender and each Agent and hold it
harmless for the full amount of Taxes (including, without limitation, any Taxes
imposed by any Governmental Authority on amounts payable under this Section
-------
2.12 or any other documentary taxes, assessments or charges made by any
----
Governmental Authority by reason of the execution and delivery of this Agreement
or any other Loan Document) paid by such Lender or such Agent (as the case may
be) and any liability (including penalties, interest, and expenses) arising
therefrom or with respect thereto. This indemnification shall be made within
thirty (30) days after the date such Lender or such Agent (as the case may be)
makes written demand therefor. A certificate as to any additional amount payable
to any Lender or Agent under this Section 2.12 submitted to Borrower and the
------------
Administrative Agent (if a Lender is so submitting) by such Lender or such Agent
shall show in reasonable detail the amount payable and the calculations used to
determine such amount. With respect to such deduction or withholding for or on
account of any Taxes and to confirm that all such Taxes have been paid to the
appropriate Governmental Authorities, the Borrower shall promptly (and in any
event not later than thirty (30) days after receipt) furnish to each Lender and
each Agent such certificates, receipts and other documents as may be required
(in the judgment of such Lender or such Agent) to establish any tax credit to
which such Lender or such Agent may be entitled.
(3) Within thirty (30) days after the date of any payment of Taxes on
amounts payable hereunder by Borrower, Borrower will furnish to the
Administrative Agent, at its address referred to in Section 11.01, the original
-------------
or a certified copy of a receipt evidencing payment thereof.
(4) Without prejudice to the survival of any other agreement of Borrower
hereunder, the agreements and obligations of Borrower contained in this Section
-------
2.12 shall survive the payment in full of principal and interest hereunder and
----
the termination of this Agreement.
(5) Each Lender that is not created or organized under the laws of the
United States of America or a political subdivision thereof shall deliver to
Borrower and the
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
Administrative Agent on or before the effective date hereof, or, if later, the
date on which such Lender becomes a Lender pursuant to Section 11.06 hereof, a
-------------
true and accurate certificate executed in duplicate by a duly authorized officer
of such Lender, in a form reasonably satisfactory to Borrower and the
Administrative Agent, to the effect that such Lender is capable under the
provisions of an applicable tax treaty concluded by the United States of America
(in which case the certificate shall be accompanied by two original, executed
copies of Form 1001 of the IRS (or any successor form or forms required under
the IRC or the applicable regulations promulgated thereunder)) or under Section
1442 of the IRC (in which case the certificate shall be accompanied by two
original, executed copies of Form 4224 of the IRS (or any successor form or
forms required under the IRC or the applicable regulations promulgated
thereunder)) of receiving payments of interest hereunder exempt from or at a
reduced deduction or withholding of United States federal income tax or that
such Lender is not a bank described in Section 881(c)(3)(A) of the IRC (in which
case the certificate should be accompanied by two original, executed copies of a
Certificate re Non-Bank Status, together with two original, executed copies of
Form W-8 or W-9 of the IRS (or any successor form or forms required under the
IRC or the applicable regulations promulgated thereunder)). Each such Lender
further agrees to deliver to Borrower and the Administrative Agent from time to
time a true and accurate certificate executed in duplicate by a duly authorized
officer of such Lender substantially in a form reasonably satisfactory to
Borrower and the Administrative Agent, before or promptly upon the occurrence of
any event requiring a change in the most recent certificate previously delivered
by it to Borrower and the Administrative Agent pursuant to this Section
-------
2.12(b)(5). Further, each Lender which delivers a certificate accompanied
----------
by Form 1001 of the IRS covenants and agrees to deliver to Borrower and the
Administrative Agent within fifteen (15) days prior to the first Payment Date
and every third anniversary of such date thereafter, on which this Agreement is
still in effect, another such certificate and two accurate and complete original
signed copies of Form 1001 (or any successor form or forms required under the
IRC or the applicable regulations promulgated thereunder), and each Lender that
delivers a certificate accompanied by Form 4224 of the IRS (or any successor
form or forms required under the IRC or the applicable regulations promulgated
thereunder) covenants and agrees to deliver to Borrower and the Administrative
Agent within fifteen (15) days prior to the beginning of each subsequent taxable
year of such Lender during which this Agreement is still in effect, another such
certificate and two accurate and complete original signed copies of IRS Form
4224 (or any successor form or forms required under the IRC or the applicable
regulations promulgated thereunder). Each such certificate shall certify as to
one of the following:
(ii) that such Lender is capable of receiving payments of
interest hereunder exempt from withholding of United States
of America federal income tax;
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
(iii) that such Lender is not capable of receiving
payments of interest hereunder exempt from withholding of
United States of America federal income tax as specified
therein but is capable of recovering the full amount of any
such withholding from a source other than Borrower and will
not seek any such recovery from Borrower; or
(iv) that, as a result of the adoption of or any change
in any law, treaty, rule, regulation, guideline or
determination of a Governmental Authority or any change in
the interpretation or application thereof by a Governmental
Authority after the date such Lender became a party hereto,
such Lender is not capable of receiving payments of interest
hereunder without deduction or withholding of United States
of America federal income tax as specified therein and that
it is not capable of recovering the full amount of the same
from a source other than Borrower.
Each Lender shall promptly furnish to Borrower and the Administrative Agent such
additional documents as may be reasonably required by Borrower or the
Administrative Agent to establish any exemption from or reduction of any Taxes
required to be deducted or withheld and which may be obtained without undue
expense to such Lender or at the expense of the requisite Person.
(6) For a period with respect to which a Lender has failed to provide the
Administrative Agent and Borrower with the appropriate form described in Section
-------
2.12(b)(5) (other than if such failure is due to a change in law occurring
----------
subsequent to the date on which a form originally was required to be provided),
such Lender shall not be entitled to indemnification under this Section 2.12
------------
with respect to Taxes imposed by the United States by reason of such failure;
provided, however, that should a Lender become subject to Taxes because of its
-------- -------
failure to deliver a form required hereunder, Borrower shall take such steps as
such Lender shall reasonably request, and at such Lender's expense, to assist
such Lender to recover such Taxes.
(7) If a Borrower pays any additional amount under this Section 2.12 and,
as a result, any Lender, together with the Administrative Agent, subsequently,
in their sole discretion and based on their own interpretation of any relevant
laws (but acting in good faith) receive or are granted a final and non-
appealable credit against or deduction from or in respect of any tax payable by
such Lender, or obtain any other final and non-appealable relief in respect of
any tax, which in the opinion of such Lender and the Administrative Agent,
acting in good faith, is both reasonably identifiable and quantifiable by them
without requir-
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
ing any Lender, the Administrative Agent or their professional advisers to
expend a material amount of time or incur a material cost in so identifying or
quantifying (any of the foregoing, to the extent so reasonably identifiable and
quantifiable, being referred to as a "SAVING"), such Lender shall, to the extent
------
that it can do so without prejudice to the retention of the Saving, reimburse
Borrower promptly after such identification and quantification with the amount
of such Saving; provided, however, that any such Saving shall be reduced by any
costs incurred by such Lender or the Administrative Agent in obtaining such
Saving.
(8) Nothing in this Section 2.12(c) shall require any Lender to disclose
---------------
to any Person any information regarding its tax affairs or to arrange its tax
and other affairs in any particular manner.
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
1.2 SECTION MAXIMUM LAWFUL INTEREST RATE. Notwithstanding any provision
----------------------------
contained herein, the total liability of Borrower for payment of interest
pursuant hereto and the Notes, including any other charges or other amounts, to
the extent such charges and other amounts are deemed to be interest, shall not
exceed the maximum amount of such interest permitted by law to be charged,
collected, or received from Borrower (the "MAXIMUM RATE"). If any payments by
------------
Borrower for the account of any Lender include interest in excess of the Maximum
Rate, such Lender shall apply such excess to the reduction of the unpaid
principal amount owing by Borrower, or if none is due, such excess shall be
returned to Borrower.
1.3 SECTION FUNDING ISSUES.
--------------
(a) Increased Costs. If, due to either (i) the introduction after the date
---------------
hereof of, or any change after the date hereof in or in the interpretation of,
any applicable law, rule or regulation by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof or (ii) compliance by any Lender after the date hereof with any final
request or final directive issued after the date hereof (whether or not having
the force of law) by any such Governmental Authority, central bank or comparable
agency, and, as a result of any of the events set forth in the above clauses (i)
-----------
and (ii), (x) there shall be any increase in the cost to such Lender in
--
maintaining its Commitment under this Agreement or funding or maintaining its
Pro Rata Share of the Loans under this Agreement, or (y) any Lender is subjected
to any charge or withholding on its obligations hereunder, or changes in the
basis of taxation of payments to any Lender in connection with any of the
foregoing (except for changes in the rate of tax on overall net income of any
Lender) (collectively, "INCREASED COSTS"), then Borrower shall, from time to
---------------
time, pay, to the Administrative Agent for the benefit of such Lender within 15
days after such Lender shall have provided notice to the Administrative Agent
(and the Administrative Agent shall have provided notice to Borrower which the
Administrative Agent shall promptly do) of such Increased Cost, an amount
sufficient to compensate such Lender for such Increased Cost, as provided
herein. A certificate setting forth in reasonable detail the computation of the
amount of such Increased Cost (which increase in cost shall be determined by
such Lender's reasonable allocation of the aggregate of such cost increases
resulting from such event), submitted to Borrower by such Lender, shall be
conclusive and binding for all purposes, absent manifest error.
(b) Increased Capital. If any Lender which is subject to minimum capital
-----------------
requirements determines that compliance by such Lender with any guideline or
request from any central bank or other Governmental Authority (whether or not
having the force of law) affects or would affect the amount of capital required
or expected to be maintained by such Lender, or any corporation controlling such
Lender, and such Lender reasonably determines that the amount of such capital is
increased by or based upon any commitment to lend here-
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
under or making or maintaining Loans, or other commitments of this type, then,
upon demand by such Person, Borrower agrees to, within five (5) days of such
demand, pay to such Person, from time to time as specified by such Person,
additional amounts sufficient to compensate such Person in the light of such
circumstances, to the extent that such Person reasonably determines such
increase in capital to be allocable to such Person's commitment or maintenance
of Loans hereunder. A certificate as to the amount of such increased cost,
submitted to Borrower by the applicable Person shall, absent manifest error, be
conclusive and binding on Borrower for all purposes.
(c) Replacement of Lender. If Borrower, as a result of the requirements
---------------------
of any of Section 2.12, Section 2.14(a) or Section 2.14(b), shall be required to
------------ --------------- ---------------
pay any particular Lender (an "AFFECTED LENDER") the additional amounts referred
---------------
to in such Section, which costs are not imposed by the other Lenders, and such
additional amounts are material, then Borrower shall be entitled to find a
replacement Lender, reasonably acceptable to the Administrative Agent and the
Requisite Lenders (such consent to such replacement Lender not to be
unreasonably withheld), to replace the Affected Lender. The Affected Lender and
the replacement Lender shall execute an Assignment Agreement with respect to all
of the Affected Lender's Commitments and all Loans owing to the Affected Lender
and comply with the other provisions of Section 11.06. Upon the payment by the
-------------
replacement Lender to the Affected Lender of the then outstanding principal
amount of Loans owing to the Affected Lender, together with accrued interest
thereon, and the payment by Borrower to the Affected Lender of any compensation
required with respect to LIBOR Loans pursuant to Section 2.07(e), the
---------------
replacement Lender shall succeed to all of the Affected Lender's rights and
obligations under this Agreement and the other Loan Documents.
(d) Limitation. Any demand for payment to be given by a Lender under
----------
Section 2.14 shall be effective only if given within 180 days of an officer of
such Lender having knowledge of the facts giving rise to the right to make such
demand.
2 ARTICLE
REPRESENTATIONS AND WARRANTIES
------------------------------
Each Credit Party represents and warrants to the Agents and the
Lenders that:
1.1 SECTION ORGANIZATION; POWERS.
--------------------
(a) Such Credit Party (i) is a corporation or limited liability company
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization and (ii) is qualified to do business in the
jurisdiction in which its principal place of business is located and in every
other jurisdiction where such qualification is necessary except where a failure
to so qualify is not reasonably expected to have a Material Adverse Effect;
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
(b) such Credit Party has the power and authority to own its properties,
to carry on its business as now conducted; and
(c) such Credit Party has the power and the authority to enter into each
Loan Document to which it is a party and to carry out the transactions
contemplated thereby.
1.2 SECTION CORPORATE AUTHORIZATION. The execution, delivery and performance
-----------------------
of this Agreement and the other Loan Documents to which such Credit Party is a
party, and the Loans hereunder:
(a) have been duly authorized by such Credit Party's Board of Directors or
managers and, if necessary, such Credit Party's stockholders or members;
(b) (1) do not (except as disclosed in Schedule 3.02) violate (i) any
-------------
existing provision of law applicable to such Credit Party and not immaterial to
its business, (ii) such Credit Party's Certificate or Articles of Incorporation
or other organizational Documents, as the case may be, or (iii) any applicable
order of any court or other governmental agency, and (2) do not conflict with,
result in a breach of or constitute (with due notice or lapse of time or both) a
default under any indenture, agreement for borrowed money, bond, note or other
similar instrument or any other material agreement to which such Credit Party is
a party or by which such Credit Party or any of such Credit Party's property is
bound;
(c) do not result in the creation or imposition of any Lien of any nature
whatsoever upon any property or assets of such Credit Party other than the Liens
granted pursuant to this Loan Agreement or the other Loan Documents;
(d) constitute legal, valid and binding obligations of such Credit Party,
enforceable against such Credit Party in accordance with their respective terms;
and
(e) do not, as of the date of execution hereof, require any governmental
consent, filing, registration or approval other than any consent, filing,
registration or approval that have been made to the extent required by
applicable law, order, rule or regulations; provided, the failure of any such
consent or approval to be obtained or filing or registration to be made or
otherwise be effective shall not affect the validity or enforceability of the
Loan Documents or otherwise be adverse in any respect to any Agent or Lender.
1.3 SECTION FINANCIAL STATEMENTS. Borrower has furnished to the Agent and
--------------------
the Lenders the audited consolidated financial statements of Borrower and its
Subsidiaries dated as of, and covering the fiscal year ended, December 31, 1998
(the "FINANCIALS"). The Financials have been prepared in accordance with GAAP
----------
applied on a basis consistent with that of preceding periods and are complete
and correct in all material respects. As of the date of the Financials, (a) the
Financials fairly represent Borrower's and its Subsidiaries'
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
financial position and results of operations; and (b) there are no omissions
from the Financials or any other facts or circumstances not reflected in the
Financials which are or may be material according to GAAP. On and as of the
Closing Date, the Projections of Holdings and its Subsidiaries for the period
from the first day of fiscal year 1999 through and including the last day of
fiscal year 2004 (the "PROJECTIONS") are based on good faith estimates and
assumptions made by the management of Holdings; provided, the Projections are
not to be viewed as facts and that actual results during the period or periods
covered by the Projections may differ from such Projections and that the
differences may be material; provided further, as of the Closing Date,
management of Holdings believed that the Projections were reasonable and
attainable.
1.4 SECTION NO MATERIAL ADVERSE CHANGE. Since December 31, 1998, no event or
--------------------------
change has occurred that has caused or evidences, either in any case or in the
aggregate, a Material Adverse Effect.
1.5 SECTION LITIGATION. There are no actions, suits or proceedings at law or
----------
in equity or by or before any Governmental Authority now pending or, to the
knowledge of such Credit Party, threatened, against or affecting such Credit
Party or any property or rights of such Credit Party as to which there is a
reasonable likelihood of an adverse determination and which, if adversely
determined, would individually or in the aggregate materially impair the right
of any Credit Party to carry on business substantially as now being conducted or
as presently contemplated or which is likely to result in any Material Adverse
Effect.
1.6 SECTION TAX RETURNS. Such Credit Party has filed or caused to be filed
-----------
all material Federal, state and local tax returns that are required to be filed,
which returns are true, correct and complete in all material respects, and has
paid or caused to be paid all taxes that have become due or shown on any
assessment received by it to the extent that such taxes have become due, except
such taxes the amount, applicability or validity of which are being contested in
good faith by appropriate proceedings and with respect to which such Credit
Party shall have set aside on its books adequate reserves with respect to such
taxes as are required by GAAP.
1.7 SECTION NO DEFAULTS. Such Credit Party is not in default (i) with
-----------
respect to any judgment, writ, injunction, decree, rule or regulation of any
Governmental Authority, or (ii) in the performance, observance or fulfillment of
any of the obligations, covenants or conditions contained in any agreement or
instrument to which such Credit Party is a party or by which any of its assets
are bound except, in the case of any matter otherwise included in clause (i) or
(ii), to the extent such matter could not reasonably be expected to have a
Material Adverse Effect.
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
1.8 SECTION PROPERTIES. Each Credit Party has good, sufficient,
----------
legal title beneficial to (in the case of fee interests in real property), valid
leasehold interests in (in the case of leasehold interests in real or personal
property), or good and sufficient title to (in the case of all other personal
property), all of their respective properties and assets reflected in the
Financials, except for assets disposed of since the date of such financial
statements in the ordinary course of business or as otherwise permitted under
Section 6.03. Except as permitted by this Agreement, all such properties and
------------
assets are free and clear of Liens.
1.9 SECTION COLLATERAL.
(a) The execution and delivery of the Collateral Documents by Credit
Parties, together with the actions taken on or prior to the date hereof pursuant
to Section 4.01, are effective to create in favor of Collateral Agent for the
------------
benefit of Lenders, as security for the Obligations, a valid and perfected
second priority Lien on all of the Collateral, and all filings and other actions
necessary or desirable to perfect and maintain the perfection and second
priority status of such Liens have been duly made or taken and remain in full
force and effect, other than the filing of any UCC financing statements
delivered to Collateral Agent for filing (but not yet filed) and the periodic
filing of UCC continuation statements in respect of UCC financing statements
filed by or on behalf of Collateral Agent and actions necessary with respect to
perfection of security interests not governed by the Uniform Commercial Code.
(b) No authorization, approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is required for
either the pledge or grant by any Credit Party of the Liens purported to be
created in favor of Collateral Agent pursuant to any of the Collateral Documents
or the exercise by Collateral Agent of any rights or remedies in respect of any
Collateral (whether specifically granted or created pursuant to any of the
Collateral Documents or created or provided for by applicable law), except for
filings or recordings contemplated by Section 4.01 and except as may be
------------
required, in connection with the disposition of any Investment Property, by laws
generally affecting the offering and sale of securities.
(c) Except with respect to any Permitted Lien and such as may have been
filed in favor of Collateral Agent as contemplated by Section 4.01, no effective
------------
UCC financing statement, fixture filing or other instrument similar in effect
covering all or any part of the Collateral is on file in any filing or recording
office.
(d) All information supplied to Collateral Agent by or on behalf of any
Credit Party with respect to any of the Collateral (in each case taken as a
whole with respect to any particular Collateral) is accurate and complete in all
material respects.
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
(e) As of the Closing Date, none of the tangible Telecommunications
Equipment included in the Borrowing Base has been in commercial operation for
more than fifteen (15) months.
1.10 SECTION LICENSES, MATERIAL AGREEMENTS, INTELLECTUAL PROPERTY.
----------------------------------------------------
(a) Such Credit Party has obtained all approvals of any Governmental
Authority having jurisdiction over such Credit Party, which approvals are
necessary or appropriate for the construction and operation of the Systems as
are presently operating, to the extent such approvals are required to be
obtained currently. Such Governmental Approvals and approvals are listed on
Schedule 3.10(a) and constitute the only licenses, permits or franchises of any
----------------
Governmental Authority required in connection with the Systems as are presently
operating. All Governmental Approvals of such Credit Party are in full force and
effect, are duly issued in the name of, or validly assigned to, such Credit
Party and such Credit Party has the power and authority to operate thereunder.
(b) Schedule 3.10(b) accurately and completely lists all material
----------------
agreements to which such Credit Party is a party as of the Closing Date,
including, without limitation, all purchase agreements, construction contracts,
right of way or right of occupancy agreements, lease agreements, consulting,
employment, management and related agreements. All of the foregoing agreements
are valid, subsisting and in full force and effect and none of such Credit
Party, or any other parties, are in default thereunder in any material respect.
Such Credit Party has given true and complete copies of all such agreements to
the Agents and the Lenders.
(c) Such Credit Party owns or possesses all the patents, trademarks,
service marks, trade names, copyrights and licenses, and all rights with respect
to the foregoing (the "INTELLECTUAL PROPERTY"), necessary for the conduct of its
---------------------
business as presently conducted without any known conflict with the rights of
others except where such conflict is not reasonably expected to have a Material
Adverse Effect. Schedule 2.1(b) of the Pledge and Security Agreement accurately
---------------
and completely lists all Intellectual Property owned or possessed by or licensed
to such Credit Party.
1.11 SECTION COMPLIANCE WITH LAWS. The operations of such Credit Party comply
--------------------
with all applicable federal, state or local laws and regulations, including,
without limitation, Environmental Laws and regulations promulgated by the FCC
and any PUC, and other telecommunications laws and regulations, except where
noncompliance is not reasonably expected to have a Material Adverse Effect. None
of the operations of such Credit Party is subject to any judicial or
administrative proceeding alleging the violation of any Environmental Laws. None
of the operations of such Credit Party is the subject of federal or state
investigation evaluating whether any Remedial Action is needed to respond to a
Release.
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
Such Credit Party has not filed any notice under any federal or state law
indicating past or present treatment, storage or disposal of a hazardous waste
or reporting a Release. Such Credit Party has no contingent liability of which
such Credit Party has knowledge or (with the reasonable exercise of diligence)
should have knowledge other than contingent liabilities that are not reasonably
expected to have a Material Adverse Effect.
1.12 SECTION ERISA. None of such Credit Party or any ERISA Affiliate of such
-----
Credit Party maintains or contributes to any Plan other than a Plan listed on
Schedule 3.12 hereto. Except as disclosed on Schedule 3.12, each Plan which is
------------- -------------
intended to be qualified under Section 401(a) of the IRC has been determined by
the IRS to be so qualified, and each trust related to any such Plan has been
determined to be exempt from federal income tax under Section 501(a) of the IRC.
Except as disclosed on Schedule 3.12, none of such Credit Party or any ERISA
-------------
Affiliate maintains or contributes to any employee welfare benefit plan within
the meaning of Section 3(1) of ERISA which provides benefits to employees after
termination of employment other than as required by Section 601 of ERISA. None
of such Credit Party or any ERISA Affiliate has breached any of the material
responsibilities, obligations or duties imposed on it by ERISA or regulations
promulgated thereunder with respect to any Plan. No Plan has incurred any
accumulated funding deficiency (as defined in Section 302(a)(2) of ERISA and
Section 412(a) of the IRC), whether waived or not waived. None of such Credit
Party or any ERISA Affiliate nor any fiduciary of any Plan which is not a
Multiemployer Plan (i) has engaged in a nonexempt "prohibited transaction"
described in Section 406 of ERISA or Section 4975 of the IRC or (ii) has taken
or failed to take any action which would constitute or result in a Termination
Event; provided that, in the case of the events described in clauses (i) and
(ii), such action, or failure to take action results in a material liability to
the Borrower. None of such Credit Party or any ERISA Affiliate has incurred any
liability to the PBGC which remains outstanding, other than the payment of
premiums, and there are no premium payments which have become due which are
unpaid. Schedule B to the most recent annual report filed with the IRS with
respect to each Plan is complete and accurate. Since the date of each such
Schedule B, there has been no adverse change in the funding status or financial
condition of the Plan relating to such Schedule B. None of such Credit Party or
any ERISA Affiliate has (i) failed to make a required contribution or payment to
a Multiemployer Plan or (ii) made a complete or partial withdrawal under
Sections 4203 or 4205 of ERISA from a Multiemployer Plan. None of such Credit
Party or any ERISA Affiliate has failed to make a required installment or any
other required payment under Section 412 of the IRC on or before the due date
for such installment or other payment. None of such Credit Party or any ERISA
Affiliate is required to provide security to a Plan under Section 401(a)(29) of
the IRC due to a Plan amendment that results in an increase in current liability
for the plan year.
1.13 SECTION INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY ACT.
----------------------------------------------------------
Such Credit Party is not an "investment HOLDING COMPANY ACT company" as that
term is defined in, and is not oth-
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
erwise subject to regulation under, the Investment Company Act of 1940. Such
Credit Party is not a "holding company" as that term is defined in, and is not
otherwise subject to regulation under, the Public Utility Holding Company Act of
1935.
1.14 SECTION FEDERAL RESERVE REGULATIONS. Such Credit Party is not
---------------------------
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any margin stock
(within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System of the United States), and no part of the proceeds of the Loans
made to such Credit Party will be used to purchase or carry any such margin
stock or to extend credit to others for the purpose of purchasing or carrying
any such margin stock or for any purpose that violates, or is inconsistent with,
the provisions of Regulation T, U or X of said Board of Governors.
1.15 SECTION INSURANCE. Schedule 3.15 contains a description of
--------- -------------
all insurance which such Credit Party maintains or has maintained on its behalf
as of the Closing Date. All of such insurance is in full force and effect.
1.16 SECTION CAPITALIZATION AND SUBSIDIARIES. As of the Closing
-------------------------------
Date, the classes of Equity Interests, number of authorized shares, number of
outstanding shares and par values or other designations of the Equity Interests
or other equity securities or beneficial interests of such Credit Party are
correctly set forth on Schedule 3.16. All the outstanding shares of Equity
-------------
Interests or other equity securities or beneficial interests of such Credit
Party are duly and validly issued, fully paid and nonassessable, and none of
such issued and outstanding shares, equity securities or beneficial interests
has been issued in violation of, or is subject to, any preemptive or
subscription rights. Except as set forth on Schedule 3.16, as of the Closing
-------------
Date, there are no: (A) outstanding shares of Equity Interests or other equity
securities or beneficial interests or other securities convertible into or
exchangeable for shares of Equity Interests or other equity securities or other
beneficial interests of such Credit Party, (B) outstanding rights of
subscription, warrants, calls, options, contracts or other agreements of any
kind, issued, made or granted to or with any Person under which such Credit
Party may be obligated to issue, sell, purchase, retire or redeem or otherwise
acquire or dispose of any shares of Equity Interests or other equity securities
or beneficial interests of such Credit Party, or (C) Subsidiaries of such Credit
Party.
1.17 SECTION REAL ESTATE ASSETS. Set forth on Schedule 3.17 is a
------------------ -------------
list of all Real Estate Assets owned as of the Closing Date by such Credit
Party, together with a street address of each such Real Estate Assets, including
a description of such properties' current use. Such Credit Party's interests in
the Real Estate Assets are sufficient in order for such Credit Party to conduct
its business and operations as conducted on the Closing Date.
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
1.18 SECTION SOLVENCY. After giving effect to any Loans made to
--------
such Credit Party hereunder, the disbursement of the proceeds of such Loans
pursuant to such Credit Party's instructions and the execution, delivery and
performance of each of the Loan Documents and transactions contemplated thereby,
such Credit Party is Solvent and is not contemplating either the filing of a
petition by it under any state or federal bankruptcy or insolvency laws or the
liquidation of all or a substantial portion of its property, and has no
knowledge of any Person contemplating the filing of any such petition against
such Credit Party.
1.19 SECTION BROKERS, ETC. Such Credit Party has not dealt with any broker,
------------
finder, commission agent or other similar Person in connection with the Loans or
the transactions being effected contemporaneously with this Agreement, and such
Credit Party covenants and agrees to indemnify and hold harmless the Agents, and
the Lenders from and against, any broker's fee, finder's fee or commission in
connection with such transactions.
1.20 SECTION NO MATERIAL MISSTATEMENTS. Neither any report, financial
-------------------------
statement, exhibit or schedule furnished by or on behalf of such Credit Party to
any of the Agents or any Lender in connection with the negotiation of this
Agreement and the other Loan Documents or included herein or therein, nor any
other information required to be furnished pursuant to the provisions of Article
-------
V hereof, contains any material misstatement of fact or omits to state any
-
material fact necessary to make the statements therein not misleading in light
of the circumstances under which they were made.
1.21 SECTION YEAR 2000 MATTERS. Each Credit Party has made a full and
-----------------
complete assessment of the Year 2000 Problems and has a realistic and achievable
program for remediating the Year 2000 Problems on a timely basis. Based on such
assessment and program, such Credit Party does not reasonably anticipate that
Year 2000 Problems will have a Material Adverse Effect.
2 ARTICLE
CONDITIONS FOR LOANS
--------------------
The obligations of each Lender to make Loans hereunder are subject to
the accuracy, as of the Initial Funding Date and as of the date of making of
each of the Loans after the Initial Funding Date, of the representations and
warranties contained in Article III (except that any representations or
-----------
warranties that relate to a specified date shall only be reaffirmed as of such
date) and the other Loan Documents, to the performance by each Credit Party of
its obligations to be performed hereunder on or before the date of such Loan and
to the satisfaction of the following further conditions:
1.1 SECTION CONDITIONS PRECEDENT TO INITIAL LOANS. In the case of the Loans
------------------------------------
to be made on the Intial Funding Date:
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
(a) All then applicable legal matters incident to this Agreement and the
other Loan Documents shall be reasonably satisfactory to Agents.
(b) The Agents, as applicable, shall have received payment in full of the
fees set forth in their separate written agreements and all other out-of-pocket
costs and expenses of the Agents and the Lenders incurred on or prior to the
Initial Funding Date, including, without limitation, attorneys' and paralegals'
fees and expenses and the fees and expenses incurred in connection with
preparation of the Loan Documents.
(c) The Agents shall have received the following items, in each case in form
and substance satisfactory to the Agents:
(i) the Financials and the Projections;
(ii) certificates dated the Initial Funding Date or dated
the Closing Date and a reaffirmation of such certificate
dated the Initial Funding Date, of the secretaries or
assistant secretaries of each of Credit Party, certifying
(1) the names and true signatures of the officers authorized
to sign each Loan Document to which such Credit Party is a
party, (2) the resolutions of the Board of Directors of such
Credit Party approving the transactions contemplated by the
Loan Documents to which each is a party, and (3) such Credit
Party's bylaws;
(iii) the written opinions of special, regulatory and local
counsel for the Credit Parties, dated the Initial Funding
Date, addressed to the Agents and the Lenders satisfactory
to (and containing only such qualifications and limitations
as are satisfactory to) Agents, which opinions shall be
substantially in the forms set forth in Exhibit D attached
hereto;
(iv) certificates of appropriate public officials dated
not more than thirty (30) days prior to the Initial Funding
Date, as to the legal existence or qualification, and good
standing of each Credit Party from such Person's
jurisdiction of organization and from the jurisdiction in
which such Person has its principal place of business;
(v) each Credit Party's Certificate or Articles of
Incorporation or other organizational documents, as amended,
modified or supplemented on or prior to the Initial Funding
Date, each certified to be true, correct and complete by the
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
Secretary of State of the state in which such Person is
organized;
(vi) an originally executed Closing Date Certificate,
together with all attachments thereto;
(vii) a completed Year 2000 questionnaire executed by Borrower;
(viii) the Notes duly executed and delivered by Borrower;
(ix) this Agreement duly executed and delivered by the
Credit Parties;
(x) the Pledge and Security Agreement executed and
delivered by the parties thereto; and
(xi) the Intercreditor Agreement, duly executed and
delivered by each of the parties thereto.
(d) In order to create in favor of the Collateral Agent, for the benefit of
Lenders, a valid and, subject to any filing and/or recording referred to herein,
perfected first priority security interest in all of the Collateral, Collateral
Agent shall have received:
(i) certificates (which certificates shall be
accompanied by irrevocable undated stock powers, duly
endorsed in blank and otherwise satisfactory in form and
substance to Collateral Agent) representing all capital
stock pledged pursuant to the Pledge and Security Agreement,
and Acknowledgments of Pledge from each applicable issuer of
Securities pledged pursuant to the Pledge and Security
Agreement;
(ii) the results of a recent search, by a Person
satisfactory to Agents, of all effective UCC financing
statements and fixture filings and all judgment and tax lien
filings which may have been made with respect to any
personal or mixed property of any Credit Party, together
with copies of all such filings disclosed by such search,
and UCC termination statements duly executed by all
applicable Persons for filing in all applicable
jurisdictions as may be necessary to terminate any effective
UCC financing statements or fixture filings disclosed
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
in such search (other than any such financing statements or
fixture filings in respect of Permitted Liens;
(iii) UCC financing statements, duly executed by each
applicable Credit Party with respect to all personal and
mixed property Collateral of such Credit Party, for filing
in all jurisdictions as may be necessary or, in the opinion
of the Agents, desirable to perfect the security interests
created in such Collateral pursuant to the Collateral
Documents;
(iv) all cover sheets or other documents or instruments
required to be filed in order to create or perfect Liens in
respect of any Intellectual Property;
(v) an opinion of counsel (which counsel shall be
reasonably satisfactory to Collateral Agent) with respect to
the creation and perfection of the security interests in
favor of Collateral Agent in such Collateral and such other
matters governed by the laws of each jurisdiction in which
any Credit Party or any personal or mixed property
Collateral is located as Collateral Agent may reasonably
request, in each case in form and substance reasonably
satisfactory to Agents; and
(vi) evidence that each Credit Party shall have taken or
caused to be taken any other action, executed and delivered
or caused to be executed and delivered any other agreement,
document and instrument, and made or caused to be made any
other filing and recording (other than as set forth herein)
reasonably required by Agents.
(e) The Administrative Agent shall have received evidence satisfactory to
the Administrative Agent that no Credit Party has any Debt other than as
described in Section 6.12.
------------
(f) On the Initial Funding Date, Borrower shall have borrowed $40,000,000 in
aggregate principal amount of Second Priority Loans under the Second Priority
Loan Documents.
(g) All of Borrower's Series C Convertible Preferred Equity Interests shall
have been converted into Equity Interests of Holdings with terms and conditions
identical thereto.
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
(h) Borrower shall have received from inception to the Closing Date, cash
equity contributions in an aggregate amount equal to at least
$70,000,000.
(i) Borrower shall have delivered to Lenders, as attachments to the Closing
Date Certificate referred to in Section 4.01(c)(iv), a closing balance sheet
giving pro forma effect to the transactions contemplated hereby, including,
without limitation, the making of any Loans on the Initial Borrowing Date, and,
together with a detailed budget for the one year period following the Closing
Date.
(j) Borrower shall have provided to Administrative Agent certificates of
insurance reflecting Borrower's and its Subsidiaries' compliance with the
provisions of Section 5.04 and the applicable provisions of any other Loan
Document, including, without limitation, naming the Collateral Agent as loss
payee and/or additional insured under the applicable coverages.
(k) Borrower shall have delivered to Collateral Agent Landlord Consents and
Estoppel with respect to (x) the Borrower's premises located at 000 Xxxxxx
Xxxxxx and (y) not less than four (4) of the premises at which a transmission
node (ATM switch center node) is located.
1.2 SECTION CONDITIONS PRECEDENT TO ALL LOANS. In the case of each Loan
---------------------------------
hereunder, including, without limitation, the Loans made on the Initial Funding
Date.
(a) The representations and warranties of Borrower set forth in Article III
-----------
or in any other Loan Document shall be true and correct in all material respects
on and as of the date of such Loan with the same effect as though such
representations and warranties had been made on and as of such date, except that
any representations or warranties that relate to a specified date shall only be
reaffirmed as of such date.
(b) At the time of each such Loan, and after giving effect to such Loan,
each Credit Party shall be in compliance with all the terms and provisions set
forth herein on its part to be observed or performed, and no Event of Default or
Default shall have occurred and be continuing and no event or change shall have
occurred that shall have caused or evidenced, either in any case or in the
aggregate, a Material Adverse Effect.
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
(c) The Administrative Agent shall have received a Notice of Borrowing for
the Loan together with the other materials required pursuant to Section 2.03.
------------
2 ARTICLE
AFFIRMATIVE COVENANTS
---------------------
Each Credit Party covenants and agrees that so long as this Agreement
shall remain in effect, any Commitment hereunder shall be outstanding or any
Obligations hereunder or under any of the other Loan Documents are unpaid,
unless the Requisite Lenders shall have otherwise given prior written consent:
1.1 SECTION CORPORATE AND FRANCHISE EXISTENCE. Such Credit Party shall preserve
---------------------------------
and maintain its corporate or other organizational existence, rights,
franchises, licenses and privileges in its jurisdiction of its organization, and
in all other jurisdictions in which such qualification is necessary in view of
its business and operations and property and preserve, protect and keep in full
force and effect its material rights and its Governmental Approvals except where
the failure to do so would not reasonably be expected to have a Material Adverse
Effect.
1.2 SECTION COMPLIANCE WITH LAWS, ETC. Such Credit Party shall comply in all
--------------------------
material respects with all laws and regulations applicable to it, including,
without limitation, Environmental Laws, regulations promulgated by the FCC and
any PUC, and other telecommunications laws and regulations, and all material
contractual obligations applicable to it except where the failure to do so would
not reasonably be expected to have a Material Adverse Effect.
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
1.3 SECTION MAINTENANCE OF PROPERTIES. Such Credit Party shall at all times
-------------------------
maintain in good repair, working order and condition, excepting ordinary wear
and tear, all of its properties material to its operations and make all
appropriate repairs, replacements and renewals thereof, in each case consistent
with prudent industry practices and sound business judgment and with respect to
the maintenance of machinery and equipment, in compliance with applicable
government regulations, manufacturers' warranty request and licensing
requirements, except where the failure to do so would not reasonably be expected
to have a Material Adverse Effect.
1.4 SECTION INSURANCE.
---------
(a) Maintenance of Insurance. Such Credit Party will maintain or cause to
------------------------
be maintained, with financially sound and reputable insurers, such public
liability insurance, third party property damage insurance, business
interruption insurance and casualty insurance with respect to liabilities,
losses or damage in respect of the assets, properties and businesses of such
Credit Party and its Subsidiaries as may customarily be carried or maintained
under similar circumstances by Persons of established reputation engaged in
similar businesses, in each case in such amounts, with such deductibles,
covering such risks and otherwise on such terms and conditions as shall be
customary for such Persons, and in any event, all such insurance shall be
maintained in accordance with the terms set forth on Schedule 3.15 hereof.
Without limiting the generality of the foregoing, such Credit Party will
maintain or cause to be maintained replacement value casualty insurance on the
Collateral under such policies of insurance, with such insurance companies, in
such amounts, with such deductibles, and covering such risks as are at all times
carried or maintained under similar circumstances by Persons of established
reputation engaged in similar businesses. Each such policy of insurance shall
(i) name Collateral Agent, the other Agents and the Lenders and their respective
Affiliates as additional insureds thereunder, as their respective interests may
appear and (ii) in the case of casualty insurance policy, contain a loss payable
clause or endorsement, satisfactory in form and substance to Collateral Agent,
that names Collateral Agent for the benefit of the Lenders and the Second
Priority Lenders as the sole loss payee thereunder under a standard lender loss
payee endorsement for any covered loss in excess of $500,000 and provides for at
least thirty (30) days prior written notice to Collateral Agent of any
modification or cancellation of such policy.
(b) Application of Payments. All payments in excess of $500,000 received by
-----------------------
such Credit Party from any insurance referred in Section 5.04(a) shall, at the
-------
request of Collateral Agent be promptly delivered directly to the Collateral
Agent, which amounts shall be applied by the Collateral Agent, upon request by
such Credit Party (and after receipt by Collateral Agent of such information
with respect to the application of such amounts as Collateral Agent may
reasonably request), for the purposes set forth in Section 2.09(b) unless an
Event of Default or Default shall have occurred and be continuing or such Credit
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
Party shall have failed to make such request within thirty (30) days after
receipt of such amounts by Collateral Agent, in which case such amounts shall be
applied in the Requisite Lenders' sole discretion to the repayment of the
Obligations or such restoration, replacement or rebuilding.
(c) General. The Collateral Agent shall be entitled, upon reasonable advance
-------
notice, to review and/or receive copies of such Credit Party's (or other
appropriate party's) books and records regarding all insurance policies carried
and maintained with respect to each System and such Credit Party's obligations
under this Section 5.04. Notwithstanding anything to the contrary herein, no
------------
provision of this Agreement or any other Loan Document shall impose on the
Collateral Agent, the Agent or any Lender any duty or obligation to verify the
existence or adequacy of the insurance coverage maintained by such Credit Party,
nor shall the Collateral Agent or any Lender be responsible for any
representations or warranties made by or on behalf of such Credit Party to any
insurance broker, company or underwriter. The Collateral Agent, at its sole
option, may obtain such insurance if not provided by such Credit Party; in such
event, such Credit Party shall reimburse the Collateral Agent or the Agents upon
demand for the cost thereof together with interest, and such costs shall
constitute Obligations secured by the Collateral. Not later than thirty (30)
days prior to the anticipated expiration date of any insurance coverage required
hereby, Borrower shall provide to Collateral Agent certificates evidencing the
renewal of each of such insurance coverage.
1.5 SECTION OBLIGATIONS AND TAXES. Such Credit Party shall pay all of its
---------------------
indebtedness and obligations promptly and in accordance with their terms and pay
and discharge promptly all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or in respect of its property, as
such become due, as well as all lawful claims for labor, materials and supplies
or otherwise which, if unpaid, might become a Lien upon such properties or any
part thereof; provided, however, that such Credit Party shall not be required to
-------- -------
pay and discharge or to cause to be paid and discharged any such tax,
assessment, charge, levy or claim so long as the validity or amount thereof
shall be contested in good faith by appropriate proceedings diligently pursued,
there exists no material risk of forfeiture and such Credit Party shall set
aside on its books such reserves as are required by GAAP and in an amount
satisfactory to the Administrative Agent with respect to any such tax,
assessment, charge, levy or claim so contested.
1.6 SECTION FINANCIAL STATEMENTS, REPORTS, ETC. Credit Parties shall furnish to
------------------------------------------
the Administrative Agent and the Lenders (except as otherwise provided herein):
(a) as soon as available and in any event within thirty (30) days after the
end of each month occurring after the Closing Date, such financial statements
for Holdings and its Subsidiaries as Holdings or its Subsidiaries may otherwise
prepare as a matter of internal policy;
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
(b) as soon as available and in any event within one hundred twenty (120)
days after the end of each fiscal year of Holdings, annual consolidated and
consolidating financial statements for Holdings and its Subsidiaries, including
the balance sheets and statements of operations, income, stockholders' equity
and cash flows, for such fiscal year, prepared in accordance with GAAP, which
consolidated financial statements and other above described financial
information shall have been audited by a nationally recognized independent
certified public accounting firm satisfactory to the Administrative Agent, and
accompanied by such independent certified public accounting firm's unqualified
opinion;
(c) as soon as available and in any event within forty-five (45) days after
the end of each month and each fiscal quarter during each fiscal year of
Holdings, consolidated and consolidating unaudited balance sheets and statements
of operations for Holdings and its Subsidiaries, and consolidated and
consolidating statements of stockholders' equity and cash flows of Holdings and
its Subsidiaries, and consolidated statements of stockholders' equity and cash
flows of Holdings and its Subsidiaries as of the end of each such month or
fiscal quarter, as applicable, and for the then elapsed portion of the fiscal
year;
(d) together with the financial statements delivered pursuant to clause (c)
----------
above a report thereon of PriceWaterhouseCoopers LLP or other independent
certified public accountants of recognized national standing selected by
Holdings and in form and substance satisfactory to Administrative Agent,
together with a written statement (which statement may contain such
qualifications as the accountants deem appropriate) by such independent
certified public accountants stating that their audit examination has included a
review of the terms of the Loan Documents, whether, in connection therewith, any
condition or event that constitutes a Default or an Event of Default has come to
their attention and, if such a condition or event has come to their attention,
specifying the nature and period of existence thereof, and that nothing has come
to their attention that causes them to believe that the information contained in
any Compliance Certificate is not correct or that the matters set forth in such
Compliance Certificate are not stated in accordance with the terms hereof;
(e) concurrently with the delivery of financial statements pursuant to
clauses (b) and (c) above, a Compliance Certificate of the chief financial
officer of Holdings setting forth the calculations contemplated in Article VII
-----------
hereof, which shall include, without limitation, a detailed calculation,
together with the basis therefor, of any amount included in clause (ii)(F) of
the definition of the term "EBITDA" as calculated for such the period for which
such financial statements are being delivered, and certifying as to the fact
that such Person has examined the provisions of this Agreement and that no Event
of Default or any Default, shall have occurred and be continuing or if such an
event has occurred, a statement explaining its nature and extent and setting
forth the steps the Credit Parties propose to take to cure such Event of
Default;
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
(f) not later than December 31 of each calendar year (i) consolidated and
consolidating projected annual revenue and income statements (including detailed
revenue and expense statements), balance sheets and cash flow statements for
Holdings and its Subsidiaries for the succeeding fiscal year, such statements to
be reasonably acceptable to the Administrative Agent, and (ii) an annual
operating budget presented on a monthly basis for such succeeding fiscal year;
(g) to the Administrative Agent, promptly upon their becoming available,
copies of any periodic or special Documents, statements or other information
filed by any Credit Party with the FCC, PUC or other Governmental Authority in
connection with the construction and/or operation of any System or with respect
to the transactions contemplated by any of the Loan Documents, and copies of any
material notices and other material communications from the FCC, PUC or from any
other Governmental Authority;
(h) promptly upon any officer of any Credit Party obtaining knowledge of
any condition or event which either constitutes an Event of Default or a Default
or which would result in any financial result for any fiscal year to deviate
materially and adversely from the financial results projected for such fiscal
year in the Projections, a certificate signed by an authorized officer of such
Credit Party specifying in reasonable detail the nature and period of existence
thereof and what corrective action such Credit Party has taken or proposes to
take with respect thereto;
(i) within thirty (30) days after the end of each fiscal year of such
Credit Party, a certificate signed by an authorized officer of such Credit Party
setting forth all the Real Estate Assets acquired by such Credit Party in the
preceding year;
(j) evidence of insurance complying with Section 5.04;
------------
(k) promptly upon the filing thereof, copies of all registration statements
and annual, quarterly, monthly or other regular reports which Holdings files
with the Securities and Exchange Commission; and
(l) promptly from time to time such other information regarding the
operations (including, without limitation, construction budgeting and System
completion), business affairs and condition (financial or otherwise) of such
Credit Party as the Administrative Agent may reasonably request.
1.7 SECTION LITIGATION AND OTHER NOTICES. Such Credit Party shall give the
----------------------------
Administrative Agent prompt written notice upon obtaining knowledge of the
following: (a) all events of default or any event that would become an event of
default upon notice or lapse of time or both under any of the terms or
provisions of any note, or of any other evidence of indebtedness or agreement or
contract governing the borrowing of money of such Credit
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
Party; (b) any levy, attachment, execution or other process against any of the
property or assets, real or personal, of such Credit Party; (c) the filing or
commencement of any action, suit or proceeding by or before any court or any
Governmental Authority which, if adversely determined against such Credit Party,
would likely result in a Material Adverse Effect; (d) any adverse notice, letter
or other correspondence of any kind from the FCC or the PUC relating to the
Governmental Approvals or any System; (e) any material default under any other
material license, agreement or contract to which such Credit Party is a party;
and (f) any matter, individually or in the aggregate with any other matter,
which has resulted in, or which such Credit Party believes may result in, a
Material Adverse Effect on such Credit Party.
1.8 SECTION FUTURE PROPERTIES. In the event that any Credit Party acquires an
-----------------
interest in any Real Estate Asset that the Administrative Agent reasonably
determines is material to such Credit Party's Business, and such interest has
not otherwise been made subject to the Lien of the Collateral Documents in favor
of Collateral Agent, for the benefit of Lenders, then such Credit Party,
contemporaneously with acquiring such Real Estate Asset, shall take all such
actions and execute and deliver, or cause to be executed and delivered, all such
documents, instruments, agreements, opinions and certificates as Collateral
Agent may reasonably request to establish a Lien on such Real Estate Asset in
favor of the Collateral Agent for the benefit of the Lenders; provided, that on
and after the date of consummation of a Qualified Equity Offering, Borrower
shall only by obligated under this Section 5.08 to use its best efforts to
obtain a Landlord Consent and Estoppel with respect to any premise at which a
transmission node (ATM switch center node) is located.
1.9 SECTION ERISA. Such Credit Party shall comply in all material respects with
-----
the applicable provisions of ERISA and furnish to the Agent, (i) as soon as
possible, and in any event within ten (10) days after such Credit Party or any
officer of such Credit Party knows or has reason to know that any Termination
Event has occurred, a statement of an officer of such Credit Party setting forth
details as to such Termination Event and the corrective action (if any) that
such Credit Party proposes to take with respect thereto, together with a copy of
the notice of any Reportable Event given to the PBGC, and (ii) promptly after
receipt thereof, a copy of any notice such Credit Party may receive from the
PBGC relating to the intention of the PBGC to terminate any Plan or to appoint a
trustee to administer any such Plan.
1.10 SECTION ACCESS TO PREMISES AND RECORDS. Such Credit Party shall permit
------------------------------
representatives of the Administrative Agent and each Lender to have access to
such Credit Party's books and records and to the Collateral and the premises of
such Credit Party at reasonable times upon reasonable notice (and after the
occurrence and during the continuance of any Default or Event of Default,
without notice and at any time) and to make such ex-
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
cerpts from such records as such representatives deem necessary and to inspect
the Collateral.
1.11 SECTION DESIGN AND CONSTRUCTION. Such Credit Party shall design,
-----------------------
construct, equip and operate its Systems in accordance with prudent industry
standards.
1.12 SECTION ENVIRONMENTAL NOTICES. If such Credit Party shall (a) receive
---------------------
written notice that any violation of any Environmental Law may have been
committed or is about to be committed by such Credit Party, (b) receive written
notice that any administrative or judicial complaint or order has been filed or
is about to be filed against such Credit Party alleging violations of any
Environmental Law or requiring such Credit Party to take any action in
connection with any Release of any Contaminant into the environment, or (c)
receive any written notice from a Governmental Authority or private party
alleging that such Credit Party may be liable or responsible for costs
associated with a response to or cleanup of a Release or any damages caused
thereby, such Credit Party shall provide the Administrative Agent with a copy of
such notice within ten (10) Business Days of such Credit Party's receipt
thereof.
1.13 SECTION AMENDMENT OF ORGANIZATIONAL DOCUMENTS. Such Credit Party shall
-------------------------------------
notify the Administrative Agent of any amendment to its Certificate or Articles
of Incorporation or other organizational Documents within ten (10) days of the
occurrence of any such event, and provide the Agent with copies of any
amendments certified by the secretary of such Credit Party and of all other
relevant documentation. Such Credit Party shall promptly deliver to the
Administrative Agent such financing statements executed by such Credit Party
which the Administrative Agent may request as a result of any such event.
1.14 SECTION FISCAL YEAR. Such Credit Party shall maintain a fiscal year
-----------
ending on December 31.
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
1.15 SECTION YEAR 2000 PROBLEMS. On or prior to March 31, 1999, each Credit
------------------
Party shall complete and deliver to the Agent a Year 2000 Corrective Plan. On or
prior to April 30, 1999 each Credit Party shall implement Year 2000 Corrective
Actions. On or prior to June 30, 1999 each Credit Party shall complete Year 2000
Corrective Actions and Year 2000 Implementation Testing. On or prior to August
31, 1999 each Credit Party shall eliminate all Year 2000 Problems, except where
the failure to correct the same could not reasonably be expected to have a
Material Adverse Effect, individually or in the aggregate.
1.16 SECTION FUTURE SUBSIDIARIES. In the event that any Person becomes a
-------------------
Subsidiary of Holdings, Holdings shall (i) promptly cause such Subsidiary to
become a Guarantor hereunder and a Grantor under the Pledge and Security
Agreement by executing and delivering to Administrative Agent and Collateral
Agent a Counterpart Agreement, and (ii) take all such actions and execute and
deliver, or cause to be executed and delivered, all such documents, instruments,
agreements, and certificates similar to those described in Section 4.01(d).
---------------
With respect to each such Subsidiary, Holdings shall promptly send to
Administrative Agent written notice setting forth with respect to such Person
(i) the date on which such Person became a Subsidiary of Holdings, and (ii) all
of the data required to be set forth in Schedule 3.16 with respect to all
Subsidiaries of Holdings; provided, such written notice shall be deemed to
supplement Schedule 3.16 for all purposes hereof.
1.17 SECTION ACCOUNTING; MAINTENANCE OF RECORDS. Such Credit Party shall
----------------------------------
maintain a system of accounting established and administered in accordance with
GAAP. Such Credit Party shall keep and maintain, and cause each of its
Subsidiaries to keep and maintain, in all material respects, proper books of
record and account in which entries in conformity with GAAP shall be made of all
dealings and transactions in relation to their respective businesses and
activities.
1.18 SECTION FURTHER ASSURANCES. Such Credit Party agrees to do such further
------------------
acts and things and to execute and deliver to or the Administrative Agent or the
Collateral Agent such additional assignments, agreements, powers and
instruments, at such Credit Party's expense, as the Administrative Agent or the
Collateral Agent may require or deem advisable to carry into effect the purposes
of this Agreement and the other Loan Documents or to better assure and confirm
unto the Administrative Agent or the Collateral Agent its rights, powers and
remedies hereunder and thereunder.
1.19 SECTION INTEREST RATE AGREEMENTS. At all times after the date which is
------------------------
thirty (30) days after the Closing Date, Borrower shall maintain, or caused to
be maintained, in effect one or more Interest Rate Agreements for a term of not
less than two years and otherwise in form and substance reasonably satisfactory
to Agent, which Interest Rate Agreements together with the amount of fixed rate
Debt of the Credit Parties shall effectively fix the interest costs of Credit
Parties with respect to an aggregate notional principal amount of
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
not less than 50% of the aggregate principal amount of the Loans and Second
Priority Loans outstanding from time to time to a rate not in excess of the Base
LIBO Rate as of the Closing Date plus 2.00, % per annum.
1.20 SECTION DEPOSIT ACCOUNTS. The Borrower shall, and shall cause each of
-----------------
its Subsidiaries to, within 30 days of the Closing Date (a) to deliver to
Collateral Agent an agreement, satisfactory in form and substance to Collateral
Agent and executed by the financial institution at which such Deposit Account is
maintained, pursuant to which such financial institution confirms and
acknowledges Collateral Agent's security interest in, and sole dominion and
control over, such Deposit Account and waives its rights to set-off with respect
to amounts in such Deposit Account, and (b) to take all other steps necessary
or, in the opinion of Collateral Agent, desirable to ensure that Collateral
Agent has sole dominion and control over such Deposit Account; provided that if
--------
the Borrower or such Subsidiary is unable to obtain such agreement from such
financial institution the Borrower shall, or shall cause such Subsidiary to,
within 30 days after receiving a written request by Collateral Agent to do so,
transfer all amounts in the applicable Deposit Account to a Deposit Account
maintained at a financial institution from which the Borrower or such Subsidiary
has obtained such an agreement.
1.21 SECTION CERTAIN POST CLOSING OBLIGATIONS.
---------------------------------
(a) On or before the 18-month anniversary of the Closing Date, Holdings
shall cause Borrower to have received aggregate cash equity contributions and/or
Qualified Intercompany Loans, since the date of its formation, of not less than
$250,000,000; provided, as used in this Section 5.21(a), the phrase "aggregate
cash equity contributions" shall not include any amount included in clause
(ii)(F) of the definition of the term of "EBITDA".
(b) In addition to the five (5) Landlord Consents and Estoppels delivered
by Borrower on the Closing Date pursuant to Section 4.01(k), within 90 days
after the Closing Date, Borrower shall obtain a Landlord Consent and Estoppel
with respect to four (4) of the premises at which as of the Closing Date a
transmission node (ATM switch center node) is located, and within 180 days after
the Closing Date, Borrower shall obtain a Landlord Consent and Estoppel with
respect to all remaining premises at which, as of the Closing Date, a
transmission node (ATM switch center node) is located; provided, however, that
on and after the date of consummation of a Qualified Equity Offering, Borrower
shall only by obligated under this clause (b) to use its best efforts to
accomplish the foregoing.
(c) Within 180 days after the Closing Date, with respect to not less than
50% of Borrower's collocation agreements in effect as of the Closing Date,
Borrower shall either (y) obtain the consents of any necessary parties to the
grant of a security interest therein in favor of Collateral Agent under the
Pledge and Security Agreement or (z) assign all rights under
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
such collocation agreements to a newly-created, wholly-owned Subsidiary, in each
case in a manner reasonably acceptable to the Administrative Agent and
Collateral Agent; provided that on and after the date of consummation of a
--------
Qualified Equity Offering, Borrower shall only be obligated under this clause
(c) to use its best efforts to accomplish the foregoing.
(d) Notwithstanding anything in this Agreement or in any other Loan
Document to the contrary (but subject, in any event to Sections 5.21(b) and
5.21(c)), each Credit Party shall use its best efforts to (i) obtain a Landlord
Consent and Estoppel with respect to any Leasehold Property at which a
transmission node (ATM switch center node) is located, and (ii) take the steps
set forth at Section 5.21(c)(y) or (c)(z) with respect to any collocation
agreement entered into thereby.
1 ARTICLE NEGATIVE COVENANTS
------------------
Each Credit Party covenants and agrees with the Administrative Agent
and the Lenders that as long as this Agreement shall remain in effect, any
Commitment hereunder shall be outstanding or any Obligations hereunder or under
any of the Loan Documents shall be unpaid, unless the Requisite Lenders shall
have otherwise given prior written consent:
1.1 SECTION LIENS, ETC. Such Credit Party shall not create, incur, assume
----------
or suffer to exist, directly or indirectly, any Lien upon or with respect to any
of its properties or the Collateral, now owned or hereafter acquired, or upon
any proceeds, products, issues, income or profits therefrom except for the
following ("PERMITTED LIENS"):
---------------
(i) Liens granted pursuant to the Loan Documents;
(ii) Liens securing any Purchase Debt to the extent that
the Liens cover only the subject assets purchased with such
Purchase Debt or other assets financed by the same lender
with other Purchase Debt provided by such lender and is
limited to the amount of the purchase price of such subject
assets;
(iii) Liens securing any Vendor Financing to the extent
that the Liens cover only the subject assets purchased with
such Vendor Financing and is limited to the amount of the
purchase price of such subject assets;
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
(iv) Liens for taxes, assessments or governmental charges
or levies on such Credit Party's property if the same shall
not at the time be delinquent or thereafter can be paid
without penalty, or are being diligently contested in good
faith and by appropriate proceedings, which does not entail
any material danger of forfeiture and for which such Credit
Party shall have set aside reserves on its books as required
by GAAP;
(v) Liens imposed by law, such as landlord's, carrier's,
warehousemen's and mechanic's liens, which liens shall be
waived in writing to the extent available, and with respect
to obligations not yet due or being contested in good faith
by appropriate proceedings which does not entail any
material danger of forfeiture and in either case for which
such Credit Party shall have set aside reserves on its books
as required by GAAP;
(vi) Liens arising out of pledges or deposits under
workmen's compensation laws, unemployment insurance, old age
pensions, or other social security benefits other than any
Lien imposed by ERISA;
(vii) Liens incurred or deposits made in the ordinary
course of business to secure surety bonds provided that such
Liens shall extend only to cash collateral for such surety
bonds;
(viii) easements and rights of way and other encumbrances
arising in the ordinary course of business which do not
secure Debt and which do not materially detract from the
operation of business on, or materially impair the title to,
the properties subject to such Liens;
(ix) Liens securing the Second Priority Loans on a second
priority basis as contemplated by the Second Priority Loan
Documents; or
(x) Liens on cash deposits or other Temporary Cash
Investments securing Debt permitted under Section 6.12(viii)
and not in excess of 105% of the undrawn amount of the
applicable letter of credit.
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
1.2 SECTION USE OF PROCEEDS. Such Credit Party shall not use the than as
---------------
provided in Section 2.01(d) hereof.
---------------
(A) SECTION SALE OF ASSETS, CONSOLIDATION, MERGER, ACQUISITIONS ETC. Such
-------------------------------------------------------
Credit Party shall not consolidate with or merge into any other Person without
the prior written consent of the Requisite Lenders, or otherwise sell, lease,
transfer or otherwise dispose of any assets except for (i) sales of inventory in
the ordinary course of business, (ii) any sale, lease, transfer or other
disposition of assets no longer used or useful in the conduct of the Business
for the fair market value thereof not to exceed $250,000 in any fiscal year and
$1,000,000 in the aggregate during the term of this Agreement, and (iii) sales
of Investments in accordance with Section 6.06(viii).
(b) Such Credit Party shall not purchase or otherwise acquire all or any
portion of the assets or business of another Person, except for (i) acquisitions
of assets in the ordinary course of business and (ii) Permitted Acquisitions.
1.3 SECTION DIVIDENDS AND DISTRIBUTIONS; SALE OF EQUITY INTERESTS.
-----------------------------------------------------
(a) Such Credit Party shall not purchase, redeem or otherwise acquire any
interest of such Credit Party, declare or make or pay any dividends in any
fiscal year of such Credit Party on any class or classes of stock, return
capital of such Credit Party to its shareholders, make any other distribution on
or in respect of any shares of any class of capital stock of such Credit Party
or make other payments to any shareholder of such Credit Party in its/his/her
capacity as a shareholder, or make payments in respect of Qualified Inter
company Loans; provided, that (i) so long as no Event of Default or Default
--------
has occurred and is continuing or would result therefrom and so long as the
Total Leverage Ratio is less than 6.00:1.00, Borrower may make payments or pay
dividends to Holdings in the amount necessary to make scheduled principal and
interest payments on Permitted Holdings Debt, (ii) Borrower may make payments or
pay dividends to Holdings to pay administrative costs (including overhead,
accounting and legal fees (in each case payable to unaffiliated third parties),
regulatory expenses and filing fees and expenses and out-of-pocket costs of
permitted Debt and equity offerings, not in excess of $1,000,000 in the
aggregate in any fiscal year and (iii) the foregoing restrictions shall not
apply to any payments or dividends made by a Subsidiary of Borrower to Borrower.
(b) Such Credit Party other than Holdings shall not sell or issue any
additional Equity Interests except to Holdings or Borrower (so long as such
additional Equity Interest are pledged to the Collateral Agent as security for
the Obligations).
1.4 SECTION MANAGEMENT FEES AND PERMITTED CORPORATE OVERHEAD. Such Credit
------------------------------------------------
Party shall not pay or enter into any arrangement to pay any fee or
compensation, or reimburse expenses of, an Affiliate or any other Person for
services which are in the nature
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
of management, corporate overhead or administrative services (other than
employment agreements and consulting agreements in lieu of employment
agreements).
1.5 SECTION INVESTMENTS. Such Credit Party shall not, directly or
-----------
indirectly, make any Investments except:
(i) Temporary Cash Investments;
(ii) Investments in certificates of deposit, repurchase
agreements, money market or other cash management accounts,
bankers acceptances and short term Eurodollar time deposits
with financial institutions having a long term deposit
rating of at least A+ from Xxxxx'x Investors Service, Inc.
or Standard & Poor's Ratings Group, respectively;
(iii) Investments in commercial paper rated P1 or A1 by
Xxxxx'x Investors Service, Inc. or Standard & Poor's Ratings
Group respectively;
(iv) a Credit Party may own Equity Interests in another
Credit Party or any person that, after giving effect to such
Investment, becomes a Credit Party;
(v) Investments arising from asset sales otherwise
permitted by this Agreement;
(vi) Investments arising from distributions in
bankruptcy or other reorganization proceedings;
(vii) Permitted Acquisitions; and
(viii) other Investments not exceeding, in the aggregate,
the sum of (x) (1) $5,000,000, and (2) the amount of any
cash proceeds received by Borrower and its Subsidiaries with
respect to Investments made pursuant to this clause (x) in
an amount not in excess of the initial Investment; provided,
the aggregate amount of any increase pursuant to this clause
(2) shall not exceed $10,000,000, in the aggregate; plus (y)
----
50% of the amount of equity contributed to, and/or Qualified
Inter company Loans received by, Borrower since the date of
its formation in excess of $250,000,000, but all such
Investments
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
permitted pursuant to this clause (y) shall not exceed
$20,000,000 in the aggregate.
1.6 SECTION SUBSIDIARIES. Such Credit Party shall not create or acquire any
------------
Subsidiary except any Subsidiary the formation of which was (i) undertaken
solely to comply with the licensing requirements of a Governmental Authority and
shall otherwise comply with the applicable requirements of the definition of
"Permitted Acquisition", (ii) to effect a Permitted Acquisition or (iii) to
comply with Section 5.21(c) or 5.21(d); provided that, concurrently with such
--------
creation or acquisition such Subsidiary shall execute and deliver a Counterpart
Agreement in accordance with Section 5.16 hereof.
------------
1.7 SECTION PERMITTED ACTIVITIES. Such Credit Party (other than Holdings)
--------------------
shall not engage in any business or activity other than the operation of its
Business as currently conducted and businesses incidental or complementary
thereto without the prior written consent of the Requisite Lenders. Holdings
shall not engage in any other activity than the ownership of the capital stock
of its Subsidiaries and the incurrence of Permitted Holdings Debt and activities
incidental thereto.
1.8 SECTION DISPOSITION OF LICENSES, ETC. Such Credit Party shall not sell,
----------------------------
assign, transfer or otherwise dispose or attempt to dispose of in any way any
Governmental Approval or any other licenses, permits or approvals except where
the same is not reasonably likely to have a Material Adverse Effect.
1.9 SECTION TRANSACTIONS WITH AFFILIATES. Such Credit Party shall not
----------------------------
directly or indirectly, enter into any transaction, including, without
limitation, leases or other agreements for the purchase or use of any goods or
services, with any Affiliate, except in the ordinary course of and pursuant to
reasonable requirements of such Credit Party's business upon fair and reasonable
terms no less favorable to such Credit Party than it would obtain in a
comparable arm's length transaction with an unaffiliated Person; provided that
--------
the foregoing shall not apply to the sale of any Equity Interests or to an
employment agreement.
1.10 SECTION ERISA. Unless the failure to comply with the following is not
-----
reasonably likely to have a Material Adverse Effect, such Credit Party shall
not:
(a) engage, or permit any ERISA Affiliate to engage, in any prohibited
transaction described in Section 406 of ERISA or 4975 of the IRC for which a
statutory or class exemption is not available or a private exemption has not
been previously obtained from the United States Department of Labor and which
may result in a material liability to the Borrower;
(b) permit to exist any accumulated funding deficiency (as defined in
Section 302 of ERISA and Section 412 of the IRC), whether or not waived;
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
(c) fail, or permit any ERISA Affiliate to fail, to pay timely required
contributions or annual installments due with respect to any waived funding
deficiency to any Benefit Plan;
(d) terminate, or permit any ERISA Affiliate to terminate, any Benefit
Plan which would result in any material liability of such Credit Party under
Title IV of ERISA;
(e) fail to make any contribution or payment to any Multiemployer Plan
which such Credit Party or any ERISA Affiliate may be required to make under any
agreement relating to such Multiemployer Plan, or any law pertaining thereto;
(f) amend, or permit any ERISA Affiliate to amend, a Plan resulting in an
increase in current liability for the plan year such that such Credit Party is
required to provide security to such Plan under Section 401(a)(29) of the IRC;
or
(g) fail, or permit any ERISA Affiliate to fail, to pay any required
installment under Section 412 of the IRC on or before the due date for such
installment or other payment.
1.11 SECTION DEBT. Such Credit Party shall not create or suffer to exist any
----
Debt except:
(i) the Obligations and the Second Priority Loans;
(ii) other obligations arising under any Loan Documents
or any Second Priority Loan Documents;
(iii) Capitalized Lease Obligations;
(iv) Debt with respect to the financing and contemplated
purchase of office equipment, vehicles and non-essential
telecommunications equipment, not to exceed an aggregate
amount for the Credit Parties of $1,000,000 at any time
("PURCHASE DEBT");
-------------
(v) Qualified Inter company Loans;
(vi) Comdisco Debt and all other Debt outstanding on the
Closing Date set forth on Schedule 6.12 hereto;
(vii) other unsecured Debt not in excess of $5,000,000 at
any time outstanding;
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
(viii) other Debt in the form of reimbursement obligations
under letters of credit not in excess of $5,000,000 at any
time outstanding; provided, any such letter of credit shall
be issued by a Lender or an Affiliate thereof, unless no
Lender or no such Affiliate is willing to provide such
letter of credit within 5 Business Days from the request to
the Administrative Agent therefor, and otherwise on market
terms;
(ix) Vendor Financing not to exceed at any time, an
aggregate principal amount, (y) prior to the consummation of
a Qualified Equity Offering, $10,000,000, and (z) after
consummation of a Qualified Equity Offering, $20,000,000;
(x) Permitted Holdings Debt; and
(xi) Interest Rate Agreements (A) entered into pursuant
to Section 5.19, and (B) not in excess of $3,000,000 of
------------
actual risk exposure on the last day of any fiscal quarter;
provided, any such Interest Rate Agreement otherwise
--------
permitted pursuant to this clause (xi) shall have a Lender
or an Affiliate thereof as the Credit Party's counterparty
thereto, unless no Lender or no such Affiliate is willing to
enter into any such Interest Rate Agreement within 5
Business Days from the request to the Administrative Agent
therefor, and otherwise on market terms.
1.12 SECTION PREPAYMENT AND DEBT DOCUMENTS.
-----------------------------
(a) Subject to provisions of Section 6.13(c), until such time as a
---------------
Qualified Equity Offering shall have been consummated, such Credit Party shall
not voluntarily prepay any Debt, except the Obligations in accordance with the
terms hereof or out of equity proceeds.
(b) Subject to provisions of Section 6.13(c), until such time as a
---------------
Qualified Equity Offering shall have been consummated, such Credit Party shall
not amend any agreement relating to Debt other than the Obligations in any
manner which would increase the amount of principal, interest or fees on such
Debt, or accelerate any payments of such Debt.
(c) In no event shall Borrower prepay the Second Priority Loans.
1.13 SECTION SALE AND LEASEBACK TRANSACTIONS. Such Credit Party shall not,
-------------------------------
directly or indirectly, enter into any arrangement with any Person providing for
such Credit
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
Party to lease or rent property that any Credit Party has sold or will sell or
otherwise transfer to such Person.
1.14 SECTION MARGIN REGULATION. Such Credit Party shall not use or permit
-----------------
any other Person to use any portion of the proceeds of any credit extended under
this Agreement in any manner which might cause the extension of credit made by
any Lender or the application of such proceeds to violate the Securities Act of
1933 or Securities Exchange Act of 1934 (each as amended from time to time, and
any successor statute) or to violate Regulation G, Regulation U, or Regulation
X, or any other regulation of the Federal Reserve Board, in each case as in
effect on the date or dates of such extension of credit and such use of
proceeds.
1.15 SECTION RESTRICTIVE AGREEMENTS, ETC. Such Credit Party shall not enter
---------------------------
into any agreement (excluding this Agreement, the Loan Documents, the Second
Priority Loan Documents, any Vendor Financing or any Purchase Debt with respect
to the assets financed thereby) prohibiting the creation or assumption of any
Lien upon its properties, revenues or assets, whether now owned or hereafter
acquired, or the ability of such Credit Party to amend or otherwise modify this
Agreement or any other Loan Document.
2 ARTICLE
FINANCIAL COVENANTS
-------------------
Each Credit Party covenants and agrees with the Agents and the Lenders
that as long as this Agreement shall remain in effect, any Commitment hereunder
shall be outstanding or the Obligations hereunder or under any of the Loan
Documents shall be unpaid, unless the Requisite Lenders shall have otherwise
given prior written consent:
1.1 SECTION FINANCIAL COVENANTS PRIOR TO ACHIEVING POSITIVE EBITDA. Until
------------------------------------------------------
the date on which Borrower and its Subsidiaries shall have achieved positive
EBITDA for Borrower and its Subsidiaries on a consolidated basis for two (2)
consecutive fiscal quarters as determined by reference to the financial
statements submitted pursuant to Section 5.06 (which in any event shall be
------------
required to occur on or before June 30, 2001):
(a) Total Debt to Capitalization. Borrower and its Subsidiaries shall not
----------------------------
at any time permit the ratio of the Total Debt to Capitalization to exceed
0.30:1.00.
(b) Consolidated Debt to Capitalization. Holdings and its Subsidiaries
-----------------------------------
shall not at any time permit the ratio of Consolidated Debt to Capitalization to
exceed 0.50:1.00.
(c) Minimum Central Office Collocations. As of the last day of each fiscal
-----------------------------------
quarter, Borrower and its Subsidiaries shall maintain an aggregate number of
Production Ready COs at least equal to the correlative numbers set forth below:
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
----------------------------------------------------------
Fiscal Quarter Ending Minimum Production
Ready Colocations
----------------------------------------------------------
June 30, 1999 380
----------------------------------------------------------
September 30, 1999 570
----------------------------------------------------------
December 31, 1999 770
----------------------------------------------------------
March 31, 2000 870
----------------------------------------------------------
June 30, 2000 980
----------------------------------------------------------
September 30, 2000 980
----------------------------------------------------------
December 31, 2000 980
----------------------------------------------------------
March 31, 2001 980
----------------------------------------------------------
June 30, 2001 980
----------------------------------------------------------
(a) EBITDA.
-------
(i) As of the last day of each fiscal quarter occurring on or
before December 31, 2000, Borrower and its Subsidiaries shall not
permit the EBITDA losses for Borrower and its Subsidiaries on a
consolidated basis for the fiscal quarter then ending to exceed the
correlative amount indicated below:
----------------------------------------------------------
Fiscal Quarter Ending Maximum EBITDA
Losses
----------------------------------------------------------
June 30, 1999 $19,600,000
----------------------------------------------------------
September 30, 1999 $23,400,000
----------------------------------------------------------
December 31, 1999 $25,900,000
----------------------------------------------------------
March 31, 2000 $25,000,000
----------------------------------------------------------
June 30, 2000 $19,200,000
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
----------------------------------------------------------
September 30, 2000 $11,900,000
----------------------------------------------------------
December 31, 2000 $ 4,700,000
----------------------------------------------------------
(i) As of the last day of each fiscal quarter thereafter,
Borrower and its Subsidiaries shall not permit EBITDA for
Borrower and its Subsidiaries on a consolidated basis for the
fiscal quarter then ending to be less than the correlative
amount indicated below:
------------------------------------------------------------
Fiscal Quarter Ending Minimum EBITDA
------------------------------------------------------------
March 31, 2001 $ 900,000
------------------------------------------------------------
June 30, 2001 $9,300,000
------------------------------------------------------------
(a) Capital Expenditures. As of the last day of each fiscal quarter,
--------------------
Borrower and its Subsidiaries shall not permit Capital Expenditures on a
consolidated, cumulative basis from the Closing Date to exceed the correlative
amount set forth below:
---------------------------------------------------------------------
Fiscal Quarter Ending Maximum Cumulative
Capital Expenditures
---------------------------------------------------------------------
June 30, 1999 $ 45,600,000
---------------------------------------------------------------------
September 30, 1999 $ 82,500,000
---------------------------------------------------------------------
December 31, 1999 $112,900,000
---------------------------------------------------------------------
March 31, 2000 $137,800,000
---------------------------------------------------------------------
June 30, 2000 $158,500,000
---------------------------------------------------------------------
September 30, 2000 $162,000,000
---------------------------------------------------------------------
December 31, 2000 $173,700,000
---------------------------------------------------------------------
March 31, 2001 $189,400,000
---------------------------------------------------------------------
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
June 30, 2001 $203,800,000
--------------------------------------------------------------------
1.1 SECTION FINANCIAL COVENANTS AFTER ACHIEVING POSITIVE EBITDA.
---------------------------------------------------
On and after the date on which Borrower and its Subsidiaries have achieved
positive EBITDA on a consolidated basis for two (2) consecutive fiscal quarters
as determined by reference to the financial statements submitted pursuant to
Section 5.06 (which in any event shall occur on or before June 30, 2001):
(a) Minimum Debt Service Coverage Ratio. As of the last day of each fiscal
-----------------------------------
quarter, Borrower and its Subsidiaries shall not permit the ratio of (1) the
product of two (2) times the EBITDA for Borrower and its Subsidiaries on a
consolidated basis for the most recently ended six (6) month period, to (2) the
product of two (2) times the Interest Expense for the most recently ended six
(6) month period plus Principal Payments required during the most recently ended
six (6) month period to be less than the following:
Fiscal Quarter Ending Minimum Debt Service
---------------------
Coverage Ratio
--------------
On or prior to March 31, 2002 1.30:1.00
On or after June 30, 2002 to and including December 1.75:1.00
31, 2002
Last Day of each Fiscal 2.00:1.00
Quarter Thereafter
(a) Minimum Fixed Charge Coverage Ratio. As of the last day of any fiscal
-----------------------------------
quarter, Borrower and its Subsidiaries shall not permit the ratio of (1) the
product of two (2) times the EBITDA for Borrower and its Subsidiaries on a
consolidated basis for the most recently ended six (6) month period to (2) Fixed
Charges for Borrower and its Subsidiaries (such ratio being referred to as the
"FIXED CHARGE COVERAGE RATIO") to be less than the following:
---------------------------
Fiscal Quarter Ending Minimum Fixed Charge
---------------------
Coverage Ratio
--------------
On or prior to March 31, 2003 1.10 to 1.00
Last Day of each Fiscal Quarter 1.25:1.00
Thereafter
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
(a) Maximum Total Leverage Ratio. As of the last day of any fiscal
----------------------------
quarter, Borrower and its Subsidiaries shall not permit the ratio of (1) Total
Debt as of such date to (2) the product of two (2) times the EBITDA for Borrower
and its Subsidiaries for the most recently ended six (6) month period to exceed
the correlative ratio set forth below:
------------------------------------------------------
Maximum Total
Fiscal Quarter Ending Leverage Ratio
------------------------------------------------------
September 30, 2001 6.00:1.00
------------------------------------------------------
December 31, 2001 4.00:1.00
------------------------------------------------------
Last Day of each Fiscal
Quarter Thereafter 3.00:1.00
------------------------------------------------------
(a) Maximum Consolidated Leverage Ratio. As of the last day of any fiscal
-----------------------------------
quarter, Holdings and its Subsidiaries shall not permit the ratio of (1)
Consolidated Debt as of such date to (2) the product of two (2) times the EBITDA
for Borrower and its Subsidiaries for the most recently ended six (6) month
period to exceed the correlative ratio set forth below:
(b)
------------------------------------------------------------
Fiscal Quarter Ending Maximum Consolidated
Leverage Ratio
------------------------------------------------------------
September 30, 2001 8.00:1.00
------------------------------------------------------------
December 31, 2001 6.00:1.00
------------------------------------------------------------
March 31, 2002 5.00:1.00
------------------------------------------------------------
June 30, 2002 4.00:1.00
------------------------------------------------------------
Last Day of each Fiscal
Quarter Thereafter 3.00:1.00
------------------------------------------------------------
(a) Capital Expenditures. Borrower and its Subsidiaries shall not permit
--------------------
Capital Expenditures on a consolidated cumulative basis for the period of April
5, 1999 to September 30, 2001 to exceed $243,800,000.
(b)
1.2 SECTION CERTAIN CALCULATIONS. With respect to any period ending on or
--------------------
after consummation of a Permitted Acquisition, for purposes of determining
compliance with the financial covenants set forth in this Article VII, or clause
(iv) of the definition of Permitted Acquisition, EBITDA shall be calculated with
respect to such period on a pro forma basis (without giving effect to
adjustments to increase EBITDA to account for expected improvements in the
operations of the Permitted Acquisition unless otherwise approved in writing by
the Requisite Lenders) using the historical financial statements of any business
or person
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
acquired or to be acquired and the consolidated financial statements of Borrower
and its Subsidiaries, which shall be reformulated as if such Permitted
Acquisition, and any Debt incurred in connection therewith, had been consummated
or incurred at the beginning of such period (and assuming that such Debt bears
interest during any portion of the applicable measurement period prior to the
relevant acquisition at the weighted average of the interest rates applicable to
outstanding Loans incurred during such period).
1 ARTICLE
GUARANTY
--------
2.1 SECTION GUARANTY OF THE OBLIGATIONS. Subject to the provisions of
---------------------------
Section 8.02, Guarantors jointly and severally hereby irrevocably and
------------
unconditionally guaranty the due and punctual payment in full of all Obligations
when the same shall become due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including amounts
that would become due but for the operation of the United States Bankruptcy
Code.
2.2 SECTION CONTRIBUTION BY GUARANTORS. Each Guarantor desires to
--------------------------
allocate among themselves (collectively, the "CONTRIBUTING GUARANTORS"), in a
-----------------------
fair and equitable manner, their obligations arising under this Guaranty.
Accordingly, in the event any payment or distribution is made on any date by a
Guarantor under this Guaranty (a "FUNDING GUARANTOR") that exceeds its Fair
-----------------
Share as of such date, that Funding Guarantor shall be entitled to a
contribution from each of the other Contributing Guarantors in the amount of
such other Contributing Guarantor's Fair Share Shortfall as of such date, with
the result that all such contributions will cause each Contributing Guarantor's
Aggregate Payments to equal its Fair Share as of such date. "FAIR SHARE" means,
----------
with respect to a Contributing Guarantor as of any date of determination, an
amount equal to the ratio of the Fair Share Contribution Amount with respect to
such Contributing Guarantor to the aggregate of the Fair Share Contribution
Amounts with respect to all Contributing Guarantors multiplied by the aggregate
amount paid or distributed on or before such date by all Funding Guarantors
under this Guaranty in respect of the obligations guarantied. "FAIR SHARE
----------
SHORTFALL" means, with respect to a Contributing Guarantor as of any date of
---------
determination, the excess, if any, of the Fair Share of such Contributing
Guarantor over the Aggregate Payments of such Contributing Guarantor. "FAIR
----
SHARE CONTRIBUTION AMOUNT" means, with respect to a Contributing Guarantor as of
-------------------------
any date of determination, the maximum aggregate amount of the obligations of
such Contributing Guarantor under this Guaranty that would not render its
obligations hereunder or thereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the United States Code
or any applicable provisions of comparable state law; provided, solely for
purposes of calculating the "FAIR SHARE CONTRIBUTION AMOUNT" with respect to any
------------------------------
Contributing Guarantor for purposes of this Section 8.02, any assets or
------------
liabilities of such Contributing Guarantor arising by virtue of any rights
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
to subrogation, reimbursement or indemnification or any rights to or obligations
of contribution hereunder shall not be considered as assets or liabilities of
such Contributing Guarantor. "AGGREGATE PAYMENTS" means, with respect to a
------------------
Contributing Guarantor as of any date of determination, an amount equal to the
aggregate amount of all payments and distributions made on or before such date
by such Contributing Guarantor in respect of this Guaranty (including, without
limitation, in respect of this Section 8.02), minus the aggregate amount of all
------------
payments received on or before such date by such Contributing Guarantor from the
other Contributing Guarantors as contributions under this Section 8.02. The
------------
amounts payable as contributions hereunder shall be determined as of the date on
which the related payment or distribution is made by the applicable Funding
Guarantor. The allocation among Contributing Guarantors of their obligations as
set forth in this Section 8.02 shall not be construed in any way to limit the
------------
liability of any Contributing Guarantor for all of the Obligations as set forth
in Section 8.01 and otherwise hereunder. Each Subsidiary Guarantor is a third
party beneficiary to the contribution agreement set forth in this Section 8.02.
------------
2.3 SECTION PAYMENT BY GUARANTORS. Guarantors hereby jointly and
---------------------
severally agree, in furtherance of the foregoing and not in limitation of any
other right which any Beneficiary may have at law or in equity against any
Guarantor by virtue hereof, that upon the failure of Borrower to pay any of the
Obligations when and as the same shall become due, whether at stated maturity,
by required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of the United
States Bankruptcy Code), Guarantors will upon demand pay, or cause to be paid,
in cash, to Administrative Agent for the ratable benefit of Beneficiaries, an
amount equal to the sum of the unpaid principal amount of all Obligations then
due as aforesaid, accrued and unpaid interest on such Obligations (including
interest which, but for the filing of a petition in bankruptcy with respect to
Borrower, would have accrued on such Obligations, whether or not a claim is
allowed against Borrower for such interest in the related bankruptcy proceeding)
and all other Obligations then owed to Beneficiaries as aforesaid.
2.4 SECTION LIABILITY OF GUARANTORS ABSOLUTE. Each Guarantor agrees that
--------------------------------
its obligations hereunder are irrevocable, absolute, independent and
unconditional and shall not be affected by any circumstance which constitutes a
legal or equitable discharge of a guarantor or surety other than payment in full
of the Obligations. In furtherance of the foregoing and without limiting the
generality thereof, each Guarantor agrees as follows:
(a) this Guaranty is a guaranty of payment when due and not of
collectibility;
(b) Administrative Agent may enforce this Guaranty upon the occurrence of
an Event of Default notwithstanding the existence of any dispute between
Borrower and any Beneficiary with respect to the existence of such Event of
Default;
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
(c) the obligations of each Guarantor hereunder are independent of the
obligations of Borrower and the obligations of any other guarantor (including
any other Guarantor) of the obligations of Borrower, and a separate action or
actions may be brought and prosecuted against such Guarantor whether or not any
action is brought against Borrower or any of such other guarantors and whether
or not Borrower is joined in any such action or actions;
(d) payment by any Guarantor of a portion, but not all, of the Obligations
shall in no way limit, affect, modify or abridge any Guarantor's liability for
any portion of the Obligations which has not been paid. Without limiting the
generality of the foregoing, if Administrative Agent is awarded a judgment in
any suit brought to enforce any Guarantor's covenant to pay a portion of the
Obligations, such judgment shall not be deemed to release such Guarantor from
its covenant to pay the portion of the Obligations that is not the subject of
such suit, and such judgment shall not, except to the extent satisfied by such
Guarantor, limit, affect, modify or abridge any other Guarantor's liability
hereunder in respect of the Obligations;
(e) any Beneficiary, upon such terms as it deems appropriate, without
notice or demand and without affecting the validity or enforceability hereof or
giving rise to any reduction, limitation, impairment, discharge or termination
of any Guarantor's liability hereunder, from time to time may (i) renew, extend,
accelerate, increase the rate of interest on, or otherwise change the time,
place, manner or terms of payment of the Obligations; (ii) settle, compromise,
release or discharge, or accept or refuse any offer of performance with respect
to, or substitutions for, the Obligations or any agreement relating thereto
and/or subordinate the payment of the same to the payment of any other
obligations; (iii) request and accept other guaranties of the Obligations and
take and hold security for the payment hereof or the Obligations; (iv) release,
surrender, exchange, substitute, compromise, settle, rescind, waive, alter,
subordinate or modify, with or without consideration, any security for payment
of the Obligations, any other guaranties of the Obligations, or any other
obligation of any Person (including any other Guarantor) with respect to the
Obligations; (v) enforce and apply any security now or hereafter held by or for
the benefit of such Beneficiary in respect hereof or the Obligations and direct
the order or manner of sale thereof, or exercise any other right or remedy that
such Beneficiary may have against any such security, in each case as such
Beneficiary in its discretion may determine consistent herewith or the
applicable Lender Counterparty Interest Rate Agreement and any applicable
security agreement, including foreclosure on any such security pursuant to one
or more judicial or nonjudicial sales, whether or not every aspect of any such
sale is commercially reasonable, and even though such action operates to impair
or extinguish any right of reimbursement or subrogation or other right or remedy
of any Guarantor against Borrower or any security for the Obligations; and (vi)
exercise any other rights available to it under the Loan Documents or the Lender
Counterparty Interest Rate Agreements; and
FIRST PRIORITY LOAN AGREEMENT
----------------------------
(f) this Guaranty and the obligations of Guarantors hereunder shall be
valid and enforceable and shall not be subject to any reduction, limitation,
impairment, discharge or termination for any reason (other than payment in full
of the Obligations), including the occurrence of any of the following, whether
or not any Guarantor shall have had notice or knowledge of any of them: (i) any
failure or omission to assert or enforce or agreement or election not to assert
or enforce, or the stay or enjoining, by order of court, by operation of law or
otherwise, of the exercise or enforcement of, any claim or demand or any right,
power or remedy (whether arising under the Loan Documents or the Lender
Counterparty Interest Rate Agreements, at law, in equity or otherwise) with
respect to the Obligations or any agreement relating thereto, or with respect to
any other guaranty of or security for the payment of the Obligations; (ii) any
rescission, waiver, amendment or modification of, or any consent to departure
from, any of the terms or provisions (including provisions relating to events of
default) hereof, any of the other Loan Documents, any of the Lender Counterparty
Interest Rate Agreements or any agreement or instrument executed pursuant
thereto, or of any other guaranty or security for the Obligations, in each case
whether or not in accordance with the terms hereof or such Loan Document, such
Lender Counterparty Interest Rate Agreement or any agreement relating to such
other guaranty or security; (iii) the Obligations, or any agreement relating
thereto, at any time being found to be illegal, invalid or unenforceable in any
respect; (iv) the application of payments received from any source (other than
payments received pursuant to the other Loan Documents or Lender Counterparty
Interest Rate Agreements from the proceeds of any security for the Obligations,
except to the extent such security also serves as collateral for indebtedness
other than the Obligations) to the payment of indebtedness other than the
Obligations, even though any Beneficiary might have elected to apply such
payment to any part or all of the Obligations; (v) any Beneficiary's consent to
the change, reorganization or termination of the corporate or organizational
structure or existence of Borrower or any of its Subsidiaries and to any
corresponding restructuring of the Obligations; (vi) any failure to perfect or
continue perfection of a security interest in any collateral which secures any
of the Obligations; (vii) any defenses, set-offs or counterclaims which Borrower
may allege or assert against any Beneficiary in respect of the Obligations,
including, without limitation, failure of consideration, breach of warranty,
payment, statute of frauds, statute of limitations, accord and satisfaction and
usury; and (viii) any other act or thing or omission, or delay to do any other
act or thing, which may or might in any manner or to any extent vary the risk of
any Guarantor as an obligor in respect of the Obligations.
2.5 SECTION WAIVERS BY GUARANTORS. Each Guarantor hereby waives, for the
---------------------
benefit of Beneficiaries: (i) any right to require any Beneficiary, as a
condition of payment or performance by such Guarantor, to proceed against
Borrower, any other guarantor (including any other Guarantor) of the Obligations
or any other Person, proceed against or exhaust any security held from Borrower,
any such other guarantor or any other Person, proceed against or have resort to
any balance of any deposit account or credit on the books
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
of any Beneficiary in favor of Borrower, any such other guarantor (including any
other Guarantor) or any other Person, or pursue any other remedy in the power of
any Beneficiary whatsoever; (ii) any defense arising by reason of the
incapacity, lack of authority or any disability or other defense of Borrower
including any defense based on or arising out of the lack of validity or the
unenforceability of the Obligations or any agreement or instrument relating
thereto or by reason of the cessation of the liability of Borrower from any
cause other than payment in full of the Obligations; (iii) any defense based
upon any statute or rule of law which provides that the obligation of a surety
must be neither larger in amount nor in other respects more burdensome than that
of the principal; (iv) any defense based upon any Beneficiary's errors or
omissions in the administration of the Obligations, except behavior which
amounts to bad faith; (v) any principles or provisions of law, statutory or
otherwise, which are or might be in conflict with the terms hereof and any legal
or equitable discharge of such Guarantor's obligations hereunder, the benefit of
any statute of limitations affecting such Guarantor's liability hereunder or the
enforcement hereof, any rights to set-offs, recoupments and counterclaims, and
promptness, diligence and any requirement that any Beneficiary protect, secure,
perfect or insure any security interest or lien or any property subject thereto;
(vi) notices, demands, presentments, protests, notices of protest, notices of
dishonor and notices of any action or inaction, including acceptance hereof,
notices of default hereunder, or any agreement or instrument related thereto,
notices of any renewal, extension or modification of the Obligations or any
agreement related thereto, notices of any extension of credit to Borrower and
notices of any of the matters referred to in Section 8.04 and any right to
------------
consent to any thereof; and (vii) any defenses or benefits that may be derived
from or afforded by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms hereof.
2.6 SECTION GUARANTORS' RIGHTS OF SUBROGATION, CONTRIBUTION, ETC.
----------------------------------------------------
Each Guarantor hereby waives, until the Obligations shall have been indefeasibly
paid in full and the Commitments shall have terminated, shall have expired or
been cancelled, any claim, right or remedy, direct or indirect, that such
Guarantor now has or may hereafter have against Borrower or any of its assets in
connection with this Guaranty or the performance by such Guarantor of its
obligations hereunder, in each case whether such claim, right or remedy arises
in equity, under contract, by statute, under common law or otherwise and
including without limitation any right of subrogation, reimbursement or
indemnification that such Guarantor now has or may hereafter have against
Borrower with respect to the Obligations, any right to enforce, or to
participate in, any claim, right or remedy that any Beneficiary now has or may
hereafter have against Borrower, and any benefit of, and any right to
participate in, any collateral or security now or hereafter held by any
Beneficiary. In addition, until the Obligations shall have been indefeasibly
paid in full and the Commitments shall have terminated shall have expired or
been cancelled, each Guarantor shall withhold exercise of any right of
contribution such Guarantor may have against any other guarantor (including any
other Guarantor) of the Obligations, including, without limitation, any such
right of contri-
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
bution as contemplated by Section 8.02. Each Guarantor further agrees that, to
------------
the extent the waiver or agreement to withhold the exercise of its rights of
subrogation, reimbursement, indemnification and contribution as set forth herein
is found by a court of competent jurisdiction to be void or voidable for any
reason, any rights of subrogation, reimbursement or indemnification such
Guarantor may have against Borrower or against any collateral or security, and
any rights of contribution such Guarantor may have against any such other
guarantor, shall be junior and subordinate to any rights any Beneficiary may
have against Borrower, to all right, title and interest any Beneficiary may have
in any such collateral or security, and to any right any Beneficiary may have
against such other guarantor. If any amount shall be paid to any Guarantor on
account of any such subrogation, reimbursement, indemnification or contribution
rights at any time when all Obligations shall not have been paid in full, such
amount shall be held in trust for such Beneficiary and shall forthwith be paid
over to such Person to be credited and applied against the Obligations, whether
matured or unmatured, in accordance with the terms hereof.
2.7 SECTION SUBORDINATION OF OTHER OBLIGATIONS. Any Indebtedness of Borrower
----------------------------------
or any Guarantor now or hereafter held by any Guarantor (the "OBLIGEE
-------
GUARANTOR") is hereby subordinated in right of payment to the Obligations, and
---------
any such indebtedness collected or received by the Obligee Guarantor after an
Event of Default has occurred and is continuing shall be held in trust for
Administrative Agent on behalf of Beneficiaries and shall forthwith be paid over
to Administrative Agent for the benefit of Beneficiaries to be credited and
applied against the Obligations but without affecting, impairing or limiting in
any manner the liability of the Obligee Guarantor under any other provision
hereof.
2.8 SECTION CONTINUING GUARANTY. This Guaranty is a continuing guaranty and
-------------------
shall remain in effect until all of the Obligations shall have been paid in full
and the Commitments shall have terminated. Each Guarantor hereby irrevocably
waives any right to revoke this Guaranty as to future transactions giving rise
to any Obligations.
2.9 SECTION AUTHORITY OF GUARANTORS OR BORROWER. It is not necessary for any
-----------------------------------
Beneficiary to inquire into the capacity or powers of any Guarantor or Borrower
or the officers, directors or any agents acting or purporting to act on behalf
of any of them.
2.10 SECTION FINANCIAL CONDITION OF BORROWER. Any Loan may be granted to
-------------------------------
Borrower or continued from time to time, and any Lender Counterparty Interest
Rate Agreements may be entered into from time to time, in each case without
notice to or authorization from any Guarantor regardless of the financial or
other condition of Borrower at the time of any such grant or continuation or at
the time such Lender Counterparty Interest Rate Agreement is entered into, as
the case may be. No Beneficiary shall have any obligation to disclose or discuss
with any Guarantor its assessment, or any Guarantor's assessment, of the
financial condition of Borrower. Each Guarantor has adequate means to obtain
information
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
from Borrower on a continuing basis concerning the financial condition of
Borrower and its ability to perform its obligations under the Loan Documents and
the Lender Counterparty Interest Rate Agreements, and each Guarantor assumes the
responsibility for being and keeping informed of the financial condition of
Borrower and of all circumstances bearing upon the risk of nonpayment of the
Obligations. Each Guarantor hereby waives and relinquishes any duty on the part
of any Beneficiary to disclose any matter, fact or thing relating to the
business, operations or conditions of Borrower now known or hereafter known by
any Beneficiary.
2.11 SECTION BANKRUPTCY, ETC.
---------------
(a) The obligations of Guarantors hereunder shall not be reduced, limited,
impaired, discharged, deferred, suspended or terminated by any proceeding,
voluntary or involuntary, involving the bankruptcy, insolvency, receivership,
reorganization, liquidation or arrangement of Borrower or by any defense which
Borrower may have by reason of the order, decree or decision of any court or
administrative body resulting from any such proceeding.
(b) Each Guarantor acknowledges and agrees that any interest on any portion of
the Obligations which accrues after the commencement of any proceeding referred
to in clause (a) above (or, if interest on any portion of the Obligations ceases
to accrue by operation of law by reason of the commencement of said proceeding,
such interest as would have accrued on such portion of the Obligations if said
proceedings had not been commenced) shall be included in the Obligations because
it is the intention of Guarantors and Beneficiaries that the Obligations which
are guarantied by Guarantors pursuant hereto should be determined without regard
to any rule of law or order which may relieve Borrower of any portion of such
Obligations. Guarantors will permit any trustee in bankruptcy, receiver, debtor
in possession, assignee for the benefit of creditors or similar person to pay
Administrative Agent, or allow the claim of Administrative Agent in respect of,
any such interest accruing after the date on which such proceeding is commenced.
(c) In the event that all or any portion of the Obligations are paid by
Borrower or any other Person (including any Guarantor), the obligations of
Guarantors hereunder shall continue and remain in full force and effect or be
reinstated, as the case may be, in the event that all or any part of such
payment(s) are rescinded or recovered directly or indirectly from any
Beneficiary as a preference, fraudulent transfer or otherwise (and whether by
action or proceeding, settlement or otherwise), and any such payments which are
so rescinded or recovered shall constitute Obligations for all purposes
hereunder.
2.12 SECTION NOTICE OF EVENTS. As soon as any Guarantor obtains knowledge
----------------
thereof, such Guarantor shall give Administrative Agent written notice of any
condition or
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
event which has resulted in a material adverse change in the financial condition
of any Guarantor or Borrower or a breach of or noncompliance with any term,
condition or covenant contained herein, any other Loan Document or any other
document delivered pursuant hereto or thereto.
2.13 SECTION DISCHARGE OF GUARANTY UPON SALE OF GUARANTOR. If all of the
--------------------------------------------
equity Securities of any Guarantor or any of its successors in interest
hereunder shall be sold or otherwise disposed of (including by merger or
consolidation) in accordance with the terms and conditions hereof, the Guaranty
of such Guarantor hereunder or such successor in interest hereunder, as the case
may be, shall automatically be discharged and released without any further
action by any Beneficiary or any other Person effective as of the time of such
asset sale; provided, as a condition precedent to such discharge and release,
Collateral Agent shall have received evidence satisfactory to it that
arrangements satisfactory to it have been made for delivery to Collateral Agent
of the applicable proceeds of such disposition pursuant to Section 2.09(c).
---------------
3 ARTICLE
EVENTS OF DEFAULT; REMEDIES
---------------------------
4.1 SECTION EVENTS OF DEFAULT. The following events shall each constitute an
-----------------
"EVENT OF DEFAULT":
----------------
(a) Borrower shall fail to pay the principal of, or, within 5 days of the date
that it is due, interest on its Notes, or any other amounts payable hereunder or
under any of the other Loan Documents when due, whether as scheduled, at a date
fixed for prepayment, by acceleration or otherwise; or
(b) any Credit Party shall fail to observe or perform any other covenant,
condition or agreement to be observed or performed by such Credit Party in any
of the Loan Documents, and such Credit Party fails to cure such breach within
ten (10) Days after written notice thereof unless the breach relates to a
covenant contained in Section 5.04, or Article VI (other than Section 6.05 or
------------ ---------- ------------
Section 6.06) or VII, in which case no notice or grace period shall apply, or
------------ ---
unless the breach relates to Section 5.06, in which case an Event of Default
------------
shall occur on the thirtieth day following the breach without any notice
requirement, unless the breach shall have been cured before such date; or
(c) any representation or warranty made by any Credit Party in connection with
this Agreement or any other Loan Document, or the Loans or any statement or
representation made in any report, certificate, financial statement or other
instrument furnished by or on behalf of such Credit Party pursuant to this
Agreement or any other Loan Document, shall prove to have been false or
misleading in any material respect when made or delivered or when deemed made in
accordance with the terms hereof or thereof; or
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
(d) any Credit Party shall fail to make any payment due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) on any other
obligation for borrowed money in excess of $250,000 with respect to any Credit
Party (other than Holdings) or in excess of $1,000,000 with respect to Holdings,
and such failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such indebtedness; or any
other default or event under any agreement or instrument relating to any
indebtedness for borrowed money in excess of $250,000 with respect to any Credit
Party (other than Holdings) or in excess of $1,000,000 with respect to Holdings,
or any other event, shall occur and shall continue after the applicable grace
period, if any, specified in such agreement or instrument if the effect of such
default or event is to accelerate, or to permit the acceleration of, the
maturity of such indebtedness in excess of $250,000 with respect to any Credit
Party (other than Holdings) or in excess of $1,000,000 with respect to Holdings;
or any such indebtedness in excess of $250,000 with respect to any Credit Party
(other than Holdings) or in excess of $1,000,000 with respect to Holdings shall
be declared to be due and payable or required to be prepaid (other than by a
regularly scheduled required prepayment) prior to the stated maturity thereof;
or
(e) any Credit Party shall (i) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator or similar official for such Credit
Party or for a substantial part of its property, (ii) make a general assignment
for the benefit of creditors, (iii) become unable, or admit in writing its
inability, to pay its debts as they become due, (iv) voluntarily or
involuntarily dissolve, liquidate or wind up its affairs, or (v) take action for
the purpose of effecting any of the foregoing; or
(f) a proceeding under any bankruptcy, reorganization, arrangement of debts,
insolvency or receivership law is filed by or against any Credit Party, or any
Credit Party takes any action to authorize any of the foregoing matters, and in
the case of any such proceeding instituted against any Credit Party (but not
instituted by any Credit Party), either such proceeding shall remain undismissed
or unstayed for a period of sixty (60) days or any of the actions sought in such
proceeding (including, without limitation, the entry of an order for relief
against, or the appointment of a receiver, trustee or other similar official for
any Credit Party or any substantial part of its property) shall be granted or
shall occur; or
(g) a Termination Event (other than a Reportable Event) occurs which the
Requisite Lenders in good faith believe would subject Borrower to a liability
which is reasonably likely to have a Material Adverse Effect; or
(h) the plan administrator of any Plan applies under Section 412(d) of the IRC
for a waiver of the minimum funding standards of Section 412(a) of the IRC and
the Requisite Lenders in good faith believe that the approval of such waiver
could subject Borrower
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
or any ERISA Affiliate to liability which is reasonably likely to have a
Material Adverse Effect; or
(i) unless it is not reasonably likely to have a Material Adverse Effect, any
of the Governmental Approvals or any other license, Governmental Approval or
other governmental consent or approval necessary for the continuing operation of
any Credit Party or any System or any other material Governmental Approval or
approval of or material filing with the FCC, any PUC or any other Governmental
Authority with respect to the conduct by any Credit Party of its business and
operations, including its Business, shall not be obtained or shall cease to be
in full force and effect, which in respect of any of the Governmental Approvals
shall, in the case of an order of the FCC, any PUC or other Governmental
Authority having jurisdiction with respect thereto, revoking, or deciding not to
renew, any such Governmental Approval, occur upon the issuance of such order,
and, in the case of any other order revoking or terminating any of the
Governmental Approvals or deciding not to renew such Governmental Approvals
prior to the termination thereof, occur when such order becomes final; or
(j) unless it is not reasonably likely to have a Material Adverse Effect, the
FCC, any PUC or any other Governmental Authority, by final order, determines
that the existence or performance of this Agreement or any other Loan Document
will result in a revocation, suspension or material adverse modification of any
of the Governmental Approvals for any System; or
(k) for any reason any Loan Document shall not be in full force and effect or
shall not be enforceable in accordance with its terms, or the Guaranty set forth
at Article VIII hereof for any reason, other than the satisfaction in full of
------------
all Obligations, shall cease to be in full force and effect (other than in
accordance with its terms) or shall be declared to be null and void or voidable
or any Guarantor shall repudiate its obligations thereunder with respect to such
Guaranty, or any security interest or lien granted pursuant thereto with respect
to Collateral having an aggregate value of $500,000 or greater shall fail to be
perfected or to have its intended priority, or any Credit Party or any Affiliate
thereof shall contest the validity of any Lien granted under, or shall disaffirm
its obligations under any Loan Document; or
(l) unless it is not reasonably likely to have a Material Adverse Effect, for
any reason, any Credit Party ceases to operate any System or ceases to own any
of its Governmental Approvals necessary for the continuing operation of any
System; or
(m) a judgment or judgments for the payment of money in excess of $500,000
individually or $1,000,000 in the aggregate at any one time shall have been
rendered against
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
any Credit Party and the same shall have remained unsatisfied and in effect for
any period of ninety (90) days during which no stay of execution shall have been
obtained; or
(n) unless it is not reasonably likely to have a Material Adverse Effect, any
Credit Party is enjoined, restrained or in any way prevented by the order of any
court or administrative or regulatory agency from conducting its business in any
material respect with respect to any one or more of its Systems; or
(o) any Credit Party becomes subject to any liabilities, costs, expenses,
damages, fines or penalties which could reasonably be expected to have a
Material Adverse Effect arising out of or related to (i) any Remedial Action in
response to a Release or threatened Release at any location of any Contaminant
into the indoor or outdoor environment or (ii) any material violation of any
Environmental Law;
(p) a Change of Control shall occur; or
(q) an Event of Default (as such term is defined in the Second Priority Loan
Agreement) shall occur.
4.2 SECTION TERMINATION OF COMMITMENT; ACCELERATION. Upon the occurrence and
---------------------------------------
at any time during the continuance of any Event of Default, the Administrative
Agent shall upon direction from the Requisite Lenders:
(a) by notice to Borrower, terminate Lenders' Commitment to make Loans
hereunder; or
(b) by notice to Borrower, declare the Obligations to be immediately due and
payable, whereupon all the Obligations shall be immediately due and payable
without further notice of any kind, provided, however, that if an Event of
-------- -------
Default described in Section 9.01(e) or 9.01(f) shall exist or occur, all of the
--------------------------
Obligations shall automatically, without declaration or notice of any kind, be
immediately due and payable and the Commitments shall be automatically
terminated.
(c) Any amounts described in clause (b) above, when received by Administrative
Agent, shall be held by Administrative Agent pursuant to the terms of the
Intercreditor Agreement and shall be applied as therein provided.
4.3 SECTION WAIVERS. Demand, presentment, protest and notices of nonpayment,
-------
protest, dishonor and acceptance are hereby waived by Borrower. Borrower also
waives the benefit of all valuation, appraisal and exemption laws and the
posting of any bond required of the Administrative Agent or any Lender in
connection with any judicial process to realize on the Collateral, to enforce
any judgment or other court order entered in favor of the Ad-
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
ministrative Agent or any Lender or to enforce by specific performance,
temporary restraining order, or preliminary or permanent injunction, this
Agreement or any other Loan Documents. Each Borrower waives the right, if any,
to the benefit of, or to direct the application of, any Collateral. Each
Borrower hereby acknowledges that none of the Administrative Agent or any Lender
has any obligation to resort to any Collateral or make claim against any other
Person before seeking payment or performance from Borrower.
5 ARTICLE
AGENTS
------
6.1 SECTION APPOINTMENT OF AGENTS. GSCP is hereby appointed Joint Lead
---------------------
Arranger and Syndication Agent hereunder, CSC is hereby appointed Joint Lead
Arranger, and each Lender hereby authorizes each Joint Lead Arranger and
Syndication Agent to act as its agent in accordance with the terms hereof and
the other Loan Documents. CIBC is hereby appointed Administrative Agent
hereunder and under the other Loan Documents and each Lender hereby authorizes
Administrative Agent to act as its agent in accordance with the terms hereof and
the other Loan Documents. Newcourt is hereby appointed Collateral Agent
hereunder, under the Intercreditor Agreement and the other Loan Documents, and
each Lender hereby authorizes Collateral Agent to act as its agent in accordance
with the terms of the Intercreditor Agreement and the other Loan Documents.
Newcourt is hereby appointed Documentation Agent hereunder, and each Lender
hereby authorizes Documentation Agent to act as its agent in accordance with the
terms hereof and the other Loan Documents. Each Agent hereby agrees to act upon
the express conditions contained herein and the other Loan Documents, as
applicable. Without limitation of any right of the Borrower pursuant to Section
10.07, the provisions of this Article X are solely for the benefit of Agents and
---------
Lenders and no Person shall have any rights as a third party beneficiary of any
of the provisions thereof. In performing its functions and duties hereunder,
each Agent shall act solely as an agent of Lenders and does not assume and shall
not be deemed to have assumed any obligation towards or relationship of agency
or trust with or for any of Borrower, any of the other Credit Parties or any of
their respective Affiliates. As of the Closing Date, all the respective
obligations of CSC, in its capacity as Joint Lead Arranger, GSCP, in its
capacity as Joint Lead Arranger and Syndication Agent, and Newcourt, in its
capacity as Documentation Agent, shall terminate.
6.2 SECTION POWERS AND DUTIES. Each Lender irrevocably authorizes each Agent
-----------------
to take such action on such Lender's behalf and to exercise such powers, rights
and remedies hereunder and under the other Loan Documents as are specifically
delegated or granted to such Agent by the terms hereof and thereof, together
with such powers, rights and remedies as are reasonably incidental thereto. Each
Agent shall have only those duties and responsibilities that are expressly
specified herein and the other Loan Documents. Each Agent may exercise such
powers, rights and remedies and perform such duties by or through its agents
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
or employees and such Agent shall have no liability with respect to the actions,
omissions, exercise or performance of any such Agent or employees selected by
such Agent with reasonable care. No Agent shall have, by reason hereof or any of
the other Loan Documents, a fiduciary relationship in respect of any Lender; and
nothing herein or any of the other Loan Documents, expressed or implied, is
intended to or shall be so construed as to impose upon any Agent any obligations
in respect hereof or any of the other Loan Documents except as expressly set
forth herein or therein.
(a) SECTION GENERAL IMMUNITY. No Agent shall be responsible to any Lender for
----------------
the execution, effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency hereof or of any other Loan Document or for any
representations, warranties, recitals or statements made herein or therein or
made in any written or oral statements or in any financial or other statements,
instruments, reports or certificates or any other documents furnished or made by
any of the Agents to Lenders or by or on behalf of any Credit Party to any of
the Agents or any Lender in connection with the Loan Documents and the
transactions contemplated thereby or for the financial condition or business
affairs of any Person liable for the payment of any Obligations, nor shall any
Agent be required to ascertain or inquire as to the performance or observance of
any of the terms, conditions, provisions, covenants or agreements contained in
any of the Loan Documents or as to the use of the proceeds of the Loans or as to
the existence or possible existence of any Event of Default or Default. Anything
contained herein to the contrary notwithstanding, Administrative Agent shall not
have any liability arising from confirmations of the amount of outstanding Loans
or the component amounts thereof, except as to any such liability arising from
gross negligence or willful misconduct.
(b) No Agent nor any of its officers, partners, directors, employees or agents
shall be liable to Lenders for any action taken or omitted by any Agent under or
in connection with any of the Loan Documents except to the extent caused by such
Agent's gross negligence or willful misconduct. Each Agent shall be entitled to
refrain from any act or the taking of any action (including the failure to take
an action) in connection herewith or any of the other Loan Documents or from the
exercise of any power, discretion or authority vested in it hereunder or
thereunder unless and until such Agent shall have received instructions in
respect thereof from Requisite Lenders (or such other Lenders as may be required
to give such instructions under Section 11.05) and, upon receipt of such
instructions from Requisite Lenders (or such other Lenders, as the case may be),
such Agent shall be entitled to act or (where so instructed) refrain from
acting, or to exercise such power, discretion or authority, in accordance with
such instructions. Without prejudice to the generality of the foregoing, (i)
each Agent shall be entitled to rely, and shall be fully protected in relying,
upon any communication, instrument or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or persons, and
shall be entitled to rely and shall be protected in relying on opinions and
judgments of attorneys (who may be attorneys for Bor-
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
rower and its Affiliates), accountants, experts and other professional advisors
selected by it; and (ii) no Lender shall have any right of action whatsoever
against any Agent as a result of such Agent acting or (where so instructed)
refraining from acting hereunder or any of the other Loan Documents in
accordance with the instructions of Requisite Lenders (or such other Lenders as
may be required to give such instructions under Section 11.05).
--------------
6.3 SECTION AGENTS ENTITLED TO ACT AS LENDER. The agency hereby created shall
--------------------------------
in no way impair or affect any of the rights and powers of, or impose any duties
or obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans, each Agent shall have the same
rights and powers hereunder as any other Lender and may exercise the same as
though it were not performing the duties and functions delegated to it
hereunder, and the term "Lender" shall, unless the context clearly otherwise
indicates, include each Agent in its individual capacity. Any Agent and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of banking, trust, financial advisory or other business with any of
Borrower and its Affiliates as if it were not performing the duties specified
herein, and may accept fees and other consideration from any Credit Party for
services in connection herewith and otherwise without having to account for the
same to Lenders.
6.4 SECTION LENDERS' REPRESENTATIONS AND WARRANTIES. Each Lender represents
---------------------------------------
and warrants that it has made its own independent investigation of the financial
condition and affairs of the Credit Parties and their Affiliates in connection
with Loans made hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Credit Parties and their Affiliates. No
Agent shall have any duty or responsibility, either initially or on a continuing
basis, to make any such investigation or any such appraisal on behalf of Lenders
or to provide any Lender with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or at
any time or times thereafter, and no Agent shall have any responsibility with
respect to the accuracy of or the completeness of any information provided to
Lenders.
6.5 SECTION RIGHT TO INDEMNITY. Each Lender, in proportion to its Pro Rata
------------------
Share, severally agrees to indemnify each Agent, to the extent that such Agent
shall not have been reimbursed by Borrower, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including counsel fees and disbursements) or disbursements of
any kind or nature whatsoever which may be imposed on, incurred by or asserted
against such Agent in exercising its powers, rights and remedies or performing
its duties hereunder or under the other Loan Documents or otherwise in its
capacity as such Agent in any way relating to or arising out hereof or the other
Loan Documents; provided, no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from such Agent's gross negligence or
willful misconduct; provided further, however,
-------- ------- -------
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
that the gross negligence or willful misconduct of any Agent shall not affect
any other Agent's right to indemnification hereunder. If any indemnity furnished
to any Agent for any purpose shall, in the opinion of such Agent, be
insufficient or become impaired, such Agent may call for additional indemnity
and cease, or not commence, to do the acts indemnified against until such
additional indemnity is furnished; provided, in no event shall this sentence
require any Lender to indemnify any Agent against any liability, obligation,
loss, damage, penalty, action, judgment, suit, cost, expense or disbursement in
excess of such Lender's Pro Rata Share thereof; and provided further, this
sentence shall not be deemed to require any Lender, subject to the second
provisio of the immediately preceding sentence, to indemnify any Agent against
any liability, obligation, loss, damage, penalty, action, judgment, suit, cost,
expense or disbursement described in the initial proviso in the immediately
preceding sentence.
6.6 SECTION SUCCESSOR ADMINISTRATIVE AGENT. Administrative Agent may resign
------------------------------
at any time by giving thirty (30) days' prior written notice thereof to Lenders
and Borrower, and Administrative Agent may be removed at any time with or
without cause by an instrument or concurrent instruments in writing delivered to
Borrower and Administrative Agent and signed by Requisite Lenders. Upon any such
notice of resignation or any such removal, Requisite Lenders shall have the
right, upon five Business Days' notice to Borrower, to appoint a successor
Administrative Agent which successor shall, unless a Default or Event of Default
shall have occurred and be continuing, be reasonably acceptable to the Borrower.
Upon the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, that successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring or removed Administrative Agent and the retiring or
removed Administrative Agent shall be discharged from its duties and obligations
hereunder. After any retiring or removed Administrative Agent's resignation or
removal hereunder as Administrative Agent, the provisions of this Article X
---------
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent hereunder.
6.7 SECTION OTHER LOAN DOCUMENTS. Each Lender hereby further authorizes
--------------------
Administrative Agent, on behalf of and for the benefit of Lenders, to enter into
the other Loan Documents , and each Lender agrees to be bound by the terms of
the other Loan Documents; provided that Administrative Agent shall not enter
--------
into or consent to any amendment, modification, supplementation, termination or
waiver of any other Loan Document without the prior consent of Requisite Lenders
(or such other Lenders as may be required to give such instructions under
Section 11.05 hereof). Each Lender hereby further authorizes Collateral Agent
-------------
(and under the terms of the Intercreditor Agreement Collateral Agent is
authorized), on behalf of and for the benefit of Lenders, to enter into each
Collateral Document as secured party, and each Lender agrees to be bound by the
terms of each Collateral Document; provided that Collateral Agent shall not
--------
enter into or consent to any amend-
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
ment, modification, supplementation, termination or waiver of the Intercreditor
Agreement without the prior consent of Requisite Lenders (or such other Lenders
as may be required to give such instructions under Section 11.05 hereof);
-------------
provided further, however, that, without further written consent or
-------- ------- -------
authorization from Lenders, Collateral Agent may execute any documents or
instruments necessary to (a) release any Lien encumbering any item of Collateral
that is the subject of a sale or other disposition of assets permitted by this
Agreement or as permitted or required under the Intercreditor Agreement or the
Collateral Documents or to which Requisite Lenders (or such other Lenders as may
be required to give such consent under Section 11.05 hereof) have otherwise
-------------
consented or (b) release any Guarantor from its Guaranty hereunder if all of the
capital stock of such Guarantor is sold to any Person pursuant to a sale or
other disposition permitted hereunder or as permitted under the Intercreditor
Agreement or to which Requisite Lenders (or such other Lenders as may be
required to give such consent under Section 11.05 hereof) have otherwise
-------------
consented. Anything contained in any of the Collateral Documents to the contrary
notwithstanding, Borrower, Administrative Agent, Collateral Agent and each
Lender hereby agree that (X) no Lender shall have any right individually to
realize upon any of the Collateral under any Collateral Document or to a
Guarantor's Guaranty hereunder, it being understood and agreed that all powers,
rights and remedies under the Collateral Documents may be exercised solely by
Collateral Agent for the benefit of Secured Parties in accordance with the terms
hereof or thereof, and (Y) in the event of a foreclosure by Collateral Agent on
any of the Collateral pursuant to a public or private sale, Collateral Agent or
any Secured Party may be the purchaser of any or all of such Collateral at any
such sale and Collateral Agent, as agent for and representative of Secured
Parties (but not any Secured Party or Secured Parties in its or their respective
individual capacities unless Requisite Lenders shall otherwise agree in writing)
shall be entitled, for the purpose of bidding and making settlement or payment
of the purchase price for all or any portion of the Collateral sold at any such
public sale, to use and apply any of the Obligations as a credit on account of
the purchase price for any Collateral payable by Collateral Agent at such sale.
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
7 ARTICLE MISCELLANEOUS
---------------------
8.1 SECTION NOTICES. Unless otherwise specifically provided herein, any notice
-------
or other communication herein required or permitted to be given to a Credit
Party, an Agent or a Lender shall be sent to such Person's address as set forth
on the signature pages hereto or in the other relevant Loan Document, and in the
case of any Lender, the address as set forth on the signature pages hereto or
otherwise indicated to Administrative Agent in writing. Each notice hereunder
shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service and signed for
against receipt thereof, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed; provided, no notice to any Agent shall be effective
until received by such Agent.
8.2 SECTION EXPENSES. Whether or not the transactions contemplated hereby shall
--------
be consummated, Borrower agrees to pay promptly (a) all the actual and
reasonable costs and expenses of the Documentation Agent, and the Syndication
Agent and each Joint Lead Arranger (without duplication with respect to each
such Person) of preparation of the Loan Documents and any consents, amendments,
waivers or other modifications thereto; (b) all the costs of furnishing all
opinions by counsel for Borrower (including any opinions requested by Lenders as
to any legal matters arising hereunder) and of each Credit Party's performance
of and compliance with all agreements and conditions on its part to be performed
or complied with hereunder and the other Loan Documents including with respect
to confirming compliance with environmental, insurance and solvency
requirements; (c) the reasonable fees, expenses and disbursements of counsel to
Agents (in each case including allocated costs of internal counsel) in
connection with the negotiation, preparation, execution and administration of
the Loan Documents and any consents, amendments, waivers or other modifications
thereto and any other Loan Documents or matters requested by a Credit Party; (d)
all the actual costs and reasonable expenses of creating and perfecting Liens in
favor of Collateral Agent on behalf of Lenders pursuant hereto, including filing
and recording fees, expenses and taxes, stamp or documentary taxes, search fees,
title insurance premiums and reasonable fees, expenses and disbursements of
counsel to each Agent and of counsel providing any opinions that any Agent or
Requisite Lenders may request in respect of the Collateral or the Liens created
pursuant the Loan Documents pertaining to the Collateral; (e) all the actual
costs and reasonable fees, expenses and disbursements of any auditors,
accountants, consultants or appraisers retained by the Administrative Agent; (f)
all the actual costs and reasonable expenses (including the reasonable fees,
expenses and disbursements of any appraisers, consultants, advisors and agents
employed or retained by any Agent and its counsel) in connection with the
custody or preservation of any of the Collateral; (g) all other actual and
reasonable costs and expenses incurred by each Agent in connection with the
xxxxx-
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
cation of the Loans and the negotiation, preparation and execution of the Loan
Documents and any consents, amendments, waivers or other modifications thereto
and the transactions contemplated thereby; (h) and after the occurrence of an
Event of Default, all costs and expenses, including reasonable attorneys' fees
(including allocated costs of internal counsel) and costs of settlement,
incurred by any Agent and Lenders in enforcing any Obligations of or in
collecting any payments due from any Credit Party hereunder or under the other
Loan Documents by reason of such Event of Default (including in connection with
the sale of, collection from, or other realization upon any of the Collateral or
the enforcement of the Guaranty) or in connection with any refinancing or
restructuring of the credit arrangements provided hereunder in the nature of a
"work-out" or pursuant to any insolvency or bankruptcy proceedings.
8.3 SECTION INDEMNITY. In addition to the payment of expenses pursuant to
---------
Section 11.02, whether or not the transactions contemplated hereby shall be
consummated, Borrower agrees to defend (subject to Indemnitees' selection of
counsel), indemnify, pay and hold harmless, each Agent and Lender and the
officers, partners, directors, trustees, employees, agents and Affiliates of
each Agent and each Lender (each, an "INDEMNITEE"), from and against any and all
----------
Indemnified Liabilities; provided, no Credit Party shall have any obligation to
any Indemnitee hereunder with respect to any Indemnified Liabilities to the
extent such Indemnified Liabilities arise solely from the gross negligence or
willful misconduct of that Indemnitee as determined by a final, non-appealable
judgment of a court of competent jurisdiction; and provided, further, however,
-------- ------- -------
that the gross negligence or willful misconduct of any Indemnitee shall not
affect the right of indemnification of any other Indemnitee hereunder. To the
extent that the undertakings to defend, indemnify, pay and hold harmless set
forth in this Section 11.03 may be unenforceable in whole or in part because
they are violative of any law or public policy, the applicable Credit Party
shall contribute the maximum portion that it is permitted to pay and satisfy
under applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by Indemnitees or any of them.
8.4 SECTION SET-OFF. In addition to any rights now or hereafter granted under
-------
applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default each Lender is hereby authorized by each
Credit Party at any time or from time to time subject to the consent of
Administrative Agent (such consent not to be unreasonably withheld, conditioned
or delayed), without notice to any Credit Party or any other Person (other than
Administrative Agent), any such notice being hereby expressly waived, to set off
and to appropriate and to apply any and all deposits (general or special,
including Indebtedness evidenced by certificates of deposit, whether matured or
unmatured, but not including trust accounts) and any other Indebtedness at any
time held or owing by such Lender to or for the credit or the account of such
Credit Party against and on account of the obligations and liabilities of such
Credit Party to such Lender hereunder and under the other Loan Documents,
including all claims of any nature or description arising out of or connected
with
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
this Agreement or any other Loan Document, irrespective of whether or not (a)
such Lender shall have made any demand hereunder or (b) the principal of or the
interest on the Loans or any other amounts due hereunder shall have become due
and payable pursuant to Article II and although said obligations and
----------
liabilities, or any of them, may be contingent or unmatured.
(A) SECTION AMENDMENTS AND WAIVERS. Subject to Section 11.05(b) and 11.05(c),
---------------------- ---------------- --------
no amendment, modification, termination or waiver of any provision of the Loan
Documents, or consent to any departure by any Credit Party therefrom, shall in
any event be effective without the prior written concurrence of the Requisite
Lenders.
(b) Without the prior written consent of each Lender that would be affected
thereby, no amendment, modification, termination, or consent shall be
effective if the effect thereof would:
(i) extend the scheduled final maturity of any Loan or Note;
(ii) waive, reduce or postpone any scheduled repayment (but not
prepayment);
(iii) reduce the rate of interest on any Loan (other than any waiver of
any increase in the interest rate applicable to any Loan pursuant to
Section 2.05(b)) or any fee payable hereunder;
(iv) extend the time for payment of any such interest or fees;
(v) reduce the principal amount of any Loan;
(vi) amend, modify, terminate or waive any provision of this Section
11.05(b);
(vii) amend the definition of "Requisite Lenders" and "Pro Rata Shares";
provided, with the consent of Requisite Lenders, additional
extensions of credit pursuant hereto may be included in the
determination of "Requisite Lenders" and "Pro Rata Shares" on
substantially the same basis as the Term Loan Commitment Amounts,
the Term Loans, the Revolving Loan Commitment Amounts and the
Revolving Loans are included on the Closing Date;
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
(viii) release or otherwise subordinate all or
substantially all of the Collateral or any
Guarantor from its obligations hereunder except as
expressly provided in the Loan Documents; or
(ix) consent to the assignment or transfer by any Credit
Party of any of its rights and obligations under
any Loan Document.
(c) No amendment, modification, termination or waiver of any provision
of the Loan Documents, or consent to any departure by Borrower or Holdings
therefrom, shall:
(i) increase any Revolving Loan Commitment
Amount of any Revolving Lender over the amount
thereof then in effect without the consent of such
Revolving Lender; provided, no amendment,
modification or waiver of any condition precedent,
covenant, Default or Event of Default shall
constitute an increase in any Revolving Loan
Commitment Amount of any Lender; or
(ii) amend, modify, terminate or waive any
provision of Article X as the same applies to any
---------
Agent, or any other provision hereof as the same
applies to the rights or obligations of any Agent,
in each case without the consent of such Agent.
(d) Administrative Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of such Lender. Any waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it was given. No
notice to or demand on any Credit Party in any case shall entitle any Credit
Party to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this Section 11.05 shall be binding upon each Lender
-------------
at the time outstanding, each future Lender and, if signed by a Borrower or
Holdings, on Borrower or Holdings.
(e) SECTION SUCCESSORS AND ASSIGNS; PARTICIPATIONS. This Agreement shall be
binding upon the parties hereto and their respective successors and assigns and
shall inure to the benefit of the parties hereto and the successors and assigns
of Lenders. No rights or obligations of Borrower or Holdings hereunder nor any
interest therein may be assigned or delegated by Borrower or Holdings without
the prior written consent of all Lenders.
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
(f) Borrower, Administrative Agent and Lenders shall deem and treat
the Persons listed as Lenders in the Register as the holders and owners of the
corresponding Revolving Loan Commitment Amounts and Loans listed therein for all
purposes hereof, and no assignment or transfer of any such Revolving Loan
Commitment Amount or Loan shall be effective unless and until an Assignment
Agreement effecting the assignment or transfer thereof shall have been delivered
to Administrative Agent and recorded in the Register. Prior to such recordation,
all amounts owed with respect to the applicable Commitment Amount or Loan shall
be owed to the Lender listed in the Register as the owner thereof, and any
request, authority or consent of any Person who, at the time of making such
request or giving such authority or consent, is listed in the Register as a
Lender shall be conclusive and binding on any subsequent holder, assignee or
transferee of the corresponding Commitment Amounts or Loans.
(g) Each Lender shall have the right at any time to sell, assign or
transfer any Revolving Loan Commitment Amount, any Loan or any other Obligation:
(i) to any Person meeting the criteria of clause
(i) of the definition of the term of "Eligible
Assignee" upon the giving of notice to Borrower and
Administrative Agent; and
(ii) to any Person meeting the criteria of clause
(ii) of the definition of the term of "Eligible
Assignee" upon the consent of each of Borrower and
Administrative Agent (neither of which shall be
unreasonably withheld or delayed or shall be
required at any time an Event of Default shall have
occurred and then be continuing); provided, each
such assignment pursuant to this Section
11.06(c)(ii) shall be in an aggregate amount of not
less than $2,000,000 (or such lesser amount as may
be agreed to by Borrower and Administrative Agent
or as shall constitute the aggregate amount of the
Revolving Loan Commitment Amounts, Loans and other
Obligations of the assigning Lender); and provided
further, no consent of Borrower or Administrative
Agent shall be required with respect to any
assignment of a Term Loan or any Revolving Loan
after the Revolving Loan Commitment Termination Date.
(h) The assigning Lender and the assignee thereof shall execute and
deliver to Administrative Agent an Assignment Agreement, together with (i) a
processing and recordation fee of (y) $1,000 in the case of assignments by or to
GSCP or Newcourt; provided that no such fee shall be payable until such time as
GSCP and Newcourt have notified Ad-
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
ministrative Agent that the primary syndication of the Loans has been completed,
and (z) $3,500 in the case of other assignments pursuant to Section
-------
11.06(c)(ii); provided, no such processing and recordation fee shall be payable
-----------
upon any assignment pursuant to Section 11.06(c)(i), and (ii) such forms,
certificates or other evidence, if any, with respect to United States federal
income tax withholding matters as the assignee under such Assignment Agreement
may be required to deliver to Administrative Agent pursuant to Section
-------
2.12(b)(5).
----------
(i) Upon its receipt of a duly executed and completed Assignment Agreement,
together with the processing and recordation fee referred to in Section 11.06(d)
----------------
(and any forms, certificates or other evidence required by this Agreement in
connection therewith), Administrative Agent shall record the information
contained in such Assignment Agreement in the Register, shall give prompt notice
thereof to Borrower and shall maintain a copy of such Assignment Agreement.
(j) Each Lender, upon execution and delivery hereof or upon executing and
delivering an Assignment Agreement, as the case may be, represents and warrants
as of the Closing Date or as of the applicable Effective Date (as defined in the
applicable Assignment Agreement) that (i) it is an Eligible Assignee; (ii) it
has experience and expertise in the making of or investing in commitments or
loans such as the Revolving Loan Commitment Amounts or Loans, as the case may
be; and (iii) it will make or invest in, as the case may be, its Revolving Loan
Commitment Amounts or Loans for its own account in the ordinary course of its
business and without a view to distribution of such Revolving Loan Commitment
Amounts or Loans within the meaning of the Securities Act or the Exchange Act or
other federal securities laws (it being understood that, subject to the
provisions of this Section 11.06, the disposition of such Revolving Loan
-------------
Commitment Amounts or Loans or any interests therein shall at all times remain
within its exclusive control).
(k) Subject to the terms and conditions of this Section 11.06, as of the
-------------
"Effective Date" specified in such Assignment Agreement: (i) the assignee
thereunder shall have the rights and obligations of a "Lender" hereunder to the
extent such rights and obligations hereunder have been assigned to it pursuant
to such Assignment Agreement and shall thereafter be a party hereto and a
"Lender" for all purposes hereof; (ii) the assigning Lender thereunder shall, to
the extent that rights and obligations hereunder have been assigned thereby
pursuant to such Assignment Agreement, relinquish its rights (other than any
rights which survive the termination hereof under Section 11.08) and be released
from its obligations hereunder (and, in the case of an Assignment Agreement
covering all or the remaining portion of an assigning Lender's rights and
obligations hereunder, such Lender shall cease to be a party hereto; (iii) the
Revolving Loan Commitment Amounts shall be modified to reflect the Revolving
Loan Commitment Amount of such assignee and any remaining Revolving Loan
Commitment Amount of such assigning Lender, if any; and (iv) if any such
as-
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
signment occurs after the issuance of any Note hereunder, the assigning Lender
shall, upon the effectiveness of such assignment or as promptly thereafter as
practicable, surrender its applicable Notes to Administrative Agent for
cancellation, and thereupon Borrower shall issue and deliver new Notes, if so
requested by the assignee and/or assigning Lender, to such assignee and/or to
such assigning Lender, with appropriate insertions, to reflect the new Revolving
Loan Commitment Amounts and/or outstanding Loans of the assignee and/or the
assigning Lender.
(l) Each Lender shall have the right at any time to sell one or more
participations to any Person in all or any part of its Revolving Loan Commitment
Amounts, Loans or in any other Obligation. The holder of any such participation,
other than an Affiliate of the Lender granting such participation, shall not be
entitled to require such Lender to take or omit to take any action hereunder
except with respect to any amendment, modification or waiver described in
Section 11.05(b) or 11.05(c) to the extent directly affecting the Loan or
Revolving Loan Commitment Amount relating to the participation. All amounts
payable by Borrower or Holdings hereunder, including amounts payable to such
Lender pursuant to Section 2.07(e), 2.12 or 2.14, shall be determined as if such
Lender had not sold such participation. Each Borrower and Holdings and each
Lender hereby acknowledge and agree that, solely for purposes of Sections 11.04
and 11.18, any participation will give rise to a direct obligation of Borrower
and Holdings to the participant and the participant shall be considered to be a
"Lender".
(m) In addition to any other assignment permitted pursuant to this Section
11.06, (i) any Lender may assign and pledge all or any portion of its Loans, the
other Obligations owed to such Lender, and its Notes for or in connection with
any loan or financing, or as part of any securitization or other similar
transaction, and (ii) with the consent of Borrower and Administrative Agent any
Lender which is an investment fund may pledge all or any portion of its Notes or
Loans to its trustee in support of its obligations to such trustee; provided, no
Lender, as between Borrower and such Lender, shall be relieved of any of its
obligations hereunder as a result of any such assignment and pledge, and
provided further, in no event shall the applicable Federal Reserve Bank or
trustee be considered to be a "Lender" or be entitled to require the assigning
Lender to take or omit to take any action hereunder.
8.5 SECTION INDEPENDENCE OF COVENANTS. All covenants hereunder shall be given
-------------------------
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or would otherwise be within the limitations of, another covenant shall not
avoid the occurrence of a Default or an Event of Default if such action is taken
or condition exists.
8.6 SECTION SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENT. All
-----------------------------------------------------
representations, warranties and agreements made herein shall survive the
execution and delivery
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
hereof and the making of any Loan. Notwithstanding anything herein or implied by
law to the contrary, the agreements of any Credit Party set forth in Sections
2.07(e), 2.12, 2.14, 11.02, 11.03, 11.04 and 11.17 and the agreements of Lenders
set forth in Sections 10.06 and 11.18 shall survive the payment of the Loans and
the reimbursement of any amounts drawn thereunder, and the termination hereof.
8.7 SECTION NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part of
------------------------------
any Agent or any Lender in the exercise of any power, right or privilege
hereunder or under any other Loan Document shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other power, right or
privilege. The rights, powers and remedies given to each Agent and each Lender
hereby are cumulative and shall be in addition to and independent of all rights,
powers and remedies existing by virtue of any statute or rule of law or in any
of the other Loan Documents. Any forbearance or failure to exercise, and any
delay in exercising, any right, power or remedy hereunder shall not impair any
such right, power or remedy or be construed to be a waiver thereof, nor shall it
preclude the further exercise of any such right, power or remedy.
8.8 SECTION MARSHALLING; PAYMENTS SET AIDE. Neither Administrative Agent nor
------------------------------
any Lender shall be under any obligation to marshal any assets in favor of any
Credit Party or any other Person or against or in payment of any or all of the
Obligations. To the extent that any Credit Party makes a payment or payments to
Administrative Agent or Lenders (or to Administrative Agent for the benefit of
Lenders), or any Agent or Lenders enforce any security interests or exercise
their rights of setoff, and such payment or payments or the proceeds of such
enforcement or setoff or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, any other state
or federal law, common law or any equitable cause (whether as a result of any
action or proceeding settlement or otherwise), then, to the extent of such
recovery, the obligation or part thereof originally intended to be satisfied,
and all Liens, rights and remedies therefor or related thereto, shall be revived
and continued in full force and effect as if such payment or payments had not
been made or such enforcement or setoff had not occurred.
8.9 SECTION SEVERABILITY. In case any provision in or obligation hereunder or
------------
any Note shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
8.10 SECTION OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS. The
----------------------------------------------------------
obligations of Lenders hereunder are several and no Lender shall be responsible
for the obli-
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
gations or Revolving Loan Commitment Amounts or Term Loan Commitment Amounts of
any other Lender hereunder. Nothing contained herein or in any other Loan
Document, and no action taken by Lenders pursuant hereto or thereto, shall be
deemed to constitute Lenders as a partnership, an association, a joint venture
or any other kind of entity. The amounts payable at any time hereunder to each
Lender shall be a separate and independent debt, and each Lender shall be
entitled to protect and enforce its rights arising out hereof and it shall not
be necessary for any other Lender to be joined as an additional party in any
proceeding for such purpose.
8.11 SECTION ENTIRE AGREEMENT; HEADINGS. This Agreement, together with the
--------------------------
other Loan Documents, constitutes and expresses the entire understanding between
the parties hereto with respect to the subject matter hereof, and supersedes all
prior agreements and understandings, inducements, commitments or conditions,
express or implied, oral or written, except as herein contained. Section
headings herein are included herein for convenience of reference only and shall
not constitute a part hereof for any other purpose or be given any substantive
effect.
8.12 SECTION APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401
OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES THEREOF.
8.13 SECTION CONSENT TO JURISDICTION. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST
ANY CREDIT PARTY ARISING OUT OF OR RELATING HERETO OR ANY OTHER LOAN DOCUMENT,
OR ANY OF THE OBLIGATIONS, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN XXX XXXXX, XXXXXX XXX XXXX XX XXX XXXX AND ANY
APPELLATE COURT TO WHICH APPEALS WITH RESPECT TO JUDICIAL PROCEEDINGS IN SUCH
COURTS MAY BE TAKEN. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH CREDIT
PARTY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY ACCEPTS
GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH
COURTS; WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; AGREES THAT SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE APPLICABLE CREDIT PARTY AT ITS
ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 11.01; AGREES THAT SERVICE AS
PROVIDED HEREINABOVE IS SUFFICIENT TO CONFER
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
PERSONAL JURISDICTION OVER THE APPLICABLE CREDIT PARTY IN ANY SUCH PROCEEDING IN
ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY
RESPECT; AND AGREES SUCH LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST EACH CREDIT PARTY IN THE
COURTS OF ANY OTHER JURISDICTION.
8.14 SECTION WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES
TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT HEREOF OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR
THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER
COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER
IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS
ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH
WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH
PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION
11.16 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR
ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING
TO THE LOANS MADE HEREUNDER. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
8.15 SECTION CONFIDENTIALITY. Each Lender shall hold all non-public
---------------
information obtained pursuant to the requirements hereof which is in written,
printed or other tangible form and consists of Projections or which has been
marked or labeled as confidential by Borrower in accordance with such Lender's
customary procedures for handling confidential
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
information of this nature and in accordance with prudent lending or investing
practices, it being understood and agreed by Borrower that in any event a Lender
may make disclosures to Affiliates of such Lender or disclosures reasonably
required by any bona fide or potential assignee, transferee or participant in
connection with the contemplated assignment, transfer or participation by such
Lender of any Loans or any participations therein or by any direct or indirect
contractual counterparties (or the professional advisors thereto) in swap
agreements (provided, such swap counterparties and advisors are advised of and
agree to be bound by the provisions of this Section 11.17) or in connection with
the enforcement of any rights or remedies hereunder or under any other Loan
Document or disclosures required or requested by any governmental agency or
representative thereof or by the National Association of Insurance Commissioners
or as request or required pursuant to any law, rules or regulations or legal
process; provided, unless specifically prohibited by applicable law or court
order, each Lender shall notify Borrower of any request by any governmental
agency or representative thereof (other than any such request in connection with
any examination of the financial condition of such Lender by such governmental
agency) for disclosure of any such non-public information prior to disclosure of
such information; and provided further, in no event shall any Lender be
obligated or required to return any materials furnished by Borrower or any of
its Affiliates. Notwithstanding anything contained herein or otherwise to the
contrary, none of the Lenders shall in any event be required to hold as
confidential any information (a) that is or becomes published or otherwise
generally available to the public other than as a result of a disclosure in
violation of this Section 11.17, (b) that was available to any Lender on a non-
confidential basis prior to its disclosure to any Lender hereunder, or (c) that
becomes available to any Lender on a non-confidential basis from a source other
than Borrower or any other Credit Party. The obligations of the Lenders under
this Section 11.17 shall continue with respect to any item of non-public
information for only so long as such item of non-public information has or
retains a confidential or proprietary nature, but in no event beyond a period of
two (2) years after the date on which such information is provided to any Lender
hereunder.
8.16 SECTION RATABLE SHARING. Lenders hereby agree among themselves that if
---------------
any of them shall, whether by voluntary payment (other than a voluntary
prepayment of Loans made and applied in accordance with the terms hereof), by
realization upon security, through the exercise of any right of set-off or
banker's lien, by counterclaim or cross action or by the enforcement of any
right under the Loan Documents or otherwise, or as adequate protection of a
deposit treated as cash collateral under the Bankruptcy Code, receive payment or
reduction of a proportion of the aggregate amount of principal, interest, fees
and other amounts then due and owing to such Lender hereunder or under the other
Loan Documents (collectively, the "AGGREGATE AMOUNTS DUE" to such Lender) which
---------------------
is greater than the proportion received by any other Lender in respect of the
Aggregate Amounts Due to such other Lender, then the Lender receiving such
proportionately greater payment shall (a) notify Administrative Agent and each
other Lender of the receipt of such payment and (b) apply a
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
portion of such payment to purchase participations (which it shall be deemed to
have purchased from each seller of a participation simultaneously upon the
receipt by such seller of its portion of such payment) in the Aggregate Amounts
Due to the other Lenders so that all such recoveries of Aggregate Amounts Due
shall be shared by all Lenders in proportion to the Aggregate Amounts Due to
them; provided, if all or part of such proportionately greater payment received
by such purchasing Lender is thereafter recovered from such Lender upon the
bankruptcy or reorganization of Borrower or otherwise, those purchases shall be
rescinded and the purchase prices paid for such participations shall be returned
to such purchasing Lender ratably to the extent of such recovery, but with any
interest on such purchase prices as such purchasing Lender is required to pay in
connection with such recovery. Borrower expressly consents to the foregoing
arrangement and agrees that any holder of a participation so purchased may
exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by Borrower to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder and that such holder shall be treated as a Lender with
respect to such participation for any and all purposes.
8.17 SECTION COUNTERPARTS; EFFECTIVENESS. This Agreement may be executed in
---------------------------
any number of counterparts, each of which when so executed and delivered shall
be deemed an original, but all such counterparts together shall constitute but
one and the same instrument. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto and receipt by
Borrower and Administrative Agent of written or telephonic notification of such
execution and authorization of delivery thereof.
[The remainder of this page is intentionally left blank.]
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their duly authorized officers as of the day and year first
above written.
NORTHPOINT COMMUNICATIONS, INC.
By: ___________________________
Name:
Title:
Notice Address: 000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx
00000
NORTHPOINT COMMUNICATIONS OF
VIRGINIA, INC.
By: ___________________________
Name:
Title:
Notice Address: 000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx
00000
NORTHPOINT COMMUNICATIONS
HOLDINGS, INC.
By: ___________________________
Name:
Title:
Notice Address: 000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx
00000
1
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
XXXXXXX XXXXX CREDIT PARTNERS L.P., as Syndication
Agent, Joint Lead Arranger and as a Lender
By: ___________________________
Authorized Signatory
Notice Address:
2
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent and as a Lender
By: ___________________________
Name:
Title:
Notice Address:
3
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
NEWCOURT COMMERCIAL FINANCE CORPORATION,
as Documentation Agent,
Collateral Agent and a Lender
By: ___________________________
Name:
Title:
Notice Address:
4
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
CAPITAL SYNDICATION CORPORATION,
as Joint Lead Arranger
By: ___________________________
Name:
Title:
Notice Address:
5
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
[OTHER LENDERS]
6
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
ANNEX A
COMMITMENT AMOUNTS
------------------
REVOLVING LOANS
Lender Revolving Loan Commitment Amount
--------------------------------------------------------------------------------
_______________
--------------------------------------------------------------------------------
TOTAL $50,000,000
--------------------------------------------------------------------------------
TERM LOANS
Lender Term Loan Commitment Amount
--------------------------------------------------------------------------------
_______________
--------------------------------------------------------------------------------
TOTAL $10,000,000
--------------------------------------------------------------------------------
TOTAL COMMITMENTS $60,000,000
1
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
SCHEDULE 3.15
INSURANCE
The Borrower shall at its own expense, with insurers and with maximum
deductibles satisfactory to the Collateral Agent:
(a) keep its insurable properties, adequately insured on a all risk basis for
the full replacement value thereof at all times;
(b)
(c) maintain in full force and effect, pay all premiums when due in respect of,
and comply with all terms and conditions of the following insurance coverages:
(d)
(i) All Risk Property Insurance. The Borrower shall maintain all
---------------------------
risk property insurance against physical loss or damage,
including but not limited to fire and extended coverage,
collapse, flood, earth movement and comprehensive boiler and
machinery coverage (including electrical and mechanical
breakdown). Such insurance shall cover the Borrower's entire
operation shall not contain any exclusion for resultant damage
caused by faulty workmanship, design or materials. Coverage shall
be written on a replacement cost basis in an amount reasonably
acceptable to the Collateral Agent. Such insurance policy shall
contain an agreed amount endorsement waiving any coinsurance
penalty;
(i) Business Interruption. As an extension of the coverage
---------------------
required under the preceding clause (b)(i), the Borrower shall
maintain business interruption insurance in an agreed amount
equal to twelve (12) months projected loss of net profits,
continuing expenses and debt service payment and shall contain an
agreed amount endorsement waiving any coinsurance penalty;
(i) Comprehensive or Commercial General Liability Insurance. The
-------------------------------------------------------
Borrower shall maintain comprehensive general liability insurance
written on an occurrence basis with a limit of not less than
$2,000,000. Such coverage shall include, but not be limited to,
premises/operations, explosion, collapse, underground hazards,
contractual liability, independent contractors, products, com-
2
FIRST PRIORITY LOAN AGREEMENT
-----------------------------
pleted operations, property damage and personal injury liability.
Such insurance shall not exclude coverage for punitive or
exemplary damages where insurable by law; and
(i) Workers' Compensation/Employer's Liability. The Borrower
------------------------------------------
shall maintain workers' compensation insurance in accordance with
statutory provisions covering accidental injury, illness or death
of an employee of the Borrower while at work or in the scope of
his or her employment with the Borrower and employer's liability
insurance in an amount not less than $500,000. Such coverage
shall not contain any occupational disease exclusions; and
(i) Automobile Liability. The Borrower shall maintain automobile
--------------------
liability insurance covering owned, non-owned, leased, hired or
borrowed vehicles against bodily injury or property damage. Such
coverage shall have a limit of not less than $1,000,000; and
(i) Excess/Umbrella Liability. The Borrower shall maintain
-------------------------
excess or umbrella liability insurance in an amount not less than
$10,000,000 written on an occurrence basis providing coverage
limits in excess of the insurance limits required under clauses
(b)(iii), (b)(iv) (employer's liability only), and (b)(v). Such
insurance shall follow from the primary insurances and drop down
in case of exhaustion of underlying limits and/or aggregates.
Such insurance shall not exclude coverage for punitive or
exemplary damages where insurable by law; and
(i) Directors and Officer's Liability Insurance. On or after any
-------------------------------------------
initial public offering of Holdings Common Stock, the Borrower
shall maintain Directors and Officers Liability Insurance in an
amount not less than $2,000,000.
